ATTACHMENT J.3 - DCN_ 2022-KOS-002 .pdf

DCN: 2022-KOS-002

Kosovo / Investment Promotion and Access to Finance Activity 1 E&E Bureau RCE Template (Version 9 September 2021)

US Agency for International Development (USAID) [USAID Kosovo]

Request for Categorical Exclusion (RCE)

Program/Project/Activity Data Activity/Project Name: Investment Promotion and Access to Finance Activity Assistance Objective: DO 2 Program Area: Economic Growth Country(ies) and/or Operating Unit: USAID Kosovo Originating Office: Economic Growth Office Date: 12/16/2021 ☒ Original RCE Original RCE LOP Start Date: [11/12/2021] ☐ RCE Amendment New Funding: $12,000,000.00 IEE/RCE History DCN LOP End Date Total Funding ($) Original RCE 2022-KOS-002 2027 $12,000,000.00 Amendment 1 Amendment 2 Amendment []

Contract/Award Number (if known):

Recommended Environmental Determination (s): Categorical Exclusion Additional Elements:

☐ Government to Government ☐ Local Procurement

☐ Donor Co-Funded ☒ Climate Change Vulnerability Analysis (included) Climate Change Vulnerability Rating Low

1. Background and Project Description

1.1 Purpose of the RCE - The purpose of this RCE is to make a threshold determination for the new

Investment Promotion and Access to Finance Activity. The purpose of this document is to establish that all proposed project/activities belong to classes of actions eligible for Categorical Exclusions as set out in Agency regulations (22 CFR 216.2(c)) and that there are no foreseeable significant direct or indirect impacts that would preclude them from receiving a Categorical Exclusion. Upon approval of this document, the Categorical Exclusions are affirmed for the project/activity. This analysis also documents the results of the project/activity level Climate Risk Management process in accordance with USAID policy (specifically, ADS 201 mandatory reference 201mal). This RCE is a critical element of USAID’s mandatory environmental review and compliance process meant to achieve environmentally sound activity design and implementation.

1.2 Project/Activity Description -The Investment Promotion and Access to Finance Activity will strengthen private sector capacity for sustainable economic growth through two components:

1) attracting investment; and 2) increasing diversified finance. The Activity will adopt a private sector led approach by creating sustainable partnerships between private sector stakeholders and the Government of Kosovo (GOK).

Kosovo / Investment Promotion and Access to Finance Activity 2 E&E Bureau RCE Template (Version 9 September 2021)

1.1 Component 1: Attracting Investment Opportunities

1.2 Foster private sector capacities to engage in dialogue between the private and public sector across different areas to attract investment.

1.3 Assist companies to attract investment through training and capacity building.

1.4 Improve the GOK’s ability to attract investment by eliminating obstacles for investors, and carry out implementation of the current legal framework through provision of technical assistance.

1.5 Increase capacities of institutions to improve the legal framework that will promote investment.

1.6 Support relevant institutions with technical assistance to promote investment.

Component 2: Diversified Finance

2.1 Assist drafting of legal framework that supports new financial instruments.

2.2 Foster private sector engagement to diversify finance.

2.3 Support relevant financial institutions to develop more diversified financial products.

2.4 Support the legal framework for equity financing.

2.5 Support equity investments for Kosovo’s small and medium sized enterprises.

2. Environmental Analysis Investment Promotion and Access to Finance Activity The purpose of this document is to establish that all proposed projects/activities belong to classes of actions eligible for Categorical Exclusions as set out in Agency regulations (22 CFR 216.2(c)) and that there are no foreseeable significant direct or indirect impacts that would preclude them from receiving a Categorical Exclusion. The technical team met with the MEO to discuss potential negative impacts that the activity may have in the environment, and it was determined that the risks are low. No environmental impact considerations are identified in this activity and the environmental risk screening has been rated low and therefore does not require the development of specific plans to address environmental risks. This RCE is a critical element of USAID’s mandatory environmental review and compliance process meant to achieve environmentally sound activity design and implementation.

Kosovo / Investment Promotion and Access to Finance Activity 3

Component 1 – Attracting Investment Opportunities

Sub-activities Categorical Exclusion Citation

1.1 Foster private sector capacities to engage in dialogue

between the private and public sector across different areas to attract investment.

22 CFR 216.2(c)(2)(i)

1.2 Assist companies to attract investment – through

training and capacity building.

1.3 Improve the GOK’s ability to attract investment by

eliminating obstacles for investors, and carry out implementation of the current legal framework through provision of technical assistance.

22 CFR 216.2(c)(2)(i)

1.4 Increase capacities of institutions to improve the legal

framework that will promote investment.

22 CFR 216.2(c)(2)(i)

1.5 Support relevant institutions with technical assistance to promote investment.

Component 2 – Diversified Finance

Sub-activities Categorical Exclusion Citation

2.1 Assist drafting of legal framework that supports new

financial instruments.

22 CFR 216.2(c)(2)(i)

2.2 Foster private sector engagement to diversify finance. 22 CFR 216.2(c)(2)(i)

2.3 Support relevant financial institutions to develop more

diversified financial products.

2.4 Support the legal framework for equity financing.

2.5 Support equity investments for Kosovo’s small and

medium sized enterprises.

2.1 Climate Change Vulnerability Analysis: In accordance with Executive Order (EO) 13677 and

Mandatory Reference for ADS Chapter 201 on Climate Risk Management for USAID Projects and Activities, the climate risk management screening analysis for the entire USAID Kosovo Mission’s activities was updated in January 2020. No climate change considerations are identified in this activity and the climate risk screening has been rated low and therefore does not require the development of specific plans to address climate risks. The technical team met with the MEO to discuss climate change impact. If during the implementation any climate change considerations are identified, they will be taken into consideration on how the activity will affect or be affected by medium, long-term climate change impacts (changes in rainfall, temperature, length of growing https://www.whitehouse.gov/the-press-office/2014/09/23/executive-order-climate-resilient-international-development https://www.usaid.gov/ads/policy/200/201mal https://www.usaid.gov/ads/policy/200/201mal

Kosovo / Investment Promotion and Access to Finance Activity 4 E&E Bureau RCE Template (Version 9 September 2021) season, land conversion, etc.) and how the activity should be adjusted in consideration of climate change vulnerabilities.

2.2 Justification for Categorical Exclusion Determination: The activities described under the USAID/ Kosovo Investment Promotion and Access to Finance activity 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) and have no foreseeable significant direct adverse effect on the environment. 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) as follows:

● Activity [1.1. – 1.6 and 2.1 – 2.5] 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.);

3. Mandatory Inclusion of Requirements in Solicitations, Awards, Budgets and Work Plans

3.1 Appropriate environmental compliance language, including limitations defined in Section 5, shall be incorporated into solicitations and awards for this activity.

3.2 The IP shall ensure annual work plans do not include activities that are defined as limitations, as defined in Section 4.

4. Limitations of the RCE: This RCE does not cover activities that:

4.1 Normally have a significant effect on the environment under §216.2(d)(1), including:

● Programs of river basin development;

● Irrigation or water management projects, including dams and impoundments;

● Agricultural land leveling;

● Drainage projects;

● Large scale agricultural mechanization;

● New lands development;

● Resettlement projects;

● Penetration road building or road improvement projects;

● Powerplants;

● Industrial plants;

● Potable water and sewerage projects other than those that are small scale.

In addition, unless the nature of the support is determined by the Resident Legal Officer or Office of General Counsel to fall under one of the defined categorical exclusions in 22 CFR §216.2(c)(2), this categorical exclusion does not cover activities that:

4.2 Support project preparation, project feasibility studies, engineering design for activities listed in

§216.2(d)(1);

4.3 Affect endangered species;

4.4 Result in wetland or biodiversity degradation or loss;

4.5 Support extractive industries (e.g. mining and quarrying);

4.6 Promote timber harvesting;

4.7 Provide support for regulatory permitting;

4.8 Support agro-processing or industrial enterprises;

4.9 Result in privatization of industrial or infrastructure facilities with heavily polluted property;

4.10 Lead to construction, rehabilitation, or renovation of buildings or other structures;

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

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

Kosovo / Investment Promotion and Access to Finance Activity 5 E&E Bureau RCE Template (Version 9 September 2021)

4.12 Procure or use genetically modified organisms.

Any of these actions, unless determined to qualify for a categorical exclusion under 22 CFR §216.2(c)(2), would require an IEE amendment with a Negative or Positive threshold determination approved by the Mission Director and with concurrence from the Europe and Eurasia Bureau Environmental Officer (BEO).

5. Revisions

5.1 Under §216.3(a)(9), if new information becomes available that indicates that activities covered by this RCE 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 and approval by the Mission Director. 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 RCE.

Kosovo / Investment Promotion and Access to Finance Activity 6

6. Recommended Determination for Categorical Exclusion:

Approval:

Zeinah Salahi, Mission Director Date

Ken Collins, Acting Deputy Mission Director Date

Perihane Ymeri, Mission Environmental Officer Date

JMIKE 15 Dec ‘21 Joshua Mike, EGO Office Director Date

Besa Ilazi, Activity COR Date

Concurrence:

Poojan Tripathi, Bureau Environmental Officer Date USAID Europe and Eurasia Bureau

Distribution:

▪ Activity File

▪ AOR/COR

▪ MEO

▪ BEO

▪ ECD

Attachments:

Annex A: Climate Risk Screening and Management Tool

Kosovo / Investment Promotion and Access to Finance Activity 7 E&E Bureau IEE Template (Version 9 September 2021)

3 Annex A: Climate Risk Screening and Management Tool

1: Components or Sub-activities 2: Time-frame and Geography 3: Climate Risks* 4: Climate Risk

Rating* 5: How Climate Risks are Addressed in the Activity*

6: Accepted Climate Risks*

Component 1: Attracting Investment Opportunities

Component 2: Access to Finance

No risks identified [Low] N/A

* means a required element, according to the Mandatory Reference