Invest International: ‘Dutch solutions for global challenges’

Invest International officially went live on October 1 with a low-key launch of its website. But the new government-backed Dutch investment institution has huge ambitions.

The new organisation, a joint venture of the Dutch state (51%) and entrepreneurial development bank FMO (49%), has two goals: strengthen the competitive position of the Netherlands and contribute to the UN’s Sustainable Development Goals (SDGs).

“Dutch solutions for global challenges,” Joost Oorthuizen, the founding chief executive officer of Invest International, told Impact Investor.

“That’s the sweet spot for our project development and financing,” said Oorthuizen, who joined Invest International after 12 years at the helm of IDH, the Sustainable Trade Initiative.

“The world is on fire, just think about the problems surrounding energy transition, biodiversity, food, housing. These all pose huge challenges and the Netherlands has a lot to offer when it comes to solving some of these.”

Although the foundation of Invest International received the full backing of the Dutch Parliament in July, some political parties were concerned the new organisation would mostly benefit larger companies instead of SMEs.

“We were explicitly founded to benefit both SMEs as well as big businesses,” said Oorthuizen. “We also offer financing to start-ups and scale-ups, which are often deemed too risky by the big banks.”

Focus on Dutch competitive advantages

Invest International brings 100 development professionals and investment managers from FMO and the Netherlands Enterprise Agency (RVO) under one roof.

In addition to financing from its share capital of €833mn the new institution will also offer funding solutions from public programs.

More than €300mn has been earmarked for the international financing of Dutch start-ups and small- and medium-sized businesses (SMEs). A further €165mn will go to public infrastructure projects in developing countries and €6mn to project development.

It is targeting five sectors where it expects Dutch companies can make an impact abroad: agrifood, infrastructure and water, healthcare, climate and energy and sustainable production.

“The Netherlands has a strong knowledge economy, with a lot of innovative companies. We want to work with these kinds of companies, we want to help them with their future business models that are relevant to the SDGs.”

‘One-stop shop’

The arrival of Invest International will make it easier for Dutch companies to access financing for their projects abroad. Instead of having to go to a number of different organisations, Invest International offers Dutch companies a one-stop shop to develop promising ideas into financeable projects.

“Dutch companies have fought hard for this in recent years,” said Oorthuizen. “Countries surrounding the Netherlands, including the UK, all have so-called national promotional institutions.” The arrival of Invest International has created a level playing field for Dutch business, he said.

Invest International inherited an existing portfolio of around €1bn of public financing to governmental bodies involved with infrastructure in developing countries.

“This is very much concessional financing, which gives us the opportunity to create a fair amount of impact,” said Oorthuizen.

“We now have a bigger and smarter toolbox to support Dutch business,” concluded Oorthuizen. “We are ready to support Dutch entrepreneurs with beautiful projects. I hope they will call us.”

Climate change, food shortages

Tom de Bruijn, Dutch Minister for Foreign Trade and Development Cooperation, welcomed the new organisation. “It is good that Dutch companies will have an extra opportunity to finance sustainable activities in developing countries,” he said.

“The benefits are two-fold. It benefits the Dutch economy. And it also creates opportunities in developing countries to take concrete action to combat climate change and food shortages.”

Oorthuizen is a well-known figure in the world of impact investing. Under his leadership, IDH was transformed from a small Dutch initiative into an international organisation, employing 250 people, co-investing €50mn a year, and bringing together governments, global traders, brands, and retailers in over 40 countries to unlock sustainability in agriculture value chains.

“At IDH, I spent a lot of time on making the agriculture chain more sustainable, from soy to palm oil and cocoa,” said Oorthuizen. “And this is where the Netherlands excels. We are masters in making agriculture work in a situation where land and labour are scarce and expensive.”

Oorthuizen uses the Nigerian city of Lagos, one of Africa’s megacities with a population of 15 million and rising, as an example.

“How are you going to feed this city? Which technology do you have to use? This is where our knowledge of agricultural production and finding intelligent solutions, for example with the use of greenhouses, comes in. There are huge opportunities for the Netherlands in this field.”

Unilever, Philips

Oorthuizen named Dutch multinationals including consumer goods giant Unilever, electronics company Philips and construction and engineering firm Ballast Nedam as examples of companies Invest International could do business with.

Oorthuizen said he recently had “a good conversation” with Frans van Houten, the long-time chief executive officer of Philips, about the possibility of leasing some of its medical equipment to African hospitals.

Not just for the benefit of ‘Holland Inc.’

Oorthuizen mentions a recent conversation with a Dutch SME about financing its plans to build 80 biogas plants processing rice husk waste in India.

“This is a good example of a relatively small project with some risk attached,” said Oorthuizen, who holds a PhD in natural resources and spent time on the ground in Asia working with rice farmers.

Especially after the Covid-19 pandemic, most lenders “won’t jump at the chance to finance it, but we would consider it, provided there is a good business plan.”

Rice waste is a huge problem in India, the world’s second biggest rice producer. “Most of the rice waste is burned by the farmers,” said Oorthuizen.

Turning rice waste into renewable, carbon-neutral power “is a good example of Dutch technology that we can export,” said Oorthuizen. “Not only will it benefit ‘Holland Inc.’ but it will also benefit the rest of the world.”