Netherlands Development Finance Company

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FMO
Type Private
Industry Development finance
Founded 8 July 1970
Headquarters The Hague, Netherlands
Products Equity financing, loans, trade finance, credit guarantees
Revenue IncreaseAftertax::93.4 million (US$:117 million) (2011)[1]
Total assets :5.06 billion (US$:6.34 billion) (2011)
Employees 336 (2013)
Website Homepage

The Netherlands Development Finance Company (FMO), called Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. in Dutch, is a bilateral private-sector development bank based in the Hague, the Netherlands. It is licensed as a bank, under the supervision of the Dutch Central Bank.

History[edit]

FMO was created in 1970 by the Dutch Government, commercial banks, the national employers' association, labor unions, and private investors to make investments in private sector projects in developing countries and emerging markets. In March 2008, FMO achieved bank status; the bank is officially under the supervision of the Dutch Central Bank (DNB). As of December 2009, FMO was present as a development finance partner in over eighty different developing countries and emerging markets.[2]

Overview[edit]

Although 51% of the shares are held by the Dutch government, FMO operates as a commercial company. Its mandate is to provide long term capital for projects in countries in which commercial investors do not yet dare to invest. Furthermore, FMO 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.

FMO invests risk capital in companies and financial institutions in developing countries. It is one of the largest bilateral private sector development banks worldwide. Thanks in part to its relationship with the Dutch government, FMO is able to take risks which commercial financiers are not able or not prepared to take. FMO has a AAA rating from Standard and Poor's.

FMO also manages funds for the Dutch government (Ministries of Foreign Affairs and Economic Affairs) 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. FMO has partnered with a number of firms to invest in private equity funds in developing countries, including Ghana (Fidelity Capital Partners Limited),[3] China (Aureos Capital),[4] Kazakhstan/Romania/Turkey (ADM Capital),[5] Mexico/Costa Rica/Belize (Aureos Capital),[6] South Africa (Lereko Metier),[7] Belize/Costa Rica/Nicaragua (EMP Latin America),[8] China/India/Vietnam (SBI Ven Capital),[9] Central America (REAL Infrastructure Capital Partners),[10] Haiti (Leopard Capital),[11] and sub-Saharan Africa (Fairview Capital Partners).[12]

FMO collaborates with other international finance institutions. Currently, FMO has a risk-sharing agreement with the Asian Development Bank (ADB), to promote trade finance in Asia.[13] FMO also collaborates with individual financial institutions in emerging markets and developing countries, including Clean Energy Development Bank in Nepal, LOLC Micro Credit Limited in Sri Lanka[14] and the TBC Bank in the Republic of Georgia on the Green Lisi Town project.[15]

As of December 2011, the total asset valuation of the bank was €5.06 billion (US$6.34 billion), and its shareholders' equity was €1.665 billion (US$2.09 billion).[16]

Ownership[edit]

The stock of FMO is held by individual, corporate and public Dutch entities as outlined in the table below:[17]

FMO Stock Ownership
Rank Name of Owner Percentage Ownership
1 Dutch Government 51.00
2 Large Dutch Banks 42.00
3 Dutch Employers' Association
4 Dutch Trade Unions
5 Individual Dutch Investors
Total 100.00

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