08 september 2007
Dutch innovation in financial services for developing countries
The World Bank and ABN Amros new Eco-3 Plus Note combines sustainable investing with an annual return of at least 3 percent. The World Bank will use the proceeds from the Note to fund poverty alleviation and sustainable development projects around the world. ABN Amro recently introduced the ABN Amro Eco Index in response to the growing awareness that climate change and the environment present opportunities to companies aiming to prevent irreversible damage.
ABN Amros head of Markets, Jean Paul van Oudheusden, explains: "By linking this product to the guarantee offered by the World Banks AAA rating, retail investors are given an opportunity to combine a solid investment with a worthwhile contribution to the good work of the World Bank." The World Bank is dedicated to providing loans, donations and technical support to help developing countries carry out their poverty alleviation plans and stimulate economic development.
The fund is compiled of companies engaged in water (25%), waste (20%), hydropower (10,5%), platinum and palladium mining (10%), wind energy (10%), alternative fuels (16,5%) and solar energy (8%).
Equally innovative is Dutch Development bank FMOs recently introduced Currency Exchange Fund (TCX) which facilitates long-term local currency financing by its investors. The fund aims to drastically reduce default probability, improve business sustainability and contribute to the development of local capital markets.
Local entrepreneurs in developing countries frequently face the problem that they have to rely on dollars or other strong currencies for major investments. If the local currency devalues, it becomes extremely difficult to fulfil their obligations and pay back their loans. TCX, with a capacity of US$ 1.2 billion, is the first fund to provide loans in local currencies.
The TCX investment group consists of FMO, the Dutch ministry for Development Cooperation, ABN Amro, Oikocredit and the development banks of Germany, South-Africa, Belgium, Norway, Denmark and Spain.
P+ webtip: ABN Amro
P+ webtip: FMO