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

About GTZ 30 years experience in development cooperation 9.500 employees in more than 140 countries Offices in 67 countries in Africa, Asia, Latin America, the Middle East and Eastern Europe 2.700 projects worldwide Working mainly on behalf of the German Ministry for Economic Cooperation and Development (BMZ) Project management for international institutions such as EU, UN, World Bank and bilateral donors The GTZ is an international cooperation enterprise for sustainable development with worldwide operations. We are looking back onto 30 years of experiences in this field. And during this period we have acquired technical and regional expertise as well as competences in project management. Currently GTZ employs about 9.500 persons, of whom some 1.000 are working at the GTZ Headquaters near Frankfurt. Additionally we run our own offices in 67 countries in Africa, Asia, Latin America, the Middle East and Eastern Europe. 29.11.2018

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. 29.11.2018

Fields of Competence Economic and employment promotion State and democracy Agriculture, fisheries and food Environment and infrastructure Health, education, social security 29.11.2018

PPP in German Development Cooperation Programme and facility launched by BMZ in 1999 Both sides achieve their goals more effectively and rapidly, results are more sustainable Implementation mainly by GTZ and DEG About 1200 proposals from EU companies About 400 projects in more than 60 countries Average project size: 400 000 € Total volume of PPP so far: about 160 Mio. € 65% private contribution, 35% public contribution 29.11.2018

PPP Principles Comply with development policy principles Joint planning, shared cost and risk Private partner bears at least 50% of the cost Beyond the limits of normal commercial activity of the private partner - but driven by a business case (“neither subsidy nor charity”) No tendering, individual negotiations Avoid windfall gains and market distortions Clear definitions and contracts 29.11.2018

Mainstreaming PPP in Technical Cooperation In addition to special PPP facility, PPPs can also be set up in “regular” official development cooperation Strength: Companies from developing countries are also eligible, PPPs are close to bilateral programmes Weakness: Less “demand oriented” from a business perspective PPPs are strictly bound to focus areas of bilateral programmes funds depend on respective situation planning may take longer 29.11.2018

PPP Challenges How do we scale up? Are we bound to micro-level or can we make a structural impact? Need to create more sector-wide approaches on a multi-stakeholder basis Need to state both, the “business case” and the “development case” How do PPP relate to regular bilateral cooperation? Need for PPP on political level, e.g. contribute to good governance, enabling framework, regulatory impact assessment, fight against corruption, PPD 29.11.2018

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

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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) 29.11.2018

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 29.11.2018

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 29.11.2018