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"We should…strive to widen the funnel of ideas and resources that are channeled towards delivering development outcomes, by bringing new and nontraditional partners to the table as part of our collaborative efforts. We should embrace greater private sector engagement in development, and identify new ways to harness the skills, technologies and innovations that companies large and small can bring to bear” - USAID Administrator Rajiv Shah
USAID can engage with businesses through:
Global Presence and Industry/Regional Knowledge. With offices, known as USAID missions, in more than 80 countries around the world, one of USAID’s strongest resources is its extensive knowledge of local country conditions and in-country contacts. Our missions can be an invaluable resource for identifying opportunities and understanding the local business environment, culture and practices.
Partnerships and Parallel Programming. USAID supports formal and informal partnerships with companies, which may entail using USAID resources in ways that can support your venture. We can build partnerships through our Global Partnerships Division and through our Feed the Future Private Sector Engagement Hub. And for companies with promising agricultural technologies that can help smallholder farmers, Feed the Future Partnering for Innovation provides grants.
Financing and Guarantees. In selected circumstances, we may be able to provide financing and risk mitigation. USAID’s Development Credit Office supports the use of partial credit guarantees to mobilize local financing in developing countries. Guarantee agreements encourage private lenders to extend financing to underserved borrowers in new sectors and regions. Our Development Innovations Ventures Division provides small grants to identify development solutions. Grand Challenges for Development offers awards and prizes to encourage new approaches to development challenges. The African Agricultural Capital Fund invests in companies that will raise farm productivity in East Africa.
The specific steps required for commercial enterprises to engage with USAID differ widely depending on the nature of the engagement. In the case where ongoing grant and credit programs exist (e.g., Development Innovations Ventures and the Africa Agricultural Capital Fund), funds can be mobilized for participating companies relatively quickly. When support programs have to be developed for specific partnership between a company and USAID, the timing can be long, on the order of months.
|Engineering Global Growth (EGG), a start-up company in Tanzania, provides electricity services to farmers without access to electrical grid connections. From one solar-powered, and three on-grid stations, it charges batteries for customer use and replaces spent batteries with charged batteries at convenient depots. It also installs wiring, lighting fixtures, bulbs and switches for customers. Service charges cover expenses and provide for the expansion of services. USAID provided a $100,000 Development Innovation Venture Grant to conduct a feasibility study to help EGG prove it had a commercially viable project. With the study, EGG was able to roll out its franchising model. Customers now praise EGG services for its reliable clean power, increased security, the light for reading, and enhanced business opportunities.|
Last updated: June 05, 2013