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Engaging the Private Sector

Engaging the Private Sector. WORLD BANK. Extensive private sector engagement . PPPs: Bank Group trust fund contributions from foundations and corporations small but growing ($218 and $31 million, 2002-8) Global Financial Solutions. Innovative approaches to:

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Engaging the Private Sector

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  1. Engaging the Private Sector WORLD BANK

  2. Extensive private sector engagement • PPPs: Bank Group trust fund contributions from foundations and corporations small but growing ($218 and $31 million, 2002-8) • Global Financial Solutions. Innovative approaches to: • address government and market failures for global public goods • monetize investor willingness to support socially sustainable projects and climate-related initiatives • GEF portfolio: WB secured high levels of cofinancing from private sector – in all focal areas

  3. Innovative financial instruments: Some examples • Leverage private resources from investors and philanthropic organizations to support expanding public spending in developing countries • Facilitate deployment of public resources in ways that reduce the risks of entry in developing country markets (leverage private investment through guarantees, risk sharing facilities, and transactional support for public-private partnerships) • Better manage the costs of crises through ex ante insurance schemes (rather than ex post recovery financing) • Provide incentives for performance and implementation

  4. GEF Earth Fund: WB/CI Platform Engage the private sector in conservation • Streamline product sourcing agreements between companies and communities • Develop conservation partnerships between private sector actors and communities that produce social and environmental results to meet corporate responsibility commitments • Build capacity of SMEs through loan financing -increased participation in product/service supply chains that benefit conservation and economic development

  5. Threats to Biodiversity Financial Tools Patrolling Reforestation Demarcation No hunting No deforestation Teachers salaries Medicines Agricultural services Wages for conservation actions Conservation Agreement Opportunity cost Conservation Actions Benefits

  6. Micro-lending mechanisms model Results for the investors Social results philanthropic Private sector Value from demonstrating social and environmental contributions High biodiversity sites GEF governance strengthened Donor community Environmental results

  7. Verde Ventures model Results for the investors Social results Private sector sourcing Natural product source areas Natural ingredients Traceable supply chains Entrepreneurship fostered GEF Environmental results

  8. Complement conservation agreements with SME investments • CI's Verde Ventures Fund invests in SMEs: provides debt financing of $30,000–$500,000 to strategic businesses that benefit conservation • Verde Ventures business partners also employ over 15,000 local people in 13 countries • Verde Ventures support has helped protect and restore more than 300,000 hectares of habitat

  9. Platform: 3 types of funding • Feasibility analysis grants. 3-9 months, up to $20,000. To assess the feasibility of implementing conservation agreements as a tool for conserving the proposed area. • Grant for implementing conservation agreements. Up to 3 years; up to $500,000. To implement conservation agreements (assessed as viable above) • Non-grant mechanisms, such as loans, guarantees, and others to support streamlining product sourcing agreements and building the capacity of small- and medium-sized enterprises. Used in combination with conservation agreements to ensure conservation outcomes or provision and maintenance of ecosystem services.

  10. SoS – Save our Species WHY BE A BUSINESS PARTNER? • Stand Out in a Competitive Market • Make the Most of a Wealth of Marketing Material • Be at the core of a Highly Credible Project • Gain Significant Visibility • Delegate to SOS -Assurance of Effective use of Funds SUPPORTED BY 8,000 OF THE WORLD BEST EXPERTS • Build on momentum • Protect your logo –Address a specific issue

  11. Lessons Learned for private partnerships • Focus on substance (not on resources)  • Early engagement • Long-term perspective • Senior management involvement • Risk management • Be more “user friendly”

  12. Issues for consideration Role. Private sector as: Level of private sector : International corporations (or foundations) National private sector or SMEs Local community initiatives, NGO, CSO • Recipient of support or funds (beneficiary) • Provider of funds and support (donor) • Provider of expertise (contractor) • Partner - ? • ►Role and support of GEF or Agency? ►Instruments?

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