Frequently asked questions
Why does Sida collaborate with the private sector?
The great global challenges, such as poverty, environmental deterioration and climate change, must be met through the collaboration of a multitude of actors, stakeholders and countries. Partnerships and different actors joining forces are essential to achieving the Millennium Development Goals. There is a great untapped potential in partnering with the private sector to help achieve the development goals. Sida’s methods for private sector collaboration are all about better harnessing this potential and opportunities.
The purpose of engaging with the private sector is to mobilize resources and encourage companies to develop new approaches that extend their core business to contribute more to improving conditions for people living in poverty. The work to include business in the global development agenda relies on the skills, resources and power of innovation among actors of the private sector, to bring opportunities to people in poverty.
With the power of innovation, and in partnership with other actors, the private sector is working to improve the quality of lives of poor people all around the world. Sida wishes to engage with companies that in their core business have come far or are embarking on this journey in creating sustainable and inclusive business ventures. We also encourage businesses that are in the process of initiating their sustainability work.
What role can private sector actors play?
Many companies around the world are actively involved, as part of their day-to-day core activities, with many of the same issues that constitute Sida’s core activities: poverty reduction initiatives, limiting greenhouse gas emissions, improving infrastructure and private sector development, health initiatives, water and sanitation solutions, to name but a few.
Business influences sustainable development by creating opportunities for people living in poverty while taking into consideration their social and environmental impacts. Such activities contribute with resources, create employment and economic growth, introduce good corporate governance and (economically, socially and environmentally) sustainable business principles, and build up capacity and know-how in partner countries. Sida works to reinforce these positive effects in collaboration with the private sector and to find win-win opportunities.
The private sector plays a crucial role in development by generating jobs and economic growth, and creating sustainable solutions. In the long term, this also helps to raise countries’ tax revenues, meaning that more money can be spent on health care, infrastructure and education, which in turn benefits companies and reduces poverty.
The overall mission of development cooperation is to help create conditions that will enable poor people to improve the quality of their lives. In working towards sustainable business the private sector is a vital stakeholder in creating these conditions.
Does Sida only collaborate with Swedish private actors?
No. One of the main features of Sida’s Private Sector Collaboration is that it is untied and open to private sector initiatives from all over the world. Collaborative initiatives are hence not limited to Swedish actors. The development impact and results achieved through the partnerships with the private sector are the primary focus of these initiatives.
What countries is Sida’s collaboration with the Private Sector targeting?
A company that wishes to apply should do business with, or operate in a least developed country or low income country. Private Sector collaboration may be applied within all countries of cooperation. Collaborative initiatives that require efforts from country or regional teams (such as Public Private Development Partnerships) should be in line with cooperation strategies. Some forms for Private Sector collaboration, such as challenge funds and support to Drivers of Change, that do not require that Sida have specific country know-how, may in some instances be used in other DAC countries.
What governs Sida’s collaboration with the Private Sector?
The strategy that governs Sida’s collaboration with actors of the private sector is the Strategy for Capacity Development and Collaboration 2011-2013. It was adopted by the Government in 2010. In March 2010 Sida adopted the B4D programme, which outlines the work in more detail. The B4D programme is today referred to as Sida’s collaboration with the Private Sector. The policies that govern Swedish development cooperation also apply to Sida’s collaboration with the private sector.
How much support has been granted?
Sida’s collaboration with the Private Sector is an initiative within Sida which is growing both in numbers and volumes. For 2012, around SEK 200 million is allocated to global and catalytic initiatives and work. Various forms of collaboration between Sida and the private sector are increasingly being used in multiple sectors and financed from other Sida budgetary lines, such as country and regional allocations (in addition to the global Private Sector Collaboration budget). In 2011, Sida’s collaboration with the Private Sector had a leverage effect on around SEK 200 million from private actors by disbursing around SEK 90 million.
What results can be seen?
The first programs began operating in 2011. Projects have not yet delivered publishable evaluations and outcomes, but we are seeing positive outcomes beginning to emerge.
Is the objective of Sida’s collaboration with the Private Sector to help businesses?
Initiatives that involve private sector partnership share the same overall objectives that form the basis for all of Sweden’s development cooperation. Collaboration with the private sector is not business promotion. Rather than helping a single company to do better business, Sida´s intention with private sector collaboration is to stimulate development which otherwise would not have taken place within the private sector due to perceived initial commercial risks or uncertain market opportunities, and to accelerate the go-to-market process. The overarching objective and reason for the collaboration is always an increased contribution to development and the combating of poverty.
Who may collaborate with Sida?
First you should see in which way your idea or project may fit into the overall framework of cross sector collaboration within Sida. Under “Collaboration opportunities” there is more information on how and with whom Sida collaborates.
Sida forms partnerships with companies and private sector organisations that contribute to economic, social and environmentally sustainable development throughout their activities, production processes and value chains. Companies should strive to align with the UN Global Compact principles and demonstrate openness to external review.
We welcome initiatives from private sector actors from all countries, provided there are clear positive effects on sustainable development and for people living in poverty in developing countries.
How do I go about to initiate a project or programme with Sida?
First you should look at what the business and development objectives are from your side and then see if it fits within the objectives and instruments of Sida under “Collaboration opportunities”.
What does the cost sharing principle mean?
Sida’s support to a project/initiative is matched by at least 50 per cent of the total cost from the private partner/s.
What forms for collaboration does Sida offer in regard to the private sector?
The main forms for private sector collaboration with Sida are Public Private Development Partnerships, Challenge Funds, Drivers of Change and Innovative Financing.