2016 External Evaluation

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Every year, BIO contracts external consultants to evaluate its financial and developmental performance concerning at least five ongoing or recently terminated investments. The 2016 case study evaluation assessed five of BIO’s agricultural investments and specifically, how these investments contributed to food security and rural development. The summary of the report can be found here.

The case studies are representative for the type of investments BIO focuses on in the agri-sector. From their assessment, the evaluators conclude that the small number and great variety of the cases constrain drawing general conclusions but do offer valuable insights into BIO’s impact potential, performance and process optimisation.


The evaluators highlight that, in its analysis of agricultural investment opportunities, BIO includes the effects of the project on the farmers, their families and their communities. This information is obtained through various sources, ranging from the client to local institutions, embassies, due diligence visits and analyses from experts on ESG aspects. Based on the recommendations of the evaluators, which emphasise the importance of an in-depth assessment of the development potential at farmer level, BIO will consider how to further systematically incorporate the farmer perspective, in its initial analysis as well as in its monitoring.

Although the evaluators feel that more added value could be achieved in investing in agriculture through the addition of “compulsory development effect impact goals” to BIO’s investment conditions, BIO is of the opinion that this would be counterproductive, unduly limiting our potential outreach. Rather, we prefer to engage prospective clients in a dialogue to align our views on the development impacts.

Furthermore, an internal reflection on how to enhance our relevance and development effects in agriculture, agro-industry and agro-forestry has yielded the preliminary conclusion that, on the one hand, our current instruments could be used in more targeted ways, and that, on the other hand, to really respond to the needs of SMEs and small-scale producers, additional instruments – with concessional components - are needed.

In their conclusion, the evaluators ask where BIO wants to be on the “financial return <=> social and/or environmental impact” spectrum. BIO’s answer is that there isn’t necessarily a trade-off between financial return and social and environmental impact. BIO recognises the “risk-return targets” challenge, especially in agricultural investments, but believes that numerous investments have been made with good results on both impact and return.


Through the MSME Support Fund, clients can apply for TA to strengthen their business performance and developmental effects. The evaluators recommend to utilise the TA opportunity not only to optimise the investment performance but also the development goals of the investment. BIO supports the recommendation while at the same time recognising the challenge of balancing objectives and requirements with the investee’s focus and priorities to ensure the investment is ultimately successful and sustainable on all fronts.

The evaluators argue that BIO’s lack of a local presence in its investment target countries limits BIO’s possibilities to invest in local SMEs. BIO agrees that local presence is vital for direct investments, in agriculture and in general, and the current absence of such presence limits the scope of suitable SME financing. Yet the challenge for local presence is to generate sufficient additional revenue to counterbalance its significant cost.


Monitoring systems are essential in impact investing. BIO monitors on two levels: financial and developmental. The evaluators point out that, because of a lack of clear monitoring and reporting requirements for development results, important and note-worthy impact results that BIO has been getting are currently not being celebrated and communicated. The evaluators recommend that BIO focus more on opportunities to learn from and communicate its development results. BIO agrees with this recommendation and intends to communicate more on its results once the new development assessment and monitoring system – introduced in 2015 – is fully operational.

Lastly, BIO agrees with the recommendation to have a regular portfolio analysis considering what has been achieved and what is more (or less) effective and relevant. We think that such an analysis would be even more useful when done per sector, and that this recent agri-evaluation can be taken as an example.