Letter from the ExCo of the Fund Manager

Dear reader,

2019 was a rough year for global development cooperation and climate action. The Madrid climate conference ended in an agreement to disagree and postpone a future consensus. Despite scientific reports that the window of opportunity for meaningful climate action is closing, nations have not been able to muster the strength to act as one community in charge of saving the global commons.

Against this backdrop of multilateral strain and rising systemic risks, the global community continued its efforts to attain the Sustainable Development Goals of the 2030-Agenda. Despite signs of progress, investments needed to overcome the USD 2.5 trillion financing gap are still lagging, particularly in fragile states, in climate adaptation and in the human development sectors such as health and education. At the time of publication of this report, these concerns are compounded by the COVID-19 pandemic in the first months of 2020. The expectation is that the world will face the worst recession since the Great Depression, due to the abrupt halt in economic activity in the last months. More than ever, there is a need for channels such as the FMO-managed state funds to play a counter-cyclical role and help address the global challenges of inequality and climate change.

The Partnership Development Facility (PDF) addresses part of this financing gap by building partnerships with Dutch companies to develop high-impact projects in emerging markets. As it remains difficult to find early- stage development capital for project development, PDF aims to catalyze the development of impact projects with the Dutch business community in the agri-food, water and climate sectors.

In 2019, PDF signed contracts for five new projects in Indonesia, Ethiopia, Zambia and Myanmar. The investments include projects in renewable energy, two wastewater treatment projects, and a project in food security. Once these projects will reach the financing stage, impact on the SDGs will become effective.

The Flying Swans Consortium, financed by the PDF, made good progress in 2019 by formalizing the partnership for the development of a national cool logistics network in Ethiopia and South Africa. This will improve logistical links for export, benefitting both commercial farms and smallholder farmers.

We thank all our stakeholders for their continuous support, including our clients and investors, the Dutch Ministries of Finance and Foreign Affairs, the NGOs that help us to improve and our colleagues for giving their best every day.

The Hague, 8 May 2020

On behalf of the Executive Committee

Fatoumata Bouaré, Chief Risk & Finance Officer
Linda Broekhuizen, Chief Investment Officer
Peter van Mierlo, Chief Executive Officer