Private Sector Engagement Program

Private sector engagement in ODA

The key factor of development is the support of sustainable economic growth, job creation, as well as supporting mobilization of domestic resources and improving business climate in the partner countries of the official development cooperation of the Slovak Republic (ODA SR).

Therefore, the private sector engagement (PSE) is a necessary condition for the success of development activities. It strengthens the socio-economic development of the local population (jobs, capacity building, effective integration into global value chains, availability of basic goods and services) and at the same time, it mobilizes private financial resources to meet the Sustainable Development Goals (SDGs).

The natural interest of Slovak MFEA and SAIDC-SlovakAid is therefore the search for synergies between the development goals of Slovak ODA and the business goals of Slovak companies, especially small and medium-sized enterprises, in developing countries.

PSE Program Goals

In order to effectively engage the private sector in the development cooperation of the Slovak Republic, a special PSE Program (for short PPP in Slovak) has been created, the aim of which is:

to support synergies between the goals of development cooperation of the Slovak Republic and business goals in developing countries;
support the creation of new business partnerships and build the sustainable capacity of local partners;
mobilize private resources to strengthen Slovak development activities;
help Slovak businesses to establish presence in developing countries and facilitate local businesses' access to global value chains;
to strengthen and expand the activities and development impact of Slovak business entities that are already active in developing countries;
to support Slovak companies in the development of their global corporate social responsibility and sustainability strategies with an emphasis on a positive environmental and social impact, and innovative business models, including regenerative approaches.

It follows from the nature and essence of development cooperation that direct export support is excluded from the program. The program is implemented through calls announced by SAIDC for all developing countries as defined by the OECD / DAC and in all sectors. Emphasis is placed on cross-cutting themes - Equal Opportunities, including Gender Equality (SDG5) and Environmental and Climate Protection (SDG13).

Priority will be given to projects that demonstrate the potential for mobilizing private sector financial resources.

The program is subject to the de minimis state aid rules in accordance with the Act of 10 November 2015 on the regulation of certain relations in the field of state aid and minimum aid and on the amendment of certain laws (the State Aid Act) and EU Commission Regulation No. 1407/2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union for de minimis aid.

By obtaining a grant, the Beneficiary may not exceed the maximum limit for the minimum state aid, which is EUR 200,000 per entity for a period of three fiscal years. The beneficiary must also meet the definition of an SME.

Phases of the PSE Program

The program provides support in two phases:

Preparatory phase - preparation of a feasibility study and business plan, including possible testing of prototypes.
Implementation phase - projects involving specific activities aimed at the practical implementation of innovative business ideas contributing to the fulfillment of development goals in the partner country.

Strategic anchoring and principles of effective development cooperation

The medium-term strategy of official development cooperation of the Slovak Republic (ODA SR) for the years 2019-2023 sets out two cross-cutting themes: Equal Opportunities (SDG5) and Environment and Climate Change (SDG13), which need to be integrated into development projects and interventions.

The cross-cutting themes are related to the 2030 Agenda and the achievement of several Sustainable Development Goals (SDGs) and are part of the six sectoral priorities of the medium-term ODA strategy of the Slovak Republic.

The principles of effective development cooperation must be observed in the design and implementation of the project: 1. Inclusive ownership of the recipient country, 2. Focus on results, 3. Inclusive partnerships, 4. Transparency and accountability, 5. Leaving no one behind.

Synergies with concessional export loans provided by Eximbanka

Slovak MFEA and SAMRS cooperate in private sector engagement in ODA with Ministry of Finance and Eximbanka.

Eximbanka's soft (concessional) export loans are another tool for entrepreneurs who want to establish their presence in developing countries. It is an opportunity to provide concessional financing to a foreign customer from the public sector in selected countries.

The credit advantage over the commercial offer is either 35% or 50%, depending on the selected developing country and is determined by OECD conditions. The benefit consists of a contribution to the repayment of part of the loan, lower interest rates and an extended maturity.

Awareness raising and capacity building

Private sector engagement in development activities of the Slovak Republic can be successful only if stakeholders are properly and regularly informed about the possibilities provided by Slovak ODA, international financial institutions and development organizations, as well as EU financial instruments, and are practically supported in this regard.

To this end, the Rozvojmajstri program was launched in 2015 in cooperation with UNDP, aimed at supporting the engagement of Slovak entrepreneurs in public tenders of international financial institutions. At the same time, it supports the understanding of SDGs and the development aspect of business activities. Awareness-raising is also coordinated with business associations and civil society organizations, including Ambrela Platform, in order to address the widest possible range of entities. For this purpose, Slovak MFEA also uses the "Let's do business abroad" portal („Podnikajme v zahraničí“).

Through advanced training, Slovak MFEA increases the capacities of economic diplomats in order to support the activities and development impact of Slovak business entities in developing countries.

Sectoral priorities of previously approved projects in PSE Program

The private sector engagement program is not sector-limited. It has only two cross-cutting themes - Equal Opportunities, including Gender Equality (SDG5) and Environmental and Climate Protection (SDG13).

Frequent sectoral priorities of supported projects of Slovak business entities include:

energy - development, production and distribution of energy from sustainable and renewable sources, energy efficiency of buildings (SDG7);
infrastructure – development of transport, logistics and communication infrastructure (SDG9);
environment - waste management, environmental technologies, protection against natural disasters (SDG13);
hydrogeology, supply, treatment and distribution of drinking water (SDG6);
agriculture - forestry, management of agricultural production (SDG2);
increasing the profitability of agricultural production, building irrigation systems, food security (SDG2);
social infrastructure - activities in the field of education and development of medical facilities (SDG3, SDG4).

Ing. Jakub Šimek
Project and Financial Manager - Private Sector Engagement Program Projects,
EU cofinanced projects and Capacity building
proj.dep@slovakaid.sk
tel.: +421-2-5978-2604