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), the Sustainable Water Fund (FDW) and the SDG Partnership Facility.
- The Dutch Good Growth Fund (DGGF), which provide financing for Dutch small and medium enterprises.
Role of ESIA
Some of these facilities are managed and implemented by the Netherlands Enterprise Agency (RVO), others by Invest International. 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 success of these facilities that the ESIAs undertaken meet good practice standards:
- Any environmental and social risks of the projects financed need to be identified and carefully managed.
- 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.
- 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).
Role of the NCEA?
To ensure that ESIA is applied effectively to its various projects, the different facilities have been making use of the NCEA advisory services since 2009. The NCEA:
- Screens project proposals against the national ESIA regulations and the IFC performance standards.
- Provides advice on specific ESIAs for projects under consideration for financing.
The RVO and Invest International work with the NCEA because our 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 or Invest International, the NCEA can make a definitive statement on the quality from a neutral and credible position. Continuity and partnership is also important. Over the years the NCEA and RVO and Invest International 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.