FMO LDC Infrastructure Fund

The Netherlands’ international development bank (FMO) has an LDC Infrastructure Fund, a joint initiative with the Government of the Netherlands, through which it supports the development and improvement of social-economic infrastructure in LDCs. By providing risk capital, the LDC Infrastructure Fund removes a risk for other financiers. Through this Fund, FMO may provide various forms of long-term financing for projects in energy, telecommunications, transportation, environmental and/or social infrastructure. The fund also invests in international or multilateral funds that facilitate infrastructure projects and gives grants for the development of new projects.


Utilization by LDCs:

Since 2002, the LDC infrastructure fund has financed various projects in LDCs.

Starting in 2015, FMO’s energy team has actively worked on financing a thermal power plant in Sierra Leone. Not being a renewable energy project, but located in a Low Income (post-Ebola) Country in Africa, the project had been presented to the Minister for approval to finance with IDF. The project was declined earlier for FMO-A due to the lack of a strong strategic investor. With the approval of the Minister, the energy team continued working on this project. Just before signing, a strategic investor stepped in which made the project feasible for funding by FMO and the contract was closed accordingly. Fund Management considers this an important contribution of IDF: enabling this project by supporting it during the structuring phase.

During 2014-2016, FMO’s Infrastructure Department (IMS) has brought some interesting projects to the IDF portfolio, including an inland port in Bangladesh that will replace transport by diesel trucks to ships/ containers. River haulage will reduce the annual GHG emission by two thirds. Another IMS investment concerns a roll-out of telecom towers in Myanmar. And IMS has also used IDF to invest in a green bus project in Colombia.

Available smooth transition procedures:

Resources:

  1. FMO
  2. Infrastructure Development Fund Annual Report (2016)