The Access to Energy Fund and Building Prospects play a crucial role in supporting businesses operating in challenging markets. The mid-term evaluation of these two funds confirmed that they effectively reach underserved populations and support the creation of high-quality jobs, including opportunities for young people.
The Dutch Ministry of Foreign Affairs has completed a mid-term evaluation of two key development funds managed by FMO: the Access to Energy Fund and Building Prospects.. The evaluation, which covers the period from 2019 to 2023, sheds light on the effectiveness and evolution of these funds and their contribution to the development goals of the Dutch ministry of Foreign Affairs.
Though the Access to Energy Fund (AEF) and Building Prospects share common objectives in supporting sustainable development, they focus on different aspects of economic growth. AEF is dedicated to expanding access to renewable energy, primarily for underserved populations in South Asia and Sub-Saharan Africa. Building Prospects focuses on stimulating private sector growth through investments in agricultural value chains and infrastructure. Both funds aim to reach the poorest populations, promote gender equality, and contribute to climate change mitigation and adaptation.
Since their inception in 2002 (AEF) and 2007 (Building Prospects), both funds have undergone several changes to better align with evolving development priorities. Most recently, their mandates were renewed in 2018, with adjustments made to their strategies and investment approaches. The goal of the mid-term evaluation is to assess the impact of these changes, determine how they have influenced the funds’ effectiveness, and identify areas for improvement.
At the close of 2023, the AEF portfolio stood at €210.9 million, while Building Prospects had a committed portfolio of €462 million. Both funds employ a revolving model, meaning that the capital invested is expected to generate cash flows that replenish the funds, allowing for continuous reinvestment.
The evaluation was conducted by ADE, a consultancy firm based in Louvain-la-Neuve, Belgium. The assessment was comprehensive, involving a mix of document reviews, interviews with FMO, meta-evaluation, portfolio analysis, and case studies of 17 individual investments. Local consultants conducted site visits in Kenya, India, and Uganda, providing on-the-ground insights into the funds' impacts. The evaluators compared the funds’ Theories of Change with the Ministry's result frameworks and FMO’s strategic objectives, offering a multi-level analysis of the funds' performance.
At its core, the evaluation shows that both funds are aligned with the key priorities of the Ministry of Foreign Affairs, including climate change mitigation, private sector growth, and improving livelihoods for the most vulnerable populations.
One of the standout findings of the evaluation is the significant role AEF and Building Prospects have played in job creation. The funds are supporting businesses that are not only creating employment but also ensuring the jobs are of high quality. Take the example of HPW Ghana, which received funding through Building Prospects to scale its operations. This enabled the company to expand production, adopt environmentally sustainable practices, and create 450 new jobs, many of which offer permanent contracts and above-average wages. These positions are especially notable in a sector typically dominated by seasonal labor, showing the potential of well-directed investments to drive real economic change.
AEF has also made strides in the renewable energy sector. Its investments in off-grid solar and solar home systems have created jobs, particularly in sales and distribution, providing stable income opportunities for many in energy-poor regions.
Despite the positive outcomes, the evaluation also highlighted several areas for improvement. Gender equality, while a priority, has not been sufficiently embedded into many projects. The evaluators recommended that FMO develops a more robust gender strategy to ensure that women benefit equally from the job creation and economic opportunities these funds are generating. FMO has already increased its focus on gender-lens investments as part of its Strategy 2030, which seeks to create a €10 billion portfolio aimed at reducing inequalities.
Moreover, the evaluation found that the funds’ current performance indicators were not sufficient to fully assess progress. With an eye toward improvement, the evaluators suggest that these indicators be revised to better reflect the goals of AEF and Building Prospects and to improve their usability in reporting. FMO has agreed to work on new indicators and is expected to propose revisions by late 2025.
Discussions on the renewal of AEF and Building Prospects’ mandates that are expected to start in 2026 offers a fresh opportunity to build on the successes and lessons of the past. With an eye toward gender equality, more precise metrics, and continued focus on sustainable, inclusive growth, the future of these funds looks promising.
In picture employee of Hydrobox, an Access to Energy Fund investment. Hydrobox provided renewable energy access to households and businesses in rural Kenya.