FMO commissioned an evidence map on the effectiveness of Building Prospects's planned interventions based on on the new strategy of the fund.
The evidence map helps to develop a more targeted approach for conducting evaluations for Building Prospects, and through this process, FMO contributes new insights to private sector development.
In December 2018, the Dutch Ministry of Foreign Affairs renewed the mandate of FMO’s Infrastructure Development Fund (IDF). A new strategy was formulated as part of the mandate renewal, directing investments to agribusiness, infrastructure and climate change mitigation and adaptation. The fund continued under a new name: Building Prospects.
In this context, FMO commissioned an evidence map on the effectiveness of Building Prospect’s planned interventions in achieving the impact goals of the fund. The purpose of the map is to determine the areas in its Theory of Change (ToC) where there is enough evidence to understand the direction and magnitude of the foreseen impact and identify the gaps where evaluations can contribute to the body of knowledge because the expected impact is less clear based on the existing research[1].
The report covers the impact of investments in the agri value chain on increasing producer participation, private sector development and reducing inequalities, the impact of access to energy infrastructure on the agricultural value chain and the impact of sustainable agriculture on Climate Action (SDG 13).
The findings of the study were insightful and varied. For instance, there is strong empirical evidence that investments in storage technology and agri-processing improve incomes and market access for farmers. There is substantial evidence that investments in private sector along the agri value chain has positive impacts on GDP growth, output, and job creation (direct and indirectly) at the macro and community level. And, while it is well documented that farmers have increased incomes owing to private sector development and agricultural value chain strengthening in agriculture, the causal link between PSD investment and its impact on agri-SMEs requires further exploration.
Also, evidence shows that gender neutral approaches are ineffective in targeting women and that specific value chains employ more women compared to men, thus, investing in these value chains will have a greater impact on women. Other identified gaps include: the quality of the jobs generated through these investments, how investments have an impact on the climate resilience of smallholders and how sustainable certification schemes help to mitigate climate change.
The evidence map helped to develop a more targeted approach to evaluation for Building Prospect by covering topics where the impact is less clear, or there is little evidence such as: impact on agri-SMES, identify agricultural value chains that employ more women and the effects on climate resilience on smallholders to name a few. Through this process, FMO aims to contribute with new insights and more learnings for private sector development.
[1] The strategy and ToC referred to in this document are versions valid at the time of ongoing discussions between FMO and the Dutch Ministry of Foreign Affairs for the renewal of FMO’s mandate.
Click here for the full report
