The same principles that guide all Sida’s development cooperation also apply to Private Sector Collaboration. For example, all of Sida’s work aims to create conditions for people living in poverty to improve their own lives and all Swedish aid is untied. However, in cases when Sida partners with the private sector there are a few principles that are of specific importance.
Partnerships with the private sector are catalytic and generate a multiplier effect on the development impact of a project. Sida’s involvement should catalyse resources such as knowledge, innovation capacity and long-term investments from private sector partners to reach development objectives.
Partnerships are formed around projects where Sida’s poverty reduction objective overlaps with a company’s core business objective, and where companies are committed to improve social and environmental responsibility in their operations.
Cost and risk sharing
Partnerships are always based on risk- and cost-sharing between Sida and partnering companies to warrant joint ownership of projects and sustainable results. The private sector partner contributes with financial and in-kind support to complement Sida’s contribution. The aim is a 50% contribution from the private sector partner.
Systemic change of markets
Projects are designed to have systemic impact and to contribute to market reforms by enabling well-functioning, inclusive and sustainable markets, value chains or business models. Sida always assess that a project does not give a competitive advantage to a specific company but rather paves the way for systemic changes.
Sida’s involvement triggers a pro-poor development impact that would not have emerged without us as a partner, i.e. shows development additionality. Alternatively, Sida’s involvement has a financial additionality and enables development that would not have taken place at the same size or scale without us.