Some of our energy projects present dilemmas for FMO. We seek to balance our ambition to promote sustainable energy with our goal to increase access to electricity in developing markets. In some low-income countries, making energy available to large numbers of businesses and households is presently only feasible by increasing conventional power-generating capacity. In such cases, we may decide to finance conventional power projects, as was the case in 2011 when we financed two emergency fossil fuel energy projects in Bangladesh, in response to the country's tremendous need for electricity.

Sustainable energy projects can also present challenges. For instance, the ongoing Addax bioethanol project in Sierra Leone involves planting 14,000 hectares of sugar cane, developing a sugar cane plantation, constructing an ethanol refinery and a biomass-fuelled power plant. While the plant will supply reliable and affordable energy for 20% of Sierra Leone's national grid, shifting dependence on fossil fuels and reducing greenhouse gas emissions, it also involves relocating several rural families. However, to minimize physical and economic resettlement (avoiding food producing areas), the project layout has undergone several revisions. This has also resulted in limited impact on biodiversity in the area. FMO has high-standard compensation plans in place for these instances. Despite this dilemma, the project is also positively impacting local people by providing direct employment and community skills development programs for people in the area, which is one of the poorest in Sierra Leone. The sponsor has established a Farmer Development Programme aiming at household food security for all households directly affected by the project which in the first year has proven to be a success. By helping residents make more efficient and effective use of land resources, food security, socio-economic development and agricultural income will be improved in the long run.

The project was preceded by three years of rigorous evaluations of the potential social, environmental and economic impacts. The project developers and land owners in the project area, assisted by a lawyer, agreed on a share in the land lease payments that goes far beyond national legal requirements.

The sponsor entered into intense dialogue with non-governmental organizations to find responsible solutions to all issues related to the Sierra Leone project and will continue to work closely with international and local NGO stakeholders to address similar dilemmas in future projects.