Objectives of the Group
Many donors aspire to have more equal, longer-term and strategic relationships with business in achieving results for the poor, complementing their traditional focus on bilateral work with governments.
The aim of the Private Sector Engagement Working Group is to enhance the ability of donor agency staff to engage with business in this way – based on appropriate operational systems and programming frameworks as well as appropriate staff roles, skills and organisational culture.
The Working Group, established in 2017, is chaired by Tobias Zeller of GIZ.
The OECD has proposed a broad definition of PSE as ‘an activity that aims to engage the private sector for development results, and involves the active participation of the private sector’ (OECD, 2016). The DCED PSE Working Group in its Operational Framework (2019) focuses on two specific PSE strategies:
- Engaging with companies on equal terms to enhance the impact of their core business on the SDGs, e.g. through the joint development and financing of SDG-oriented business models or dialogue platforms on responsible business practices. In contrast, other approaches involving active private sector participation focus more on local business (e.g. MSD) or local business associations and government agencies (e.g. BER), primarily to generate inclusive and sustainable economic opportunities (SDG 8).
- Engaging with the financial sector, to mobilise private finance for development, e.g. through blended finance instruments.
Key achievements of the Group
In addition to the recent products listed below, the Working Group has also organised several webinars and regular peer-learning workshops. Recent topics include One-Stop Online Portals to streamline agencies’ offer to businesses, Results Measurement in PSE, and agency-wide reform initiatives to enable strategic PSE.
- Private Sector Engagement. Synthesis Note, DCED, 2022 (En français, en español).
- Promoting Responsible Business Conduct: A scoping paper for donors supporting Private Sector Engagement, DCED, 2022
- Donor Engagement in Innovative Finance: Opportunities and Obstacles, DCED 2019. Provides a comprehensive introduction to, and overview of, the field.
- Minimising the risk of negative market distortions in PSE. A practical framework, DCED 2018 – reviews how PSE interventions may give rise to three types of negative market distortions and explores four practical solution areas: Designing against and measuring distortions; crowding in other commercial players; involving competition agencies and experts; and publishing information.
- How donors can support strategic private sector engagement. Programming innovations and organizational change, DCED 2017 – including insights from interviews with donor agencies as well as large international NGOs.
- Engaging the private sector through multi-stakeholder platforms, DCED 2017 – based on extensive interviews with DCED members, other platform participants and platform managers; and
- Overview of donor funds and facilities for partnering with business (DCED, 2017).
Current activities of the Group
In 2025, the group is exploring the development of a joint Theory of Change on how PSE is expected to lead to development outcomes alongside partner business benefits. A task team within the group is further interested in how donor agencies can enhance synergies and collaboration with DFIs in mobilising finance. Members are also discussing impacts of the changing geopolitical landscape on their private sector engagement work.