Sub-principle 1.C

Invest in capacities for PSE through development co-operation


Why is this important?


Projects and programmes involving the private sector as an implementation and/or funding partner are less likely to produce desired impacts if they lack adequate and sustained investments in capacity development both at their development partners’ headquarters and in their embassies at country level (heads of co-operation, technical staff). Ensuring that individual staff and teams have the necessary training and skills to effectively implement activities together with the private sector and throughout the project cycle is integral to success. This also means learning how to identify whether private sector solutions are best suited to achieve development outcomes; communicate and partner with the private sector; and help local stakeholders acquire the necessary skills that can be sustained in the long term independently of individual development co-operation projects. Sharing best practices and supporting partner country capacity-building processes are important means towards these objectives, as these help scale public-private engagement and thus offer vital spillover effects into other target contexts, populations and sectors. A major emphasis should also be placed on identifying and providing appropriate training to actors with multiplying effects, notably within local and regional governments; among local business associations; and in MSMEs, including those in the informal sector.

Self-reflection questions
Discover Tool
Policy Level Project Level
  • Has your government or organisation identified which skills you already have and which you are lacking to lead your private sector engagement (PSE)? 
  • Do you have a dedicated budget to train your staff (at headquarters and at country level) and contracted personnel that covers key skills and helps with cultural change that may be needed?
  • Do you have a systematic process in place to recruit PSE experts, and strengthen such expertise locally, within embassies, without depending on consultants? 
  • Do you provide training to local stakeholders to develop their longer term capacity and establish them as capable partners in PSE partnerships and projects?
  • Are there PSE guidelines in place for staff and other stakeholders to design, implement and assess partnerships with the private sector, including due diligence processes?
  • Do your country programmes provide budget or in-kind support for training and capacity building of local actors, including governments (national and subnational), the private sector and civil society? Do such offers include easy-to-access formats (roundtables, video training, etc.) and easy-to-understand resources (local language, etc.)?
  • Do your projects assess capacity and training needs in the design phase to identify and proactively address any gaps of private sector players and other partners?
  •  Do your projects have dedicated and long-term resources for building the capacity of your project partners and contracted intermediaries?
  • Do your projects offer training and capacity support before, during and after the project for the local private sector and civil society organisations to engage with your government or organisation in projects? 
  • Do your projects acknowledge and offer different types of capacity-building support according to different contexts (e.g. in fragile and conflict-affected states?)

Actions to consider
Discover Tool
Policy Level Project Level
  • Develop specialised programmes to provide training and technical support to staff and contractors both at headquarters and in the partner country. In doing so, make sure to provide the right resources and training to the right individuals to limit the need for knowledge transfer.
  • Develop or make available problem solving tools that can be used across institutions and are easily available to staff (e.g. dedicated training sessions and workshops, guidance material, case studies, effective knowledge- sharing and learning mechanisms, professional exchanges and secondments). 
  • Ensure that soft skills – interpersonal skills, effective communication, adaptability and flexibility – and cultural change are also covered in your training programmes to enable open exchanges on the role of PSE.
  • Review existing capacity-building programmes and determine how skills for PSE can be integrated across the full suite of organisational training opportunities.
  • Have a dedicated budget at headquarters and country level for relevant capacity building for your own staff and local stakeholders.
  • Brief and discuss with partner country counterparts innovative approaches and new instruments your government or organisation uses, such as blended finance.
  • Identify the set of necessary skills and knowledge for your projects and assess stakeholders’ most significant gaps and shortcomings.
  • Help private sector actors understand how participating in development co-operation benefits them, what it requires, and how to navigate development partner and government systems to harness the available opportunities.
  • Consider how the capacities of local, national and international private sector actors can be improved to contribute to development outcomes. 
  • Provide capacity-building activities and trainings for local project partners to close knowledge gaps and enable more effective partnering and project implementation.
  • Consider partnering with key institutions working in this field for more substantive capacity-building support. Many non-governmental organisations and other organisations are developing guidance for capacity building in partner countries.

Pitfalls to avoid
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Policy Level Project Level


  • Provide overly standardised training packages that do not cover the specific sectoral or thematic knowledge needed for effective partnering with the private sector.
  • Exclusively invest in one-off, single-session trainings. These are unable to build dedicated capacity to respond to shifts in the policy environment and private sector. 
  • Offer trainings for which the audiences are too broad, not recognising that different levels of staff require different types of training.
  • Help your staff understand the concept of PSE without considering how engagement looks to the private sector and which practicalities it requires.


  • Unduly focus on short-term results or goals. Think beyond the project horizon when developing skills and expertise; this is at the heart of development co-operation. 
  • Offer trainings that are not relevant to partner country and local stakeholder – particularly private – needs. 
  • Assume that all partners have the required capacity to implement projects and/or engage in dialogue and partnerships with the private sector.
  • Assume that businesses and other actors are aware of opportunities for private sector engagement in development co-operation.


The International Fund for Agricultural Development (IFAD) defines in its Action Plan for the IFAD Private Sector Engagement Strategy 2019-2024 (p.17) a renewed institutional set up, capacity building and training as one of the main set of actions required for successful implementation. This includes the establishment of a private sector, advisory and implementation unit as new lead for technical PSE expertise, the recruitment and assignment of new staff with private sector expertise, the nomination of new focal points with private sector expertise across all IFAD departments, and the development of specific training modules to strengthen staff capacity at headquarters and the project level.

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