Letter from the MB of the Programme Manager

Staying the course 

In 2023, the volatile global economic and geo-political circumstances were aggravated by more extreme weather conditions, food crises, the collapse of several major banks, the ongoing war in Ukraine, the war in Gaza, and Sahel coups. All with direct and prolonged devastating effects on the well-being of entire communities, in particular in FMO’s geographies. This instability is often worsened by adverse financial factors in many emerging markets such as higher interest rates, high inflations, and increased sovereign debt. The global economy is still growing, but growth is uneven. Over the past 3 years, poverty rates in poor countries have increased. Of the SDGs, only 15% is on track, 48% is moderately on track, and 37% has stagnated or is reversing.

Within this context, our 50+ year mission becomes more relevant by the day: enabling entrepreneurs to increase inclusive and sustainable prosperity. Over the next decade, the World Bank estimates one billion young people — a majority living in emerging markets — will try to enter the job market. If they won’t be able to find decent jobs, this will leave millions without hope for a sustainable future. Our investments supported jobs in local markets – 990,000 direct and indirect jobs in 2023 – and enhanced access to energy, food and finance, crucial factors in breaking the downward cycle of poverty and migration.

Maximizing our impact towards the SDGs is the foundation of FMO’s strategy towards 2030. This past year marks the first full year dedicated to implementing and working towards these 2030 goals. Staying on course, we had similar priorities as in 2022: growing impactful business, ensuring FMO’s foundations are solid, and organizational development.

The Mobilising Finance for Forests programme (MFF) supports the restoration and protection of forests and contributes to FMO’s target towards SDG 13: Climate Action. FMO’s investments in the forestry sector also contribute to our impact ambitions under SDG 10: Reducing Inequalities, and SDG 8: Decent Work and Economic Growth, creating jobs in typically remote regions with limited job opportunities. 

Fostering the new generation of entrepreneurs in emerging markets, we are building a market creation pillar within FMO. Our aim is to help upcoming sustainable businesses grow to the level where they can absorb regular funding from us, and ultimately from institutional investors. This will allow them to contribute to local prosperity and climate action at a larger scale. By providing technical assistance and investment partners, we support the development of these currently unbankable, yet potentially impactful opportunities, into bankable and scalable businesses.

MFF’s Technical Assistance (TA) facility and the Development Contributions (DC) provided through the program are helping to establish blueprints for how to implement market creation throughout FMO and beyond. For instance, following an MFF Operational Committee Meeting with FMO and the UK Government, AndGreen Fund, one of FMO's portfolio assets, was able to deploy its first investment from its DC facility in 2023 to Belterra Agroflorestas. Belterra is a young Brazilian Cacao plantation company. Through the DC funding, AndGreen was able to support an early-stage businesses with less than three years of audited financial statements, and a first-time borrower. 

Looking ahead

Staying the course, in 2024 we will remain focused on the three core priority SDGs: Decent work and Economic Growth (SDG 8), Reduced Inequalities (SDG 10) and Climate Action (SDG 13), continuing the work towards our 2030 goals. With regard to growing impactful business, we aim to further increase new investments in Green and Reducing Inequalities. We will take the next steps in market creation, supporting the new generation of entrepreneurs. FMO’s Public Funds and facilities will be fundamental to reach these goals.

With the fragile global economic and political situation in some of our markets, we do realize our financial result can be volatile and further growth to maximize our impact will be challenging. But given the immense climate challenge that lies ahead and the huge investments that are needed to support job creation and overall economic development in emerging markets, we see it as our role to be countercyclical and focus on the long term. We invest when others shy away, always with our mission in mind: enabling entrepreneurs to increase inclusive and sustainable prosperity.

The Hague, 28 March 2024

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