1. Public-Private Partnerships
The PPP-Concept of GTZ
Working Group
„Cooperation with German/European Private Business Sector“
Cairo, April 5th 2006
Explanatory notes:
German Development Cooperation can react flexibly regarding different partner structures:
(e.g. cooperation of political foundations with political parties; NGOs with civil society; government organisations with government institutions)
complimentary division of labour
(different instruments will be used by different organisations with specific expertise)
admission of restricted competition (institutions in the non-profit sector must also compete for the best ideas and forms of implementation guided by a common political framework)
because development policy thereby experiences wide establishment and legitimisation in its own society
Nadja Steffens, PPP-MENA

2. FDI and ODA in development countries in billion US $
Background (1) – private companies shaping development
Globalization: ongoing expansion of international production and service networks
FDI twice as high as ODA
FDI and ODA in development countries in billion US $
200
100 50
150
FDI
ODA
2002
1993
1990
1996
1999
2004

3. Background (2) – private companies shaping development
Dialogue between state, civil society, private sector has gained importance
Companies increasingly care about social responsibility (CSR)
Private sector provides wide range of know-how broad range of (fast changing) knowledge cannot be held by state

4. … the effect
The size of this private-sector engagement has significant side-effects:
Companies make important contributions to the development of our (partner) countries: they
transfer new technologies
train local workers
help improve the quality of local products and services
create jobs, sources of income and stable trading relations

5. PPP Goals of Development Goals of Private Sector Businesses
This means that there are many potential fields for cooperation between the two sides !
Goals of
Development
Cooperation
Goals of Private Sector Businesses
PPP
The answer
1999: German Government creates Public Private Partnership Programme to make use of this trend for development policies

6. Objective of PPP
Sustainability on the basis of a long term economically driven engagement
Use of resources of the private sector in order to achieve development policy goals
Access to technologies and know-how
Promotion of social responsibility of companies
Support of Technical Assistance

7. Some Rules Apply – the “PPP Criteria”
Everyone benefits: entrepreneurial success for the private partner and benefit for society, industry, administration, etc.
Projects in line with objectives of German Government‘s development policies and sector focuses in the country
Substantial contribution of the company (in cash and/or in kind)
Shared risk (the company can only realise the project with a partner like GTZ)
PPP IS NOT A TOOL OF FOREIGN TRADE PROMOTION
No subsidies !

8. Basic Characteristics of the PPP Concept
Projects are jointly planned, financed, implemented & evaluated
Each partner brings in their special strengths
Sustainability (through commercial interest/ long term engagement, ROI of the private partner)
All kinds of enterprises can participate (big/small; multinational/national)
PPP is possible in (almost) all sectors (no drugs, no arms….)

9. Embedded in TC to reach programme objectives
3 Pillars of one Strategy
PPP Facility
StrategicAlliances
Integration
Laboratory
Initial funding
Visibility of GTZ
One topic
different countries
Strategic partners
Structural changes
Embedded in TC to reach programme objectives

10. PPP-Facility (1999) Special funds provided by BMZ
 innovative projects
 as incentive to test the instrument
Only German / European companies!
GTZ: max Euro
Duration max. 3 years
Managed by PPP office at HQ
Each country has one PPP Project Manager
397 projects implemented
Public share: 66,8 Mio €
Private share: 119,6 Mio €
PPP-Facility (1999)
PPP Facility
Laboratory
Initial funding
Visibility of GTZ

11. Embedded in TC to reach programme objectives
PPP is part of normal TC business
Cooperations with private sector partners contribute to reach TC Programme objectives
Public funds come from the TC budget
Local companies admitted as well
Duration and public contribution as allows TC
Managed by AV of TC Programme
PPP office advises
248 in 50 TC-Programme
public share: 19,0 Mio € / private share: 35,9 Mio €
Integration (2002)
Integration
Embedded in TC to reach programme objectives
… more flexible than PPP facility!

12. Strategic alliances … are PPP projects …
Dealing with one topic
Implemented in several countries or regions
With strategic partners like business associations (AVE) or TNCs (Holcim, etc.)
Aiming at structural changes in one sector worldwide or new topics for one region
Examples (besides AVE and 4C):
AVE, Common Code for the Coffee Community, Uhde GmbH
Strategic alliances
StrategicAlliances
One topic
different countries
Strategic partners
Structural changes

13. Overview of PPP activities in the MENA-Region

14. PPP-Facility Regional division of projects
19 Projects implemented, 11 Projects currently being implemented
Σ 30 Projects (since 1999)
5 Projects in Pipeline
Regional division of projects

15. PPP-Facility Sectoral Division of projects Volume of PPP-projects
Public share: 3,6 Millon €
Private Share & Third Parties: 5,4 Million €
Mobilisation coefficient: 1,5

16. PPP Integration in Technical Corporation
4 Projects implemented, 16 Projects currently being implemented
Σ 20 Projects (since 2002)
1 Project in Pipeline
Regional division of projects

17. PPP Integration in Technical Corporation
Sectoral Division of projects
Volume of PPP-projects
Public share: 2,1 Millon €
Private Share & Third Parties: 3,1 Million €
Mobilisation coefficient: 1,5

18. Thank you for your attention!

19. 1.) How does your topic particularly contribute to employment promotion or employment creation ?
Example BEGECA in Syria: 8 producers of medecine/generica (GMP-Standards) – nonprofit-market, increase in demandemployment creation
Example IPP in Algeria: Sale of treated sewing sludge as fer tilizer (job creations on different levels of the supply chain – in the waste water treatment, sales and marketing strucures employment creation
Different Examples of Vocational Training in Egypt:
Pimdi
German Egyptian Welding Centre
employment promotion

20. 2.) Describe specific interventions for technical cooperation projects
How can the private sector contribute to the objective of the TA-project/programme?
Contacts and dialogue
Special acquisition
PPP possible in nearly all sectors (Vocational Training, Water, Environment, Health, etc.)

21. Companies that “come along”
3.) Describe achieved or expected results/impacts and their sustainability.
Companies that “come along”

22. 4.) Give evidence in form of case studies, best practices or lessons learnt.
Example of method of GTZ Jordan
Lessons Learnt – next slide

23. Back-up: Lessons Learnt
Langfristiges Interesse der UN und wirtschaftliche Stärke in angemessenem Verhältnis zum Eigenbeitrag
Formulierung klarer, tatsächlich erreichbarer Ziele (Wirkungskette)
Schaffung von Transparenz über Interessen der Partner
“Keep it simple” (Verfahrensschritte, Anzahl der Partner)
Realistische Bewertung von Inkind-Leistungen
Regelmäßige Abstimmung mit Partner

24. Possible measures in order to promote PPP
Spezielle PPP-ASP in allen Ländern
Operationspläne
Instrumententraining LMI (Supportstruktur)
PPP-Kennungen nachhalten
Kommunikation verbessern (Webseite des B3 – PPP neu ab Mai)
Multiplikation von Best Practices

25. Possible measures in order to promote PPP
Welche konkreten Beratungsbedarfe gibt es?
Können deutsche/lokale Unternehmen gezielt angesprochen werden?
Frage an die AVs: In welcher Weise können Unternehmen der Zielerreichung Ihres Vorhabens dienen?
Aktive Suche von Partner vor Ort (siehe Partnersuche – Dia- log und Akquise)
Klassische Kommunikationsformen (PPP-Report, etc.)

26. Back-up: The Road to PPP – the partner
How to find a partner? - locally
Through contacts and dialogue in the context of the
TC programme:
Companies that “come along”
Via business platforms that deal with issues relating to Corporate Social Responsibility (CSR)
Ongoing dialogue with bi-national Chambers of commerce, engagement in national Global Compact Network, business and trade associations

27. Back-up: The Road to PPP – the partner
How to find a partner? - locally
Through special acquisition efforts
Local Workshops with sector companies to pro-mote possibility to work with GTZ in PPP (Fachgespraech)
Tendering for proposals  example to be developed

28. The Road to PPP – the contract and implementation designes
Cooperation
Joint responsibility for implementation
All partners contribute know-how / resources
No transfer of funds between partners
GTZ contribution is Facility financed
PPP Cooperation Contract
Contracting GTZ
As implementing service provider
Implementation by GTZ
Financed by GTZ funds and by company or other donors (DIFID, SECO, multilaterals …)
PPP combined financing contract
Consulting
As more favourable consulting service
Implementation by company
Local company as 3rd party
Administration and monitorring by GTZ
PPP Consulting Contract
Example: GEWC
Form of contract has
effects on the implementation!

29. Benefits for GTZ Access to other wise inaccessible know how
Additional financial ressources
Sustainability on the basis of a long term economically driven engagement
Private companies are THE modernization force within the economy

30. Benefits for the private sector/companies
Reputation: BMZ/GTZ als neutraler Partner
Regionalspezifisches und interkulturelles Know-How der GTZ
Kontakte zu öffentlichen Stellen der Partnerländer
Risikomanagement: vorbeugende Maßnahmen (Standards), um z.B. imageschädigende Kampagnen zu vermeiden
Philantropie versus PPP

31. Interventionsebenen Erarbeitung von Richtlinien, Standards
Entwicklung von Aus- und Fortbildungsgängen
Technologietransfer
Einführung innerbetrieblicher Verbesserungen als Pilotmaßnahmen (HIV/Aids-Arbeitsplatzpolitik)