Notes to the annual accounts

1. Banks

 

2020

2019

Banks

17,257

30,969

Balance at December 31

17,257

30,969

The cash on bank accounts can be freely disposed of.

2. Current accounts (assets)

 

2020

2019

Current account with FMO

107

110

Balance at December 31

107

110

Current account assets relate to amounts receivable from FMO and can be freely disposed of.

3. Short-term deposits

Short-term deposits are liquid accounts and are subject to an insignificant risk of changes in fair value. The Fund has on demand full access to the carrying amounts.

 

2020

2019

Money market funds

13,936

14,285

Balance at December 31

13,936

14,285

Short term deposits consist of MMF, which are measured at FVPL. Short term deposits have a maturity of less than three months.

4. Loans portfolio

Loans originated by the Fund include loans to the private sector in developing countries for the account and risk of the Fund.

 

Loans measured at AC

Loans measured at FVPL

Total 2020

Balance at January 1, 2020

162,373

41,149

203,522

Disbursements

42,358

812

43,170

Conversion from loan to equity

-

-1,552

-1,552

Repayments

-17,283

-6,455

-23,738

Interest Capitalization

-

150

150

Derecognized and/or restructured loans

190

-

190

Changes in amortizable fees

152

-24

128

Changes in fair value

-

-1,193

-1,193

Changes in accrued income

1,633

-492

1,141

Exchange rate differences

-13,100

-1,528

-14,628

Balance at December 31, 2020

176,323

30,867

207,190

Impairment

-24,968

-

-24,968

Total balance at December 31, 2020

151,355

30,867

182,222

 

Loans measured at AC

Loans measured at FVPL

Total 2019

Balance at January 1, 2019

172,789

30,522

203,311

Disbursements

28,809

13,911

42,720

Conversion from loan to equity

-

-450

-450

Repayments

-41,994

-3,777

-45,771

Write-offs

-408

-

-408

Changes in amortizable fees

54

-24

30

Changes in fair value

-

-566

-566

Changes in accrued income

-28

525

497

Exchange rate differences

3,151

1,008

4,159

Balance at December 31, 2019

162,373

41,149

203,522

Impairment

-20,062

-

-20,062

Total balance at December 31, 2019

142,311

41,149

183,460

The contractual amount of assets that were written off during the period are still subject to enforcement activity. This period there were no recoveries from written off loans (2019: €0.1 mln).

The following table summarizes the loans segmented by sector:

 

2020

     

Loans segmented by sector

Stage 1

Stage 2

Stage 3

Fair value

Total 2020

2019

Financial Institutions

90,112

37,175

17,776

22,209

167,272

166,031

Energy

287

4,176

-

2,746

7,209

7,402

Agribusiness

823

1,006

-

536

2,365

3,167

Multi-Sector Fund Investments

-

-

-

5,376

5,376

6,860

Net balance at December 31

91,222

42,357

17,776

30,867

182,222

183,460

       
       
 

2020

     

Loans segmented by geographical area

Stage 1

Stage 2

Stage 3

Fair value

Total 2020

2019

Africa

26,949

34,779

16,494

6,642

84,864

71,126

Asia

32,358

7,578

1,282

8,658

49,876

51,659

Latin America & the Carribbean

27,736

-

-

1,494

29,230

28,847

Europe & Central Asia

4,179

-

-

13,823

18,002

23,830

Non - region specific

-

-

-

250

250

7,998

Net balance at December 31

91,222

42,357

17,776

30,867

182,222

183,460

       
       
 

2020


2019

    

Gross amount of loans to companies in which the Fund has equity investments

10,975

12,170

    

Gross amount of subordinated loans

6,046

1,999

    

Gross amount of non-performing loans

38,281

34,936

    

For definition and more details on non-performing loans, we refer to section 'Credit Risk' within the Risk Management paragraph.

The movements in the gross carrying amounts and ECL allowances for the loans at AC are as follows:

Changes in loans to the private sector at AC in 2020

Stage 1

Stage 2

Stage 3

Total

 

Gross carrying amount

ECL allowance

Gross carrying amount

ECL allowance

Gross carrying amount

ECL allowance

Gross carrying amount

ECL allowance

At December 31, 2019

113,742

-1,881

13,695

-572

34,936

-17609

162,373

-20,062

Additions

37,559

-1,328

4,723

-559

-

-

42,358

-1,887

Exposures derecognised or matured / lapsed (excluding write-offs and modifications)

-13,201

482

-4,006

224

-76

2

-17,283

708

Transfers to Stage 1

115

-4

-

-

-115

4

0

0

Transfers to Stage 2

-33,516

373

33,383

-373

133

-

0

0

Transfers to Stage 3

-3,792

141

-

-

3,792

-141

0

0

Modifications of financial assets (including derecognition)

-

-

190

-

-

-

190

0

Changes in risk profile not related to transfers

-

-757

-

-571

-

-3,525

0

-4,853

Amounts written off

-

-

-

-

-

-

0

0

Changes in amortizable fees

34

-

92

-

26

-

152

0

Changes in accrued income

802

-

147

-

684

-

1,633

0

Foreign exchange adjustments

-7,834

287

-4,091

75

-1,175

764

-13,100

1,126

At December 31, 2020

93,909

-2,687

44,133

-1,776

38,281

-20,505

176,323

-24,968

Changes in loans to the private sector at AC in 2019

Stage 1

Stage 2

Stage 3

Total

 

Gross carrying amount

ECL allowance

Gross carrying amount

ECL allowance

Gross carrying amount

ECL allowance

Gross carrying amount

ECL allowance

At December 31, 2018

133,576

-1,939

10,360

-249

28,853

-14,462

172,789

-16,650

Additions

21,715

-626

6,934

-250

160

-3

28,809

-879

Exposures derecognised or matured / lapsed (excluding write-offs and modifications)

-35,719

66

-3,885

17

-2,390

786

-41,994

869

Transfers to Stage 1

-

-

-

-

-

-

-

-

Transfers to Stage 2

-

-

-

-

-

-

-

-

Transfers to Stage 3

-7,462

103

-

-

7,462

-103

-

-

Modifications of financial assets (including derecognition)

-

-

-

-

-

-

-

-

Changes in risk profile not related to transfers

 

544

 

-83

-

-3,761

-

-3,300

Amounts written off

-

-

-

-

-408

408

-408

408

Changes in amortizable fees

-24

-

41

-

37

-

54

-

Changes in accrued income

-141

-

7

-

106

-

-28

-

Foreign exchange adjustments

1,797

-29

238

-7

1,116

-474

3,151

-510

At December 31, 2019

113,742

-1,881

13,695

-572

34,936

-17,609

162,373

-20,062

The impairments related to guarantees are included in provisions (see Note 10).

Total impairments on loans in the profit and loss account

  
 

2020

2019

Additions and reversals loans Massif portfolio

-5,702

-3,629

Recoveries (writen - off loans)

-

129

Balance at December 31

-5,702

-3,500

The following table shows the values of the IMF GDP forecasts used in each of the economic scenarios for the ECL calculations for 2020 and 2021. The upside and downside scenario calculations are derived from the base case scenario, adjusted based on an indicator of public debt to GDP in emerging markets.

IMF GDP % Growth Forecasts

2020

2021

India

-10.3%

8.8%

Myanmar

2.0%

5.7%

Zimbabwe

-10.4%

4.2%

Uzbekistan

0.7%

5.0%

Kenya

1.0%

4.7%

Nicaragua

-5.5%

-0.5%

Afghanistan

-5.0%

4.0%

Cote d Ivoire

1.8%

6.2%

Senegal

-0.7%

5.2%

Bangladesh

3.8%

4.4%

The following tables outline the impact of multiple scenarios on the ECL allowance as at December 31, 2020 and December 31, 2019:

December 31, 2020

Total unweighted amount per ECL scenario

Probability

Loans to the private Sector

Guarantees

Total

ECL Scenario:

     

Upside

23,334

2%

466

1

467

Base case

25,007

50%

12,488

16

12,504

Downside

28,406

48%

13,617

18

13,635

Total

76,747

100%

26,571

35

26,606

      

December 31, 2019

Total unweighted amount per ECL scenario

Probability

Loans to the private Sector

Guarantees

Total

ECL Scenario:

     

Upside

19,355

5%

966

2

968

Base case

20,451

50%

10,207

18

10,225

Downside

22,433

45%

10,077

18

10,095

Total

62,239

100%

21,250

38

21,288

In order to demonstrate the sensitivity, the tables below present the distribution of stage 2 impairments by the criteria that triggered the migration to stage 2 versus stage 2 impairments triggered by the 30 day past due backstop.

December 31, 2020

   

ECL allowance - Stage 2 trigger assessment

Loans to private sector

Loan commitments

Total

    

More than 30 days past due

-64

-

-64

Forbearance

-794

-3

-797

Deterioration in credit risk rating

-918

-

-918

Total

-1,776

-3

-1,779

December 31, 2019

   

ECL allowance - Stage 2 trigger assessment

Loans to private sector

Loan commitments

Total

    

More than 30 days past due

-3

-7

-10

Forbearance

-

-

-

Deterioration in credit risk rating

-569

-56

-625

Total

-572

-63

-635

5. Equity investments

The equity investments in developing countries are for the Fund's account and risk. The movements in fair value of the equity investments are summarized in the following table. Equity investments are measured at FVPL.

 

Equity measured at FVPL

Net balance at January 1, 2020

256,042

Purchases and contributions

31,752

Reclassification from loans

1,550

Return of Capital

-34,280

Changes in fair value

-2,723

Net balance at December 31, 2020

252,341

 

Equity measured at FVPL

Net balance at January 1, 2019

252,854

Purchases and contributions

31,604

Reclassification from loans

486

Return of Capital

-15,845

Changes in fair value

-13,057

Net balance at December 31, 2019

256,042

The following table summarizes the equity investments segmented by sector:

 

2020

2019

Financial Institutions

155,220

93,852

Energy

1,563

1,149

Agribusiness

7,697

9,752

Multi-Sector Fund Investments

77,121

65,419

Infrastructure, Manufacturing and Services

10,740

85,870

Net balance at December 31

252,341

256,042

6. Investments in associates

The movements in net book value of the associates are summarized in the following table:

 

2020

2019

Net balance at January 1

6,746

5,681

Purchases and contributions

-

146

Share in net results

999

805

Exchange rate differences

-585

114

Net balance at December 31

7,160

6,746

Investments in associates are valued based on the equity accounting method.

The following table summarizes the associates segmented by sector.

 

2020

2019

Financial Institutions

7,160

6,746

Net balance at December 31

7,160

6,746

The following table summarizes the share in the total assets, liabilities, total income and total net profit/loss of the associates

 

Total

Total assets

15,446

Total liabilities

8,318

Total income

993

Total profit/loss

476

7. Other receivables

 

2020

2019

Receivables related to equity disposals and dividends

476

6,645

Fee receivables

52

189

Balance at December 31

528

6,834

8. Other liabilities

 

2020

2019

Amortized costs related to guarantees

20

17

Other liabilities

-

423

Balance at December 31

20

440

9. Accrued liabilities

 

2020

2019

Suspense account

128

-

Accrued costs capacity development

5,540

2,789

Balance at December 31

5,668

2,789

10. Provisions

The amounts recognized in the balance sheet are as follow:

 

2020

2019

Allowance for loan commitments

8

352

Liabilities for guarantees

31

37

Balance at December 31

39

389

11. Contributed fund capital and reserves

 

2020

2019

Contributed Fund Capital

350,990

350,990

Initial contribution FMO

7,778

7,778

Contribution DGIS current year

1,850

-

Balance at December 31

360,618

358,768

The fund capital is revolvable (100% revolvability) when the current value of assets is equivalent or above the sum of the capital put into the fund by shareholders.

Other reserves

2020

2019

Other reserves

68,697

68,697

Balance at December 31

68,697

68,697

Undistributed results

2020

2019

Balance at January 1

66,629

70,507

Net profit / (loss)

-28,270

-3,878

Balance at December 31

38,359

66,629

12. Net interest income

 

2020

2019

Interest on loans measured at AC

13,179

13,374

Interest on banks

-41

-120

Total interest income from financial instruments measured at AC

13,138

13,254

Interest on loans measured at FVPL

2,193

2,779

Interest on short-term deposits

160

134

Total interest income from financial instruments measured at FVPL

2,353

2,913

Total net interest income

15,491

16,167

13. Net fee and commission income

 

2020

2019

Prepayment fees

-

14

Front-end fees for FVPL loans

-

31

Administration fees

173

168

Other fees (arrangement, cancellation and waiver fees)

7

30

Net fee and commission income

180

243

14. Dividend income

 

2020

2019

Dividend income direct investments

527

2,050

Dividend income fund investments

859

1,408

Total dividend income

1,386

3,458

15. Results from equity investments

 

2020

2019

Results from equity investments:

  

Unrealized results from capital results

10,469

-8,845

Unrealized results from FX conversions - capital results

118

-1,375

Unrealized results from FX conversions - cost price

-13,309

5,149

Net unrealized results

-2,722

-5,071

   

Results from sales & distributions:

  

Realized results

-498

5,462

Release unrealized results

-2,191

-8,054

Net results from sales & distributions

-2,689

-2,592

Total results from equity investments

-5,411

-7,663

16. Results from financial transactions

 

2020

2019

Results on sales and valuations of FVPL loans

-1,193

566

Foreign exchange results

-16,084

2,101

Total results from financial transactions

-17,277

2,667

17. Expenses

 

2020

2019

Remuneration FMO

-10,680

-10,896

Capacity development expenses

-6,409

-4,960

Other operating expenses

-

-6

Evaluation expenses

-849

-218

Total operating expenses

-17,938

-16,080

Remuneration FMO relates to management fees paid to FMO.

Capacity development expenses relate to grants or contributions paid to beneficiaries in terms of the fund's objectives.
Evaluation costs relate to expenses made during frequent investigations and controls of existing investments and costs related to due diligence of new projects.

18. Off-Balance Sheet information

To meet the financial needs of borrowers, the Fund enters into various irrevocable commitments (loan commitments, equity commitments and guarantee commitments) and contingent liabilities. These contingent liabilities consist of financial guarantees, which commit the Fund to make payments on behalf of the borrowers in case the borrower fails to fulfill payment obligations. Though these obligations are not recognized on the balance sheet, they do obtain Credit Risk similar to loans to private sector. Therefore, provisions are calculated for financial guarantees and loan commitments according to ECL measurement methodology.

The outstanding amount for financial guarantees issued by the Fund and amount of guarantees received by the Fund are as follows:

 

2020

2019

   

Contingent liabilities

  

Effective guarantees issued

556

1,479

Less: provisions, amortized costs and obligations for guarantees (presented under other liabilities/provisions)

-51

-54

Total guarantees issued

505

1,425

As agreed with the Dutch Ministry of Foreign Affairs, the fund shall maintain 1 euro for each euro of guarantee issued. The total amount of cash as per 31 December 2020 is adequately covering the total guarantees issued and hence meets the requirement set out by the Dutch Ministry of Foreign Affairs.

Nominal amounts for irrevocable facilities are as follows:

 

2020

2019

   

Irrevocable facilities

  

Contractual commitments for disbursements of:

  

- Loans

10,150

23,968

- Grants

2,396

1,499

- Equity investments and associates

69,356

55,113

Contractual commitments for financial guarantees given

-

1,220

Total irrevocable facilities

81,902

81,800

The movement in exposure for the financial guarantees issued (including contractual commitments) and ECL allowance is as follows:

Movement financial guarantees in 2020

Stage 1

Stage 2

Stage 3

Total

 

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

At January 1, 2020

2,699

-37

-

-

-

-

2,699

-37

Additions

1,019

-6

-

-

-

-

1,019

-6

Exposures matured (excluding write-offs)

-802

-

-

-

-

-

-802

-

Transfers to Stage 1

-

-

-

-

-

-

-

-

Transfers to Stage 2

-

-

-

-

-

-

-

-

Transfers to Stage 3

-

-

-

-

-

-

-

-

Changes to models and inputs used for ECL calculations

-

9

-

-

-

-

-

9

Foreign exchange adjustments

-222

3

-

-

-

-

-222

3

At December 31, 2020

2,694

-31

-

-

-

-

2,694

-31

Movement financial guarantees in 2019

Stage 1

Stage 2

Stage 3

Total

 
 

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

At January 1, 2019

2,270

-49

-

-

-

-

2,270

-49

Additions

1,135

-4

-

-

-

-

-

-4

Exposures matured (excluding write-offs)

-838

-

-

-

-

-

-838

-

Transfers to Stage 1

-

-

-

-

-

-

-

-

Transfers to Stage 2

-

-

-

-

-

-

-

-

Transfers to Stage 3

-

-

-

-

-

-

-

-

Changes to models and inputs used for ECL calculations

-

17

-

-

-

-

-

17

Foreign exchange adjustments

47

-1

-

-

-

-

47

-1

At December 31, 2019

2,699

-37

-

-

-

-

2,699

-37

The movement in exposure for the loan commitments is as follows:

Movement of loans commitments in 2020

Stage 1

Stage 2

Stage 3

Total

 

Nominal amount

ECL allowance

Nominal amount

ECL allowance

Nominal amount

ECL allowance

Nominal amount

ECL allowance

At January 1, 2020

18,541

-289

1,508

-63

0

0

20,049

-352

Additions

0

0

0

0

0

0

0

0

Exposures derecognised or matured (excluding write-offs)

-16,163

549

-1,243

126

0

0

-17,406

675

Transfers to Stage 1

240

-6

-240

6

0

0

0

0

Transfers to Stage 2

-859

5

859

-5

0

0

0

0

Transfers to Stage 3

0

0

0

0

0

0

0

0

Changes to models and inputs used for ECL calculations

0

-275

0

-71

0

0

0

-346

Changes due to modifications not resulting in derecognition

0

0

0

0

0

0

0

0

Amounts written off

0

0

0

0

0

0

0

0

Foreign exchange adjustments

-1,109

11

-25

4

0

0

-1,134

15

At December 31, 2020

650

-5

859

-3

0

0

1,509

-8

Movement of loans commitments in 2019

Stage 1

Stage 2

Stage 3

Total

 

Nominal amount

ECL allowance

Nominal amount

ECL allowance

Nominal amount

ECL allowance

Nominal amount

ECL allowance

At January 1, 2019

10,848

-127

3,076

-99

-

-

13,924

-226

Additions

19,105

-202

-

-

-

-

19,105

-202

Exposures derecognised or matured (excluding write-offs)

-5,657

19

-7,323

111

-

-

-12,980

130

Transfers to Stage 1

-

-

-

-

-

-

-

-

Transfers to Stage 2

-5,756

31

5,756

-31

-

-

-

-

Transfers to Stage 3

-

-

-

-

-

-

-

-

Changes to models and inputs used for ECL calculations

-

-8

-

-44

-

-

-

-52

Changes due to modifications not resulting in derecognition

-

-

-

-

-

-

-

-

Amounts written off

-

-

-

-

-

-

-

-

Foreign exchange adjustments

-

-2

-

-

-

-

-

-2

At December 31, 2019

18,541

-289

1,508

-63

-

-

20,049

-352

19. Analysis of financial assets and liabilities by measurement basis

The significant accounting policies summary describes how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognized. The following table gives a breakdown of the carrying amounts of the financial assets and financial liabilities by category as defined in under IFRS 9 and by balance sheet heading.

December 31, 2020

FVPL - mandatory

Amortized cost

Total

Financial assets measured at fair value

   

Short-term deposits

13,936

-

13,936

Loans to the private sector

30,867

-

30,867

Equity investments

252,341

-

252,341

Total

297,144

-

297,144

Financial assets not measured at fair value

   

Banks

-

17,257

17,257

Loans to the private sector

-

151,355

151,355

Current accounts

-

107

107

Other receivables

-

528

528

Total

-

169,247

169,247

Financial liabilities not measured at fair value

   

Other liabilities

-

20

20

Accrued liabilities

-

5,668

5,668

Total

-

5,688

5,688

December 31, 2019

FVPL - mandatory

Amortized cost

Total

Financial assets measured at fair value

   

Short-term deposits

14,285

-

14,285

Loans to the private sector

41,149

-

41,149

Equity investments

256,042

-

256,042

Total

311,476

-

311,476

Financial assets not measured at fair value

   

Banks

-

30,969

30,969

Loans to the private sector

-

142,311

142,311

Current accounts

-

110

110

Other receivables

 

6,834

6,834

Total

-

180,224

180,224

Financial liabilities not measured at fair value

   

Other liabilities

-

440

440

Accrued liabilities

-

2,789

2,789

Total

-

3,229

3,229

Fair value hierarchy

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, based on lowest level input that is significant to the fair value measurement as a whole, as follows:
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;
Level 3 – Valuation technique for which the lowest level input that is significant to the fair value measurement is unobservable.

Valuation process

For recurring and non-recurring fair value measurements categorized within Level 3 of the fair value hierarchy, the Fund has a valuation process in place to decide its valuation policies and procedures and analyze changes in fair value measurement from period to period.

The Fund’s fair value methodology and governance over its methods includes a number of controls and other procedures to ensure appropriate safeguards are in place to ensure its quality and adequacy. The responsibility of ongoing measurement resides with the relevant departments. Once submitted, fair value estimates are also reviewed and challenged by the Investment Review Committee (IRC). The IRC approves the fair values measured including the valuation techniques and other significant input parameters used.

Valuation technique

When available, the fair value of an instrument is measured by using the quoted price in an active market for that instrument (level 1). A market is regarded as active if transactions of the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, valuation techniques are used that maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

Valuation techniques include:

  • Recent broker / price quotations

  • Discounted cash flow model

  • Option-pricing models

The techniques incorporate current market and contractual prices, time to expiry, yield curves and volatility of the underlying instrument. Inputs used in pricing models are market observable (level 2) or are not market observable (level 3). A substantial part of fair value (level 3) is based on net asset values.

Equity investments are measured at fair value when a quoted market price in an active market is available or when fair value can be estimated reliably by using a valuation technique. The main part of the fair value measurement related to equity investments (level 3) is based on net asset values of investment funds as reported by the fund manager and are based on advanced valuation methods and practices. When available, these fund managers value the underlying investments based on quoted prices, if not, multiples are applied as input for the valuation. For the valuation process of the equity investments we further refer to the accounting policies within these Annual Accounts as well as section 'Equity Risk', part of the Risk Management chapter. The determination of the timing of transfers is embedded in the quarterly valuation process, and therefore recorded at the end of each reporting period.

The table below presents the carrying value and estimated fair value of value financial assets and liabilities not measured at fair value.

Carrying value financial assets

2020

 

2019

 

At December 31

Carrying value

Fair value

Carrying value

Fair value

Banks

17,257

17,257

30,969

30,969

Loans to the private sector at AC

151,355

142,915

142,311

128,864

Total non fair value financial assets

168,612

160,172

173,280

159,833

The following table gives an overview of the financial instruments measured at fair value using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.

December 31, 2020

Level 1

Level 2

Level 3

Total

Financial assets at FVPL

    

Short-term deposits mandatory at FVPL

13,936

-

-

13,936

Loans to the private sector mandatory at FVPL

-

-

30,867

30,867

Equity investments

13,145

-

239,196

252,341

Total financial assets at fair value

27,081

-

270,063

297,144

December 31, 2019

Level 1

Level 2

Level 3

Total

Financial assets at FVPL

    

Short-term deposits mandatory at FVPL

14,285

-

-

14,285

Loans to the private sector mandatory at FVPL

-

-

41,149

41,149

Equity investments

11,080

-

244,962

256,042

Total financial assets at fair value

25,365

-

286,111

311,476

The following table shows the movements of financial assets measured at fair value based on level 3.

 

Loans to the private sector

Equity investments

Total

Balance at January 1, 2020

41,149

244,962

286,111

Total gains or losses

   

ˑ In profit and loss (changes in fair value)

-1,217

9,750

8,533

Purchases/disbursements

812

30,805

31,617

Sales/repayments

-6,455

-34,280

-40,735

Accrued income

-492

-

-492

Exchange rate differences

-1,528

-13,591

-15,119

Interest Capitalization

150

-

150

Reclassification Loans versus Equity

-1,552

1,550

-2

Balance at December 31, 2020

30,867

239,196

270,063

 

Loans to the private sector

Equity investments

Total

Balance at January 1, 2019

30,522

252,854

283,376

Total gains or losses

   

ˑ In profit and loss (changes in fair value)

-566

-13,473

-14,039

Purchases/disbursements

13,911

31,604

45,515

Sales/repayments

-3,777

-15,845

-19,622

Accrued income

501

-

501

Exchange rate differences

1,008

416

1,424

Reclassification Loans versus Equity

-450

486

36

Transfers out of level 3

-

-11,080

-11,080

Balance at December 31, 2019

41,149

244,962

286,111

Type of debt investment

Fair value at December 31, 2020

Valuation technique

Range (weighted average) of significant unobservable inputs

Fair value measurement sensitivity to unobservable inputs

     

Loans

7,386

Discounted cash flow model

Based on client spread

A decrease/increase of the used spreads with 1% will result is a higher/lower fair value of approx €7m.

 

2,533

ECL measurement

Based on client rating

An improvement / deterioration of the Client Rating with 1 notch will result in 1% increase/decrease.

Debt Funds

20,948

Net Asset Value

n/a

n/a

Total

30,867

   

Type of equity investment

Fair value at Dec 31, 2020

Valuation technique

Range (weighted average) of significant unobservable inputs

Fair value measurement sensitivity to unobservable inputs

     

Private equity fund investments

130,115

Net Asset Value

n/a

n/a

Private equity direct investments

37,620

Recent transactions

Based on at arm’s length recent transactions

n/a

 

40,622

Book multiples

1.0 – 1.4

A decrease/increase of the book multiple with 10% will result in a lower/higher fair value of €4 million.

 

29,233

Earning Multiples

Depends on several unobservable data such as EBITDA multiples (range 1.32 - 1.55)

A decrease/increase of the used unobservable data with 10% will result in a lower/higher fair value of €3million.

 

1,606

Put option

The guaranteed floor depends on several unobservable data such as IRR, EBITDA multiples, book multiples and Libor rates

A decrease/increase of the used unobservable data with 10% will result in a lower/higher fair value of €2 million.

     

Total

239,196

   

20. Related party information

Dutch Government:

The Dutch Ministry of Foreign Affairs, Directoraat-generaal internationale Samenwerking sets up and administers the investments funds (“State Funds”), including MASSIF, according to the Dutch Government’s development agenda. Directoraat-generaal internationale Samenwerking is the main contributor to MASSIF, providing funding upon FMO’s request.

Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (“FMO”)

The Dutch development bank FMO supports sustainable private sector growth in developing and emerging markets by leveraging its expertise in agribusiness, food & water, energy, financial institutions, Dutch business focus areas to invest in impactful businesses. FMO is a public-private partnership, with 51% of FMO’s shares held by the Dutch State and 49% held by commercial banks, trade unions and other members of the private sector. FMO has a triple A rating from both Fitch and Standard & Poor’s.

FMO has been entrusted by the Dutch Government to execute the mandates of the State Funds: Currently MASSIF, Building Prospects, Access to Energy – I, FOM, FOM-OS, Dutch Fund for Climate and Development Land Use Facility are under FMO’s direct management; the execution of Access to Energy – II and the other facilities of the Dutch Fund for Climate and Development are performed by third parties under FMO’s supervision.

FMO charges a management fee to the Dutch Ministry of Foreign Affairs and it is reimbursed accordingly from MASSIF’s subsidy amount (2020: € 11 million; 2019: € 11 million). FMO is also a minor contributor to the fund with a total contribution of € 8 million in 2020 (2019: € 8 million)

21. Subsequent events

There has been no significant subsequent event between the balance sheet date and the date of approval of these accounts which should be reported by the Fund.