This study explores the relation between Scandinavian donor private sector development and collaboration (PSD/PSC) policies and recipients of the support in Mozambique. It seeks to understand how such relations function in the complex local political and business environment. The study departs in theory regarding hybrid regimes and private sector development, and an analytical framework is designed as a model for relations based on theories on state-business relations and aid effectiveness. The material was gathered during a two-months field study where interviews were carried out with key actors of development cooperation such as embassy staff, fund managers and local entrepreneurs. The study finds that several PSC tools are shaped according to a western point of view and not always well adjusted to the local Mozambican context. It also finds that the design of the policies in many cases produces a high entrance barrier to Mozambican entrepreneurs, why most recipients are essentially foreign business people.