Attachment J-9- IEE Amendement_28Jan2021.pdf

INITIAL ENVIRONMENTAL

EXAMINATION

PROJECT/ACTIVITY DATA

Project/Activity Name: Market Systems Strengthening (MSS) Project Geographic Location(s) (Country/Region): Uganda/East Africa Amendment (Yes/No), if Yes indicate # (1, 2...): Yes, #1 Implementation Start/End Date (FY or M/D/Y): December 1, 2019– September 30, 2023 If Amended, specify New End Date: October 31, 2025 Solicitation/Contract/Award Number(s): TBD Implementing Partner(s): Multiple Bureau Tracking ID: Uganda MSS IEE Amd. 1

Tracking ID of Related RCE/IEE (if any): Uganda_MSS_IEE_2019-2024_02062019 https://ecd.usaid.gov/document.php?doc_id=51770 Tracking ID of Other, Related Analyses: Climate Risk Management for Projects and

Activities 10/15/2017 Uganda Climate Vulnerability Assessment Report Economic assessment of the impacts of climate change in Uganda by CDKN (2015)

ORGANIZATIONAL/ADMINISTRATIVE DATA

Implementing Operating Unit(s):

(e.g. Mission or Bureau or Office)

USAID/Uganda

Other Affected Operating Unit(s): USAID/Uganda Economic Growth Office – Private Sector Unit, Agriculture Unit

Lead BEO Bureau: Africa Bureau Funding Account(s) (if available): Feed the Future, Original Funding Amount: $ 236,332,894 If Amended, specify funding amount: $ 46,034,790 If Amended, specify new funding total: $ 282,367,684 Prepared by: USAID/Uganda Market Systems Strengthening

Project Management Team (MSS-PMT);

USAID/Uganda Mission Environmental Officer

Date Prepared: October 2nd, 2020

ENVIRONMENTAL COMPLIANCE REVIEW DATA

Analysis Type: ☒Initial Environmental Examination

☒Deferral

Environmental Determination(s): ☒Categorical Exclusion(s) ☒Negative ☐Positive https://www.google.com/url?q=https%3A%2F%2Fecd.usaid.gov%2Fdocument.php%3Fdoc_id%3D51770&sa=D&sntz=1&usg=AFQjCNF6SK8YhRouvKdn67WDJUPbqgPa9g https://www.usaid.gov/sites/default/files/documents/1868/201mal_042817.pdf https://www.usaid.gov/sites/default/files/documents/1868/201mal_042817.pdf https://www.climatelinks.org/sites/default/files/asset/document/ARCC-Uganda%2520VA-Report.pdf https://cdkn.org/wp-content/uploads/2015/11/UGANDA_Economic-assessment-of-climate-change_WEB.pdf https://cdkn.org/wp-content/uploads/2015/11/UGANDA_Economic-assessment-of-climate-change_WEB.pdf

☐Deferred (per 22 CFR 216.3(a)(7)(iv) IEE Expiration Date (if applicable): October 31, 2025 Additional Analyses/Reporting Required:

Climate Risks Identified (#): Low ___12___ Moderate ___4___ High ___3___ Climate Risks Addressed (#): Low ______ Moderate ___#___ High ___#___

THRESHOLD DETERMINATION AND SUMMARY OF FINDINGS

PROJECT/ACTIVITY SUMMARY

The purpose of the Market Systems project is to facilitate the development of a competitive marketplace that is resilient and provides goods and services demanded by actors or people in an inclusive and sustainable manner. The MSS Project IEE Amendment #1 extends the expiration of the original IEE from September 2023 to October 2025, adds 2 new activities:

Strategic Investments Activity (SIA) and Global Development Alliance (GDA) with Agilis; and modifies funding amount (cost increase) and activity descriptions (scope) for: Agribusiness Initiative (aBi) Activity, Inclusive Agriculture Markets (IAM) Activity, and Agriculture and Markets Support Activity- Word Food Program (WFP).

ENVIRONMENTAL DETERMINATIONS

Upon approval of this document, the determinations become affirmed, per Agency regulations

(22 CFR 216).

TABLE 1: ENVIRONMENTAL DETERMINATIONS

Projects/Activities Categorical Exclusion Citation (if applicable)

Negative Determinatio n

Positive Determination

Deferral2

Project/Activity 1:

Strategic Investments Activity (SIA) – NEW

ACTIVITY

X

Project/Activity 2:

GDA- PSE Agalis -

NEW ACTIVITY

Project/Activity 3:

Agribusiness Initiative (aBi) Trust.

Project/Activity 4:

Agriculture and Market Support – World Food Program

(WFP)

Project/Activity 5:

Inclusive Agriculture Markets (IAM)

1 Positive Determinations require preparation of a Scoping Statement and Environmental Assessment.

2 Deferrals must be cleared through an Amendment to this IEE prior to implementation of any deferred activities.

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CLIMATE RISK MANAGEMENT

USAID supports strengthening development outcomes by integrating climate change into Agency programming, learning, policy dialogues and operations. The Automated Directives System (ADS) 201 requires climate risk assessment and management for all new projects and activities across sectors to ensure the effectiveness and sustainability of project and activity objectives in the face of extreme weather and climate events.

Per ADS 201 and the climate risk screening process detailed in the mission’s approved CDCS, climate risk analysis has been conducted for the USAID/Uganda Market Systems Strengthening PAD IEE Amendment #1. The analysis, based on the 2013 USAID/Uganda Climate Change Vulnerability Assessment, established that climate risks range from low to high, depending on the project element (see annex 1 for the detailed CRM analysis). Temperature increases (2 degrees Celsius by 2030), seasonal variations in rainfall patterns and the likelihood of increased extreme weather events are anticipated to impact agricultural productivity, increase pest and diseases and weather- related post-harvest losses, and likely affect storage and transportation of agricultural produce.

Accordingly, the project elements under this PAD IEE amendment shall implement the following options to manage the identified climate risks:

1. The strategic Investments Activity (SIA) project element shall conduct climate risk screening for each grant as an award condition. Grantees shall integrate and implement identified climate risk management options as part of USAID environmental compliance requirements.

2. The GDA- PSE Agilis project element shall distribute and encourage farmers to plant drought, disease, and pest tolerant seed varieties to reduce vulnerability in the agricultural market system. It shall ensure storage and transportation facilities are weather-proofed, and that transportation schedules are informed by weather forecasts. It shall include field trials for climate-smart crop varieties.

3. The Agribusiness Initiative (aBi) Trust element shall also purchase and encourage farmers to plant drought, disease, and pest tolerant varieties to reduce vulnerability. The farmer trainings shall be designed to include climate-smart agriculture.

4. The Agriculture and Market Support – World Food Program (WFP) project element shall include climate-smart post-harvesting procedures and technologies in farmer training programs; and shall continue to promote technologies that reduce post-harvest handling losses.

5. The Inclusive Agriculture Markets (IAM) project Element shall conduct climate risk screening for each small grant as an award condition under the COVID 19 response actions. Grantees shall integrate and implement identified climate risk management options as part of USAID environmental compliance requirements.

These climate risk management options shall be integrated into Activity design narrative, solicitation, and contract documents, the EMMP and implementation plans.

BEO SPECIFIED CONDITIONS OF APPROVAL

The negative determination with conditions recommended in this IEE are contingent on full implementation of specified conditions and a set of general monitoring and implementation requirements specified in Section 5 of the IEE.

https://www.climatelinks.org/sites/default/files/asset/document/ARCC-Uganda%2520VA-Report.pdf https://www.climatelinks.org/sites/default/files/asset/document/ARCC-Uganda%2520VA-Report.pdf

The Strategic Investments Activity (SIA) is deferred until a time when the Mission has further information on the scope, scale, and target of finance, investment, and business development activities. In order to rectify the deferral:

• The Mission A/COR or Team Lead, in consultation with the MEO, must engage the AFR BEO beginning with the award design and solicitation process, to draft language to notify the offerors of environmental review requirements upon award.

• Following award, the Mission A/COR and IP will develop an environmental and social framework (ESMF) for investments and financing that will document a means of ensuring environmental and social safeguards are included, monitored, and recorded in the targeted projects. The AFR BEO must be consulted in the design and development and will be included on clearance of the ESMF.

• This IEE will be amended with the completion of the ESMF.

COVID-19 Condition: To reduce COVID-19 transmission during the implementation of these activities, USAID managers must:

• Ensure all activities addressed by this IEE adhere to current, applicable COVID-19 guidelines. Refer to the AFR COVID-19 PIEE (attached and linked here --https://ecd.usaid.gov/document.php?doc_id=52754) for links to U.S. and international guidance on appropriate measures to reduce COVID-19 transmission. Such measures may include, but are not limited to social distancing, use of personal protective equipment, limiting the size of gatherings and travel, and effective disinfection.

• Share with the partner:

o Applicable COVID-19 guidance from the USAID Mission or U.S. Embassy;

o Applicable COVID-19 guidance from local authorities;

o The following Agency-wide “COVID-19 GUIDANCE FOR IMPLEMENTING

PARTNERS” page on the USAID website: https://www.usaid.gov/work-usaid/resources-for-partners/covid-19-guidance-implementing-partners.

• Ensure that partners have appropriate training, authorization, and resources to meet the expectations of the applicable guidance while implementing these activities.

Reporting Conditions: The AFR BEO requests that the activity managers/AORs/CORs provide access to the Regional Environmental Advisor (REA) and to the AFR BEO Team to review (not approve) the Environmental Mitigation and Monitoring Plans/Reports (EMMPs/EMMRs) that will be written to implement the findings of this IEE. These should be uploaded into the appropriate sub-folder(s) of this Google Drive folder: https://drive.google.com/drive/folders/1q7HGMzgopJ- MuKxkQEJ4GSPp9R7Qzv-5?usp=sharing

This will facilitate access by all parties who need these documents, including the Mission Environmental Officer and the AOR/COR. This will allow the REA and the BEO Team to spot-check and review these documents to confirm that the mitigations seem appropriate and are cognizant of the specific design of the activities.

IMPLEMENTATION

In accordance with 22 CFR 216 and Agency policy, the conditions and requirements of this document become mandatory upon approval. This includes the relevant limitations, conditions and requirements in this document as stated in Sections 3, 4, and 5 of the IEE and any BEO Specified Conditions of Approval.

https://drive.google.com/drive/folders/1q7HGMzgopJ-MuKxkQEJ4GSPp9R7Qzv-5?usp=sharing https://drive.google.com/drive/folders/1q7HGMzgopJ-MuKxkQEJ4GSPp9R7Qzv-5?usp=sharing

USAID APPROVAL OF INITIAL ENVIRONMENTAL EXAMINATION

PROJECT/ACTIVITY NAME: Uganda Market Systems Strengthening Project IEE Amendment #1

Bureau Tracking ID: ______________________

Approval: Cleared 1/25/2021 Richard Nelson, Mission Director Date

Clearance: Cleared 1/22/2021 Linda Percy, Acting Deputy Mission Director Date

Clearance: Cleared 1/19/2021 Tim Stein, Director Program Office Date

Clearance: Cleared 1/21/2021 Regina Burns Mackenzie, Director Economic Growth Office Date

Clearance: Cleared 1/19/2021 Jessica Okui, Mission Environmental Officer Date

Clearance: Cleared 1/19/2021 Robert Bagyenda, Climate Integration Lead Date

Clearance: Cleared 1/19/2021 David Kinyua, Regional Environmental Advisor Date

Clearance: Cleared 1/19/2021 Colin Quin, AFR Climate Change Advisor Date

Concurrence: 1/28/2021 Brain Hirsch Bureau Environmental Officer Date

DISTRIBUTION:

OAA

EG

MEO

Program Office

INITIAL ENVIRONMENTAL

EXAMINATION

CONTENTS

1.0 PROJECT/ACTIVITY DESCRIPTION 5

1.1 PURPOSE OF the IEE 5

1.2 PROJECT/ACTIVITY OVERVIEW 5

1.3 PROJECT/ACTIVITY DESCRIPTION 5

2.0 BASELINE ENVIRONMENTAL INFORMATION 6

2.1 LOCATIONS AFFECTED AND ENVIRONMENTAL CONTEXT (ENVIRONMENT,

PHYSICAL, CLIMATE, SOCIAL, Threatened and ENDANGERED species) 6

2.2 APPLICABLE AND APPROPRIATE PARTNER COUNTRY AND OTHER

INTERNATIONAL STANDARDS (E.G. WHO), ENVIRONMENTAL AND SOCIAL LAWS,

POLICIES, AND REGULATIONS 6

2.3 COUNTRY/MINISTRY/MUNICIPALITY ENVIRONMENTAL CAPACITY ANALYSIS (AS

APPROPRIATE) 6

3.0 ANALYSIS OF POTENTIAL ENVIRONMENTAL RISK 7

4.0 ENVIRONMENTAL DETERMINATIONS 7

4.1 RECOMMENDED ENVIRONMENTAL DETERMINATIONS 7

4.2 CLIMATE RISK MANAGEMENT 7

5.0 CONDITIONS AND MITIGATION MEASURES 8

5.1 CONDITIONS 8

5.2 AGENCY CONDITIONS 9

5.3 MITIGATION MEASURES 10

6.0 33

7.0 34

ATTACHMENTS: 12

1.0 PROJECT/ACTIVITY DESCRIPTION

1.1 PURPOSE OF THE IEE

The purpose of this document, in accordance with Title 22, Code of Federal Regulations, Part 216 (22 CFR 216), is to provide a preliminary review of the reasonably foreseeable effects on the environment of the USAID intervention described herein and recommend determinations and, as appropriate, conditions, for these activities. Upon approval, these determinations become affirmed, and specified conditions become mandatory obligations of implementation.

This IEE also documents the results of the Climate Risk Management process in accordance with USAID policy (specifically, ADS 201mal).

This IEE is a critical element of USAID’s mandatory environmental review and compliance process meant to achieve environmentally sound design and implementation. Potential environmental impacts should be addressed through formal environmental mitigation and monitoring plans (EMMPs) and/or Environmental Assessments (EAs), if needed.

The MSS Project IEE Amendment #1 adds two new activities - i) Strategic Investment Activity (SIA) Activity, and ii) GDA -PSE (Agalis) activity; and modifications in funding amounts and activity descriptions for 3 activities – i)Follow on Agricultural Business Initiatives (aBi) Trust, ii) Agricultural Market Systems - World Food Program ((WFP), and iii)Inclusive Markets Systems (IAM). These 3 activities have already been evaluated in earlier IEE. Ongoing activities with an approved environmental monitoring and mitigation plan (EMMP) may continue operating under that EMMP. New activities or ongoing activities without an existing, approved EMMP must meet the conditions of this IEE regardless of the award date. Any future amendments will be made to this new IEE.

1.2 PROJECT/ACTIVITY OVERVIEW

The purpose of the Market Systems project is to facilitate the development of a competitive marketplace that is resilient and provides goods and services demanded by actors or people in an inclusive and sustainable manner. This amendment does not alter the overall project purpose.

All details in this section remain as described in the original IEE (File Name: Uganda _MSS_IEE_2029-2024_02062019, and is cross reference in this Amendment.

1.3 PROJECT/ACTIVITY DESCRIPTION

TABLE 2: DEFINED OR ILLUSTRATIVE PROJECTS/ACTIVITIES AND SUB-ACTIVITIES

Activity 1: Strategic Investments Activity (SIA) Brief Description: The purpose of this activity is to promote commercial investments and transactions that align with or complement USAIDs/Uganda’s development objectives. It seeks to facilitate development-related investments using different forms of capital including, but not limited to, local and international equity investors, entrepreneurs, pension funds, banks, impact funds, endowments, insurance firms, high-net-worth individuals, the diaspora, and development finance institutions.

SIA seeks to mobilize financing for investment (“additional” financing which otherwise would not have occurred) in support of USAID/Uganda’s targeted development objectives over a period of five years. It will facilitate domestic and international commercial investments that are aligned with USAID’s development priorities across sectors including agriculture and food security, energy, environment and biodiversity, health and others The Activity’s objectives are:

https://www.usaid.gov/our_work/environment/compliance/22cfr216 https://www.usaid.gov/ads/policy/200/201mal

● Increased commercial financing in agriculture and related sectors.

● Improved policies, laws, and regulations regarding commercial investments.

● Increased Productive use of Energy in the agriculture and health sectors.

Among other interventions, the Activity will: (a) support potential investees to develop clear capital structuring to finance their operations and growth, (b) provide business and transaction advisory services, (c) produce market research reports on potential investee companies and on the different sectors of the Ugandan market that are a potential for investment like the health, agriculture and environment sectors (d) provide technical support for investment memorandum preparation, (e) provide risk capital grants to catalyze investment, (f) build organizational capacity to create policy and regulatory enabling environments for private sector operations, and (g) support private sector-led innovation and diffusion of Productive Use of Energy technologies.

Through this support, investees will have clear and well-developed organizational structures, financial records and processes, while investors/funders will have adequate information about investment opportunities in the market.

Type of action: Contract Budget Estimate: $19,500,000 Implementing Partner (IP): TBD

Sub Activity 1.1 Mobilize additional commercial financing for investment within high-potential, high-priority development-related sectors in Uganda e. g agriculture sector, energy sector, health sector, education sector, environment sector among others.

Sub Activity 1.2 Build institutional and technical capacity for commercial entities affected by policy and regulatory shortcomings.

Sub Activity 1.3 Provide grant funds, technical assistance and partnership brokering to form value-additive partnerships targeting commercial investors and investees, corporations, local businesses (from small to large) to advance development outcomes.

Sub Activity 1.4 Provide technical assistance and capacity building capacity to create an enabling environment, which fosters transparent, inclusive private sector led-economic growth.

Sub Activity 1.5 Provide sectoral technical expertise and knowledge to address complex development issues pertaining to private sector development in Uganda. The Activity will improve knowledge management on private sector development and disseminate best practices more effectively.

Sub Activity 1.6 Use USAID’s risk - mitigation and flexible authorities; to support private sector development- through promoting more competitive access to finance and other resources, in a manner that mitigates risks and vulnerability of SMEs.

Sub Activity 1.7 Leverage private finance by linking investors and investees to affordable credit lines provided by financial institutions, capital markets. This shall be achieved by leveraging USAID’s reputation and credible convening power

Activity 2: GDA- PSE (Agilis)

Brief Description: The aim is to develop a private sector alliance between USAID and Agilis Partners through a Global Development Alliance (GDA). The partnership will boost soybean production in

Uganda through development and adoption of advanced soybean-maize crop rotation protocols to increase smallholder farmers’ livelihoods.

How activity support project purpose: The alliance will enable (i) large-scale agricultural commodity production, (ii) smallholder capacity building, and (iii) commodity processing and distribution to transform the soybean value chain in Northwestern Uganda.

This activity shall provide technical support to develop, promote profitable and sustainable soybeans protocols among smallholder farmers; and modern processing of oilseed and animal feeds.

Type of Action: Cooperative Agreement Budget estimate: $3,000,000 IP: Agilis Partners Sub Activity 2.1: To support distribution of quality seeds to out grower smallholder farmers.

Sub Activity 2.2: To support development of modern soybean processing facilities.

Sub Activity 2.3: To support agriculture extension services and training of stallholder farmers in improved soybean production practices.

Sub Activity 2.4: To support the marketing of soybeans from small holder farmers.

Sub Activity 2.5: To support research on field tests on improved soybean and maize conservation agriculture protocols.

Activity 3: Agribusiness Initiative (aBi) Trust

USAID/Uganda is contributing to the development of the country’s agricultural/agribusiness sector by improving performance of select value chains of certain cross market functions, such as quality seed assurance and access to finance. The Mission entered into a delegated cooperation agreement with the Royal Danish Embassy. Funds through this agreement support the Agribusiness Initiative (aBi) Trust, which is working to develop the competitiveness of key value-chains including beans, coffee, and maize. The Trust leverages funding from USAID, DANIDA, and other donors. This donor-to-donor agreement started in 2011 and responds to IPR objectives to support local and private sector capacity as well as donor to donor collaboration. As the initial agreement closes, USAID/Uganda will support a follow-on agreement of the same scope and will leave open the option to continue with a similar grant-making facility through another partnership or direct management from the Mission.

In response to the COVID-19 pandemic, and its possible effects of creating a food production gap, the aBi Development Board would like to take measures to support farm production as well as food and nutrition security. The objective is to avert a downward spiral in food production by providing agro-inputs to about 40,000 farmers in the maize, sorghum, beans, sunflower and soy value chains.

This is expected to boost production and trade generating total additional income of USh 36 bn to the beneficiary farmers and USh 72 bn to participating SMEs for sustainability of the value chains.

The above support will ensure that the aBi Business Plan objectives, to which we, the Development Partners, have committed funds, can remain on track to attain the necessary impacts regarding incomes and employment within the Ugandan agribusiness sector. It will also ensure that agribusinesses remain trading along key food value chains.

Type of Action: Cooperative Agreement Budget estimate: $ 1,534,790 IP: aBi Trust

Sub Activity 3.1: Purchase and distribution of agro inputs (treated seeds and fertilizers).

Sub Activity 3.2: Farmer trainings. This shall include farmer mobilizations; and establishment of demonstrations; development and distribution of posters; and holding radio talk shows etc.

Activity 4: Agriculture and Market Support – World Food Program (WFP)

Brief Description: The Agriculture and Market Support (AMS) is a value chain development program in Uganda designed to link smallholder farmers to markets, improve their productivity and incomes, and contribute to the Government of Uganda’s (GOU) national efforts towards Sustainable Development Goal 2 ‘Zero Hunger.’ The activity aligns with and reinforces several USAID development priorities including:

a. assisting the GOU to implement its progressive refugee policies with effective humanitarian assistance;

b. reducing poverty and improving nutrition through Feed the Future programming; and

c. promoting economic and agricultural development through smallholder farmers and market actors.

Through its network of market development actors, The World Food Program (WFP) catalyzes business relationships between smallholders and private-sector service providers.

Sub activities: Provide technical support for capacity building of smallholder farmers and aggregators as well as national capacity strengthening activities in the Karamoja sub-region and amongst the refugee-hosting areas. These interventions will build resilience capacities of vulnerable households and communities in the Karamoja sub-region and refugee hosting districts who benefit from in-kind and cash assistance in order to move the food insecure beneficiaries from relief to self-resilience status, these specifically include:.

1. Train and mentor aggregators in grain handling and storage including hermetic storage technology and warehouse management, quality control, good hygiene practices, record keeping, as well as access to finance for business expansion.

2. Train smallholder farmers in grain post-harvest management and collective marketing.

3. Strengthen Government of Uganda counterparts at national and sub-national levels to adopt AMS tools in government programs and systems.

Type of Action: Cooperative Agreement Budget estimate: $10,000,000

IP: WFP

Sub Activity 4.1: Train and mentor aggregators in grain handling and storage including hermetic storage technology and warehouse management, quality control, good hygiene practices, record keeping, as well as access to finance for business expansion.

Sub Activity 4.2: Train small holder farmers in grain post-harvest management and collective marketing.

Sub Activity 4.3: Strengthen Government of Uganda counterparts at national and sub- national levels to adopt AMS tools in government programs and systems.

Activity 5: Inclusive Agriculture Markets (IAM)

The Feed the Future (FTF) Inclusive Agriculture Markets (IAM) activity, implemented by DAI, works with agro-industry, Government of Uganda (GOU) institutions, and private sector organizations to help the agriculture market system work more effectively and benefit more market actors such as youth and women. The activity’s TEC increase is two-fold: 1) to increase the scale of operations in the “resilience zone” - Uganda’s Karamoja region and selected refugee-hosting districts; and 2) to help farmer organizations and agribusinesses recover from the secondary effects of COVID. Specifically, the TEC increase will enable the contractor to do more capacity building work in Karamoja and refugee hosting districts; work with large private sector firms (local and foreign) that can engage small agribusinesses through a tiered partnership approach in order to enhance efficiencies in the sector and facilitate sustainable partnerships; do more capacity building work for target firms and organizations whose ability to engage in the market has been affected by the COVID-19 pandemic; and continue supporting COVID-19 response actions that are not typically market driven and had not been envisaged in the original Activity scope.

Capacity building in the different cross market functions such as input supply, output marketing, logistic, finance, information access etc. The capacity building for market actors will be determined by the needs assessment and the organizational capacity assessment and may include governance, accounting systems, quality assurance, etc.

The TEC increase will also enable the contractor to provide COVID 19 responses that help farmers and agribusinesses recover from the shock and re-engage in the market. The contractor will provide a variety of assistance including restoring relationships among players, small grants to affected firms, and significant strengthening of producer organizations. The TEC increase will also enable the Contractor to provide capacity building support for agribusiness firms affected by the COVID-19 pandemic to revamp their systems and structures, and to fast track emergency response actions during and beyond the COVID-19 pandemic.

Type of Action: Contract Budget estimate: $12,000,000 IP: DAI Global LLC

Sub Activity 5.1: Capacity building:

i) In Karamoja and selected refugee hosting districts;

ii) In tiered partnership approach r to enhance efficiencies in the sector and facilitate sustainable partnerships.

iii) Capacity building work for target firms and organizations whose ability to engage in the market has been affected by the COVID-19 pandemic among other assessments: and

iv) Capacity building for market actors - that will be determined by the needs assessment and the organizational capacity assessment, which may include governance, accounting systems, quality assurance, among others.

Sub-activity 5.2: Provide COVID 19 response actions such as restoring relationships among market players, providing small grants to affected firms, and significant strengthening of producer organizations in order to help farmers and agribusinesses recover from the shock and re-engage in the market.

Sub Activity 5.3

Will this project/activity involve construction3 as defined by ADS 201 and 303? Yes ☐ No ☒

3 Construction, as defined by ADS 201 and 303, includes: construction, alteration, or repair (including dredging and excavation) of buildings, structures, or other real property and includes, without limitation, improvements, renovation, alteration and refurbishment. The term includes, without limitation, roads, power plants, buildings, bridges, water treatment facilities, and vertical structures. In the box below, describe any construction planned for this project/activity. Refer to ADS 201maw for required Construction Risk Management procedures.

Provide capacity building support for agribusiness firms affected by the COVID-19 pandemic to revamp their systems and structures, and to fast track emergency response actions during and beyond the COVID-19 pandemic, e.g setting up platforms for marketing and ordering goods and services online, digitising services, etc.

https://www.usaid.gov/sites/default/files/documents/1865/201maw.pdf

2.0 BASELINE ENVIRONMENTAL INFORMATION

2.1 LOCATIONS AFFECTED AND ENVIRONMENTAL CONTEXT (ENVIRONMENT, PHYSICAL,

CLIMATE, SOCIAL, THREATENED AND ENDANGERED SPECIES)

MSS Project activities shall be implemented by the USAID/Uganda Economic Growth (EG) Office – Agriculture sector and Private sector. These activities shall take place throughout the country in a variety of environmental conditions. Over the life of the MSS Project, USAID anticipates further refinements and adjustments to the targeted districts to ensure support is reaching those most in need and being harmonized with other Mission priorities and investments by the GOU and other development partners.

2.2 APPLICABLE AND APPROPRIATE PARTNER COUNTRY AND OTHER INTERNATIONAL

STANDARDS (E.G. WHO), ENVIRONMENTAL AND SOCIAL LAWS, POLICIES, AND REGULATIONS

Relevant Ugandan laws and regulations related to environmental protection and natural resources management include:

• The Constitution of Uganda (1995) includes provisions related to environmental protection and land tenure, including:

• Section 39 – Right to a clean and healthy environment: Every Ugandan has a right to a clean and healthy environment.

• Section 245 – Protection and preservation of the environment: Parliament shall, by law, provide for measures intended to:

o Protect and preserve the environment from abuse, pollution and degradation;

o Manage the environment for sustainable development; and o Promote environmental awareness.

• Section 237 – Land Ownership:

o Land in Uganda belongs to the citizens of Uganda and shall vest in them in accordance with the land tenure systems provided for in the Constitution of Uganda.

o Notwithstanding clause 1:

The Government or Local Government may, subject to Article 26 of the Uganda Constitution, acquire land in the public interest; and the conditions governing such acquisition shall be prescribed by Parliament.

The Government or Local Government as determined by Parliament by law shall hold in trust for the people and protect natural lakes, rivers, wetlands, forest reserves, game reserves, national parks and any land reserved for ecological and touristic purposes for the common good of all citizens.

o Land in Uganda shall be owned in accordance with the following land tenure systems:

Customary;

Freehold;

Mailo; and Leasehold.

• The National Environment Act (NEA, 1995) establishes the National Environment

Management Authority (NEMA) and the governing principles for environmental planning, regulation, and management, including environmental quality standards, requirements for environmental impact assessment (EIA) and penalties for environmental offenses.

NEMA is the principal agency in Uganda charged with the responsibility of coordinating, monitoring, regulating, and supervising environmental management in the country.

NEMA spearheads the development of environmental policies, laws, regulations, standards, and guidelines and guides the GOU in sound environmental management.

NEMA is expected to encourage, supervise, monitor, and coordinate environmental actions among and between sectors and provide technical and training input and policy-level assistance to other agencies.

• The National Environment Management Policy (NEMP, 1995) provides the framework to guide development actions and is the cornerstone of the country’s commitment to social and economic development that is environmentally sustainable and which will bring the benefits of a better life to all Ugandans. The overall policy goal is “sustainable social and economic development which maintains or enhances environmental quality and resource productivity on a long term basis that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.” The NEMP aims to guide sustainable economic development through sound environmental and natural resources management using a participatory approach. The NEMP promotes environmentally responsible social and economic growth and recognizes biodiversity conservation as a form of natural resources management that is critical to meeting the needs of Ugandans.

• The National Environment Action Plan (NEAP, 1995) presents strategies for the kinds of development Uganda needs to guide it on the path of improving the quality of human life, while at the same time conserving the environment. The NEAP is a response to the challenge of environmental degradation and is an action agenda to achieve the balance between development and environmental management. It analyses and brings together, in a coherent manner, different sector-based activities into one integrated effort. It focuses on key environmental problems, namely: soil degradation, deforestation, loss of biodiversity, wetlands degradation, pollution, management issues, etc. The NEAP is in line with Agenda 21, which Uganda endorsed at the Earth Summit in Rio de Janeiro in 1992. The NEAP involves all interested organizations, both local and international, in the quest for sustainable development.

• Uganda’s Environmental Impact Assessment Regulations (1998) apply to: 1) all projects included in the Third Schedule to the NEA; and 2) any major repairs, extensions, or routine maintenance of any existing project which is included in the Third Schedule to the NEA. The Third Schedule lists a wide range of project types (agriculture, mining, infrastructure, waste disposal, etc.) No developer shall implement a project for which an environmental impact assessment is required under the NEA and under these regulations unless the environmental impact assessment has been concluded in accordance with these regulations. [It should be noted that, in addition to complying with USAID Environmental regulations, all USAID funded activities 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.

Since the mid-1980s, Uganda’s development policy has increasingly recognized the critical importance of natural resources to the country’s economic base.

• The current National Development Plan 2015/16 – 2019/20 (NDP II) is the second in a series of six five-year plans aimed at achieving Uganda’s Vision 2040: “a transformed Ugandan society from a peasant to a modern and prosperous country within 30 years.” The goal of the NDP II is to propel the country towards middle income status by 2020 through strengthening the country’s competitiveness for sustainable wealth creation, employment and inclusive growth. The focus of the Environment and Natural Resources sector of the NDP II is geared toward the following: 1) protecting, restoring and maintaining the integrity of degraded fragile ecosystems; 2) increasing sustainable use of environment and natural resources; 3) increasing national forest cover and economic productivity of forests; 4) increasing the national wetland coverage; 5) increasing the functionality and usage of meteorological information systems; and 6) increasing the country’s resilience to the impacts of climate change. Additional relevant Ugandan laws and regulations related to the agriculture sector include:

• The Uganda National Agriculture Policy (2014): The vision of the National Agriculture Policy is “A Competitive, Profitable and Sustainable Agriculture Sector”. The overall objective being to promote food and nutrition security and to improve household incomes through coordinated interventions that will enhance sustainable agricultural productivity and value addition; provide employment opportunities, and promote agribusinesses, investments and trade. Through this policy GOU is working toward achieving the following objectives:

o Food and nutrition security for all citizens of Uganda;

o Every household shall earn better income from agriculture and other related income-generating activities;

o Agricultural enterprises will be developed according to their suitability to particular agro- zones;

o Uganda’s domestic, regional, and international trade will increase, and so will the national economy;

o Uganda’s agricultural resources shall be well used and preserved to sustain production for now and the future; and o Uganda’s human capacity to support this agricultural development will be strengthened.

• Seeds and Plant Act (2006): This provides for the promotion, regulation and control of plant breeding and variety release, multiplication, conditioning, marketing, importing and quality assurance of seeds and other planting materials.

• Plant Variety Protection Act (2014): This provides for promotion and development of new plant varieties and their protection as a means of enhancing breeders innovations and rewards through granting of plant breeders’ rights and other related matters.

• Biotechnology and Bio safety Bill (2012): The Bill seeks to promote massive introduction of genetically modified seeds which will increase farmer’s dependency on the agro-industry. The bill is informed from the Biotechnology and bio-safety policy.

• Plant Protection and Health Act (2010): This consolidates and reforms the law relating to protection of plants against destructive diseases, pests and weeds, to prevent the introduction and spread of harmful organisms that may adversely affect Uganda’s agriculture and regulate export and import of plant and plant products so as to protect and enhance international reputation of Uganda’s agricultural products.

• The Energy Policy for Uganda (2002): The main policy goal is “to meet the energy needs of the Ugandan population for social and economic development, in an environmentally sustainable manner”.

The broad policy objectives are:

a. To establish the availability, potential and demand of the various energy resources in the country;

b. To increase access to modern affordable and reliable energy services as a contribution to poverty eradication;

c. To improve energy governance and administration;

d. To stimulate economic development;

e. To manage energy-related environmental impacts; and

f. To increase the role of private sector in the power sector operations and future development.

• Renewable Energy Policy for Uganda (2007); The overall goal of the Renewable Energy Policy (REP) is to increase the use of modern renewable energy.

The key policy objectives include:

a. To maintain and improve the responsiveness of the legal and institutional framework to promote renewable energy investments;

b. To establish an appropriate financing and fiscal policy framework for investments in renewable energy technologies;

c. To promote research and development, international cooperation, technology transfer and adoption of standards in renewable energy technologies;

d. To utilize biomass energy efficiently so as to contribute to the management of the resource in a sustainable manner;

e. To promote the sustainable production and utilization of bio-fuels; and

f. To promote the conversion of municipal and industrial waste to energy. Under the power generation program, REP promotes power generation from mini-hydro power schemes, biomass, cogeneration, wind, solar, geothermal and peat. There are plans to consider nuclear power generation in the power mix in the long term.

• Electricity Act (1999): Provides for the establishment of the Electricity Regulatory Authority; to provide for its functions, powers and administration; to provide for the generation, transmission, distribution, sale and use of electricity; to provide for the licensing and control of activities in the electricity sector; to provide for plant and equipment and for matters relating to safety; to liberalize and introduce competition in the electricity sector. The salient features of the Act are:

a. Liberalizing the electricity industry;

b. Disbanding of the Uganda Electricity Board (UEB) (historically a vertically integrated monopoly) into three entities namely generation, transmission and distribution;

c. Establishment of Electricity Regulatory Authority (ERA) to regulate the sector;

d. Establishment of the Rural Electrification Fund (REF), with the main objective of enhancing rural access to electricity; and

e. Establishment of the Electricity Dispute Tribunal (EDT) that has jurisdiction to hear and determine electricity sector disputes which are referred to it.

• Power Africa Uganda Electricity Supply Accelerator (2018): This Accelerator will facilitate the addition of 1,000 megawatts of generation capacity and 1,000,000 new electricity connections in Uganda by 2020.

2.3 COUNTRY/MINISTRY/MUNICIPALITY ENVIRONMENTAL CAPACITY ANALYSIS (AS

APPROPRIATE)

The National Environment Act (NEA, 1995) established the National Environment Management Authority (NEMA) and the governing principles for environmental planning, regulation, and management, including environmental quality standards, requirements for environmental impact assessment (EIA) and penalties for environmental offenses. NEMA is the principal agency in Uganda charged with the responsibility of coordinating, monitoring, regulating, and supervising environmental management in the country. NEMA spearheads the development of environmental policies, laws, regulations, standards, and guidelines and guides the Government of Uganda in sound environmental management. The role of NEMA is to encourage, supervise, monitor, and coordinate environmental actions among and between sectors and provide technical and training input and policy-level assistance to other agencies.

The National Environment Management Policy (1995) provides the framework to guide development actions and is the cornerstone of the country’s commitment to social and economic development that is environmentally sustainable and which will bring the benefits of a better life to all Ugandans.

The Ugandan government through NEMA has formulated a number of policies to regulate land use and impacts on the environment; for example, the Poverty Eradication Action Plan (2000), the Sector Wide Approach to Planning for Water and Sanitation Sector (2002), the National Wetlands Policies (1995), the Environmental Impact Assessment Regulations (1998), the National Environment Management Policy (1994), the National Environment Act (1995), the Constitution of the Republic of Uganda (GoU 1995), among others. However, as reflected by the alarming rate at which natural resources are being depleted, it is evident that these laws and policies are not enforced effectively. There is a glaring gap between the existence of laws and policies on the one hand, and the reality of implementation on the ground. This calls for effective implementation of existing policies and laws without fear or favor and for increased budgetary allocation to accommodate funding for the execution of policies and laws. It also calls for meticulous review of the existing environmental policy regime with a view to tailoring, customizing, and localizing it for practical purposes.

Additionally, the implementation of environmental laws and policies in Uganda is affected by high levels of corruption country wide, and lack of environmental sound alternatives for economic survival. At the grass root level, all Local Governments have recruited District Environmental Officers, whose role is to ensure sustainable implementation of government programs and sustainable use of natural resources. However, these officers are not well motivated and facilitated to carry out their roles.

3.0 ANALYSIS OF POTENTIAL ENVIRONMENTAL RISK

ACTIVITY 1: TITLE: MARKET SYSTEMS STRENGTHENING PROJECT

TABLE 3A. POTENTIAL IMPACTS –ACTIVITY 1: Strategic Investments Activity (SIA)

Activity Potential environmental and social impacts Activity 1: Strategic Investments Activity (SIA) Sub-activity 1.1:

Mobilize additional commercial financing for investment within high-potential, high-priority development-related sectors in Uganda e.g agriculture sector, energy sector, health sector, environment sector among others.

Financing of investments in the various sectors could have a wide range of potential environmental and social impacts, depending on the sector, scale, and location of investments;

USAID’s manageable interest in the downstream outcomes and impacts of the activity is therefore also unknown. Indirectly, negative impacts associated with loan making, business development, and financing, without environmental due diligence requirements integrated into that process, can contribute to industry and sector growth that is unsustainable and reliant on extraction or depletion of natural resources for financial benefit. An adequate analysis of potential environmental impacts to meet the requirements of 22 CFR 216 procedures cannot be made at this stage as target stakeholders, their investment interest, and design safeguards are still unknown.

Sub-activity 1.2:

Support institutional and technical capacity building to commercial entities affected by policy and regulatory shortcomings.

Sub-activity 1.3:

Provide grant funds, technical assistance and partnership brokering to form value-additive partnerships targeting commercial investors and investees, corporations, local businesses (from small to large) to advance development outcomes.

Sub-activity 1.4:

Provide technical assistance and capacity building capacity to create an enabling environment, which fosters transparent, inclusive private sector led-economic growth.

Sub-activity 1.5:

Provide sectoral technical expertise and knowledge to address complex development issues pertaining to private sector development in Uganda. The Activity will improve knowledge management on private sector development and disseminate best practices more effectively.

Sub-activity 1.6:

Use USAID’s risk - mitigation and flexible authorities; to support private sector development- through promoting more competitive access to finance and other resources, in a manner that mitigates risks and vulnerability of SMEs.

Sub-activity 1.7:

Leverage private finance by linking investors and investees to affordable credit lines provided by financial institutions, capital markets. This shall be achieved by leveraging USAID’s reputation and credible convening power.

ACTIVITY 2: GDA- PSE Agalis TABLE 3B. POTENTIAL IMPACTS – ACTIVITY 2: GDA- PSE Agalis Activity Potential environmental and social impacts Activity 2: GDA- PSE Agalis Sub-activity 2.1:

To support distribution of quality seeds to out grower smallholder farers.

Distribution of poor-quality seed could lead to spread of crop diseases, invasive species, and alien species to different areas.

Additionally, the seeds distributed may not be favorable for soils and climatic conditions of some areas - ultimately leading to low crop production / livelihoods in some areas.

Poor management of seeds packaging material (non-biodegradable) could lead to introduction of non-biodegradable material into the soils, affecting soil fertility and crop productivity.

Chemically treated seeds could be a source of health and safety hazards both to the persons distributing and farmers.

Distribution of seeds could lead to expansion of crop agriculture into ecologically sensitive and fragile ecosystems e.g. wetlands, river banks, forests etc; which ultimately leads to loss of ecological goods and services, spread of alien species into protected areas, and loss of biodiversity.

Distribution of seeds will lead to increased used of agro chemicals i.e. pesticides and fertilizers, which could lead to air, surface/ground water, and soil pollution. The agro chemicals could also enter the food chain and lead to bioaccumulation and /or lead to eutrophication of water bodies.

Sub-activity 2.2:

To support development of modern soybean processing facilities.

Processing of agricultural produce could lead to air, surface/ground water, and soil pollution depending on the location and scale of processing. Additionally, health and safety issues arising from inappropriate protection of workers can lead to adverse health hazards. Waste from agro processors could lead to soil, surface/ground water pollution, if not well managed.

Solid Waste Production. Processing can result in the generation of solid organic and inorganic wastes that must be handled properly. Additionally, spoiled products may need to be disposed of, in which case, the spoiled products could be hazardous for human or animal consumption (e.g., aflatoxin contamination). Discarded materials can contaminate groundwater.

Generation of Wastewater/Liquid Waste. Liquid wastes from processing can contain significant quantities of organic and inorganic matter. These wastes, if improperly disposed, can generate standing water that may become a breeding ground for disease vectors.

Wastewater/liquid wastes from…