EC & FMO Boost Climate Adaptation & Mitigation Investments with New EUR 105 million Guarantee Agreement

FMO, as manager of the Dutch Fund for Climate and Development (DFCD), is proud to announce its new partnership with the European Commission to fight climate change and foster sustainable development. The European Union (EU)'s budgetary guarantee is worth up to EUR 105 million and is supported by European Fund for Sustainable Development Plus (EFSD+). This triple-A EU guarantee enables a EUR 240 million top-up to DFCD's Land Use Facility. This further confirms the EU's commitment to addressing climate adaptation and mitigation through strategic investments in agriculture, forestry and ecological systems.

A significant impact on local MSMEs and climate adaptation finance models

Funded by the Dutch government and powered by a consortium of expert organizations - FMO (Dutch Entrepreneurial Development Bank), CFM (Climate Fund Managers), SNV, a global development partner, and WWF Netherlands - the DFCD program features origination, water, and land use investment facilities, dedicated to curbing the effects of climate change by scaling relevant business solutions. The DFCD Aya Land Use Facility is specifically designed to address market failures in climate adaptation and mitigation by boosting investment in agriculture, forestry and ecological systems projects, with a possible renewable energy component. With this new top up, the program is able to also improve the prospects of vulnerable groups such as women, youth, and smallholder farmers, as well as improve the resilience of vulnerable ecosystems in least developed and fragile countries - as such it aims to scale the number of new climate-relevant investments initiated and led by local MSMEs, helping our partner countries achieve the SDGs.

The European Fund for Sustainable Development Plus (EFSD+) is dedicated to advancing the Sustainable Development Goals by promoting sustainable and inclusive economic, environmental, and social development. Its primary focus areas include poverty eradication, socio-economic equality, climate change adaptation and mitigation, environmental protection, job creation, and support for vulnerable groups.

Aligned with these objectives, the Programme emphasizes private sector development, addressing investment bottlenecks, leveraging private sector financing, promoting gender equality, and empowering vulnerable populations. It also supports significant initiatives such as the EU-Africa Global Gateway and the Team Europe Initiative 'Investing in Young Businesses in Africa'.

ABOUT THE TRANSACTION

The European Commission's guarantee of up to EUR 105,000,000 enables FMO to increase its exposure to this program with EUR 240,000,000. This will facilitate scaling of climate-related investments led by local MSMEs and improving the prospects of vulnerable groups such as youth, women, and smallholder farmers, while enhancing ecosystem resilience.

The European Fund for Sustainable Development Plus (EFSD+) provides an integrated financial package, offering grants, guarantees, and financial instruments globally, supported by the External Action Guarantee. This agreement marks a significant step forward in the EU's efforts to promote sustainable development and climate resilience through strategic investments and partnerships.

"We are really happy with the guarantee of the European Commission to the Dutch Fund for Climate and Development (DFCD). The unique structure of the DFCD enables NGOs and the financial sector to work together to invest in transformational climate projects in our partner countries. This guarantee is a true example of the power of Team Europe cooperation!" said Steven Collet, Director-General International Cooperation of the Netherlands Ministry of Foreign Affairs.

"This new guarantee agreement with the European Commission represents a significant step forward in our mission to drive food security and climate investments. By enhancing the DFCD Land Use Facility, we are better equipped to support local MSMEs, foster sustainable agricultural and forestry practices, and improve the resilience of vulnerable ecosystems. This partnership underscores our commitment to creating impactful, scalable solutions that address climate change and promote sustainable development. We are excited to continue working with the European Commission to achieve these critical goals," added Huib-Jan De Ruijter, Co-Chief Investment Officer, FMO.

"CFM is proud to be a part of the DFCD consortium and to have the opportunity to contribute to addressing the world's most pressing issues related to climate adaptation and resilience in emerging markets. This strategic investment of the European Commission allows the consortium to further scale its firepower against the climate crisis, enhance its collaboration, expand the list of lessons learned that can be used in similar facilities, and ultimately accelerate the pace at which impactful ideas are conceived, developed, constructed, and brought into operation," said Georges Beukering, Head of New Ventures, CFM

"We're delighted to have the opportunity to build upon some of the impacts and learnings we've been able to contribute to over the past five years of collaboration within the DFCD. With the accelerating and deepening challenges emanating from the climate crisis, innovative partnerships which can enable climate adaptation, build resilience and protect landscapes, as envisaged within DFCD Aya, are more necessary than ever," said Simon O'Connell, CEO, SNV.

"The European Commission's DFCD guarantee is exactly the kind of ambitious commitment needed to reach global climate and biodiversity goals, stimulating activities that will benefit livelihoods and resilience in climate vulnerable countries, and establishing ever more favorable conditions for a nature-positive economy," concluded Jelle de Jong, Executive Director, WWF-NL.

ABOUT THE DFCD

The Dutch Fund for Climate and Development (DFCD) is a climate resilience fund, dedicated to supporting climate adaptation and mitigation projects which benefit vulnerable communities and landscapes. It is funded by the Dutch government and powered by a consortium of expert organizations: FMO (Dutch Entrepreneurial Development Bank), CFM (Climate Fund Managers), SNV, a global development partner, and WWF Netherlands. For more information, please visit www.thedfcd.com

ABOUT THE EUROPEAN FUND FOR SUSTAINABLE DEVELOPMENT

The European Fund for Sustainable Development Plus (EFSD+) is one of the financing tools of Global Gateway, promoting sustainable investments in the European Union's (EU) partner countries. Offering a variety of risk-sharing instruments of up to €40 billion, the EFSD+ aims to mobilize up to €135 billion of public and private financing to help partner countries achieve the Sustainable Development Goals (SDGs).

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