SDIP Investment Approach
The SDIP adopts a new development approach, the portfolio investment approach, which aims to increase aid efficiency and effectiveness.
This approach is a shift away from traditional activity based engagements to one where DFAT (the Department of Foreign Affairs and Trade) interacts with partners on a more macro and strategic level. DFAT provides ‘earmarked’ core funding to partners to undertake work that supports the SDIP goal and objectives and with negotiated conditions designed to strengthen institutional performance rather than for specific activity plans. This allows partners the flexibility to modify and adapt their work programs to any changes in context, reducing the administrative burden of the partner and DFAT, and enabling them to be more responsive to emerging opportunities.
The SDIP partners progress the goal and objectives of the SDIP at multiple levels across the sub region (regional/national/sub-national and local), and in four key ways including policy and governance reform; supporting regional networks and collaboration; technical assistance and capacity development; and technology transfer.
In this way, DFAT’s ‘portfolio’ of partners is able to contribute to change in the target sectors. These sectors, however, are seen as open and dynamic systems. The portfolio investment approach seeks to recognise the inter-play between the SDIP partners and other actors in effecting change in and across the target sectors. In so doing, the portfolio approach moves away from measuring performance, in terms of attributing change to a specific partner’s activity, to considering performance in terms of the collective contribution of DFAT’s portfolio of partners to achieving broader and sustained change