SOO Tracked Changes Version- RFP 72053823R00002.pdf

RFP 72053823R00002

Caribbean Resilient Economies and Sectors Activity

ATTACHMENTS (SECTION J)

J.1 STATEMENT OF OBJECTIVES (SOO) - Amended

CARIBBEAN RESILIENT ECONOMIES AND SECTORS

I. PURPOSE

Across the Eastern and Southern Caribbean region, increased public and private investment is critical to accelerate the adoption of climate and disaster resilient approaches in key economic sectors and prevent backsliding of development gains. However, while priority issues for climate resilience and adaptation are addressed in national policies and plans, detailed investment plans are often not available, and priorities in key economic sectors are unclear. Even in situations where investment priorities, plans, and funding sources are in focus and available, public capacity to manage and monitor climate finance remains insufficient. Investments in climate resilience by the public and private sector in particular are generally stymied by insufficient mechanisms to cover the spectrum of risk experienced across sectors; a lack of access to knowledge (i.e., on climate risks, the business case for investment in resilience, successful adaptation investment strategies, etc.); and a lack of access to technical and financial resources to design and implement resilience projects.

The purpose of the Caribbean Resilient Economies and Sectors (Caribbean RESET) Activity is to reduce constraints to climate and disaster finance and increase investments in climate and disaster resilience across economic sectors.

The activity is designed to achieve the following three objectives:

● Objective 1: Increased public sector capacity to develop, update, or implement financial instruments for climate- and disaster-related risk management and investment in key sectors for resilience and green-blue economic growth.

● Objective 2: Improved private sector investment in resilience approaches and technologies.

● Objective 3: Establish and strengthen productive partnerships for resilience-building actions.

Theory of Change

IF public sector capacity to develop, update, or implement financial instruments for climate/disaster risk management and investment in key sectors is increased; IF private sector

J.1.1 investment in resilience approaches and technologies is increased; IF productive partnerships for resilience-building actions are established and strengthened; THEN countries of the Eastern and Southern Caribbean (ESC) will have reduced systemic constraints to climate and disaster finance and increased investment in inclusive, resilient, and sustained market-based socioeconomic growth.

II. CONTRACT LENGTH AND PLACE OF PERFORMANCE

The activity is expected to have a duration of approximately five years, beginning on or around

December 2023 through December 2028.

This activity will be implemented regionally and will include 11 countries in the Eastern and

Southern Caribbean. These are Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grenada, Guyana, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago, and Suriname.

III. BACKGROUND

General Background and Regional Context

The Eastern and Southern Caribbean (ESC) is highly vulnerable to natural hazards. In recent years, the region has endured extreme hurricanes that devastated communities and infrastructure and left thousands of people without shelter, livelihoods, and services. Countries in the ESC are also prone to droughts, extreme heat and precipitation, and storm surges. The economic impact is staggering - estimated damages from storms have ranged as high as 200 percent of national annual GDP from a single event. With climate change, risks to the region from natural hazards are expected to mount as sea level rises, precipitation patterns change, and temperature increases. Projections indicate that the estimated cost of inaction on climate change in the Caribbean will exceed $10 billion by 2025 and $20 billion annually by 2050, representing approximately 5 to 10 percent of regional GDP. Compounding this situation, ESC countries, particularly small islands, are highly dependent - economically - on other countries.

The COVID-19 pandemic highlighted the precariousness of mono-sector economies' dependence on tourism and the fragility of their food, energy, and water security. These critical sectors— tourism, food, energy, and water—are also highly sensitive to climate change.

The World Bank classifies The Bahamas, Barbados, St. Kitts and Nevis, Trinidad and Tobago as high income countries; and Dominica, Guyana, St. Lucia, St. Vincent and the Grenadines, and

Suriname as upper-middle-income countries. But high income levels have also come, J.1.2 historically, with high exposure to global business cycles, which has resulted in high economic volatility; unemployment, particularly among youth; and persistent inequality and poverty. At the same time, SIDS that graduate to high-income status face several challenges in the loss of

Official Development Assistance’s (ODA) associated financial and non-financial support (Quak, 2019). Economic growth has slowed over the past 10 years; more recently, the COVID-19 pandemic and the war in Ukraine has demonstrated that the region is still highly vulnerable to changes in global tourism demand and supply-chain disruptions.

Caribbean countries are not prepared for the myriad of challenges posed by climate change.

Governments across the region have limited room in their budgets to invest in climate resilience for several reasons, including low rates of economic growth since the global financial crisis of

2008/2009; previous impacts of extreme storms, which required money to rebuild from; and the recent economic impact of the COVID-19 pandemic. These factors have contributed to high public debt in the region; with a recent (2022) report by UN ECLAC noting that the regional average stood at 29.1 percent of government revenue over the period 2010 - 2019.As a result, there exists a major financing gap hampering investment in resilience; for example, McLean

(2022) estimated that the median financing gap for 16 Caribbean countries to implement their nationally determined contributions under the Paris agreement is $800 million. A recent (2022) assessment by the United Nations Framework Convention on Climate Change found that for the six Eastern Caribbean independent States (Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines) the reported total cost of meeting their 2017-2021 adaptation and mitigation needs up to 2030 was estimated between $3.3 and

$4.6 billion. This equates to approximately $409.5 million annually needed in climate finance for adaptation and mitigation from all sources – international, domestic, public, and private – a figure that is roughly 5,000 times greater than the current annual funding provided.

Limited technical and institutional capacity in key national institutions and the non-State sector is also a barrier to implement and sustain adaptation initiatives in the Caribbean region. This is compounded by limited measures to build climate resilience, and mechanisms to encourage adaptation measures, especially among private sector actors. Achieving long term sustainability requires strengthening of institutional and technical capability of sectors to participate in and sustain the adaptation effort. Additionally, encouraging collaboration and partnerships among national, regional, and international partners to sustain these efforts is important.

Despite existing challenges, Caribbean countries are politically committed to long term climate action - adaptation and low carbon development - and have engaged in strategic planning in varying degrees to support their respective goals in these areas. As of February 2023, four ESC countries have completed national adaptation plans (NAPs) while many others are working on drafts. All ESC countries are party to the Paris Agreement and are in various stages of

J.1.3 https://assets.publishing.service.gov.uk/media/5d41b473ed915d09de9d1af4/626_SIDS_graduation_impacts_losing_concessional_finance.pdf https://assets.publishing.service.gov.uk/media/5d41b473ed915d09de9d1af4/626_SIDS_graduation_impacts_losing_concessional_finance.pdf https://repositorio.cepal.org/bitstream/handle/11362/47740/3/S2101016_en.pdf https://www.cepal.org/sites/default/files/presentations/2022_cdr_presentation_-_addressing_vulnerability_debt_and_liquidity_in_the_caribbean_revised_11.10.22.pdf https://www.cepal.org/sites/default/files/presentations/2022_cdr_presentation_-_addressing_vulnerability_debt_and_liquidity_in_the_caribbean_revised_11.10.22.pdf https://unfccc.int/sites/default/files/resource/UNFCCC_NBF_TA_OECS_final.pdf https://unfccc.int/sites/default/files/resource/UNFCCC_NBF_TA_OECS_final.pdf completing required Nationally Determined Contributions (NDC), which are updated every five years. Some countries also have climate change policies and action plans. However, countries struggle to turn these commitments into action for a number of reasons, including insufficient climate finance resources and institutional and technical capacity challenges described above.

The strategies that have worked in the past will not be enough in the future. Climate change threatens to intensify natural hazards and brings new sources of volatility through impacts on sensitive sectors such as water, agriculture, natural landscapes, and the industries they support.

As storm intensity and sea-level rise continue to increase, disruptions from natural hazards become more significant and last longer, affecting economic growth, employment, and national competitiveness.

Alignment with USAID/ESC’s Regional Development Cooperation Strategy

This activity contributes to both Development Objectives described in the mission’s Regional

Development Cooperation Strategy (2020-2025). Specifically, this activity contributes to the achievement of Intermediate Result (IR) 1.3 Ability to withstand shocks increased through its contribution to sub-IR 1.3.2 Sector policies and approaches supporting resilience adopted and instituted and IR 2.2 Communities equipped to reduce vulnerabilities through its contribution to sub-IR 2.2.1 Improved disaster management capacity of local actors.

The activity will contribute to at least the following indicator in USAID/ESC’s performance management plan:

● Number of people using climate information or implementing risk-reducing actions to improve resilience to climate change as supported by USG assistance

● Number of institutions with improved capacity to assess or address climate change risks supported by USG assistance

Development Challenge

Limited public and private sector investment has stymied the translation of national climate and disaster risk policies/plans into on the ground action. As a result, critical economic sectors including, but not limited to, agriculture and water remain highly vulnerable to the impacts of climate change and climate-related disasters which threatens to reverse development progress in ESC countries. This undermines the ability of ESC countries to transition to sustainable green and blue economies.

There is no universally accepted definition of a 'green' or 'blue' economy; however both are accepted to represent an alternative economic approach that addresses growing financial uncertainty and vulnerability of SIDS. Green activities typically encompass energy, J.1.4 transportation, and agricultural sectors, while blue activities include, but are not limited to, fisheries and the use of freshwater, coastal, and oceanic resources. Both include strategies to address climate change mitigation and adaptation, and are distinguished from the current economic model by emphasizing inclusive and equitable stakeholder involvement, livelihood support, and social protection.

USAID and U.S. Government Support for Climate Resilience

USAID Activities

USAID has a history of providing support to building climate and disaster resilience in the ESC region. Within the last 10 years, considerable efforts have been directed in the following areas:

● Improving systems to support efficient response to disasters and to strengthen hydro-meteorological and hydrological systems

● Improving countries’ access to funding from multilateral sources of climate finance, including the Green Climate Fund

● Building community resilience by providing funding directly to community based organizations to implement on the ground actions

● Supporting the Government of Barbados to build resilience to flooding in target communities

USAID/ESC’s current activities in the region, as well as Caribbean RESET, and other planned activities are aligned with the U.S.-Caribbean Partnership to Address the Climate Crisis 2030

(PACC 2030). Specifically, Caribbean RESET is intended to advance Objective 2 under PACC 2030:

Promoting Climate Adaptation and Resilience. The activity is also aligned with Pillar 3 of PACC

2030: Enhancing Local Capacity Building. In addition, Caribbean RESET is aligned with the

President’s Emergency Plan for Adaptation and Resilience (PREPARE), especially Pillars two and three: Mainstream and Integrate Adaptation, Build Relationships, Execute; and Mobilizing

Finance and Private Capital respectively.

IV. PERFORMANCE OBJECTIVES AND RESULTS

This activity will accelerate the adoption of practices for climate and disaster resilience in key economic sectors (e.g., agriculture) and facilitate the transition to green/blue economies in ESC countries by catalyzing financial investment. This will be done by strengthening public sector capacity to develop, update, or implement financial instruments for climate and disaster-related risk management and investment in key sectors; by supporting the adoption of climate smart technologies and management approaches; and by creating and strengthening productive

J.1.5 partnerships to build technical expertise and provide vulnerable groups with the skills to take part in resilient economies.

The resultant contract will be divided into three objectives.

Objective 1: Increased public sector capacity to develop, update, or implement financial instruments for climate- and disaster-related risk management and investment in key sectors for resilience and green-blue economic growth.

The contractor must increase the capacity of and support an increase in the number of ESC governmental entities that demonstrate interest and commitment (subject to feasibility and concurrence by host government institutions) to use using risk financing strategies at a national level, or within key sectors, such as agriculture. The contractor must also build the capacity of the public sector to develop improve the number and/or quality of and/or increase quality of climate adaptation projects that are aligned with countries’ national climate adaptation commitments and/or targets and that are ready to receive and/or do receive private investment to improve the climate or disaster resilience of critical economic sectors. Finally, the contractor must increase the capacity of the national governments to manage climate or disaster risk financing products and investment vehicles. Success in this objective will be measured in accordance with achieving the following results, as a result of technical assistance provided:

● Enhanced Increased ability to use of financing instruments for climate resilience that pool and manage risk by national governments, or governmental entities.

● Improved capacity of national governments and related entities to increase the number of blended finance projects or deals supporting climate adaptation. Increased number of blended finance projects or deals supporting climate adaptation developed or advanced by national governments, or government entities.

● At least one debt swap instrument is executed advanced (subject to feasibility and concurrence by host government institutions) that improves climate adaptation/resilience outcomes considerate of nature and the most vulnerable groups.

Illustrative subtargets are outlined below:

○ Conduct landscape assessment on debt swaps in ESC countries, identifying key capacity and financing gaps and the countries where swaps may be most appropriate based on a range of factors including level of interest among

Ministries of Finance and line ministries, degree of prioritization of investable adaptation/resilience projects, the amount of privately-held debt per country, and more.

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○ Provide technical support to increase capacity in the public sector to execute swaps.

○ Convene public and private sectors, with representatives from the different pillars needed to execute a debt swap, including:

■ Debt holders (private creditors)

■ Organizations with experience with structuring debt for climate swaps

■ Key government stakeholders (Ministries of Finance and Environment)

■ Guarantee issuers (could include other USG agencies)

Additionally, the activity must track and measure:

● The value of private or public finance leveraged for climate-related work.

● The increase in government engagement in risk financing and blended finance transactions.

Objective 2: Improved private sector investment in resilience approaches and technologies.

USAID expects that the Contractor will increase the adoption of climate-smart technologies and approaches by smallholder farmers and micro, small and medium enterprises (MSMEs) working in the (green-)blue economy industries of ESC countries. This will be done through the use of a grants under contract (GUC) program with local, U.S. and international private entities that can offer commercial solutions for climate resilience. In addition, USAID encourages prospective bidders to propose a co-investment approach where, for example, private sector entities can lead in the introduction of off-the-shelf, climate-smart technologies that can help smallholder farmers improve agricultural productivity and build economic resilience in response to changing weather patterns and potential disasters. Such approaches could also help local MSMEs working in the (green-)blue economy industries of ESC countries to adopt technologies and approaches that improve climate resilience. Grants issued must follow a Grants Manual and can only be administered following USAID's review and approval of the manual. The Activity will use the International Finance Corporation’s definition of MSMEs.

To support the GUC program, the contractor must increase MSMEs in the ESC’s access to information and support services to help them adopt climate smart technologies or management practices which are appropriate for their scale, technically sound, and consistent with sectoral strategies or plans for the agriculture or (green-)blue economic sectors. This work should produce the following result:

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● Increased adoption of climate or disaster resilient technologies or management approaches used by farmers in the agriculture sectors and MSMEs in the (green-)blue economies of ESC countries demonstrated by the number of people that have applied climate or disaster smart practices in their businesses/operations.

Additionally, the activity must track and measure:

● Increase in private sector access to information and services that facilitate investment in climate and disaster resilience strategies.

Objective 3: Establish and strengthen productive partnerships for resilience-building actions.

The contractor must increase knowledge sharing within the Caribbean region and between the

United States, and its partners and the region to facilitate the replication of best practices

(including technologies) in climate resilience and financing options that unlock private capital for adaptation across critical sectors of the (green-)blue economy, particularly agriculture and water. The contractor must also generate opportunities for youth to develop professional networks and increase their knowledge which will support them to learn and apply approaches within their careers which contribute to national goals related to climate or disaster resilience.

This work must produce the following results (subject to feasibility and concurrence by host government institutions):

● Embedded experts within national and/or regional institutions for the purposes of building institutional capacity to plan, use technology, or implement management or financial approaches which build resilience to climate change in key sectors.

● Increased partnerships and knowledge exchange between U.S.-based institutions and

ESC-based private sector organizations related to climate smart practices and technologies.

● Establishment or strengthening/expansion of an existing program to provide early career

(youth) professionals with training and job-embedded training opportunities in climate finance and blended finance transactions.

● Establishment or strengthening/expansion of existing programs to provide vulnerable or traditionally marginalized populations such as women, youth, or Indigenous People with internships, mentoring or skill-building opportunities related to careers that build climate resilience.

Additionally, the activity must track and measure:

● Engagement with U.S. strategic partners in the region.

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Results and Indicators

The contractor must address how the activity will work to reach the results detailed under each objective, as well as other efforts to contribute to and measure success in accordance with the indicators noted above. Beyond the indicators detailed under the objectives above, offerors may identify and propose additional indicators in their proposal. The offeror will provide their targets for all indicators identified in their proposal and/or describe how they will work to positively impact these indicators to meet the objectives of the PWS. Additional indicators may be identified post-award in consultation with USAID and be integrated into the Activity’s AMELP.

The contractor must at a minimum contribute to the following standardized “F” Indicator from the Bureau for Foreign Assistance (F), as well as propose an additional USAID Climate Change

Standard Indicator to contribute to:

● EG11-4 Amount of investment mobilized (in USD) for climate change adaptation as supported by USG Assistance.

● EG 11-5 Number of people supported by USG to adapt to the effects of climate change.

● EG 11-6 Number of people using climate information or implementing risk-reducing actions to improve resilience to climate change as supported by USG assistance.

V. Alignment and Coordination with USAID and Other Donor Activities

USAID Activities

USAID’s current Policy and Regulatory Reform for Resilience (PROSE) Activity supports national governments within the ESC in strengthening legal frameworks for regional, national, and sectoral resilience. Interventions will support the advancement of the Caribbean Disaster

Emergency Management Agency's Comprehensive Disaster Management (CDM) Blueprint and associated support tools, particularly as they relate to the development and implementation of policy and legislation. Additionally, interventions will seek to improve implementation of risk reduction measures across critical economic sectors and enhance civic participation in the development of and enhancement of CDM (including climate change adaptation and disaster risk management) policy, regulations, and plans. The offeror must ensure that interventions under Caribbean RESET must complement and be aligned with efforts and outputs of this activity as it relates to sectoral policies or legislation.

In addition to Caribbean RESET, USAID/ESC is planning three new activities to build climate resilience in ESC countries. If approved, these planned initiatives will broadly focus on strengthening climate data systems, supporting inflows of international climate finance to ESC countries, the development of investment vehicles focusing on resilience and support for small

J.1.9 and medium-sized enterprises (SMEs) to reduce the impact of climate-related extreme events and natural disasters on their livelihoods and economic well being. Over the life of Caribbean

RESET, the contractor must coordinate implementation with these three planned initiatives to ensure no duplication of effort, maximize synergies and expand the reach of the activity’s benefits.

Finally, USAID/ESC will be supporting a range of initiatives to support food security in the region, in alignment with challenges CARICOM identified at the Summit of the Americas. Caribbean

RESET is expected to complement these initiatives by engaging the private sector to accelerate the adoption of climate smart technologies and management approaches by smallholder farmers in the agriculture sector.

Other Donor Activities

Caribbean RESET is expected to closely collaborate with other donors and Development

Agencies working to improve the climate and disaster resilience of key sectors and increase involvement of the private sector financing for resilience. The Contractor is expected to monitor the donor landscape in the ESC and engage other donors in coordination with USAID when appropriate to ensure complementarity with Caribbean RESET.

VI. OPERATING CONSTRAINTS AND CONTRACT PARAMETERS

Geographic focus

This activity will support 11 countries in the ESC: Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grenada, Guyana, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint

Lucia, Suriname, and Trinidad and Tobago. Certain objectives or interventions may be targeted for implementation in specific countries, however it is anticipated that some interventions will be regional in nature (supporting all 11 countries). The offeror must provide an evidence-based approach for the focusing of certain results within specific countries.

The offeror must propose specific target countries for elements of the activity based on data and experience in the region. Interventions which support resilience of the agriculture sector will be aligned with USAID/ESC’s activities that support food security in the region.

Alignment with USAID Climate Strategy

In April, 2022 USAID launched its new Climate Strategy (2022-2030). Caribbean RESET will contribute locally to support the achievement of the strategy’s global vision of a resilient, J.1.10 prosperous, and equitable world with net-zero greenhouse gas emissions. Specifically, this activity will contribute to the following IRs outlined in the Climate Strategy:

● IR 1.1 Catalyze urgent mitigation (emissions reductions and sequestration) from energy, land use, and other key sources.

● IR 1.2 Build Resilience Strengthen resilience of populations vulnerable to climate impacts

(adaptation).

● IR 1.3 Mobilize Finance Increase the flow of and equitable access to finance to support adaptation and mitigation.

● IR 1.5 Enable and empower women and youth and other marginalized and/or underrepresented groups to lead climate action.

● IR 2.1 Advance transformation of key systems and essential services to reduce emissions and enhance climate resilience.

● IR 2.2 Shifting market signals to support a transition to net-zero economies and financial systems

Several of the Strategy’s embedded principles are also features of Caribbean RESET’s approach, including: Locally Led Development, Equity and Inclusion, Private Sector Engagement and

Evidence and Innovation.

Target Beneficiaries

Target beneficiaries for this activity include governmental agencies with disaster and climate finance within their remit as well as sector ministries responsible for agriculture, water and sectoral activities aligned with the (green-)blue economy. Activities will also benefit private sector actors located in the ESC, particularly farmers and persons working in (green-)blue economy industries. The activity will also benefit youth, particularly through interventions related to Objective 3.

Gender and Social Inclusion

The contractor must maximize gender and social inclusion within the activity. The Contractor must describe how it will implement activities to benefit and meet the unique needs of women, youth and Indigenous People based on the differential impacts of climate change, unique opportunities and potential for these groups to be engaged in and help build climate resilient economies.

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A 2020 study by the Inter-American Development Bank on the impacts of climate change on the women and men of the Caribbean noted that in this region, gender inequalities are not always obvious. For example, while in the Caribbean more women than men are obtaining a university education, few of them are graduating with science, technology, engineering, and mathematics

(STEM) degrees, which are necessary for many of the highly paid jobs that come with the fourth industrial revolution. Of relevance for climate resilience efforts, experts have noted that there is a significant difference in the progress different types of women have made. For example, young women have higher levels of unemployment than their male colleagues, and poor women in rural areas, many who are single heads of households, are more vulnerable to economic and climate shocks than educated, urban women. At the same time, women have been identified as key drivers of environmental, agricultural, and income diversification necessary to promote climate resilience in Caribbean communities.

Climate and environment-related impacts on socioeconomic conditions in the region are likely to disproportionately affect youth, for example by limiting growth and funds available for essential investment in training and job creation, adding to high levels of youth unemployment and related challenges. Youth in the region have a number of concerns, including access to the job market, and therefore should be equipped with the knowledge and life skills required for resilience in a changing climate, including sustainable lifestyles, but also exposure to and training in jobs and practices which contribute to environmental sustainability and resilience.

Caribbean RESET will support USAID priorities outlined in the Policy on Promoting the Rights of

Indigenous Peoples (PRO-IP). Despite their environmental leadership, Indigenous Peoples have historically been largely excluded from climate policy decision-making, action, and finance

Given Indigenous Peoples’ significant role in stewarding land, forests, and other vital environmental systems, better integrating them into climate finance is also essential to create effective and enduring climate programs. In line with the PRO-IP, interventions must identify communities that may be affected; examine the local histories, inequalities, and power dynamics in which those communities are situated; and engage these populations in meaningful and consistent dialogue. Where there are risks of adverse impacts, including on Indigenous

Peoples’ rights, livelihoods, cultures, lands and territories, natural resources, or sacred sites, free, prior and informed consent (FPIC) should be sought for related activities.

Market-based Solutions

Incentivizing private sector investment in technology introduction, distribution, marketing, adoption, and training is critical for ensuring sustainable use and commercial viability of tools that can help users build resilience to shocks and stressors. The contractor must set aside a maximum of $3.5 million for the GUC program which will be used so that private sector

J.1.12 https://www.cif.org/sites/cif_enc/files/knowledge-documents/study-of-the-impacts-of-climate-change-on-the-women-and-men-in-the-caribbean-pilot-programme-for-climate-resilience-countries.pdf companies are leading the introduction of off-the-shelf, climate-smart technologies that can help smallholder farmers improve agricultural productivity in response to changing weather patterns and potential disasters. This approach will also be used to support MSMEs working in the (green-)blue economy industries to adopt climate and disaster resilient technologies.

Debt swaps provide opportunities for raising capital in low-income countries to address environmental and other policy challenges and support green growth. The contractor must support the advancement of a debt swap that supports climate adaptation/resilience outcomes considerate of nature and the most vulnerable groups.

Private Sector Engagement

Private sector engagement is a key aspect of this activity. As public sector finance is limited, raising adequate funds for climate action requires enhancing the private sector’s role across adaptation and resilience. This activity builds on and contributes to on-going work to spur private investment in adaptation through PREPARE by providing concrete examples of how this work can be done programmatically. Current private investment for climate action focuses primarily on mitigation activities, given the comparatively higher returns and relative ease of monetizing and measuring outcomes for these projects. This work will contribute to building the case for the importance of private sector engagement on adaptation and areas of mutual benefit for national governments and citizens. This activity is anticipated to engage the private sector as both partners and beneficiaries under each activity objective.

Engaging Local Organizations (Localization)

Local institutions and organizations will be supported and utilized to the greatest extent possible under this contract, in order to carry out program interventions. Sustainability must be considered a top priority. Local partners and beneficiaries must be empowered and have the capacity to take ownership of new processes introduced and maintain the activity’s results and impacts beyond the life of this activity.

Inclusive Development and Diversity, Equity, Inclusion, and Accessibility

USAID promotes a nondiscriminatory, inclusive, and integrated development approach that ensures that all people, including those who face discrimination and thus may have limited access to a country’s benefits, legal protections, or social participation are fully included and can actively participate in and benefit from development processes and activities. Inclusive development means all people should be able to contribute to and benefit from USAID’s development programming. Unfortunately, many people are denied access to services or are

J.1.13 marginalized from participating in development because of their identity. Every person, regardless of identity, is instrumental in the transformation of their own societies and their inclusion throughout the development process leads to better outcomes.

Diversity and equity in the workplace of USAID projects is critical to carrying out the mandate to promote inclusive development. USAID is committed to a diverse, equitable, inclusive workplace where everyone has an opportunity to thrive. An inclusive environment is safe, respectful, engaging, celebratory and motivating. It also values the unique contributions of all individuals and communities. We also prioritize the establishment of an equitable and effective workplace for the staff working on USAID-funded activities.

The offeror is expected to propose meaningful strategies to include opportunities for marginalized and under-represented groups in both the staffing and implementation of this activity. The offeror must demonstrate a commitment to equity, that is, ensuring that the specific and proportionate needs of all persons and groups to attain fair and just treatment and outcomes are addressed. This includes, but is not limited to USAID/ESC’s interest in partnering with Minority-Serving Institutions, when appropriate.

Grants Under Contract

USAID/ESC intends to use a GUC modality to incentivize private sector investment in resilience.

The program will provide a maximum of $3,500,000 for a GUC with local, U.S. and international private entities that can offer commercial solutions for climate resilience. In addition, USAID encourages prospective bidders to propose a co-investment approach where, for example, private sector entities can lead in the introduction of off-the-shelf, climate-smart technologies that can help smallholder farmers improve agricultural productivity and build economic resilience in response to changing weather patterns and potential disasters. Such approaches should also help businesses working in the (green-)blue economy industries adopt technologies and approaches that improve climate resilience. Grants issued must follow a Grants Manual and can only be administered following USAID's review and approval of the manual.

GUCs need not be defined at the time of the proposal; these GUCs will be negotiated and finalized after award, with USAID consent, in accordance with the clauses of the award.

The GUC program will be subject to compliance with agency regulations and policies, including but not limited to ADS 302.3.4.13, and the award amount thresholds in ADS

302.3.4.13.c (1) - individual grant amounts $250,000 or less to a U.S. entity. The offeror’s proposed GUC program is subject to Contracting Officer’s approval.

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Conditions guiding Grants Under Contract:

As per ADS 302.3.4.13(c), the grant program under the GUCs authority will comply with the following conditions:

(1) USAID will be significantly involved in establishing the selection criteria and provide prior written approval of the recipients. USAID may be less significantly involved when grants are at or below the micropurchase threshold as defined in 48 CFR Section 2.101.

(2) USAID will ensure that the requirements that apply to USAID-executed grants in ADS 303, Grants and Cooperative Agreements to Non-Governmental Organizations, and the applicable standard provisions in ADS 303 are also applied to grants that a USAID contractor executes.

(3) USAID will retain within the contract the ability to terminate the grant activities unilaterally in extraordinary circumstances.

(4) The Contracting Officer will include FAR clause 52.203-16, Preventing Personal Conflicts of

Interest, and include a statement as part of a Grants Under Contracts provision that the contractor must follow the requirements of the clause in the selection and award of GUCs.

(5) The Contractor will develop guidelines (subject to the Contracting Officer Representative review and Contracting Officer approval) for grant application submissions, specific eligibility criteria, procedures for the review and approval of grants, and procedures for monitoring and reporting of funded project results.

(6) The successful offeror will be required to develop a Grants Manual which will be administered following USAID's review and approval of the manual. Grants must be structured to leverage resources from the private sector and other non-USAID sources that support similar program objectives.

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