Attachment_4_to_the_Amendment_0001-J.6_DCN_2019_GEO_002_Economic_Security_CE_NDWC.pdf

DCN: 2019-GEO-002

Georgia / The USAID Economic Security Program 1 EE.BEU Standard Form: IEE.v3

US Agency for International Development (USAID) USAID/Georgia

Initial Environmental Examination (IEE) Program/Project/Activity Data

Activity/Project Name: The USAID Economic Security Program

Assistance Objective: DO 2. Inclusive and Sustainable Economic Growth

Program Area:

IR 2.2. Increase Competitiveness and Employment Generation in Targeted Sectors

Country(ies) and/or Operating Unit: Georgia Originating Office: Office of Economic Growth Date: 09/25/18 PAD Level IEE: Yes No Supplemental IEE: Yes No RCE/IEE Amendment: Yes No

DCN of Original RCE/IEE:

DCN of Amendment(s):

If Yes, Purpose of Amendment (AMD):

DCN(s) of All Related EA/IEE/RCE/ER(s):

Implementation Start/End: LOP: FY 2019 - FY 2023

Funding Amount: LOP Amount: $18,600,000

Contract/Award Number (if known):

Recommended Environmental Determination:

Categorical Exclusion: Positive Determination:

Negative Determination: Deferral:

Additional Elements:

Conditions: Local Procurement:

Government to Government: Donor Co-Funded:

Sustainability Analysis (included): Climate Change Vulnerability Analysis (included):

1. Background and Project Description

1.1. Purpose and Scope of IEE

The purpose of the IEE is to cover the USAID Economic Security Program. The purpose of this program is to facilitate accelerated growth of sectors outside of agriculture that show strong potential to create jobs, increase incomes, increase MSME revenues, and support diversification to more productive economic activities, including the tourism sector and up to 3 additional sectors. Within the identified sectors, the contractor must use a value chain approach to promote growth.

1.2. Project Overview and description

The program will achieve these goals by improving the workforce, including professional, management, and vocational skill development, supporting new service and product development, improving coordination and communications between key stakeholders, and developing and co-funding partnerships that have catalytic effects on MSMEs in these sectors.

Georgia / The USAID Economic Security Program 2

To meet the goal and objectives of the USAID Economic Security Program, the contractor and its interventions must be flexible and responsive to changing market conditions and other exogenous factors.

In case of rapidly changing market conditions and new opportunities, the contractor may need to change sector(s) in order to promote increased employment and economic competitiveness. In case of unexpected shocks that threaten investments in targeted sector(s), such as geopolitical events, natural disaster, or other threats, the contractor may need to adapt its interventions to respond accordingly.

Component 1: Strengthen cooperation in targeted sectors

The contractor must provide technical assistance and cost-share grants to strengthen linkages and cooperation throughout value chains in targeted sectors and improve support services intended to enhance growth and productivity across targeted value chains in targeted sectors. This technical assistance must prioritize value chains for support, identify gaps and interventions to strengthen these value chains, and build coordination and collaboration between key stakeholders in prioritized value chains including firms, associations, GOG agencies, municipalities, and others. For example, if a value chain assessment determines that the lack of access to new technologies is a key impediment to the domestic production of high-quality construction materials, the contractor will link the cluster of domestic producers with technology providers, provide grants to increase access to new and improved technologies, and/or provide the necessary technical assistance to bring these technologies to Georgian value chain participants. Also, if the lack of regulations is identified as a significant factor hindering the development of services and products in the targeted sectors, the contractor will provide technical assistance to facilitate public-private dialogue on related issues.

After USAID approves the assessment, the contractor must provide technical expertise and cost-share grants to strengthen in-country systems for the sustainable delivery of productivity-enhancement services to targeted value chains, facilitate market linkages, and improve coordination and communication between key stakeholders in the targeted sectors, including non-governmental organizations and sector associations, government and state agencies, and donors. Examples of potential interventions include, but are not limited to, the following:

1. Support the development of a tourism alliance and other sector associations by strengthening association governance, facilitating the development of private sector-led certifications, especially those that are internationally recognized and contribute to improved human safety and environmental safeguards, and building capacity to advocate for sector development;

2. Facilitate public-private dialogue among sector stakeholders to jointly identify any policy and regulatory constraints to the development of targeted sectors and propose concrete legislative and regulatory actions to mitigate these constraints, as well as identify areas for collaboration to improve sector competitiveness;

3. Increase and strengthen market linkages by designing initiatives to help groups of firms participate in business-to-business meetings including trade missions and fairs, develop joint promotion and branding initiatives, and source locally by consolidating purchases and sharing logistics for primary inputs;

4. Support key sector stakeholders to jointly identify and prioritize investments that promote the development of targeted sectors and to access funding for these projects, including through GOG financing sources and international financial institutions, and;

5. Increase access to finance by working with financial institutions to deepen understanding of the market potential and financing opportunities for value chains in targeted sectors.

Component 2: Support MSMEs to improve productivity, sales, quality and develop new products and services

The contractor must provide cost-share grants and technical assistance to MSMEs that improve their productivity, sales, and quality and develops new products and services. The contractor must design and deliver cost-share grants and technical assistance in ways that address value chain gaps identified in the

Georgia / The USAID Economic Security Program 3 assessment conducted under component 1. For example, if a value chain assessment determines that a shortage of domestically-produced packaging materials hinders the development of a targeted value chain, the contractor will provide grants and technical assistance to Georgian firms to start production of demanded packaging. This technical assistance will include both assistance, directly provided by the contractor, and technical assistance provided through sub-contractors. In addition, the contractor must design and deliver technical assistance to non-grant recipients in ways that address value chain gaps identified in the assessment conducted under component 1. For technical assistance recipients, the contractor must identify opportunities for cost-share contributions for beneficiaries whenever possible.

When providing technical assistance, the contractor must take a systematic approach to supporting groups or clusters of firms within value chains in targeted sectors rather than supporting individual firms across a wide range of value chains. Furthermore, whenever possible, in delivering technical assistance the contractor must partner with GOG agencies and other donors to maximize the impact of the assistance.

Types of interventions may include, but are not limited to, the following:

1. Improve firm-level operational capacities by supporting the development of business, financial, and marketing plans and enhancing logistics, operations, procurement, and other management capacities;

2. Increase productivity, productive capacity, and product quality by supporting the upgrade and expansion of production facilities and access to new and improved production technologies;

3. Improve ability to meet international production standards and receive internationally-recognized certifications, including environmental and other eco-friendly certifications, and;

4. Facilitate increased access to new domestic buyers, international markets, and financing opportunities for further growth and expansion.

Component 3: Industry-led workforce development

The contractor must provide technical assistance and cost-share grants to support industry-driven improvements in training and educational opportunities for the workforce that supports targeted sectors, including professional, management, and vocational skill development. Technical assistance must be designed to increase the level of private sector engagement in workforce development and build communication and partnerships between public sector, industry and education service providers to support workforce development, including on-the-job learning opportunities. Technical assistance and cost-share grants must be targeted to address identified gaps in training and educational programs for the workforce that supports targeted sectors. Potential grant and technical assistance recipients may include, but are not limited to, business service providers, vocational and technical training centers, universities, professional organizations, non-governmental organizations or other organizations that provide services that build the skills of potential and current employees engaged in targeted sectors. Examples of technical assistance and grants include, but are not limited to, the following:

1. Design initiatives that increase communications and strengthen linkages between industry, government, and educational institutions to address skills mismatches and contribute solutions for demand-driven education;

2. Support businesses to create on-the-job learning opportunities and develop incentives that tie trainings and certifications to internships, apprenticeships, and other forms of preferential consideration for employment opportunities;

3. Develop programs that train specialists in high demand in targeted sectors;

4. Improve and upgrade service quality and safety standards for various education service providers to internationally accepted practices, standards, and certifications;

5. Support graduates of workforce development programs to start their own businesses and/or gain internships and employment through job fairs and similar events that link graduates with potential employers, and;

6. Design sustainable long-term workforce development platforms, such as physical spaces/hubs, that are jointly financed and managed by sector associations and universities/training providers.

Component 4: Build sustainability of activity interventions and resiliency to factors that threaten economic opportunity and growth in targeted sectors

Georgia / The USAID Economic Security Program 4

The contractor must provide technical assistance to firms and organizations in targeted sectors to make activity interventions and results achieved through these interventions sustainable beyond the life of the activity. The contractor must examine the incentives and motivations of key actors in targeted sectors for sustaining interventions and incorporate these findings into intervention design. Where possible, the contractor must reorient practices or activities that could undermine sustainability, preferably in ways that create new opportunities. The contractor must also provide technical assistance to firms and organizations in targeted sectors that build the resilience of firms to factors with the potential to threaten economic opportunity and growth that could arise in the near future, including biological threats, natural disasters, and geopolitical risks. The contractor must also promote engagement and partnerships with financial institutions and other private and public sector actors that have interests in seeing activity interventions and results sustained into the future. Examples of technical assistance include, but are not limited to, the following:

1. Identify factors that could threaten economic activity in targeted sectors, including issues critical to the sustainability of activity interventions and results;

2. Design and implement mitigation strategies and techniques that increase the resiliency of activity interventions and results, and;

3. Design and implement discrete interventions to address natural or manmade emergencies that threaten economic activity in targeted sectors during the course of implementation.

Component 5: Building public private partnerships

The contractor must create and operate a Partnership Development Fund and facilitate the establishment of PPPs and Global Development Alliances (GDAs), primarily in targeted sectors but also potentially in other sectors. The contractor must provide technical assistance to develop relationships between key stakeholders in ways that will accelerate Georgia’s economic diversification, as well as its transition from donor-driven development to locally-owned solutions and self-reliance. Specifically, the contractor must provide technical assistance to catalyze linkages between private sector resource partners, the government, and local constituencies around a shared development challenge and opportunity; help these diverse stakeholders conceive new partnership ideas; co-design feasible and high-impact partnership activities;

leverage financing by linking potential partners with sources of capital; and, ensure that the promising partnerships materialize.

The contractor must achieve these outcomes through the following steps. First, the contractor must provide technical assistance to gain a better understanding of the private sector’s needs, interests, and resources that could be leveraged to drive locally-owned development; this scoping exercise must include a mapping of industry leaders and private sector investment funds, where they work, and potential ways in which they could engage with MSMEs and GOG to develop targeted sectors. To the extent possible, this scoping exercise must complement the sector and value chain assessment conducted in component 1.

Second, the contractor must provide technical assistance that facilitates engagement between private sector leaders, MSMEs, and GOG that results in the identification and co-design of potential partnerships that build targeted sectors; these series of engagements must also support the GOG and private sector partners to identify regulatory incentives for the private sector to partner with non-private sector players and co-fund development activities.

Third, the contractor must provide technical assistance that identifies innovative methods to access and leverage financing for partnerships identified in the second step; it is expected that the vast majority of the partnerships designed in the second step will be entirely funded with non-U.S. government resources (e.g., by private sector, GOG, other donors, and financial institutions). Examples of potential types of partnerships may include, but are not limited to, the following:

Georgia / The USAID Economic Security Program 5

1. Investments in new and/or existing facilities that builds the productive quality and capacity of complementary value chain actors -- such as primary producers from which processors source inputs --through trainings, certification programs, and other services, as well investments in new and/or existing value adding processing enterprises;

2. Investments in technology, marketing, supply chain, logistics, infrastructure, and other initiatives that benefit firms throughout the value chain in targeted sectors;

3. Investments designed to enhance workforce skills in targeted sectors, including partnerships with leading private sector firms, educational institutions, GOG, sector associations, and others, that leverage knowledge and resources, in ways that align employers’ needs with skills delivered by training and education providers, and;

4. Investments in small businesses in targeted sectors that demonstrate the capacity to drive innovation and quality improvements and serve as models for other actors in the sector, but only if the benefits can be demonstrably spread to the wider MSME population.

The contractor must co-finance the most promising, high-impact partnership activities to demonstrate their viability and benefits to public, private and non-private stakeholders through its Partnership Development Fund. The Partnership Development Fund will be up to $1.5 million and will allow USAID to co-fund with the private sector resource partner, with at least a 1:1 match, a minimum of three new partnership activities (i.e., GDAs) during the life of the program. Each partnership activity must be linked to at least one of USAID/Georgia’s Country Development Cooperation Strategy Development Objectives, be replicable and/or scalable, and demonstrate clear benefits to proposed sectors. Each co-financing opportunity for which the contractor plans to use the Partnership Development Fund must be presented to the COR for prior approval.

APPROACH TO PROVIDING COST-SHARE GRANTS

Components one, two and three include a cost-share grants program. Below are requirements and parameters for the implementation of the cost-share grants program.

1. The aggregate amount of grants allocated under all three components must be $4 million.

2. The maximum grant size is $100,000 but a majority of the grants must be less than $70,000.

3. The contractor must design and implement a competitive cost-share grants program with detailed and transparent selection criteria.

4. The purpose of the cost-share grants is to facilitate investments in business expansions and/or sector growth that would not have otherwise occurred. The intended purpose is not to use grants to displace investments that likely would have otherwise taken place without program support or to support firms that have received significant donor support in the past.

5. Grants provided to MSMEs must not exceed 40% of the total new estimated cash investment required for a new business start-up or the expansion of an existing business. Loans may be used to meet matching requirements, however, in-kind contributions will not be considered.

6. Grants provided to non-profit entities, including cooperatives and associations, will not exceed 70% of the total new estimated cash investment required to improve and/or expand operations. Loans and in-kind contributions may be used to meet matching requirements for these non-profit entities.

7. Grants provided to finance training and educational improvements and new offerings must not exceed 70% of the total new estimated cash investment required for the improvement or new offering. Loans and in-kind contributions may be used to meet matching requirements. Priority will be given to grantees who secure third-party private sector contributions to meet the matching requirements.

8. The contractor must work with all grant recipients to develop a series of training opportunities for their suppliers and clients, as applicable. These trainings will be designed to strengthen both business and technical skills and modern production techniques.

9. Entities receiving grants must agree to employ at least one intern on at least a part-time basis.

Georgia / The USAID Economic Security Program 6

10. Prior to issuing a large scale grant, the contractor must assess and document harmful distortions to local markets or businesses that may result from providing a grant to a potential recipient. In the event harmful distortions are observed, the contractor must develop mitigating measures to offset market distortions.

Prior to issuing a grant, the USAID Contracting Officer’s Representative (COR) must provide approval.

2. Baseline Environmental Information

2.1. Locations Affected and Environmental Context

Georgia is situated along the Black Sea and borders the neighboring countries of Azerbaijan, Armenia, Turkey, and Russia. The population of Georgia is approximately 3.7 million people. The capital city is Tbilisi with a population of 1.1 million people. The physical terrain of Georgia is primarily mountainous.

Georgia has 22 microclimates varying from cool and dries to warm and humid. Natural resources include iron ore, hydropower resources, manganese deposits, and forestry. Georgia is a small developing economy, with a gross national income (GNI) per capita of $3,830 in 2016. Georgia’s main economic activities include tourism, mining, manufacturing, hydropower generation, trade and transport, construction, and agriculture.

Georgia is a small developing economy, with a population of approximately 4.5 million people and a gross national income (GNI) of USD 2,560. According to a 2009 World Bank report, 25% of the population lives below the poverty line, with higher rates in rural areas. However, poverty rates vary greatly among regions.

For example, the World Bank report estimates that 59% of the population in the Shida Kartli region lives below the poverty line, while in the neighboring Kvemo Kartli region; the rate is only 8%. In any case, nearly half of the population lives in rural areas, where low-intensity, subsistence farming provides the principal source of livelihood, often coupled with social support programs and intra-family assistance. The Gini coefficient for Georgia is 43 (National Statistics Office of Georgia (GeoStat)), which puts the country behind most of its post-Soviet neighbors in terms of income equality. This has been fueled by the “jobless growth” occurring in Georgia, resulting from economic reforms benefitting primarily the elite and a small yet growing middle class, and a focus on investments in sectors such as banking and real estate, which creates few jobs.

2.2. Description of Applicable Environmental and Natural Resource Legal Requirements Policies, Laws, and Regulations

Georgia has a significant number of laws, Presidential orders and Government acts on environmental protection. Some examples include:

The Law on Environmental Protection (1999 and updated) Law on Environmental Impact Permit (1991 and updated) Law on Ecological Expertise (2007) Law on Protected Areas Forestry code (currently being updated) Water law (under the development) Red Book

The Law on Ecological Expertise of 2007 remains the framework for environmental impact assessments (EIAs) that apply to new projects that may have adverse impacts on the environment. EIAs are part of the state ecological expertise (SEE) authority. Citizens and public organizations have access to EIAs and can express their views according to Aarhus and Espo conventions.

In addition to Georgian law, United States Government (USG) environmental policy compliance is required for all new activities.

Georgia / The USAID Economic Security Program 7

2.3. Sustainability Analysis

The USAID Economic Security Program will provide technical assistance to firms and organizations in priority sectors to make activity interventions and results achieved through these interventions sustainable beyond the life of the activity. The activity will examine the incentives and motivations of key actors for sustaining interventions and incorporate these findings into intervention design. The activity will also promote engagement and partnerships with financial institutions and other private and public sector actors that have interests in seeing activity interventions and results sustained into the future. In addition, the contractor must build the resilience of MSMEs to factors with the potential to threaten investments in the priority sectors.

2.4. Climate Change Vulnerability Analysis

This analysis sought to identify whether and how the Project will affect, or be affected by, medium and longer-term climate change impacts, and how the Project’s design should be adjusted in consideration of climate change vulnerabilities.

Some of the resulting recommendations include the following measures:

Encourage the private sector to develop and deploy technologies in renewable energy and energy efficiency; waste, water and sanitation; and transport. There are opportunities across the entire value chain and to reach a wide variety of beneficiaries – in design, manufacturing, operations and maintenance (O&M), installation, retail and distribution, and R&D.

Analyze climate information to determine vulnerabilities and risks to key economic sectors for the program cycle.

Develop new insurance instruments to address climate risks.

Georgia / The USAID Economic Security Program 8

3. Analysis of Potential Environmental Impact

Component 1: Strengthen cooperation in targeted sectors

Defined/Illustrative Activities Potential Impacts Potential Climate Risk Climate

Risk Rating

Opportunities for Climate Resiliency

1.1 Support the development

of a tourism alliance and other sector associations by strengthening association governance, facilitating the development of private sector-led certifications, especially those that are internationally recognized and contribute to improved human safety and environmental safeguards, and building capacity to advocate for sector development. This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health

In 2017-2050: The average annual air temperature throughout Georgia will increase by 1.3 C to 1.6 C, the number of summer days (above 25°C) will increase; in contrast to all other cases, the temperature increase in West Georgia will be higher than in East Georgia. The absolute minimum air temperature by 1 C is probable in the mountain zone; the overall tendency is for an increase. The number of frost days is decreasing throughout Georgia.

The annual number of hot days will increase about 2.5 times. The percentage change of annual total precipitation is within a range from an 11% decrease to an 8% increase. A number of days of heavy rain will increase by 2 to 5 days; a decrease is more observable in the southeast, also in Adjara and a large part of Imereti; and an increase will take place in mountain regions, mostly within the Greater Caucasus.

Low

Encourage the private sector to develop and deploy technologies in renewable energy and energy efficiency;

waste, water and sanitation; and transport. There are opportunities across the entire value chain and to reach a wide variety of beneficiaries – in design, manufacturing, operations and maintenance (O&M), installation, retail and distribution, and R&D.

Analyze climate information to determine vulnerabilities and risks to key economic sectors for the program cycle.

Develop new insurance instruments to address climate risks.

1.2 Facilitate public-private

dialogue among sector stakeholders to jointly identify any policy and regulatory constraints to the development of

Potential impacts of grant supported activities on land, water, air and human health

Same as above Low Same as above

Georgia / The USAID Economic Security Program 9

Climate

Risk Rating

Opportunities for Climate Resiliency targeted sectors and propose concrete legislative and regulatory actions to mitigate these constraints, as well as identify areas for collaboration to improve sector competitiveness.

This activity will be done through TA and cost-share sub-grants.

1.3 Increase and strengthen

market linkages by designing initiatives to help groups of firms participate in business-to-business meetings including trade missions and fairs, develop joint promotion and branding initiatives, and source locally by consolidating purchases and sharing logistics for primary inputs.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health

Same as above Low Same as above

1.4 Support key sector

stakeholders to jointly identify and prioritize investments that promote the development of targeted sectors and to access funding for these projects, including through GOG financing sources and international financial institutions.

This activity will be done through TA and cost-share sub-

Potential impacts of grant supported activities on land, water, air and human

Georgia / The USAID Economic Security Program 10

Risk Rating

Opportunities for Climate Resiliency grants.

1.5 Increase access to

finance by working with financial institutions to deepen understanding of the market potential and financing opportunities for value chains in targeted sectors.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health Same as above Low Same as above

Component 2: Support MSMEs to improve productivity, sales, quality and develop new products and services

Climate

Risk Rating

Opportunities for Climate Resiliency

2.1 Improve firm-level

operational capacities by supporting the development of business, financial, and marketing plans and enhancing logistics, operations, procurement, and other management capacities.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health

In 2017-2050: The average annual air temperature throughout Georgia will increase by 1.3 C to 1.6 C, the number of summer days (above 25°C) will increase; in contrast to all other cases, the temperature increase in West Georgia will be higher than in East Georgia. The absolute minimum air temperature by 1 C is probable in the mountain zone; the overall tendency is for an increase. The number of frost days is decreasing throughout Georgia.

The annual number of hot days will increase about 2.5 times. The percentage change of annual total precipitation is within a range from an

Low

Encourage the private sector to develop and deploy technologies in renewable energy and energy efficiency;

waste, water and sanitation; and transport.

There are opportunities across the entire value chain and to reach a wide variety of beneficiaries – in design, manufacturing, operations and maintenance (O&M), installation, retail and distribution, and R&D.

Analyze climate information to determine vulnerabilities and risks to key economic sectors for the program cycle.

Develop new insurance instruments to address climate risks.

Georgia / The USAID Economic Security Program 11

Risk Rating

Opportunities for Climate Resiliency

11% decrease to an 8% increase. A number of days of heavy rain will increase by 2 to 5 days; a decrease is more observable in the southeast, also in Adjara and a large part of Imereti;

and an increase will take place in mountain regions, mostly within the Greater Caucasus.

2.2 Increase productivity, productive capacity, and product quality by supporting the upgrade and expansion of production facilities and access to new and improved production technologies.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health Same as above Low Same as above

2.3 Improve ability to meet

international production standards and receive internationally-recognized certifications, including environmental and other eco-friendly certifications.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health

Same as above Low Same as above

2.4 Facilitate increased

access to new domestic buyers, international markets, and financing opportunities for further growth and expansion.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human

Georgia / The USAID Economic Security Program 12

Component 3: Industry-led workforce development

Climate

Risk Rating

Opportunities for Climate Resiliency

3.1 Design initiatives that

increase communications and strengthen linkages between industry, government, and educational institutions to address skills mismatches and contribute solutions for demand-driven education.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health

In 2017-2050: The average annual air temperature throughout Georgia will increase by 1.3 C to 1.6 C, the number of summer days (above 25°C) will increase; in contrast to all other cases, the temperature increase in West Georgia will be higher than in East Georgia. The absolute minimum air temperature by 1 C is probable in the mountain zone; the overall tendency is for an increase. The number of frost days is decreasing throughout Georgia.

The annual number of hot days will increase about 2.5 times. The percentage change of annual total precipitation is within a range from an 11% decrease to an 8% increase. A number of days of heavy rain will increase by 2 to 5 days; a decrease is more observable in the southeast, also in Adjara and a large part of Imereti; and an increase will take place in mountain regions, mostly within the Greater Caucasus.

Low

Encourage the private sector to develop and deploy technologies in renewable energy and energy efficiency;

waste, water and sanitation; and transport. There are opportunities across the entire value chain and to reach a wide variety of beneficiaries – in design, manufacturing, operations and maintenance (O&M), installation, retail and distribution, and R&D.

Analyze climate information to determine vulnerabilities and risks to key economic sectors for the program cycle.

Develop new insurance instruments to address climate risks.

3.2 Support businesses to

create on-the-job learning opportunities and develop incentives that tie trainings and certifications to internships, apprenticeships, and other forms of preferential consideration for

Potential impacts of grant supported activities on land, water, air and human

Georgia / The USAID Economic Security Program 13

Risk Rating

Opportunities for Climate Resiliency employment opportunities.

This activity will be done through TA and cost-share sub-grants.

3.3 Develop programs that

train specialists in high demand in targeted sectors.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health

Same as above Low Same as above

3.4 Improve and upgrade

service quality and safety standards for various education service providers to internationally accepted practices, standards, and certifications.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health

Same as above Low Same as above

3.5 Support graduates of

workforce development programs to start their own businesses and/or gain internships and employment through job fairs and similar events that link graduates with potential employers.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health Same as above Low Same as above

3.6 Design sustainable long-

term workforce development platforms, such as physical spaces/hubs, that are jointly financed and managed by sector associations and universities/training providers.

This activity will be done through TA and cost-share sub-grants.

Potential impacts of grant supported activities on land, water, air and human health Same as above Low Same as above

Georgia / The USAID Economic Security Program 14

Component 4: Build sustainability of activity interventions and resiliency to factors that threaten economic opportunity and growth in targeted sectors

Defined/Illustrative Activities Potential Impacts Potential Climate Risk Climate

Risk Rating

Opportunities for Climate Resiliency

4.1 Identify factors that could

threaten economic activity in targeted sectors, including issues critical to the sustainability of activity interventions and results.

No adverse impacts are likely

In 2017-2050: The average annual air temperature throughout Georgia will increase by 1.3 C to 1.6 C, the number of summer days (above 25°C) will increase; in contrast to all other cases, the temperature increase in West Georgia will be higher than in East Georgia. The absolute minimum air temperature by 1 C is probable in the mountain zone; the overall tendency is for an increase. The number of frost days is decreasing throughout Georgia.

The annual number of hot days will increase about 2.5 times. The percentage change of annual total precipitation is within a range from an 11% decrease to an 8% increase. A number of days of heavy rain will increase by 2 to 5 days; a decrease is more observable in the southeast, also in Adjara and a large part of Imereti; and an increase will take place in mountain regions, mostly within the Greater Caucasus.

Low

Encourage the private sector to develop and deploy technologies in renewable energy and energy efficiency;

waste, water and sanitation; and transport. There are opportunities across the entire value chain and to reach a wide variety of beneficiaries – in design, manufacturing, operations and maintenance (O&M), installation, retail and distribution, and R&D.

Analyze climate information to determine vulnerabilities and risks to key economic sectors for the program cycle.

Develop new insurance instruments to address climate risks.

4.2 Design and implement

mitigation strategies and techniques that increase the resiliency of activity interventions and results.

No adverse impacts

Georgia / The USAID Economic Security Program 15

Risk Rating

Opportunities for Climate Resiliency

4.3 Design and implement

discrete interventions to address natural or manmade emergencies that threaten economic activity in targeted sectors during the course of implementation.

No adverse impacts

Component 5: Building public private partnerships

Climate

Risk Rating

Opportunities for Climate Resiliency

5.1 Investments in new

and/or existing facilities that builds the productive quality and capacity of complementary value chain actors -- such as primary producers from which processors source inputs -- through trainings, certification programs, and other services, as well investments in new and/or existing value adding processing enterprises;

Potential impacts of grant supported activities on land, water, air and human health

In 2017-2050: The average annual air temperature throughout Georgia will increase by 1.3 C to 1.6 C, the number of summer days (above 25°C) will increase; in contrast to all other cases, the temperature increase in West Georgia will be higher than in East Georgia. The absolute minimum air temperature by 1 C is probable in the mountain zone; the overall tendency is for an increase. The number of frost days is decreasing throughout Georgia.

The annual number of hot days will increase about 2.5 times. The percentage change of annual total precipitation is within a range from an 11% decrease to an 8% increase. A number of days of heavy rain will increase by 2 to 5 days; a decrease is more observable in the southeast, also in Adjara and a large part

Low

Encourage the private sector to develop and deploy technologies in renewable energy and energy efficiency;

waste, water and sanitation; and transport. There are opportunities across the entire value chain and to reach a wide variety of beneficiaries – in design, manufacturing, operations and maintenance (O&M), installation, retail and distribution, and R&D.

Analyze climate information to determine vulnerabilities and risks to key economic sectors for the program cycle.

Develop new insurance instruments to address climate risks.

Georgia / The USAID Economic Security Program 16

Risk Rating

Opportunities for Climate Resiliency of Imereti; and an increase will take place in mountain regions, mostly within the Greater Caucasus.

5.2 Investments in

technology, marketing, supply chain, logistics, infrastructure, and other initiatives that benefit firms throughout the value chain in targeted sectors;

Potential impacts of grant supported activities on land, water, air and human health

Same as above Low Same as above

5.3 Investments designed to

enhance workforce skills in targeted sectors, including partnerships with leading private sector firms, educational institutions, GOG, sector associations, and others, that leverage knowledge and resources, in ways that align employers’ needs with skills delivered by training and education providers, and;

Potential impacts of grant supported activities on land, water, air and human health

Same as above Low Same as above

5.4 Investments in small

businesses in targeted sectors that demonstrate the capacity to drive innovation and quality improvements and serve as models for other actors in the sector, but only if the benefits can be demonstrably spread to the wider MSME population.

Potential impacts of grant supported activities on land, water, air and human

Georgia / The USAID Economic Security Program 17

4. Recommended Environmental Actions

4.1. Recommended Mitigation Measures

Component 1: Strengthen cooperation in targeted sectors

Defined/Illustrative Activities Potential Impacts Mitigation Measures Recommended Threshold Determination

1.1 Support the development of

a tourism alliance and other sector associations by strengthening association governance, facilitating the development of private sector-led certifications, especially those that are internationally recognized and contribute to improved human safety and environmental safeguards, and building capacity to advocate for sector development

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative Determination with Conditions

1.2 Facilitate public-private

dialogue among sector stakeholders to jointly identify any policy and regulatory constraints to the development of targeted sectors and propose concrete legislative and regulatory actions to mitigate these constraints, as well as identify areas for collaboration to improve sector competitiveness

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

1.3 Increase and strengthen

market linkages by designing initiatives to help groups of firms participate in business-to-business meetings including trade missions and fairs, develop joint promotion and branding initiatives, and source locally by consolidating purchases and sharing logistics for primary inputs;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

Georgia / The USAID Economic Security Program 18

1.4 Support key sector

stakeholders to jointly identify and prioritize investments that promote the development of targeted sectors and to access funding for these projects, including through GOG financing sources and international financial institutions, and;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

1.5 Increase access to finance by

working with financial institutions to deepen understanding of the market potential and financing opportunities for value chains in targeted sectors.

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

Component 2: Support MSMEs to improve productivity, sales, quality and develop new products and services

Defined/Illustrative Activities Potential Impacts Mitigation Measures Recommended Threshold Determination

2.1 Improve firm-level

operational capacities by supporting the development of business, financial, and marketing plans and enhancing logistics, operations, procurement, and other management capacities;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

2.2 Increase productivity, productive capacity, and product quality by supporting the upgrade and expansion of production facilities and access to new and improved production technologies;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

Georgia / The USAID Economic Security Program 19

2.3 Improve ability to meet

international production standards and receive internationally-recognized certifications, including environmental and other eco-friendly certifications, and;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

2.4 Facilitate increased access to

new domestic buyers, international markets, and financing opportunities for further growth and expansion.

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

Component 3: Industry-led workforce development

Recommended Threshold Determination

3.1 Design initiatives that

increase communications and strengthen linkages between industry, government, and educational institutions to address skills mismatches and contribute solutions for demand-driven education;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

3.2 Support businesses to create

on-the-job learning opportunities and develop incentives that tie trainings and certifications to internships, apprenticeships, and other forms of preferential consideration for employment opportunities;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

Georgia / The USAID Economic Security Program 20

3.3 Develop programs that train

specialists in high demand in targeted sectors; Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

3.4 Improve and upgrade service

quality and safety standards for various education service providers to internationally accepted practices, standards, and certifications;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define appropriate EMMPs to be developed. The ERC/EMMP will be completed and approved with sub-grant approval process, prior to activities beginning.

Negative

3.5 Support graduates of

workforce development programs to start their own businesses and/or gain internships and employment through job fairs and similar events that link graduates with potential employers, and;

Potential impacts of grant supported activities on land, water, air and human health

USAID will ensure the implementing partner prepares and submits for USAID approval the attached Environmental Review Checklist (ERC) that will define…