Attachment J.1 Section C - Statement of ObeJctives (SOO).pdf

C.1 ACTIVITY TITLE

The activity title is USAID Alternatives to Charcoal (A2C) Activity.

C.2 PURPOSE

The purpose of USAID Alternatives to Charcoal Activity is to reduce charcoal energy consumption by [Offeror to propose %] in Lusaka and by [Offeror to propose %] in

Zambia, and catalyze an [Offeror to propose %] increase in the use of private sector led low emissions charcoal alternative technologies and/or fuels in order to reduce deforestation directly attributed to charcoal production by [Offeror to propose %].

C.3 BACKGROUND

In Zambia, charcoal and firewood accounts for more than 70% of national energy consumption, according to a 2012 study.1 In the city of Lusaka, about 85% of urban households use charcoal, even though many of those have access to electricity. The estimated total household charcoal consumption in Lusaka province alone is 402,000 tons, outstripping commercial and industrial charcoal use by a factor of fifteen.2 Currently, charcoal remains the cheapest and most readily available cooking fuel source, despite its illegality. Alternatives to charcoal have not taken hold, seemingly due to cost considerations, market barriers and cultural preferences for charcoal.

One 2012 projection indicated that charcoal consumption in Lusaka district will increase by 42 percent in the period 2020 to 2030 and further argued that charcoal production in itself is not a problem, but rather is due to the rising demand for charcoal from the increasing urban and peri-urban populations.3 At the current rate of consumption, the charcoal industry will have lasting negative impacts on Zambia’s natural resource base and result in increased greenhouse gas emissions.

Zambia’s annual deforestation rate is estimated between 200,000 to 300,000 hectares annually,4,5 a quarter of which is attributed to charcoal production. Forest loss and degradation, resulting from charcoal production, agricultural expansion and settlements, are significant sources of carbon emissions and drivers of habitat loss that puts the country’s biodiversity at risk. According to Kutsch et al. (2011), it is estimated that deforestation from charcoal production in Zambia leads to a per capita emission rate of 2 to 3 tons of CO2 per year.6 Over

75 percent of charcoal production is from forest areas as opposed to farming areas. Nine of the country’s twenty national parks are encroached and over 40 percent of national and local forest reserves have not been spared from charcoal production. 7

1 Giesecke, C (2012). Deforestation in Zambia: driving factors and potential solutions, USAID, Washington DC.

2 ibid 3 Mwitwa,J and Makano, A (2012) Charcoal production, supply and demand assessment in Eastern and Lusaka Provinces 4 Vinya, R., Syampungani, S., Kasumu, E.C., Monde, C. & Kasubika, R. (2011). Preliminary Study on The Drivers of Deforestation and Potential for REDD+ in Zambia. A consultancy report prepared for Forestry Department and FAO under the national UN-REDD+ Programme Ministry of Lands & Natural Resources. Lusaka, Zambia.

5 National Forest Policy (2014), Government of the Republic of Zambia 6 Kutsch, W. L., Merbold, L., Ziegler, W., Mukelebai, M. M., Muchinda, M., Kolle, O., & Scholes, R. J. (2011). The charcoal trap: Miombo forests and the energy needs of people. Carbon Balance and Management, 6(1)5.

7 Watson, F. G., Becker, M. S., Milanzi, J., & Nyirenda, M. (2015). Human encroachment into protected area

Zambia’s Vision 2030, and specifically the energy sector vision and targets, aspire to provide universal access to clean, reliable, and affordable energy at the lowest economic, financial, social, and environmental cost, with a target of reducing the share of wood-fuel by 40% by

2030.8 In addition, the Seventh National Development Plan9 outcome number four provides for improved energy production and distribution for sustainable development. In particular, strategy three promotes renewable and alternative energy and states that efforts will be made to develop a comprehensive national energy strategy including a master plan for sustainable alternatives to charcoal and other household energy needs. Furthermore, both the Zambian government’s forest policy10 and national strategy for reducing emissions from deforestation and forest degradation (REDD+)11 have objectives that focus on the promotion and wide adoption of appropriate and affordable alternative energy sources to reduce greenhouse gas emissions. These strategic objectives are in line with the country’s energy policy12 which also aims to promote alternative energy sources and seeks to reduce dependence on wood fuel and ensure sustainable provision of affordable, reliable modern energy services.

C.4 ACTIVITY OBJECTIVE

The A2C activity contributes to the achievement of USAID/Zambia Country Development

Cooperation Strategy Development Objective 2 (rural poverty reduced through enterprise driven inclusive economic growth) and Intermediate Result 2.3 (Natural resources more sustainably managed). Achieving the activity objectives will help to reduce deforestation, build the capacity of Zambia to develop and implement Low Emissions Development Strategies and reduce net greenhouse gas emissions, in line with the goals set in the country’s National Policy on Climate Change, the Seventh National Development Plan, and the Nationally Determined

Contribution under the Paris Climate Change Agreement.

The Development Hypothesis for this activity holds that if there is a strong business enabling environment for private sector led, low emissions charcoal alternative technologies and/or fuels, and if consumer preference is shifted away from charcoal, then charcoal alternative consumer use will increase, demand for charcoal will decrease, thereby leading to reduced deforestation and greenhouse gas emissions. Lower demand for, and income from, charcoal, will necessitate alternative livelihoods support, particularly to charcoal producing communities.

C.5 SUCCESS

Successful implementation of this activity will:

• Reduce deforestation through increased use of private sector led, low emissions charcoal alternative technologies and/or fuels;

networks in Zambia: implications for large carnivore conservation. Regional environmental change, 15(2), 415-429.

8 Vision 2030 (2006) Government of the Republic of Zambia 9 7th National Development Plan (2017) Ministry of National Development Planning 10 National Forest Policy (2014), Government of the Republic of Zambia 11 Zambia’s strategy to reduce emissions from deforestation and forest degradation (2015), Ministry of Lands, Natural Resources and Environmental Protection 12 National Energy Policy (2008), Ministry of Energy and Water Development, Republic of Zambia

• Improve the business enabling environment for the charcoal alternative industry;

• Enhance enforcement of laws and policies in the forestry and energy sectors;

• Increase public perception of the negative impacts of charcoal on forests; and,

• Support charcoal producers in transitioning to alternative sustainable livelihoods.

C.6 KEY STAKEHOLDERS

Based on the above background, USAID/Zambia consulted with key stakeholders, including the private sector, government, regulators, and Non-Governmental Organizations (NGOs), academia and donors working in the industry. The stakeholders agreed on the need to increase the use of private sector led, low emissions charcoal alternative technologies and/or fuels and to help reduce the demand for charcoal production and thereby helping to minimize forest degradation and deforestation.

The following list provides key stakeholders and their envisioned respective roles and responsibilities within the USAID’s A2C Activity:

Stakeholder Role

USAID/Zambia Oversight of the performance of the Contract.

Private Sector Partner with USAID and Zambian Government to identify and pursue profitable market opportunities that address USAID and

GRZ priorities and objectives through the development of low emissions charcoal alternative technologies and/or fuels and social behavior change.

Forestry Department Involved and consulted during activity planning and implementation to ensure alignment with policy provisions and other institutional arrangements and mandates.

Ministry of Energy Involved and consulted during activity planning and implementation to ensure alignment with policy provisions and other institutional arrangements and mandates.

Energy Regulation Board

(ERB)

Improve regulations for the private sector led, low emissions charcoal alternative technologies and/or fuels industry and establish a regulatory environment that prioritizes Zambia’s deforestation goals.

Ministry of Commerce, Trade and Industry

Facilitate the business enabling environment for the private sector led, low emissions charcoal alternative technologies and/or fuels industry.

Zambia Revenue

Authority (ZRA)

Facilitate a revenue sharing arrangement that both provides benefit to the Government of the Republic of Zambia as well as encourages a profitable business enabling environment for the private sector led, low emissions charcoal alternative technologies and/or fuels industry.

Cooperating Partners such as FAO, UNDP, Finnish Embassy, Swedish Embassy, World Bank, DFID, etc.

Align their existing or planned activities and/or propose changes to

Contract in order to maximize collective impact for sustainable resource management or poverty reduction through enterprise driven inclusive economic growth.

Zambia Environmental

Management Agency

(ZEMA)

Assist in licensing, monitoring and evaluation of interventions; GHG emission reduction; GHG inventory monitoring and reporting; and cross-sectoral coordination both across GRZ and the public, private

& civil society sectors.

Ministry of Agriculture Involved and consulted during activity planning and implementation to ensure alignment with policy provisions and other institutional arrangements and mandates.

Collaborate on recommendations, techniques and challenges to identify issues at the intersection of charcoal production and agricultural expansion.

Zambia Development

Agency (ZDA)

Facilitate the business enabling environment for the private sector led, low emissions charcoal alternative technologies and/or fuels industry, specifically through promoting greater trade and investment.

Community Based

Organizations (CBOs)

Align their existing or planned activities and/or propose changes to

Contract in order to maximum collective impact for sustainable resource management or poverty reduction through enterprise driven inclusive economic growth.

Traditional leaders Involved and consulted during activity planning and implementation to ensure alignment with local priorities, law and norms.

C.7 KNOWN CHALLENGES

Specific challenges to any effort to advance the promotion of alternatives to charcoal include, but are not limited to:

Factors affecting demand: Unfamiliarity with low emissions charcoal alternative technologies and/or fuels, insufficient knowledge of where to purchase these, lack of openness to adopting new technology and cultural taste preferences for food cooked with charcoal among consumers have been identified as barriers to adoption of low emissions charcoal alternative technologies and/or fuels.

Market Dynamics: The market dynamics and pricing for low emissions charcoal alternative technologies and/or fuels currently limit their market penetration and expansion and render them as “premium” products.

Supply Chains: While the supply chains for certain low emissions charcoal alternative technologies and/or fuels are in place in Zambia, they require expansion in order to penetrate the mass market.

Business enabling environment: The current business enabling environment in Zambia is not ideal to develop and expand low emissions charcoal alternative technologies and/or fuels with barriers and little to no incentives for market entry.

Limited Cross-Sectoral Actions: The complexities of working across competing sectors and priorities (e.g., energy, poverty reduction, economic growth, environment and trade) among all the stakeholders (e.g., GRZ, private sectors, cooperating partners, civil society organizations) around charcoal limit the development and implementation of comprehensive solutions that lead to a win-win for all parties.

C.8 OBJECTIVES

USAID’s A2C Activity addresses charcoal-related forest degradation and deforestation across the country by promoting the shift to private sector led, low emissions charcoal alternative technologies and/or fuels.

The offeror will be required to propose metrics/targets under each objective. In order to reach the vision of Success and achieve the intended Purpose of this activity, the following objectives will be achieved:

Objectives are listed in descending order of priority.

Objective 1: Increase by [Offeror to propose %] the household use of private sector led low emissions charcoal alternative technologies and/or fuels.

Illustrative metrics:

• % increase of private sector entities supplying private sector led, low emissions charcoal alternative technologies and/or fuels

• % increase in volume of private sector led, low emissions charcoal alternative technologies and/or fuels

• % increase in number of households using private sector led, low emissions charcoal alternative technologies and/or fuels

• % reduction in the number of households using charcoal

• % decrease in demand for charcoal

Objective 2: Support GRZ to improve the business enabling environment for the private sector led low emissions charcoal alternative technologies and/or fuels industry and improve charcoal law enforcement capacity.

• Implementation of incentives to this industry to catalyze market growth

• Reduced number of days for this industry to obtain permits

• Ease of doing business

• Incentives (i.e. through awards, promotions etc.) for law enforcement Officers to boost their morale and motivate them to effectively perform their law enforcement activities

• Number of apprehensions

Objective 3: Implement a social behavior change and product marketing initiative to increase consumer use of private sector led, low emissions charcoal alternative technologies and/or fuels and increase public perception on the negative impact of charcoal production on forests.

• Decrease in preference for charcoal use in cooking

• % increase in number of households using private sector led, low emissions charcoal alternative technologies and/or fuels

• Increase in number of advertisements and campaigns about accessibility of private sector led, low emissions charcoal alternative technologies and/or fuels

• Increase public perception on the negative impact of charcoal production on forests.

Objective 4: Support alternative sustainable livelihoods to charcoal producing communities, particularly when there is an impact to livelihoods due to increased use of private sector led, low emissions charcoal alternative technologies and/or fuels

• % decrease in number of households engaged in charcoal production

• Number of households with increased incomes from charcoal alternatives

Objective 5: Adaptive management must be a core competency of this award. The ability to pause, reflect, and pivot is critical to ensure that the other objectives listed above are achieved.

• Pause and reflect sessions held at least every six months; targets adjusted on an annual basis, as needed; pivots incorporated to maximize private sector led growth in low emissions charcoal alternative technologies and/or fuels industry; pivots incorporated to achieve private sector and host government led sustainability at activity completion.

• Studies to inform award-level or industry-wide course corrections

In year one, the successful offeror will jointly work with USAID staff to gather and analyze additional information to inform the refining of the activity design. This will include commissioning of surveys and studies/analyses on the charcoal and alternatives' value chains, market environment and environmental impact (e.g., deforestation and/or non-renewable energy source consumption levels, as well as emissions and waste). Further, the successful

Offeror will contract a third party, independent organization or contractor(s) to conduct a baseline on charcoal use in Zambia, and on deforestation levels attributed to charcoal. This baseline will recommend realistic targets in consultation with relevant stakeholders. The successful offeror will select private sector actors and GRZ bodies and enter into written partnership agreement(s), based on the results of the collected data.

The offeror will incorporate the agreed-upon targets and indicators, and initiate plans with

GRZ and private sector partners to catalyze the private sector led, low emissions charcoal alternative technologies and/or fuels industry. This will include marketing, production and distribution assistance at a minimum. The contractor is expected to provide substantive assistance to at least one charcoal alternative supplier, but will also provide grants and business development assistance to entrepreneurs (with preference for youth and women-led) with innovative technologies, fuels or sales strategies for expansion or diversification of charcoal alternatives. Additionally, the successful offeror will engage charcoal producers in the targeted provinces to transition to alternative livelihoods.

The offeror will provide grants via Grants under Contract authority, as specified in Section H.

The grants will be to additional charcoal alternative companies/entrepreneurs or value chain actors to spur innovation, diversify the market offerings and technologies/fuels available to consumers, avoiding the establishment of monopolies and encouraging market competition in the sector.

The offeror will enter into written partnership agreement(s) with one or more private sector entities and with the relevant Zambian government (GRZ) entities, clearly stating the private sector and GRZ in-kind and monetary contributions and levels of effort towards joint objectives to develop the charcoal alternative industry and transition consumer use away from charcoal. The selected private sector entity(ies) will prioritize partnerships with American companies that would facilitate greater trade and investment between the USA and Zambia, whenever feasible and realistic.

The Offeror will work closely with GRZ and other relevant entities to improve the business enabling environment to increase the use of private sector led, low emissions charcoal alternative technologies and/or fuels. Some of the actions could be, but not limited to:

promote the inclusion of fiscal and non-fiscal incentives among the relevant Zambian Ministries such as, but not limited to, the Ministry of Finance, Ministry of Energy, Ministry of Trade, Commerce and Industry; work with the Energy Regulation Board to improve regulations around low emissions, non-charcoal energy sources, coordinate with the Zambia Development

Agency on unlocking greater trade and investment in charcoal alternatives and; discuss tax breaks or other exceptions with the Zambia Revenue Authority.

The successful offeror will only implement activities and interventions under the sustainable livelihoods objective, once it has been determined that the overall activity's interventions have resulted in a decrease in charcoal demand, thus necessitating a transition to alternative livelihoods for charcoal producing households in the targeted provinces.

C.9 GENDER INTEGRATION AND SOCIAL INCLUSION

USAID strives to promote gender equality, in which both women and men have equal opportunity to benefit from and contribute to economic, social and cultural development.

Men and women occupy distinct roles in promoting alternatives to charcoal, and interventions will need to be identified with these specific roles in mind. This activity will integrate gender as a cross-cutting consideration in the implementation of all activities.

The activity will address at least three questions: (1) How gender roles throughout existing low-emissions energy supply chains affect the achievement of sustainable results;

(2) How activities affect the relative statuses of men, women, and youth; and (3) How gender equality, female empowerment, and youth engagement to transition from charcoal to private sector led, low emissions charcoal alternative technologies and/or fuels will be enhanced. These three questions and others should contribute to guide the implementation of activities where appropriate and applicable.

For example, gender consideration will need to be applied during the selection of candidates for training and during public awareness campaigns. Special attention will be given to ensure appropriate messages are targeted at the right audience, without disadvantaging potential beneficiaries and participants. The contractor will document in great detail how gender considerations will be applied in the implementation of specific activities. The contractor must promote equitable gender norms when developing methodologies, research designs, dissemination plans and in all aspects of planning and performance. This includes attention to gender within internal documents such as staffing patterns and communication materials. The contractor must incorporate gender equity considerations in all aspects of this activity, including monitoring gender outcomes (e.g., changes in attitudes and norms, increased women’s decision making) as well as using disaggregated information by gender and age, and considering the differing impacts on women, children, and vulnerable groups. In addition, this activity shall offer grants and business development services to stimulate business development with preference to women-led entrepreneurs or organizations.

C.10 SELF RELIANCE AND SUSTAINABILITY

This activity exemplifies the Agency’s priority goal of catalyzing innovation by identifying new and innovative ways to partner with the private sector. This is in order to have a significant sustainable impact that will lead to increased self-reliance. The activity will build sustainability into existing government and regulatory structures that will persist beyond the activity’s life in at least two ways. First, the government is committed to supporting sustainable energy supply in Zambia. This activity will collaborate extensively with the Zambian government by strengthening policy and regulatory frameworks and by improving its capacity for enforcement to reduce illegal charcoal production. Second, the activity will establish an enabling environment to support small businesses (American, Zambian, regional, etc.) that play key roles in providing low emission energy options. The private sector will be substantially engaged in improving the value chain for low emission technologies and fuels by supporting social enterprises in high density residential areas to improve supply and demand for these technologies and fuels. These businesses are envisaged to remain profitable enterprises beyond the life of the activity.

C.11 ENVIRONMENTAL COMPLIANCE

The Foreign Assistance Act of 1961, as amended, Section 117 requires that the impact of

USAID’s activities on the environment be considered and that USAID include environmental sustainability as a central consideration in designing and carrying out its development programs.

ADS Parts 201.5 and 204 (http://www.usaid.gov/policy/ADS/200/) in part, require that the potential environmental impacts of USAID-financed activities are identified prior to a final decision to proceed and that appropriate environmental safeguards are adopted for all activities.

The contractor must comply with host country environmental regulations unless otherwise directed in writing by USAID. In case of conflict between host country and USAID regulations, the latter shall govern.

None of the activities funded under this contract will be implemented unless an environmental threshold determination, as defined by 22 CFR 216, has been reached for that activity, as documented in the Initial Environmental Examination (IEE), duly signed by the Bureau

Environmental Officer (BEO).

This activity is covered under the Economic Development DO2 IEE cleared by the Bureau

Environmental Officer 08/14/2015 and expires on 9/30/2020. The A2C is also covered in the new Environment IEE that is currently in circulation.

The Threshold Decision level has been determined to be Negative with Conditions.

Therefore, the contractor is subject to the terms and conditions for Environmental Compliance as defined in Section H.19 [See Attachment J.2].

C.12 YOUTH INTEGRATION

This activity is rooted in a Positive Youth Development (PYD) approach, which is based on the belief that, “given guidance and support from caring adults, all youth (ages 10-29) can grow up healthy and productive, making positive contributions to their families, schools, and communities.” PYD programs intentionally focus on developing competencies and behaviors that support pro-social attitudes, a clear and positive personal identity, and positive belief in the future. PYD programs encourage youth leadership and experiential learning, as well as adult approachability and champions. Services and opportunities are designed to support young people in developing a sense of competence, usefulness, belonging and empowerment. For many, the PYD approach is a paradigm shift in the way that they think about youth, education employment, leadership, health and protection of the planet and its resources. The contractor should work with the private sector to ensure that youth are engaged in decision making, management and leadership of this activity. The activity should use a youth centered approach towards engaging the youth in marketing, sales and product disseminating. In addition, this activity will offer grants and business development services to stimulate business development with preference to youth-led entrepreneurs or organizations.

C.13 ADDITIONAL REFERENCE MATERIALS

For additional reference materials, please refer to Attachment J.3.

C.14 CLIMATE CHANGE INTEGRATION

Climate change is a cross cutting issue that can have significant impacts on regional, national, and local development efforts in all sectors. In recognition of that fact, in 2014 President

Obama signed Executive Order (EO) 13677 which requires all US agencies to factor climate change into their foreign assistance planning and manage the associated climate risks. In addition, a country’s development trajectory can significantly influence its emissions of greenhouse gases (GHGs) that cause climate change.

Climate risk management (CRM) is required for all USAID-supported activities, with limited exceptions. Climate risk has the potential for negative consequences on activity objectives and/or outcomes due to changing climatic conditions. The focus of climate risk management at

USAID is on the risk to USAID development programming. The CRM process may identify potential development opportunities associated with current and expected climatic and meteorological changes, including chances to achieve additional development objectives

(including increasing climate resilience and reducing greenhouse gas emissions).

The Offeror must describe their approach to climate risk assessment and how the assessment will inform activity implementation and adaptive management. In addition, given the challenges posed by climate change, the Offeror will need to articulate practices and interventions that can enable climate resilient approaches to succeed and support the sustainability of the investments made under this activity.

C.15 SCIENCE, TECHNOLOGY, INNOVATION AND PARTNERSHIP (STIP)

USAID/Zambia is one of 20 Missions recognized as a “Lead Mission” in applying Science, Technology, Innovation and Partnership (STIP) to enhance its development impact. The A2C activity will provide opportunities for burgeoning small businesses and entrepreneurs to pilot and promote new innovations and technologies in the private sector led, low emissions charcoal alternative technologies and/or fuels industry. Specifically, this activity shall offer grants and business development services to catalyze innovative ideas and facilitate market access with preference to women-led entrepreneurs or organizations.

Considering that other stakeholders are already supporting sustainable charcoal production interventions in Zambia, this activity will only focus on supporting alternatives to charcoal.

[END SOO]