Attachment 1 IEE.pdf

Georgia / Financial Innovation Program 1 EE.BEU Standard Form: RCE.v4

United States Agency for International Development (USAID) USAID/Georgia

Request for Categorical Exclusion (RCE)

Program/Project/Activity Data:

Activity/Project Name: USAID Financial Innovation Program

Assistance Objective: DO 3: Inclusive High-Value Employment Opportunities Provided Through Increased Economic Growth

Program Area: Sub-IR-3.2: Competitiveness of Key Sectors Increased Sub-IR 3.2.3: Access to Investment Resources Increased

Country(ies) and/or Operating Unit: Georgia Originating Office: Economic Growth Date: 8/9/2021 PAD Level RCE: Yes No RCE/IEE Amendment: Yes No Supplemental RCE: Yes No

DCN of Original RCE/IEE:

DCN of Amendment(s):

If Yes, Purpose of Amendment:

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

Implementation Start/End: LOP: FY 2022 - FY 2027 Funding Amount: LOP Amount: $19,000,000

Contract/Award Number (if known):

Recommended Determination: Categorical Exclusion Additional Elements:

Government to Government: Local Procurement: Donor Co-Funded:

Climate Change Vulnerability Analysis (included):

Climate Change Vulnerability Rating: Low

1. Project and Activity Description

1.1 Purpose and Scope of RCE

The purpose of the RCE is to cover USAID Financial Innovation Program activity. The activity will be implemented through FY2027. The overall budget of the activity is $19,000,000. The activities under the program do not have any impact on the natural and physical environment. Therefore, USAID/Georgia requests a categorical exclusion for this activity.

1.2 Project Overview

The purpose of the USAID Financial Innovation Program (hereinafter the “Program”) is to increase the flow of diversified investment resources and innovative financial products to Georgia's private sector in order to grow, create jobs, and attract additional private investment. The Program will achieve this through a holistic approach that:

DCN: 2022-GEO-002

Georgia / Financial Innovation Program 2

Strengthens the financial market regulatory environment and infrastructure institutions while leveraging innovations in financial technology;

Stimulates the market for equity and quasi-equity instruments and supports finance providers to offer an expanded set of innovative and diversified financial products and services tailored to Georgian start-ups and high potential SMEs; and, Supports Georgian businesses to access fit-for-purpose financing instruments through a network of transaction advisors.

The program will focus primarily, but not exclusively, on expanding access to finance for start-ups and SMEs with high potential for employment generation. It will also include a focus on non-traditional finance providers. Furthermore, it envisions the establishment of a catalytic, blended finance investment mobilization platform to be available to de-risk and cost-share innovation and risk taking. The program shall be implemented using adaptive management, enabling the Program to adapt activities and targets in response to changes in the political and economic landscape that arise during implementation.

2. Environmental Analysis

The Activity has three objectives:

Objective 1: Financial Market Regulatory Environment and Infrastructure Objective 2: Delivery of Innovative Financial Products and/or Services to the Private Sector Objective 3: Private Sector Capacity Building through Transaction Advisors

Defined or illustrative activities under Component One— Financial Market Regulatory Environment and Infrastructure

Categorical Exclusion Citation

Climate Risk Rating*

1.1 Improve the financial market regulatory framework and financial market infrastructure to support the introduction of innovative and diverse products and services

No adverse impacts are likely low

1.2 Introduce innovative, technologically-driven solutions for financial products and services that fulfill unmet business need(s)

No adverse impacts are likely low

1.3 Establish a Public-Private Advisory Council

No adverse impacts are likely low

Defined or illustrative activities under Component Two— Delivery of Innovative Financial Products and/or Services to the Private Sector

Categorical Exclusion Citation (if applicable)

Climate Risk Rating*

2.1 Stimulate the market for private equity and quasi-equity

instruments for start-ups and SMEs

No adverse impacts are likely low

2.2 Diversify financial products and services tailored to SME needs No adverse impacts are likely low

Georgia / Financial Innovation Program 3

Defined or illustrative activities under Component Three— Private Sector Capacity Building through Transaction Advisors

Categorical Exclusion Citation

Climate Risk Rating*

3.1 Establish an investment mobilization platform

No adverse impacts are likely low

3. Justification for Categorical Exclusion Determination The activities under the program will not have an effect on the natural or physical environment and are among the classes of activities listed in 22 CFR 216.2(c)(2). Therefore, under §216.2(c)(1), neither an IEE nor an EA will be required for these activities. Instead, a categorical exclusion threshold determination is recommended for the following identified activities under 22 CFR 216.2(c)(2):

All activity under §216.2(c)(2)(i) Education, technical assistance, or training programs except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.).

4. Limitations of the Categorical Exclusion Determination:

This categorical exclusion does not cover classes of actions normally having a significant effect on the environment under §216.2(d):

i. Programs of river basin development;

ii. Irrigation and water management;

iii. Agricultural land leveling;

iv. Drainage projects;

v. Large scale agricultural mechanization;

vi. Resettlement projects;

vii. New land development;

viii. Penetration road building and road improvement;

ix. Powerplants;

x. Industrial plants; and

xi. Potable water and sewerage projects In addition, this categorical exclusion does not cover activities that:

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

Affect endangered species;

Provide support to extractive industries (e.g., mining and quarrying);

Promote timber harvesting;

Lead to construction, reconstruction, rehabilitation, or renovation work;

Support agro-processing or industrial enterprises;

Provide support for regulatory permitting;

Lead to privatization of industrial facilities or infrastructure with heavily polluted property;

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

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

Procure or use genetically modified organisms.

Georgia / Financial Innovation Program 4

Any of these actions would require a Europe and Eurasia Bureau Environmental Officer (BEO) approved amendment to the categorical exclusion.

5. Mandatory Inclusion of Environmental Compliance Requirements in Solicitations, Awards, Budgets, and Work Plans

Appropriate environmental compliance language, including limitations defined in Section 4, shall be incorporated into solicitations and awards for categorical exclusions.

The implementing partner shall ensure annual work plans do not prescribe activities that are defined as limitations in Section 4.

6. Revisions Under §216.3(a)(9), if new information becomes available that indicates that activities covered by the categorical exclusion might be considered major and their effect significant, or if additional activities are proposed that might be considered major and their effect significant, this categorical exclusion determination will be reviewed and, if necessary, revised by the Mission Environmental Officer (MEO) with concurrence by the BEO. It is the responsibility of the USAID Contract Officer’s Representative (COR)/Agreement Officer’s Representative (AOR) to keep the MEO and BEO informed of any new information or changes in the activity that might require revision of this determination.

7. Recommended Determination for Categorical Exclusion:

Concurrence: _______________________________________ Poojan Tripathi, E&E Bureau Environmental Officer

Date

Distribution:

Activity File MEO (to also provide a copy to AOR/COR)

Attachment: Annex A Climate Risk Screening and Management Tool for Activity/Project/Strategy Design

POOJAN BHASKER

TRIPATHI (affiliate)

Digitally signed by POOJAN BHASKER TRIPATHI (affiliate) Date: 2021.10.17 14:18:28 -04'00'

Annex A: Climate Risk Screening and Management Tool

1.1: Tasks/ Defined or Anticipated Tasks or Interventions*

1.2:

Time-frame

1.3:

Geograp hy

2: Climate Risks* 3: Adaptive Capacity

4: Climate Risk Rating* [Enter rating for each risk: High, Moderate, or Low]

5: Opportunities

6.1: Climate Risk Management Options

6.2: How Climate Risks are Addressed in the Activity*

7: Next Steps for Activity Implementat ion*

8: Accepted Climate Risks*

Component 1:

Financial Market Regulatory Environment and Infrastructure FY

2022 -

FY

Georgia

In 2017-2050: The average annual air temperature throughout Georgia will increase by 1.3 C to 1.6 C, the number of summer days (above 25°C) will increase;

the absolute minimum air temperature by 1 C is probable in the mountain zone, the overall tendency is for an increase. The number of frost days is decreasing throughout Georgia. The annual number of hot days will increase about 2.5 times. The percentage change of annual total

The climate is likely changing in the way that it may have low-level effect on professionals to conduct/participate in the research and training activities under the project.

Low ● None of those are relevant to this component.

Support facilities that maintain air conditioning and evacuation plans (in case of disaster)

None None None

Component 2:

Delivery of Innovative Financial Products and/or Services to the Private Sector

Low ● None of those are relevant to this component.

Support facilities that maintain air conditioning and evacuation plans (in case of disaster)

None None None

1.1: Tasks/ Defined or Anticipated Tasks or Interventions*

1.2:

Time-frame

1.3:

Geograp hy

2: Climate Risks* 3: Adaptive Capacity

4: Climate Risk Rating* [Enter rating for each risk: High, Moderate, or Low]

5: Opportunities

6.1: Climate Risk Management Options

6.2: How Climate Risks are Addressed in the Activity*

7: Next Steps for Activity Implementat ion*

8: Accepted Climate Risks*

Component 3:

Private Sector Capacity Building through Transaction Advisors precipitation is within a range from an 11% decrease to an 8% increase. A number of days of heavy rain will increase by 2 to 5 days; a decrease is more observable in the southeast, also in Adjara and a large part of Imereti; and an increase will take place in mountain regions, mostly within the Greater Caucasus.

Low ● None of those are relevant to this component.

Support facilities that maintain air conditioning and evacuation plans (in case of disaster)

None None None

* means a required element, according to the Mandatory Reference