Many German companies have specialist knowledge, products or services that are also needed in developing countries and emerging economies – in sectors such as education, energy, agriculture and the skilled trades. Getting involved in these regions can open up new markets and forge partnerships, while supporting sustainable development. But how do you get started? The Agency for Business and Economic Development (AWE) is the first port of call. With an extensive network of partners, also in developing countries and emerging economies, we offer support at every stage of your project. We provide advice if you:
- wish to invest or operate in developing countries and emerging economies,
- are planning projects, for example in infrastructure, energy, education, agriculture, or
- wish to take advantage of support and financing opportunities.
1. From business model to project idea
It all starts with one simple question: what can my company achieve in or with developing countries and emerging economies? This may involve tapping into a new market, for example, diversifying supply chains or recruiting qualified staff. The initiative must also be relevant to the partner country’s economy.
If your company is considering branching out into development cooperation, AWE is your first port of call. We offer a free initial consultation, information on support programmes and can match you with relevant contacts. We aim to provide structured support to companies that wish to engage with development policy.
What is development cooperation?
Development cooperation (DC) is a key instrument of Germany’s foreign and sustainability policy. It is designed to support Germany’s geopolitical interests and build fair and trusting relationships with developing countries and emerging economies. It also supports joint action to combat poverty, promote peace, strengthen human rights and support sustainable economic, social and environmental development.
Germany regards DC as a partnership of equals that is aligned with the United Nations Sustainable Development Goals (SDGs).
German DC policy is designed by the Federal Ministry for Economic Cooperation and Development (BMZ), which sets development priorities that are negotiated with other federal government ministries. DC measures are carried out by implementing organisations (see infographic), including GIZ (Technical Cooperation) and KfW (Financial Cooperation).
2. What points of entry are available?
One key point of entry is public funding for programmes run by the Federal Ministry for Economic Cooperation and Development (BMZ).
Government programmes
- develoPPP is a key instrument here. As part of this BMZ programme, companies wishing to implement innovative projects that offer additional development benefits can access cofinancing arrangements, advice from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and support for project development. They enter into Public-Private Partnerships (PPPs) as part of develoPPP, bringing 50% of the overall investment funding to the project. The other half is provided by the public partner.
- The Deutsche Investitions- und Entwicklungsgesellschaft (DEG) also provides companies with financial and strategic support, for example through loans (ImpactConnect) or equity investments. Loans are offered at attractive interest rates, which are even lower if the project aims to have a particularly transformative impact.
- Companies can also receive support from the Import Promotion Desk (IPD) run by sequa gGmbH and the Federation of German Wholesale, Foreign Trade and Services (BGA), for example to forge contacts with reliable suppliers and partners in the food, digital services and sustainable tourism sectors.
- International project and export loans are also available from KfW’s IPEX Bank, provided your project supports sustainable digital business.
Calls for tenders from multilateral organisations
Another opportunity, frequently underestimated, involves tenders awarded by public development organisations and financial institutions such as GIZ, KfW, the United Nations, the World Bank and the European Union to private companies. These awards range from contracts for consultancy services and construction projects to digital solutions. Such tenders not only provide direct access to international projects, such as reconstruction measures in Ukraine, they are also transparent, open and involve a predictable level of risk. However, participation does usually require a certain amount of experience in international project work.
International tenders issued by the EU and the UN enable companies to access new markets, secure contracts and build partnerships. Visit the TED (Tenders Electronic Daily) and UN Global Marketplace (UNGM) portals to view published project tenders, apply your expertise on a global scale and boost your international competitiveness.
Funding for self-initiated projects
Companies are also increasingly making a difference in partner countries through their own initiatives. By developing a viable business model that delivers social or environmental benefits, you can, for example, set up a social enterprise, which may be eligible for further funding, for example from KfW.
Opportunities also arise when implementing due diligence obligations, for example under the Federal Act on Corporate Due Diligence Obligations in Supply Chains, with training initiatives and environmental standards in partner countries specifically linked to support programmes.
The four pillars of German development cooperation
- Financial cooperation (FC): Provides grants, loans and funding, for example, via KfW or DEG.
- Technical cooperation (TC): Implemented by GIZ, for example, which coordinates projects and establishes contacts with partner countries
- Cooperation with civil society: For example, with organisations such as Misereor and Brot für die Welt
- Multilateral cooperation: With international organisations such as the United Nations or World Bank
3. Finding strong partners
No sustainable project is developed single-handedly. Companies need local partners – be they non-governmental organisations (NGOs) or regional companies. As an experienced implementing organisation, GIZ also supports implementation, from setting up the supply chain to training skilled workers. German Chambers of Commerce Abroad (AHKs) in many countries offer practical assistance in accessing markets, networking and legal matters.
4. From planning to practice
Practical planning starts with a clear objective, reliable partners and funding:
- Who is the target group?
- What are the results and added value?
- What risks are there on site?
- What regulations and standards apply locally?
- Who will provide financing for the project?
A structured project plan forms the basis for a funding application. AWE will support you every step of the way, where necessary. Our Developing Countries Funding and Financing Database provides an overview of financing solutions, along with project ideas. We will also work with you to identify the support mechanism best suited to your needs and the eligibility criteria.
5. Protect your business
Projekte der Entwicklungszusammenarbeit unterliegen besonderen Bedingungen. Im Vergleich zu anderen wirtschaftlichen Expansionsvorhaben können Sie diese besonders absichern. Das BMZ stellt drei Instrumente zu Verfügung:
