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Eligibility:To receive FMO financing, one of the investing parties must be a Dutch or Western European company. Projects must be commercially and financially viable, and have a sustainable impact on local development. Projects will be evaluated based on the soundness of their environmental and social policies, and on the corporate governance structure of the new enterprise and its adherence to transparent procedures.
Types of Projects Funded: FMO is currently active in 40 developing and emerging countries. The agency focuses on exporting companies, the financial sector, infrastructure (physical infrastructure, transport, telecom, energy and water), and on micro, small and medium-sized enterprises. FMO has an exclusion list that outlines the types of projects it will not finance.
Financial Instruments:
Loans and Mezzanine Finance, and Guarantees: FMO can offer loans, guarantees, and mezzanine finance on corporate or project terms. Lending will not exceed 25% of a company's balance sheet or total estimated project costs (generally from $USD 1 million to $USD 100 million). FMO extends financing on commercial terms for a period of 5 to 12 years, sometimes with a grace period. FMO can also offer syndicated loans to help mobilize funding from private sources.
Equity and Quasi-equity: FMO normally takes a minority interest and subscribes to between 10% and 35% of a private sector company's equity, or an investment of EUR 3 to 5 million. The average commitment term is 5 years.
Least Developed Countries Infrastructure Fund (LDC Fund): The LDC Fund was established to provide various forms of long-term financing (up to 20 years) for investments in large public/ private infrastructure projects in the least-developed countries. The fund can take equity positions of up to EUR 7.75 million.
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