FMO (Netherlands)
- Score:
- 32.9
- Position:
- 15 / 22 (Non-sovereign)
Overview
The Dutch Entrepreneurial Development Bank (FMO), is a Dutch development bank structured as a bilateral private sector international financial institution. It was established in 1970. FMO manages funds for the Ministries of Foreign Affairs and the Economic Affairs of the Dutch Government to maximise the development impact of private sector investments in developing countries. The Dutch Government holds a majority share of 51%. The rest is shared between Large Dutch Banks (42%), Dutch Employers’ Association, Dutch trade unions and individual investors. FMO joined the European Development Finance Institutions Association (EDFI) in 1992.
Analysis
FMO ranked 15th out of 22 non-sovereign DFIs assessed, with a score of 32.9 out of 100. While this reflects an improvement from its 2023 score of 28.9, its overall ranking dropped from 10th place. An important barrier to further improvement was its continued lack of disclosure of investment data in bulk download format. Additionality, although FMO is an IATI publisher, it currently only discloses investments from government funds including the MASSIF and Building Prospects funds to IATI. As such, FMO failed to score points for IATI format of publication across the Index.
FMO came 18th in the Core Information component with a score of 7.46 out of 20, dropping from its position at 14th in 2023. At the organisational level, it continued to fail on aspects of its disclosure policy and accessibility. At the project level, FMO saw improvements since 2023 only on status and disclosure date. It again did not get any points for unique identifier, sub-national location, domicile, sub-sector, investment instrument, total investment cost, disbursement, client contact, approval date and last update date. FMO also dropped points for format for many indicators due to there not being a bulk download available and because most projects were not published to the IATI Standard.
For the Impact Management component, FMO ranked joint 12th with a score of 8 out of 25, slightly dropping from its position at 10th in 2023. It continued to receive all available points for the impact measurement approach and evaluations indicators. However, it did not publish any sector or country strategies and did not score for any project-level indicators in this component including impact metrics and results.
FMO scored 13.7 out of 30 in the ESG and Accountability to Communities component, ranking 9th, which is the same position as in 2023. It scored 100 per cent for its E&S and project-level grievance (PGM) community disclosure policies. It was only missing articulating what E&S documentation is to be disclosed for medium and high-risk projects for its E&S global disclosure policy. One improvement since 2023 is that FMO now specifies when a document should be translated and in which language. It scored points for its IAM, but it did not score points for having a community disclosure policy for it. Significantly, FMO was one of two bilateral DFIs that scored points for having an early global disclosure policy. However, apart from the disclosure of its IAM on project pages, FMO did not score points for project-level indicators including summary of E&S risks, E&S documentation and assurance of community disclosure.
In the Financial Information component, FMO came joint third lowest, scoring 1.75 out of 15. This is a slight improvement from 2023 where it ranked joint last, only because it scored on the new climate finance methodology indicator. Other than that, it only scored points for the financial reports/statements indicator. It did not score for any project-level indicators in this component, including for climate finance data.
Finally, FMO came joint 3rd in the Financial Intermediary (FI) Sub-Investments component, scoring 2.5 out of 15. In 2023, it came joint 4th. One noted improvement is that FMO’s new disclosure policy includes a policy on disclosing qualifying private equity fund sub-investments. At the project-level, it only scored for the FI (bank) use of funds indicator.
Recommendations
- FMO should publish all of its investments to the IATI Standard.
- It should make investment data available in a bulk download format.
- FMO should review its disclosure policy according to current best practice.
- It should disclose further Core Information data including unique identifiers, domicile, sub-sector, disbursement, approval date and last update date. It should consistently disclose sub-national location, investment instrument and total investment cost.
- FMO should disclose its sector or country strategies.
- It should disclose project-level Impact Management indicators, including additionality statement, activity indicators/metrics and results.
- FMO should clearly articulate what E&S documentation will be disclosed for medium and high-risk projects. It should also create a policy guiding the disclosure of the presence of the IAM at community level.
- FMO should consistently disclose project-level ESG and Accountability to Communities indicators, including summary of E&S risks and E&S documentation.
- It should provide assurance of community disclosure for investments when disclosure is required. It should also disclose a beneficial ownership statement and identification of the main shareholders of the client company.
- For Financial Information indicators it should disclose for concessionality, mobilisation and share of equity. It should consistently disclose for repeat investment, currency of investment, co-financing and loan tenor.
- FMO should disclose whether investments include climate finance, the amount split by mitigation and adaptation, as well as a rationale for why climate finance has been counted. It should also publish a climate finance methodology.
- It should define use of funds for FIs (banks) at the organisational level.
- FMO should disclose all private equity fund sub-investments and qualifying FI (bank) sub-investments in line with guidance in Publish What You Fund’s DFI Transparency Tool.