Making Development Investable in Vietnam
Vietnam is entering a new stage of development. As development finance becomes more constrained, the private sector is taking on a growing role in addressing environmental, social and climate challenges.
But businesses only invest when there is a business case. A solution may benefit farmers, the environment or climate resilience, but if the technology is unproven, the investment is too costly or the market is uncertain, businesses — particularly small and medium enterprises (SMEs) — may hesitate to take the first step.
This challenge is especially relevant in Vietnam, where SMEs make up the vast majority of businesses. Like larger companies, they increasingly approach sustainability through practical business needs: improving resource efficiency, meeting buyer requirements, or reducing production costs. But many have fewer dedicated staff and less capacity to invest before a clear return is visible.
This is where private sector engagement becomes increasingly relevant to development cooperation. This collaboration is about working with businesses and other actors in ways that align development objectives with commercial incentives, mobilize private resources, and create conditions for solutions to continue beyond project support.
Sharing investment risk
The private sector brings assets that development organizations cannot provide alone: capital, technology, commercial expertise, employees, infrastructure, relationships with farmers and suppliers, and access to markets. Development organizations, meanwhile, can contribute technical knowledge, evidence, networks, convening power and targeted catalytic support.
The value lies in combining these strengths.
A good example is Helvetas’ work with Nhat Tam Cooperative in Dak Lak under the Circular Economy Cocoa Project, funded by the European Union, which turned a circular economy solution into a business investment.
Nhất Tâm is a cooperative of about 200 farmer members. It is an important cocoa sourcing and agricultural service hub in Vietnam’s Central Highlands. With drying needs of up to 1,000 tons a year across crops such as cocoa, coffee, macadamia and maize in its sourcing and service network, the cooperative needed an affordable way to provide drying services while making use of agricultural residues. Imported biomass gasification technology would have cost around USD 46,000, making it difficult for a local cooperative to invest.
In 2025, Helvetas worked with Nhat Tam and domestic technical experts to develop and test a locally adapted gasification system. Nhat Tam co-invested in the pilot, while Helvetas helped bring in technical expertise and reduce the cost and risk of the first investment. The resulting system cost approximately USD 14,000, with Nhat Tam contributing USD 5,000 and Helvetas USD 9,000.
Today, the system enables Nhất Tâm to offer drying services to farmers at around one-third of the cost of external providers. This could save farmers around USD 23,000 a year, while creating an additional service revenue stream for the cooperative. An economic analysis shows that the system could generate an estimated net benefit of around USD 13,000 per year, giving the investment a payback period of about 11 months.
Nhat Tam has now ordered a second system, this time as a business investment rather than through the development project. The cooperative is also exploring a new business opportunity using the biochar generated through gasification, potentially combining it with dried cattle manure to produce a soil amendment for sale.
This illustrates the value of private sector engagement at its most practical level: Development cooperation can help a business test a solution, reduce the risk of the first investment and build confidence in its commercial value. Once the economic case becomes clearer, the business has a reason to continue investing.
From single- to multi-actor partnerships
The Nhat Tam experience represents a traditional private sector engagement approach: co-investing in innovation and sharing the risk of testing a new solution. However, partnerships can also unite multiple actors, bringing together businesses, corporate foundations, farmers and development organizations to pursue solutions that no single entity could easily implement alone.
An example of this collaborative model can be found in the cocoa value chain in Dak Lak province. Automated irrigation and fertigation systems were introduced across approximately 50 farms through a joint USD 115,000 investment. This combined philanthropic funding from Vingroup’s Thien Tam Foundation, development support from Helvetas, and direct contributions from Nhat Tam and local farmers.
Early results show improvements in farming efficiency, including a 1.5- to 2-fold increase in first-season yields, a 30–50% reduction in water consumption, and a substantial decrease in daily labor requirements through automation.
Multi-actor partnerships take various forms across agricultural value chains. Under the Circular Economy Cocoa Project, firms such as Puratos, Marou Chocolate and Trong Duc Cocoa act as supply chain anchors, piloting circular solutions and embedding sustainable practices throughout their sourcing networks. Similarly, initiatives like the Swiss Sustainable Coffee Platform enable international companies such as Migros and Volcafe to drive sector-wide change through co-financing mechanisms.
Evolving from recipient to investor
Private sector engagement can also develop through long-term business relationships. DACE, a Vietnamese organic spice company, first worked with Helvetas through the BioTrade initiative, supported by SECO, when it was a small company with limited export experience. Through training, market exposure, international trade fairs and support for organic certification, DACE gradually built its market and business capabilities.
Over time, the relationship changed. DACE moved from receiving project support to investing its own resources in production facilities and human resources. In the Organic Spice Production project, supported by BMLEH, DACE is now an implementation partner, contributing funding and staff alongside Helvetas’ technical expertise.
The significance of this evolution is not simply that DACE has grown. It is that a business that once participated mainly as a project participant is now coming to the table with its own resources and commercial interests.
This is where long-term partnership matters. Businesses need to know that development organizations understand their operational realities. Development organizations, in turn, need partners that are genuinely committed to change. That trust can make it possible to move from project participation to co-creation.
A stronger business marketplace
Another approach to private sector engagement is to strengthen the business ecosystem. Through the Swiss Import Promotion Programme (SIPPO), Helvetas works with business support organizations to improve export readiness, connect companies with international markets and improve services available to exporters.
SIPPO does not provide direct subsidies to individual companies; instead, it strengthens sector-wide capabilities and facilitates market links — such as connecting international buyers with qualified local producers like DACE.
As these approaches show, there is no single model for nonprofits to work with companies. It can involve co-investment in technology, partnerships with lead firms, direct business collaboration, international co-financing or strengthening the ecosystem around businesses.
What happens next?
The success of a private-sector partnership should not be measured only by what happens during a project. The most important questions surround what happens after the project.
Does the company continue investing? Do farmers continue adopting the solution? Does another business replicate it?
Together, these questions point to a broader measure of impact: what happens after development funding ends, and how much further the initial support can go.
This relies on making the most of leverage by using relatively limited development support to enable continued investment, adoption or replication beyond the project itself.
For Vietnam, where small and medium enterprises and cooperatives are central to employment, innovation and value-chain development, private sector engagement offers a way to connect development objectives with the resources and incentives already present in the economy.
Lessons learned
These experiences point to several practical lessons for development organizations working with businesses in Vietnam:
- Commercial logic first: Prove the business case before pursuing scale; clear financial returns drive long-term adoption, not donor subsidies. For development actors, this means testing commercial viability early and designing support around the investment decisions businesses will eventually need to make themselves.
- Catalytic, not continuous: Use development funds solely to de-risk the first step and unlock private co-investment from day one. The aim is not to finance a solution indefinitely, but to help move it from a development-supported experiment towards a commercially viable investment.
- Build capabilities, not dependency: Shift from funding isolated activities to supporting long-term partners as they transition from project participation towards co-investment. This requires investing in relationships, skills and decision-making capacity alongside technical solutions.
- Transform ecosystems, not just supply chains: Combine direct enterprise support with ecosystem-building (like SIPPO) to create broader opportunities for small and medium enterprises. This can address constraints that individual companies cannot solve alone, including access to markets, business services, meeting standards and engaging with international buyers.
Developing market-supported solutions
As development finance becomes more constrained, stronger collaboration with the private sector will become increasingly important. But private sector engagement should not be understood simply as shifting responsibility for sustainable development onto businesses. It is about combining the resources, expertise and incentives of different actors in ways that make sustainable solutions more viable.
Sometimes that means helping a cooperative take the risk of investing in a new technology. Sometimes it means partnering with a business to deliver solutions. Sometimes it means opening markets or strengthening the ecosystem around businesses.
The ultimate goal is to move from project-supported solutions to market-supported solutions.
When the first gasifier is supported by development cooperation but the second is considered as a business investment, that is more than a successful project outcome. It is a sign that a development solution may be becoming commercially viable.
And that is one of the most important roles private sector engagement can play in Vietnam’s next chapter: making sustainable solutions increasingly investable for business.
About the Author
Dinh Kim Quynh Diep is the Communications Officer for Helvetas Vietnam.
