Private Sector Development

Dutch policy - Aid for Trade

In its current policy on development cooperation, the Dutch government emphasises the need to focus not only on aid but also, and increasingly, on trade. As a result, more international cooperation resources are allocated to facilities that finance public and private sector or joint public –private partnership projects in developing countries and emerging markets. These Private Sector Development (PSD) instruments include:

  • Two facilities for development of public infrastructure:  Develop2Build (D2B) and DRIVE. The third infrastructure facility, ORIO, has been closed for new applications, but approval and monitoring processes for projects that have already been accepted are still ongoing;
  • Facilities for Sustainable Entrepreneurship and Food Security (FDOV) and the Sustainable Water Fund (FDW); Both facilities are closed for new applications.
  • The Dutch Good Growth Fund (DGGF), which provide financing for Dutch small and medium enterprises.  

Role of ESIA

All of these facilities are managed and implemented by the Netherlands Enterprise Agency (RVO), and are open to investments in up to 68 countries. For many projects, if not most, an ESIA will be undertaken. Often ESIA is obligatory according to the legislation of the country where the project will be implemented. But ESIA is also central to the IFC Performance Standards, which are an important benchmark for the above mentioned facilities.

There are three reasons why it is important for the succes of these facilities that the ESIAs undertaken meet good practice standards:

  1. Any environmental and social risks of the projects financed need to be identified and carefully managed.
  2. The ESIAs should identify opportunities for improved environmental and social performance of a project, to help maximise the project’s contribution to sustainable economic growth. 
  3. The ESIA processes need to be transparent and inclusive. This means that affected parties (local communities) should be engaged in an ESIA process and their concerns appropriately responded to. Attention for affected communities include the engagement of vulnerable groups, as these are often underrepresented (for example people without official land titles). 

To ensure that ESIA is applied effectively to its various projects, the RVO has been making use of the NCEA advisory services since 2009. 

Role of the NCEA?

The RVO relies on the NCEA for ESIA advice because the NCEA's in-house database of country ESIA regulations is comprehensive, and not available anywhere else in the Netherlands. In addition, there are no conflicts of interest that may compromise the independent nature of the advice. The NCEA never has a direct stake in any of the proposals submitted under the facilities. When there is concern about the quality of an ESIA, whether inside or outside the RVO, the NCEA can make a definitive statement on the quality from a neutral and credible position. Continuity and partnership is also important to the RVO. Over the years the NCEA and RVO staff have been able to jointly explore how ESIA fits best into the project development and approval processes. This has led to a good understanding amongst the NCEA staff of the dynamics of the different facilities, and consequently more tailored advice.