The private sector plays an increasingly important role in development. Private enterprise, investment and innovation are important drivers of productivity and therefore of economic growth and job creation.
In the 2015 Addis Ababa Action Agenda on finance and development, the countries undertook to develop "policies and, if required, to strengthen regulations to align private sector incentives better with public objectives, in particular measures that incentivise the private sector to adopt long-term viable practices, and policies that encourage quality long-term investments". Especially as "the States must take measures to create favourable conditions, at all levels, and the necessary regulatory framework to encourage enterprise and the dynamism of the corporate sector" (paragraphs 35 and 36).
The importance of the private sector was reiterated in the 2030 Agenda for Sustainable Development adopted on 25 September 2015. The 2030 Agenda explicitly promotes "public-private partnerships bringing together governments, […] the private sector […] and other interested participants and mobilising all available resources" (paragraph 17.17).
The EU Council also recognises the role of the private sector in implementing the 2030 Agenda Sustainable Development, within the framework of the revision of the European consensus on development. In the conclusions of the Council meeting of 12 May 2016, ministers emphasised the importance of encouraging private sector investment, in particular by making better use of official development assistance and public finance to ensure sustainable and inclusive growth and to create employment in developing countries.
Luxembourg, having played an active role in finalising the aforementioned texts, includes the private sector in development cooperation in different forms, such as supporting company creation, even micro companies, in its partner countries. Luxembourg encourages the Luxembourg private sector to become involved in its partner countries by organising economic missions, such as those to Senegal or in Ethiopia (January 2016), and through other new mechanisms such as the Business Partnership Facility.
Business Partnership Facility
The Business Partnership Facility (BPF) was created in 2016 to encourage the Luxembourg and European private sector to join partners in developing countries to set up sustainable commercial projects. The BPF's goal is to contribute to sustainable development and inclusive growth in developing countries, and to forge innovative and mutually beneficial partnerships between Luxembourg or European companies and actors in the South. The facility has an annual budget of one million euros and, cofinances, in the form of a grant, up to 50% of the project, but without exceeding the threshold of 200,000 euros. The eligible sectors are: i) information and communication technologies (ICT); ii) Biohealth; iii) fintech, iv) eco-innovation/circular economy, and v) logistics.
You will find more information on the Business Partnership Facility by clicking here.