Private Sector Engagement (PSE) is highlighted in the Swiss International Cooperation Strategy 2021–24 as an important modality to achieve sustainable development and poverty reduction. As part of the ambition to partner with the private sector in the achievement of the Sustainable Development Goals (SDGs), the Swiss Agency for Development and Cooperation (SDC) committed 15 million Swiss francs for the Bamboo-UNCDF Initiative for the Least Developed (BUILD) Fund.

The BUILD Fund is a unique investment fund in support of small and medium-sized enterprises (SMEs) in least developed and lower middle income countries (LDCs and LMICs). Combining public and private investments, it will catalyse positive impact on the ground and contribute to achieve the SDGs.

Launched in 2020 and managed by Swiss-based Bamboo Capital Partners (BCP), the BUILD Fund provides growth capital to businesses identified, supported and nurtured by UNCDF. The overall objective of the BUILD Fund is to contribute to poverty alleviation, reduce gender inequalities and promote inclusive and sustainable economic growth. The BUILD Fund aims to invest in four sectors, namely 1) food security, nutrition, agribusiness; 2) financial inclusion and innovation; 3) green economy and renewable energy; 4) local infrastructure, and has a cross-cutting focus on youth and women’s economic empowerment. A key element of this is the economic advancement of women, particularly by supporting businesses owned or run by women. The BUILD Fund thus contributes to the achievement of various goals of the Swiss International Cooperation Strategy 2021–24.

Promoting inclusive and sustainable economic growth

Switzerland will support the BUILD Fund with two separate but complementary investments: First, a direct investment of 5 million Swiss francs into the BUILD fund that can be deployed globally in those countries and sectors with the highest financing gap to achieve the 2030 Agenda. Second, an indirect investment of 9 million Swiss francs by way of a contribution to UNCDF, which will earmark the contribution to investments in Zambia and Zimbabwe. Finally, the SDC provides a 1 million Swiss francs to the BUILDER TA facility, which is closely involved in pipeline generation, portfolio building, and business advisory support to businesses.

The SDC have a long history of working in Southern Africa and this funding has been specifically earmarked for projects in Zambia and Zimbabwe that fall under the Southern African Development Community (SADC). Swiss support in the region started in 1994 in South Africa and then developed into a regional programme covering several SADC Member States. Starting 2023, the programme will focus on Zimbabwe and Zambia only. In Zimbabwe, activities in the areas of food security and sexual and reproductive health and rights, with a special focus on women and youth have been developed in the wake of the humanitarian crisis that has been unfolding since 2008.

In Zambia and Zimbabwe, as in many developing countries, SMEs face difficulties to meet their financial needs, despite their importance to the achievement of the SDGs and their contribution to economic growth. This constrains their productivity and survival. Blended finance should in principle address this underfunding, but although it is on the rise, only 6% of private finance mobilised by official development finance between 2012 and 2017 went to LDCs.