Development agencies are increasingly looking to business as a partner in achieving development outcomes. AusAID’s business engagement agenda “seeks to achieve greater effectiveness in the aid program by cooperating with the business community to jointly deliver creative solutions that help people overcome poverty” (AusAID, 2012a). This is also recognised in the recent release of AusAID’s Private Sector Development Strategy that, broadly, commits AusAID to engaging more fully with the private sector both in Australia and in developing countries (AusAID, 2012b). This paper illustrates innovative private sector engagement strategies to support improved health outcomes, and is supported with case studies. Specifically, this paper offers evidence-based possibilities for AusAID to pursue its interest in partnerships for service delivery with the extractive industry in Papua New Guinea (PNG). In addition, it considers three opportunities for donor support for specific, poverty-reducing business ventures through risk-sharing with private sector project proponents: (i) partnering with private health providers; (ii) social franchising, and; (iii) private public investment partnerships.

This paper was originally presented at the “Engaging business in development” forum on 17 October 2012 at the Australian National University and is intended to be a constructive contribution to emerging AusAID thinking on the execution of its engagement with the private sector.