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MOLDOVA COMPETITIVENESS PROJECT

QUARTERLY PROGRESS REPORT JANUARY 1 – MARCH 31, 2021

QUARTERLY REPORT

YEAR SIX QUARTER TWO (FY2021 Q2)

SUBMITTED: APRIL 14, 2021

Prime Contractor: Chemonics International Inc. www.chemonics.com/

Partners: J. E. Austin Associates, Inc. www.jeaustin.com

Bhavana World Project www.bhavanaworldproject.com

Contract No.: AID-117-C-15-00001

PHOTO CAPTION: Photo caption: seamstress at MCP- supported apparel factory Coralav-Lux in Balti PHOTO : MCP

DISCLAIMER

This assistance is made possible by the support of the American, Swedish, and British people through the United States Agency for International Development (USAID), Sweden and the UK. The contents are the responsibility of the creator and do not necessarily reflect the views of USAID, the American, Swedish, and UK Governments.

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TABLE OF CONTENTS

ACRONYM LIST ...... 6 EXECUTIVE SUMMARY ...... 8 PROJECT MAPPING ...... 14 SECTION I ...... 15

PROJECT TECHNICAL INTERVENTIONS DURING FY21 Q2 ...... 15

WINEGROWING ...... 15

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED ) ...... 15 PROGRAM 1. Upgrading quality and driving innovation in viticulture and ...... 15 Activity 1.1. ASW (Association of Small Winemakers) Mentorship Program - support in emergence and development of small producers ...... 15 Activity 1.2. Strengthen and expand PQUP (Product Quality Upgrading Program) ...... 17 PROGRAM 2. knowledge and innovation for future growth ...... 18 Activity 2.1. Build upon professional development programs to deliver workforce improvement skills...... 18 OBJECTIVE 2. EXPANDED MARKET LINKAGES ...... 19 PROGRAM 3. WoM International Promotion Program Support ...... 19 Activity 3.1. Build WoM brand equity and foster linkages ...... 19 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY ...... 22 PROGRAM 4. Support policy upgrades and regulatory reforms in the wine industry ...... 22 Activity 4.1. Support wine industry policy upgrades, legal and regulatory reforms and institutional strengthening sustainable development ...... 22

TOURISM INDUSTRY ...... 27

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION) ...... 27 PROGRAM 1. Start-up : product development, quality upgrading and tourism offer diversification ...... 27 Activity 1.1. Strengthen the tourism product development and improve tourism hospitality infrastructure ...... 27 OBJECTIVE 2: EXPANDED MARKET LINKAGES ...... 31 PROGRAM 2. Tree of Life Program: building awareness for Moldova internationally ...... 31 Activity 2.1. Build international awareness for Moldova’s Tourism ...... 31 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY ...... 36 PROGRAM 3. Sustainable tourism policies and friendly business environment ...... 36 Activity 3.1. Rethink the tourism industry: reformed policies and regulation to ensure sustainable development .. 36

INFORMATION , AND CREATIVE SERVICES ...... 39

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION) ...... 39 PROGRAM 1. Promoting STEAM and careers ...... 39 Activity 1.1. Continue supporting the Future Classroom Lab (FCL) concept in Moldovan schools and NCDIE Center (ongoing) ...... 39 Activity 1.2. Continuous support to the educational Robotics program ...... 42 Activity 1.3. Support digital skills building in VET institutions teachers ...... 44 PROGRAM 2. Centers of Excellence development and support ...... 44 Activity 2.1. Strengthen the Artcor Center ...... 44 Activity 2.2. Establish the Mediacor Digital Center ...... 46 Activity 2.3. Support the establishment of the Balti Innovation Center ...... 47

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Activity 2.4. Strengthen the FabLab network ...... 48 Activity 2.5 Support the CIRCLE Laboratory Cluster at TUM ...... 50 Activity 2.6. Facilitate communications and event for Centers of Excellence ...... 51 OBJECTIVE 2: EXPANDED MARKET LINKAGES ...... 52 PROGRAM 3. Grow Moldova as an IT and creative services industry destination ...... 52 Activity 3.1. Support a program for Creative Services Industry ...... 52 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY ...... 53 PROGRAM 4. Legislative and capacity building support for IT and creative services industry ...... 53 Activity 4.1. Support legal efforts and capacity building activities for new institutions ...... 53

LIGHT INDUSTRY ...... 55

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION) ...... 55 PROGRAM 1. Continue strengthening ZIPhouse as the flagship institution in workforce development and startup acceleration ...... 55 Activity 1.1. Solidify ZIPhouse institutional capacity ...... 55 Activity 1.2. Boosting creativity, entrepreneurship and building community ...... 55 Activity 1.3. Developing industry skills through advanced technical education and training ...... 56 PROGRAM 2. Strengthen the SMART (Streamline , Accountability, Resource Efficiency, and Transparency) Factory Program ...... 57 Activity 2.1. Implement complex innovative methods to streamline manufacturing and productivity growth ...... 57 Activity 2.2. Create brands and products aligned with fashion trends ...... 58 OBJECTIVE 2: EXPANDED MARKET LINKAGES ...... 58 PROGRAM 3. Expanding market opportunities ...... 58 Activity 3.1. Reposition Moldova as a full product manufacturing partner and support internationalization of Moldovan fashion brands in regional and European markets ...... 58 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY ...... 62 PROGRAM 4. Assist APIUS to become a strong professional and industry association ...... 62 Activity 4.1. Strengthen APIUS institutional capacity ...... 62

DELIVERABLES ...... 63

SECTION II ...... 64

PROJECT-LEVEL OUTCOMES AND RESULTS ...... 64

Sector Engagement, Enhancement, and Development (SEED) Fund ...... 64 Environmental Protection ...... 64 Anti-Corruption ...... 65 Access to Finance ...... 65 Public-Private ...... 65 Inclusive Development ...... 70 Monitoring & Evaluation ...... 73 Project Communications ...... 77 SECTION III ...... 81

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY2020 Q4 (JULY-SEPTEMBER 2020) ...... 81

SECTION IV ...... 83

PROJECT ADMINISTRATION ...... 83

Level of Effort Report ...... 83 Administration and Finance ...... 83

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SECTION V ...... 84

ANNEXES ...... 84

ANNEX I. SUCCESS STORIES ...... 85 ANNEX II. RISK ASSESSMENT ...... 93

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ACRONYM LIST

ANTRIM National Association for Inbound Tourism APIUS Employers Association of Light Industry ASW Association of Small Wineries ATIC Moldovan Association of Private ICT Companies B&B Bed & Breakfast B2B Business to Business CIS Commonwealth of Independent States COP Chief of Party COR Association of Creative Industry Companies in Moldova DCFTA Deep and Comprehensive Free Trade Agreement DO Development Objective EBRD European for Reconstruction and Development EDGE Economic Development, Governance and Enterprise Growth Project ESP Export Support Program EU European Union EURATEX European Apparel and Textile Confederation FCL Future Classroom Lab FY Fiscal Year GIZ German Agency for International Cooperation HVAA High Value Activity Project HoReCa , , and Cafes ICT Information and Communications Technology IMS Integrated management System ISO International for Standardization LOE Level of Effort days LOP Life of Project M Millions M&E Monitoring and Evaluation MIA Moldovan Investment Agency MoEI Ministry of Economy & Infrastructure MSU Moldovan State ONVV National Office of Vine and Wine PDO Protected Designation of Origin PGI Protected Geographical Indication PMU Project Management Unit PPP Public Private PR PQUP Product Quality Upgrading Program Q Quarter QMS Quality Management System UK United Kingdom SEED Sector, Engagement, Enhancement, and Development Fund SMART Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency SME Small and Medium Size Enterprise STEAM Science, Technology, Engineering, Arts and Math STTA Short-term Technical Assistance TBD to be determined TIC Tourism Information Center ToL Tree of Life

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TUM Technical University of Moldova TIS Tourism Industry Strategy USAID United States Agency for International Development USD United States Dollar USG United States Government WoM Wine of Moldova WFTGA World Federation of Tourist Guide Associations

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EXECUTIVE SUMMARY

WINEGROWING INDUSTRY

In Q2Y6, MCP continued to improve the quality of production through technical training and mentoring, and started the process of handing over quality improvement programs to the USAID High Value Agriculture Activity (HVAA) . With MCP’s assistance, Moldovan wineries won 70 awards at the Mundus Vini International wine competition. MCP opposed another initiative that would threaten the existing ONVV PPP governance model and has aided the industry on the review and promotion of new amendments to the Vine and Wine Law, which ensured a seat in the National Office for Vine and Wine Coordination Council to a small wine producers’ representative.

Increasing productivity, quality and skills: MCP handed over the winemaking consultancy of transitional wineries and small winemakers during bottling season to HVAA, and endowed the newly emerged small vintners with marketing assets such as brand names, logos, and labeling solutions. MCP also assisted HVAA with mediating negotiations with the Association of Small Winemakers (ASW) for the award of a dedicated grant that will stimulate ASW’s institutional capacity and ensure the continuity of services after MCP’s close.

Improving market linkages: MCP contributed to support four individual wineries to access and expand on EU markets, generating added brand awareness. MCP also supported ONVV-led initiatives to spur ecommerce, provided technical support to ONVV in an effort to develop new international positioning for the national wine brand, Wine of Moldova, and delivered technical expertise to develop short term and targeted communication campaigns in the UK.

Strengthening business enabling environment: ONVV’s PPP model has been repeatedly challenged, however, due to the Government’s interim status, notices on constitutional motions are on hold. MCP will continue to closely monitor the situation and provide specialized assistance to the ONVV and the wine industry associations to ensure that their opinion is duly presented to the court.

Caption: Façade of Crama Mircesti, M CP grantee. Credit: Crama Mircesti

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TOURISM INDUSTRY

In Q2Y6, MCP continued to strengthen Moldova’s unique rural, soft adventure and wine tourism products and ANTRIM’s role as a business association, and promote smart regulations and legal improvements to serve as a resilience measure during the COVID-19 crisis.

Increasing productivity, quality, and skills: This quarter, with MCP’s support, eight wineries and seven rural guesthouses launched or upgraded their services and facilities. The Wine Routes of Moldova celebrated one year since the affiliation with the European Cultural Roues and has continued to grow. The National Association for Inbound Tourism (ANTRIM) partnered with the Moldova State University (MSU) to develop learning programs for tourist guides including a digital platform.

Improving market linkages: ANTRIM and MCP deployed a domestic promotional campaign around the Martisor holiday, reaching more than 550,000 people. ANTRIM, in partnership with MCP and the Moldovan Investment Agency (MIA) supported three tour operators to participate at the ITB Berlin travel trade show. MCP facilitated the signing of an MoU between ANTRIM and the Ukrainian Hospitality Association, aiming to enhance regional tourism opportunities, which was followed by a high-level interregional forum.

Strengthening business enabling environment: In Q2Y6, MCP continued to advocate for the official approval of the Tourism Development Program “Tourism – 2025.” In collaboration with ANTRIM, MCP continued to promote smart regulations for the sector, and is assisting the Ministry of Economy and Infrastructure (MoEI) to develop a Legal Guide for Starting a Tourism Business. In Q2Y6, MCP supported ANTRIM’s development as a leading business association offering guidance, legal expertise, funding, technical assistance, and facilitating collaboration with relevant and important partners.

Photo caption: Participants of MCP supported promotional campaign “Hora Martisorului”. Credit: MCP

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INFORMATION TECHNOLOGY, ENGINEERING AND CREATIVE SERVICES

In Q2Y6, MCP continued to support the development of ICT, Creative and Engineering Industries’ pillars. In addition to Future Classroom and Educational Robotics that promote STEAM (Science, Technology, Engineering, Arts and Mathematics) education, MCP continued to provide support to innovation centers such as Artcor Creative Industries Center and FabLab Chisinau, and to on the development of Balti Innovation Park, Digital Media Production Center Mediacor, and six regional FabLabs in Singerei, Soroca, Orhei, Ungheni, Cahul and Drochia.

Increasing productivity, quality, and skills: In Q2Y6, the Future Classroom Center supported teachers to improve their digital and pedagogical skills, promoted a collaborative culture, and emphasized best practices in education process management, underscoring the accelerated technological progress made during the COVID-19 pandemic. Over 3,000 teachers attended the online “Technology makes a difference,” conference, which included 15 speakers from Moldova, Romania, Estonia, and Belgium. 25 pioneer teachers were designated as “Digital Ambassadors” through a competitive program supported by MCP and the Soros Moldova Foundation. Future Classroom Center made progress on their renovations, with a goal to expand its facilities.

Improving market linkages: MCP supported Moldovan creative professionals Elias Tadeus and Lev Volosn to become internationally certified professionals in sound engineering and animation through the US and German Mastering and Animation Academies. This is part of an effort to develop a group of internationally certified trainers in Moldova, and strengthen Artcor Creative Center as a credible alternative education provider on the market.

Strengthening business enabling environment: The Creative Industries Association of Moldova (COR) organized its 2021 General Assembly to select the new Board (ten seats), and to adopt new Bylaws that outline eligibility requirements for Board members based on apolitical and ethical principles. As of 2021, COR, in partnership with the State University, will also manage Mediacor, Moldova’s first Media Technology Center. Moldova IT Park developed the IT Park Development Strategy for 2021-2025 which was discussed with IT Park residents and approved during the General Assembly. Currently, there are 700 active residents of the IT Park, of which 151 are foreign companies with foreign capital from 35 countries.

PCaption: Artcor Creative Center hosts the personal exhibition of Irina Greciuhina artist in March 2021. Credit: Artcor/Irina Greciuhina 10

LIGHT INDUSTRY

In Q2Y6, MCP supported the consolidation of the DININIMA umbrella brand, engaging ten companies in an e-commerce campaign, and generating a 70%increase in on Fromtheheart.shop. 14 other brands launched functional reaching up to $1,75K sales per month through the ZIPhouse Acceleration Program, an increase of 30% compared to Autumn of last year.

Increasing productivity, quality, and skills: Over 295 participants upgraded their business skills at ZIPhouse Fashion Academy through activities such as the ZIPhouse Fashion Accelerator, Z Generation Young Designers Competition, and Fashion Hackathon, most of which were conducted online. MCP’s SMART program investments in manufacturing improvements led to an average of 1.5 times increase in productivity, and a 30% increase in production capacity. Four SMEs received assistance with introducing innovative , and software in manufacturing and computerized pattern . Five companies implemented the Integrated Management Systems (IMS) and two became internationally certified, ensuring safety standards and good working conditions for its 650 workers, the majority of which are women.

Improving market linkages: MCP supported APIUS to deploy a five-month online B2B campaign and promote competitive advantages of sourcing to Moldova, resulting in 880 EU expressing interest in sourcing fashion manufacturing services to Moldova. 125 fashion buyers (14%) established contacts with Moldovan manufacturers, and eight others started negotiations for collaboration.

Strengthening business enabling environment: MCP facilitates dialogue between APIUS and EURATEX, ensuring the development of a new strategy for recovery and long- term resilience built on fair trade, sustainability, and digital transformation. Since the EU is a major export market, integrating Moldova in the wider European fashion family offers valuable opportunities for Moldovan fashion businesses and a post-COVID-19 recovery path. To increase visibility and attract potential buyers, APIUS conducted meetings with business associations from Lithuania, and , and China.

Caption: MCP assisted company Portavita received ISO certification and now produces protective equipment at Moldova Government request Photo Credit: Portavita

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COVID-19 PANDEMIC

MCP-supported industries (tourism, light industry, wine, and creative sectors) continue to be severely affected by the COVID-19 pandemic and are facing drastic economic setbacks. To help Moldova’s small and medium enterprises overcome challenges stemming from the pandemic, MCP provides ongoing assistance and mentorship to business associations and supports SMEs to embrace digital technologies as a critical tool for their continuity and sales enhancement. In Y6Q2, MCP focused its efforts on accelerating and scaling up the digitization activities, including digital marketing, e-commerce, and online learning. MCP continued to support the implementation of key e-commerce initiatives GoOnline and ZIPhouse E-commerce Acceleration Program. Through MCP, USAID alongside Sweden and the UK, supported the GoOnline initiative to assess the situation in the field of e-commerce, industry legislation, and regulations, thus enabling Moldovan companies to adapt modern e-commerce tools and increase their sales. The GoOnline initiative offered e-commerce assistance to over 80 Moldovan SMEs, of which over 50% are operated by women. The SMEs benefited from an e-commerce kit that includes support for online shops, elaboration of content for social media pages, integration of e-payments, development of a basic logotype, and delivery services. In addition, MCP supported 40 local fashion brands to advance their e-commerce services through the ZIPhouse E-Commerce Acceleration Program, allowing them to develop online shops and build customer loyalty.

To ensure the sustainable recovery of Moldova’s light industry after the COVID- 19 pandemic, MCP supported APIUS Light Industry Association to initiate the development of a policy paper, which capitalizes on Moldovan light industry’s growth over the recent years (including its shift to high value added), while re-strategizing and preparing for a changing industry after COVID-19. The policy paper is developed with the support of international manufacturing experts, including Dirk Vantyghem, General Director of the European Apparel and Textile Confederation (EURATEX), who underscored the need for Moldovan manufacturing companies’ alignment to global fashion trends and adoption of sustainable practices to integrate in the new reality of the EU manufacturing industry.

In addition, MCP supports the regional cooperation between Moldova, Ukraine, and Belarus to accelerate economic recovery and enhance the tourism industry’s resilience through the development of joint tourism itineraries. MCP alongside the USAID Economic Development, Governance and Enterprise Growth (EDGE) Project supported ANTRIM and the Hospitality Association of Ukraine to organize online forums for Ukrainian and Moldovan tour operators and representatives to discuss anti-crisis measures during the pandemic, and provide sustainable solutions for the industry’s recovery.

In Y6Q2, MCP continued to assist innovation centers ZIPhouse, Artcor, Future Classroom and FabLab to deliver digital content, including online trainings, educational tutorials, entrepreneurship, and community events. To consolidate the network of STEAM teachers and enhance online education across the country, the Future Classroom National Center selected 25 teachers to become “Digital Ambassadors.” As part of the “Teacher – Digital Ambassador” national initiative designed by MCP, Orange and Moldovan Ministry of Education, and the Soros Foundation Moldova, the selected teachers will develop digital

12 educational resources and programs to promote best practices for digital transformation, and provide specialized trainings on digital tools for education for nearly 100 teachers in the regions.

MCP has also continued to deploy a high-impact digital promotion campaign, especially in the tourism and wine sectors, to enhance community solidarity during these difficult times and increase awareness of Moldovan products on local and international markets. The digital marketing campaigns #ColindaMoldova, #Martisor and #MyWine promote Moldovan cultural and soft adventure experiences and encourage local and international travelers to visit Moldova to experience Moldovan gastronomy and wine. The MCP-supported “Hora Martisorului” digital campaign mobilized an unprecedented cultural awareness of Moldovan values and traditions, reaching an audience of more than 550,000 people from Moldova, Romania, Ukraine, Poland, and Italy. Over 150 community leaders, ambassadors, diplomats, singers, influencers, and Diaspora members engaged in the awareness campaign Hora Martisorului to express their solidarity during the COVID-19 pandemic and share a virtual Martisor with their families and friends. The campaign, organized by ANTRIM in partnership with MCP, went “viral” and generated over 1.2 million impressions on Facebook, Instagram, and other social media platforms.

Photo caption: Moldovan teacher attending Google for Education training during COVID pandemics at the Future Classroom Center. Photo credit: Future Classroom Center

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PROJECT MAPPING

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SECTION I

PROJECT TECHNICAL INTERVENTIONS DURING FY21 Q2

Chemonics International Inc. (Chemonics) and its partners, J. E. Austin Associates, Inc. and Bhavana World Project, are pleased to submit to the United States Agency for International Development (USAID), the Government of Sweden, and UK aid, this Quarterly Report covering the period from January 1 through March 31, 2021.

WINEGROWING INDUSTRY

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

PROGRAM 1. Upgrading quality and driving innovation in viticulture and winemaking

Activity 1.1. ASW (Association of Small Winemakers) Mentorship Program - support in emergence and development of small wine producers

MCP and HVAA Deploy Employ Consultations for Small Winegrowers During the Bottling Stage of the Wine Production Cycle

Through ASW’s Mentorship Program, MCP is committed to supporting small wineries in need of expertise during the most critical stages of wine production. After harvesting and processing, the bottling stage (including wine conditioning) is considered to be one of the most crucial and risky stages of wine production, since the wine may inadvertently change as a result of improper practices. In order to minimize risk and to ensure high quality standards, during the reporting period, MCP deployed four local consultants to assist 18 small wineries, with participants of intake one to fourof the program, to ensure safe bottling of vintage white and rose from 2020, and red wines from earlier harvests. MCP also ensured the transition of this activity to HVAA, which allocated 90 level-of-effort days necessary to continue the consultancy needs.

MCP Prepared Four Small Winegrowers to Launch on the Domestic Market by Developing Brand Names, Identities, and Wine Labels

ASW’s Mentorship is a holistic program, through which MCP assists new wineries from the start-up phase up to the placement of the final product on the market, with subsequent marketing support. Thus, during the reporting quarter, MCP deployed development of brand names, brand identities and label for four wineries enrolled in the program in the fourth intake, mainly: GT Ulinici Nicolae, Agroservice-Com, GT Olarasu Mihail and SVC Inter SRL. This is a critical phase for future success and involves a lot of mediation between the beneficiaries and the branding agencies. MCP acts as a mediator and facilitator of the dialogue, developing agency briefs and ensuring proper management of the process, as well as providing necessary marketing expertise, advice and insights. It is anticipated that all four wineries will launch their wines under new brand names and identities by May 2021.

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Caption: Collage with work-in-process identities for Rizov Familna Vinarna – SVC Inter, Crama Ulinici – GT Ulinici Nicolae, Alter Ego wines – Agroservice - Com . Credit: Studio 43Oz, Bonsanco, Casa Imago

‘My Wine’ Digital Campaign Enhances Winter Holiday Season Sales for Small Winemakers

During the winter holiday season, the Association of Small Winemakers (ASW) continued to implement the “Vinul Meu” (“My Wine”) digital campaign with support from MCP, encouraging consumers to buy locally to support small Caption: Cover image for charity . Credit: ASW winemakers. To build the community spirit in times of social isolation, the small winemakers recorded a common video greeting expressing their gratitude for people’s support and launched an online auction to raise funds for a children’s community center in one of Moldova’s villages. The small winemakers auctioned off 12 of their best wines stored in private collections, demonstrating Corporate Social Responsibility (CSR) and contributing to a charitable cause. To date, the ‘My wine’ digital community- driven campaign has over 6,000 followers on Facebook and Instagram and serves as the largest community in Moldova dedicated to wine and wine culture, with a reach that exceeds 10 million people.

HVAA Pre-Awards ASW a Grant that Will Ensure Sustainable Development of the Association and Continuity of Activities

With continuous MCP support, the Association of Small Winemakers managed to affirm itself as an important player of the winegrowing sector of Moldova’s economy and to create and sustain an ecosystem which is favorable to emergence of new small wine producers and development of the existing ones. However, the ASW still needs support in its institutional development, establishing and providing services for its members as well as in assuring a financial autonomy, as current incomes are barely sufficient to cover operational costs. As such, during the reporting, MCP technical team has assisted HVAA in drafting of a Request for Application for a dedicated grant to help ASW to respond to the challenges above.

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Hence, ASW prepared the grant application that was pre-approved for the financing by the HVAA Selection Committee. To the reporting date, the grant contract is in the negotiation phase, as the ASW had to distribute more precisely the allocated funds for training programs, equipment acquisition and marketing & promotion activities (which have received additional incrementation of funds in the negotiation process), MCP tech acted as dialogue facilitators and HVAA advisors along the process. The anticipated grant will be of a great value to ASW and will to following: - Better qualified executive team – as the grant budget envisages a partial coverage of the remuneration - Innovative marketing and promotion activities - Trainings for emerging wineries through peer – to – peer approach - Increased inventory of shared winemaking equipment available for ASW members - Increased institutional capacities in Lobby and Advocacy

ASW Receives One Voting Right in ONVV Coordination Council (Board)

As reported previously, MCP has supported and advocated for a stronger role of the ASW in the winegrowing sector, and during Y5 has proposed to allocate to ASW a non- distributed seat at ONVV Coordination Council (Board). Unfortunately, the proposal was not included in the amendments voted July 2020, however after repeated revision of the law with additional amendments the newly voted law No. 57 On Vine and Wine on March 26, 2021 (reported in detail herewith) finally assigns a voting right to the Association.

Eight Small Winemakers Won 12 Medals at Mundus Vini Spring Tasting 2021, Grace to MCP and ONVV Support

An undisputable proof of the results achieved by MCP’s ASW Mentorship program are the medals in the international wine contests won by program participants. In February 2021, MCP, under a common program with ONVV, facilitated participation of 94 samples from over 40 producers at Mundus Vini Spring Tasting (detailed results are reported below). From 70 received medals 12 (6 gold and 6 silver) were won by small wineries bringing recognition for achieved results, however for 2 small wineries these results were most awarding: Kara Gani Ciotra Cabernet Sauvignon won a gold medal, being the first international awards for this small winery from Gagauzia (also because last year due to a logistical error the samples arrived after the deadline and were not admitted to this contest) and for Crama Mircesti, receiving a sliver for Rara Neagra 2018 – the very first medal received by this winery since its launch in 2020.

Activity 1.2. Strengthen and expand PQUP (Product Quality Upgrading Program)

MCP and HVAA support transitional wineries to produce higher added-value bottled wine moving away from bulk sales

Similar to the previously reported activity, during the reporting period, MCP in collaboration with HVAA and ONVV deployed winemaking consultations for transitional wineries during the bottling phase of wine production. As such, four winemaking consultants have received consulting assignments at seven transitional wineries, summing up to a total of 28 level-of-efforts days. As a result, by June 2021, these beneficiaries will be able to commercially launch and sell their white and rose wines from the 2020 harvest and red

17 wines from the previous harvest that are compatible with Wine of Moldova and/or Protected Geographical Indication (PGI) quality standards.

MCP Supports National Heritage Winery Mileștii Mici to Revamp its Brand Identity

MCP supported the state enterprise “Milestii Mici” to upgrade its brand identity in accordance with modern visual standards, and re-design the labels of four ranges of bottles. The Milestii Mici wine industrial complex is a top wine tourism destination in Moldova, appraised as an object of the national wine-growing heritage. The complex holds the Guinness World Record for Caption: New design of the label for the entry-level range of Milestii Mici. hosting the largest wine Credit: Milestii Mici collection in the world, and includes a , tasting room, and over 150 kilometers of underground that can be accessed by bicycles or electric buses.

MCP has assisted the winery since 2016, providing technical support in upgrading the quality of their still and sparkling wines, as well as enhancing their marketing efforts. As result, Milestii Mici has increased its competitiveness on the domestic market, and re-launched their exports to target markets such as Romania, Ukraine, China, and Japan.

PROGRAM 2. Building knowledge and innovation for future growth

Activity 2.1. Build upon professional development programs to deliver workforce improvement skills

Moldovan Winegrowers Enhance Knowledge and Understanding of the Romanian Market

Romania is the largest export destination for Moldovan bottled wine, with great affinity for added value wines from middle to premium price segments. Since 2015, exports of bottled wine to this destination have increased over 250% in value and doubled in volume. Despite this impressive growth, experts argue that there are still plenty of growth opportunities both for existing and new exporters, and that this increase is related to implementation of more effective and updated marketing and promotion campaigns. In order to build knowledge and capacity of local marketing specialists, ONVV contracted and organized an online presentation under the Wine of Moldova Academy, entitled “Research study on consumer behavior in wines and spirits segment and the perception of the Romanian consumer towards wine products and brands in the Republic of Moldova.” The study concluded that Moldova is well placed and well perceived, being positioned as second in preference by country of origin in still wines (after Romania), third in the category (after Romania and France), and fourth in sparkling wines (after Romania, France and Italy).

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The study also revealed a strong position in the premium wine category of individual brands such as Purcari and Cricova, and presented extensive findings on consumer insights. As a result, 28 marketing and sales professionals from 12 Moldovan wineries have updated their knowledge on the Romanian market and consumption patterns.

Best Grapes Initiative Continues to Provide Winegrowers with Agri-Intelligence Data

Historically, the Moldovan wine sector has lacked scientific knowledge on vineyard management and vine care techniques, as well as on the impact of climacteric conditions on the current state and health of the vineyards. However, with MCP’s support, ONVV has been implementing the Best Grapes project, which uses information from a network of over 20 demo plots and argi-intelligence data gathered by autonomous meteorological stations. During the reporting period, based on the data from these sources as well as the data gathered from field inspection visits completed by ONVV viticulture experts, ONVV has compiled and disseminated three newsletters across the sector with current reports on viticulture, recommendations of vineyard operation,s and disease probability assessments.

OBJECTIVE 2. EXPANDED MARKET LINKAGES

PROGRAM 3. WoM International Promotion Program Support

Activity 3.1. Build WoM brand equity and foster business linkages

ONVV Initiates the Update of Wine of Moldova’s Positioning

According to the year six workplan, MCP is keen to provide strategic support to ONVV to prepare a complex campaign toolkit and update the WoM brand DNA, prior to launching an international communication campaign with extensions and adaptations of target export markets. The national wine brand, Wine of Moldova. A Legend Alive, was launched internationally in 2014, and has since consumed its “novelty” and is beginning to wear out in terms of design and relevancy of the message in line with expectations of consumers on international markets. The draft of the sectorial strategy (reported below) has outlined several priorities that can lay the foundation of the new positioning of the brand. As such, during the reporting period and following the change of the director, ONVV initiated the process of reviewing the current brand pillars: positioning and Unique Selling Proposition. To date, ONVV has finalized the state acquisition procedure and selected a foreign consulting agency, Cube Communications, to update the Wine of Moldova brand.

MCP Mobilizes International Expertise to Kick-Start International Communication Campaigns to Promote Wine of Moldova

MCP is dedicated to supporting ONVV in the conceptualization, deployment and implementation of international campaigns aimed at raising awareness and the reputation of Wine of Moldova as a high-quality wine producing country. Due to reasons such as the need to revise brand positioning and USP, this process was delayed several times. ONVV plans to deploy full-fledged communication campaigns after the new strategy and brand updates are finalized, which does not align with private sector expectations for continuous communication support and reputation building especially during the pandemic when all B2B events are cancelled or postponed, and international travel is under restriction. To address

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this, MCP during the reporting quarter, organized several consultations between the ONVV Director Cristina Frolov and leading international wine marketing experts hired by MCP – Robert Joseph and Polly Hammond. The experts presented several concepts of activities that could be implementable in the short to mid-term, which could boost the image of Moldovan wines immediately. The consultants also proposed an educational initiative aimed at enhancing the digital marketing literacy of local winery specialists. The concepts have been preliminary approved by ONVV and are pending approval by the Coordination Council during the next meeting.

ONVV Initiates a Communication Campaign in the UK

The United Kingdom is one of the largest importers of wine in the world by value, ranked second after the US. According to the Wine of Moldova Marketing and Promotion framework, the UK is defined as a second-tier market (after key export neighboring markets) due to its complexity and difficulty to enter. However, international wine marketing experts consider it as a very important market in terms of building an international reputation, since it is the country of residence for some of the most influential wine critics and writers, as well as the home of the most recognized wine educational institutions such as Wine and Spirits Education Trust (WSET) and Institute of Masters of Wine. Accordingly, even small successes of a wine producing country or a brand on this market may bring international resonance and generate momentum for export growth. Thus, ONVV has included the deployment of a robust communication campaign in its 2021 plans and obtained the approval of the Coordination Council. During the reporting quarter, MCP provided technical assistance to ONVV in developing the terms of reference for the state acquisition package of documents, which ONVV has placed in the state procurement system that is pending offers from potential service providers.

ONVV Partners with Romanian Online Retailer Topdinks.Ro to Capitalize on Ecommerce Growth Trend

Romania is the number one export destination for Moldovan wines.In 2020, the Romanian market absorbed 9.7 millions of bottles of wine worth over $17.9 million. As highlighted in the previously reported IPSOS report, the market still shows great potential for growth and affinity for medium and premium price-ranged wines. However, most of the traditional channels were affected during the pandemic, except for Ecommerce which grew by +36% in 2020, compared to the previous year. The growth pace seems to persist, and according to experts, it will constitute at least +15% in

Caption: Screenshot from Topdrinks.ro and campaign visuals Credit: Wine of Moldova, Toprdrinks.ro

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the current year1. In order to capitalize on the growing ecommerce trend, Wine of Moldova partnered with one of top five Romanian Retailers – Topdrinks.ro, to implement a promotional campaign which included the creation of a special category on the “Wine of Moldova;” listing of new producers (15 in total are listed to date); dissemination of press releases; social media postings; and online display promotion. The results and the impact of the campaign are still under evaluation, however, preliminary data reveals sales that exceed 2000 bottles mainly from the premium segment.

Wine of Moldova Receives 70 medals at Mundus Vini Spring Tasting 2021

Participation in international wine contests remained one of the few traditional marketing instruments available during the pandemic, and the only type of wine industry event that is still being organized. Furthermore, affirmation through the receipt of an increased number of medals is a lucrative tactic, proving enhancement of the quality of Moldovan wines throughout the years. Since 2016. MCP has initiated a program aimed to support and stimulate wineries to submit samples to international competition. One of the competitions was Mundus Vini, which happens twice a year and is considered one of the largest contests in the world due to over 7000 wines being evaluated. ONVV gradually took over this activity and MCP has intervened only where it was necessary. In December and January, ONVV and MCP organized participation of over 90 samples for the spring edition of the contest and received remarkable results: 70 total medals were awarded to Moldovan wines, of which 34 were gold and 36 silver, placing Moldova in the eights position by the number of medals received among the 36 participating countries. 26 out of 70 medals were won by MCP beneficiaries of the quality improvement programs: small winegrowers and transitional wineries.

Export Support Program – Helping New Generation Wineries and Small Winegrowers to Tap into the EU Market

Since 2015, MCP has implemented a firm-level Export Support Program complementing the Wine of Moldova marketing and promotion framework that is in line with the national brand communication strategy. This tailored support package is adapted to the size, export- readiness, and role in contributing to the national brand equity on export markets of each winery which considers the anticipated effects on other beneficiaries. The marketing opportunities and support available are tailored to both large exporters and small wineries and requires at least a 50/50 cost-share by the company, based on realistic and executable marketing plans. Project marketing assistance under the ESP Program is also beneficial for the WoM national brand image, resulting in a spillover effect to other Moldovan winemakers. As such, during the reporting quarter MCP assisted the following beneficiaries under the Export Support Program:

• Castel Mimi. MCP continued to implement the PR and Social Media promotion campaign under the contract with Romanian award-winning communication agency Rogalski & Damaschin for Casel Mimi. During the reporting period, apart from regular social media postings, a batch of wines were delivered to top opinion leaders and influencers in Romania. This activity had an important impact and echoed throughout Romania, generating greater visibility for the Castel Mimi brand.

1 Source: https://www.romania-insider.com/payu-ro-ecomerce-march-2021

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• Radacini. This winery is one of the leading exporters to the Netherlands, accounting for almost 8% of the total bottled wine exports in 2020. Radacini is represented on this market by one of the leading importers and distributors, Delta Wines, which ensured wide distribution across multiple channels. Thus, MCP decided to support this winery to deploy a trade marketing and consumer promotion campaign involving one of the leading wine bloggers in the Netherlands - Esmee Langereis. Esmee’s company will produce a video that will be distributed via social media and through Delta Wines’ newsletter that is sent to their network of commercial partners.

• Crama Mircesti after a robust launch on the domestic market, Crama Mircesti shipped its first export to Romania and was listed in several important chains. However, to generate sales momentum, this small winery needed support with deploying a launch communication campaign. MCP agreed to cover the costs of this campaign that would be deployed by a specialized communication agency, whereas the winery and its distributors committed to cover all trade marketing costs and provide an in-kind contribution (in wine samples). The campaign is scheduled for deployment in April 2021.

• Vinaria Hincesti is one of MCP beneficiaries that proved its ability to produce high-quality bottled wine. Recently, Vinaria Hincesti had to change its importer and distributor in Romania and has since lost market share. In order to kick-start and regain sales, the winery needed to deploy a communication campaign which MCP agreed to cost share. Thus, in the reporting quarter, MCP contracted a communication agency, assisted the winery to provide all necessary information and briefs, and developed a communication plan that includes social media promotion; online display promotion; and programs for opinion leaders and influencers. This campaign will be deployed in April 2021.

OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

PROGRAM 4. Support policy upgrades and regulatory reforms in the wine industry

Activity 4.1. Support wine industry policy upgrades, legal and regulatory reforms and institutional strengthening sustainable development

ONVV PPP Model Challenged by Constitutional Court Motion Filed by Member of Parliament

MCP is committed to safeguarding ONVV and its groundbreaking Public-Private partnership model. During the reporting period, MCP acted proactively to the third tentative effort in five years to amend the existing status quo in the wine sector. In January, backed by a Gagauzian wine and brandy holding, Member of Parliament Chirill Motpan filed a motion in the Constitutional Court that proposes to defer wineries that are residents in the Free Economic Zone from paying to the Vine and Wine Fund, and challenges the ONVV PPP model and private sector contributions to ONVV Vine and Wine Fund. MCP has timely

22 informed the donors and activated all available lobby and advocacy resources to oppose this effort. The motion is currently pending Government notice, however, due to the current Government’s resigned status, any notices on constitutional motions are on hold, and will not be examined until a new Government is in place. MCP will continue to closely monitor the situation and provide specialized assistance to the ONVV and the wine industry associations to ensure that their opinion is duly presented to the court and that the PPP model is well portrayed within the court proceedings. Amendments to Main Sectors’ Governing Law No. 57 ‘On Vine and Wine’ Voted on by The Parliament

The implementation of the wine industry legal and regulatory reforms initiated in 2013 need to continue, as this is a long-term process to fully reorganize the industry regulation, management, and control. Additionally, the current legislation needs to be continuously harmonized to the circumstances and needs of the private sector. The audit of ONVV’s activities by the Court of Accounts revealed several inaccuracies and ambiguities in the main governing law No. 57 “On Vine and Wine” which had to be corrected to ensure smooth functioning of ONVV and the efficient use of funds accumulated in the Vine and Wine Fund. Thus, since June, MCP has provided assistance to ONVV and the private sector associations to develop and propose amendments to the stated law, which were approved by Parliament in the second reading on March 26, 2021. The main improvements include: • The number of the Council for Coordination members is increased to 15 members, instead of 13, by adding one representative from Ministry of Economy and one representative from Ministry of Finance; • The Association of Small Winemakers was entitled to a vote in the Council of Coordination; • Grapes sold internally are exempt from paying the wine contribution to the Fund. Only exported grapes will remain subject to paying the wine contribution; • The contribution paid for alcohol and wine spirits has been decreased by 0.40 MDL (from 1,6 to 1,2 MDL per liter of AA); • The aromatized wines and products based on wine are clarified as objects for the wine contribution calculation; • The management of the Vine and Wine Registry has been added to the list of areas to be funded from the Vine and Wine Fund; • The replacement of the words `technical regulations` by the words `normative acts` throughout the law. Some of the approved ammendments are considered to be inadequate, especially the last one – since it deviates from the Law’s intention to have all quality regulation and key legal restrictions be regulated by law or Government decision, and not by other subordinated acts (i.e. Orders from MADRE, ANSA, etc). MCP will work with sector associations, ONVV, and HVAA to mobilize donor support with revising these ammendments once the law can be reviewed again.

ONVV Transposes Reformed Law into Sub-Normative Acts

MCP seeks to ensure implementation of legal reforms into sub-normative acts and orders. During the reporting period, ONVV and MARDE developed two regulations that ensure seamless functioning of the PPP and eliminate the following barriers and ambiguities:

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• Regulation on determination of PGI Association with highest contributions to National Vine and Wine Fund - following the amendments of the main governing law No.57/2006 of June 2020, a seat at ONVV's coordination council was attributed to a representative of a PGI Association with highest contribution to National Wine and Vine fund. Consequently, the Ministry of Agriculture, Rural Development and Environment has developed a regulation and established a working group that will analyse the data received from PGI Associations, and allocate a voting right to one member in the ONVV Coordination Council. • Draft of the regulation for allocation of budgets from Vine and Wine Fund for joint marketing and promotion activities – following a request from the private sector, ONVV developed a draft regulation for funding of marketing and promotion activities in which several wineries can participate and that are not organized directly by ONVV. The document is needed to introducce clarity and impose joint resonsibility by cost-sharing, however, the concept raises several questions on impartiality of allocation of common resources to large participants. MCP has provided technical assitance to address these questions. The draft of the regualtion is ready and will be proposed for voting to the ONVV Coordination Council.

MCP and HVAA Advocate for Relaunch of The Development of The Wine Sector Development Strategy: Wine of Moldova 2030

Following the change in ONVV’s management and the release of the first draft for sector consultation, the development of the Strategy has been delayed once more for several reasons: the drawbacks of the previous document which has an excessive focus on academic and scientific research; difference in views of several sectors stakeholders and the provisions of the draft on basic pillars of the strategy; and the lack of justification and financial coverage for proposed initiatives. MCP’s technical team has flagged the need for continuation of the development of all dialogue platforms conducted during the reporting period, including meetings and discussions with HVAA and USAID. It was agreed that it would be discussed with the Strategy’s Steering Committee Chairman to unblock the development process. Meanwhile, separate from MCP, ONVV contracted an EU expert to conduct repetitive analysis of the legal framework to identify and propose means to eliminate legal barriers. MCP will continue to monitor the situation and ensure that the new recommendations will not impair the general strategic development vision.

Bridge Finance Analysis Presented Continually to ONVV Management

In FY20, as a strategy development exercise, MCP provided the “Bridge Finance” study to ONVV on the financial state of the sector and the means to overcome finance gaps generated by the pandemic. The report was developed in a timely manner and presented to ONVV management just before the release of the first draft of the strategy. However, the draft did not include any of the proposals presented in the study for unclear reasons. MCP and the authors of the Study have presented it repeatedly to new the ONVV Director Mrs. Cristina Frolov, who endorsed the proposed solutions positively -- particularly the idea of establishing a private Equity Fund. Consequently, the drafts of the letters to Ministry of Finance, donors, and Moldova’s developing partners were developed and presented to ONVV. MCP and the successor project HVAA will continue to advocate for the proposed concept and closely monitor the activities of ONVV and MARDE in this regard.

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PGI Associations Exerted Their Self-Control Functions During Regional Assessment Tastings

According to European best practices, a PGI wine is traditionally sold with a 15-20%higher price than the same wine with a generic label. The four PGI associations – Valul lui Traian, Stefan Voda, Codru, and Divin - have a leading role in promoting high-quality wines and regional wine traditions. However, due to limited experience and low capacity, the Moldova PGI wine associations need support to organize their internal control procedures, clarifying and adjusting their PGI technical specifications aimed to promote the specific features of each wine region. To enforce the PGI wine production system, PGI associations need to be fully operational and execute their legal and statutory role.

During the reporting quarter, ONVV in cooperation of PGI Association, organized three regional tasting of the wines produced from the 2020 harvest. These events act as evidence of the increased role in the sector structure and enforce and enact self- management and auto-control of quality functions of PGI Associations. As such, the Caption: ONVV winemaking expert, Mrs. Elizaveta Breahna holding opening authorized tasters, and remarks during PGI tasting Credit: Wine of Moldova representatives of the PGI association have evaluated over 285 wine samples from 55 wineries using the internationally accepted 100 points OIV scale, and tasting software developed with MCP’s support. Afterwards, the results were made public to all members of the associations in order to assess the overall level of quality per region and inform members of the association on quality issues of some wine batches. Notably, most of the wines produced by MCP beneficiaries under the quality upgrading programs PQUP and ASW Motorship, were evaluated as having above average scores.

MCP Assists PGI Associations in Enhancing their Web Presence

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In order to increase the digital footprint and information available on the about Moldovan PGI regions, which to date are also the highest standards of wine quality, MCP provided support to PGI Association Valul lui Traian. The support helped to develop and post a website containing all current information on specifics of the region, the terroir, wines, PGI Association members and a map of touristic destinations. Caption: Screenshot of PGI Valul lui Traian website homepage Credit: PGI Association Valul lui Traian

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TOURISM INDUSTRY

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

PROGRAM 1. Start-up tourism Moldova: product development, service quality upgrading and tourism offer diversification

Activity 1.1. Strengthen the tourism product development and improve tourism hospitality infrastructure

Installation of 213 New Tourist Signs to Resume Enco

In January 2021, following multiple requests and high-level ministerial meetings, the State Road Administration of Moldova re-launched the installation of 213 MCP-supported tourist road signs, which had been delayed due to political turmoil. Despite numerous actions taken by the initiative’s three partners – the Moldovan Investment Agency (MIA), the National Office for Vine and Wine Photo caption: Tourism road signage indicating Domeniile Pripa winery. Credit: (ONVV), and MCP – the Domeniile Pripa, Facebook page problem could not be solved at a technical level. The road signs have been stalled for over six months because of the State Road Administration’s refusal to execute the installation, putting at risk the successful completion of the three-year nation-wide initiative to enhance visitors’ access to Moldova’s key tourist attractions.

Conflicts between road authorities and tourism stakeholders are common in other countries as well; therefore, MCP’s leadership and facilitation was essential. The agreement between the partners is that ONVV, MIA, and MCP will finance signage production costs, while the State Road Administration will fund installation costs. The signs cover MCP- assisted guesthouses and wineries with new hospitality facilities that opened to the public, such as Ceramica Triboi, Mester Faur, and Gagauz Sofrasi guesthouses, as well as Novak, Gitana, and Tronciu wine producers.

The nation-wide tourist signage initiative, initiated in 2018 by MCP in partnership with MIA and ONVV, and in coordination with the Ministry of Economy and Infrastructure, ensured installation of over 350 tourist road signs directing travelers to 100 key tourist attractions. Access to information, including tourist road signs, was listed as a major gap by 63% of international travelers in the MCP-supported Moldova visitor exit surveys.

46 Wineries are Ready to Receive Tourists as a result of MCP’s Strategic Support

Realizing Moldova’s wine tourism potential, MCP initiated the “Wine Tourism Accelerator Program” for wineries, applying an intervention matrix including technical assistance, workforce development, service quality upgrading, and grants component through the SEED Fund. The goal for the wine tourism development is for every winery in Moldova to have the ability to receive tourists, thus upgrading Moldova from a Caption: Asconi winery guesthouses built with MCP support. Credit: MCP wine producer country to a destination for wine tourism. During Q2Y6, MCP closed the last eight grants being implemented under this program. Launch events could not be organized due to pandemic related restrictions, however, all eight wineries plan to start receiving guests during the summer season, hoping that the pandemic will be at least partially contained. This assistance has been especially appreciated considering the global crisis which has caused unprecedented damage in the tourism industry, but also other sectors including the wine industry by decreasing possibilities for wineries to invest in the improvement of their facilities and services.

MCP’s portfolio of strategic wine tourism assistance includes 46 wineries of different scale and at various stages of development, concentrated in three major wine tourism hubs: Stefan Voda region (South-East of Moldova), Gagauzia region, and the Central region. During the project’s lifetime, MCP invested over $535 thousand in wine tourism grants offered to 34 wineries. Wineries are cost-sharing at least 50 percent of the investment. Digitalization and workforce development are two other major areas of intervention that have been extensively supported by MCP.

MCP-Supported Rural Guesthouse Casa Veche Fully Sold Out in Domestic Bookings during the Winter Holiday Season

Despite the global tourism industry crisis spurred by the COVID-19 pandemic, MCP- supported rural guesthouse Casa Veche reported an unexpected surge in interest from local travelers. Located on the Stefan Voda wine and rural tourism trail, near Etcetera winery, Casa Veche rural guesthouse was fully booked during the winter Caption: MCP-supported Casa Veche rural guesthouse in Palanca season, offering visitors village.Credit: MCP

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accommodation services and soft adventure experiences. The rural guesthouse can accommodate up to 20 overnight guests and 50 restaurant visitors at a time. In line with other MCP-supported rural guesthouses, Casa Veche complies with the ‘Safe Travel’ standards and is committed to strict health and safety guidelines for their visitors and personnel.

To date, customers' travel habits have started to shift to local destinations, demonstrating the importance of rural tourism development and prototyping. MCP combined investment and assistance for Casa Veche rural guesthouse totaled $17,200, mobilizing co-investment from its owners, worth over $50,000. The resulting rural facility is now capable of attracting visitors with high standards of accommodation, offering traditional and a wide range of tourism experiences, such as cooking masterclasses and biking.

MCP Grant Assistance for Rural Guest Houses Combats a Key Challenge in Moldova’s Tourism Industry

To combat a key challenge in Moldova’s tourism industry of few rural guesthouses that are able to accommodate travelers, and to help rural entrepreneurs capitalize on the sustainable tourism market, MCP decided to support rural guesthouses to refurbish their facilities, preserving the authentic rural style, while diversifying their tourist services to include local experiences from cooking traditional dishes to folk dancing Caption: Cooking workshop at rural guesthouse. Credit: MCP and biking. These essential infrastructure and service upgrades were geared towards meeting the expectations of higher paying Western travelers, thus directing tourism capital flow to benefit rural communities.

During Q2Y6, the last seven beneficiaries out of the 34 included in MCP’s portfolio of grant assistance for rural B&Bs finalized their grants and are planning to receive travelers during summer 2021. These strategic upgrades have created a new vision of rural tourism in Moldova throughout the years, developing new tourism products that are in line with current global trends of sustainable tourism. Grants provided through MCP’s SEED fund are intended to improve accommodation and service quality, and are cost-shared with beneficiaries at a ratio of approximate one to three. MCP ensures preservation of the authenticity elements through design and architecture services provided to beneficiaries.

Wine Routes of Moldova - One Year Affiliation with the Cultural Routes of the Council of Europe

At the end of February 2021, the National Inbound Tourism Association of Moldova marked one year since the affiliation with the national oeno-tourism route “Wine Routes of Moldova” within the accredited cultural-European Routes of the Council of Europe, along with 30 other itineraries certified under the international forum. Since 2019, due to years of

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MCP and ANTRIM efforts, Moldova has been a part of the pan-European network of routes and tourist experiences dedicated to wine – “Iter Vitis – Les Chemins de la Vigne.” 34 tourist destinations included in this itinerary benefited from MCP’s assistance through grants and support in business development, which led to greater diversity and quality of wine tourism experiences included in the “Wine Routes of Moldova.”

During the first year of affiliation, the “Wine Routes of Moldova” continued to expand, winning awards and appearances in specialized international publications, including “Lonely Planet”, even as the pandemic suspended some of the most ambitious growth plans.

Moving forward, ANTRIM aims to establish partnerships with Caption: 1 year anniversary since Wine Routes of Moldova affiliation to the European Iter Vitis Route. Credit: ANTRIM ONVV and entrepreneurs in the field of wine tourism for the development of the Wine Road, international promotion, and regional and global interconnection with other tourist itineraries, including through cooperation and long-term activities as set out in the Council of Europe Resolutions.

The “Wine Routes of Moldova” includes seven unique wine and gastronomic itineraries, 30 visits to wineries, wine cellars, dozens of cultural-tourist events and numerous cultural, historical and gastronomic experiences and a total of 1,560 km of circuits in the three wine regions with Protected Geographical Indication, marked with approximately 450 tourist road signs, promoted through catalogs, brochures and maps.

ANTRIM Signs Memorandum of Understanding with Moldova State University to Boost Tour Guides’ Professional Development

The National Inbound Tourism Association of Moldova (ANTRIM) partnered with the Moldova State University (MSU) to develop a series of continuous learning programs for tourist guides to help them advance their guiding skills in line with the World Federation of Tourist Guide Associations’ (WFTGA) high standards of training and ethics. To date, Photo caption: The signing of the Memorandum of Understanding between with MCP’s support, 48 ANTRIM and Moldova State University to boost tour guides’ professional Moldovan tourist guides development. Credit: Moldova State University received WFTGA accreditation, enhancing their skills to better serve the Moldovan tourism industry. The partnership, facilitated by MCP, formalizes a three-year collaboration between ANTRIM and MSU, and ensures a permanent platform for joint activities and continuous

30 learning. The students will be involved in the tourism routes development and benefit from trainings of trainers (ToT) to improve their guiding skills and better respond to the market needs.

During the pandemic, the need for tourist guides has decreased by 90%, requiring greater attention and support in this area. To shed light on the challenges faced by Moldovan tour guides, on international Tourist Guide Day, ANTRIM launched a promotional campaign to express their solidarity and support for this profession and encourage tourist guides and students aspiring to be tourist guides to improve their guiding skills. The campaign featured solidarity messages from local and international tourism representatives and supporters, including Mary Kemp Clarke, Vice President of the WFTGA.

Digital Platform to Enhance Tourism Guide Visibility and Promotion Capacities

MCP developed a digital platform in order to support tourism guides with recovering from the pandemic. On the website, guides can build a profile, write articles, receive reviews, create itineraries, and promote their offers. A real-time booking and payment solution is also planned to be integrated on the platform to help guides receive direct online payments. Aggregating the tourism guide’s offer on a modern and user- friendly platform will increase their visibility and improve access to information for tourists. It also allows for a more efficient promotion of a unified offer, rather than promoting each guide separately. The website will be managed by ANTRIM in partnership with the Photo caption: MCP developed digital platform for tourism tourism guides to stimulate their engagement. guides. Credit: MCP The platform was recently finalized, and the content integration process was initiated.

OBJECTIVE 2: EXPANDED MARKET LINKAGES

PROGRAM 2. Tree of Life Marketing Program: building awareness for Moldova internationally

Activity 2.1. Build international awareness for Moldova’s Tourism

ANTRIM Christmas Campaign “Colinda Moldova” Stimulates Inbound Tourism and Promotes Moldova as a Tourism Destination The Moldovan tourism industry was severely affected by the COVID-19 pandemic, with many accommodation units and hotels registering in 2020 over 98% sales loss as a result of booking and service cancellations. To stimulate inbound tourism and help Moldovan tourism businesses attract new clients, ANTRIM, with MCP’s support, launched a Christmas

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campaign promoting winter tourism offerings of various rural guesthouses, hotels, wineries, centers, and tour operators. The campaign “Colinda Moldova” (Wander throughout Moldova) reached over 130,000 views on social media, enticing locals to explore domestic tourism Online banner of the “Colinda Moldova” promotional campaign. Credit: Rediscover the Routes of Life, Facebook page. opportunities. In light of the COVID-19 restrictions, all tourism businesses have undertaken strict measures to ensure the safety of their clients, serving only small groups of people. The campaign featured a series of videos and visuals highlighting Moldovan Christmas traditions and promoting Moldova as an attractive tourism destination for visitors.

MCP-Supported Awareness Campaign “Hora Martisorului” Generates High Engagement from Moldovan Citizens and the Diaspora

MCP-supported “Hora Martisorului” digital campaign mobilized an unprecedented cultural awareness of Moldovan values and traditions, reaching an audience of more than 550,000 people from Moldova, Romania, Ukraine, Poland, and Italy. Over 150 community leaders, ambassadors, diplomats, singers, Caption: Collage of “Hora Martisorului” videos. Credit: ANTRIM. influencers, and Diaspora members engaged in the awareness campaign Hora Martisorului to express their solidarity during the COVID-19 pandemic and share a virtual Martisor with their families and friends. Martisor was included on the UNESCO’s list of intangible cultural heritage of humanity, raising awareness about Moldovan spring traditions. The campaign, organized by ANTRIM in partnership with MCP, went viral and generated over 1.2 million impressions on Facebook, Instagram, and other social media platforms. The videos reached an average of 23 seconds per view, compared to the industry normal of 10 seconds.

Travel and tourism are among the most affected sectors with a massive fall of international demand amid global travel restrictions. To ensure the industry’s recovery, MCP supports Moldovan tourism businesses to employ sustainable practices and measures to re- launch their businesses safely, while deploying outstanding digital campaigns in the online environment.

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MCP Supported Three Tour Operators to Promote Moldova’s Tourism Offers at the World's Leading Travel Trade Show ITB Berlin

ANTRIM, in partnership with MCP and the Moldovan Investment Agency, supported tour operators Tatrabis, Visit Moldova, and Sup Moldova Tours and Rental to participate at ITB Berlin -- the world’s leading travel trade show. The event was held online during March 9-12th, and featured participation of over 3,500 exhibitors from 120 countries. During the event, participants promoted Moldovan tourism offers and pitched their experience packages to travel consumers, encouraging them to visit Moldova. The attendees showed interest in traveling to Moldova when the COVID-19 travel restrictions ease up, and experience Moldovan rural life, soft adventure experiences, and gastronomy. The trade show provided participants and trade visitors an ideal platform to network, exchange ideas, stay well- informed, and negotiate business with market Photo: Tatrabis representative participating at ITB Berlin online. Credit: ANTRIM players and tourism service providers from all over the world, despite the COVID-19 pandemic and current travel restrictions.

To ensure the industry’s recovery, MCP supports Moldovan tourism businesses to shift market strategies and adopt global trends focused on digitization, sustainability, and regional tourism, while encouraging industry representatives to employ sustainable practices and security measures to re-launch their businesses safely. MCP supports the national tourism portal 360.moldova.travel to provide interactive digital experiences with virtual tours for monasteries, wineries, and other major tourism sites, and deploys outstanding tourism and Wine of Moldova digital campaigns that enjoy great popularity in the online environment.

ANTRIM Signs a Memorandum of Understanding with the Hospitality Association of Ukraine to Stimulate Regional Tourism Opportunities

Following the participation in an online forum on the prospects of regional tourism in the previous quarter, ANTRIM partnered with the Hospitality Association of Ukraine to enhance regional tourism opportunities and develop common tourism products for travelers. The partnership, documented in a Memorandum of

Understanding, aims to Caption: Online event announcing the signing of a Memorandum of Understanding support tourism between ANTRIM and the Hospitality Association of Ukraine. Credit: ANTRIM. representatives to adopt best

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practices for industry recovery and improve the quality of their services. As part of the partnership, tourism representatives from both countries will benefit from information sessions and tours to increase awareness about each country’s tourism potential and exchange experiences and resources to develop common tourism offers. The collaboration will focus on developing soft adventure experiences and tourism itineraries for regional travelers, while promoting sustainability and enhancing the competences of tour guides. The signing of the Memorandum was featured in an online event, viewed by over 5,000 people.

Moldova Joins Ukraine and Belarus in Regional Forum to Provide Sustainable Solutions for Tourism Industry COVID Recovery

Over 300 tour operators and hotel representatives from Moldova, Ukraine and Belarus gathered at an online forum to discuss measures for regional tourism development and provide sustainable solutions for the industry’s recovery. Michael Jones, from USAID Moldova, joined the event alongside Moldova’s secretary of state at the Ministry of Economy and Infrastructure and the First Deputy Chairman of

Caption: Michael Jones, USAID Economic Growth Office Director, provides the State Agency for opening remarks at the online forum on „Anti-crisis measures and tourism Tourism Development of development during the pandemic: Ukraine, Moldova, Belarus” Credit: ANTRIM. Ukraine, to provide welcome remarks and show support for the tourism industry. Michael Jones applauded the regional initiative to develop joint tourism itineraries and underscored the importance of regional cooperation in enhancing the tourism industry’s resilience and accelerating economic recovery.

The forum was organized by the National Inbound Tourism Association of Moldova (ANTRIM) in partnership with the Hospitality Association of Ukraine, with support from MCP and EDGE projects. In April, with USAID’s support, ANTRIM and the Hospitality Association of Ukraine will host a five-day workshop for Moldovan tour operators to develop new tourism products targeting Ukrainian travelers.

The COVID-19 pandemic has significantly impacted the tourism industry worldwide, generating losses in global revenue of over $1.3 trillion in 2020. However, despite the travel restrictions, Ukraine welcomed 3.4 million foreign visitors in 2020, one-third of which were from Moldova (933,000 visitors). At the same time, 13.5% of the tourists visiting Moldovan wineries and guesthouses in 2020 came from Ukraine, preceded only by Romania with 31.4%. MCP supports Moldovan tourism businesses to shift market strategies and adopt global trends focused on digitization, sustainability, and regional tourism, while encouraging industry representatives to employ sustainable practices and security measures to re-launch safely.

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The Investment Agency and ANTRIM to Hold High-level Tourism Industry Forum 2021, with MCP’s support

The Investment Agency and private sector stakeholders need to rely on market intelligence while planning and executing marketing programs. ANTRIM will strengthen its business and market intelligence service as part of the think-tank role in the industry. To respond to these needs, MCP will provide support to the organization of the high-level Tourism Industry Forum 2021, to be held by the Investment Agency and ANTRIM in April 2021. During Q2Y6, MCP has assisted the two with the development of a compelling and useful agenda, including insights from high-level international experts who will provide valuable thoughts for the entire sector. The event will serve as a platform for discussion and collaboration amongst tourism industry stakeholders and be an opportunity for professional development aimed at amplifying tourism industry progress.

ANTRIM and Chisinau City Hall Developed a Marketplace for Moldovan Artisans The National Inbound Tourism Association of Moldova (ANTRIM) in partnership with Chisinau City Hall developed a marketplace in the center of Chisinau for Moldovan artisans. The marketplace is equipped with 21 units of urban trading to be used by local artisans during craft fairs. In the absence of merchants, the furniture, made from durable, Photo caption: Urban marketplace for Moldovan artisans in the center of Chisinau. Credit: ANTRIM robust, and easy to maintain materials, will be used as street furniture. The urban installations including vertical stands and table supports feature elements of the "Tree of Life" country brand’s stylistic identity. The marketplace was launched as part of the Municipal Tourism Development Strategy “Chisinau – Tourism Capital,” implemented by Chisinau City Hall, with support from ANTRIM. The strategy is part of a collaboration agreement facilitated by MCP to foster inbound tourism and to promote Chisinau as an attractive tourist destination. To implement these activities, ANTRIM serves as the main coordinator, while the Chisinau City Hall allocated administrative and financial resources in the amount of $28,500.

The First Sightseeing Trolleybus in Moldova Will Take Passengers on a Panoramic View of Chisinau

ANTRIM in partnership with Chisinau City Hall launched the first Sightseeing Trolleybus in the capital city of Moldova. The trolleybus runs on weekends and offers passengers a unique opportunity to tour the city and visit the most popular tourist attractions in Chisinau. To familiarize passengers with Moldovan history and culture, the trolleybus includes audio guides, providing comprehensive information about the attractions. The audio guides were developed by ANTRIM in collaboration with Artcor Creative Center and are available in three languages, including Romanian, Russian, and English. The trolleybus can carry 75 people; however, during the pandemic, the trolleybus will carry only 65% of its capacity. The

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trolleybus tours the city’s main landmarks, including the Arch of Triumph, the Cathedral, the National Palace, the National Opera Ballet, the Circus, as well as various other theatres, museums and monuments of cultural and historic importance.

The Chisinau Sightseeing Trolleybus was launched as part of the Municipal Tourism Development Strategy “Chisinau – Tourism Capital,” implemented by the Chisinau City Hall, with support from ANTRIM. The strategy is part of a collaboration agreement facilitated by MCP to foster inbound tourism and to promote Chisinau as an attractive tourist destination. The collaboration agreement also foresees the development of a tourism identity for Chisinau and the launch of an awareness campaign to inform visitors and locals about the tourist attractions and leisure events held in the capital city. To implement these activities, ANTRIM served as the main Visual of the first Chisinau Sightseeing Trolleybus launched by ANTRIM in partnership with the Chisinau City Hall. Credit: ANTRIM. coordinator, while the Chisinau City Hall allocated administrative and financial resources in value of $28,500.

OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

PROGRAM 3. Sustainable tourism policies and friendly business environment

Activity 3.1. Rethink the tourism industry: reformed policies and regulation to ensure sustainable development

New Tourism Strategy Pending Approval amid Political and Health Challenges

Reforming Moldova’s outdated tourism sector policies and regulations is a lengthy, complex, but a much-needed process. MCP continued to push for tourism law reforms, strengthening the public-private dialogue, defining broad strategies, and proposing practical policy recommendations. As a result of the White Paper development, the Ministry of Economy and Infrastructure (MoEI) requested MCP’s assistance in developing a new strategic policy for the tourism industry’s development, to replace the outdated “Tourism-2020 Strategy” that was approved in 2014. MCP engaged local and international expertise to assist the public authorities and private sector associations to develop a strategic vision for sustainable and robust growth of the tourism industry. Though already in the process of approval, the newly developed Strategy had to be revised considering the COVID-19 pandemic outbreak.

The updated National Tourism Development Program “Tourism - 2025” and the accompanying Action Plan, were translated into Russian and English, but are still waiting

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approval as a consequence of the political and health crisis. The situation remains unclear amid the current political turmoil, however, MCP will continue to push for the approval of the new Strategy. It is crucial for the Government of Moldova (GoM) to move forward with an implementable strategy that supports the sector in weathering a global pandemic.

Legal Guide for Starting a Tourism Business to Assist Entrepreneurs with most Essential Regulatory Information

During Q2Y6, MCP re-engaged in the development of a Legal Guide for Starting a Tourism Business. In June 2020, the Moldovan Parliament approved a set of improvements to the Tourism Law aimed at easing business regulations and enhancing the development of the country’s in-bound tourism. These improvements remove the stringent regulations applied to tourism entities and enable Moldovan entrepreneurs to replicate and apply international best practices of doing business.

Knowing that entrepreneurs and start-ups in the tourism industry often do not have an advanced entrepreneurial education and experience, with the vast majority of them being micro enterprises, activities on behalf of individuals, or seasonal entrepreneurial activities, MCP offered to assist the Ministry of Economy and Infrastructure to develop an explanatory legal guide that could be easily understood by everyone, elaborating on the most essential regulatory issues regarding the initiation and organization of tourist services. The legal guide will serve to inform, guide, and encourage entrepreneurial initiatives with touristic income-generating Sergiu Iliescu, a new entrepreneur planning to launch a SUP business in activities, which will in turn ensure the socio-economic 2021, posing with a paddle board. prosperity of Moldova’s regions. Credit: SUP Moldova

The Legal Guide for Starting a Tourism Business is designed as an accessible guide, in a popular language, with professional interpretations of the legal norms related to the legal framework of activities in the tourism industry, especially for micro and small enterprises and self-employed activities. The Legal Guide will serve as a regulatory benchmark for the most essential requirements and will not comprehensively cover all obligations established by the legislation in force. In addition, the guide will include some useful recommendations and practical tips for start-up. It is expected that the Legal Guide will be finalized and made available to the public during the upcoming quarter.

ANTRIM on its Way to Becoming the Leading Tourism Business Association of Moldova

During the reporting quarter, MCP continued to support ANTRIM to become the leading tourism business association in Moldova, focusing exclusively on domestic and inbound travel. As MCP’s main counterpart and legacy organization, ANTRIM continued to implement impactful activities promoting Moldova as a tourism destination internationally through viral campaigns, pushing for the enhancement of the business environment and regulatory framework, developing educational and workforce development opportunities

37 for the industry, implementing activities for the expansion of regional tourism as a sustainable solution for the sector’s recovery, and offering valuable input for the development of the Legal Guide for Starting a Tourism Business.

Due to MCP’s continuous and strategic support, ANTRIM expanded its capabilities of attracting funding from external sources. During Q2Y6, ANTRIM continued to implement projects like the collaboration with the Ministry of Education, Culture and Research and the German Agency for International Cooperation (GIZ) in Moldova for a complex initiative aimed at developing the Sipoteni region, .Victoria Bucataru, ANTRIM’s Executive Director, and Cristian Cotorobai sign the acquisition contract for transportation equipment aimed at developing the the participation in the Sanitation Service Project financed by the European Union in Sipoteni, Heirpreneurship project, which Calarasi.Credit: ANTRIM. is financed through the Black Sea Basin Program, and the implementation of a small grants program for six tourism businesses sponsored by the private company Efes Vitanta Moldova Brewery. These collaborations have been facilitated by MCP to increase ANTRIM’s abilities to absorb direct funding from other donors and maintain its role as the leading business association in the industry.

In April 2021, ANTRIM will hold a Board Meeting and General Assembly, and discuss the appointment of a new association President, the adoption of a new statute, and the presentation of potential new members. Also in April, with USAID’s support, ANTRIM and the Hospitality Association of Ukraine will hold a five-day online workshop for Moldovan tour operators to develop new tourism products targeting Ukrainian travelers.

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INFORMATION TECHNOLOGY, ENGINEERING AND CREATIVE SERVICES

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

PROGRAM 1. Promoting STEAM education and careers

Activity 1.1. Continue supporting the Future Classroom Lab (FCL) concept in Moldovan schools and NCDIE Center (ongoing)

Future Classroom Center Continued Working on Space Renovation to Expand its Premises and Accommodate more Beneficiaries

The Pedagogical State University continued to advance its renovation, adding an additional floor to expand the Future Classroom Center, thus responding to the continuously high demand for teacher training and school digitization support. MCP provided support for re- designing the spaces and is cost-sharing on refurbishments, while the Pedagogical State University committed to cover the renovation costs. With this expansion, the Center will triple in size from 400 sq.m. to about 1200 sq.m., adding six training rooms, offices for the center staff, kitchen, and a lounge area to facilitate networking. The representatives of USAID and Sweden visited the site and complimented the university representatives on the continuous support provided to the center.

Photo caption: Visit of Embassy of Sweden in Moldova representatives Adam Amberg - Head of Development Cooperation, Catarina Nilsson - First Secretary/ EU ICT Development Cooperation, Evghenia Snitco - Programme Officer Development Cooperation (EU ICT) and USAID Moldova Sr. Project Management Specialist - Corneliu Rusnac at NCDIE “Clasa Viitorului” Credit: MCP

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Future Classroom Teachers Learned to Solve STEM Problems and Develop an Engineering Mindset Using FCL Equipment

On January 23 and February 13, 2021, 31 teachers of informatics, robotics and physics from FCL schools attended practical training sessions on ”How to solve STEM problems through experiments, using programmable equipment.” This training took place onsite at the FCL Center premises for two groups of teachers. The training was conducted by Andrei Photo caption: Training sessions ”How to solve STEM problems through experiments, using programmable equipment”, conducted by Andrei Bragarenco, lecturer from the Bragarenco at NCDIE “Clasa Viitorului” Credit: FCL Technical University of Moldova, and Founder of Microlab Engineering club. Onsite events were organized with great precautions, and following all the health rules and epidemiologic requirements, to prevent spread of the COVID-19 virus.

Over 60 Future Classroom Teachers and Students Develop Digital Skills at Artcor Storytelling and Video Production Trainings

The Future Classroom Center in partnership with Artcor Creative Industries Center organized trainings on storytelling and video production for teachers and students enrolled in the Future Classroom initiative. During the two-days training, 60 participants learned to create video content to promote their schools and stimulate children’s interest for STEAM (Science, Technology, Engineering, Arts and Mathematics) education. The trainings were led by Artcor School professionals, who taught participants how to create a video report, develop a basic script for a video, and edit a video while taking into Caption of the training on video production for Future Classroom teachers and pupils. Photo Credit: MCP account lighting, sound, and camera angles.

In an era of globalization and technology-driven changes, the role of arts and creativity is in continuous expansion, with digital media contributing substantially to the improvement of the learning process and the development of STEAM education. Following the trainings, participants will continue to apply the newly developed digital skills to create promotional videos for their schools.

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MCP supports the collaboration between Future Classroom and Artcor Creative Center to enhance youth’s interest for creativity and encourage them to pursue a career in the creative fields. To date, the creative industry in Moldova employs over 13,000 people, who are mostly young, offering them stable jobs and competitive salaries.

Future Classroom Teachers and Students Participate in a Video Production Contest to Promote the Role of Technologies in Education

Students and teachers from 13 MCP-supported Future Classrooms across the country participated in a video production contest launched by the Future Classroom Center to promote their schools and communicate the impact of technologies in the education process. Following their participation in the storytelling and video production trainings led by Artcor School professionals, the participants Snapshot from the video promoting Future Classroom in Stefanesti village, rayon Floresti. Credit: Stefanesti gained valuable creative and lyceum, FB page. digital skills, which helped them

to produce videos, from scriptwriting to filming, editing and post-production. The videos enjoyed great popularity Snapshot from the video promoting Future Classroom in Stefanesti village, rayon among the young generation, Floresti. Credit: Stefanesti lyceum, FB page. reaching over 64,000 views and 4,000 shares on social media platforms. MCP awarded the participating Future Classrooms with LEGO MINDSTORMS EV3 and LEGO WeDo 2.0 robotics sets. MCP supports Future Classroom to enhance the youth’s interest in STEAM (Science, Technology, Engineering, Art, Mathematics) education and encourage them to pursue a career in the IT and creative fields. To date, the ICT and creative industries in Moldova employ over 42,500 people, who are mostly young, offering them stable jobs and competitive salaries.

25 Teachers Were Selected to Become Future Classroom Digital Ambassadors and Promote Digital Transformation in Moldovan Schools

The Future Classroom National Center announced the 25 teachers that were selected to become Digital Ambassadors as part of the “Teacher – Digital Ambassador” national initiative that aims to consolidate the network of STEAM teachers and enhance online education across the country. The “Teacher – Digital

Caption: Visual showing an IT and mathematics teacher from Puhaceni village Ambassador” initiative was in Moldova nominated as Digital Ambassador. Credit: FCL designed by MCP, Orange and

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Moldovan Ministry of Education in partnership with Soros Foundation Moldova. The teachers were selected from a pool of 91 applicants from all over the country, demonstrating an increased interest and knowledge in digital technologies. As part of the Future Classroom initiative, Moldovan teachers experiment with market-driven, transformative learning technologies such as virtual classrooms, robotics kits, 3D , coding platforms, virtual reality (VR), IoT devices, microcomputers, sensors, digital labs, etc.

As part of this initiative, the 25 Digital Ambassadors will develop 50 digital educational resources and programs that will promote best practices for digital transformation and will provide specialized trainings on digital tools for education for nearly 100 teachers in the regions.

Activity 1.2. Continuous support to the educational Robotics program

Over 3,000 Teachers Underscored Technological Progress in Education during the COVID-19 Pandemic at the Future Classroom Online Conference

The Future Classroom National Center organized with MCP’s support an online conference for teachers and underscored the critical role of digital technologies in ensuring quality online learning during the COVID-19 pandemic. Over 3,000 teachers, including nearly 400 teachers from neighboring Romania joined the event to discuss technological progress in education, and share their experiences with adopting and using distance learning tools.

Caption: Adam Amberg, Head of Development Cooperation, Embassy of Sweden and Corneliu Rusnac, Senior Project Management Specialist at USAID Moldova provide welcome remarks at the FCL online conference for teachers “Technology makes the difference”. Credit: FCL

The event featured solidarity messages from USAID and Sweden’s officials, as well as the Moldovan Education Minister who praised Moldovan teachers for their flexibility in adopting digital technologies and encouraged them to find balance and promote mental well- being. The event was broadcasted online and reached over 26,000 views on social media.

The online conference featured presentations from international experts Bart Verswijvel, Senior Caption: Bart Verswijvel – Senior Adviser Pedagogical Adviser Education Advisor at the Future Future Classroom Lab, providing “Active Learning in Hybrid Learning Spaces” presentation at the FCL online conference Classroom Lab Project in Belgium and

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Mart Laanpere, Head of the Center for Information Technology in Education at Tallinn University, Estonia. The speakers highlighted the importance of creating a dynamic environment for hybrid learning and ensuring access to resources and digital technologies to advance online education. UNESCO figures show that two thirds of an academic year was lost on average worldwide due to COVID-19 school closures, causing a significant knowledge gap for students. Prior to the pandemic, only 15-20% of Moldovan teachers were using digital technologies in their regular educational activities. To address the growing need for digital skills and tools for online education, MCP facilitated a national partnership with Google, which enabled over 20,000 Moldovan teachers (75%) to access Google Suite for Education and improve their digital literacy skills during the pandemic.

Video Tutorials on the use of FCL Equipment to Promote Transformative Technologies

The Future Classroom Center team developed five video tutorials on some of the most popular FCL equipment: Makey Makey invention kit, Snap Circuits set of elements for building electronic circuits, Tello EDU programmable drone, Microbit pocket-sized computer, LEGO Simple and Powered Machines set. Seven teachers from FCL schools Snapshots from FCL Facebook page and Youtube channel where the were featured in these videos, explaining the use of the equipment and their benefits for the students. The videos were produced by Teamwork SRL in the Future Classroom Center, in compliance with all health restrictions, to avoid spread of COVID-19. The video tutorials will be continuously promoted on the FCL site and social media accounts, for the benefit of the whole educational community. The aim is for the videos to promote the implementation of Future Classroom Lab concept and increase the network of digitally transformed schools.

MCP continued to support Educational Robotics program, and in response to the increased interest in implementing this program in schools, MCP supported FCL center to conduct teachers training on the use of robotics. On January 5th, 2021, 17 schoolteachers attended LEGO MINDSTORMS EV3 educational robotics introductory courses, as a last round of training sessions which started at the end of 2020. In 2021, due to the pandemic restrictions, some schools continued to encounter difficulties in teaching robotics, as many of them were conducting only distance learning, or these types of activities were forbidden to ensure student safety.

Originally, MCP was supporting the organization of the FIRST LEGO League robotics competition in the beginning of each year. In this pandemic year, the onsite organization of the event became impossible. However, the interest from the students and teachers was still high, and MCP was awaiting guidance and tools from the FIRST LEGO League international organization to conduct the online or hybrid event. MCP team finished the distribution of FIRST LEGO League Challenge 2021 competition sets to school teams, and the students, guided by their coaches prepared for the different categories of the

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tournament: Robot Game, Robot Design, Research Project and Teamwork. However, because of the conditions created by the ongoing pandemic, some of the schools were closed and the teams could not meet to work together on the Robot Design and Robot game. At the same time, the situation in the country is still very serious with great restrictions, and it will not be possible to organize the contest in-person. Accordingly, the MCP team is in discussions with FIRST Foundation tech team about the possibility of organizing the competition online. However, the Remote Event Hub system developed by FIRST does not have all of the functionalities fully developed and tested yet, which makes the organization of an online competition challenging for both organizers and participants. Thus, the MCP team is considering postponing or canceling this year's edition.

Activity 1.3. Support digital skills building in VET institutions teachers

VET Students Receive Training on Cisco IT Essentials

The Vocational Education and Training (VET) institutions continued the second semester of the implementation of Cisco IT Essentials Course and improved IT curricula, based on the Cisco program. This is due to the partnership initiated in early 2020 between MCP, the Ministry of Education, Culture and Research (MECR), the Excellence Center in Informatics and IT, and the local Cisco Instructors Training Center DNT. During spring-summer 2020, a group of 103 VET teachers were trained online on the Cisco IT Essentials course. Further, a working group of experts adapted the curriculum from Cisco to comply with MECR standards. As a result, certain ITE course modules were integrated in the main IT curricula, and are being taught to nearly 16,000 VET students since September 2020. Additionally, 400 students at IT Support Technician specialization are learning the full Cisco ITE course, which they will study for two years. In the beginning of 2021, the Romanian version of the Cisco IT Essentials course became available on the platform, due to the efforts of Cisco Romania. This will make the teaching much more effective and increase the interest in this program even further.

PROGRAM 2. Centers of Excellence development and support

Activity 2.1. Strengthen the Artcor Creative Industries Center

Artcor Architectural Project Nominated for EU Prize for Contemporary Architecture – Mies van der Rohe Award

Artcor, Moldova’s first Creative Hub, was nominated for the EU Prize for Contemporary Architecture – Mies van der Rohe Award. This is the first time the European Commission and Fundació Mies van der Rohe have included Moldova in the list of nominees, alongside participants from 40 other countries. As one of the 449 Artcor, Moldova’s first Creative Hub, featured on the the EU Mies van der Rohe Award. Credit: Volker Kreidler, https://eumiesaward.com/work/4884 works nominated, Artcor was

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selected for its sustainability goals and innovative ideas, demonstrating excellence in conceptual, social, cultural, and technical terms. The EU Mies van der Rohe Award raises awareness of quality architecture and its contribution to the well-being of citizens and the sustainable development of European cities, towns, and villages. The winners will be announced in 2022 and offered prizes in value of 60,000 Euro for the EU Prize for Contemporary Architecture and 20,000 Euro for the Emerging Architect Prize.

Launched in early June 2019, with financial and technical support from MCP, Artcor provides a new ecosystem for Moldova’s emerging creative sector. The 1,000 m2 facility, designed by architect Maxim Calujac, serves as the nucleus of Moldova’s creative community. Artcor supports the burgeoning creative sector in Moldova, and provides companies, , students, and other sector professionals with co-working spaces, and cutting-edge training opportunities that amplify export potential.

Moldcell Secures Core Funding for the Development of the Artcor Creative Center

Photo caption: Online meeting between Nirvana Chaudhary, President of the Moldcell Foundation, MCP and Artcor management highlighting Moldcell core funding for Artcor. Credit: MCP The President of Moldcell Foundation and Nepalese billionaire investor Nirvana Chaudhary identified Artcor Creative Center as a flagship project for the Moldcell Foundation in Moldova and secured continuous funding to scale up the creative educational and entrepreneurial opportunities provided by Artcor. The Moldcell Foundation is the largest private partner for Artcor that committed to allocate its 2021 Corporate Social Responsibility (CSR) budget, estimated at one million lei (approximately $55,000), to fund the Artcor executive team and the Artcor School.

Being allocated a seat on the COR Association board, the Moldcell Foundation will be able to use their telecom technology to infuse creativity and bring a new vision for Artcor development. Known to collaborate with tech giants such as Amazon, Google, and Bill & Melinda Gates Foundation, and stimulate tech media-driven startups, Nirvana Chaudhary will bring an international corporate culture to Artcor and facilitate access to start up funds, thus providing a game-changing opportunity for the development of the Moldovan digital and creative industries. Nirvana Chaudhary was impressed with Artcor’s results and expressed an interest to replicate the Artcor model in Nepal.

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The partnership between Moldcell, Moldova’s second largest telecom provider, and Artcor was facilitated by MCP to spur the development of Moldova’s creative and digital sectors and increase their competitiveness on global markets.

Activity 2.2. Establish the Mediacor Digital Center

Moldova State University Commits Additional 2 Million Lei to Develop the Media Production Pavilion at Mediacor

To respond to the high demand for media production facilities and improve Moldova’s nascent digital media industry, MCP partnered with the State University to develop Moldova’s first Media Technology Center, Mediacor. Moldova State University will host the Center, from more than 1,000 students in the faculties of journalism, communication, and IT to use the facilities, and encouraging them to pursue a career in the creative fields. In addition to the $350,000 contribution allocated from the state and university budget for the Photo caption: Moldova State University Senate visit Mediacor Media Technology development of the Mediacor Center. Credit: MCP Center, the University committed an additional $115,000 (2 million lei) for the of the new media production pavilion, for which the University received a U.S. Embassy grant in the amount of $740,000. The pavilion will host a production studio of 400 m2, enabling Moldovan production companies to access high-value pre- and post-production facilities. Moldova State University will launch a public tender for the construction of the pavilion in February 2021, to ensure the launch and operation of the Mediacor Center and the media production pavilion in the fall of 2021.

Mediacor is a public-private partnership between Moldova State University, the Association of Creative Industry (COR) companies, and MCP, which plays a critical role in ensuring a common understanding, shared vision and active participation in the development and management of the Mediacor Center between all partners. Once complete, Mediacor will house a state-of-the-art recording pavilion, production facilities, accessible networking, and co-working and learning areas to foster collaboration between Moldovan digital media start- ups and stakeholders.

Moldovan Media Production Studios Provide Technical Expertise to Finalize the Construction of Mediacor Studios

11 local media production studios visited the construction site of Mediacor, Moldova’s first Media Technology Center, to witness the construction progress and co-design the Mediacor production studios. During the visit, the private media production studios, ranging from game development and 3D animation to motion capture, filmmaking, and sound design, provided their technical expertise on the functionality of the Mediacor studios and reaffirmed the critical need for the Media Technology Center infrastructure, which will fulfill

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their creative and production needs. The participants also exchanged ideas on including new University majors that converge media, technology, and creative subjects. Some Moldovan firms have started to approach potential international partners in Japan, Estonia, and the US, and have already received an inquiry from an A-star US-based film producer, who expressed his interest in the Mediacor post-production capacities.

The Mediacor Technology Media Center is under construction and will open its doors in the fall of 2021. To date, the Center’s renovation works include clearing and preparing the site, adding new separator walls, plastering, ensuring sound isolation and major networks, and building the mechanical systems. Once complete, Mediacor will house high-value Caption: COR Association visit at Mediacor, Media Technology Center. Credit: pre- and post-production COR Creative Industries Association, Facebook facilities, accessible networking, and co-working and learning areas to foster collaboration between Moldovan digital media start-ups and stakeholders. To date, nearly 2,800 businesses operate in the creative industry, providing jobs for 13,000 young professionals.

Activity 2.3. Support the establishment of the Balti Innovation Center

The Construction of the Balti Innovation is Progressing

The construction companies contracted by the Regional Development Agency are on track to complete renovations of the Balti Innovation Center. MCP provided technical support to the Balti University in development of the Innovation Hub bylaws and establishment of the partnership agreements with the future residents of the Hub. MCP Caption: Construction site of the Balti Innovation Center provided support in developing Credit: Regional Development Agency “North” Facebook the Regulation of the Administration Council of the Center and Regulation of the Center Activity as well as coordinated the inter-stakeholder working group meetings for the development of the center. For infrastructure development support, MCP engaged an interior designer to provide assistance for the construction companies during the construction process to meet the design and space functionality requirements of an innovation center.

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Activity 2.4. Strengthen the FabLab network

Three New Fabrication Laboratories Launched in Rural Regions to Spur Innovation and Engineering

To drive rural entrepreneurship and ensure access to innovation and technology in rural regions, MCP has opened three new regional fabrication laboratories (FabLabs) in Orhei, Soroca and Singerei. Equipped with an array of flexible computer-controlled tools, including 3D printers, laser cutting machines, computerized sewing and embroidery machines, pyrographs, and Vynil cutting machines, the FabLabs offer local communities a technical prototyping platform for education, innovation and invention. This $35,000 Photo caption: Users prototype objects using the laser cutting machine at FabLab Orhei. Credit: MCP investment builds on the vital role of local libraries and schools as community resources, adding to their offerings with space for digital fabrication, , and engineering. Providing access to technology, the newly launched regional FabLabs play a key role in addressing youth out-migration and “brain drain,” ensuring rural innovators’ access to these tools without having to travel to Chisinau. The Moldovan network of FabLabs includes six regional FabLabs and the national FabLab in Chisinau, which are linked with over 1750 FabLabs around the world.

To date, more than 5,000 Moldovans have benefited from FabLab activities, developing their digital and engineering skills. The ICT and engineering industry employs over 29,500 people, mostly young people, offering salaries four times higher than the national average.

FabLab Challenges over 40 Engineering Students to Develop Smart House Solutions at Home Automation Hackathon

44 young programmers and engineers from the Technical University of Moldova participated in a three-day Home Automation Hackathon, exploring their engineering skills and developing smart house solutions. The Hackathon was organized with core support from MCP, leveraging contributions and technical expertise from reputable private Caption: Participants exploring CIRCLE laboratories technologies during the tech companies including Home Automation Hackathon. Credit: MicroLab Orange Telecom (French-

48 based), Allied Testing (U.S.-based), Crunchyroll (part of the Warner Media company) and Amdaris (UK-based).

Grouped in teams of four, the participants used the equipment and software available at the CIRCLE laboratories to develop automated systems and facilitate the smart house residents’ control and monitoring of lighting, temperature, security, air quality, and more. With targeted guidance from mentors, the participants engaged in “Design Thinking” and “Case Study” challenges, exploring their engineering skills and demonstrating a high interest for Internet of Things (IoT) and embedded systems.

MCP supports MicroLab to conduct educational and community building activities in , robotics and IoT and provide graduates with the necessary skills to access jobs in Moldova’s growing ICT and precision engineering industries. To date, these industries employ more than 25,000 professionals in Moldova, mostly youth, and provide salaries that are four times higher than the average salary in the country.

Developing Innovation and Engineering through FABLAB Academy – MAKE a SHIFT

FabLab Chisinau Academy is the biggest educational program developed by FabLab Chisinau. The program started in September 2020, and consists of four courses over six months, covering various subjects including the correct use of instruments and tools, workplace safety, composite materials, prototyping, , laser Photo caption: Work presentations from the 3D printing course at the FabLab cutting, and using a metal Academy - MAKE a SHIFT. Credit: FABLAB Chisinau cutter. These courses are educating all participants wanting to pursue a career in engineering.

Using didactical materials, , and documentation, interns are enriching their knowledge in engineering. During the 3D printing course, participants had access to the space and instruments of FabLab, with the supervision of a mentor or assistant, along with 3D filament to put their learned theories into practice. The 3D printing course within the MAKE a SHIFT Academy from FabLab Chisinau was completed on January 25, 2021. The course involved 11 participants, of which three were women and 8 men. The participants were guided by two mentors with advanced knowledge in the field of 3D printing.

MCP Supported the FABLAB LED BOX Hackathon

MCP supported the regional FabLabs in developing a logo LED BOX for the use of each FabLab in their spaces and for the community. The main objective was to challenge the FabLab teams in a competition of creativity, teamwork, engineering education, and functionality. Five out of six regional FabLabs were fully involved in this activity, monitored

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by MCP, and four mentors were engaged by MCP. 40 participants were involved in the LED BOX Hackathon, and from their words, the lessons learned were most valued in the final. The hackathon served as a great platform for Regional FabLab teams to enhance their capacity building and stimulate new digital skills development.

Each FabLab made a functional Led Box that was mounted at the entrance of their FabLab. From January until March 2021, the regional FabLabs were visited by more than 1300 people, and around half of them were involved in FabLab activities. To drive rural entrepreneurship and ensure access to innovation and technology in rural regions, MCP supports the functioning of six regional fabrication laboratories Photo caption: Working process during the FabLab LED BOX Hackathon. Credit: FABLAB Orhei (FabLabs). The regional FabLabs play a key role in addressing youth out-migration and “brain drain,” ensuring rural innovators’ access to technology without having to travel to Chisinau and equipping them with engineering skills needed to access jobs in Moldova’s growing ICT industry.

Activity 2.5 Support the CIRCLE Laboratory Cluster at TUM

MCP Provided Support for Upgrading the CIRCLE Laboratories

MCP provided support for upgrading the CIRCLE laboratories with advanced robotics and drone technologies. The new equipment was donated in February 2021, and will be used within curricular laboratory sessions of students from IT, Robotics, Electronics and Engineering faculties as well as for various contests and hackathons for Photo caption: Participants of the Home Automation Hackathon the construction of drones Credit: NGO Microlab and its adaptation/creation to a cycle of IoT activities. TUM’s laboratory cluster “CIRCLE” in partnership with Engineering Club “Micolab,” with MCP’s support, conducted the “Home Automation Hackathon” with the participation of students from IT, Robotics and Microelectronics faculties. During the event which lasted 48 hours, participants developed a series of automations for smart houses, home appliances automation, home safety systems sensors and hardware management using cloud applications.

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Activity 2.6. Facilitate communications and event management for Centers of Excellence

MCP ICT and Creative beneficiaries Become Popular on Social Media after Featured in the #EPosibilAcasa (#it’sPossibleAtHome) Online Promo Campaign

MCP engaged USAID, Sweden and British Embassy Facebook pages and Instagram accounts in a national communications campaign to promote the success stories of the Competitiveness Project activity over the last six years. The robotics teacher and digital ambassador from north of Moldova, Inna Donos, as well as the graphic designer Constantin Sarcov were featured on the USAID, British and US Embassies social media accounts, leading to multiple shares, comments and reactions. Both participants demonstrated great work ethics and resilience within their fields of work, contributing to the development of Moldova’s competitiveness and setting an example for their peers. While Inna Donos has trained over 200 regional teachers on the use of Google for Education applications as part of the National Digital Literacy Program implemented by FCL as a response to the COVID- 19 pandemic, Constantin Sarcov and his Agency Creative Piko promoted Moldova’s creative potential on the international arena, receiving high recognition at international contests like Cannes Lions, D&AD and Cresta International Advertising Award. The stories of regular people that benefited from MCP’s support are appreciated by media and the general public, since the stories resonate with people once they see the human approach of any reform or project. MCP will continue featuring beneficiaries on social media and engaging media interactions. The campaign is expected to last three months, and feature over 60 beneficiaries in success stories, social media posts, video clips, media interviews, talk shows, podcasts and other communications channels.

Photo Caption: Captures from Social Media Communications Campaign promoting MCP beneficiaries in ICT and Creative Industries Photo Credit: MCP/USAID and UK in Moldova Facebook pages

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OBJECTIVE 2: EXPANDED MARKET LINKAGES

PROGRAM 3. Grow Moldova as an IT and creative services industry destination

Activity 3.1. Support a bridge program for Creative Services Industry

MCP Supports Moldovan Creative Professionals to Become Internationally Certified by US and German Mastering and Animation Academies

Music composer Ilie Gorincioi and 2D animator and storyboard artist Lev Volosin were the first Moldovan creative professionals to receive international certification from renowned audio mastering and animation academies based in Germany and the U.S. Attaining this certification enabled them to advance their creative skills and become internationally accredited trainers at the Artcor School, where they provide three-month professional courses in sound design & music production and 2D& 3D animation. Both creative professionals own and are part of creative studios, which are valuable members of the Moldovan Creative Industries Association board. Ilie Gorincioi is the founder of Tadeus Music Studio. He has previously written music for Disney movies and worked with the German film score composer and record producer Hans Zimmer. With MCP’s support, he took a pro-mixing online coaching course at the Mastering Academy in Caption: Lev Volosiv visual under the #ePosibilAcasa (it’s Germany and became a certified Mastering possible at home) MCP closing communications Engineer. campaign. Credit: MCP

MCP also supported Lev Volosin, animator at Simpals Studio and winner of multiple international awards for the animated movie “Aripi” (“Wings”), to attend the storyboarding course and workshops at the U.S.-based online animation school “Animation Mentor” and receive international certification. The six-week course enabled Lev Volosin to fine-tune his storyboarding techniques and improve his portfolio, while also establishing a strong network with creatives from all over the world. Animation Mentor has an alumni community of over 5,000 students, working for world-class studios like Pixar, DreamWorks, Industrial Light & Magic, Laika and WETA. MCP supports Moldovan creative community members with enhancing their professional development and sharing their knowledge and expertise through educational programs of global relevance and quality.

Activity 3.2. Support creative industry companies to implement e-commerce solutions

Over 200 SMEs Join Online Conference on E-Commerce to Improve their Knowledge on Online Sales

The Artcor and ZIPhouse Centers organized an online conference for Moldovan small and medium enterprises (SMEs) to highlight the main results of the GoOnline e-commerce

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initiative and provide them with solutions on how to increase their sales. The conference, “My business is online. How to improve my sales?”, gathered over 200 SMEs that provide e- commerce services in areas as diverse as light manufacturing, tourism, agriculture and creative industries. The event featured participation of local and international e-commerce experts, who highlighted new patterns in consumer behavior and stressed the importance of data protection in the online environment. The conference also included targeted panel discussions on logistics, deliveries, and marketplaces, providing participants with additional e-commerce guidance and advice on selling their products online.

The Deputy Director of the Office of Economic Growth at USAID Moldova provided welcome remarks and underscored USAID’s support for the GoOnline initiative, which offered e-commerce assistance to over 80 Moldovan SMEs, of which over 50% are operated by women. Through MCP, USAID alongside Sweden and the UK Caption: Brian K. Wittnebel, Deputy Director, Office of Economic Growth at supported the GoOnline USAID Moldova provides welcome remarks at the Online Conference on E- initiative to assess the Commerce. Credit: COR situation in the field of e- commerce, industry legislation, and regulations, thus enabling Moldovan companies to adapt modern e-commerce tools and increase sales. In addition, MCP supported 40 local fashion brands to advance their e-commerce services via the ZIPhouse E-Commerce Acceleration Program, allowing them to develop online shops and build customer loyalty. It is expected that by 2040, around 95% of all worldwide purchases will take place online, and Moldova is following the trends. The online conference was organized with support from MCP in partnership with UNDP, SDC, the Moldova Investment Agency, ODIMM, and the Ministry of Economy and Infrastructure.

OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

PROGRAM 4. Legislative and capacity building support for IT and creative services industry

Activity 4.1. Support legal efforts and capacity building activities for new institutions

COR Association Organized its 2021 General Assembly and Adopted its new Bylaws

The Creative Industries Association of Moldova (COR) organized its 2021 General Assembly to select the new Board (ten seats), and to adopt its new Bylaws that outline eligibility requirements for Board members based on apolitical and ethical principles. The event welcomed new members, featuring remarks from Bully (a US based

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animation and game design studio with clients like Dreamworks, Disney and others) and Moldcell Foundation (founded by Moldcell, Moldova’s second largest telecom provider acquired by Nepalese billionaire Nirvana Chaudhary) that became the core private sponsor of Artcor (leveraging Caption: Online Voting process at the General Assembly of COR Association on March 9, 2021. Credit: COR MCP core funding). To date, the COR Association has over 40 members including creative and marketing agencies, and graphic design and animation studios. As of 2021, COR in partnership with the State University, will also manage Mediacor, Moldova’s first Media Technology Center. MCP provides COR Association with significant institutional support to lay the groundwork for Mediacor and strengthen its operations, strategy, and governance.

COR Association Welcomes Moldcell Foundation and Bully Entertainment on its Board and Consolidates its Capacity to Manage the Artcor and Mediacor Centers

The Creative Industries Association of Moldova (COR) organized its 2021 General Assembly and selected new board members for the coming years. COR allocated two seats to Moldcell Foundation, Moldova’s second largest telecom provider and the Association’s largest private partner, and to Bully Entertainment, a US-based animation and game design Caption: John Riordan, USAID Deputy Mission Director provides welcome studio that works with remarks at the General Assembly of COR Association. Credit: COR clients like DreamWorks and Disney. During the General Assembly, the board also adopted new bylaws that outline eligibility requirements for board members and presented the industry vision for future development of Artcor and Mediacor Centers. USAID and Sweden’s officials provided welcome remarks and underscored the Association’s growing role in defining the economic and social perspectives of the creative industries in Moldova. With core support from MCP and other partners, in 2020, the COR Association implemented projects worth over five million lei (over $285,000), providing critical e-commerce support to local SMEs and demonstrating industry resilience during the pandemic crisis.

To date, the COR Association has over 40 members including creative and marketing agencies, and graphic design and animation studios. As of 2021, COR in partnership with the State University, will also manage Mediacor, Moldova’s first Media Technology Center. MCP

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provides COR Association with significant institutional support to lay the groundwork for Mediacor and strengthen its operations, strategy, and governance. LIGHT INDUSTRY

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

PROGRAM 1. Continue strengthening ZIPhouse as the flagship institution in workforce development and fashion startup acceleration

Activity 1.1. Solidify ZIPhouse institutional capacity

ZIPHOUSE Engages in New Regional Project Mainstreaming Sustainability and Circular Economy Processes in Fashion Industry

A partnership established in the spring of 2020 between ZIPHOUSE and ECHN has led to the launch of a new regional project for sustainability and circular economy processes in the Fashion Industry, called S4Fashion.

This project is co-funded by the European Union, through COSME Work Programme Photo caption: Online launch of S4Fashion project. Credit: ZIPhouse 2019 and led by ECHN in partnership with Envolve Greece Entrepreneurship, We Connect Data (WCD), Instituto Europeo di Design (IED) and ZIPHOUSE of the Technical University of Moldova. S4Fashion is mainstreaming sustainability and circular economy processes in the Fashion Industry through an evidence-based approach and the amplification of its impact. The project is planning to develop a support arrangement for 25 transnational partnerships, that will be selected through an open call, and will create sustainability solutions, practices and business models for the fashion industry based on previous achievements and the further amplification and development of these solutions.

In addition, a larger number of organizations will be supported with building a system of “transnational sustainable fashion laboratories. The consortium is formed by diverse partners located across Europe who bring expertise from the sectors of sustainable fashion, business support, creative industries and technology, and join their forces to work for a greener and sustainable fashion industry.

Activity 1.2. Boosting creativity, entrepreneurship and building community

DININIMA Brands Reach up to 30% Sales Increase as Result of ZIPHOUSE Acceleration Program in Ecommerce

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After almost a year of program implementation, brands enhanced through ZIPHOUSE Acceleration in Ecommerce started to reach three months consecutive sales increases in an average of 30% compared with autumn of last year.

The program has accelerated 40 brands, out of which 15 are startups, all developing fully functional websites including shopping possibilities via credit cards, local and international shipping through delivery solution systems integration, and e-fulfilment systems. The program has also conducted more than 200 hours of trainings and individual mentorship on all e-commerce processes, facilitating the improvement on User Experience and User Interaction, Legal compliance and Export Procedures, Sales through Facebook and Instagram, Brand Digital Communication and Marketing Strategies in Ecommerce, engaging nine local and international experts. Maxikids, Arillu, Bombonici, Ponti, Vitalie Burlacu, AnnaPopova, Georgette, Maicom, Oldcom, Odevalle and Ajoure have registered increased sales from 25 to 30%compared with autumn of 2020 after improving their websites and Photo caption: Oldcom.md website screenshot. Credit: MCP marketing strategies.

Activity 1.3. Developing industry skills through advanced technical education and training

Z Generation Contest Attests an Increased Interest from Local and International Fashion Startups

ZIPhouse Center of Excellence in Design and Technology selected 35 emerging designers and fashion startups to participate in the fourth edition of the Z Generation contest, demonstrating an increased interest from local and international audiences. For the first time, the list of participants Online banner for Z Generation Contest 2021. Credit: ZIPhouse, FB page. includes four young designers from Iasi, Romania, who will join startups and students from Moldova’s largest to develop innovative collections and receive mentorship from local and international professionals. During the six-months program, participants will gain skills in conceptualizing outfits using sustainable fabrics and innovative designs. The finalists will represent Moldova at the International Young Designers Contest 2021 in Kiev, which is one of the largest and most influential international fashion events in Eastern and Central Europe. They will also benefit from support in developing look books and promotional videos to launch on the national and international fashion map.

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MCP supports contests like Z Generation to nurture local talent and support emerging designers, which is essential for the long-term competitiveness of Moldova’s fashion industry. To date, ZIPhouse has accelerated over 90 fashion startups and helped young designers develop critical skills in pattern making and design. PROGRAM 2. Strengthen the SMART (Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency) Factory Program

Activity 2.1. Implement complex innovative methods to streamline manufacturing and productivity growth

Implementation of Innovative Technological Solutions Generated an Increase in Productivity for Loz Textil Apparel Company

With MCP’s support, apparel company Loz Textil, which provides services for European clients by manufacturing different types of uniforms, increased the productivity in their cutting department by 1.5 times. The company offers jobs for approximately 120 workers from the rural area in Moldova. The cutting department was previously a bottleneck of the value chain, and six workers in the department struggled to to satisfy the production capacity. In order to address this, MCP offered the company a grant to purchase equipment for productivity and quality enhancement such as the automated Spreading machine. The machine guarantees easy and tension free spreading of woven and knitted fabrics. Due to the utilization of the Spreading machine, the production capacity of the company increased by about 30% and the productivity by about 1.5 times. The grant offered by MCP covered only 1/3 of the total cost of the Spreading machine, while the rest has been covered by the company.

BEFORE AFTER

Manual spreading process in the Loz Textil cutting Automated spreading process in the Loz Textil cutting department Credit: Loz textil Apparel company department Credit: Loz Textil Apparel Company

MCP Supports Moldova’s Largest Apparel Factory ‘Ionel’ to Implement Quality Standards and Enhance Competitiveness on the European Market

MCP assisted Moldova’s largest apparel factory, Ionel, to update its Integrated Quality Management System (ISO 9001:2015) in compliance with the demands for greater production efficiency and commitment to quality from the international supply chains. The international certification enables manufacturers to improve their operations and strengthen the quality of their final product, while focusing on automation and sustainability.

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Ionel is a beneficiary of the MCP SMART (Streamline Manufacturing, Accountability, Resource efficiency, and Transparency) program, that benefited from complex support in enhancing productivity and improving occupational health and safety standards to increase their competitiveness and meet the demands of international customers. The company produces high- quality menswear for big-name European clients, who are under increasing pressure from customers and shareholders to guarantee that their supply-chain is socially responsible. Managed by female entrepreneur Tamara Luchian, the factory ensures safety standards and good working conditions for its 500 workers, the majority of which are women.

To date, MCP has assisted 19 Moldovan factories to obtain international certifications, ensuring a healthy work environment for over 3,000 employees and making steady improvements in attracting quality-conscious European buyers, while increasing long-term sectoral competitiveness.

Activity 2.2. Create brands and Integrated QMS certification received by Moldovan products aligned with fashion trends apparel factory Ionel. Credit: Ionel apparel factory The activity finalized in previous quarter.

OBJECTIVE 2: EXPANDED MARKET LINKAGES

PROGRAM 3. Expanding market opportunities

Activity 3.1. Reposition Moldova as a full product manufacturing partner and support internationalization of Moldovan fashion brands in regional and European markets

APIUS Light Industry Association Promotes Moldova as a Reliable Apparel Sourcing Destination in Eastern Europe

Moldova’s fashion manufacturing industry has been severely affected by the COVID-19 pandemic, registering an 11% decrease in exports in 2020. Leading business partners from Italy, Romania and France reduced manufacturing orders by 35% up to 60%. To seek new partnerships and investments from international fashion buyers, MCP supported APIUS Light Industry Association to deploy a five-month online Business-to- Business (B2B) campaign and promote competitive advantages of sourcing to Moldova. As a result, nearly 880 EU businesses expressed interest in sourcing fashion manufacturing services to Moldova and visited APIUS’s dedicated website, accessing a database of 170 local manufacturers featured in Moldova’s first Clothing, Footwear & Accessories Manufacturers’ Guide, which was

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developed with MCP’s support. The manufacturers vary from apparel factories, pattern- making studios, and design bureaus to independent fashion brands. APIUS became a one- stop shop for international inquiries, providing match-making services and putting international buyers in contact with Moldovan manufacturers based on pre-selected criteria, such as production capacity, order requirements and international certification. Most of the interested fashion buyers were from the Netherlands (191), Sweden (184), and Germany (122), followed by Finland, France, Spain, Austria, Italy, Poland, and Croatia. 125 fashion buyers (14%) established contacts with Moldovan manufacturers, while eight others started negotiations for collaboration. The COVID-19 pandemic led to an unprecedented supply chain disruption, shifting the world fashion industry towards digital transformation. In this context, many EU buyers look for reliable apparel destinations closer to Europe to facilitate apparel production and distribution. Moldova is a good fit, offering a wide range of competitive advantages such as short delivery times (starting from two weeks), flexible orders with no minimum requirements (an important advantage for international Photo caption: The advantages of sourcing to Moldova featured on APIUS buyers who aim to reduce their landing page. Credit: APIUS. stocks), and ethical production standards, which demonstrate good working conditions for employees and fair-trade practices. MCP-Supported Three Small Enterprises to Participate at Wedding Days Organized by Pallas Mall, Iasi Romania

Taking cultural affinities, customer preferences, and developed economic and political relationships into account, Romania presents great potential for market expansion. One of MCP’s main objectives for Y6 is to continue to facilitate increased infiltration of the Romanian market with brands from MCP-supported light industry companies, which ensure the highest value added. The COVID-19 pandemic has drastically affected the fashion industry, especially the wedding dress manufacturers. For about a year, wedding dress manufacturers had no sales.

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Wedding Days, which were organized on March 4-7 at Pallas mall Iasi, Romania, was extraordinarily important and welcome for Moldovan wedding dress manufacturers. To improve the situation of small wedding dress producers, MCP supported two wedding dress manufacturers (Sophy and Coralav Lux) and a jewelry manufacturer (Rodica Braga) Photo caption: Ilete wedding collection at Palas Moll, Iasi, Romania to participate at Wedding . Credit: Coralav Lux apparel company Days, organized at Pallas Mall, Iasi, Romania. This event was a success for Moldovan producers. Participating brands signed orders worth over $28,300, demonstrating the popularity of Moldovan designs on the Romanian export market. MCP supports the growth of Moldova’s bridalwear industry due to its need for highly skilled seamstresses, embroiderers, and other craftspeople, creating quality jobs for women.

MCP-Supported Young Designer Constantzia Yurashko Granted the Fashion Scout’s Ones to Watch Award at London Fashion Week

Constantzia Yurashko, an emerging fashion designer and beneficiary of the MCP- supported ZIPhouse Fashion Acceleration Program, was granted the Fashion Scout’s Ones to Watch Award, and the opportunity to launch her collection “Passage through Time” during the London Fashion Week (LFW). The Fashion Scout’s Ones to Watch Award offers emerging designers the opportunity to raise their profile and build brand awareness, while showcasing their creativity to an international audience of buyers and the media.

Photo caption: Constantzia Yurashko collection “Passage With a sustainable ethos and strong through Time”. Credit: Constantzia Yurashko commitment to domestic production, Constantzia Yurashko is one of Moldova’s leading emerging fashion designers embracing the environment conscious fashion movement and raising awareness about social responsibility in fashion. MCP supported Constantzia with developing a look and a promotional video for her new collection, which received high appreciation from international audiences.

London Fashion Week (LFW) will run as a digital event during February 19-23, showcasing both menswear and womenswear. MCP enables sustainable and future thinking designers like Constanzia Yurashko to infiltrate international markets and access famous online

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marketplaces and fashion world magazines, while building the industry’s resilience, creativity, and innovation in these difficult times.

Activity 3.2 Promote the Din Inima Umbrella Brand and expand domestic market

Christmas Promotional Campaign Supports Ten DININIMA Brands to Increase Ecommerce Sales during the Winter Holidays

The National Light Industry Association of Moldova (APIUS) in partnership with the local online marketplace Fromtheheart.shop, launched a Christmas promotional campaign to boost DININIMA brands’ e-sales during the winter holidays. Fromtheheart.shop, developed with MCP’s support in 2018, is Moldova’s premiere local e-commerce retailer focused exclusively on domestic brands. The campaign benefited from increased promotion from local partners Nata Albot, Moldovan media blogger and Hermina local knitwear factory, which founded the marketplace. The campaign engaged ten DININIMA brands to sell their products on the online marketplace and attract new clients via Facebook and Instagram Kuki, DININIMA brand. Credit: Fromtheheart.shop, Facebook page ads. During the one-month winter holiday campaign, the participating brands generated sales in value of $35,000, a 70% increase compared to the sales registered during a regular month. Facebook and Instagram ads offer businesses better opportunities to engage with audiences, leading to business growth, a higher retention rate, and ultimately, higher sales.

DININIMA launches first Facebook shop with top 100 products to increase online sales performance

With MCP’s support, APIUS launched a new spring campaign promoting 100 DININIMA products which were integrated on dininima’s Facebook page, attracting more than 1000 users to the product page and about 100 new page “likes” on Facebook within the first two weeks only. The campaign started in the middle of March and targets and promotes 12 brands that have improved their online shops within the Acceleration Program in Ecommerce organized by ZIPHOUSE in partnership with APIUS, thus increasing website trafficking.

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Caption: DININIMA campaign cover “DININIMA vine la tine acasa”. Credit: APIUS

OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

PROGRAM 4. Assist APIUS to become a strong professional and industry association

Activity 4.1. Strengthen APIUS institutional capacity

APIUS Association Develops a Policy Paper on Ensuring the Sustainable Recovery of the Moldovan Light Industry after COVID-19

Over 35 board members of the APIUS Light Industry Association and representatives of the industry joined an online workshop on the development of a policy paper to ensure industry recovery after COVID- 19. The development of the policy paper was initiated with MCP’s support and capitalizes on the Moldovan light industry’s growth over the recent years Caption: Online workshop on the development of the policy paper “Rebuilding A More Sustainable Moldovan Fashion Manufacturing Industry After COVID-19”. (including its shift to high Credit: APIUS value added), while re- strategizing and preparing for a changing industry after COVID-19. The workshop featured participation of international manufacturing experts, including Dirk Vantyghem, General Director of the European Apparel and Textile Confederation (EURATEX), who underscored the need for Moldovan manufacturing companies’ alignment to global fashion trends and adoption of sustainable practices to integrate in the new reality of the EU manufacturing industry. The workshop offered industry representatives a platform for discussion and experience- sharing in terms of attracting EU buyers; developing and prioritizing environmental-friendly practices that minimize waste; increasing competitiveness; preserving jobs for women in

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rural areas; automating and digitalizing production processes; and advocating for policy and regulatory changes.

To address the industry challenges, MCP facilitates dialogue between APIUS and EURATEX, ensuring the development of a new strategy for recovery and long-term resilience built on fair trade, sustainability, and digital transformation. As the EU is the major export market, accounting for 80 percent of Moldova’s light industry exports, integrating Moldova in the wider European fashion family offers valuable opportunities for Moldovan fashion businesses and a post-COVID-19 recovery path.

APIUS Association Organizes Events to Increase Visibility and Promote Moldova’s Light Industry

The APIUS executive team met with representatives of the Lithuanian Enterprise Network (EEN), the Lithuanian Garments and Textiles Association, and the Vilnius Industries and Business Association to discuss the EU4Business: Connecting Companies grant competition (EU4BCC) of the Eurochambres, funded by the European Union. The main objective of the project is to organize a series of activities, such as B2B Matching, Twinnings and study visits between Moldova and Lithuania to promote the Moldovan Light Industry.

At the initiative of the Trade and Economic Bureau of the Embassy of the Republic of Moldova in the Russian Federation, in collaboration with APIUS and the Export Center of the Yaroslavl Region of the Russian Federation, an online round table "Perspectives of the cooperation of the Republic of Moldova with the Yaroslavl Caption: Online meeting with Latia Association and Vilnius Industry and Business Association Credit: APIUS Region in the field of light industry" was organized. During this round table, participants identified and discussed opportunities for the development of mutually beneficial bilateral trade and economic cooperation in the field of light industry. The APIUS Executive Team, Vice President of APIUS, and the Ambassador of the Republic of Moldova to the People's Republic of China, Mr. Dumitru Braghiș participated in the meeting. During the meeting, the potential of the Moldovan Light Industry was presented, and joint collaboration projects were discussed, as well as the initiation of a dialogue with associations of similar profile in order to promote the export of domestic brands and attract investments in this sector.

DELIVERABLES

During the reporting quarter, the project submitted the following deliverables to USAID as per contract requirements:

1. Quarterly Report, Q1 FY21 2. Monthly Report, January 2021 3. Monthly Report, February 2021

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SECTION II

PROJECT-LEVEL OUTCOMES AND RESULTS

Sector Engagement, Enhancement, and Development (SEED) Fund

During the quarter, the SEED Fund focused on implementing the SEED Fund budget of $5.525 million. In Jan-Mar 2021, the SEED Fund disbursed a total of $ 251,354 covering 25 existing grant beneficiaries across all industries. To date, the SEED Fund has disbursed a total of $ 5,368,557 or 97% of the total $5.525 million.

SEED Fund Performance through Grant Allocation by Industry through March 2021 March 2021 Wine (by value) $124,141 Tourism Total Disbursed 1% $32,302 13% Wine & Wine 33% 17% Toursim Wine Tourism Total awarded, not yet 5% disbursed* ICT Cluster

To be awarded Light Industry 8% $5,368,557 Crosscutting 23% *at the ER of March 2021 of 1 USD = 17.5 MDL 163 grants have been awarded through March 2021

Local Capacity Building Program

MCP works with 11 business associations that together boast more than 1,000 members. To date, MCP's total core grant support for the five flagship business associations is worth $2.1 million. MCP directs most of its workforce development and trade assistance through these industry associations to enable them to increase their capacity, relevance and ensure self-reliance upon the project's completion. Additionally, support for and integration among the sectorial associations plays a vital role in developing each industry to ensure their sustainability, despite the changes in Moldova's government.

Environmental Protection

MCP continues monitoring environmental compliance in accordance with the environmental threshold determinations. None of the MCP interventions are expected to have a significant impact on the environment. As part of the environmental compliance monitoring, MCP continues online check-ins with beneficiaries to ensure that beneficiaries follow technical and environmental guidelines and collect photos and videos on progress made.

As part of grants closeout, MCP is working on Records of Compliance with Activity Specific Environmental Mitigation and Monitoring Plans, certifying that MCP met all applicable ERC/EMMP conditions. By the end of March 2021, MCP submitted records of compliance for 93 closed grants to the COR/AOR and received COR's approvals. The project will submit Records of Compliance reports for all remaining grant activities by the end of April 2021.

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Anti-Corruption

During the quarter, MCP continued to support increased transparency of operations in the selected industries by advocating for appropriate and transparent policies that reduce government rent-seeking. MCP similarly advocates for a level playing field among firms, large and small, to better ensure that firm growth and profits are based on enterprise productivity and innovation, and not connections. Furthermore, Chemonics and its employees maintain high ethical conduct standards in the selection, award, implementation, and oversight of Project activities. MCP employees complete on an annual basis the mandatory Chemonics training on "Code of Business Conduct.”

Access to Finance

Eight New Loans in Energy Efficiency Aiming to Improve Private Sector Competitiveness and Living Standards Placed under DFC Guarantee

In Q2Y6, eight new loans Loans in Energy Efficiency: Performance valued at $108,216 were through March 2021 placed under guarantee by Prime Capital and disbursed to

new borrowers. To date, the Total Awarded financial institution has placed $1,301,289 138 loans under guarantee Total Disbursed valued at $1,301,289, of which $2,226,049 $1,287,154 (99%) has been Remaining DCA disbursed. The coverage date amounts for placing loans under guarantee will expire in 2027, and to date, the financial institution has absorbed 34% $1,287,154 of the guarantee amount. Since its launch, MCP has provided ongoing support for the implementation of this guarantee. The financial guarantee signed with Prime Capital in 2014 strengthens this financial institution’s capability to finance loans to entrepreneurs and individuals engaged in energy efficiency and renewable energy sectors in Moldova, stimulating economic growth. The guarantee is a 15-year $3.5 million agreement, and each participating agency (USAID and Sweden) takes on 25% of the risk – allowing both parties to guarantee larger lending facilities and promote mutual development goals.

Public-Private Partnerships

49 Public-Private Partnerships (PPPs) Designed to Encourage Systemic and Sustainable Change Leveraged $56.75 Million in Resources, with $2.77 Million in Q2Y6

MCP integrated several types of PPPs into the program, including STEM education partnerships, centers of excellence, industry branding and marketing alliances, which involve various partners including public sector organizations (i.e. Ministry of Economy, ONVV, Ministry of ICT), educational institutions (schools and universities), and private sector

65 companies (e.g. Microsoft, CISCO). In total, MCP facilitated 49 public-private partnerships, which collectively leverage $56.75 million worth of resources for shared objectives in reform, trade promotion, workforce development, and economic growth, with $2.77 million in Q2Y6. The sustainability of these PPPs is ensured by maintaining strong relationships with government ministries, educational institutions, and private partners.

Table. PPPs progress in Q2Y6

Industry PPP name Progress in the quarter Winegrowing ONVV During Q2Y6, ONVV organized a session of the ONVV Industry Coordination Council. ONVV organized the submission of wine samples to four international wine contests, and organized trainings for wine industry professionals on marketing research subjects. Winegrowing WoM An e-commerce promotion campaign in Romania was Industry Marketing organized and preparations for launching an international Platform campaign for Moldovan wines started. Winegrowing WoM Within this PPP, 28 marketing and sales professionals from Industry Academy 12 Moldovan wineries upgrading their skills and increased knowledge as a result of participation at the training "Market Study of the consumer behavior in wine and segment and consumer perception on Moldovan wine products and trademarks" which presented key findings and conclusions of research on Romanian consumer perception of Moldovan wines. Winegrowing Best Grapes Three news bulletins containing agri-intelligence data were Industry issued. Winegrowing Terroir Under this PPP, three regional tasting assessing the quality Industry of the 2020 vintage were organized. Winegrowing "WoM Under this PPP, the new revision of the main governing Industry Advocacy law was approved. platform" Winegrowing PQUP Consultations during bottling season for seven transitional Industry wineries started. Winegrowing ASW Consultations during bottling season for 18 small Industry winemakers started. ASW receives one voting right in ONVV Coordination Council (board). Tourism Orheiul In Q2Y6, MCP assisted the Natural Cultural Reserve Vechi- “Orheiul Vechi” to upgrade their website and purchase a Heritage safe. In addition, all grants over $177 thousand assigned Tourism Hub within the PPP to 13 beneficiaries from Orheiul Vechi region were closed, the last one being closed in Q2Y6. Tourism Tourism Although the TIC had to close its physical doors for all Information visitors, the Center stayed active online, answering all Center (TIC) requests, providing recommendations, and promoting tourism destinations from Moldova. MCP contributed to the PPP by purchasing two safes for the TIC needs, financing the development of a digital platform for tourism

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guides to be administrated by TIC in partnership with tourism guides. The City Hall continued to offer in-kind support by providing the location for the TIC. Tourism Tourism During Q2Y6, MCP invested in the translation of the Development Tourism Development Plan 2025 and Action Plan into Platform English. The documents are still awaiting approval amid the political and health crisis. IT, CSI and PE Robotics PPP The progress on this PPP was negatively impacted by the pandemic. Robotics is a hands-on activity; it is difficult to simulate online or to organize it in full compliance with anti-COVID safety measures. The MCP supported FCL Center conducted one initial level training for robotics teachers on LEGO robotics sets. MCP team finalized the distribution of FIRST LEGO League Challenge 2021 competition sets to school teams and communicated with the FIRST Foundation tech team on the Remote Event Hub, on the possibility of organizing the event online or in hybrid mode. IT, CSI and PE Future FCL continued to assist Moldovan teachers to effectively Classroom implement technologies and innovation in education. Over Lab (FCL) 60 Future Classroom teachers and students developed digital skills at Artcor storytelling and video production trainings, and 25 teachers were selected to become Future Classroom Digital Ambassadors and promote digital transformation in Moldovan schools. Over 3,000 Teachers Underscored Technological Progress in Education during the COVID-19 Pandemic at the Future Classroom Online Conference. Video tutorials on the use of FCL equipment were produced to promote transformative technologies. The Future Classroom Center advanced the renovation of spaces, aimed to expand the center’s facilities with several training rooms, a video recording studio, offices for the team, common kitchen, and a networking area. IT, CSI and PE Cisco ITE for The Vocational Education and Training (VET) institutions VET continued the implementation of Cisco IT Essentials Course and improved IT curricula, based on the Cisco program. ITE course modules were integrated in the main IT curricula and are being taught to nearly 16,000 VET students since September 2020. 400 students at IT Support Technician specialization are learning the full Cisco ITE course, which they will study for two years. The Romanian version of the Cisco IT Essentials course became available on the platform, due to the efforts of Cisco Romania. IT, CSI and PE Fabrication In Q2Y6, MCP supported the establishment of three new Laboratories regional FabLabs: in Orhei, Soroca and Singerei. The new (FabLabs) FabLabs are fully equipped. Now, the Moldovan network of FabLabs includes six regional FabLabs and the national

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FabLab in Chisinau, which are linked with over 1750 FabLabs around the world. During Q2Y6, over 1300 people visited the regional FabLab’s and almost half participated in FabLabs’ activities. IT, CSI and PE Virtual IT The number of active IT and Creative companies that are Park residents of the Moldova Virtual IT Park exceeded 700 companies. The IT Park made an infrastructure related survey and it’ members responded that 37% of them moved to new offices with better electricity power supply, parking and green areas. In addition, the IT Park Development Strategy for 2021-2025 was developed and approved on March 31, 2021during the General Assembly. The IT park budget was increased to support activities for the IT ecosystem including: external promotion, training for residents and increasing the institutional capacity of the IT Park. IT, CSI and PE CIRCLE Lab MCP provided support for upgrading the CIRCLE at TUM laboratories with advanced robotics and drone technologies. The new equipment was donated in February 2021. The new equipment will be used within curricular laboratory sessions of students from IT, Robotics, Electronics and Engineering faculties as well as for various contests and hackathons for the construction of drones and its adaptation/creation to a cycle of IoT activities. IT, CSI and PE Balti The construction of the Balti Innovation Hub is in full Innovation progress. The construction companies contracted by the Hub Regional Development Agency are on track with the construction schedule. Additionally, MCP provided technical support to the Balti University in development of the Innovation Hub bylaws and establishment of the partnership agreements with the future residents of the Hub. MCP provided support in developing the Regulation of the Administration Council of the Center and Regulation of the Center Activity as well as coordinated the inter-stakeholder working group meetings for development of the center. For infrastructure development support, MCP engaged an interior designer to provide assistance for the construction companies during the construction process to meet the design and space functionality requirements of an innovation center.

IT, CSI and PE StartNet IT During Q2Y6, MCP focused efforts in attracting foreign Park (Digital companies to become residents of the Digital Park. In Park) partnership with Moldova IT Park, a campaign to attract foreign companies and specialists was launched, using the Startup Visa mechanism envisioning the simplified procedure for obtaining work permits for foreign

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employees. For the development the phase two of the Digital Park, Starnet initiated a dialogue with the Administration of the “Tracom” and Agency for Public Property for relaunching the activities for of the land envisioned for the extension of the Park. IT, CSI and PE Law on IT Law on IT Parks is fully functional. Moldova IT Park (see Park above) is functioning and reached over 700 active residents out of which 151 are foreign companies created by capital from 35 foreign countries. As a result of the enabling policies such as the Law on IT Parks, the total export of IT services in 2020 exceeded $200 million. IT, CSI and PE Creative COR organized its 2021 General Assembly to select the Industries new Board (ten seats), and to adopt its new Bylaws that Association of outline eligibility requirements for Board members based Moldova on apolitical and ethical principles. To date, the COR (COR) Association has over 40 members including creative and marketing agencies, and graphic design and animation studios. As of 2021, COR in partnership with the State University, will also manage Mediacor, Moldova’s first Media Technology Center. IT, CSI and PE Mediacor In addition to the $350,000 initial contribution allocated Digital Media from the state and the State University budgets for the Hub development of the Mediacor Center, the State University committed an additional $115,000 for the construction of the new media production pavilion, for which the University received a U.S. Embassy grant in the amount of $740,000. IT, CSI and PE Artcor The Moldcell Foundation, the largest private partner for Creative Hub Artcor secured core funding for the development of the Artcor Creative Center committing to allocate its 2021 Corporate Social Responsibility (CSR) budget, estimated at $55,000 USD to fund the Artcor executive team and the Artcor School. IT, CSI and PE Go Online The GoOnline project presented its results to over 200 SMEs at the Online Conference on E-Commerce aiming to Improve Knowledge on Online Sales. In total, the GoOnline initiative offered e-commerce assistance to over 80 Moldovan SMEs, of which over 50% are operated by women.

Light Industry DININIMA In Q2Y6, the Google Ads campaign continued to promote promotional Moldova as a reliable and ethical apparel sourcing campaigns destination to EU clients through a Landing Page on the APIUS website. Also, a new promotional campaign promoting the online commerce of 100 DININIMA products through Facebook DININIMA shop was organized and a collaboration with Elefant.md was initiated.

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Light Industry ZIPhouse All PPP partners continued to support and invest in Design and ZIPhouse to secure its institutional capacity and ensure its Technology continued content development. TUM provided space, Center paid the utilities and the workforce, and some trainings materials for the events (Z Generation and Level Up mentorship sessions, Courses, Fashion English Courses); the ZIPHOUSE team attracted new events’ partners; APIUS promoted the events; MCP supported ZIPHOUSE activities through the grant program and by improving the center’s website and online presence. Light Industry DININIMA The PPP is the collaboration in promoting exports and international market linkages for the light industry. Within this PPP, markets three companies attended Ghidul Miresei trade fair in Iasi Romania, generating 140 market linkages and $28,300 in sales. Light Industry Fashion E- Within the PPP, ZIPhouse continued the implementation commerce of Level Up Acceleration Program and finalized the Basic 360 Initiative Kit. In addition, the creative industry organized an event ”I am online. Why don’t I make sales?” presenting e- commerce practices. Eight brands were selected for digital promotion support, to reach local and regional visibility of their online shops.

Inclusive Development

MCP recognizes and affirms our donors’ commitments to inclusive Inclusive Development Highlights, development and provides all project Q2Y6 results beneficiaries with equal opportunities to participate in activities and benefit  59% of participants in capacity from project-funded assistance. building programs are women Through its activities, MCP aims to reduce gender disparities in economic  58% of activity participants are youth opportunities by empowering women to enhance their careers, increasing the  37% of the total 170 firms assisted in capacity of women and girls, and Q2Y6 are women-owned cultivating leaders in business. MCP also focuses on youth, as this group  13 companies from Gagauzia and demonstrates the highest level of involved in MCP emigration. Therefore, Project activities supported activities are designed to interest and attract youth, motivate them to develop their skills and their careers in-country, and create opportunities for youth involvement. MCP assistance is inclusive of Transnistria and Gagauzia, engaging prominent and emerging enterprises in target industries, expanding youth development activities, and promoting tourism in these regions.

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Economic Empowerment of Women

In Q2Y6, MCP expanded its outreach to 18 enterprises, seven of which are women- owned. The project now assists an impressive 976 enterprises, 338 or 35% of which are women-owned. The disaggregation by MCP Share of women-owned companies in total assisted industries MCP assisted, by sectors reveals that the light 1200 60.0% industry has the highest 976 55.7% share of women-owned 1000 50.0% 800 40.0% companies at 56%. In 34.6% 32.9% tourism, the share of 600 30.0% 338 309 400 235 20.9% 20.4% 20.0% women-owned 231 172 201 companies assisted by 200 49 76 41 10.0% MCP is 33%, 21% in the 0 0.0% winegrowing industry TOTAL Winegrowing Tourism Light IT cluster and 20% in IT cluster. In Total assisted companies Q2Y6, 170 enterprises Women-owned assisted companies participated in MCP’s share of women-owned companies, % activities to improve knowledge, processes, technologies, and practices, and 63 enterprises or 37% were women- owned.

Creating Opportunities for Women and Youth Involvement MCP designs its activities using a non-discriminatory approach, with the goal of including groups that have been historically excluded or disadvantaged, especially women and youth.

Participants in MCP - supported capacity building programs up o date, Table. Participants in MCP activities by sectors in Q 2Y6 Total 49,365 Description Women Youth TOTAL 29,684 participants 59,309

40,384 IT cluster 19,551 44,929 Light industry 260 202 180

1,386 Tourism 1,519 Winegrowing 2,142 28 13 20 Industry 1,969 Wine 1,780 4,376 Tourism 65 46 26

5,626 Light industry 6,834 7,862 IT cluster 1,303 713 727

- 20,000 40,000 60,000 80,000 Youth participants Women participants TOTAL 1,656 974 953 Total participants

Project activities are designed to interest and attract women and youth, and motivate them to develop their skills and their careers in-country, providing an attractive alternative to migration.

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All MCP programs focusing on the winegrowing industry seek inclusive development of women and youth. In this respect, the project’s ASW Mentorship program is designed to encourage young winemakers to launch small wineries and/or to support the development of emerging small wineries (Carpe Diem, Minis Terrios, Gogu Winery, Atu Winery, Crama Mircesti, Unicorn Estate, Teba Prim, Vinaria Lupascu, Pomusoara Dulcisoara). Under the Wine of Moldova Academy initiative, in Q2Y6, MCP supported knowledge upgrade activities and trainings for 28 industry professionals, 71% of which were youth and 46% of which were women.

In the tourism sector, as the pandemic has brought severe restrictions impeding the organization of in-person meetings and events, in Q2Y6 MCP mainly focused on lobbying and advocacy activities for long-term results. At the Regional Forum to Provide Sustainable Solutions for the Tourism Industry’s COVID-19 Recovery, 65 industry professionals participated from Moldova, 40% of which were youth and 70% of which were women. Also, four of the grantees in wine tourism and rural grants closed during this quarter are owned by women and/or youth. The grants focus on the endowment of rooms and bathrooms with furniture, arrangement of spaces for children, endowment with equipment for tourism activities: bicycles, hammocks; arrangement and equipment of food service spaces like restaurant and terraces and provision of kitchens equipped and professional utensils.

In the IT cluster, 15 activities targeting youth and women were reported in Q2Y6: four in IT, five in the Creative Services subsector and six in Precision Engineering. Of 1,303 participants in Q2Y6, 56% were youth and 55% were women. To date, of the 44,929 people that participated in IT cluster activities, 90% were youth and 44% were women.

In IT, an industry traditionally dominated by men, MCP works to reduce the gender gap and promote STEAM youth education through two flagship initiatives - Future Classroom and Educational Robotics – which are spearheaded in over 200 schools and public libraries across the country. These programs are instrumental in shifting mindsets and improving skills, relevant for future jobs industry wide. The Future Classroom Center organized training sessions and an online conference for teachers, attended by over 650 people, who improved their digital, technological, and pedagogical skills, enabling them to ensure quality distance learning and manage the educational process remotely, while promoting STEAM education in Moldovan schools. Around 23% of the beneficiaries were youth and 80% were women. From all participants at the conference and trainings for the teachers 23% were youth and 79% were women since traditionally the schoolteachers are mostly women in Moldova.

In the Precision Engineering sub-sector, in Q2Y6, 487 youth enhanced their skills, 85% of them being youth and 25% being women, attending FABLAB ACADEMY - 3D printing course, MicroLab trainings and community building events.

In the Creative Sub-sector, from 168 participants at the workshops, all were youth and 43% were women. In addition, the GoOnline project presented its results to over 200 SMEs at the Online Conference on E-Commerce aiming to Improve Knowledge on Online Sales. In total, the GoOnline initiative offered e-commerce assistance to over 80 Moldovan SMEs, of which over 50% are operated by women.

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In the Light Industry, MCP supported the implementation at the innovative hub ZIPhouse of 14 work-skills development activities, which resulted in knowledge upgrades and trainings for 260 industry specialists, of which 66% are women and 59% are youth. As part of the ZIPhouse activity plan for Q2Y6, MCP assisted ZIPhouse to launch the Z GENERATION contest which targeted young specialists and students, where 40 applicants have applied, organized a Fashion Hackathon where 20 students and graduates were challenged to design an outfit, and few editions of the Fashion Business English.

Supporting Economic Development of Transnistria and Gagauzia In the winegrowing industry, MCP provided technical assistance to a small winemaker Kara Gani (CGL Prim), and a transitional winery, Kazayak Vin -- both from Gagauzia -- under the quality improvement program. Representatives from one Gagauzian winery, Tartcomvin, participated in the Wine of Moldova Academy seminar. Five Gagauzian wineries - Tartcomvin, Kazayak Vin, Bostavan, Vinuri de Comrat and Kara Gani (CGL Prim) received support to register samples at international wine contest Mundus Vini Spring Tasting 2021. One Transnisitrian company – Kvint participated in the regional evaluation of wine of the Codru PGI, subsequently seven Gagauzian wineries: Tartcomvin, Kazayak Vin, Kara Gani (CGL Prim), Vinuri de Comrat, DK Intertrade, Combinatul de vinuri Taraclia, Cioc Maidan Vin, participated in PGI Valul lui Traian tasting.

In the tourism sector, MCP continued to promote tourism locations from Transnistria and Gagauzia which are included in the Wine Routes of Moldova, such as Kvint Distillery in Tiraspol and related points of interest like Sturgeon Complex Aquatir, Sheriff Stadium, and Bender Fortress. In addition, MCP promoted wineries and B&Bs from Gagauzia - Vinuri de Comrat, Kara Gani, Vinia Traian and Gagauz Sofrasi guesthouse as well as the National Gagauz History and Ethnographic Museum. Also, during this quarter, MCP closed the last grant in Transnistria for the beneficiary “La Nistru” guesthouse (AgroTiras SRL).

In the IT cluster, the Educational Robotics program continues to be implemented in six schools in Gagauzia, and four schools in Transnistria, all of them previously receiving MCP’s support in endowment with LEGO robotics kits and teachers training. The team aims to include representatives of these regions in various activities, thus 53 teachers from UTA Gagauzia and 18 from Transnistria attended the online conference “Technology makes a difference,” organized by FCL.

In the creative services sub-sector, MCP-supported Creative Industries Association (COR) partnered with UNDP to assist 15 companies from Transnistria to set up online shops using the GoOnline platform. These 15 companies join 60 other firms to benefit from an e- commerce kit, including website development, branding, communication, design and social media promotion.

Monitoring & Evaluation

Ongoing Monitoring and Evaluation (M&E) activities were conducted to document project results and new achievements

During the quarter, all activities implemented with MCP support were documented and included in the project’s M&E database, with results verified for accuracy. Along with data collection and analysis, reports were generated for each indicator showing progress against

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established targets. Progress against each established target was included in the MCP Quarterly Report, providing an overview of current data and data analysis.

New Achievements Registered by MCP in Q2Y6

MCP expanded its outreach to an additional18 enterprises, either directly or through its association counterparts. The project now assists an impressive 976 enterprises, 338 or 35% of which are women-owned. The distribution by sectors is presented in the table. Of these 976 enterprises, MCP assistance has helped 487 unique SMEs increase their sales and make 17,633 new market linkages. in Y2Q6 alone, MCP implemented eight sales facilitation activities benefitting 67 companies, with a total of 96 event participations resulting in 175 market linkages mainly from companies’ participation at ITB Berlin 2021 (organized online for tourism-oriented companies) and Iasi Bride's Guide exhibition (Ghidul Miresei) for light industry companies. Due to COVID-19 related restrictions for participation at international trade fairs or even their cancellation, MCP assisted local companies with their promotion on the local and international market through online campaigns such as: online promotion campaign of Moldovan wines on the Romanian market, and Colinda Moldova winter promotional campaign, "Martisor" campaign.

MCP assisted companies, by sectors 1200 60.0% 55.7% 976 1000 50.0%

800 40.0%

34.6% 32.9% 600 30.0%

400 338 20.9% 20.4% 20.0% 309 235 231 201 172 200 10.0% 76 49 41 0 0.0% TOTAL Winegrowing Tourism Light IT cluster

Total assisted companies Women-owned assisted companies share of women-owned companies, %

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The project made significant progress in 1,656 participants in MCP capacity building activities, Q2Y6 delivering capacity building programs. In Q2Y6, a total of 1,656 people attended over 30 activities aiming to enhance 260 job skills. To date, 59,309 16% - Light industry people have participated in 28 65 2% - Winegrowing MCP-supported capacity industry building programs. 14% - Tourism MCP develops public- 79% - IT cluster private partnerships and implements initiatives to 1,303 provide sustainable and scalable local solutions to grow assisted industries. In Q2Y6:

• $2.77M new funds were leveraged within MCP-facilitated transformational PPPs, of which 57% is MCP’s contribution, 11% is private companies’ contribution, 27% is the public sector’s contribution, and 5% is another donors’ contribution.

• 8 new project-assisted public-private sector dialogue platforms were conducted to improve the sector-enabling environment in most affected by COVID-19 sectors: tourism and light industry. Four platforms are in the tourism sector and three of them target recovery from COVID-19, while also examining regional solutions (i.e. - a MOU was signed by ANTRIM with Hospitality Association of Ukraine to Stimulate Regional Tourism Opportunities). One platform aims to boost tour guides’ professional development. In the light industry, four platforms were launched - related to women’s economic empowerment, collaboration with foreign embassies and associations for increasing light industry capacity and attracting investments. There is also a Public Private Advocacy Platform to define 2021 opportunities and priorities in the light industry and develop its 2021 Action Plan.

• Three documents improving business environment were approved: two in winegrowing industry - the amendment to Law 57 related to ONVV management being added one voting right to the ASW, the regulation on Determination of PGI Association with highest contributions to National Vine and Wine Fund; and one in tourism - updates in legislation on the measures for 2021 for Tourism Sector Rehabilitation as result of ANTRIM's official address to the authorities.

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PERFORMANCE MONITORING: TARGET VS. ACTUAL

MCP INDICATORS YEAR 6 Life of Project Indicator Y6 Non- (LOP) Cumulative Cumulative Cumulative Q2Y6 Result Target Result Result Target versus LOP Project Purpose: Grow and Expand Targeted Competitive Industries

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) IR 2.2: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.2.1: Increased Productivity Number of enterprises receiving assistance 4 to improve knowledge, processes, 700 50 976 276 18 technologies and practices Assisted enterprises applying improved 5 370 25 391 21 9 knowledge, processes, and technologies Assisted enterprises following recognized 6 180 5 223 43 19 product or process standards Individuals receiving job skills aligned with 7 40,000 4,500 19,309 1,411 industry needs 59,309 Objective 2. Expanded Market Linkages

IR 2.2: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.1.2: Increased Access to Finance Number of assisted enterprises in targeted reported 10 190 5 N/A N/A industries with increased financing annually reported 11 Financing accessed by assisted enterprises $120,000,000 $6,000,000 N/A N/A annually Sub-IR 2.2.2: Expended Market Linkages Increased value of sales facilitated on behalf reported 2 $250,000,000 $15,000,000 N/A N/A of assisted enterprises annually Number of enterprises with sales facilitated 9 350 15 487 137 10 through USG assistance Value of new private sector investment in reported 3 $170,000,000 $5,000,000 N/A N/A assisted enterprises annually Number of assisted enterprises in targeted reported 12 250 30 N/A N/A industries with increased investment annually Objective 3. Improved Sector –Enabling Environment and Increased Local Capacity

IR 2.1: Improved Economic Foundation for Growth

Sub-IR 2.1.1: Improved Business and Trade Enabling Environment Number of regulations and administrative 13 procedures eliminated, streamlined or 45 7 50 5 3 simplified with USG support Number of Public-Private Partnerships 14 40 0 49 -9 0 established Value of Public-Private Partnerships 15 $35,000,000 $2,000,000 $56,751,691 $21,751,691 $ 2,774,349 established +60% over +60% over reported 16 Improved capacity of local institutions** N/A N/A baseline baseline annually Project-assisted public-private sector 17 50 2 103 53 8 dialogue platforms conducted

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OTHER INDICATORS COLLECTED BY MCP

Life of Project Cumulative Indicator Y6 Non- (LOP) Cumulative Target Cumulative Q2Y6 Result Target Result versus Target Result Project Purpose: Grow and Expand Targeted Competitive Industries

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) IR 2.2: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.2.1: Increased Productivity

Percentage change in specified productivity reported 8 +20% +10% N/A N/A measure (sales per employees) annually

Objective 2. Expanded Market Linkages

IR 2.1: Improved Private Sector Competitiveness in Selected Industries

Sub-IR 2.2.2: Expended Market Linkages

Value of domestic and export sales in reported 1 N/A N/A N/A N/A targeted sectors annually Increased number of market linkages 18 N/A N/A 17,758 N/A 300 established with donor assistance*

Objective 3. Improved Sector –Enabling Environment and Increased Local Capacity

IR 2.1: Improved Economic Foundation for Growth

Sub-IR 2.1.1: Improved Business and Trade Enabling Environment Number of supported through reported 19 170 0 N/A N/A USG assistance* annually

Number of innovations supported through reported 20 USG assistance with demonstrated uptake 170 0 N/A N/A annually by the private or public sector*

Project Communications

MCP Close-Out Communication Campaign

During Y6Q2, MCP started to deploy a comprehensive close-out communication campaign featuring MCP beneficiaries and highlighting the core support provided by USAID, Sweden, and the UK in developing and increasing the competitiveness of the winegrowing, tourism, and light industries, as well as the ICT, precision engineering and creative industries. The communication campaign #eposibilacasa (It is possible at home) is an awareness campaign that aims to promote MCP beneficiaries and inspire people to follow their example. The #eposibilacasa campaign places regular people in the spotlight, who demonstrated great resilience and work ethic in their field of activity, becoming valuable community leaders and making an impact in the development of Moldova’s economy. The “e posibil acasa” message expresses an idea of unity and success, and underscores the results achieved by Moldovan

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people with support from USAID, Sweden, and the UK. The campaign is held throughout March - May 2021 and consists of a series of human success stories and flagship initiatives supported by MCP.

Caption: Visuals highlighting MCP beneficiaries from winegrowing, tourism, ICT and creative industries. Credit: MCP

Throughout Y1-Y6, MCP supported over 950 entrepreneurs to increase their competitiveness on local and international markets, ensuring a sustainable development of Moldova’s key industries. At the same time, MCP supported the development of strong industry associations and Excellence Centers that offer Moldovan professionals a platform for growth and advancement. The reforms supported by MCP, the grants and the technical assistance provided have directly impacted the competitiveness of their businesses andthe lives of the entrepreneurs, enabling them to create new jobs and improve the lives of their communities.

The success stories are formatted as long-reads and social media posts, with visuals and interactive videos, highlighting the business idea, successes and challenges encountered by the beneficiaries, and the progress made in the development of the Caption: Video success stories of MCP beneficiaries, light industry. Credit: MCP

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sectors. These success stories are featured in the press, on the donors’ social media accounts, and on dedicated Facebook pages created by MCP-supported associations and Excellence Centers. The campaign announced via a press release, also includes the participation of USAID, Sweden and UK representatives and MCP beneficiaries in various TV shows, podcasts and video reports that outline the progress and successes in the winegrowing, tourism, light industry, ICT, precision engineering and creative industries. Thus, the communication campaign focuses on two inspirational meanings, namely the development and the growth of the MCP beneficiaries’ own businesses, and the recovery of the MCP-supported industries after the COVID-19 pandemic.

Media - a Tool to Promote Industry Competitiveness and High-impact Project Activities.

Caption: MCP beneficiary Agrici winery featured in the Caption: MCP-supported FabLab Orhei featured in the Diez Agromedia media portal. Credit: Agromedia. media portal. Credit: Diez.

MCP targets all media – TV, on-line, written press, and radio. In Y6Q2, more than ten national and local media channels produced over 30 press materials about MCP’s beneficiaries and project activities, reflecting industry highlights such as the launch of three new Regional FabLabs in Orhei, Sangerei and Soroca rayons; the Creative Industries Association of Moldova General Assembly; the GoOnline Conference on E-commerce; the Future Classroom’s online conference for teachers “Technology makes the difference,” and the online forum on “Anti-crisis measures and tourism development during the pandemic: Ukraine, Moldova, Belarus,” among others.

As part of the MCP close-out communication campaign, in March, the press featured nearly 15 beneficiaries from the winegrowing, ICT and light industries, highlighting their success stories and the support offered by USAID, Sweden and UK.

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Industry Events

During this quarter, MCP continued to actively inform USAID, Sweden and the UK of the project’s industry events, which are covered by the media to reinforce the role of USAID, Sweden and the UK in the project’s achievements and its target industries. As the coordinator of industry events, MCP plays an instrumental role in developing scene setters and briefers for USG, Swedish Government and British Embassy representatives, providing detailed timelines, technical expertise, background knowledge, and talking points/key messages. In Y6Q2, MCP ensured high-level engagement in key online project events and initiatives, such as the Creative Industries Association of Moldova General Assembly, the

Caption: John Riordan, USAID Deputy Mission Director Caption: Adam Amberg, Head of Development Cooperation, Embassy provides welcome remarks at the General Assembly of COR of Sweden, provides welcome remarks at the FCL online conference Association. Credit: COR for teachers “Technology makes the difference”. Credit: FCL GoOnline Conference on E-commerce, the Future Classroom’s online conference for teachers “Technology makes the difference,” and the online forum on “Anti-crisis measures and tourism development during the pandemic: Ukraine, Moldova, Belarus.” The leadership of USAID, Swedish and UK Governments demonstrated their support to MCP industry representatives through online videos and participation in online events.

Branding

In Y6Q2 the project continued to ensure accurate branding for online events, campaigns and webinars organized with support from MCP. All events and digital campaigns were branded in line with USAID, Sweden, and UK regulations, reflecting donor logos and disclaimers as needed.

Photo caption: Facebook banner for GoOnline Conference on E-commerce. Credit: Artcor

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SECTION III

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY2020 Q4 (JULY- SEPTEMBER 2020)

Winegrowing Industry

• Finalize equipment acquisitions under ASW grant extension (associated costs- $7,000); • Deploy next wave of Vinul Meu (My wine) campaign to support small wineries (associated costs- $5,000); • Provide input to sectorial strategy as well as mentorship and guidance to ONVV in deploying international campaign and targeted campaign in UK (int. STTA – Robert Joseph); • Pursue development of the national winegrowing development strategy, deliver necessary technical assitance and expertise (int. STTA - TBD).

Tourism

• Organize a digital campaign to activate inboubd tourism (associated costs - $5,000); • Launch of Moldova.travel upgraded website (associated costs – $12,000); • Support ANTRIM and Investment Agency in organizing the high level Tourism Industry Forum 2021 (associated costs – $6,000); • Support digital B2B events in target markets for tourism businesses (associated costs – $6,000); • Support tourism businesses integrate real time booking solutions (associated costs – $5,000).

Light Industry

• Finalize the DININIMA campaign (associated costs- $10,000); • Upgrade seven websites within Level Up Acceleration Program (associated costs- $23,000); • Finalize acquisitions for two Photo Studios for e-commerce (associated costs - $8,000); • Assist the organization of the digital Moldova Fashion Days (associated costs - $4,500); • Support two apparel companies in IMS certification (Local STTAs - Ala Oberst, Iuliu Turcan, associated costs - $4,000); • Support APIUS to develop a Policy Paper on Ensuring the Sustainable Recovery of the Moldovan Light Industry after COVID-19 (Int. STTAs - Dirk Vantyghen, Serge Leon, associated costs - $1,000).

IT cluster

• Continue the capacity building and promotional efforts for FCL Center and develop three guides for the educational community: (associated costs - $2,000); • Conduct online contest for high-school students, to increase brand engagement for FCL (associated costs - $2,000);

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• Conduct training courses for VET teachers on Google tools for Education (associated costs- $4,000); • Continue support for Artcor School courses and community events (associated costs - $23,000); • Finalize branding for MEDIACOR centre (PO – $760). • Endowment of Future Classroom Center with education furniture, learning and IT education equipment (associated costs – $14,000 \); • Support FabLab Academy activities and community building - Embedded systems, Software Development & Management, Advanced Makeathon contest (associated costs - $5,400); • Development of Moldova IT park Communication Strategy for foreign (associated costs - $4,300).

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SECTION IV

PROJECT ADMINISTRATION

Level of Effort Report

The following table provides a summary of the project LOE utilization and estimated expenditures. CONTRACT Cumulative Remaining LABOR CATEGORY TOTAL Y6Q2 LOE LOE LOE (workdays) Long-Term Technical Assistance - 3,023 122.25 2,757.13 265.87 Key personnel Long-Term Technical Assistance - 1,388 64.00 1,357.00 31.00 Expatriate (Includes TCNs) Short-Term Technical Assistance - Expatriate (Includes TCNs and professional technical assistance from 2,407 8.69 2,241.62 165.38 Chemonics and J.E. Austin Associates home office staff) Long-Term Technical Assistance - 15,113 780.75 14,101.64 1,011.36 CCN Short-Term Technical Assistance - 7,296 139 7,158.63 137.37 CCN TOTAL 29,227 1,114.69 27,616.02 1,610.98

MCP Budget and estimated expenditures

Y6Q2 Expenses Percentage of Contract Expenses to Forecasted Obligation (Feb. & Mar. Obligation Value Date Expenses* Estimate) Spent $28,491,382 $27,646,232.83 $1,103,629 $26,108,639 94.4% $1,321,400 *The forecasted expenses include estimated expenditures only for the third Quarter of FY 2021

Administration and Finance

During the quarter, the Project's administrative and financial systems continued to run smoothly with key, professional, and support positions aligned to the needs of the Project. As a result of the COVID-19 pandemic, the MCP team continues to work remotely from home. MCP’s budget assimilation is balanced and the resources well-distributed across the remaining Y6 with 94.4% of the total obligated amount expended through March 31, 2021. SEED Fund absorption is also on par with the total contract expenditures, with 97% of the total $ 5.5 million SEED Fund already expended. MCP will utilize the remaining funds across the remaining period of implementation through September 2021.

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SECTION V

ANNEXES

ANNEX 1.

Success Stories

ANNEX 1I.

Risk Assessment

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ANNEX I. SUCCESS STORIES

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ANATOLIE DUMITRAS’S WINERY: THE BUSINESS Photo Credit: Maxim Ciumas Photo Caption: Anatolie Dumitras and his son THAT ALLOWED HIS showcasing bottles of wine on their vineyards.

THREE SONS TO STAY HOME

One can sense the gentle scent of laburnum, linden, flowers, and wood herbs in the wines produced from the vineyards of the Dumitras winery that stretches over a four-hectare land and is part of the Tiglau Hill, situated in the vicinity of Vadul-Leca village in the Republic of Moldova’s Telenesti district.

“A good wine is a combination between soul, care, love and work.” The Dumitras brothers are running a successful wine business together with their father, and behind each bottle produced at the winery, there is a lot of work and passion that goes into it. The family believes that the grapes and the wine represent an important part of their ancestral heritage, one that needs to be preserved. Their business, which they are immensely proud of, is named after their family, and started with just a few cuttings brought from Italy, where Anatolie Dumitras, the father and the founder of the winery, worked for many years.

Getting started with large-scale winemaking. Anatolie Dumitras is a veterinarian by trade but has grown to love everything connected to vineyards and wines. Mr. Dumitras was one of the many Moldovans who emigrated to neighbouring European countries in search of work. He migrated to Italy, and remained there for 11 years, working at a winery in order to continue providing income to his family back home. “In 2019 we benefitted from a grant provided by Before 2016, the family produced small USAID and Sweden, which turned out to be a good quantities of wine, mainly for themselves and start to produce bottled wine in larger quantities. We their relatives. However, after witnessing the started developing the part related to quality wine success of small wine producers in Moldova production, to meet all the requirements. We and learning about the support provided by wouldn’t be able to achieve such a growth with our USAID and Sweden through the Moldova own sources, because we needed huge investments.” Competitiveness Project (MCP), the family decided to pursue their goal of producing Victoria Mutruc, CoderDojo beneficiary wine on a larger scale. in Chisinau, Moldova.

The support provided by USAID and Sweden through the Moldova Competitiveness Project helped the Dumitras family to secure consultations with a professional technologist – Mrs. Nadejda Mardari. MCP’s Association of Small Winemakers (ASW) Mentorship Program supports the emergence and development of small wine producers in Moldova. Under this program, MCP works with professional winemakers such as Nadejda Mardari to work hand- in-hand with small winemakers to assist them with each step of the winemaking process.

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Based on the advice and mentorship of professional winemakers, MCP also supports the small wineries with grants to secure necessary equipment for larger-scale wine production. To get started, the Dumitras family acquired a refrigerator to help them with the production of white and rose wines.

For wineries that specialize in white wines, temperature stabilization during the fermentation process is critical, thus MCP helps these wineries with securing proper cooling systems. Additionally, to keep the wine in sterile and good hygienic conditions, MCP provides grants for the purchase of steel tanks (or inox vessels). This is important to ensure that proper steps are being taken to guarantee high quality in the wine.

Aside from the refrigerator and inox vessels, the family also procured equipment to crush grapes and bottle the wine. Finally, the family built a special room for grape processing and wine fermentation.

A sound family business

The three Dumitras sons, Ștefan, Ion, and Tudor are responsible for “It’s easy to give up and leave in search for a marketing, promotion and all other better place, but what if by doing so, you lost your activities taking place at the Dumitras chance to try and fight?” winery. Their involvement and appreciation increased after they installed the new equipment and produced their first wine. This gave them courage and confidence to continue the wine production. Soon after, the family started collaborating with a chain of local markets and benefitted from the support and consultancy of a professional sommelier. From there, they promoted their wine in restaurants, wine cabinets and markets. Currently, they sell their products online through their website and deliver them in Chisinau and eight other well-known locations in the country. The Dumitras winery provides consumers with the following wines – Chardonnay, Merlot, Merlot Rose, Pinot Grigio and Rose -- which is a coupage between Merlot and Muscat. They hope that in one month, their loyal customers will taste the new Sauvignon Blanc. The family now knows that goals can be accomplished here, at home in Moldova as well, and that all that is needed is a desire, perseverance, and continued hard work.

Caption: Dumitras winery’s vineyards. Caption: Stainless steel barrels at the Dumitras winery. Credit: Maxim Ciumas Credit: Maxim Ciumas

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SMALL FARMER

Photo caption: Tudor Aghenie at Crama Tudor ACCOMPLISHES Photo credit: Maxim Ciumas HIS DREAM OF OPENING A WINERY IN IS HOME VILLAGE

The winemaker Tudor Aghenie and his small rural business have proven that #itispossibleathome. This is the tagline of an MCP communication campaign that aims to bring in the spotlight entrepreneurs and professionals that make a significant impact in the development of Moldova’s economy.

“In my household in Sadova. I organized authored wine tasting areas. The quality of this wine has recently dramatically improved.”

Tudor Aghenie is a sixth-generation small wine producer who lives in Sadova, Calarași. With the support of the Moldova Competitiveness Project, funded by USAID and Sweden, which aims to support and promote local entrepreneurs who choose to develop a business at home in Moldova, Tudor Aghenie’s household has become a popular tourist attraction. Together with his family, the entrepreneur manages 20 hectares of vine and a rural guesthouse bearing the name Crama Tudor.

A chance to create a future at home. It is now a dream to visit the small rural guesthouse and to taste the traditional food cooked by Mrs. Aghenie. Visitors can order pastries, stuffed cabbage and stew from homegrown rabbits, bread baked in the oven, and homestyle chicken noodle soup. They can even taste the six varietal wines in the cellar, where the owner displays a wine collection for selected guests. Then, one has the option to take a ride on one of the six bicycles or on an all-terrain (ATV) to roam the hills of the village. In the forest next to the vineyard, Mr. Aghenie built several guesthouses to accommodate visitors from all over the world.

“Tourists can stay overnight. There is a small cellar, an oven and they can cook the food they want. If somebody had told me 20 years ago that I would accommodate people from all over the country and earn some money from this, I would have not believed them. But the MCP project showed me that I can run my business at home, and I am so lucky to benefit from support and promotion.”

Wholesale grape production to bottled wine production.

Crama Tudor is a family-owned winery based in Sadova village, Calarasi district, which has successfully made the transition from wholesale grape production to value-added bottled wine production in just two years. Tudor Aghenie, the head of the household, majored in fruit growing and viticulture at Moldova’s Agriculture and Technical Universities before working at the soviet wine factory in Sadova. He is a small farmer, with 20 hectares of land, where he cultivates fruits, table grapes and Feteasca Regala, Chardonay, Pinot Noir, and Merlot wine grapes for sale.

To start adding value to the grapes he grows, Tudor joined the MCP Association of Small Winemakers mentorship program in 2017. Over two winemaking seasons working closely with an MCP wine consultant, Tudor discovered the processes and stages involved with making quality wine and received support to develop a wine brand and associated marketing toolkit. The family business has also begun to invest in tourism facilities, with the addition of an eating area nestled between the vineyards and the forest where visiting groups are served with placinta and other traditional dishes. Tourist hospitality services are a catalyst for sales, but also an opportunity to promote the wines of small producers.

MCP’s support for small producers of bottled wine is part of a long-term strategy to shift Moldova’s wine industry from large scale bulk production to modern bottled wines, attractive to high-value markets in Europe and Asia, and resilient to threats from future Russian embargoes. Due to continuous efforts in this direction, the number of institutionalized small wineries has increased 6- fold since 2014.

Caption: Crama Tudor. Credit: Maxim Ciumas

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INNA DONOS – MOLDOVAN TEACHER

PROMOTING DIGITAL Photo caption: Inna Donos at Future Classroom Centre Photo credit: Future Classroom Centre TRANSFORMATION IN THE NORTHERN REGION

It is with great mastery and passion for technologies and robotics that Inna Donos ignites the spirit of curiosity in students eager to discover engineering, sciences, and modern technologies. She has guided teams of students throughout national competitions and contests and helped them to develop important skills for the future.

“Students no longer want to embrace the classical learning methods and for them, the cooperation, research and communication are more important values than the mere gain of knowledge. That is where the technologies are of help. It’s not an easy task for a teacher, because they need to adjust the contents or create them anew in line with the needs of the modern world.”

While attending school herself, Inna Donos already knew that she wanted to become a teacher. She would help the teachers from K-12 classes at the school that she attended. She developed a passion for computers and technologies and was sure that this was what the future held for her. She followed a pathway full of challenges and outstanding achievements, grew professionally, and has since educated over 800 students at the “Vasile Alecsandri” High School from Balti.

Today, Inna Donos is an IT and robotics teacher, author of numerous curricula and educational programmes, and a valuable trainer of the Future Classroom National Centre for Digital Innovation in Education. Inna has trained nearly 200 regional teachers to use Google for Education tools to improve their digital skills as part of the National Digital Literacy Programme, led by the Ministry of Education, Culture, and Research, with strategic support from USAID, Sweden and the UK, and Orange Moldova. Inna has recently won the title of Teacher - Digital Ambassador, as part of a contest funded by Soros Foundation. She is among the 25 teachers in the country who hold this title, which gives the teachers more confidence in their abilities, and motivates them to reach new heights.

Providing more opportunities to students Inna Donos always wanted to provide more “Students are the main beneficiaries of the Future opportunities to her students. In 2016, she Classroom, as they develop 21st century competences, became a part of the Educational Robotics so needed for a bright and successful future.” Program, and in 2017, her high school enrolled in the pilot iteration of the Future Classroom initiative and was selected as a Centre of Excellence for the northern region. Combining a new type of learning environment, smart digital technology, and an interdisciplinary approach to reset Moldova’s K12 education to the digital age, Future Classroom advances digital skill-building and literacy for Moldovan teachers and youth, supporting digitally competent and confident educators and boosting advanced digital skills. Future Classroom is a public-private partnership led by the Moldovan Ministry of Education, Culture and Research, with donor support from USAID, Sweden and the UK through the Moldova Competitiveness Project, the leading telecom and technology corporation Orange Moldova, and Liechtenstein Development Service (LED).

The future is technology.

Inna Donos was able to develop professionally by taking part in various trainings organized within the MCP-supported Educational Robotics and Future Classroom initiatives. She travelled to Romania, Estonia, and South Korea for trainings and knowledge exchange. Inna was amazed with the technologies used by Korean schools, the level of organization and the educational process in Romanian schools, and the innovative spaces designed by Estonian schools. All this knowledge was shared with her colleagues, so that they could all contribute to the modernization of education in Moldova and equip students with the necessary knowledge for a prosperous future.

In 2020, Inna trained other teachers within the framework of the National Digital Literacy Programme implemented by the Future Classroom Centre as a response to the Covid-19 crisis, followed by the request of the Ministry of Education, Culture and Research (MECR). The teacher training took place online and focused on G Suite for Education. During the training, the teachers had the opportunity to see that Google tools are simple and convenient and could make their jobs easier. Inna appreciates that many of her colleagues have decided to start using these tools in their classrooms, and even said that they will never return to the old teaching methods. The partnership between Google and the MECR, facilitated by MCP, has enabled teachers to gain access to Google applications and tools, which contributes to the centralized organization of teaching activities in Moldova and the efficient management of the educational system.

Education as a common endeavour

Inna Donos has participated in all Robotics contests organized with the support of the Moldova Competitiveness Project: FIRST LEGO League, FIRST LEGO League Junior, and SumoBot Photo caption: Inna Donos attending the Photo caption: Inna Donos training a teacher Challenge. Inna’s 2019 Moldova First Lego League with the on the use of LEGO Education robotics sets. Robotics team from Balti. Photo credit: MCP Photo credit: Future Classroom Centre participation in these contests was made possible due to student interest, her colleagues’ encouragement, and the high school management’s support. Ina’s high school team was awarded prizes (in the Fundamental Values and Robot Design categories) each time that they participated in the competitions. These competitions are important for the development of technical skills and competences as well as the values that they promote: cooperation, teamwork, engagement, mutual respect, inclusiveness, and diversity of opinions. Additionally, the welcoming and entertaining environment is good motivation to participate in such events. With the support of the Moldova Competitiveness Project, funded by USAID, Sweden, and the UK, the “Vasile Alecsandri” lyceum from Balti was offered sets of robotics, modern digital tools, and innovative trainings and turned into a Centre of Excellence and a model for

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ANNEX II. RISK ASSESSMENT

Risk Risk description Likelihood Impact Risk Risk mitigation Change since last quarter? Category The COVID-19 pandemic and the unfolding economic crisis is a major external factor that has brutally intervened across the globe, disrupting systems, industries, supply chains, and consumer mindset. MCP’s most affected industries are tourism, light industry and the creative sectors. The immediate economic impact is huge, with firms losing current and near-term business for 2020 with recovery perspectives only to begin in 2021-2022. Most businesses have shut down for the duration of the pandemic, or continue to operate at reduced capacity. The MCP-supported economic sectors experienced decline in the 2020 annual sales and exports, in particular light industry and winegrowing reduced exports by avg 9%, while tourism international travel restrictions remain in place and only domestic travel has sporadically been allowed. ICT seems to be the least affected industry, with exports on the rise and making up for reduction of domestic IT service sales. The emergency state in Moldova continued in 2021, currently in effect during April – May 30 2021 Implementing partner (Moldovan Parliament Decision Nr. 49). The global crisis and the will continue to adjust COVID-19 pandemic is ongoing interventions to impacting Moldova’s External/force the changing global and High High High MCP has mobilized industry associations to act as focal points for economic and social majeure national economic and industry SMEs and in the dialogue with the Government to define national and systems, and MCP-target social context caused by industry anti-crisis economic policies. Industry associations played a key role to industries in particular the COVID-19 support business continuity. In the reporting quarter, with MCP support, pandemic. ANTRIM (tourism) continued to implement a Sanitary Guide to help re-opening of tourism businesses, under the World Travel and Tourism Council `Safe Travel` quality seal, aligned with World Health Organization guidelines, and vetted by the Moldovan Ministry of Health. The `Safe Travel` Moldova Guide has been implemented already by 23 tourism businesses, mostly rural guesthouses, hotels and wineries. In collaboration with ANTRIM, MCP continued to promote smart regulations for the sector, and is assisting the Ministry of Economy and Infrastructure (MoEI) to develop a Legal Guide for Starting a Tourism Business. MCP supported ANTRIM’s development as a leading business association offering guidance, legal expertise, funding, and technical assistance, as well as facilitation of collaborations with relevant and important partners. With MCP assistance, APIUS association (light industry) initiated dialogue with EURATEX, Europe’s largest fashion association, on post-COVID recovery strategies built on fair trade, sustainability and digital transformation. MCP supported APIUS Light Industry Association to initiate the development of the industry policy paper, which capitalizes on the Moldovan light industry’s growth over the recent years (including its shift to high value added), while re-strategizing and preparing for a changing industry after COVID-19.

MCP redirected its ongoing assistance and funding to support e- commerce as a medium-term remedy to revamp business sales during and post COVID-19. MCP e-commerce support benefits over 250 SMEs in fashion, tourism, creative and other industries. MCP provides comprehensive e- commerce assistance, including development of e-shops, content, SEO, integration of e-payments and logistics, and digital marketing.

In the reporting quarter, MCP continued to support the implementation of e- commerce initiatives GoOnline and ZIPhouse E-commerce Acceleration Program. GoOnline organized an Ecommerce Conference attended by over 200 SMEs, addressing key success factors such as logistics, e-payments, product listing, digital marketing. MCP facilitated spring DININIMA digital campaigns promoting domestic ecommerce sales (top 100 local fashion products) that led to increase in online sales by up to 30 percent for promoted brands. This enabled Moldovan fashion brands to mitigate domestic sales loss (reaching 50 percent), and recover some sales via digital channels. MCP also supported ONVV-led initiatives to spur ecommerce, provided technical support to ONVV in an effort to develop new international positioning for the national wine brand, Wine of Moldova, and delivered technical expertise to develop short term and targeted communication campaigns in the UK.

Looking forward, MCP will adapt the project’s ongoing and future interventions to the changing global and national economic and social context, including but not limited to a stronger focus on digitizing businesses and re-shifting markets to support trade diversification and recover business sales.

Implementing partner Moldova continues to experience ongoing political and Government changes. will promote business- Government changes directly impact MCP-led policy initiatives. MCP was able to Political climate is driven reforms by establish working relationships with the Dodon-led Government and re-introduce uncertain, and fragility of working with and flagship initiatives. However, these suffered changes once again as a result of the pro-European vector Political/ Moderate to Moderate strengthening business newly-elected president Maia Sandu and the resulting impact on the Government. threatens economic Moderate External High to High associations in target reforms and industries. The - Changing Ministers and state secretaries causes an information gap and loss of development in MCP- implementing partner institutional memory. USAID, Sweden and UK aid articulated the MCP-driven target industries will work with business policy priorities in tourism, ICT, winegrowing, and workforce development associations to improve during courtesy calls with the Government. As a result, during the reporting

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their advocacy skills, quarter, MCP managed to unblock the installation of tourism road signage build formal and informal elevating the problem to the Ministry of Economy (and its subordinated channels of public-private National Road Agency) this activity being relaunched in January 2021. dialogue for bettering business environment - ONVV’s PPP model has been repeatedly challenged, however, due to the and aligning with EU Government’s interim status, notices on constitutional motions are on hold. framework. Stronger MCP will continue to closely monitor the situation and provide specialized collaboration between assistance to the ONVV and the wine industry associations to ensure that their businesses and opinion is duly presented to the constitutional court. Still, the Moldovan government will provide Parliament approved detrimental amendments to the wine law that increased direct input to policy the Government stance in the ONVV Board. MCP will work with the ONVV decisions. board to mitigate risks around this legal change and ensure a unified private sector voice.

- During this quarter, MCP continued to advocate for the official approval of the Tourism Development Program “Tourism – 2025” which was previously revised in the context of the pandemic. The updated National Tourism Development Program “Tourism - 2025” and the accompanying Action Plan, were translated into Russian and English, but are still waiting approval as a consequence of the political and health crisis. The situation remains unclear amid the current political turmoil, however, MCP will continue to push for the approval of the new Strategy. It is crucial for the Government of Moldova (GoM) to move forward with an implementable strategy that supports the sector in weathering a global pandemic.

Artcor – The Academy of Fine Arts is honoring its ongoing financial commitment Implementing partner for Artcor operational costs, and as of January 2021 COR Association started to will assist the relevant cover the utilities costs. The Center is demonstrating excellent progress, and all Government partners are committed, proactive and engaged, contributing to its success. MCP counterpart with facilitated a new partnership with Moldcell, the second largest telecom operator, budgeting, public Public funding which signed an MOU to become a corporate sponsor for Artcor committing to procurement and other committed for joint allocate its 2021 Corporate Social Responsibility (CSR) budget, estimated at one steps to ensure initiatives, such as Artor, million lei to fund Artcor. This will mitigate the Artcor operational risks and allocation and Balti Innovation Center, Delivery Moderate Moderate Moderate support its overall sustainability. disbursement of funding. Future Classroom Mitigation measures will and/or trade promotion, MEDIACOR – In addition to the $350,000 contribution allocated from the state be included in the is not disbursed and university budget for the development of the MEDIACOR Center, the activity budget, that University committed an additional $115,000 (2 million lei) for the construction of would allow for the the new media production pavilion to mitigate any risks of exceeding the available completion of the construction budget. The refurbishment of the MCP-funded part of the activity with reduced MEDIACOR infrastructure is on track, with 60 percent of the renovation being funding. complete. MCP developed a phased approach for MEDIACOR implementation to

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reduce the risk, whereby it will complete a portion of the infrastructure to enable MEDIACOR to begin activities in the fall of 2021.

Balti Innovation Center (Tekwill extension) is on schedule, with core funding worth 28 million lei coming from the North Regional Development Agency that has the funding available and continues to make good progress on the construction. MCP has regular meetings with the University and the Agency to ensure progress. MCP provided support in developing the Regulation of the Administration Council of the Center and Regulation of the Center Activity, as well as coordinated the inter-stakeholder working group meetings. For infrastructure development support, MCP engaged an interior designer to provide assistance for the construction companies during the construction process to meet the design and space functionality requirements of an innovation center, thus mitigating the design risk.

Future Classroom Center – As a result of the pandemic-related school closure since March, the Future Classroom initiative is being adapted. MCP and its implementing partners are looking at ways to enhance online learning platforms. During the quarter, Future Classroom delivered a national level online conference on technologies in education, a series of technology training courses, as well as deployed a national initiative incentivizing teachers as Digital Ambassadors. In addition, in anticipation of its growing role in digitization of Moldova’s educational system, the Future Classroom Center is expanding to add another training floor, and as a result triple in size to respond to the continuously high demand for teacher training and school digitization support. MCP provided support for re- designing the spaces and is cost-sharing on endowment, while the Pedagogical State University committed to cover the renovation costs from its 2021 budget. Renovations started and are on track.

Moldovan Investment Agency. MCP is working towards strengthening its supported business associations to be able to provide capacity for trade promotion activities to MIA. Because of the COVID-19 pandemic, most regional tradeshows were cancelled, and MCP stepped in to help redirect the funds to other meaningful trade support activities. In particular, MIA redirected its funds to e-commerce and digital promotion campaigns in tourism and fashion manufacturing. In the reporting quarter, MCP continued the partnership with MIA for the APIUS-led EU B2B digital marketing campaign and the GoOnline initiative. In tourism, MCP in partnership with ANTRIM and MIA supported Moldova participation at ITB Berlin travel trade show (organized online); and started preparations for the National Tourism Industry Forum 2021 in May.

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Implementing partner Industry associations and innovation centers switching to online and will work with the teleworking. Amidst the COVID-19 pandemic, MCP-supported industry strongest and most associations and innovation centers continued to telework and upped their abilities representative business to deliver online services. This includes delivering online training content, holding associations in the videoconferences, online Board meetings and partner engagement workshops. assisted industries. It is MCP supported their internal processes and provides ongoing coaching in this key that these are not process, ensuring that these organizations continue to operate. APIUS, ONVV and politically biased. Robust ANTRIM, COR associations held online meetings of their Board, enabling them to capacity building will be connect with members from rural parts of Moldova and overcome in-person provided, including meeting restrictions. COR Association organized online its General Assembly embedded expertise, selecting the new Board (10 seats) and adopting its new Bylaws that outline trainings, and coaching. eligibility requirements for Board members based on apolitical and ethical Through a targeted principles. Artcor continued to deliver skills trainings on graphic design, marketing, OCA (Organizational ecommerce via online means. ZIPhouse continued implementation of the e- Industry associations and Capacity Assessment) commerce startup program for 50 businesses entirely remote. Future Classroom other key local Delivery Moderate Major Major tool, the implementing National Center continued to deliver its teacher training courses online and counterparts display partner will screen each selected 25 teachers to become Digital Ambassadors to enhance online education institutional weakness institution on an annual across the country. ANTRIM partnered with the Moldova State University (MSU) basis to ensure to develop continuous learning programs for tourist guides and a digital platform transparent governance, was developed for the guides. a strong executive body, and financial sustainability, as well as progress on their performance improvement plan. Grants to local counterparts will include conditionalities related to institutional strengthening. Implementing partner Changing economic situation, supply chains and market requirements will undertake a rigorous as a result of the COVID-19 pandemic. The COVID-19 pandemic is assessment of business expected to cause significant changes to the national and international economic readiness to export to system, from supply chains to markets and consumers. To maintain the relevance target markets, before of its market assumptions and interventions, MCP continued to reassess the Assisted enterprises do engaging in trade ongoing and planned trade-support activities to ensure that these are or will be not meet target market Delivery Moderate Major Moderate promotion assistance. adapted to the new market realities. Stronger focus is being placed on digitization requirements Complex assistance will of businesses and trade, such as e-commerce, online bookings for tourism, digital be provided first to campaigns, etc. During the reporting quarter, MCP supported exclusively digital upgrade the campaigns in tourism, winegrowing industry, and fashion manufacturing. MCP’s product/service to meet ICT and Creative beneficiaries become popular on social media after featured in market requirements, the #EPosibilAcasa (#it’sPossibleAtHome) online awareness campaign. In fashion

97 including better manufacturing, the five months EU B2B campaign for Moldova apparel factories productivity, quality and continued and over 880 EU businesses expressed interest in sourcing fashion managerial capacity of manufacturing services to Moldova and visited APIUS’s dedicated website, the businesses. In addition, Colinda Moldova, My Wine and Martisor awareness campaigns were high-impact, the implementing and the last one went viral generating over 1.2 million impressions on Facebook, partner will work Instagram, and other social media platforms. MCP also facilitated ANTRIM’s together with the private participation at a Moldova, Ukraine and Belarus joint Forum, which resulted in the sector to select markets development of a common platform for discussing prospects of regional tourism. where existing products In addition, MCP facilitated the signing of an MoU between ANTRIM and the have the highest Ukrainian Hospitality Association, aiming to enhance regional tourism potential to succeed, for opportunities. This was followed by a high-level interregional forum for tour instance Romania for operators and hotel representatives to discuss anti-crisis measures. apparel, or Italy for tourism. New and improved rural guesthouses and small tourist wineries. To overcome Moldova’s deficit in high-quality rural tourism experiences, MCP continued to support grant implementation for the additional pool of 15 guesthouses in Moldova’s high potential tourism regions (Orhei, Stefan Voda, Hincesti, Ungheni, Cahul). To mitigate the implementation risks associated with low capacity of rural entrepreneurs, MCP infuses grants with critical mentorship and technical assistance for rural product development, business and tax models, architecture, and design. In addition, MCP is requesting cash grantee contributions that cover at least 50% of the project, to mitigate the financial risk for completing the infrastructure project, as well as to demonstrate and commitment. During the quarter, MCP completed the financing through grants phase, closing the last 8 wine tourism grants and 7 rural guesthouses grants. MCP’s portfolio of wine tourism and rural guesthouses grant assistance includes 34 guest houses and 34 wineries of different scale and at various stages of development. No launching events could be organized due to the pandemic related restrictions, however, all wineries and B&Bs plan to start receiving guests during the summer season. This assistance has been especially appreciated considering the global crisis which has caused unprecedented damage in the tourism industry.

To mitigate the international trade promotion risk for the fashion manufacturing industry MCP supports implementation of quality standards in assisted Moldovan factories, ISO and BSCI social compliance standards. The COVID-19 induced crisis points to increased demand from European buyers for ethical and socially compliant factories. In the reporting quarter, two Moldovan factories obtained international quality systems certification, namely Ionel and Gemini Clothing Limited. Overall, MCP supports 48 factories (employing 3,750 people) to streamline factory productivity and technology standards. Out of these, 12 unique factories have already obtained internationally recognized social

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compliance and quality certifications, namely ISO, OHSAS and/or BSCI social compliance certification. These are the first internationally certified apparel factories in Moldova and create a critical mass and role models for the industry to follow. This also opens the door for Moldovan factories to work with premium European brands/buyers, which today require socially compliant and sustainable factories.

Project Assumptions

Context: Moldova has experienced tremendous political and economic turbulence over the last 5-6 years, with the funneling of more than $1 billion USD out of three Moldovan in 2014 and the replacement of five governments in 2015 alone. Moldova’s economy is led by private consumption and is fueled by remittances. Moldova faces a sharp demographic decline, requiring structural reforms for private sector growth and job creation. The ongoing political crisis adds political barriers to improving economic performance.

Economic Development Challenges and Risks: With the June 2014 signature of the Association Agreement (AA) and the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union (EU), Moldova opened duty-free access to one of the world’s most prosperous markets. Moldova’s alignment with the EU has the potential to promote increased investment and modernization, create a more transparent business climate, and spur innovations through heightened competition and exposure to new technologies. While Moldova’s trade with the EU is building up, reaching an impressive 70% of its exports in 2018, entering these EU trade agreements brings high risks to Moldovan businesses that are used to selling products and services to Russia and other low value-added CIS markets. Moldovan enterprise and industries are still not as strong as they need to be to withstand external economic shocks and face tough global competition. To compete in higher-value markets, the Moldovan government and the business community need to make critical investments to adjust legislation, product quality and marketing in line with new market requirements. Moreover, many businesses and even industries in Moldova engage in low value-added business models, leading to low wages and investments. For instance, the garment industry, the third largest exporter and top employer of women, is dominated by ‘cut-and-make’ sewing services, with an estimated 80% of the industry’s $400 million USD exports being low-cost labor for Western brands.

Workforce Development Challenges and Risks: Moldova is torn by heavy (e)migration and brain drain, especially of its younger population. One quarter of Moldova’s population lives abroad either temporarily or permanently, which makes Moldova among the countries with the highest migration per capita in the world. Many Moldovan citizens are still leaving the country to pursue education and higher-wage jobs elsewhere. Although sluggishly increasing, the average gross monthly wage in Moldova remains low, 8,107 lei in 2020 (approx. $468 USD), making insufficient household income to meet living standards. Employers and industry associations in Moldova agree that their primary challenge, outside of Moldova’s need for business regulatory reforms, is to find sufficient skilled workers. This underscores the need for the public and private sectors to come together to prioritize economic development, availability of better paying jobs, and most importantly enhancing the skills of the workforce.

Opportunities: Continued and focused improvements of Moldovan SMEs to diversify production, expand trade, increase quality and productivity will lead to exponential gains for Moldova’s competitiveness, especially in European and other high value-added markets. Many Moldovan SMEs displayed readiness to transition to higher value-added business models, such as original designs in the garment industry that result in seamstress wages 10 to 50% higher than the national average. Emerging innovation-based industries in Moldova have strong growth and high earning potential, for example the Information Technology (IT) sector has recorded exponential development, with software exports having grown 20-fold since 2005, reaching $217 M USD in 2019 (33% increase vs. 2018) and $270M USD in 2020 (24% increase), while the industry’s tech engineers earned $1,500 USD per month in 2020 or four times the national average. IT, clustered with other non-traditional emerging industries, such as Engineering and Creative Services, have a unique role in creating quality jobs and addressing brain drain. Tourism is another overlooked industry, with untapped potential in Moldova, that is growing fast worldwide. Moldova is the least visited country in Europe, and yet its rich heritage, distinctive culture and reputation for warm hospitality, are sound footing for developing a thriving tourism economy, in even in the most remote rural regions, contributing to a reduction in poverty and migration.

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