FMO-A(ctive) financing for Dutch and Foreign companies
FMO is a Dutch development bank, 51% owned by the Dutch Government and 49% by Dutch commercial banks. FMO finances entrepreneurs from developing countries and emerging markets to develop the private sector and by this create sustainable economic growth and improve people’s living standards.
FMO services sectors that have a high long-term impact; agribusiness, food & water and energy. FMO invests directly in foreign companies and indirectly through financial institutions. FMO-A is the main part of FMO’s financing activities. Foreign companies in developing countries and emerging markets can apply for financing. An involvement of Dutch companies is not required.
This financing may be provided in the form of:
- Debt financing; senior- or subordinated loan
- or a combination of these
The FMO-A facility offers the opportunity to strengthen their financial structure by providing often unsecured or subordinated loans. As a result, companies are placed in a better position to attract additional financing from local banks.
Within the Agro-food sector FMO finances investments related to (a) Input supply (b) Primary production/farming (c) Infrastructure - storage/warehouses, irrigation (d) Commodity and food processing (e) Trade and distribution (wholesale/retail).
FMO-A is available for investments in mainly Low-Income- and Low-Middle-Income countries, but Upper- Middle-Income countries in Africa, Asia, Middle East, Eastern Europe and Latin America are considered as well. To verify whether your country is in this list, check the DAC country list of OECD. However within this list certain countries have more priority. Please contact us to verify whether your business case in the specific country has a reasonable chance for obtaining financing through FMO-A.
Each business case is approached individually and the financing is tailor-made. However, the general features and criteria are:
- Direct financing to foreign companies, no Dutch involvement required, but is advantageous
- Financing by FMO-A exceeds approx. € 10 million or the equivalent in USD.
- Financing up to 25% of the balance sheet total
- In Euro or USD or local currency
- Maturity between 3 and 12 years
- A grace period of maximum 3 years
- Interest % depending on the sector- and country risk
- A sound track record of the company
- A dedicated and professional management
- Commitment of shareholders
A sound business plan has to be available. The financial criteria differ, depending on the activities; agro primary production, agro-processing or agro trade.
Besides a sound business plan showing financial profitability and –sustainability, FMO seeks projects with substantial development impact. All companies applying for FMO financing, need to comply (in time) with the OECD guidelines for responsible business practice and sustainable development criteria.
The application process takes, depending on the availability of a business plan, between 3 and 6 months and a due diligence forms part of the evaluation.
We would be happy to perform a quick scan together with you, to see whether your business case potentially qualifies for funding by FOM, and if so, support you with the application.