Letter from the MB of the Fund Manager
In 2022, the global economy faced an intensification of upheaval. The Ukraine war – first and foremost a humanitarian disaster – led to political and economic crises across the region and beyond. Inequality rose, the climate crisis continued to unfold, and a global recession began to loom, pushing an increasing number of vulnerable people into food insecurity, reduced energy access and poverty. The crises also lead to a heightened stress on global trade systems, in particular in the Energy- and (agricultural) Commodities markets.
The poorest economies, where poverty reduction had already slowed down significantly, face continued challenges, confronting the resilience of society. Development finance institutions such as FMO will need to intensify their operations in the coming years to encourage the flow of private finance to meet sustainable investment needs in these societies.
In close consultation with our stakeholders, we updated our strategy towards 2030. In our ‘Pioneer-Develop-Scale’ strategy the role of our public funds and facilities is pivotal. These help us explore higher risk opportunities and markets to make them ready for additional private investments.
Our long-standing track record in managing public funds to catalyze private finance, has contributed to a significant expansion of our responsibilities. Over the past few years, FMO set up facilities and investment programs with the European Commission and the Green Climate fund. In 2021, the UK government also decided to entrust FMO with the management of the UK's Mobilising Finance for Forests programme.
Building Prospects main objective is to stimulate private sector development and drive job creation, contributing to SDG 8 – decent work and economic growth. This is achieved most efficiently through investing in the agribusiness value chain, and by investing in industry and infrastructure. Development of infrastructure and the agricultural sector are mutually reinforcing as agriculture relies on a strong enabling environment with proper access to natural resources, electricity and logistics.
The war has re-enforced the urgency to continue building and developing agricultural value-chains in emerging markets. Through supporting entrepreneurs in emerging markets to scale their business, Building Prospects helps strengthen the enabling environment for local communities.
Building Prospects provided a €4 million loan to HPW Fresh & Dry, which is the largest processor of tropical dried fruits in West Africa. HPW cooperates with smallholder farmers and plays a role in improving their standard of living. It is also the most important employer in the region and FMO’s investment can generate around 250 new local jobs.
In 2023, the developing countries will continue to see hardship and challenges. To support them, courage and ambition are imperative in the deployment of FMOs public funds and facilities, especially against the background of the ongoing climate crisis. We will continue to generate investments that create equal opportunities and equitable access to finance, that protect the value of ecosystems and forests, that provide access to renewable energy and that help build up fair value chains in agriculture.
The Hague, 26 April 2023
On behalf of the Management Board
Fatoumata Bouaré, Chief Finance & Operations Officer
Franca Vossen, Chief Risk Officer
Huib-Jan de Ruijter, Co-Chief Investment Officer
Michael Jongeneel, Chief Executive Officer
Peter Maila, Co-Chief Investment Officer