CDC Plus: using technical assistance to drive our response to COVID-19
As the COVID pandemic began in early 2020, the first question for CDC was how we could respond efficiently and effectively to protect investee businesses and the people supported by those businesses.
At the time, the reach and impact of the pandemic was still uncertain, with national and international response strategies only just beginning to take shape.
Within CDC, among our first teams to respond was CDC Plus, our technical assistance facility. The role of CDC Plus is to support our investees to achieve even more impact by providing technical assistance to make a lasting difference to the lives of underserved groups. Using our experience as an impact investor in emerging markets, we identify and create opportunities that are beyond the scope of returnable capital.
CDC Plus also works with industry stakeholders to develop and test solutions to address business challenges in priority sectors and geographies. For example, in close collaboration with the local team from the Foreign and Commonwealth Development Office (FCDO), CDC Plus has developed a pioneering multi-year programme in Myanmar to improve the performance of domestic small and medium-sized enterprises (SMEs). The objective of the programme is to increase investment flows to SMEs and economic opportunities for the people of Myanmar.
In early March, the team received an application for support from a clinic requesting funding to facilitate ongoing healthcare provision to patients in Kenya. The application was for support on staff training and crucial PPE provisions.
After an expedited approval, the successful application prompted thinking at CDC about how CDC Plus could respond more widely to the growing crisis – both in terms of what could be supported and how to establish a more permanent streamlined decision-making process to support a faster turnaround on funding approvals. The team was able to draw upon work done last year to refine its processes and grow its own team. This meant it was well poised to respond to the crisis with thorough but flexible systems.
CDC Plus’ response was quickly developed by creating two dedicated facilities.
“We were fortunate that we had a well-timed Board meeting to sign off a COVID technical assistance policy in April, and our shareholder FCDO was supportive of us reprofiling our plans for the year to allow for a quick and full response,” says CDC Plus Director, Sarah Marchand.
The first, the ‘COVID-19 Business Response Facility’ provides support for businesses to adapt or scale up innovative, inclusive solutions to respond to the pandemic. The second, the ‘COVID-19 Emergency Technical Assistance Facility’ focuses on providing advice for businesses to plan, manage risks and safely operate during the crisis.
Using a call for proposals to identify projects, the team enlisted the relevant groups from across CDC so that the commercial, business integrity and environmental, social and governance screening of proposals took place as quickly as possible, turning around decisions on projects within a week.
“It was a real cross team effort,” adds Marchand. “Colleagues put other work to one side so that this could happen quickly and supported us in reviewing proposals and following up to finalise terms and sign contracts.”
CDC Plus has now held three application rounds in April, July and September for both facilities and been inundated with the response. To date it has approved 50 projects across both facilities, totalling £4.5 million and providing support to a diverse range of businesses.
Examples include a project to help digitise the route to market in a Ugandan distribution company so it can deliver basic goods to some of the more remote parts of the country and support to a garment manufacturer to pivot into producing PPE. Around 30 per cent of the approved projects were in the health sector, and another 30 per cent in financial services and agriculture.
Other DFIs have also used technical assistance to respond to COVID. As part of its response, CDC Plus has worked closely with colleagues from across EDFI – the group of European DFIs – to align approaches and coordinate on projects which require input from multiple organisations. This included a task force comprising the European DFIs to discuss issues such as funding for PPE and developing guidance for employers on supporting staff during COVID.
The team is now thinking about the role it can play as businesses and markets rebuild from the crisis and adapt to the ‘new normal’, at a time when we all face a rare opportunity to build back with a more resilient, inclusive and climate conscious private sector.
CDC Plus is a valuable tool in this effort. The facility can support businesses to understand their carbon footprint and identify resource efficiency opportunities; it can share the risk of piloting new technologies; and it can allow companies to test the impact of selling or distributing to new customers where the commercial business case is unproven.
And the team has a role to play as a convenor; bringing together partners to address issues in frontier markets and sectors where collaboration can lead to the greatest impact. As such CDC Plus is always looking for opportunities to collaborate with partners who are working to create impact through economic development in our markets.
The quick and effective response from CDC Plus meant it has played a key role in our efforts to counter the impact of the pandemic and provided an opportunity for DFI collaboration. It illustrated the benefits of a rigorous but flexible system to enable support to reach where it is needed the most. Going forward, we plan to maintain this approach, even as our focus shifts to supporting our investees and the markets in which they operate to recover and become more resilient.