SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY Innovation Against Poverty Private Sector Collaboration Jenny Åkerbäck

SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY Innovation Against Poverty Private Sector Collaboration Jenny Åkerbäck

WHAT is Collaboration with the Private Sector?

Collaboration creates value addition Business goals Collaboration opportunities Development goals

Forms of collaboration Drivers of Change PPDP Challenge Funds Innovative Financing

PUBLIC PRIVATE DEVELOPMENT PARTNERSHIPS Swedish Transport Academy, Erbil, Iraq Initiated by Scania CV AB Partnership with UNIDO, Ministry of Labour and Social Affairs Kurdistan, Qanadeel Al Rafidain, MOLSA, Embassy of Sweden, Swedish Trade Council Operations and maintenance of heavy equipment in the sectors of transport, material handling, agricultural equipment, construction, etc. 4 yrs, total budget of 5,6 MUSD (Sida 2,8 MUSD)

PUBLIC PRIVATE DEVELOPMENT PARTNERSHIPS What s in it for Sida? Additional private sector contributions to development goals Raising companies awareness of global challenges Creation of jobs and income sources for local populations Transfer of know-how and modern technologies Improving working conditions in industry and agriculture Securing sustainability, for example by introducing environmental and social standards What s in it for businesses? Securing value chains; Environment & climate efficiency Health investments Capacity development Branding & good-will Communications Recruitment Competitive edge Market opportunity Long-term profit

Drivers of Change

Innovative Financing Unit for Loans and Guarantes To complement and stimulate other financial resources that have the potential to contribute to the goal of poverty reduction and sustainable development. The portfolio today: 10 billion SEK in a guarantee frame Around 3 billion SEK in guaranteed lending within 15 different strategies 20 approved guarantees, and 20 new projects in pipeline Example: Volume Guarante

Challenge Funds

CHALLENGE FUNDS What s in it for Sida? Find solutions to development challenges Fund specific purposes: (innovation, agribusiness, peace) Cost and risk sharing Leverage Outreach (BoP) Opportunities for targeting (women entrepreneurship, fragile environments) Reach scale Local entrepreneurship What s in it for businesses? Seed funding Investment funding Cost and risk sharing Leverage Technical resources Network Facilitates access to other funding

Innovations Against Poverty The Innovations Against Poverty Programme Sida challenges the private sector to develop products, services & business models that can benefit the people at the base of the pyramid (BoP) and contribute to fight poverty and climate change Business for Development

CHALLENGE FUNDS Innovations Against Poverty Small Grant (SG) - The Explorative phase Large Grant (LG) The Research & Pilot phase Products, services or systems ready to be put to market test affordable & accessible by people in poverty The Launching & Scaling up phase Fund manager PwC

Expected benefits & outcomes * Access to more affordable essential products & services for people living in poverty produced in a sustainable manner Solutions to climate & environmental challenges Access to smart solutions within the fields of health, infrastructure, energy, education or agriculture Additional income generation for poor people through employment and engagement as producers & suppliers

CHALLENGE FUNDS IAP Over 1000 applications from 67 countries 66 projects approved (from 26 countries) Health, agribusiness, energy, communications, finance.

Lessons learnt from donor perspective No support for Early stage Entreprenurs Risky Business Entrepreneutial Mindset The People factor / Technical Support

Key insights from grantees Delays across the board Products to expensive or not appropriate for BoP Business models not right Finding suitable partners Competition superior Problematic customer acquisition

CHALLENGE FUNDS: IAP AECF MAVC The Challenge IFP GIF Seed Alliance Amplify Change SSBF SWFF Powering Agriculture Launched 2011 2008 2013 2012 2013 2014 2012 2014/2015 2015 2013 2012 Sectors Any Agricultural, financial service, energy & technology Technology & ICT Any Peace building activities Any Technology & ICT Health, SRHR &Sanitation Any Water Energy & agriculture Regions Global Africa / South East Asia Global Bosnia Colombia Global Africa, Asia Pacific, Latin American and Caribbean Southern Africa / Asia Somalia Global Global Financial Support >1.850.000 SEK 1 850 000-11 000 000 SEK in grants & loans <1 150 000 SEK <280 000 SEK <925 000 SEK Grants/ loans / equity investments 350 000 115 650 000 SEK 3 windows with grants < 194 000 SEK 3 windows with grants < 2 310 000 SEK 30.000 & 100.000 SEK < 7 384 000 SEK < 11 000 000 SEK Technical Assistance Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes Number of Cycles 5 16 1 (will use other methods from now on to find projects) 2 1 Always open 13 Not started yet Not started yet 1 1 Number of approved 63 179 31 15 5 0 (just started) 177 Not started yet Not started yet 16 (not yet entirely cleared) 11 Sidas Contribution 83 000 000 SEK 296 000 000 SEK 111 000 000 SEK 4 500 000 SEK 10 600 000 SEK 100 000 000 SEK 10 500 000 SEK 350 000 000 SEK Not yet clear 100 000 000 SEK 152 000 000 SEK Total Budget 83 000 000 SEK 1 920 000 000 SEK 332 000 000 SEK 4 500 000 SEK 10 600 000 SEK 1 476 780 000 SEK 25 704 000 SEK Not yet clear Not yet clear 184 600 000 SEK 350 000 000 SEK Fund Manager PwC KPMG Hivos UM Sarajevo GIZ & Corporación Emprender GIF APNIC, LACNIC, AFRINIC Mannion Daniels Business Sweden USAID USAID Programme Manager at Sida Johanna Bark & Jenny Åkerbäck Partner/ Närskap Carol Bäckman & Carmen Lopez- Clavero, Intem/Geco Peter Linnér & Anna Öberg, Intem/ DemoMR Åsa Trulsson, UM/Bosnien & Hercegovina Rikard Sjöstrand, UM/Colombia Ola Pettersson, Partner/ Närskap Jens Karberg, Intem/Geco Eva Charlotte Roos, Intem/Social Maria Stridsman, Afrika/Hållbar Carol Bäckman, Intem/Geco Frida Rohde, Intem/Geco

Thank You! Jenny.akerback@sida.se www.sida/privatesector