PPPLab Day: Achieving the potential of PPPs for Transformational Change
On the 30th of November PPPLab organized a full-house session on financing PPPs. In the invitation they promised to ‘Show the money!’ but of course all participants quickly landed with their feet on the floor when ‘the banker’ shouted: ‘Show me the bankable projects!’ and the ‘impact funder’ added: ‘Show me the impact!’ An interesting conversation about balancing risks, returns on investment and impact played out. The Hivos-Triodos Fund was an eye opening example of the fact that blending of grant and commercial money not only allowed a € 75 million revolving fund to be set up for MFIs and SMEs, but also leveraged an additional € 800 million. The fund suffered loss the initial 7 years but Triodos wouldn’t have been this patient if it hadn’t had the complementary funds from Hivos.
A sneak-preview of the PPPLab navigation tool for developing a financing strategy showed that smart combinations of financing resources might be a better way to sustainability & scaling then hopping from grant to grant. In the food security and water sector we need to become better at showing the impact. Impact equals money whether through impact investors that are ready to accept lower return on investment/longer tenors or through philanthropists/donors that are ready to contribute to tangible, proven results.
Creativity and engaging key stakeholders from early stages are needed to leverage additional funding for PPPs. While all players may speak different languages, we have reached a stage in which people understand the need to work together and the need to use each other’s strengths. A positive development compared to a while ago but we aren’t there yet: We need to become more action driven rather instead of getting stuck in lengthy discussions.
Discussions often end in debates on how inclusive a business can be and ethical issues around profit making in the public domain. These are definitely important issues but they shouldn’t paralyze us. To move forward we have to stop expecting others to change their habits to work with us; we need to adapt our own processes to enable working productively together. In blending finance with different risk perceptions that is essential.