Empowering the private sector to drive economic growth can be a powerful force for strengthening communities and accelerating self-reliance. Private Sector Engagement (PSE) is a strategic approach to international development through which USAID consults, strategizes, aligns, and collaborates with the private sector for greater scale, sustainability, and effectiveness of development or humanitarian outcomes. The private sector can also be a critical partner in reducing greenhouse gas emissions, adaptation to build resilience to climate change impacts, and managing natural resources.
Many private-sector actors want to use their expertise and capital to support sustainable business and development goals. The private sector creates nine out of ten jobs in the developing world and provides an important pathway to self-reliance. USAID’s new Private Sector Engagement Policy is a call to action to expand work with the private sector to design and deliver development and humanitarian programs across all sectors. This policy signals a shift toward enterprise-driven development as a sustainable way to empower people, communities, and countries for self-reliance. PSE is not a new initiative for USAID, but the new policy will change how programs are designed, implemented, monitored, and evaluated.
USAID has promoted PSE in clean energy through the Power Africa, Asia Enhancing Development and Growth Through Energy (EDGE) and the America Crece initiatives. USAID has also developed partnerships with the National Renewable Energy Laboratory (NREL) and the Climate Economic Analysis, Development, Investment, and Resilience (CEADIR) Activity to support clean energy. Examples include work to mobilize private sector investment, provide training in mini-grid development, and promote renewable energy auctions.
USAID’s sustainable landscapes activities are reducing deforestation and forest degradation by providing financing through loan guarantees for the Althelia Climate Fund and the Brazil Biodiversity Fund. USAID helped establish the Tropical Forest Alliance to obtain corporate commitments to reduce deforestation in the supply chains of major companies, initially for beef, palm oil, pulp and paper, soybeans and later cocoa and coffee. The USAID-funded Productive Landscapes (ProLand) Activity includes work to reduce deforestation through commodity chain transformation and market system approaches to catalyze economic growth. USAID has worked with IBM to integrate Big Data into transboundary water management. USAID’s Water, Sanitation, and Hygiene Finance (WASH-FIN) provides technical assistance and services to help municipalities and water and sanitation service providers mobilize greater financial resources for improved service delivery.
In May, Climatelinks is focusing on private sector engagement and climate change. A selection of ongoing activities, as well as current blogs, resources, and tools, can be found below.
BLOGS:
The Hunt for Private Sector Approaches to Reduce Deforestation in the Democratic Republic of the Congo: Part 1 – Why is it so challenging? and Part 2 – What can be done to address the challenges? These blogs contain ProLand's recommendations for overcoming barriers to promoting alternatives to forest product overexploitation through market system approaches and private sector partnerships.
Scaling Climate Finance for Sustainable Landscapes through Private-Public Dialogue captures takeaways from a workshop on private investment in climate-smart commodity production in Southeast Asia.
The Role of Public-Private Partnerships in Delivering Climate Information Services in Africa describes how public-private partnerships can advance hydrometeorological information services in Sub-Saharan Africa.
RESOURCES:
Spotlight Series: Learning Agenda on Climate Services: Private Sector Solutions for Climate Services captures learning highlights, challenges and solutions for the private sector in providing climate and weather information services in Africa.
Local Governance and Private Sector Opportunities for Climate Adaptation Sustainable Livelihoods and Biodiversity in Madagascar includes an assessment and training and technical assistance on climate adaptation, opportunities for improving local governance, and expanding private sector engagement and financing, with links to workshop presentations.
The Emerging Markets for U.S. Smart Grid Suppliers and Investors Forum built on the Renewable Energy and Smart Grid Suppliers Forum. Both events obtained insights from private suppliers of renewable energy, smart grids, and energy storage products and services in developing countries as well as sources of financing and U.S. government assistance.
Enabling Private Sector Clean Energy Investment in Southeast and South Asia presents findings and recommendations from a workshop with private sector and government representatives on opportunities to scale up clean energy investment in the region.
A Climate Bond Road Map for Agrobanco in Peru describes the steps in developing a climate bond from pre-issuance to post-closing and the guidelines for issuing green bonds.
ProLand - Assessment of Private Sector Approaches to Achieving Conservation Objectives in CARPE - USAID/DRC discusses how private sector actors, activities, and public- private partnerships (PPPs) can contribute to rural economic growth and conservation on a large scale in the Democratic Republic of the Congo.
Convening Private Sector Investment in Climate-Smart Commodity Production in Southeast Asia includes recommendations for promoting private, climate-smart investment in key agricultural and forestry value chains.
TOOLS:
The Clean Energy Lending Toolkit contains diagnostics, procedures, and case studies to help commercial banks assess the profitability of renewable energy and energy efficiency lending to households and commercial and institutional clients as well as manufacturers and installers. The toolkit is also available in French and Spanish.
The climate services Financial Planning Tool helps national meteorological and hydrological services understand existing resource gaps, advocate for adequate public sector resources, and create a strategy to earn additional revenue, including from the public sector.
Climate Risk Screening and Management Tools (also available in Spanish) USAID’s tools to identify climate risks and mitigation measures includes the Economic Growth Annex, alongside other sector-specific annexes. The annex provides illustrative questions and examples designed to help users think through risks, opportunities, and climate risk management options.
Isabela Barriga
Isabela es gerente de redes sociales y coordinadora de contenido para Climatelinks a través del proyecto SEEK de USAID. Ella ayuda con la gestión de la información, la investigación y la redacción de blogs. Anteriormente, Isabela brindó apoyo de comunicación y gestión de contenido a organizaciones intergubernamentales, asociaciones público-privadas y misiones diplomáticas, incluidas las Naciones Unidas, GAVI (actualmente, la Alianza de Vacunas) y la Embajada de Ecuador. Isabela tiene un B.S. en Salud Pública y estudios completos en Desarrollo Internacional y Gestión de Conflictos (Universidad de Maryland, College Park).
Eric Hyman
Dr. Eric Hyman is an Economist in the USAID Economic Growth, Education, and Environment Bureau’s Economic Policy Office. Dr. Hyman was previously Economist and Environmental Officer at the U.S. African Development Foundation and Chief of Program Evaluation at EnterpriseWorks Worldwide/Appropriate Technology International. He has a Ph.D and M.R.P in Environmental Planning from the University of North Carolina at Chapel Hill and a B.A. in Economics and Environmental Science from the University of Virginia.
