PublicPrivate Partnerships in German Development Cooperation Jrg Hartmann
Public-Private Partnerships in German Development Cooperation Jörg Hartmann Executive Director Centre for Cooperation with the Private Sector German Technical Cooperation joerg. hartmann@gtz. de Berlin, May 5 2006 Seite
About GTZ n 30 years experience in development cooperation n 9. 500 employees in more than 140 countries n Offices in 67 countries in Africa, Asia, Latin America, the Middle East and Eastern Europe n 2. 700 projects worldwide n Working mainly on behalf of the German Ministry for Economic Cooperation and Development (BMZ) n Project management for international institutions such as EU, UN, World Bank and bilateral donors 9/7/2021 Seite 2 2
Capacity Development Building the capacities of people, organisations and societies Objective: Partners make effective and efficient use of resources in order to achieve their own goals on a sustainable basis. 9/7/2021 Seite 3 3
Fields of Competence Economic and employment promotion State and democracy Agriculture, fisheries and food Environment and infrastructure Health, education, social security 9/7/2021 Seite 4 4
PPP in German Development Cooperation n Programme and facility launched by BMZ in 1999 n Both sides achieve their goals more effectively and rapidly, results are more sustainable n Implementation mainly by GTZ and DEG n About 1200 proposals from EU companies n About 400 projects in more than 60 countries n Average project size: 400 000 € n Total volume of PPP so far: about 160 Mio. € 65% private contribution, 35% public contribution 9/7/2021 Seite 5 5
PPP Principles n Comply with development policy principles n Joint planning, shared cost and risk n Private partner bears at least 50% of the cost n Beyond the limits of normal commercial activity of the private partner - but driven by a business case (“neither subsidy nor charity”) à No tendering, individual negotiations à Avoid windfall gains and market distortions à Clear definitions and contracts 9/7/2021 Seite 6 6
Mainstreaming PPP in Technical Cooperation n In addition to special PPP facility, PPPs can also be set up in “regular” official development cooperation n Strength: Companies from developing countries are also eligible, PPPs are close to bilateral programmes n Weakness: Less “demand oriented” from a business perspective q PPPs are strictly bound to focus areas of bilateral programmes q funds depend on respective situation q planning may take longer 9/7/2021 Seite 7 7
PPP Challenges n How do we scale up? Are we bound to micro-level or can we make a structural impact? n Need to create more sector-wide approaches on a multi-stakeholder basis n Need to state both, the “business case” and the “development case” n How do PPP relate to regular bilateral cooperation? n Need for PPP on political level, e. g. contribute to good governance, enabling framework, regulatory impact assessment, fight against corruption, PPD 9/7/2021 Seite 8 8
Public-Private Partnerships in German Development Cooperation Jörg Hartmann Executive Director Centre for Cooperation with the Private Sector German Technical Cooperation joerg. hartmann@gtz. de Berlin, May 5 2006 Seite
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4 Types of PPP in Development Cooperation Source: GPPi, Business UNusual, 2005 Issue advocacy e. g. Health (HIV workplace policies with car manufacturers) Developing norms & standards e. g. Supply chains (Sector-wide PPP in textiles and coffee) Sharing & coordinating resources & expertise e. g. Infrastructure (Waste management with cement industry) Harness markets for development e. g. BOP (Micro-insurance with commercial insurer) 9/7/2021 Seite 1111
Lessons Learnt (1) Issue advocacy § Local ownership critical § Public scrutiny high: Be clear about the balance of the “good cause” and the business case; communicate accordingly Developing norms & standards § Mainstream or niche? § Multistakeholder approach, brokering skills § Implementation is key and to be considered early § Political implications high 9/7/2021 Seite 1212
Lessons Learnt (2) Sharing & coordinating resources & expertise § No blueprints in difficult sectors, e. g. water, utilities § Often rather regular business than partnership § Community involvement and sector policy critical Harnessing markets for development § BOP-modells currently seen as the most promising approaches of private contribution to development § Must be demand-driven, not supply-driven § About business modells, not only about products § Sales and distribution channels are a challenge 9/7/2021 Seite 1313
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