Attachment 1 DCN 2022GEO001 IEE.pdf

DCN: 2022-GEO-001

Georgia / USAID Resilient Communities Program 1 E&E Bureau IEE Template (Version 27 July 2021)

US Agency for International Development (USAID) USAID/Georgia

Initial Environmental Examination (IEE)

Program/Project/Activity Data Activity/Project Name: USAID Resilient Communities Program

Assistance Objective: DO.1: Resilience to External Malign Influence Strengthened

Program Area: DO.1: Resilience to External Malign Influence Strengthened

Country(ies) and/or Operating Unit: Georgia Originating Office: EG Date: 8/13/2021 Original IEE? Yes No Original IEE LOP Start Date: FY2022 IEE/RCE Amendment? Yes No New Funding: $24,000,000 IEE/RCE History DCN LOP End Date Total Funding ($) Original IEE N/A FY 2026 $24,000,000 Contract/Award Number (if known):

Recommended Environmental Determination (s):

Categorical Exclusion Positive Determination Negative Determination Deferral

Additional Elements:

Conditions Government to Government

No Conditions Public International Organization (PIO) environmental and social policies and procedures applicable

Local Procurement Sustainability Analysis (included)

Donor Co-Funded Climate Change Vulnerability Analysis (included) Climate Change Vulnerability Rating: Low

1. Background and Project Description

1.1 Purpose and Scope of IEE

The purpose of the IEE is to cover the USAID’s 5-year USAID Resilient Communities Program activity, estimated at $24,000,000. Recommended Environmental Determinations for this activity is Categorical Exclusions and Negative Determination with Conditions.

1.2 Project Overview

The purpose of the USAID Resilient Communities Program is to strengthen resilience capacity of at-risk communities, improving their economic conditions and ability to mitigate economic shocks and malign influence.

Georgia / USAID Resilient Communities Program 2 E&E Bureau IEE Template (Version 27 July 2021)

The primary focus of the Program is to strengthen the resilience of up to 93 communities alongside the ABL (all GOG-administered territories adjacent to ABL, excluding occupied communities) and potentially other communities of the country that are vulnerable to external malign influence. The list of primary target communities is attached in Annex A of this scope of work. The program will use a market-systems approach to address the root causes of vulnerability in target communities through increased market linkages, investment, and community strengthening. The Program will not prescribe any sector or type of implementation activity. Rather the Program must take a broad approach to resolve the wide range of economic, and social challenges for improved resiliency.

1.3 Project Description

The USAID Resilient Communities Program has four components:

Component 1 – Targeted communities have increased cohesion and increased resilience to economic, social, and environmental shocks

The aim of Objective 1 is to build the capacity of target communities in economic planning and in risk identification, mitigation, and response. It will support the improvement of services at the community and municipal level and will sustainably build local productive economic infrastructure. The contractor must design and implement activities that can be adapted to reflect a changing development context and improve the ability of people, businesses, households, communities, and municipalities in and near the ABL to mitigate, adapt to, and recover from shocks and stresses in a manner that reduces chronic vulnerability and facilitates their ability to lead their own development.

Component 2 – Improved Productivity of Micro and Small Enterprises

The Program’s resources will be used to improve productive capacity and productivity to meet product quality requirements, and certification standards, adopt improved technologies, improve marketing and branding at different levels of value-chains, build logistics, facilitate purchase agreements to expand linkages with the producer clusters from the target communities, and facilitate access to national, and potentially international markets. This support can be for existing micro and small enterprises as well as startup businesses.

Component 3 – Increased integration of MSMEs in targeted communities into the regional and national markets

Under this Component, the Contractor must design interventions that create opportunities for enterprises in the target area to engage in market systems sustainably and profitably as well as address market systems gaps, such as lack of storage facilities and supply chain problems. The Contractor must design and implement an integrated set of interventions that increase the potential for enduring linkages within and between target communities and the greater Georgian territory.

Component 4 – Increased private investment in or near ABL communities to accelerate Small and Medium Enterprises’ growth and diversify the economy

The purpose of this objective is to attract and mobilize private and public investment and partnerships that advance enterprise-driven development in target areas. The Contractor must make catalytic use of Program resources to attract investment in the target communities, including creation of new

Georgia / USAID Resilient Communities Program 3 E&E Bureau IEE Template (Version 27 July 2021) and/or expansion of existing SMEs; incentivizing private enterprises to introduce innovation, best practices, and technology that enhance firm-level productivity, improve backward linkages with target communities, and strengthen selected market systems. The Contractor must engage a wide-range of private sector entities across industries in co-creating market-based solutions to attract investment in target communities and facilitate linkages to sustained, resilient markets.

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 1.2 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 3.7 million people and a gross national income (GNI) of USD 4,290. According to a 2019 World Bank report, 19.5 % 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 35.9 (The World Bank), 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.

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

2.3 Environmental Capacity Analysis

Georgia’s legal framework for biodiversity has experienced some significant changes in recent years, most notably the introduction and passage of new legislation and a re-structuring of the government. Increasing attention from lawmakers in updating legislation has been driven mostly by requirements of the EU Association Agreement and associated free trade act. Passage of draft legislation is required to finalize harmonization activities; additional work is also needed on integrating conservation considerations into legislation for other sectors (energy, tourism, etc.)

Improved capacity for implementing both legislation and national strategies for biodiversity conservation is needed; Georgia continues to be heavily dependent on international actors and funding for development and implementation of many of its strategies and laws.

2.4 Sustainability Analysis

The Contractor must design and implement interventions in ways that ensure that their results are sustainable beyond the life of the program. Sustainability of the activities should be ensured from the very first steps of Program design and carried throughout by focusing on private sector-led development; by engaging stakeholders in the design of the interventions and addressing their needs; and by ensuring local ownership of Program results. Where possible, the Contractor must reorient practices or activities that could undermine sustainability, preferably in ways that create new opportunities. The Contractor must also promote engagement and partnerships with financial institutions and other private and public sector actors that have interests in seeing program interventions and results sustained into the future and ensure that each grantee has a sustainability plan after the end of the Program.

2.5 Climate Change Vulnerability Analysis

In accordance with Executive Order (EO) 13677 and Mandatory Reference for ADS Chapter 201 on Climate Risk Management for USAID Projects and Activities, was conducted climate risk management screening for the activity.

Climate Risk Ratings are defined as:

Low climate risk: Climate change is unlikely to significantly impact achievement of development outcomes relative to other stressors and development challenges.

A low climate risk rating does not require the development of specific plans to address climate risk.

https://www.whitehouse.gov/the-press-office/2014/09/23/executive-order-climate-resilient-international-development https://www.usaid.gov/ads/policy/200/201mal https://www.usaid.gov/ads/policy/200/201mal

Georgia / USAID Resilient Communities Program 5 E&E Bureau IEE Template (Version 27 July 2021)

3. Environmental Impacts and Recommended Mitigation Measures Component 1 – Targeted communities have increased cohesion and increased resilience to economic, social, and environmental shocks Defined/Illustrative Activities Potential

Impacts Mitigation Measures Recommended

Threshold Determinations

1.1 Build the capacity of target

communities in economic planning and in risk identification, mitigation, and response

No adverse impacts are likely

None Categorical Exclusion

1.2 Improve service delivery at the

community and municipal level

No adverse impacts are likely

None Categorical Exclusion

1.3 Improve local economic

infrastructure

Potential impacts on land, water, air and human health

The implementer shall submit a short description of the proposed activities to the COR and MEO. In case potential impacts on the environment and/or health of the beneficiaries are possible, an Environmental Review Checklist (ERC) with Environmental Mitigation and Monitoring Plan (EMMP) shall be completed prior to start of the activities. No ERC will be required for the activities that do not have potential environmental or occupational health impacts.

Negative Determination with Conditions

Component 2 – Improved Productivity of Micro and Small Enterprises (MSE)

Defined/Illustrative Activities Potential Impacts

Mitigation Measures Recommended Threshold Determination

2.1 Identify sectors and crops most

suitable to the area and most capable of providing the inter-community and inter-regional linkages that are sought by this program, in addition to opportunities for increased productivity and profitability

No adverse impacts are likely

None Categorical Exclusion

2.2 Improve productivity and increase

revenues for selected micro- and small-enterprises

Potential impacts on land, water, air and human health

The implementer shall submit a short description of the proposed activities to the COR and MEO. In case potential impacts on the environment and/or health of the beneficiaries are possible, an Environmental Review Checklist (ERC) with Environmental Mitigation and Monitoring Plan (EMMP) shall be completed prior to start of the activities. No ERC will be required for the activities that do not have potential environmental or occupational health impacts.

Negative

2.3 Prepare MSEs for increased market

integration

No adverse impacts are likely

None Categorical Exclusion

Georgia / USAID Resilient Communities Program 6 E&E Bureau IEE Template (Version 27 July 2021)

Component 3 – Increased integration of MSMEs in targeted communities into the regional and national markets Defined/Illustrative Activities Potential Impacts Mitigation Measures Recommended

Threshold Determinations

3.1 Identify existing commercially

viable sector clusters. Where no such clusters exist, organize small producers into commercially viable clusters

No adverse impacts are likely

None Categorical Exclusion

3.2 Link new and existing clusters to

other value-chain players

No adverse impacts are likely

None Categorical Exclusion

3.3 Increase trade between the

target communities and other regions of Georgia

No adverse impacts are likely

Component 4 – Increased private investment in or near ABL communities to accelerate Small and Medium Enterprises’ growth and diversify the economy Defined/Illustrative Activities Potential Impacts Mitigation Measures Recommended

Threshold Determinations

4.1 attract and mobilize private and public investment and partnerships that advance enterprise-driven development in target areas

Potential impacts on land, water, air and human health

The implementer shall submit a short description of the proposed activities to the COR and MEO. In case potential impacts on the environment and/or health of the beneficiaries are possible, an Environmental Review Checklist (ERC) with Environmental Mitigation and Monitoring Plan (EMMP) shall be completed prior to start of the activities. No ERC will be required for the activities that do not have potential environmental or occupational health impacts.

Negative

4.2 establish the Rural Development Fund to engage with and incentivize institutional investors and other private sector resource partners to provide catalytic capital support for economic development and diversification and ensure resilient enterprise-driven growth.

No adverse impacts are likely

None Categorical Exclusion

4.3 Increase trade between the

target communities and other regions of Georgia

No adverse impacts are likely

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4. Conclusions of the Environmental Review

4.1 Recommended Environmental Determinations:

Categorical Exclusions:

A categorical exclusion is recommended for the following identified activities under 22 CFR 216.2(c)(2):

• Activity 1.1, 1.2, 2.1, 2.3, 3.1, 3.2, 3.3, 4.2, 4.3 under §216.2(c)(2)(i) Education, technical assistance, or training programs except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.);

Negative Determination:

Under §216.3(a)(2)(iii), a negative determination is recommended for activities 1.3, 2.2, 4.1. Specific terms and conditions are presented below in Section 4.2.

4.2 Negative Determination Terms and Conditions:

4.2.1 Prior to initiating any activity that has the potential to result in significant adverse environmental, health, and safety impacts, the IP shall prepare an environmental review document in the ERC/EMMP format provided by the MEO. The COR/AOR and MEO shall approve the environmental review document prior to implementation The BEO reserves the right to rescind the approval of an environmental review document due to environmental risks. For each site-specific activity, the environmental review document shall include a Certification of No Adverse Significant Effects on the Environment signed by the IP, COR/AOR, and MEO; assigned a Document Control Number (DCN) and posted to the Environmental Compliance Database (ECD).

4.2.2 Preparation of environmental review documents shall be captured in annual work plans, and therefore budgeted for and reviewed for adequacy at least annually.

4.2.3 Changes in activities and their associated environmental review documents shall necessitate amending the IEE or issuing a Memo to the File (depending on the extent and potential impact of the changes).

4.3 USAID Monitoring and Reporting

4.3.1 The AOR/COR, with the support of the MEO, is responsible for monitoring compliance of activities by means of desktop reviews and site visits.

4.3.2 The AOR/COR is responsible for confirming that the IP includes environmental compliance requirements and monitoring results as part of their routine project reporting to USAID.

4.3.3 If at any time the project is found to be out of compliance with the IEE, the AOR/COR or

MEO shall immediately notify the BEO.

4.3.4 A summary report of Mission’s compliance relative to this IEE shall be sent to the BEO on an annual basis, normally in connection with preparation of the Mission’s annual environmental compliance report required under ADS 203.3.8.5 and 204.3.3.

4.3.5 The BEO or his/her designated representative may conduct site visits or request additional information for compliance monitoring purposes to ensure compliance with this IEE, as necessary.

4.4 Implementing Partner (IP) Environmental Compliance Monitoring and Reporting

4.4.1 If an individual activity is found to pose significant adverse environmental effects that have not been identified and addressed in the approved environmental review documents, new environmental review documents shall be developed to include environmental safeguards for such effects.

4.4.2 IPs shall report on environmental compliance requirements and monitoring results as part of their routine project reporting to USAID.

4.4.3 After the IP has finalized its activities at a specific site, the IP shall sign a Record of Compliance certifying that the organization met all applicable conditions and submit it to the

Georgia / USAID Resilient Communities Program 8 E&E Bureau IEE Template (Version 27 July 2021)

COR/AOR. The COR/AOR shall keep the original for the project files and provide a copy to the MEO and BEO. The ROC shall be assigned a DCN and posted to the ECD.

5. Mandatory Inclusion of Requirements in Solicitations, Awards, Budgets and Workplans

5.1 Appropriate environmental compliance language, including limitations defined in Section 6, shall be incorporated into solicitations and awards for this activity and projects budgets shall provide for adequate funding and human resources to comply with requirements of this IEE.

5.2 Solicitations shall include Statements of Work with tasks for meeting environmental compliance requirements and appropriate evaluation criteria.

5.3 Environmental mitigation and monitoring requirements, when available, shall also be included in solicitations and awards.

5.4 The IP shall incorporate conditions set forth in this IEE into their annual work plans.

5.5 The IP shall ensure annual work plans do not prescribe activities that are defined as limitations, as defined in Section 6.

5.6 The USAID Mission will include an indicator for environmental compliance as part of the project’s performance monitoring plan. (For example, if an IEE has a threshold determination of negative determination, then a possible indicator is if the IP complied with the ERC/EMMP.)

6. Limitations of the IEE: This IEE does not cover activities (and therefore should changes in scope implicate any of the issues/activities listed below, a BEO-approved amendment shall be required), that:

6.1 Normally have a significant effect on the environment under §216.2(d)(1), including:

• Programs of river basin development;

• Large scale irrigation or water management projects, including dams and impoundments;

• Agricultural land leveling;

• Large scale drainage projects;

• Large scale agricultural mechanization;

• New lands development;

• Resettlement projects;

• Penetration road building or road improvement projects;

• Powerplants;

• Industrial plants;

• Potable water and sewerage projects other than those that are small scale.

6.2 Support project preparation, project feasibility studies, engineering design for activities listed in §216.2(d)(1);

6.3 Affect endangered species;

6.4 Result in wetland or biodiversity degradation or loss;

6.5 Support extractive industries (e.g., mining and quarrying);

6.6 Promote timber harvesting;

6.7 Provide support for regulatory permitting;

6.8 Result in privatization of industrial or infrastructure facilities;

6.9 Assist the procurement (including payment in kind, donations, guarantees of credit) or use

(including handling, transport, fuel for transport, storage, mixing, loading, application, cleanup of spray equipment, and disposal) of pesticides or activities involving procurement, transport, use, storage, or disposal of toxic materials and /or pesticides (cover all insecticides, fungicides, rodenticides, etc. covered under the Federal Insecticide, Fungicide, and Rodenticide Act); and

6.10 Procure or use genetically modified organisms.

Georgia / USAID Resilient Communities Program 9 E&E Bureau IEE Template (Version 27 July 2021)

7. Revisions

7.1 Under §216.3(a)(9), if new information becomes available that indicates that activities covered by the IEE might be considered major and their effect significant, or if additional activities are proposed that might be considered major and their adverse effect significant, this environmental threshold decision will be reviewed and, if necessary, revised by the Mission with concurrence by the BEO.

It is the responsibility of the USAID COR/AOR to keep the MEO and BEO informed of any new information or changes in the activity that might require revision of this IEE.

8. Environmental Threshold Decision Clearances:

Concurrence:

Poojan Tripathi, Bureau Environmental Officer Date USAID Europe and Eurasia Bureau

Distribution:

Activity File

AOR/COR

MEO

BEO

ECD

Georgia / USAID Resilient Communities Program

EE.BEU Standard Form: ERC/EMMP.v2

Annex A: Climate Risk Screening and Management Tool

1: Components or Sub-activities

2: Time-frame and Geograph y

3: Climate Risks* 4: Climate Risk Rating*

5: How Climate Risks are Addressed in the Activity*

6: Accepted Climate Risks*

Component 1:

Targeted communities have increased cohesion and increased resilience to economic, social, and environmental shock

FY 2022-

FY2026

Georgia

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 Support facilities that maintain air conditioning and evacuation plans (in case of disaster) and increase awareness and advocacy.

While the services are provided the contractor should be mindful to gather any information related to climate change, if applicable.

Develop specific environmental criteria as part of the grants selection process to identify, avoid, or minimize impacts and raise environmental awareness.

Support opportunity to integrate Climate adaptation tools to MSMEs

None

Component 2:

Improved Productivity of Micro and Small Enterprises

Low none

Component 3:

Increased integration of MSMEs in targeted communities into the regional and national markets

Low none

Objective 4.

Increased private investment in or near ABL communities to accelerate Small and Medium Enterprises’ growth and diversify the economy

Low none