Additionality

Additionality is BIO’s added value to an investment, both financially and non-financially. It’s a key part of our approach and is assessed for each investment.

For the investments approved in 2024, BIO's financial additionality is 100%, with 20 out of 22 projects where it is the primary goal. This mostly involves offering financing that wasn’t previously available in the market.

In 19 of the 22 investments approved in 2024, BIO also plays a role in non-financial additionality (5 projects as a primary goal and 14 as a secondary goal). As in the previous year, this non-financial additionality will mainly focus on strengthening environmental and social risk management, often through the Business Development Support Fund’s support.

An independent evaluation by Steward Redqueen of BIO’s non-financial additionality and Business Development Support Fund (BDSF) interventions for 2023-2024 highlighted how crucial this support is to BIO's development mission. In particular, they emphasised the value of BIO’s tailored approach as a smaller development finance institution. Clients were very satisfied with the technical assistance provided through the BDSF and BIO's environmental and social (E&S) guidance, which led to clear improvements in areas like E&S risk management, gender equality, and climate action. However, the evaluation also noted that the BDSF budget was not fully used.

BIO’s management has taken this feedback seriously and is working on improvements across strategic, operational, and capacity-building areas. (1) Strategically, BIO will align its definition of non-financial additionality with OECD standards and refine its BDSF strategy for fund managers, while continuing to support the broader development ecosystem. (2) Operationally, BIO will streamline how it identifies, designs, monitors, and delivers non-financial additionality, standardising BDSF offerings while still tailoring them to client needs. This includes exploring collaboration with Enabel for technical assistance and strengthening follow-up and evaluation processes through digitisation. To build capacity, BIO will improve both internal and external communication about its non-financial additionality approach, keep engaging with other development finance institutions, and provide regular training for staff on managing the BDSF portfolio. These improvements aim to make BIO's support for private sector development even stronger and more impactful.

Read the summary and BIO's management response

As international certifications such as Fairtrade, Forest Stewardship Council, ISO or Organic can be instrumental in reaching a company’s objectives, grants from the BDSF can help clients obtain them. Alternatively, technical assistance and feasibility studies may be used to finance gender equality programmes, to create green financial products, to implement best lending practices, and develop client protection measures for the clients of microfinance institutions. To ensure an alignment of interests and maximise a project’s chances of success, BIO always requires clients to bear part of the costs of the subsidised activities.

Technical assistance

Technical assistance improves a company’s economic, social, and environmental impact by co-financing pivotal initiatives, such as the development of an environmental and social action plan, the digital product innovations for microfinance institutions, or the establishment of a business training centre for a bank’s SME clients.
Feasibility studies

Feasibility studies play an indispensable role in analysing the technical viability and profitability of an investment project. These studies may range from an environmental and social impact assessment for a new solar project to a comprehensive market and technical analysis for an agribusiness venture.
Technical assistance facilities

Technical assistance facilities are created by funds to pool the contributions of their investors and make them available for their clients. They are the indirect equivalent of direct technical assistance and feasibility studies.

Approved BDSF projects in 2024

In 2024, BIO approved 19 BDSF projects, totalling EUR 1,261,293.

Of the 19 projects, nine focused on managing environmental and social risks, while three were about measuring impact and contributing to the SDGs. The remaining projects aimed at improving the company's operations and financial performance by supporting strategic planning, financial planning, and improving management tools.