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The private sector plays a crucial role in development, and is an important partner to Sida.

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Private sector

Private Sector Collaboration

Updated: 3 March 2017

Sida collaborates with the private sector in cases when we consider it the best and most efficient way to reach development goals and support sustainable development. 

Partnerships and collaboration is extremely important to find new, long-term solutions to our time’s biggest challenges. There are great gains to be made from the exchange of knowledge and experiences with others. The Global Goals for Sustainable Development provide a platform from which innovative and effective partnerships can be built between actors from different sectors and industries. The Global Goals clearly show how businesses can contribute to the fulfilment of the goals by integrating sustainability – in all its dimensions – in their core business.

Why work with the private sector?

The overarching goal of all Sida’s work is to create conditions for people living in poverty to improve their own lives. Because of low investment many people living in poverty lack productive work and goods that would help them improve their livelihoods. The private sector is a large source of innovation, employment and growth that has the potential to positively affect the situation for poor people in low and middle income countries. Therefore the private sector has an integral role in driving sustainable development.

Sida’s collaboration with the private sector is aimed at harnessing this potential to enable well-functioning, inclusive and sustainable markets, value chains or business models. The private sector is a partner with both the responsibility and the capacity to help accelerate the fight against poverty in all its forms.

Collaboration with private sector partners can enable Sida to reach better results in its work with for example decent working conditions, employment opportunities or sustainable and responsible production. Sida stands a better chance to address these challenges and achieve systemic change if we engage private sector partners who have the influence to drive and lead the change through their core business and value chains. By identifying the mutual interests between different actors we can enter partnerships and pool resources to work towards the same goals, achieving greater impact than if we were undertaking individual initiatives.

Partnering with the private sector is not an end in and of itself; rather it is one stakeholder group of many with whom we collaborate. Private sector collaboration is a method and not a development programme. This means that private sector collaboration can be implemented in all of Sida’s prioritised areas.

Who do we work with?

In line with Sweden’s policy of untied aid, no priority is given to Swedish companies or brands. From Sida’s perspective it is irrelevant whether or not Swedish companies gain from private sector partnerships, the goal of all our work is to help the global poor.

The private sector does not only consist of large multinational companies; it is a large and heterogeneous group of stakeholders. The private sector is partly made up of entrepreneurs from low and middle income countries with small scale, and often unproductive, businesses.

Independent of a company’s size, Sida’s collaboration with private sector partners is always undertaken 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.

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, in most cases with equal cost-sharing.

How do we work with the private sector?

Sida engages with the private sector in different ways that you can read about below:
Challenge funds
Private Public Development Partnership
Drivers of Change
Innovative Finance (Sida's guarantee instrument)
Swedish Leadership for Sustainable Development

Page owner: Department for Partnerships and Innovations

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