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Highlights

Our Energy focus sector enjoyed a highly successful 2012, with a record number of transactions. We committed €364 million in new projects, almost 70% of them in sustainable and renewable energy. This brought the portfolio to more than €1.2 billion. Technological developments in solar and wind are quickly pushing down equipment prices. Combined with persistently high prices for fossil fuels and government policies to stimulate renewables, this is stoking demand for renewable energy. We are encouraged to witness these developments and happy to be able to contribute to them.

We believe this trend will continue, and we will continue to focus increasingly on renewable energy. Nevertheless, the substantial demand for fossil fuel-based energy will by no means disappear, with fossil fuels still needed for a stable energy grid supply in most countries. We will therefore continue to finance such transactions in lower-income countries if they meet our regular ESG criteria (based on the IFC Performance Standards), and only if no viable renewable alternative is available in the short term.

Last year saw our first rural energy transactions, all of which are in Africa and have already been closed. These small-scale yet significant projects were financed by the Access to Energy Fund, which we manage on behalf of the Dutch Government. The projects provide local, mostly off-grid and renewable energy solutions such as windmills or roof-based solar panels to people living too far from the grid. In the future we expect to contract more such projects, which we will also finance through the Access to Energy Fund.

The year saw construction completed on the first FMO-financed solar energy project in Peru. Two more large-scale solar projects were financed in India and South Africa. We began investing in developing innovative new climate business projects in areas such as sustainable agriculture, energy efficiency and forest conservation, another area in which we wish to expand.

Another highlight of 2012 was our first energy venture in Mongolia and the country’s first wind project and independent power venture. We acted as lead arranger of financing for a large combined cycle energy plant in Ghana, where we arranged more than US$200 million in financing (including our own share), and a wind project in Nicaragua. It remains our aim to secure more lead arranger roles so we can catalyze more financing.

As developing countries are hit by climate change yet have scarce financial ability to mitigate its effects or invest in sustainable energy, forestry or agricultural projects, we believe that the financing of climate business will become increasingly important. FMO has a clear role to play.

New contracts (per region 2011 vs 2012)

PER REGION 2011 VS 2012 (€xmln)
 20122011
Africa168160
Asia9260
Latin America & the Caribbean7988
Eastern Europe & Central Asia2545
Non-region specific00
Total364353

Committed portfolio (per region 2011 vs 2012)

PER REGION 2011 VS 2012 (€xmln)
 20122011
Africa501452
Asia297235
Latin America & the Caribbean318270
Eastern Europe & Central Asia7449
Non-region specific1112
Total1,2011,018

DII (development impact indicator)

NEW CONTRACTS PER REGION 2011 VS 2012
 20122011
Africa115115
Asia5932
Latin America & the Caribbean5058
Eastern Europe & Central Asia1932
Non-region specific00
Total243237