“Flash blending” development finance: how to make aid donor–private sector partnerships help meet the SDGs

Abstract

Aid donors, development advocates, and finance experts increasingly look to the private sector to fill the estimated $2.5 trillion annual Sustainable Development Goals financing gap, an amount likely to increase due to effects of COVID-19. Donors use a variety of partnerships with the private sector to realise development objectives. We use the term donor-private partnerships (DPPs) to describe the broad range of arrangements between donors and private-sector actors. Using ODA to leverage private finance, innovation testing, or service delivery, modalities include blended finance, de-risking instruments, publicprivate partnerships, and more. Does the reality match donors' enthusiastic rhetoric? There are success stories but civil society actors and others question whether private-sector engagement in development reduces poverty and inequality, advances gender justice, and achieves environmental sustainability. There may be trade-offs between development and profit making. We present our research based on frameworks we developed to categorise and assess DPPs. We applied these to 20 partnerships involving nine donors and found that donors fail to sufficiently integrate development, human rights, and environmental standards. They inconsistently implement due diligence and risk management requirements, and impact assessments are inadequate. Our frameworks offer practitioners and academics valuable tools to examine how DPPs can advance sustainable development.

A critical review of public–private partnerships in the COVID-19 pandemic: key themes and future research agenda

“…At the height of the pandemic, another concern has risen up among academics and practitioners relating to the sustainability of the current PPP projects (Cohen et al. , 2021; Strasser et al.…”

“…Moreover, a green building fund protects against biodiversity loss, climate change and extreme carbon emissions. Green financing arrangements between private financiers and the state has been encouraged to sponsor green buildings and projects to achieve the United Nation's Sustainable Development Goals (Cohen et al. , 2021).…”

“…4.2.7 Sustainability in PPP arrangements. At the height of the pandemic, another concern has risen up among academics and practitioners relating to the sustainability of the current PPP projects (Cohen et al, 2021;Strasser et al, 2021). Sustainability is summarised as activities that satisfy immediate needs with comprising the resources for future generations.…”

“…Moreover, a green building fund protects against biodiversity loss, climate change and extreme carbon emissions. Green financing arrangements between private financiers and the state has been encouraged to sponsor green buildings and projects to achieve the United Nation's Sustainable Development Goals (Cohen et al, 2021). Evidently, Hasan et al (2021) mentioned the need to embrace green finance in COVID-19 recovery measures of PPP projects because it is socially responsible investment solution.…”

Addressing global health challenges requires harmonised and innovative approaches to the development assistance for health

“…However, while the private sector is expected to provide additional financing, services and knowledge, DAH via PPPs is not yet a much matured mechanism. Concerns have been raised regarding process oversight and outcome assurance in relation to such partnerships, seeing the private sector is not always bound by effectiveness principles, including ownership, results orientation, transparency and accountability, and given its profit-seeking nature service affordability is not always guaranteed for low-income groups 5 6. Hence, stakeholders are faced with the challenge of establishing and implementing a holistic mechanism that enables cooperation, regulation and results monitoring of DAH via PPPs.…”