Private sources now represent nearly 90 percent of financial flows to developing countries. The private sector creates nine out of ten jobs in the developing world and provides an important pathway for partner countries to achieve self-reliance. It is also the driving force behind many new innovations that help solve development problems. To foster greater collaboration between USAID and the private sector to advance development, USAID officially launched its new Private Sector Engagement (PSE) policy in December 2018.
In Peru, USAID has a long history of partnering with the private sector to implement enduring solutions that help address some of the most complex development challenges. The launch of the PSE policy helps USAID pivot closer to unleashing the power of the private sector to achieve shared development objectives. USAID/Peru endeavors to create new and build on existing partnerships that further common priorities across multiple sectors. Promoting sustainable forest management and green businesses that balance economic growth with biodiversity conservation is paramount for successful PSE. In rural economies once dominated by coca cultivation, USAID’s successful track record in harnessing private sector interests and resources in remote and underserved areas is bolstered by joint investment in improved governance. USAID/Peru will pursue other opportunities to partner with the private sector as it implements its new five-year strategy, 2020-2025.
MOBILIZING PRIVATE INVESTMENT FOR ALTERNATIVE DEVELOPMENT
Mobilizing Private Investment for Alternative Development in Peru is USAID/Peru’s buy-in to USAID/Washington’s global blended finance mechanism CATALYZE. This activity is designed to complement and build on the existing robust alternative development portfolio of private sector alliances and public sector institutional strengthening activities. In three years, CATALYZE-Peru seeks to crowd in around $110million in new investments in the portfolio, including, but not limited to, the Coffee, Cacao and Digital Alliances.
Total Project Investment: USAID $15 million - Partners TBD
Duration: June 2020 – December 2023
COFFEE ALLIANCE FOR EXCELLENCE
The Coffee Alliance for Excellence (CAFE) is a public-private partnership that seeks to increase the income of smallholder coffee farmers so that they need not resort to drug cultivation for economic survival. Between 2017 and 2019, CAFE facilitated $31 million in gross sales, brokered the sale of 4,367 tons of coffee, valued at $9.3 million, with 7,872 families participating in the Alliance activities.
IMPLEMENTER: TechnoServe, Inc.
PARTNERS: Jacob Douwe Egberts (JDE), Perales Huancaruna S.A.C (Perhusa), Olam, World Coffee Research (WCR), International Potato Center (CIP)
Total Project Investment: USAID $11,225,896 - Partners $1,700,000
Duration: October 2, 2017 - October 2, 2022
Limited access to digital and financial services in rural Peru increases isolation and constrains economic development. USAID and private sector partners are working together through the CR3CE Alliance to reduce this isolation through internet connectivity and private financing access for 100 communities in the central Peruvian jungle.
PARTNERS: Yachay, Cisco, Microfinanzas Prisma, Caja Los Andes, Financiera Confianza and MiBanco Total Project Investment: USAID $10 million - Partners $21,957,021
Duration: December 15, 2017 – December 14, 2022
PERU CACAO ALLIANCE
The Peru Cacao Alliance is an innovative public-private partnership that lifts 24,000 rural families out of poverty and integrates them into the licit economy through cacao cultivation. Between 2012 and 2016 the Peru Cacao Alliance installed more than 28,000 hectares of cacao, incentivizing 17,000 smallholder farmers to leave illicit crops and choose alternative crops such as cacao. Through the Alliance, USAID and a number of private companies –including agricultural suppliers like NaanDanJain and Yara, and cacao buyers like ICAM and Romex-- help increase farmer productivity and promote private investment.
IMPLEMENTER: Palladium International
Total Project Investment: USAID $29,971,443 - Partners $65,255,673
Duration: September 1, 2016 – August 31, 2022
AMAZON BUSINESS ALLIANCE (ABA)
The new ABA platform will accelerate future investment in sustainable development and conservation in the Peruvian Amazon. USAID provided $10 million to launch a partnership joining Conservation International and the BHP Foundation in seeding a $20 million investment facility. The facility will seek to crowd in an additional $50 - $100 million from the private sector. Over five years, ABA expects to create 100 “green” businesses that promote the sustainable use of natural ecosystems, limit deforestation and forest degradation, and restore degraded ecosystems, while improving local community livelihoods.
IMPLEMENTER: Conservation International Foundation
Total Project Investment: USAID $10 million - Partners $10 million
Duration: September 2020 – August 2025
THE PREVENT PROJECT
PREVENT works with the Government of Peru and civil society to improve the enabling conditions to deter and combat environmental crimes, thereby reducing their negative impact within and around protected areas, especially forests and indigenous lands. PREVENT promotes active participation from civil society, media, activists and the business sector to strengthen advocacy and information dissemination. Private sector partners will be engaged to reduce demand in illegal commodity exploitation and help incentivize legally sourced gold with social and environmental safeguards, including with support from grants provided through PREVENT’s Innovation Fund.
IMPLEMENTER: DAI (Development Associates International)
PARTNERS: Asociación para la Conservación de la Cuenca Amazónica (ACCA), Derecho, Ambiente y Recursos Naturales (DAR), and the Environmental Law Institute (ELI)
Total Project Investment: USAID $20,934,000 - NORAD $3 million
Duration: September 2019 – September 2024
THE FOREST ALLIANCE
Every year 150,000 hectares of forest is destroyed in the Peruvian Amazon from agriculture, infrastructure construction and cattle ranching. Peru’s indigenous communities are one of the largest Amazonian land holders and manage a significant portion of the Amazon forests. The Forest Alliance supports indigenous communities in the Ucayali region to conserve and manage their forested lands under an innovative model with the private sector. The model generates revenues for indigenous peoples through a REDD+ mechanism and a diversity of sustainable economic activities based on forest products. In partnership with a social impact investor, the Forest Alliance is poised to put forth a sustainable business structure with far reaching benefits for indigenous and native communities.
IMPLEMENTING PARTNER: Asociación para la Investigación y el Desarrollo Integral AIDER
LEVERAGE PARTNER: Mirova Natural Capital (MNC) Fund
Total Project Investment: USAID $3.5 million - Partners $3.5 million
Duration: March 2019 – March 2024
CENTER FOR AMAZONIAN SCIENTIFIC INNOVATION, ALLIANCE FOR SCIENCE AND ECOSYSTEM RECOVERY (CINCIA-ACIERTA)
CINCIA-ACIERTA leverages alliances with U.S. and Peruvian academic and research institutions to develop transformative solutions that promote sustainable development, combat environmental destruction caused by alluvial gold mining, and improve human health in the Madre de Dios and Loreto, the most ecologically diverse and threatened regions in the world. CINCIA-ACIERTA collaborates with researchers from over 15 domestic and international institutions while leveraging support from private sector partners, including the geospatial mapping company Esri, Skytruth and Descartes Lab.
Total Project Investment: USAID $8.8 million - Partners TBD
Duration: June 2021 - May 2026
USAID’s Pro-Bosques forestry technical assistance program seeks to improve private sector engagement in forest sector activities to build a legal, profitable and sustainable forestry market, while reducing deforestation rates and illegal logging in the Amazon regions of Loreto, Ucayali and Madre de Dios. Assistance to forest title holders and forest sawmills helps increase sustainability, legality, inclusivity, and profitability of forest timber enterprises in priority regions. Pro-Bosques helps forestry companies to access services of Procompite, a Peruvian Government financing initiative, to expand their timber and other wood products business plans. The project also supports Peru’s National Forest Service, the national network of Forestry CITE (Center of Technology Innovation), and the three target regional governments, to increase the local- and legally-sourced timber market.
IMPLEMENTER: Tetra Tech ARD
PARTNER: Norwegian Agency for Development Cooperation (NORAD)
Total Project Investment: USAID $23 million – NORAD $2 million
Duration: September 2018 - September 2023
AMAZON INDIGENOUS RIGHTS AND RESOURCES
The Amazon Indigenous Rights and Resources (AIRR) activity seeks to empower indigenous peoples across multiple Amazon countries to better exercise their rights in the face of large-scale infrastructure development and extractive activities that may affect their livelihoods. The activity aims to incorporate the rights and interests of indigenous peoples into public and private sector development planning to balance human welfare and environmental conservation. In particular, AIRR invests in community enterprises defined by local entrepreneurs that empower access to quality jobs.
IMPLEMENTER: World Wide Fund for Nature/World Wildlife Fund (WWF)
PARTNERS: All in for Development, NESsT, Derecho Ambiente y Recursos Naturales (DAR), Coordinator of the Indigenous Organizations of the Amazon Basin (COICA), Coordenação das Organizações Indígenas da Amazônia Brasileira (COIAB), Interethnic Association for the Development of the Peruvian Rainforest (AIDESEP), Operação Amazônia Nativa (OPAN), Organization of Indigenous Peoples from the Colombian Amazon (OPIAC), Indigenous Zonal Organization of Putumayo (OZIP), Instituto Centro de Vida (ICV), Instituto de Pesquisa Ambiental da Amazônia (IPAM), Operação Amazônia Nativa (OPAN).
Total Project Investment: USAID $17.9 million - Partners TBD
Duration: August 2019 – August 2024
INNOVATING SOLUTIONS FOR GOLD MINING IN THE AMAZON
Illegal gold mining in rivers and floodplains in the Amazon is an important driver of deforestation and ecosystem-wide negative impacts, including toxic mercury poisoning of people, water, and food sources. To help artisanal, small-scale and informal gold mining become more environmentally responsible and socially equitable in Amazon priority countries, USAID and Conservation X Labs will use a Grand Challenge model to engage the private sector in the development and implementation of targeted innovations. Awardees will show how the innovation will help reduce threats to biodiversity and demonstrate demand, a customer base, and a plan to ensure financial stability and sustainability for the innovation to reduce artisanal mining.
IMPLEMENTER: Conservation X Labs
Total Project Investment: USAID $2,252,265
LEVERAGE: $5.5 million - Gordon and Betty Moore Foundation ($3.325 million), ESRI ($1.845 million) and Microsoft ($360,000)
Duration: July 2020 – July 2022
COMPANIES TRANSFORMING PERU: INCREASING COMPETITIVENESS THROUGH CORPORATE PURPOSE
This activity seeks to support the Peruvian Institute of Business Administration (IPAE) Asociación Empresarial to train executives to not simply engage in corporate philanthropy, but to focus on social problems as core business opportunities. Such an approach yields societal benefits in the direct pursuit of profits. Businesses that pioneer new strategies and markets by addressing Peru’s development challenges will be recognized annually in a list of companies that are transforming Peru. IPAE Asociación Empresarial’s media partners will communicate the Shared Value principles and publicize awardees in order to build awareness and expand the community of companies driving social change.
IMPLEMENTER: Peruvian Institute of Business Administration (IPAE) Asociación Empresarial, supported by the Peruvian Frieda & Manuel Delgado Parker Association (AFMDP)
Total Project Investment: USAID $400,000 - Partners $1,174,000
Duration: November 2020 – November 2024
SUSTAINABLE MANAGEMENT OF FOREST CONCESSIONS
USAID is partnering with Green Gold Forestry to transition their business model from low-impact timber harvesting to a carbon sequestration and carbon credit sales model across 206,000 hectares of Amazonian rainforest. This partnership promotes improved forest management, climate change mitigation, and development of multiple sustainable products in partnership with private companies such as Frutama and local communities through NGO partners such as Derecho, Ambiente, y Recursos Naturales (DAR) and Centro para el Desarrollo del Indígena Amazónica (CEDIA). More broadly, it represents a new business model for the Amazon, which could demonstrate a profitable alternative approach for timber companies managing forest concessions in areas that are difficult to access or that lack large quantities of high-value timber stocks.
Total Project Investment: USAID $3,700,000 - Partners $1,400,000
Duration: March 2021 - March 2024
PERUVIAN COFFEE AND QUINOA DEVELOPMENT
In early January 2022, USAID/Peru signed a five-year, $5 million cooperative agreement with OLAM Agro Peru S.A.C. This “Peruvian Coffee and Quinoa Development” activity will improve extension services and access to digital technologies for 1,350 Peruvian quinoa and coffee farmers. It will help smallholder farm families in Junin, Ayacucho, and Apurimac regions increase productivity and improve product quality so they can remain competitive despite international price volatility, thus increasing their incomes and motivating them to continue to pursue licit livelihoods in coca-producing areas.