News detail - Munich Re and FMO sign a USD 500 million Risk Sharing Framework Agreement to scale up impact investing


Munich Re and FMO sign a USD 500 million Risk Sharing Framework Agreement to scale up impact investing

December 19, 2019

FMO and Munich Re are pleased to announce the establishment of a new Unfunded Risk Participation Program which will allow Munich Re to invest in the SDG’s by participating in transactions of FMO for a total amount up to USD 500 million in the next three years. 

This milestone agreement fully supports FMO’s ambition to scale up private sector mobilization and maximize funding towards developing countries in the Financial Institutions, the Energy and Agribusiness sector. It will allow FMO to provide more capital to our customers, supporting our mission to enhance local prosperity and offers an innovative way to draw capacity from private sector insurance companies towards supporting the poorest countries in the world.

The innovative partnership allows Munich Re, a global reinsurance group and one of the top providers of reinsurance, primary insurance, and insurance-related risk solutions in the world, to participate in the underwriting excellence of FMO. By creating an efficient way of credit risk underwriting via portfolio solutions, the agreement also serves as a blueprint for further public-private partnerships.   

Doris Höpke, member of Munich Re’s Board of Management, said: “The risk participation program with FMO creates a win-win situation for both our enterprises: FMO benefits from the strong insurance capacity of Munich Re to mobilize more capital for their mission, Munich Re profits from FMO’s excellence in loan origination and credit risk management in emerging markets. The partnership allows us to open up new markets for our business, while supporting FMO in their mission to foster private sector growth in developing countries.”

Linda Broekhuizen, Chief Investment Officer at FMO said: “We welcome the trend where we see an increasing amount of DFI’s and Multilaterals setting up arrangements with reputable insurance companies to bolster impact. I’m proud to see insurance giants like Munich Re recognising the value of supporting FMO’s lending operations in emerging markets via our unique Risk Sharing Framework Agreement. We are excited to partner up with Munich Re as we see significant scope for a further step up in impact investment in the coming years. I would like to thank them for their commitment and trust in FMO.

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The program will be serviced by FMO's syndications team.

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