FMO, the Dutch Development Bank, and TCX, The Currency Exchange Fund, proudly announce that their two initiatives have been selected as pilot initiative by The Global Innovation Lab for Climate Finance (“GILCF”). GILCF is a global initiative that supports the identification and piloting of cutting edge climate finance instruments. GILCF aims to drive billions of dollars of private investments into climate change mitigation and adaptation in developing countries.
The selected FMO initiative is named The Climate Development and Finance Facility (“CDFF”) and the selected TCX initiative is called The Interest Rate Exchange (“IRX”). The selection was made out of 100 proposals put forward to the GILCF and both initiatives will now be developed as pilots that are designed to address investment barriers in renewable energy, energy efficiency and adaptation in developing countries.
Through the CDFF initiative, FMO targets the lack of (private) financing for infrastructure and renewable energy projects in developing countries due to a lack of expertise and because energy projects require high amounts of capital expenditure. The CDFF addresses these challenges by combining several innovative investment facilities into a single facility that can fund projects in the wind, solar and hydro sectors. CDFF’s ambitious target for 2020, is to obtain at least USD 2 billion in private finance. The Dutch government has committed EUR 7 million to the Facility and FMO is also interested in directly investing up to USD 75 million.
The IRX initiative will address currency exchange risk for renewable energy projects in developing countries. The Currency Exchange Fund (TCX) together with the International Finance Corporation (IFC) will act as implementing agencies.
Nanno Kleiterp, CEO at FMO, comments: “The selection of our project by The Global Innovation Lab for Climate Change is a tremendous boost for our work and reaffirms our reputation as a leading impact investor, capable of making a true impact as well as healthy financial returns. During the Impact Capital Summit Europe on 19 and 20 May in The Hague, the Netherlands, where FMO will act as keynote speaker, we will provide more information on this and other recent initiatives.”
Ruurd Brouwer, Managing Director and CEO at TCX, comments: “It is fascinating to see that out of more than a hundred proposals, two Dutch initiatives have been selected. We believe this underlines the need for parties who are capable of successfully implementing innovations to existing challenges in frontier markets. FMO and TCX have proven to be able to do this and create a financially sound development impact. ”
About FMO
FMO (the Netherlands Development Finance Company) is the Dutch Development Bank. For 45 years, FMO has been investing in the private sector within developing countries. We believe in a world in 2050 where nine billion people can live well and within the boundaries of the planet. We specialize in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8 billion, FMO is one of the largest bilateral private sector development banks. For more information on FMO please visit www.fmo.nl.
About TCX
The Currency Exchange Fund (TCX) is the world’s unique fund dedicated to realizing access to local currency financing in frontiermarkets. In doing so it offers a unique risk management tool for entreprises in these markets, sheltering them from international financial crises and instability.
