RFP 72011524R00002 Green Economy Activity.pdf

Issue Date: May 15, 2024

Questions Due: May 28, 2024, 10 am Bishkek time Proposals Due: July 9, 2024, 10 am Bishkek time

Subject: Request for Proposal (RFP) 72011524R00002 Green Economy Activity

Dear Potential Offerors:

U.S. Agency for International Development (USAID)/Kyrgyz Republic is seeking proposals from qualified organizations to implement a Green Economy Activity as described in the attached Request for Proposals (RFP).

The activity will be implemented through a single cost-plus-fixed fee completion contract. The applicable geographic codes for this procurement are 937 and 110. The amount of total funding reserved for this activity is $23,999,151. The cost proposal must not exceed this amount. Offerors must carefully review Sections L and M of this RFP for details of the process.

The competition will utilize a Highest Technical Rated with Fair and Reasonable Price and Realistic Cost (HTR) process, not a tradeoff process. In this process, USAID is concerned with getting the best technical solution that has a fair and reasonable price and realistic cost. There will not be a tradeoff to justify paying a premium for a higher technical rated proposal.

If your organization decides to submit a proposal in response to this solicitation, it must be submitted by the designated date and time indicated above and in Block 9 of the RFP cover page (Standard Form 33). Proposals received after the closing date and time will be processed as late and handled in accordance with FAR 52.215-1. Proposals in response to this solicitation must be valid for 180 days and signed by an official who is authorized to bind the Offeror’s organization.

Questions and comments related to this RFP must be submitted electronically to AlmatyAASolicitations@usaid.gov with a copy to Natalya Virt, Senior Acquisition and Assistance Specialist at nvirt@usaid.gov and Gulzhanat Rysdauletova, Acquisition and Assistance Specialist at grysdauletova@usaid.gov no later than date and time indicated above using the following format for the email subject line: “72011524R00002, Green Economy Activity – [Name of Organization] Questions/Comments”.

USAID will make every effort to respond to questions/comments from each Offeror and will distribute all responses to all offerors as an amendment to this RFP.

mailto:AlmatyAASolicitations@usaid.gov mailto:nvirt@usaid.gov mailto:grysdauletova@usaid.gov

The Technical and Cost proposals must be separate and must be submitted according to Section L of this RFP. Only electronic proposals will be accepted in response to this RFP.

This RFP can be viewed and downloaded from www.sam.gov. USAID bears no responsibility for data errors resulting from transmission or conversion processes. Further, be aware that amendments to solicitations are occasionally issued and will be posted on the same website from which you downloaded the solicitation. USAID advises to regularly check the above website for amendments. It is the responsibility of the offerors to make sure they access the RFP and its amendments in their entirety.

Issuance of this RFP in no way obligates the U.S. Government to award a contract nor does it commit the U.S. Government to pay any costs incurred in the preparation and submission of a proposal. Furthermore, the Government reserves the right to reject any and all offers, if such action is considered to be in the best interest of the U.S. Government.

Thank you for your interest in USAID programs.

Sincerely, Raphael Metzger Contracting Officer http://www.sam.gov/

72011524R00002

SOLICITATION, OFFER AND AWARD

4. TYPE OF SOLICITATION2. CONTRACT NUMBER 3. SOLICITATION NUMBER

7. ISSUED BY CODE 8. ADDRESS OFFER TO (If other than Item 7)

ORDER UNDER DPAS (15 CFR 700)

6. REQUISITION/PURCHASE NUMBER

NOTE: In sealed bid solicitations "offer" and "offeror" mean "bid" and "bidder".

NEGOTIATED (RFP)

SEALED BID (IFB)

5. DATE ISSUED

1. THIS CONTRACT IS A RATED RATING PAGE OF PAGES

1 133

C. E-MAIL ADDRESS

EXT.NUMBERAREA CODE

B. TELEPHONE (NO COLLECT CALLS)A. NAME

10. FOR

INFORMATION

CALL:

CAUTION: LATE Submissions, Modifications, and Withdrawals: See Section L, Provision No. 52.214-7 or 52.215-1. All offers are subject to all terms and conditions contained in this solicitation.

(Date)(Hour) local timeuntildepository located in copies for furnishing the supplies or services in the Schedule will be received at the place specified in Item 8, or if hand carried, in the

SOLICITATION

9. Sealed offers in original and

PART IV - REPRESENTATIONS AND INSTRUCTIONS

OTHER STATEMENTS OF OFFERORS

EVALUATION FACTORS FOR AWARD

INSTRS., CONDS., AND NOTICES TO OFFERORS

REPRESENTATIONS, CERTIFICATIONS AND

LIST OF ATTACHMENTS

CONTRACT CLAUSES

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.

I

J

K

L

M SPECIAL CONTRACT REQUIREMENTS

CONTRACT ADMINISTRATION DATA

DELIVERIES OR PERFORMANCE

INSPECTION AND ACCEPTANCE

PACKAGING AND MARKING

DESCRIPTION/SPECS./WORK STATEMENT

SUPPLIES OR SERVICES AND PRICES/COSTS

SOLICITATION/CONTRACT FORM

PART II - CONTRACT CLAUSESPART I - THE SCHEDULE

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SEC. DESCRIPTION PAGE(S) (X) DESCRIPTION SEC. (X)

11. TABLE OF CONTENTS

18. OFFER DATE17. SIGNATURE

SUCH ADDRESS IN SCHEDULE.

IS DIFFERENT FROM ABOVE - ENTER

15C. CHECK IF REMITTANCE ADDRESS

EXT.NUMBERAREA CODE

15B. TELEPHONE NUMBER

(Type or print)AND

ADDRESS

OF

OFFEROR

CODE FACILITY

16. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER15A. NAME

DATEAMENDMENT NO.DATEAMENDMENT NO.

and related documents numbered and dated):

amendments to the SOLICITATION for offerors

(The offeror acknowledges receipt of

14. ACKNOWLEDGEMENT OF AMENDMENTS

CALENDAR DAYS (%)30 CALENDAR DAYS (%)20 CALENDAR DAYS (%)10 CALENDAR DAYS (%)

(See Section I, Clause No. 52.232.8)

13. DISCOUNT FOR PROMPT PAYMENT

designated point(s), within the time specified in the schedule.

by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the

NOTE: Item 12 does not apply if the solicitation includes the provisions at 52.214-16, Minimum Bid Acceptance Period.

OFFER (Must be fully completed by offeror)

IMPORTANT - Award will be made on this Form, or on Standard Form 26, or by other authorized official written notice.

28. AWARD DATE

(Signature of Contracting Officer)

27. UNITED STATES OF AMERICA

25. PAYMENT WILL BE MADE BY

26. NAME OF CONTRACTING OFFICER (Type or print)

CODE 24. ADMINISTERED BY (If other than Item 7)

ITEM

(4 copies unless otherwise specified)

23. SUBMIT INVOICES TO ADDRESS SHOWN IN

41 U.S.C. 253 (c) ( 10 U.S.C. 2304 (c) (

22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION:

21. ACCOUNTING AND APPROPRIATION20. AMOUNT19. ACCEPTED AS TO ITEMS NUMBERED

AWARD (To be completed by government)

CODE

05/15/2024 X

720115

USAID/Central Asia/Kazakhstan 41 Kazibek Bi St.

Almaty 050010, Kazakhstan 00000

0900 F 07/09/2024

Natalya Virt +77 12ext.

nvirt@usaid.gov

272-5076

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PAGE(S)

Raphael Metzger

AUTHORIZED FOR LOCAL REPRODUCTION

Previous edition is unusable

STANDARD FORM 33 (Rev. 9-97)

Prescribed by GSA - FAR (48 CFR) 53.214(c)

1-2 4-6

7-22 23-25 26-27 28-44 45-49 50-84

85-93

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12. In compliance with the above, the undersigned agrees, if this offer is accepted within _____0_________ calendar days (60 calendar days unless a different period is inserted

ITEM NO. SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

NAME OF OFFEROR OR CONTRACTOR

2 133

CONTINUATION SHEET

REFERENCE NO. OF DOCUMENT BEING CONTINUED PAGE OF

72011524R00002

(A) (B) (C) (D) (E) (F)

Green Economy Activity

OPTIONAL FORM 336 (4-86)

Sponsored by GSA

FAR (48 CFR) 53.110

NSN 7540-01-152-8067

RFP No. 72011524R00002 Green Economy Activity

Contents

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

SECTION C – ACTVITY DESCRIPTION

SECTION D - PACKAGING AND MARKING

SECTION E - INSPECTION AND ACCEPTANCE

SECTION F - DELIVERIES OR PERFORMANCE DELIVERABLES AND REQUIRED REPORTING

SECTION G - CONTRACT ADMINISTRATION DATA

SECTION H - SPECIAL CONTRACT REQUIREMENTS

PART II - CONTRACT CLAUSES

SECTION I – CONTRACT CLAUSES

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

SECTION J - LIST OF ATTACHMENTS

PART IV - REPRESENTATIONS AND INSTRUCTIONS

SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS OF OFFERORS

SECTION L- INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS

SECTION M – EVALUATION FACTORS FOR AWARD

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to acquire services to implement the USAID/Kyrgyz Republic’s Green Economy Activity as described throughout this contract.

B.2 CONTRACT TYPE AND SERVICES

A Cost or Cost-Plus-Fixed-Fee (CPFF) Completion contract is anticipated. For consideration set forth below, the contractor must provide the deliverables and outputs described herein.

B.3 TOTAL ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

(a) The Total Estimated Cost and fixed fee, if any, is as follows (TBD):

Item Year 1

(USD)

Year 2

(USD)

Year 3

(USD)

Year 4

(USD)

Year 5

(USD)

Total

1 Salaries

2 Fringe Benefits

3 Consultants

4 Travel, Transportation and Per Diem

5 Allowances

6 Subcontracts

7 Other Direct Costs

8 Indirect Costs

9 Total Costs

10 Fixed Fee

Total Estimated Cost (including Fixed Fee)

(b) The amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee, if any) for performance hereunder is

$TBD. The Contractor shall not exceed the obligated amount.

(c) Funds obligated hereunder are anticipated to be sufficient through TBD.

B.4 COST REIMBURSABLE

The U.S. dollar costs allowable shall be limited to reasonable, allocable and necessary costs determined in accordance with FAR 52.216-7, Allowable Cost and Payment, FAR 52.216-8, Fixed Fee, if applicable, FAR 52.232-20, Limitation of Cost, FAR 52.232-22, Limitation of Funds and AIDAR 752.7003, Documentation for Payment.

B.5 INDIRECT COSTS

Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs must be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases.

Description Rate Base Type Period

TBD TBD TBD TBD TBD

Base of Application: TBD

Type of Rate: TBD

Period: TBD

Source: TBD

NOTE: Insert additional indirect rates as needed for the prime above.

The Contractor is allowed to recoup indirect costs (OH, G&A, etc.) as Other Direct Costs (ODC) if it is part of the contractor’s usual accounting procedures, consistent with FAR Part 31 and the contractor's Negotiated Indirect Cost Rate Agreement (NICRA).

B.6 PAYMENT OF FEE

(a) This is a Cost Plus Fixed Fee (CPFF) contract. The total amount of fee, if any, that can be earned has been set at the time of award and does not vary with actual cost. Cost Reimbursement with no fee will also be considered.

(b) The form of this CPFF contract is the completion form. Definite goals or targets must be achieved and end products must be completed, delivered, and accepted by USAID during the period of performance and within the total estimated cost as a condition for payment of the entire fixed fee.

(c) The goals or targets that must be achieved and end products that must be completed, delivered, and accepted by USAID in order for fee to be payable are identified in the Life of Project Work Plan (WP) and/or the Monitoring, Evaluation, and Learning (MEL) Plan (see Sections C and F); and referred to alternatively therein as milestones, results, outputs, indicators and/or benchmarks.

(d) Within 30 days of approval of the WP and MEL Plan by the COR the Contractor must submit a proposed Fee Distribution Plan for approval by the Contracting Officer.

(e) The proposed Fee Distribution Plan must take the overall fee that has been fixed for this award and distribute it across goals or targets and end products from the approved WP and/or MEL Plan. The distribution should be expressed as both a percentage of total fixed fee and as the total dollar amount represented by the percentage.

(f) Goals or targets and end products from the Fee Distribution Plan that have fee associated with their completion or delivery shall be referred to as Fee Bearing Milestones.

(g) The Fee Distribution Plan must include both implementation management and development results milestones as Fee Bearing Milestones.

(h) When a Fee Bearing Milestones is not completed or achieved the portion of the total fixed fee allocated to the Milestone in the Fee Distribution Plan shall not be paid.

(i) When a Fee Bearing Milestones is not completed on time, or requires more cost/effort to complete than projected in the WP and/or MEL Plan, the portion of the total fixed fee allocated to the Milestone in the Fee Distribution Plan shall be subject to adjustment of the fee by the Contracting Officer.

(j) The Fee Distribution Schedule must be approved before the fee is paid.

END OF SECTION B

SECTION C – ACTVITY DESCRIPTION

Green Economy in Kyrgyz Republic

List of Acronyms

ADB Asian Development Bank AQI Air Quality Index

CDCS Country Development Cooperation Strategy CO2 Carbon Dioxide

EBRD European Bank for Reconstruction and Development

ESG Environmental, Social, Governance

FGI Future growth Initiative Activity

GDP Gross domestic product GHG Greenhouse Gas Emissions GIZ German Corporation for International Cooperation GmbH

IFC International Finance Corporation

Kha Thousand of hectares MWt Megawatt OSCE Organization for Security and Cooperation in Europe

PCA Power Central Asia Activity SMEs Small and Medium Enterprises as per National Statistics Classification1

UNDP United Nations Development Program

UNEP United Nations Environment Program

UNFCCC United Nations Framework Convention on Climate Change USAID United States Agency for International Development WB World Bank

1 National Statistical Committee classifies Firm size disaggregated by the number of job holders in the firm i.e. Micro-1-7, Small-8-15, Medium-16-50 & Large>50

I. PURPOSE AND SCOPE

The purpose of the Green Economy Activity is to build the capacity of the Kyrgyz Republic to adapt to and mitigate the effects of climate change in its economy in order to create and develop a “green economy,” or one that is low carbon, resource-efficient, and socially inclusive.2 The Activity will promote practices that contribute to a robust and resilient economy, reduce greenhouse gas (GHG) emissions in the private and public sectors, increase climate financing, and develop a policy framework to catalyze sustainable and green climate solutions.

The offeror should help advance the Kyrgyz Republic’s climate-sensitive economic growth agenda. To meet this objective, the Contractor will provide technical assistance and administer grants under contract (GUCs) to promote economic development while reducing the country’s contribution to GHG emissions and waste, increasing green jobs, promoting green financing, and contributing to a circular economy. At least 44 per cent of the TEC will be allocated to GUCs.

The activity will include the following areas:

1. Improving governance and institutional capacity for a green economy. Within this component, the Activity will improve the Kyrgyz Republic’s legislative and regulatory framework and governance, and build capacity in the government and national institutions to promote and incentivize the use of eco-friendly and climate-friendly solutions. Illustrative areas for engagement include promoting environmentally friendly policies, awareness raising, and governance measures affecting housing, heating, agriculture, industry, energy, and private sector development in order to reduce national emissions and contribute to a decarbonization agenda in a cost-effective manner.

2. Adoption of innovative technology by the public and private sectors. The Activity will help the public and private sectors to adopt innovative technologies to accelerate economic development while reducing the negative impact of development on the country’s environment. It will promote initiatives that use fewer resources to produce the same amount of output that do not negatively impact land, water, and air quality. Through this component, the Contractor will provide GUCs on a co-financing basis to businesses, including innovative and creative hubs, private sector associations, policy institutes, and start-ups. The grants will be in the service of specific projects that help to create jobs and do not have a negative impact on the climate, or can even mitigate the effects of climate change and development.

3. Green economy financing: increase the inflow of green financing into the country and increase green financing within the country’s financial system. The Contractor will work with domestic and international financial and non-bank institutions, high-net-worth individuals, foundations, and international financial institutions to increase the amount of finance that can be used for green economic expansion. It will also work with businesses and business associations to help them acquire green financing and see the financial value proposition in it.

2 “A green economy is defined as low carbon, resource efficient and socially inclusive. In a green economy, growth in employment and income are driven by public and private investment into such economic activities, infrastructure and assets that allow reduced carbon emissions and pollution, enhanced energy and resource efficiency, and prevention of the loss of biodiversity and ecosystem services.”

Source UNEP, https://www.unep.org/

II. PERIOD AND PLACE OF PERFORMANCE

The duration of the Activity is five years. It is expected that most of the work will take place in the Kyrgyz Republic with the Contractor's main in-country office located in Bishkek.

III. BACKGROUND

A. General background information and country context

A large evidence base exists showing that negative climate-related megatrends will, over time, hinder economic prosperity as factors of production (such as water, energy, and land) become increasingly scarce and expensive.3 The evidence shows that climate change will increase the prevalence of health and income inequalities leading to instability, both within countries and between the global North and South. Furthermore, unless these negative trends are reversed, the economies of developing countries will be weakened and more vulnerable.

The Kyrgyz Republic, as a small country, has already experienced negative climate-related trends, such as a scarcity of water for irrigation and export that has led to tensions with neighboring countries, significant land degradation in the agricultural sector that has reduced yields and livestock production, high pollution levels to the point where the capital city of Bishkek is among the 10 capital cities with the worst air quality in the world, scarcity of electricity, waste management problems, and other factors that impede stable and sustainable economic growth. The Kyrgyz Republic is the third-most vulnerable country to the effects of climate change among all countries in Eastern Europe and Central Asia.4 Its average temperature has increased from 5.8 C to 6 C over the last 20 years.5 Many of these problems have resulted from intensive economic production and limited attention to its climate, environment and emission repercussions.

Resource-driven economy. Economic production depends on relatively cheap labor and the extensive use of available resources. As in many developing nations, the Kyrgyz Republic uses more resources and emits more GHG that produces less GDP than developed countries (while the world average is

0.24 kilograms of GHG per dollar of GDP, Kyrgyz Republic emits 0.38 kilograms of GHG per dollar of GDP. As a point of comparison, Switzerland produces 0.03 kilograms of GHG per dollar of GDP).6 The country's mining sector contributes to about 12 per cent of GDP with significant terrain excavations.

The growing apparel sector produces a significant amount of waste that is dumped in landfills or burned. Businesses should be introduced to and encouraged to adopt resource-efficient solutions in energy, input supplies, and natural resource use. Additional efforts should be taken to expand

3 Based on ADB Climate Risk Country Profile: Kyrgyz Republic -2021; OurWorldinData.org; Climate Watch, the World Resources Institute;

McKinsey Global Institute Analysis, Intergovernmental Panel on Climate Change (IPCC) reports and articles, Living Planet report-2020 of World Wildlife Fund; The Dasgupta Review on Economic Biodiversity of 2021; Environmental research Journal of February 2021 on Fossil Fuel Combustion.

4 "Kyrgyzstan ranks third most vulnerable to climate change impacts in Central Asia" www.kabar.kg based on University of Central Asia’s (UCA) Mountain Societies Research Institute (MSRI) 5 "Kyrgyz Republic is one of the most vulnerable countries to climate change in Central Asia". www.unicef.org 6 https://en.wikipedia.org/wiki/List_of_countries_by_carbon_intensity_of_GDP http://kabar.kg/eng/news/kyrgyzstan-ranks-third-most-vulnerable-to-climate-change-impacts-in-central-asia/ http://www.kabar.kg/ https://www.unicef.org/kyrgyzstan/press-releases/kyrgyzstan-one-most-vulnerable-countries-climate-change-central-asia business growth in low-emission industries like information technology, the creative industry, and eco-tourism.

Resource-intensive agriculture: The Kyrgyz Republic relies heavily on livestock in the agricultural sector, as many families own large herds of animals that they not only use for meat and dairy production but also as mobile stores of wealth and for cultural reasons. According to the United Nations Framework Convention on Climate Change, the Kyrgyz Republic emits approximately 3 million tons per year of agricultural methane emissions, which includes animals, animal waste, rice production, and the burning of agricultural waste.7 As a result of heavy grazing, the country is losing its pastures and forests because it uses resource-intensive production methods. A recent GIZ report indicates that at least 29 per cent of pastures are degraded as of 20228, and a Global Forest Watch report shows that the country has lost 2,470 hectares of tree cover in the last 20 years.9 These factors contribute to higher levels of emissions due to in-farm grazing and lack of emission pockets.10 As a result, agricultural production processes need to be improved to reduce GHG and promote green agricultural practices.

Glacial melting and water issues: Rising temperatures are reducing the country’s glacial cover and aggravating water accessibility issues. The Kyrgyz Republic has experienced anecdotal cases in the last two years of irrigation water deficits, as reported by USAID farmer partners and media, which has contributed to tensions with its neighbors that share water basins and water resources.11 The country’s extensive use of hydropower for electricity needs also forces it to release a significant amount of water in winter for electricity production, resulting in less water remaining during the summer for irrigation. For example, crumbling irrigation networks that have not been well-maintained since Soviet times force people to use drinking water for household garden irrigation, which has resulted in drinking water shortages in the summer in Bishkek city.

Issues in energy. The Kyrgyz Republic depends on hydropower for its national electricity supply.

Water scarcity caused by irregular rainfall, lower snow and rain levels, and higher temperatures that evaporate water resources and cause drought are threatening the sustainability of this clean energy source. If temperatures rise and the water level continues to fall, the country’s energy sector may collapse. Electricity supply deficits - particularly in winter - have led to households increasingly relying on coal for their energy needs. Russia and the People’s Republic of China have signed memoranda of understanding with the government of the Kyrgyz Republic to develop many large coal, hydroelectric, solar, and wind projects, but their terms are opaque and they may constitute debt traps if power purchase agreements are signed from them. Solar and wind energy development is in a nascent stage

7 National report to UNFCCC at unfccc.int 8 GIZ supported report “Pasture condition maps in Kyrgyzstan” by International Fund for Agricultural development and Climate Resilience Cluster of the Earth Observation for Sustainable Development. https://kyrgyzstan.un.org/sites/default/files/2022- 03/EO4SD_condition_maps_ver2.5_ORANGE.pdf 9 https://www.globalforestwatch.org/dashboards/country/KGZ/ 10 In farm grazing or growing cattles in a closed farm means that the farmers feed them with fodder like corn. The fodder production takes more resources including fertilizers, pesticides, water, labor, etc.? and the manure in big quantities produces methane that is believed to produce more heat and thus more harmful than CO2 11 https://eurasianet.org/kyrgyzstan-capital-citys-water-crisis-nears-critical-point, https://reliefweb.int/report/kyrgyzstan/long-road-sufficient-water, https://thediplomat.com/2021/11/drought-and-crumbling-infrastructure-threats-to-kyrgyzstans-agricultural-sector and requires a comprehensive approach to create bankable projects that can be developed on a nationwide basis. National standards to reduce energy losses for heating need to be created in order to reduce overall energy consumption, particularly from coal.

Air pollution. As a result of households using coal to heat their homes in the winter, many areas of the country have very poor air quality during the winter months with particulate levels reaching upwards of 433 on the Air Quality Index (AQI).12 Russia’s Gazprom acquired Kyrgyzstan’s national natural gas company in 2014, and it is currently extending existing gas piping infrastructure in Bishkek city and the surrounding neighborhoods. However, due to limited gasification, low-quality coal still remains a significant source of heating for many newly developed neighborhoods in Bishkek and rural Kyrgyzstan. Outdated urban planning practices do not allow for natural winds to pass through to push out dirty air. Increasing numbers of cars on the road also contribute to higher GHG emissions and air pollution. As a result, the number of people with diseases resulting from poor air quality has increased by 20 per cent in the last ten years, as per the Kyrgyz Republic’s National Statistical Committee.

Sinking in waste. The Kyrgyz Republic has long had a problem in solid waste collection and processing.

According to experts, about 100 million tonnes of production and consumption waste are stored in 35 tailing dumps and 25 mine dumps. The largest landfill in Bishkek remains a source of ongoing air pollution throughout the city. The landfill has a recurring fire that results from the decomposition of organic material producing easily ignited gas. The European Bank of Reconstruction and Development (EBRD) has provided assistance to improve the management of the landfill, however, there is still much progress to be made to solve the problem.

In summary, the country’s current economic development is highly resource-intensive and not climate-friendly. This trend needs to be changed for it to thrive in a new climate reality.

Shrinking civic space. In April, 2024, the President signed the Law on Foreign Representatives, which requires all CSOs to re-register with the Ministry of Justice and to be categorized as “foreign representatives” if they receive foreign funding and engage in “political” or “policy” work. CSOs affected by this law would be subjected to heightened inspections and more severe sanctions. The new tax reporting requirements add a significant financial and administrative burden on CSOs, especially small and rural organizations. This law might impact the way the Activity is implemented in the area of public policy and with the CSOs.

B. Development challenge or problem statement

The Activity will show a pathway to sustainable economic growth that considers economic growth in the context of climate and environmental issues.

Theory of Change:

IF the legal and regulatory environment for business is improved, IF businesses receive incentives to adopt innovations, and IF financial products for green investments are more readily available, 12 https://www.iqair.com/us/kyrgyzstan/bishkek

THEN businesses will expand green investment, reduce GHG emissions, preserve water resources, and create jobs in climate-resilient, low-carbon technologies.

The Activity will contribute to the National Development Strategy of the Kyrgyz Republic until 2026 and be based on the results of the Green Economy Program 2023.

The Activity supports USAID/Kyrgyz Republic’s Country Development Cooperation Strategy (CDCS) Development Objective 2: Robust and Diversified Economic Opportunities for the People of the Kyrgyz Republic. The CDCS calls for the development of a robust and dynamic private sector that will allow the country to realize its economic growth potential and stated economic objectives. Sustainable economic growth is only possible by accounting for climate and environmental changes. As a result, the country needs to develop economic opportunities for people and businesses in an environmentally friendly way, reduce the negative effects of climate change, and make economic growth more sustainable in the long term. This activity will also support the climate annex to the

CDCS.

This Activity will contribute to the Integrated Country Strategy “Mission Objective 2.1: An accessible, diversified, ideas-based economy attracting greater international and regional interconnectivity” and “Mission Objective 2.2: Implementation of sustainable natural resource management and adoption of cleaner energy sources and technologies.”

C. Relationship to other USAID activities and other donor-funded programs

The Green Economy Activity will closely work with and build its future initiatives on the ongoing and past work of USAID in the country and in the region. It will help to create an enabling environment in the legal and regulatory environment and in private sector incentives that strengthen the results of developmental assistance and similar green growth activities in the country/region. More specifically, the Contractor will collaborate and coordinate with other relevant initiatives, particularly those identified in the following lists. These lists may change over time as new activities come online and existing activities are completed.

Bilateral Activities

Enterprise Competitiveness Project. (Ended 2023) This five-year initiative aimed to enhance the competitiveness of the Kyrgyzstani economy, support private SMEs, create jobs, and boost SME sales.

The activity concluded in August 2023. This activity provided support to 120 SMEs and helped to create 22,000 jobs. In the majority of cases the Activity provided support for shifting to more resource efficient and innovative technologies on which the Green Economy Activity will build on. Among examples there are (i) assistance to local waste treatment facility to guest house, (ii) water efficient irrigation system for potato producer, (iii) shifting to a breed cattle to reduce the use of resources and increase the production of the meat and milk products.

USAID Agro Trade. The USAID/Kyrgyz Republic Agro Trade Activity is a five-year activity that promotes job creation and increases the incomes of Kyrgyz farmers and agribusinesses by strengthening value chains, leading to increased regional and cross-border trade with Uzbekistan. One of the key objectives for the Agro Trade Activity is building markets for Kyrgyz agricultural products, notably in Uzbekistan through interventions that create new business opportunities, boost productivity, and https://drive.google.com/file/d/1FvI1E9s30ttY2DgXX--_8Qa5jOXxoM2L/view?usp=drive_linkloads/file/7d50e21eb06002d0116e53b2e80df95a45339ba9.pdf https://drive.google.com/file/d/1RSKF5Wgp3YaGpcUIHEH_LCiIWyPpGKVy/view?usp=drive_link improve the business-enabling environment. The Agro Trade Activity supports and promotes economic empowerment, and engages women, youth, and marginalized groups in agriculture to overcome constraints such as a lack of knowledge, business skills, productive economic assets, marketing networks, and gender-based violence prevention in households and communities. Green economy will build on some of the Agrotrade practices like drip irrigation, biohumus development, hydroponics to grow fodder.

USAID Media-K. The USAID Media-K activity plans to produce climate-related content in the Kyrgyz language and will release it in 2025. The Green Economy Activity can provide information to Media-K that it can deliver to a broader audience on emissions, climate mitigation, and adaptation. Green economy will cooperate with K Media on extending the information coverage of the new technologies that the general public can adopt and or change the consumer preferences or behavior to shift towards more climate friendly practices.

USAID Kyrgyz Republic Trusted and Accountable Politics Activity (KTAP) is planning to launch a national environmental campaign beginning in 2024. The Activity is working closely with several Members of the parliament on green policies. Some of the policies that are proposed by Green Economy Activity could be supported by KTAP and help to get parliamentary approval if needed.

Regional Activities

USAID Power Central Asia. The USAID Power Central Asia Activity (PCA) is helping the five Central Asian countries to meet their national and regional priorities in energy security and unlock the economic benefits of regional electricity trade. The Activity collaborates with national governments and energy stakeholders to address three objectives: support to update national energy strategies and develop optimal market design/support efforts to scale up clean and renewable energy (RE), improve regional energy cooperation by enabling cross-border electricity trade, and open access to generation and transmission networks. In the Kyrgyz Republic, PCA partners with the Ministry of Energy to reform the energy sector and support a clean energy transition. This includes analyzing challenges to renewables’ integration to the grid, selecting the best sites for new projects, developing Power Purchase Agreements, and piloting small-scale projects, such as roof-top solar, to demonstrate the value of distributed energy. The examples of the PCA activity on the use of Renewable energy could be replicated by the Green economy Activity.

USAID Water and Vulnerable Environment. The USAID Regional Water and Vulnerable Environment (WAVE) Activity strengthens water cooperation across Central Asia to improve stability, economic prosperity, and healthy ecosystems. The goal of WAVE is to strengthen regional capacity to manage shared water resources and mitigate environmental risks in the Syr Darya and Amu Darya River basins for water use by all Central Asian countries. More than 300 representatives from the government, non-governmental organizations, and private sector entities are currently discussing their shared interests and issues for regional water cooperation and have provided many ideas for further action.

The Green Economy Activity will complement the WAVE activity by providing farmers with new technologies to save irrigation water, thus contributing to the WAVE mandate to increase the effective use of water.

USAID Regional Sustainable and Integrated Natural Resource Management Project has a component on irrigation water management in the border areas of two watersheds in the Fergana Valley that will be implemented in 2024 and 2025. Some of the activities of the Green Economy Activity will be implemented in Ferghana Valley and in that way complement the activities of this Project.

USAID Trade Central Asia. The USAID Trade Central Asia (TCA) Activity helps to improve region-wide trade connectivity to accelerate economic growth and increase economic opportunity in Central Asia by harmonizing customs and border procedures, increasing public-private dialogue on trade and investment, improving cross-border firm-to-firm connectivity, strengthening the resilience of Central Asian economies through trade, and addressing gender-relevant trade issues. TCA could help the Green Economy Activity to develop a common standard for green goods and new innovative green technologies that could be mutually accepted by CAR countries and if needed exempt from customs duties.

USAID Future Growth Initiative. The USAID Future Growth Initiative (FGI) helps companies across Central Asia, to increase their competitiveness, create new jobs, and improve their revenues as well as improve the incomes of their workforce. The areas of work include (i) fostering competitive industries by expanding into new target markets (regionally or globally) to increase sales and exports while attracting local and international investment; (ii) developing entrepreneurship and a capable workforce through targeted training to create new jobs or improve current ones; and (iii) creating conditions for jobs and investment by supporting policy change through public-private dialogue, analysis, and application of global standards. FGI is closely working with some of the areas that Green Economy will also work and Green Economy can support some initiatives on climate mitigation that FGI started in Kyrgyzstan.

Development Partner Programs

The Asian Development Bank (ADB) has launched a new five-year country partnership strategy (CPS) 2023-2027 to support the Kyrgyz Republic’s development priorities by fostering inclusive, resilient, and private sector-led growth.13 Among its priorities is strengthening resilience against climate impacts to boost food security and minimize losses from extreme weather events.

German Development Cooperation (GIZ) is working on green economy and private sector development by promoting the use of green economy principles in three sectors: fruit and vegetable production, livestock, and tourism. The GIS also implements programs funded by UK Aid, EU, and Swiss cooperation.

European Bank for Reconstruction and Development (EBRD) is working on waste management loan structuring and green finance promotion with commercial banks to make green finance more accessible in the Kyrgyz Republic.

International Finance Corporation (IFC) is introducing a policy for environmental, social, and governance requirements for commercial banks and will be working with the regulator.

UNDP and UNEP are working on environmental protection and assisting with National Determined Contributions and Biennial Update Report to UNFCCC. The Green Economy Activity will contribute to at least four Sustainable Development Goals, including SDG 7, Affordable and Clean Energy; SDG 8, Decent work and Economic Growth; SDG 9, Industry Innovation and Infrastructure; and SDG 13, Climate Action.

Organization for Security and Cooperation in Europe (OSCE) focuses on helping the Kyrgyz

13 https://www.adb.org/documents/kyrgyz-republic-country-partnership-strategy-2023-2027

Government to address environmental challenges and disaster risk reduction issues. In particular, the OSCE Programme Office assists with the implementation of the Aarhus Convention, which is an environmental agreement on the current generation’s accountability over the environment to future generations and promotes a green economy by supporting open forums for sharing knowledge, resources, and experiences between state officials and civil society.

European Union (EU) has worked with rural communities on an environmentally friendly agriculture value chain and also has an investment facility in drinking water infrastructure. The EU helps youth to mitigate climate change by increasing their awareness, training, and public platforms.

The World Bank announced in October 2023 a new five-year Country Partnership Framework 2024- 2028 (CPF) for the Kyrgyz Republic that defines the strategic focus of its engagement with the country around job creation, natural resource management, and improving human capital outcomes.14 The new CPF with $500 million of investments is centered around three core pillars aimed at delivering tangible development outcomes: 1) increasing private sector-led job creation, 2) improving access to sustainably managed natural resources, and 3) enhancing the human capital and economic empowerment of vulnerable population groups. The CPF also includes a strong focus on key global challenges, including strengthening climate resilience and reducing emissions, closing gender gaps, supporting jobs and economic transformation, strengthening institutions, and reducing fragility risk.

Bilateral Investment and Credit Organisations. In recent years the Government actively promoted the creation of bilateral lending and investment facilities. The first one was the Kyrgyz Russian Development Fund that was established with $ 500 million of initial capital to promote economic cooperation between Kyrgyzstan and Russia, to modernize and develop the Kyrgyz economy, and effectively use the opportunities sparked by the participation of the sides in the Eurasian economic integration. It has provided cheap loans to large scale companies that could potentially create market distortions. In 2021 Hungarian -Kyrgyz Investment Fund was created with $16 million initial capital with the aim to attract investment to the Kyrgyz Republic from Hungary and overall help to the development of small and medium-sized businesses. The same year Uzbek-Kyrgyz Development Fund was established with a charter capital of $50 million to promote economic cooperation between the two countries.

IV. PERFORMANCE OBJECTIVES AND RESULTS

Through this Activity, USAID/Kyrgyzstan will provide assistance to the Kyrgyz Republic to develop a green economy. These efforts will require a complex approach that includes producing legal, policy and institutional changes leading toward behavioral changes in private-sector business practices.

The Activity is expected to work in the following three areas:

1. Improving governance and institutional capacity for a green economy

Any policy and governance area of the economy, be it housing, heating, agriculture, energy, or private sector development that helps to improve the environmental and climate stance of the country could be assisted under this component. The area of assistance is to be negotiated

14 https://www.worldbank.org/en/country/kyrgyzrepublic/publication/cpf-2024-2028 https://www.worldbank.org/en/country/kyrgyzrepublic/publication/cpf-2024-2028 https://www.worldbank.org/en/country/kyrgyzrepublic/publication/cpf-2024-2028 with USAID and can be selected through a call for applications. The themes for interventions on the legal framework and institutional capacity will be agreed upon with USAID.

In this area, the Activity is expected to achieve the following outputs:

1.1. Improved legal framework and capacity of public and private sector institutions on climate-friendly and green solutions for economic activities.

1.1.1. Provide technical assistance to the Government to incorporate elements of a

Green Economy (e.g., reduction of emissions, waste management, green financing, clean and renewable energy, improved resource utilization in agriculture and other sectors of the economy) into ten government regulations of economic activity, including guidance and informational material used by the government to explain or inform compliance with law and regulation. Examples of ten types of government regulations include;

-Updating or amending the existing law;

-Updating the implementing regulations for a law;

-Updating guidance documents for industry/the public on changes to the law or regulation;

-Updating instructions for permitting and reporting by industry;

-Updating industry standards for buildings, constructions and facilities.

1.1.2. Improve the country’s legal framework which leads to a rise in the Environmental Protection Index’s GHG intensity rate from its current 37.5 to 45 points.15

1.1.3. Administer on-the-job training to eight country-based private design and construction companies on adopting innovative technologies and environmental standards, including energy efficiency audit requirements and pursuit of sustainable practices across systems, such as Leadership in Energy and Environmental Design (LEED) credentials.

1.1.4. Update construction standards and requirements to incorporate green economy, clean energy, GHG reduction and energy efficiency to arrive at a result of at least 20 public buildings and 40 private sector buildings in construction that could approximate LEED certification or International Green Construction Code (IgCC) requirements that results in net zero emissions.16 Consider MEEPS for measuring the energy performance of buildings and policy integration.

2. Adoption of innovative technology by the public and private sectors

Adoption of new technology to use fewer resources to produce the same or greater amount of output, and that does not negatively impact land, water, and air quality. Adoption of innovative solutions in agriculture to improve food safety and reduce methane emissions, drip

15 https://epi.yale.edu/epi-results/2022/country/kgz 16 https://www.usgbc.org/leed https://www.iea.org/reports/assessing-measures-of-energy-efficiency-performance-and-their-application-in-industry irrigation, resource efficient fodder, innovative approaches to livestock, crop production and processing. Innovative solutions in science, technology, and engineering that promote climate-friendly solutions, creative industries, and digital solutions to reduce the negative impact from economic activity are welcomed. Solutions will involve competitive based co-financed grants targeted for green solutions with a requirement to match financing from the private sector.

The total leverage of the private capital from USAID GUCs should be threefold.

This Component of the Green economy Activity will use grants under contract (GUCs) to provide incentives for the private sector to create green jobs, reduce GHG emissions, and increase green financing. The GUCs will seek to leverage private capital and expertise from USAID-assisted small and medium enterprises (SMEs) and, as applicable, third-party private sources to help SMEs and financial sector partners invest in climate-friendly technologies.

Specifically, GUCs will be used to 1) help SMEs incorporate green production, energy efficiency and reduce GHG emissions; 2) help the private sector create more green and sustainable jobs;

3) promote green financial products and non-bank green investment vehicles targeting SMEs;

4) catalyze private resources and expertise for green investment; 5) address constraints and barriers to develop the green economy, renewable energy, energy efficiency, and resources efficiency, and 6) support early-stage high-growth business models in green economy and green employment.

The grant component of this activity is expected to total approximately $10,540,500.

Individual grants are subject to grant application but anticipated to be under $250,000. All of the grants are expected to be issued to local entities or for the benefit of the local economy and in furtherance of the the purposes of this contract. The range of potential grantees and the number of activities to be supported under Green Economy will require designing and managing a variety of grant award options, including matching grants for the private sector and in-kind grants or technical assistance for the public sector, that will help achieve the activity objectives.

The selection of initiatives will use the EU Taxonomy approach, namely, the intervention should

a. make a substantial contribution to at least one environmental objective below (for example, the intervention will have at least 51 per cent of its revenue or expenses (depending on the application) from green technologies);

b. do no significant harm to any of the other five environmental objectives;

c. comply with minimum safeguards and technical screening criteria; and

d. comply with USAID priorities, policies and mission.

This component will have a substantial USAID Kyrgyz Republic Mission involvement in the process of selection of the partners and selection of the source of nationality for the innovative technologies.

The indicative results of this area are the following:

2.1. At least 8,000 neutral or green full-time equivalent jobs created with Activity assistance. The EU Taxonomy provides the description of sectors by degree of their impact on climate as “green” (with most positive impact on climate change), “neutral” and “brown” (negative impact on climate change). It is expected that activity will only create “neutral” and “green” jobs.17

2.2. At least 70 partnerships with SMEs to shift to green and/or innovative, creative technologies that create climate-neutral or climate-friendly growth, including better agricultural practices, resulting in a reduction of GHG emissions by 20 per cent in metric tons for the supported entities. The partnerships may include retrofits of existing buildings, circular economy and mitigation of GHG caused by constructing new buildings.

2.3. At least $50 million in total funding leveraged by private firms, financial institutions and organizations (excluding land used as leverage) for projects that advance a green economy.

2.4. Supply of energy from wind and/or solar sources increased by 5 megawatts.

If any of the activities will result directly in the production of a good or service, including support for production of agricultural commodities for export, the contractor must conduct

17 EU Regulation https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32020R0852 the relevant analysis as detailed in ADS 225 and submit such analysis to the COR and receive COR approval prior to engaging in such activities.

Due to high reputational risk related to the grant program, the personnel involved in the grant program will be required to get clearance from the USAID Kyrgyz Republic.

3. Green economy financing This component will introduce green financing to the domestic financial sector, including working…