Photo: Sven Torfinn /Panos
Public Private Development Partnerships (PPDP)
In a Public Private Development Partnership, the public and private sectors make a joint investment in a project implemented by a third party. The objective is to create conditions for people living in poverty to improve their lives.
Sida’s Public Private Development Partnerships (PPDP) aim to engage the private sector in proactively committing to developing countries through investments, trade, technology transfer and problem-solving. The development partnerships focus on collaboration with large companies and cover initiatives in which private and public actors share a common interest in creating opportunities and achieving development goals. In other words win-win situations where projects are commercially driven while generating significant improvements for people in poverty.
Private investments can, for instance, have a positive impact for people living in poverty if the company, the partner country in question and Sida establish a programme directed at specific parts of the value chain (as an example, a value chain is the process from the cotton seed to the garment we buy in a shop). Sida could co-finance support to small farmers (agriculture, organisation, management, etc.) to enable the farmers to participate in new markets that emerge from a private investment.
We welcome PPDP initiatives emerging from the business sector which, together with a local partner, address local development constraints. A company, cluster or a consortium in harness with local partners are the drivers of the projects. Projects are aligned with national poverty reduction strategies and priorities as well as the Swedish country strategies.
Sida’s support aims at adding value to private investments from a development perspective. Systemic weaknesses and constraints in developing markets might be related to a lack of critical physical infrastructure or constraints in the value chain, such as poor knowledge among farmers preventing them from delivering products of sufficient quality for processing or export.
Examples of Sida supported activities:
• pilot projects
• technical assistance
• training and capacity building
• investments in facilities linked to a business venture (such as infrastructural projects)
• market support
• other problem-solving initiatives
The main part of the investment associated with a project is expected to be private capital. Sida funding is complementary and Sida involvement is meant to be additional to a business venture and have clear benefits for people in poverty. The principle is based on the private partners and Sida jointly financing a project that is implemented by a third non-profit party in which the resources are pooled. The ratio for co-financing is maximum 50 per cent, meaning that the private partner covers a minimum of 50 per cent of the total cost. The idea is principle is that there should be joint risk-taking for the PPDP as a whole.
Management of the support
The financial support is never directed to individual businesses but channelled to a local partner, such as a local ministry or locally established organisation that has the ownership of the project.
Read about some of our current partnerships:
- A Working Future
- Coffee farmers adapting to climate change
- Swedish vocational school creates opportunities for unemployed Iraqis
- Supporting Iraq’s move to market economy
- The Tonggol Tuna – a Partnership for Sustainable Fishery
- Milk increases school attendance in Zambia
- Sustainable Water Resource Management (SWAR)