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The 4 Criteria a PPP Needs to Meet

Public Private Partnerships have become a successful instrument in the fight against poverty. I’d like to share four criteria that we believe a PPP should meet.

The 4 Criteria a PPP Needs to Meet

Public Private Partnerships have become a successful instrument in the fight against poverty. Successful PPPs motivate all partners to work outside their comfort zone – to move beyond prejudice and distrust, and find shared objectives. This form of collaboration provides international NGOs, and other partners in PPPs, with many valuable learning points.

I’d like to share four criteria that we believe a PPP should meet.

1.    The project should be scalable

If we want to make a real contribution to decreasing poverty, we need to rise above community level. We need systemic change to make sure that the impact reaches further than the people that were directly targeted. We need to be able to upscale and that is definitely a criterion that is overlooked in many PPPs.

Contributing to systemic change is challenging for PPPs, as project outcomes are context specific and not always replicable beyond the region or country, or outside a specific company. Project partners might focus on how the intervention satisfies their own, short-term needs rather than achieving greater impact. Understandably, many companies are not keen to share their business case or their learnings for fear of losing competitiveness, making it harder for other companies to copy the method in a different region.

We recommend that the funding of PPPs should be conditional on their ability to scale up. This means scalability needs to be taken into account when developing a proposal, to ensure there is a return on investment for the company involved. It also means that knowledge sharing should be more prominent.

2.    Include the poorest of the poor

It is difficult to reach the poorest of the poor using a market-based model. Farmers who are already better equipped are the ones who are able to pay for assets such as quality seeds and planting materials. And the more developed regions provide the best enabling environment – such as education, infrastructure, financial facilities, adequate legislation.  

In our experience, the implementation of a cross subsidy somewhere in the chain contributes to a more inclusive PPP. For example, if private partners pay extra for agricultural produce, this enables underprivileged farmers to buy better – but more expensive – fertilizers and equipment. This in turn benefits the quality of the farmers’ produce, leading to higher income, even for the ‘poorest of the poor’ farmers.

3.   Include local government

Support from local governments and institutions is critical for the success of PPPs. Legislation and regulation concerning land access, natural resources management, and food safety are critical for the successful implementation of PPPs working in the agricultural sector. Besides, the support of local officials is also essential when it comes to scalability (point 1). 

Local governments and institutions are not always optimally involved, as the public partner subsidizing the project could be the Dutch government. A participating institution might be “only” a local university. Including local governments and institutions should thus be one of the criteria when it comes to approving the PPP for funding.

4.  Be clear on the roles and expectations of all partners involved

To reach the targets set it is vital to have the right partners on board. It goes without saying that all partners should have the relevant knowledge and track record. More importantly, however, they must believe that the business case is viable, feasible and sustainable. To show they are serious about it, they have to be willing to put some skin in the game, by investing and by co-developing. They must also be present right from the start and participate fully in the program – and business model development – to ensure relevance and buy-in, and demonstrate commitment. Key is that trust is built between the different partners; something that takes time and personal investment.

It is important to pay close attention to power dynamics, as there is always a risk that these will reinforce pre-existing inequalities. The project manager is key to the success of a PPP. He or she should be able to harness the individual strengths of the partners, and skillfully manage expectations when partners are working together for the first time.

PPPs are hard work, as we have experienced ourselves over the years. There is no blueprint – PPPs always have to be tailored to a specific context. They are not the solution to every development challenge, but they certainly offer the opportunity to think differently about a problem within the context of a certain sector, value chain or service.

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