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Strategy 2009-2012

2012 was the last year of our previous strategy period. The core ambitions of the Moving Frontiers strategy were creating more development impact by moving to low-income countries (LICs), developing leadership in sustainability and in our three focus sectors, and catalyzing commercial investors to invest in difficult markets. The strategy and its outcomes were thoroughly evaluated last year to assess whether we had achieved the desired increase in development impact.

Please find below our main targets.

  Target  Realization 
Total Portfolio including state funds  € 5.8 billion  € 6.3 billion 
Total portfolio in LIC’s (%) excluding state funds  35  40 
Renewable Energy  € 400 million  € 736 million 
EDIS (average)  64  65
Net 5 year average return on shareholders’ equity (in %)  6.0  6.4 
Cost to income (in %)  25  21 

Low-Income Countries (LICs)

We implemented the move to LICs successfully. By the end of the strategy period 2009-2012, we exceeded the target of having 35% of the FMO portfolio in low-income countries by 5 percentage points at 40%. When including the Government funds the portfolio in low-income countries amounted to 43%.

Sector-Based Approach

At the start of the strategic period, we set Energy, Housing and Financial Institutions as focus sectors. Agribusiness, Food & Water was added as a focus sector in 2011. Unfortunately, we were forced to discontinue Housing as a focus sector in 2012, due to unsatisfactory financial results, a lack of strategic partners and a largely undeveloped market for affordable housing.

In spite of the setback with Housing, our focus sector approach allowed us to develop considerable experience and expertise in specific operational areas, for example the energy industry in Africa. We were particularly successful in further expanding our renewable energy portfolio across all regions. Our ambitions to lead in terms of market position or innovation were only partially realized due to our small size in relation to our target markets. We will continue to pursue these ambitions in the coming strategy period.


We achieved good results in sustainability, an area where FMO is now viewed as one of the leading development finance institutions (DFI). As the only DFI to our knowledge with dedicated environmental and social (E&S) expertise embedded in our sector departments, we aim to add value not only in environmental, social and governance (ESG) risk management but also in advising our clients where ESG opportunities lie in their business. This year we increased our Development Impact Indicator to 910, up from 861 in 2011.

We are now intensifying our efforts in implementing good corporate governance throughout our business.

Stimulating Innovation

In the last two years, knowledge and innovation within FMO has focused mainly on improving the capacity for and culture of knowledge sharing. We have implemented new knowledge management systems and changes within FMO to foster a knowledge-sharing culture. Innovation is highly valued at FMO, and has been made more salient through initiatives such as innovation awards, the establishment of an innovation team and the building of an ‘innovation pipeline’. We see knowledge sharing and innovation as complementary elements of FMO’s business, the goal of both being the highest quality of service. In the coming years we will continue to enable innovation and strive to provide knowledge-based solutions for our clients.

Catalyzing Investment

Our results in catalyzing commercial investment undershot our target. This was due to the sharply decreased risk appetite among commercial investors amid the global crisis. As a result we were not able to fully realize our ambitions in third-party fund management.


Overall, we can conclude that our 2009-2012 Moving Frontiers strategy was successful. It led to strong financial performance and portfolio growth, allowing us to achieve our targeted return on equity of a five-year average minimum of 6%, to consistently outperform our cost to income target of between 25% and 30% and to maintain good portfolio quality. We were also happy to surpass our targeted Economic Development Impact Score (EDIS): we scored 65 in 2012, one point above our original target. The insights obtained regarding the requirements and expectations of commercial investors were instrumental in developing a new fund management strategy to be implemented in the years to come.

Building on the success of and learning from the Moving Frontiers strategy, we will continue along the same strategic lines for the 2013-2016 period. Our intention is to further increase development impact and to add more value for our clients.