Date post: | 11-Jan-2017 |
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Government & Nonprofit |
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New global Agenda 2030 for sustainable development and SDGs
emphasize partnerships and multistakeholder cooperation
Development aid is not enough. Private sector
engagement enhances development impacts
UN Sustainable Development Goals
International resource flows to developing countries
FDI
Remittances
ODA
Long-term debt
Short-term debt
Role of development finance is
rapidly changing
Agenda 2030 requires huge
resources: Where from?
International resource flows in
relation to the needs of Agenda 2030
Glo
bal n
eed
s o
f all c
ou
ntrie
s
Need
s o
f develo
pin
g c
ou
ntrie
s
Finland’s development aid focuses on
four priority areas
1. The rights and status of women
and girls have been enhanced
3. Societies have become more
democratic and better-functioning
2. Developing countries’ own economies have generated more jobs,
livelihood opportunities and well-being
4. Food security and access to water and
energy have improved and natural resources are used sustainably
Private sector
development
Developing countries’ own economies have
generated more jobs, livelihood opportunities
and well-being
MFA’s private sector instruments
Rapid action Long-term engagement
Str
en
gth
en
ing
exis
tin
g
init
iati
ves
Develo
pin
g
new
in
itia
tives
PIF
BEAM
EEP
FINNFUND
FINN-
PARTNER-
SHIP
BEAM − Business with Impact
Innovations for development program 2015−2019
Basics
Supports development of
innovations, research and
knowledge that improves
the welfare of low-income
people in developing
countries and creates new
and sustainable business
Aim Concretely
New products, services,
technologies, modes of
operations, distribution
channels, social
innovations
Development, piloting and commercialization
Tekes administers
MFA and Tekes finance 25
million € (both 12.5 million
€ ) and applicants finance
25 million €
Fixed-term 2015−2019
BEAM www.tekes.fi/beam
BEAM − Business with Impact
Innovations for development program 2015−2019
For whom?
No sectoral limitations
E.g. education, health,
communications,
renewable energy,
environmental protection
related products and
services
Sectors Criteria
Uses Finnish knowledge
and technology
Program doesn’t
support exports nor
traditional partnerships
Finnish enterprises,
education and research
institutes, civil society
organizations
BEAM encourages to
develop broader ecosystem
involving different partners
in Finland and developing
countries
www.tekes.fi/beam
An example of a BEAM project:
Funzi − mobile learning and information services
Funzi aims at bringing education
to everyone’s reach
Anyone can download Funzi app
for free and receive daily bite-size
lessons on livelihoods and
wellbeing
www.funzi.fi | www.funzi.mobi
www.tekes.fi/beam
Supports sustainable
business in developing
countries through funding
long-term for-profit
business partnerships
between Finnish and
developing-country
organizations
Aim Services
Matchmaking: Identifying and matching of business
partners
Business Partnership Support:
e.g. establishing a subsidiary or joint venture,
subcontracting, importing from a developing country,
other long-term business activity, piloting and
demonstration project of technology or solutions,
vocational education and training, and support services
for a business partnership
Advisory services
Database on developing-country markets
− Supports early phases of a business partnership
www.finnpartnership.fi
For whom?
Applicant can be a Finnish
enterprise or other
business-driven
organization and an
enterprise registered
outside Finland with a
significant Finnish interest
Demand-driven
Sectors
No sectoral limitations
E.g. ICT, agribusiness and
food industry, metal
industry, services,
construction,
manufacturing,
environmental products
Criteria
Support range:
30−85 % of project costs
depending on the size of
applicant and target
country
Max. 400 000 euros /
project
Not available for the actual
investment nor exports
− Supports early phases of a business partnership
www.finnpartnership.fi
For whom? Sectors
No sectoral limitations
E.g. ICT, agribusiness and
food industry, metal
industry, services,
construction,
manufacturing,
environmental products
Criteria
− Supports early phases of a business partnership
www.finnpartnership.fi
Namibia’s biggest waste management company
Rent-A-Drum started the licensed production and
use of Molok’s deep collection systems in
Namibia
Molok was granted Finnpartnership’s Business
Partnership Support for market mapping,
feasibility study, business planning and training
of staff in Namibia
Central target was to create profitable
sustainable business in Namibia and create new
jobs
www.molok.fi
www.finnpartnership.fi
An example of a Finnpartnership project:
Molok − deep collection systems
Basics
Supports economic and
social development in
target countries by
offering long-term risk
finance for profitable
sustainable investment
projects
Aim Sectors
E.g. renewable energy,
financial services,
construction, electronics,
forestry, metal industry,
tourism
75 % “climate projects”
Finnfund is a state-owned
development finance
company
Equity 251 million euros
Portfolio 355 million euros
Self-sustaining (excl.
“special risk finance”)
Capital increases from
ODA
www.finnfund.fi
Services
Commercially viable
projects
Looks for ”Finnish
interest” but not a strict
requirement and
interpreted flexibly
Criteria
• Equity investments
• Risk loans
• Mezzanine finance
• (Guarantees)
• Advisory services
Investments range
between 1−20 million
euros
Projects
• Greenfield projects
• Ongoing business
projects
• Funds
www.finnfund.fi
An example of a Finnfund project:
Lake Turkana Wind Park
Finnfund has invested in Sub-
Saharan Africa’s largest wind
park
Project increases significantly
access to affordable and clean
energy in Kenya
Project also offers direct and
indirect jobs for Kenyans
www.finnfund.fi
Public Sector Investment Facility (PIF) – Funding for developing-country public investments
formin.finland.fi/investmentfacility www.finnvera.fi
Supports economically
viable but commercially
non-viable public sector
investments in developing
countries
• LMIC + LDC/LIC
• Meet principles of
sustainable lending
• No HIPC/MIDR
• Can access Finnvera’s
guarantee
E.g. Vietnam, Kenya, Egypt,
Philippines, Honduras,
maybe Tanzania, Ethiopia
Aim Actors
• Public sector entity
• Finnish enterprise
• MFA
• Finnvera
• Financial institution in
EEA
Countries Basics • Mixed export credit instrument
• Tied aid
Finland’s development policy program
Uses Finnish equipment, technology,
expertise and services
Procurement according to legislation in
developing countries
Eligible for export credit
Eligible for Finnvera’s guarantee
• (Commercial loan)
• Interest subsidy
• Guarantee subsidy
Grant equivalent (45 % LIC, 15 % LMIC)
Projects (subsidy) ranging between
2−30 million euros
MFA and a developing country
cofinance the project
Criteria Funding
Public Sector Investment Facility (PIF) – Funding for developing-country public investments
formin.finland.fi/investmentfacility www.finnvera.fi
Kriteerit
Original concessional
credit project
Kenya Power and
Lighting Co. Ltd (KPLC)
ABB Finland Oy
24 million euros
formin.finland.fi/investmentfacility www.finnvera.fi
An example of a potential PIF project:
Kenya Power’s Juja Station − concessional credit project
Financial support from MFA’s fixed-term private sector & innovation programs
Challenge funds
TANZIS − Support to
Tanzanian Innovation
System
Cooperation with Slush
in 2014; 2015, 2016
Startup entrepreneurs’
bootcamp and Slush
S
Global Impact Accelerator 2016
Responsible business conduct
Finland encourages the enterprises to contribute to
sustainable development in a responsible manner
Responsibility makes good
business!
Human Rights Based Approach to
Development (HRBA)
• HRBA in all development cooperation
• Based on international human rights treaties
and obligations
Private sector instruments funded projects
have HRBA obligations
Human rights due diligence
Possible remedy and compensation
Commitment to UNGP and UN Global Compact’s
principles
International guidelines and initiatives
The key elements of responsible business conduct:
United Nations Guiding Principles on
Business and Human Rights
OECD Guidelines for Multinational
Enterprises
United Nations Global Compact
ISO 26000 standard
ILO Declaration on Fundamental Principles
and Rights at Work
Business in humanitarian and
crisis situations
Humanitarian assistance, reconstruction and disaster risk reduction require
innovative, technology-focused and holistic solutions in various sectors:
Shelter & housing, water & sanitation, hygiene, education, health, logistics, warehousing, fuels, ICT, energy etc.
International organizations procure annually goods
and services for more than 100 billion USD
UNITED NATIONS
Funds, programs & special agencies:
UN procurement 2015:
17.5 billion USD
INTERNATIONAL FINANCE
INSTITUTIONS
World Bank procurement
2015: 7,6 billion USD
$ 10 million
$ 0,045 million
$ 7,9 million $ 565 million