Public-Private Partnerships The PPP-Concept of GTZ

1. Public-Private Partnerships • The PPP-Concept of GTZ Working Group „Cooperation with German/European Private Business Sector“ Cairo, April 5th 2006 Nadja Steffens, PPP-MENA

2. FDI and ODA in development countries in billion US $ 200 FDI ODA 150 100 50 0 2004 1993 1999 2002 1990 1996 • Background (1) – private companies shaping development • Globalization: ongoing expansion of international production and service networks • FDI twice as high as ODA

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

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. 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. Special funds provided by BMZ  innovative projects  as incentive to test the instrument • Only German / European companies! • GTZ: max 200.000 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. 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. … 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 • 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. 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 ConsultingContract • 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)