Development impact

FMO calculates the ex ante economic development impact of its investments using the Economic Development Impact Score (EDIS). With this tool, we assess the potential contribution that the activities we finance, make to the local economy. It is part of the FMO scorecard application. This is our instrument for judging and tracking FMO's investments in a uniform and objective manner - it is developed to objectify and weigh risks and to assess the impact of each potential project.

In 2011, the average EDIS of our new commitments was 66, well above our current strategies target of 64. A target we annually wish to reach and one we can only reach by having a sufficiently high EDIS on average for every new commitment. This year it was amongst others reached through a large number of energy projects and private equity deals which often have a relatively high EDIS.

Our Development Impact Indicator (DII) provides insight into the relationship between development impact and the volume of new investment. We calculate the DII by multiplying the EDIS score by the amount of new investments in millions of euros, and dividing this figure by 100.

DII was 861 in 2011, up from 687 in 2010. A higher DII reflects our aggregated developmental footprint, with a greater volume of impact investments ultimately generating benefits for a greater number of people.

In addition to EDIS and DII, FMO has developed a set of quantitative impact and outreach indicators to provide more detail on our economic development impact. Gaining more insight into the impact of our investments helps us optimize our portfolio's impact.