Letter from the ExCo of the Fund Manager
2019 was a rough year for global development cooperation and climate action. The Madrid climate conference ended in an agreement to disagree and postpone a future consensus. Despite scientific reports that the window of opportunity for meaningful climate action is closing, nations have not been able to muster the strength to act as one community in charge of saving the global commons.
Against this backdrop of multilateral strain and rising systemic risks, the global community continued its efforts to attain the Sustainable Development Goals of the 2030-Agenda. Despite signs of progress, investments needed to overcome the USD 2.5 trillion financing gap are still lagging, particularly in fragile states, in climate adaptation and in the human development sectors such as health and education. At the time of publication of this report, these concerns are compounded by the COVID-19 pandemic in the first months of 2020. The expectation is that the world will face the worst recession since the Great Depression, due to the abrupt halt in economic activity in the last months. More than ever, there is a need for channels such as the FMO-managed state funds to play a counter-cyclical role and help address the global challenges of inequality and climate change.
In the Energy sector, developments give rise to hope that the SDGs are within reach. Over the past three decades, many millions of people have gained access to energy. In 1990 just over 71% of the global population were connected to electricity. In the past decade this number has risen to 89% (2017). The number of people without access to electricity has fallen below one billion. However, even with the current pace of progress, 650 million people are expected to remain without access in 2030. 9 out of 10 of these people will live in Sub-Saharan Africa.
The Access to Energy Fund of the Dutch government (AEF) aims to help accelerate these connections to on- and off-grid renewable energy as well as to clean-cooking facilities. As the fund manager, FMO looks back at a successful year for the AEF: the fund provided EUR 48 million of new financing to 10 companies in developing countries, while providing energy access to 3,823,308 people through its contribution to the companies in its existing portfolio.
In 2019, under the new enlarged geographic mandate, the AEF was able to finance projects in all OECD DAC countries. This led to pioneer financing possibilities in, amongst others, the renewable energy sector in Bangladesh and Ukraine.
We thank all our stakeholders for their continuous support, including our clients, the Dutch Ministry of Foreign Affairs, the NGOs that help us to improve and our colleagues for giving their best every day.
The Hague, 8 May 2020
On behalf of the Executive Committee
Fatoumata Bouaré, Chief Risk & Finance Officer
Linda Broekhuizen, Chief Investment Officer
Peter van Mierlo, Chief Executive Officer