FMO () is a Dutch

development bank Development finance institution (DFI), also known as a Development bank, is a financial institution that provides risk capital for economic development projects on a non-commercial basis. DFIs are often established and owned by governments or ...

structured as a bilateral private-sector

international financial institution An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence is subject to international law. Its owners or shareholders are generally national governments, alt ...

based in

the Hague The Hague ( ) is the capital city of the South Holland province of the Netherlands. With a population of over half a million, it is the third-largest city in the Netherlands. Situated on the west coast facing the North Sea, The Hague is the c ...

, the

Netherlands , Terminology of the Low Countries, informally Holland, is a country in Northwestern Europe, with Caribbean Netherlands, overseas territories in the Caribbean. It is the largest of the four constituent countries of the Kingdom of the Nether ...

. Among others, FMO manages funds for the Ministries of Foreign Affairs and Economic Affairs of the

Dutch government The Netherlands is a parliamentary representative democracy. A constitutional monarchy, the country is organised as a decentralised unitary state.''Civil service systems in Western Europe'' edited by A. J. G. M. Bekke, Frits M. Meer, Edward E ...

to maximize the development impact of private sector investments. It is licensed as a

bank A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...

and supervised by the

Dutch Central Bank De Nederlandsche Bank (, , abbr. DNB) is the national central bank for the Netherlands within the Eurosystem. It was the Dutch central bank from 1814 to 1998, issuing the guilder. Since 2014, it has also been the country's national competent auth ...

. The Dutch government holds 51% of the shares, but FMO operates as a commercial company. Due to its relationship with the Dutch government, it is able to take risks which commercial financiers are not able or not prepared to take. The FMO has a AAA rating from Standard and Poor's. , the bank's total asset valuation was €8.32 billion (US$9.67 billion), and its shareholders' equity was €2.83 billion (US$3.29 billion). FMO's mandate is to provide long term capital for projects in countries in which commercial investors do not yet dare to invest. It invests

risk capital A capital requirement (also known as regulatory capital, capital adequacy or capital base) is the amount of capital a bank or other financial institution has to have as required by its financial regulator. This is usually expressed as a capital ...

in companies and financial institutions in developing countries and has a strict policy on maximizing development impact with a methodology designed to make sure that FMO's return on investment is not just financial but also has positive environmental and social effects. Investments to date include Yoco, WWF and other NGOs in Paraguay's Agricultural sector.

History

FMO was founded in 1970 by the

Dutch Government The Netherlands is a parliamentary representative democracy. A constitutional monarchy, the country is organised as a decentralised unitary state.''Civil service systems in Western Europe'' edited by A. J. G. M. Bekke, Frits M. Meer, Edward E ...

in conjunction with

commercial bank A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. It can also refer to a bank or a division of a larger bank that deals with whol ...

s, the national employers' association, labor unions, and private investors to invest in

private sector The private sector is the part of the economy which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The private sector employs most of the workfo ...

projects in

developing countries A developing country is a sovereign state with a less-developed Secondary sector of the economy, industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. ...

and

emerging markets An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or we ...

. In March 2008, FMO achieved bank status; the bank has been under the supervision of the Dutch Central Bank (DNB) since then.

Objectives

FMO manages funds for the Ministries of Foreign Affairs and Economic Affairs of the

to maximize the development impact of private sector investments. For instance, the Capacity Development Program provides funding with the aim to create access to management and technical know-how.

Controversial investments

In 2009 the FMO invested in a coal

power plant A power station, also referred to as a power plant and sometimes generating station or generating plant, is an industrial facility for the electricity generation, generation of electric power. Power stations are generally connected to an electr ...

near Bargny in

Senegal Senegal, officially the Republic of Senegal, is the westernmost country in West Africa, situated on the Atlantic Ocean coastline. It borders Mauritania to Mauritania–Senegal border, the north, Mali to Mali–Senegal border, the east, Guinea t ...

, called Sendou I. The project triggered a debate about the impact on the environmental circumstances of the inhabitants. Following this, the Independent Complaints Mechanism of FMO has undertaken a Compliance Review and a Mediation process, in reaction to which the Management Board of FMO has written an official response

Ownership

The stock of FMO is held by individual, corporate and public Dutch entities as outlined in the table below:

References

{{authority control Banks established in 1970 Banks of the Netherlands Development finance institutions Government-owned companies of the Netherlands International finance institutions Dutch companies established in 1970

History

Objectives

Controversial investments

Ownership

See also

References