ZRDA ACTIVITY IN GEORGIA

FY 2020 QUARTERLY REPORT I

January 31, 2020

This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc.

ZRDA ACTIVITY IN GEORGIA

FY 2020 QUARTERLY REPORT 1 (16)

Cooperative Agreement No. AID-114-A-16-00004 Cover photo: The first Khachapuri Festival in Village Rukhi, Samegrelo-Zemo Svaneti, October 2019 (photo credit: Chemonics International)

DISCLAIMER

The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States government.

ACRONYMS

AIC NGO Abkhazintercont AMP Activity Management Plan APMA Agricultural Program Management Agency APS Annual Program Statement BSO Business Support Organization CDF Chachkari Development Fund CHCA Charity Humanitarian Centre “Abkhazeti” DCFTA Deep & Comprehensive Free Trade Agreement (EU) DMO Destination Management Organization EOI Expression of Interest F2F USAID Farmer-to-Farmer Activity FSC Farm Service Center FY Fiscal Year G4G USAID Governing for Growth Activity GAP Good Agricultural Practices GARA Government of the Autonomous Republic of Abkhazia GEL Georgian Lari GFA Georgian Farmers’ Association GFDC Georgian Farmers Distribution Company GITA Georgia’s Innovation & Technology Agency GLA Georgian Logistics Association GNTA Georgia National Tourism Agency GoG Government of Georgia GRDF Georgian Rural Development Fund HACCP Hazard Analysis Critical Control Point ICC Information and Consultation Center IDP Internally Displaced Person IFAD International Fund for Agriculture LEPL Legal Entity of Public Law LOP Life of Project KMS Key Management Solutions Ltd.

ZRDA FY 2020 QUARTERLY REPORT I i

MDF Municipal Development Fund MoA Ministry of Agriculture MOU Memorandum of Understanding MRDI Ministry of Regional Development & Infrastructure MSME Micro, Small and Medium Size Enterprise NGO Non-Governmental Organization PHHM Post-Harvest Handling and Management RDA Regional Development Association RDFG Association Rural Development for Future Georgia RFA Request for Applications RFP Request for Proposals SOW Scope of Work TIC Tourism Information Center ToT Training of Trainers UNDP United Nations Development Programme USAID United States Agency for International Development USD United States Dollar USG United States Government ZSF Zrda Sub-Award Facility Zrda USAID Zrda Activity in Georgia ZRI Zrda Resiliency Index

ZRDA FY 2020 QUARTERLY REPORT I ii

CONTENTS

Acronyms ...... i Executive Summary ...... 1 Activity implementation Progress ...... 4 Zrda Sub-Purpose 1: Improve MSME Development & Growth ...... 4 Zrda Sub-Purpose 2: Increase Productivity of Rural Households ...... 11 Zrda Sub-Purpose 3: Facilitate Market Linkages between Producers & Buyers ...... 16 Zrda Sub-Purpose 4: Promote Local Economic Development by Establishing Networks . 25 Cross-Cutting Management Objectives ...... 32 Euro-Atlantic Integration ...... 32 Integrating Gender and Youth: ...... 32 Partnership & Coordination Updates ...... 34 Telling Our Story/Communications: ...... 39 Monitoring and Evaluation: ...... 45 Annex A. Zrda Indicator Tracking Matrix ...... 46 Annex B. Success Stories (Attached) ...... 52 Annex C. Zrda Activity Map ...... 53

ZRDA FY 2020 QUARTERLY REPORT I iii

EXECUTIVE SUMMARY

This quarterly report summarizes accomplishments of the Zrda Activity in Georgia (hereinafter “Zrda”) covering the first Quarter of the Fiscal Year (FY) 2020 (October 1, 2019 – December 31, 2019). Zrda began implementation upon execution of the Cooperative Agreement on March 15, 2016.

USAID ZRDA HIGHLIGHTS FOR OCT 1, 2019 – DEC 31, 2019

By Q1 FY 2020, new sales generated by Zrda MSMEs reached $29.5 million, 82% of the LOP target . This represents a 17% increase relative to the previous quarter results ($25.1 million). SALES Cumulative total sales increased by 8% from Q4 FY2019 to Q1 FY 2020, reaching $44.7 million. New sales are expected to reach $32 million by Q2 FY 2020 - 89% of the LOP target. 1,196 new jobs were created by FY 2019. This represents an JOBS 11% increase from the previous quarter, and has now reached 50% of the total LOP target.

During Q1 FY 2020, Zrda trained 461 new individuals across all TRAINING sectors. The overall number of individuals who received project supported training to date is 4,590. By Q1 FY 2020, the total value of funding leveraged to date is LEVERAGE $3.1 million from project partners, which is 86% of Zrda’s LOP target. 44% of Zrda beneficiaries are women. GENDER & YOUTH 27% of Zrda beneficiaries are youth. Total beneficiaries by Q1 FY2020: 107,596

Zrda Sub-Award Facility (ZSF): During Q1 FY 2020, the Zrda Technical Team members utilized sub-award mechanisms to facilitate interventions in support of Zrda objectives across priority sectors and regions. Zrda sub-awards are used to finance activities through local actors – private sector entities, NGOs, associations and other business support organizations (BSOs), and government agencies (where relevant and appropriate). Zrda’s approach to sub-award utilization emphasizes flexibility and provides transparent, streamlined processes that can be easily understood by implementing partners and Zrda staff. During Q1 FY 2020, Zrda developed and released 9 solicitations for sub-awards including: Zrda & Start-up Georgia funding opportunity for ABL communities; establishment of greenhouses; arrangement of cold storage and drying facilities; support existing catering businesses to expand and increase their profitability; support museums to develop better services; development of Digital Transformation capacity building training programs; handicraft support program for Samegrelo Region; arrangement of blueberry demo greenhouses; and arrangement of open field demo plots. Overall, 24 new applicants were awarded during this period, with the total amount of 276,625 GEL.

Household Survey & Zrda Resiliency Index (ZRI): In Q1 FY 2020, Zrda sub-awardee ACT completed the fourth round of the annual survey, focusing on the Zrda Resilience Index (ZRI) only. The survey was carried out among 300 households across 81 Zrda-target communities and assessed the project’s progress four years after its inception. Typically, four project indicators are measured by the ACT survey, however, this iteration assessed only the two ZRI-related indicators : Percentage change in “Zrda” Resiliency Index measuring capacity of beneficiary communities to cope with shocks to

ZRDA FY 2020 QUARTERLY REPORT 1 | 1

livelihoods and Number of stakeholders implementing risk-reducing practices/actions to improve resilience to livelihood shocks as a result of USG assistance.

The research outcomes indicate a significant improvement in the households’ resilience and general well-being compared to the baseline period. Furthermore, the comparative analysis shows that the target group (i.e. project beneficiaries) has achieved better results in this regard than the control group (i.e. non-beneficiaries). More precisely, the following tendencies were revealed: • The community resilience index has increased by 39% compared to the baseline period (to 25.76 points from 18.50 points); and it has increased by 1% compared to last year’s results (to 25.76 points from 25.52 points); • Compared to the household resilience average point in 2016, 76% of beneficiaries have increased their household resilience (2,679 households); a comparison of the data with the 2018 results shows that 48% of households increased their resilience (1,694 households). • 63% of the interviewed beneficiaries said that they have attended trainings throughout the past 12 months. Out of this 63%, 61% confirmed participating in Zrda-facilitated training programs, and 46% of the beneficiaries that have attended Zrda-supported trainings noted that these trainings have effectively helped them improve the financial conditions of their respective households. Specifically, 16% of the 46% Zrda beneficiaries mentioned that they or their family members managed to find a paid job, while almost half of them highlighted that they were able to secure new or increased income following the trainings.

Progress Against Purpose-Level Indicators Zrda results against Purpose-Level indicators are summarized in Table 1 below. Please refer to Annex A: Zrda Indicator Tracking Matrix for complete results as applicable from Zrda’s inception through Q1 FY 2020.

Table I: Zrda Purpose-Level Indicators ZRDA ACTIVITY IN GEORGIA PURPOSE LEVEL INDICATORS

LOP Q1 FY 2020 CUM. CUM. INDICATOR TARGET RESULTS RESULTS % OF LOP

Value of sales generated by MSMEs over life of 1 $36,000,000 $4,430,016 $29,493,678 82% project (P/F) Number of MSMEs generating new sales over life 2 800 65 900 113% of project (P) 3 Number of new jobs created (P) 2,400 116 1,196 50% Number of households increasing income by at 4 13,200 N/A 7,527 57% least 25 percent (P) Percentage change in Zrda Resiliency Index measuring capacity of beneficiary communities 5 10% N/A 39% N/A to cope with shocks to livelihoods (P)

Number of stakeholders implementing risk- reducing practices/actions to improve resilience 6 900 N/A 1,244 138% to livelihood shocks as a result of USG assistance (P/S)

Total value of funding leveraged from GoG and 7 other sources for infrastructure and non- $3,600,000 $232,198 $3,084,064 86% infrastructure projects (P/F)

Number of beneficiaries using improved 8 infrastructure services (P) 9,600 5,979 7,644 80%

Analysis: The new sales indicator, which used to be one of the most challenging project indicators for three consecutive years, has experienced a significant increase during the last few quarters and is now on track toward achieving the project’s overal target. During Q1 FY 2020, the value of new sales increased by 17%, bringing the cumulative new sales number to $29.5 million for LOP-to-date. Compared to Q1 FY 2019, the value of new sales has increased by 108%. Total sales from all beneficiaries have reached $44.7 million. Based on our new sales forecasting tool, new sales are ZRDA FY 2020 QUARTERLY REPORT 1 | 2

projected to reach approximately $32 million cumulative by Q2 FY 2020, which will be 89% of the LOP target.

Value of New Sales (USD)

35,000,000 29,493,678 30,000,000 25,063,662

25,000,000 21,833,646

20,000,000 16,396,104 14,203,332 15,000,000 10,988,957 10,000,000 6,224,684 3,498,843 5,000,000 1,667,4842,512,096 9,60036,756 0 -5,000,000

-10,000,000Q2 FY2017Q3 FY2017Q4 FY2017Q1 FY2018Q2 FY2018Q3 FY2018Q4 FY2018Q1 FY2019Q2 FY2019Q3 FY2019Q4 FY2019Q1 FY2020

Currently, the number of new jobs is the most challenging purpose-level indicator. In the reporting quarter, 116 full-time equivalent new jobs were created. Overall, the number of new jobs has reached 1,196 which is 50% of the LOP target.

New Jobs Dynamics 2,500 1911 2,000 1683

1,500 1,196 1111 1,080 1,000 662 689 375 500

0 FY 2017 FY 2018 FY 2019 FY 2020 (Q1) Full-time equivelent Jobs Total Jobs Linear (Full-time equivelent Jobs)

Leverage generated LOP-to-date has reached $3.1 million, which is 86% of Zrda’s overall target. Out of this, 66% is generated from the private sector and 34% from the public sector.

Purpose-level indicator #8 (access to infrastructure), where progress remained slow previously, has experienced a significant increase, with the Q1 FY 2020 results hitting 5,979 beneficiaties, which is 3.5 times higher compared to the previous cumulative result. The indicator total has now reached 7,644 beneficiaries, representing 80% of the LOP target. Zrda is making progress under this infrastructure component through the partnership with BP in Kvemo Kartli and Samtskhe Javakheti regions, where Regional Development Association (RDA) is the BP implementing partner. During the reporting period, the RDA facilitated Community Development Component received nine Infrastructure Rehabilitation projects applications from local Community Based Organizations, funded eight new projects, and saw the completion of eight previously approved and funded rehabilitation projects.

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ACTIVITY IMPLEMENTATION PROGRESS

The following sections provide updates on the activities under implementation across all Zrda Sub- Purposes as well as the activities completed during Q1 FY 2020. The report summarizes activities in detail, describes impact and results of each activity, and indicates next steps to be implemented during the remainder of FY 2020.

Zrda continues to work in 81 target communities to create 2,400 jobs, increase sales for 800 MSMEs by $36 million, increase incomes of 13,200 households by at least 25 percent, generate measurable improvements in community resilience, and leverage $3.6 million from municipalities, donors, and private sector partners. Additionally, Zrda continued the implementation of partnerships with key private sector partners, including British Petroleum (BP) and the Anaklia Community and Economic Development program (ACED).

ZRDA SUB-PURPOSE 1: IMPROVE MSME DEVELOPMENT & GROWTH Zrda Sub-Purpose I focuses on strengthening MSME capacity to grow and contribute to local economic development and integrating into national and international market systems. Sub-Purpose Level 1 indicators and progress made as of Q1 FY 2020 are provided in Table 2 below1.

Table 2: Sub-Purpose Level I Indicators

SUB-PURPOSE LEVEL 1 INDICATORS

FY 2020 FY 2020 LOP CUM. (% OF INDICATOR ACTUAL (% TARGET TARGET LOP TARGET) OF TARGET) 1.1.1 Number of business plans supported as a 30 22 (73%) 350 336 (96%) result of USG assistance (C) 1.2.1 Number of MSMEs accessing evidence- based market research through 2000 2392 (120%) 12,500 14,218 (114%) associations/BSOs (C) 1.3.1 Number of assisted MSMEs that have incorporated updated standards to product 60 1 (2%) 420 340 (81%) development as a result of USG assistance (C) 1.4.1 Number of public-private dialogues 60 10 (17%) 300 112 (37%) facilitated (C) 1.5.1 Number of MSMEs operating more profitably (at or above cost) because of USG 150 209 (139%) 780 800 (103%) assistance (S)

1 Sub-purpose indicators are tracked at the MSME level (both farm and non-farm MSMEs) rather than by specific activities. Indicators that cannot be tracked at the individual MSME level are tracked via the dedicated household and ZRI survey instruments.

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1003A: Food Safety Training Program for Zrda Micro & Small Businesses (Hospitality & Agriculture)

• Within this Activity trainings on food safety issues were conducted for BP/Zrda MSME projects in Akhaltsikhe and MSMEs of Akhmeta Municipality, includingthe applicants of the Pankisi Community Links Activity in Georgia. • The training topics included: 1) existing potential threats of catering businesses; 2) Results/Updates: requirements for public catering businesses; 3) new legislation in food safety Training Session (photo by Chemonics harmonized with DCFTA requirements; 4) International Inc.) waste management based on new legislation; and, 5) requirements for field kitchens and containerized kitchen units for tourism activities. • The invited Food Safety Expert evaluated Zrda beneficiary facilities, such as drying facilities, cafes and guesthouses in Anaklia and other MSME’s. The appropriate recommendations were prepared and delivered to the grantees. Challenges: • Activity is on track/no material challenges. • The food safety trainings will be conducted alongside hospitality and agriculture activities to ensure that beneficiaries with relevant businesses will receive Next Steps: timely food safety training assistance to support implementation of their activities. • The food safety trainings for new grantees will be held in all Zrda targeted regions.

1003B: Development of Local Geo GAP System with GFA

Results/Updates: • In this reporting period, farmers Giorgi Tediashvili (Fruit Orchard) and Kakha Tutberidze (Greenhouse) participated in the GeoGap

Geo Gap certified Greenhouse (photo by the GFA)

certification program. The Georgian Farmers’ Certification company provided consultations to the farmers which were later audited and certified with the GeoGAP certificate. • GFA continued the public outreach campaign for GeoGap in Svaneti, Samegrelo, Racha and Imereti, to promote the certification program to farmers.

Challenges: • Activity is on track/no material challenges.

Next Steps: • The Local GeoGAP team will continue implementing the GeoGAP Pilot projects. The GFA GeoGAP team has started the procurement process for the GeoGAP mobile laboratory van. GFA will set up a laboratory in the van that will be able to help producers to implement GeoGAP with the relevant laboratory services (soil, water, packaging, fruits/vegetables, etc.).

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1004A: Greenhouse & Agro-Insurance Promotion (under 1004: Facilitate Access to Finance) • Zrda was introduced to a new insurance company, Euroins. After several meetings and negotiations, Zrda and Euroins reached an agreement and signed an MOU with the goal of promoting insurance products. The activity will also support youth employment through trainings to strengthen their skills and knowledge of Results/Updates: insurance products, further needed for becoming insurance agents. This will help support a wider campaign to improve agro-insurance culture and strengthen the resilience of the beneficiaries. It will also offer youth living in the municipalities closer linkages with private insurance companies and better access to insurance products.

Challenges: • Activity is on track/no material challenges.

• Zrda will promote insurance products in the region, involving youth in product development and promotion; Next Steps: • Zrda will select around 50 training participants in each municipality and conduct 10 training sessions.

1004C: Value Chain Financing Pilot Scheme

• The goal of this activity is to develop a replicable value chain financing model to support the sustainable development of fruit and vegetable value chain actors by facilitating access to financial services. Zrda has signed a Memorandum of Understanding (MOU) with Crystal, the Microfinance Organization, and has Results/Updates: facilitated a partnership between Crystal and Agro-Com, a Farm Service Center operating in Shida Kartli to implement the scheme. • 2 loans were issued during the reporting period totaling GEL 46,000.00. • Overall, 152 loans have been disbursed under the activity totaling GEL 716,078.00.

Challenges: • Activity is on track/no challenges observed • Continue activity in Shida Kartli Next Steps: • Continue the monitor of the activity

1006: CHCA No-Interest Micro-Loan Facility for Western Georgia • CHCA completed cycle IX of the Free Loan Program in Samegrelo and Shida Kartli. 86 loan applications were received in total, out of which 18 in Samegrelo and 68 in Shida Kartli. • After the selection process, 26 loans were Results/Updates: approved for the total amount of GEL 120,600.00 (6 loans in Samegrelo and 20 loans in Shida Kartli). IDP beneficiary in Zugdidi (Photo by • Out of 26 loans 17 were from Chemonics International Inc.)

agricultural and 9 loans non-agricultural sector. • In total, 137 loans have been issued to date totaling GEL 681,352.00. • CHCA continues to make efforts to reduce the total amount of debt accrued in Challenges: 2018. During the reporting period the debt amount was reduced by GEL 11,120.00. The total debt amount by the end of the reporting period is GEL 43,816.00. • Implement one more cycle of the activity Next Steps: • Close the activity

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1006A: Investing in ABL • Zrda and the JSC Partnership Fund signed an MOU aimed at facilitating investments in target villages located along the Administrative Boundary Lines (ABLs) with the occupied territories of South Ossetia and Abkhazia, using existing tools such as the sub-award facility of Zrda and the innovative component of the program implemented by Start-up Georgia LLC, a company funded and owned by the Partnership Fund. • 3 joint commettee meetings, as well as the information sessions were conducted by Zrda Results/Updates: and Start-up Georgia in Gori, Perevi and Zugdidi. • 7 projects (4 in Shida Kartli and 3 in Samegrelo) were approved by Start-up Program Presentation in Rukhi, Georgia and submitted to Zrda for approval Samegrelo. (Photo by Chemonics for Zrda funding. Those projects are: International Inc). Production of fertilizers for drip irrigation systems; Used auto oil processing; Production of Kombucha; Production of Churchkhela bars; Development of a deep-freezing facility; Development of a goat farm and goat milk processing; Mobile milk processing plant. The total amount of these projects is GEL 5,196,945.00. The amount requested from Zrda is GEL 1,460,000.00, representing 28.1% of the total.

Challenges: • Activity is on track/no challenges observed

• Organize Zrda sub-award committee meetings to discuss received applications Next Steps: • Participate in Start-up Georgia award committee meetings • Implement and monitor the activity

1008: Akhmeta Municipality Micro Grants Activity - Completed

• Zrda continued monitoring all 57 Small Grants Program beneficiaries for Akhmeta municipality with the following geographical distribution: Pankisi Valley – 17, city of Akhmeta – 6, Tusheti – 16, Zemo and Kvemo Alvani – 14, Matani – Results/Updates: 4. • During the reporting period, all 57 beneficiaries managed to generate income totaling GEL 187,790.

Challenges: • No challenges observed.

Zrda will continue to monitor the business performance of all grantees and Next Steps: provide support in linking product/service producers to new markets.

ZRDA FY 2020 QUARTERLY REPORT 1 | 7 1008A: Underserved Minority and Geography Small Grants Activity • Zrda started to implement a Small Grants Program in Dusheti, Marneuli and Bolnisi municipalities to support improved agriculture, tourism, and service development for minority households in geographically remote areas. Grant agreements were signed with selected 13 grantees - Dusheti - 8; Bolnisi – 4, Marneuli -1 - operating in beekeeping, berry production, greenhouse and open field vegetable production, fruit growing, car repair and other services. • During the reporting period, all awarded beneficiaries managed to generate income totaling GEL 46,500.

Results/Updates:

car repair service in Village Shulaveri, Tea House in Bolnisi municipality Marneuli Municipality (Photo by (Photo by Chemonics International Chemonics International Inc.) Inc.)

• Two beneficiaries in Marneuli and Bolnisi could not yet meet their leverage Challenges: requirement. As such, Zrda is waiting for their portion of the contribution to be completed and will then deliver the requested equipment. • Zrda will monitor the performance of all 13 grantees and provide support in Next Steps: linking products/services to new markets.

1009 (A&B): ICT, Innovation and Entrepreneurship Activity with GITA

• As a follow-up to the E-literacy Improvement Program (1009 B), implemented by Georgian Innovations and Technology Agency (GITA) in partnership with Zrda, the service provider Griffin began supporting the development of simple e-commerce functional websites for up to 200 MSMEs who have participated in the Program. Results/Updates: • Through this program, Zrda and GITA expect that the supported MSMEs from Zrda target municipalities will increase sales and improve market linkages. • Currently, Griffin works with 37 MSMEs on web-site development. Out of the 37 MSMEs, 10 completed the technical parts, so Griffin is now working on completing the content and e-commerce elements. Additionally, Griffin provides Content Management System trainings for all contracted beneficiaries.

Challenges: • The activity is on track/no material challenges.

• Zrda will continue cooperation with GITA to step-by-step help around 200 Next Steps: MSMEs to successfully carry out marketing activities for their goods and/or services through easy-to-use image and e-commerce websites.

ZRDA FY 2020 QUARTERLY REPORT 1 | 8 1010: SME Technical Assistance Facility for Certifications & Business Services • The activity aims to address the needs of Zrda target SMEs/lead firms in terms of technical assistance (TA) to support access to finance, implementation of modern standards and technologies, exports and other activities leading to sales, profitability increase, and new jobs. • Zrda solicits sub-award applications directly from target SMEs/lead firms operating in Zrda target communities and/or having market linkages with MSMEs, and/or creating job opportunities for individuals from Zrda target communities. Within the Zrda target value chains, and through these sub-awards, Zrda subsidizes 50% of the consulting service fee, up to a predetermined maximum amount. • The following activities were implemented and results reached during the reporting period: - TMT LLC, fruit and vegetables processing in Shida Katli: ISO 22000:2005 pre-certification consulting Results/Updates: completed. Service provider - ISO/Management and Technical Group. After the pre-certification preparation, the company passed through the certification process and was certified by the German certification body TÜV SÜD. While the pre-certification fee was co- funded by Zrda, the TÜV SÜD certification fee was fully paid by the beneficiary. Expected annual sales increase: GEL 75,000.00. - KODY Cooperative, honey and other beekeeping products in Samtskhe-Javakheti: HACCP pre- certification consulting delivery process started and is to be completed in March 2020; Service provider: ISO Consulting; Expected annual sales increase: GEL 51,700.00

Challenges: • Activity is on track/no challenges observed

• Monitor implementation of the activity Next Steps: • Close or extend the activity

1010A: MSME Business Skills Training – completed. • This activity aimed to provide built-in business skills training to MSMEs from Zrda target areas that took part and benefited from business support programs and were in need of further business skills development. These programs were implemented by Enterprise Georgia, APMA, BP. Results/Updates: • 23 MSMEs were trained by EXPERTO in Samtskhe-Javakheti; Shida Kartli and Samegrelo. • In total, 260 MSMEs have been trained by Business skills trainings (Photo ABKHAZINTERCONT (AIC), Georgian Rural by Chemonics International Inc) Development Fund (GRDF) and EXPERTO LLC in Sameglero, Shida Kartli, Kvemo-Kartli, Samtskhe-Javakheti and Mtskheta- Mtianeti Regions.

Challenges: • Activity was on track/no challenges observed.

Next Steps: • Activity Completed.

ZRDA FY 2020 QUARTERLY REPORT 1 | 9 1010B: Facilitate usage of modern hospitality and retail software by Zrda target MSMEs

• Zrda supports target MSMEs in hospitality, service and agricultural sectors to install and use business operation specific modern software. The software helps user businesses to better control their daily operations and better serve customers. As a result, target business are able to attract more customers and increase revenues, optimize costs, increase profitability and therefore have the capacity to reinvest more in business expansion. The activity includes 50% service fee co-financing by Zrda and is implemented at the Zrda target municipality level and not only at the community level. • As a result of a competitive process, 5 service providers have been identified: Results/Updates: BDO, AREALI, FINA, HRS and IT FORCE. • The status of 2 applications that are considering the purchase and installation of FINA’s accounting and management software is as follows: - A&E LLC (Borjomi) – service agreement signed. Software installation, staff training, and equipment delivery is planned for January 2020; A&E LLC expects to have about GEL 500,000.00 worth of sales during the first year of operations. - ALI LLC (Akhaltsikhe) – Service agreement signed, software installed, and staff trained. ALI LLC expects around GEL 200,000 annual sales increase because of improved management and service.

Challenges: • Activity is on track/no challenges observed.

• Monitor the activity. Next Steps: • Close or extend the activity.

1011: Restaurant Service Improvement Activity

Results/Updates: • Zrda partnered with Gastronaut in order to select sub-recipients in the catering industry and provide professional consultations. These consultations will be designed to fit each participant’s specific needs to address a variety of capacity gaps. The individual consultations include a needs assessment to identify main areas for improvement and link sub- recipients with actionable recommendations and the creation of a roadmap on how to improve their catering businesses in the following areas: - Concept creation - Menu creation (with calculations) Regional Information Sessions (Photo - HR structure and service by: Chemonics International Inc) - Gastro marketing and communications • Zrda and Gastronaut released a RFA and conducted informational sessions in all Zrda target regions. Around 60 applications were submitted in response to the RFA. Challenges: • Activity is being implemented with no material challenges.

Next Steps: • Zrda and Gastronaut will evaluate all received applications and identify the best applicants that will receive assistance through this activity. • Zrda will continue food safety trainings for catering businesses (covered under 1003A) in the target regions.

ZRDA FY 2020 QUARTERLY REPORT 1 | 10 1012A: Publishing Guesthouse Guidebook – completed. • This activity focused on developing a printed guidebook to support guesthouses operating in Zrda target areas to develop/modify their infrastructure and soft skills in order to make themselves more attractive for guests, both local and foreign. This would allow benegfciaries to grow and strengthen their businesses. The guidebook focuses on the maintenance and promotion of the Results/Updates: national/regional style and heritage as a crucial factor to improve the guesthouses’ niche market and make them more attractive. • Sub-award agreement was signed with the Georgian Wine Association (GWA). • The GWA finalized the guidebook and printed 1,000 copies. Regional Information Sessions (Photo • The guidebook presentations took place in by: Chemonics International Inc.) Tbilisi, as well as in Akhmeta, Akhaltsikhe and Zugdidi. The guidebook was distributed among Zrda beneficiaries as well. • The book preparation took more time than planned which caused the delay of the Challenges: project completion. Next Steps: • Activity completed.

ZRDA SUB-PURPOSE 2: INCREASE PRODUCTIVITY OF RURAL HOUSEHOLDS Activities under Sub-Purpose 2 focus on supporting rural households to increase their productivity and incomes from both on- and off-farm livelihoods opportunities. Sub-Purpose Level 2 indicators and progress made as of Q1, FY 2020 are provided in Table 3 below.

Table 3: Sub-Purpose Level 2 Indicators

SUB-PURPOSE LEVEL 2 INDICATORS

FY 2020 CUM. (% OF FY 2020 LOP INDICATOR ACTUAL (% LOP TARGET TARGET OF TARGET) TARGET)

2.1.1 Number of households accessing market data through 10,000 15,468 (155%) 64,570 65,570 (102%) USG-support communication channels (C)

2.2.1 Number of households and others who have applied new technologies or management practices as a result of USG 1,000 277 (28%) 7,000 5,967 (85%) assistance (C/F)

2.3.1 Number of individuals who received USG supported 600 282 (47%) 3,600 2,124 (59%) short-term agricultural sector productivity training (C)

2.4.1 Number of hectares under improved technologies or management practices as a result of USG 900 19 (2%) 6,000 2.,211 (37%) project (F)

ZRDA FY 2020 QUARTERLY REPORT 1 | 11 2001: Berry Nursery Establishment Activity

• Zrda international berry experts conducted a four- day field and classroom intensive training course on High Tunnel Blueberry Production Systems and Cane Berry Propagation. The experts and the training participants visited a Zrda-supported blueberry nursery in Rukhi village, Zugdidi Municipality, where the experts showed pruning techniques to the training participants. The experts visited a blueberry plantation in Rike village, Zugdidi Municipality and a blackberry and raspberry nursery in Kogoto village of Akhmeta Municipality. They provided field trainings on blueberry planting and raspberry and blackberry propagation to 23 farmers. Field training in Rike, Zugdidi Municipality (Photo by • Zrda-supported berry nurseries have produced Results/Updates: Chemonics International Inc.) more than 45,000 plants. Zrda-supported AgroAgora refilled its stock with 52,000 plants imported from Poland. By this time under “The Plant the Future Program,” AgroAgora sold around 50,000 plants, generating income of 410,000 GEL. • Zrda announced the RFA for the arrangement of blueberry greenhouse demonstration plots, including the establishment of up to 2000sq.m to utilize modern technologies of berry production in greenhouses. This activity will have demonstration effect for blueberry growers who want to prolong the blueberry production cycle and gain a higher market price. Zrda received 10 applications for this program out of which 9 are from Samegrelo-Zemo Svaneti and 1 from Samtskhe-Javakheti.

Challenges: • The main challenge remains the low production capacity of nurseries which is mainly related to the skills and qualifications of nursery personnel.

• Arrange trainings for the blueberry production demonstration greenhouses and in blueberry production under protected environment; • Organize a study tour on new agriculture technologies in blueberry cultivation; Next Steps: • Introduce modern propagation techniques for blueberry production in greenhouses and the open field; • Print a comprehensive manual for blueberry production and distribute the printed copies to the FSCs, ICCs, and the farmers.

ZRDA FY 2020 QUARTERLY REPORT 1 | 12 2002: Train Farmers on Market-Driven Production Practices (Public Sector)

Strengthening & Capacity Building of State Extension ICCs: • During the reporting period, Zrda continued collaboration with the state owned Information Consultation Centers (ICCs), operating under the Agriculture and Rural Development Agency (ARDA). Zrda announced an RFA for the establishment of demonstration plots in Zrda targeted communities of Kvemo Kartli, Samtskhe-Javakheti, Mtskheta Mtianeti, Kakheti (Akhmeta Municipality) and Samegrelo-Zemo Svaneti regions in fruit and vegetable sectors where ICC Results/Updates: specialists will be involved as extension service providers. • The RFA includes arranging demonstration plots in the fruit and vegetable sectors to establish up to 1.0 hectare of demo plots and utilize modern technologies of fruit and vegetable production in the open field. Zrda received 15 applications in response, specifically, 5 from Samegrelo-Zemo Svaneti and 10 from Samtskhe- Javakheti. • Zrda will support the ICCs to hire interns andtrain them in the technological aspects of fruit and vegetable production. • The Ministry of Agriculture allocated the department of the ICCs under the Challenges: Agricultural and Rural Development Agency (ARDA) as a legal entity. This process caused delays in the activities related to the ICCs in cooperation with Zrda. • Arrange demonstration plots in Zrda target villages in Kvemo Kartli and Samtskhe-Javakheti where the ICC specialists will provide consultation to the Next Steps: farmers on production aspects. • Establish fruits and vegetable demonstration plots where the ICC specialists will provide consultation to the selected beneficiaries.

2002A: Private Sector Extension System Development Private Sector Extension Support through Development of Commercial Extension Packages with FSCs: • Under the private sector extension system development, Zrda arranged fruits and vegetable demonstration plots through private Farm Service Centers (FSCs). Zrda continues to promote consultation packages through the FSCs that considers delivery of the consultations directly to the farmers by visiting them at Results/Updates: least four times during the production session. Despite the fact that some FSCs are successfully implementing this activity, some of them still need to improve their organizational capacity. Based on this finding, Zrda hired a local expert who will help the FSC staff improve capacity in terms of operational management,including reporting requirements. The expert has already visited the FSCs and assesed their organizational challenges to identify where Zrda interventions can have the most impact. • Arranging demonstration plots under the FSCs’ subsidy model still remains Challenges: challenging for the FSCs. All procedures concerning the arrangement of demonstration plots requires high organizational capacity from FSCs. • Support the FSCs to establish village-based demonstration plots across Zrda target regions; Next Steps: • Continue promotion of crop-based consultation packages and demonstration plots in Zrda targeted communities; • Facilitate local and international experts from F2F to conduct intensive production trainings to the FSCs’ specialist.

ZRDA FY 2020 QUARTERLY REPORT 1 | 13 2003A: Cred Agro-Information Portal (Under 2003: Promote Market Information Systems and Electronic Match-Making Services) • During the reporting period the Bank Credo and the NGO Elva continued to administer an electronic matchmaking platform Kalo.ge, which merged with the Traktor.ge. • Since the launch of Kalo.ge, the platform reached up to 60,180 Results/Updates: users (among those users Kalo.ge page (Photo by Chemonics International Inc.) Kalo.ge has 42,077 paying subscribers) and subscribers countrywide, with 1,936 registered quarterly active users. Within the reporting period, the Kalo.ge shop facilitated sales of GEL 2,306 among 10 farmers using the online storefront, purchasing agriculture products including seeds, pesticides, fertilizers, saplings, equipment, etc. The Kalo.ge offers up to 906 products in partnership with 12 leading input suppliers. • Through the Farm Help module, the Kalo consultants responded to over 1,000 individual questions via social media, e-mail, and the call center. • Piloting of various types of in-field consultancy services. • Not all new subscribers make full use of member benefits yet. Challenges: • Growth of retail activities (Kalo Shop) is lower than expected. From internal research, the need for more active (in-field) engagement of farmers will be crucial to increase trust and visibility. • Zrda will monitor the portal on a quarterly basis and promote it among Zrda farmers. • More active engagement of new subscribers through better information Next Steps: provision (leaflets etc.) follow-up calls, SMS/push notifications. • Research into the commercial viability of crop marketing services. - Identification of the most promising value chains - Support to pilot group of 50-100 farmers

2003B: GFA Agro-Information and Electronic Match-Making Platform (Under 2003: Promote Market Information Systems and Electronic Match-Making Services) • During Q1 of FY20, 242 new users were registered through Android and Apple iOS to Agronavti, the mobile matchmaking platform developed by Zrda and GFA. • To publicize the platform and provide information about the Agronavti app to farmers, GFA actively continues to use various tools such as: agro digest, agro prices, agro library, land auction, world expo calendar, and agro legislation, among others, totaling over 48 posts. Results/Updates: • During the reporting period the Agronavti app was promoted in Rustavi and Mtskheta at the Regional Forum of E-commerce, which was attended by approximately 65 farmers. Agronavti platform Agro Game (Photo by GFA • For the first quarter via the Agronavti ) platform, the distribution company GFDC purchased and distributed GEL 890,000 of products, including GEL 152,192 worth of vegetables, berries, dairy products, and honey from 25 farmers from Zrda target municipalities.

ZRDA FY 2020 QUARTERLY REPORT 1 | 14 • GFA completed developing AgroGame for both iOS and Android System which were made available in the respective application stores. • For the construction of cold storage, the GFA still expects to obtain the Challenges: construction permit. • The GFA will regularly monitor portal status and publicize Agronavti among Zrda regions and farmers to link local farmers and increase sales. Next Steps: • The GFA will continue to cooperate with the Roads Department regarding the construction permits. • Develop the desktop version for the Agroanvti platform and translate the content into English.

2004C: Tour Guides Training and Certification

• Zrda worked with the Center for Training and Consultancy (CTC) to continue the development of vocational certification training programs for tour guides in Zrda target regions. The objective of the program is to create a pool of certified tour guides to boost Training for teachers (photo by: Chemonics tourism in Zrda priority regions. International Inc) • The CTC developed a Job and Results/Updates: Competence Framework for Tour Guides and a curriculum for the program based on numerous interviews and workshops carried out with tour operators, tour guides, sector associations and the following Vocational Institutions: Zugdidi State Teaching University, Kachreti “Aisi” (Akhmeta branch), Gori VET “Gantiadi”, and Akhaltsikhe VET “Opizari”. All four schools carried out information campaigns in regions to attract and select potential course participants and promote the newly developed course. • The CTC conducted working meetings with the Ministry of Education and Science of Georgia and the National Centre for Education Quality Enhancement for determining the exact steps for course authorization. • Within the reporting period, all four VETs concluded the first cycle of the course which resulted in the certification of 70 tour guides.

Challenges: • The activity was implemented with no challenges.

• Zrda intends to organize a closing event of the first round of trainings and create market linkage and networking opportunities among the course graduates and tour operators. Furthermore, this will be an opportunity for the vocational colleges to present their course results and demonstrate areas for continued Next Steps: collaboration and next steps with The Ministry of Education (MOE) and Georgia National Tourism Association (GNTA). • Zrda shall continue its support for teacher’s qualification enhancement by engaging local and international experts and review the opportunity to implement a second cycle of the course in cooperation with all four VET colleges.

ZRDA FY 2020 QUARTERLY REPORT 1 | 15 2005: Greenhouse Technology Promotion & Training

• Zrda continued the Greenhouse Subsidy Program, which subsidizes the establishment and/or renovation of existing greenhouses through a fixed rebate subsidy scheme. Zrda increased maximum contribution per square meter from GEL 10 up to GEL 15, in response to currency depreciation, and increased Greenhouse in Rukhi, Zugdidi Municipality. the Greenhouse eligible area to 2,000 (Photo by Chemonics International Inc.) square meters in order to promote increased commercialization. Zrda Results/Updates: facilitates access to finance through Credo, Crystal, and the IFAD financed program AMMAR to help farmers attract financial resources as needed. • 24 farmers have already completed the establishment of 23,781 square meters of greenhouses and started production of off season vegetables and herbs. One farmer has been approved during the reporting period to arrange a 250sq.m greenhouse. • During the reporting period, Zrda, in conjunction with the IDP Livelihood Agency, completed the installation of 13 greenhouses with a total production area of 3,120 square meters. 103 farmers were trained in herbs and vegetable production in greenhouses. • Zrda supported greenhouse beneficiaries under all programs produced cucumbers, herbs, lettuce, tomatoes, vegetable, and strawberries and generated an income of GEL 1,364,556. Challenges: • Due to climate conditions, the installation of two IDP Greenhouses in Akhaltsikhe and Tsalka Municipalities were postponed until early spring 2020. • Continue promotion of off-season vegetable production through the joint program with LEPL IDP Livelihood Agency. Next Steps: • Conduct intensive production trainings for farmers with the involvement of international and local experts. • Continue the Greenhouse Subsidy Program, which subsidizes the establishment and renovation of existing greenhouses through a fixed rebate subsidy scheme.

ZRDA SUB-PURPOSE 3: FACILITATE MARKET LINKAGES BETWEEN PRODUCERS & BUYERS Activities under Sub-Purpose 3 promote new and improved linkages between producers and buyers, ranging from local smallholders to large international companies. In terms of market linkages, a dedicated AMP will not be developed for these activities but rather, linkages will be opportunistically facilitated within other approved activities or directly with partner firms through relationship development activities. Sub-Purpose Level 3 indicators and progress made as of Q1, FY 2020 are provided in Table 4 below.

Table 4: Zrda Sub-Purpose-Level 3 Indicators SUB-PURPOSE LEVEL 3 INDICATORS

FY 2020 CUM. % OF FY 2020 LOP INDICATOR ACTUAL (% LOP TARGET TARGET OF TARGET) TARGET 3.1.1 Number of new market referrals established through USG assistance (C) 1,200 2 (0%) 7,500 6,330 (84%)

3.2.1 Number of market linkages established through 780 2 (0%) 2,920 2,279 (78%) USG assistance (C)

ZRDA FY 2020 QUARTERLY REPORT 1 | 16 Activity 3001D: Tourism Trade Fair Support for Regional Promotion Activities • Zrda together with the Georgian Tourism Administration (GNTA) and Georgian tour operators are planning to join efforts to promote Georgia’s adventure tourism potential at the Hall of Adventure and Responsible Tourism of ITB Berlin Trade Show in Germany in March 2020. • The GNTA has participated in ITB Results/Updates: Belin Trade Show in previous years, promoting cultural tourism in Georgia. This year, through Zrda support, the GNTA and 7 Georgian tour operators will expand their promotion activities in both cultural and adventure tourism. Being the world’s leading travel trade show, ITB Berlin serves as the foremost business platform for global touristic offers and is held annually. The show hosts more than 160,000 trade visitors from 180 countries of the 6 continents. It is the third show, after New York Times Travel Show and The Adventure Travel World Summit, to be selected and attended by Georgian tour operators through the support from Zrda. Challenges: • No major challenges were observed. • Zrda will continue coordination with the Adventure Travel Trade Association (ATTA) and search for partners and opportunities to host trips in Georgia. • Zrda identified 7 Georgian tour operators to participate in the ITB Berlin Trade Next Steps: Show to reach the relevant audience and promote the adventure potential of the country. Zrda will hold meetings with stakeholders to identify other partners to cost share and complement existing efforts under this activity.

3002A: Digital Transformation Capacity Building trainings for MSMEs (Second phase of Digital Marketing Activity) • During FY 2020, Zrda continues to support small and medium-size hotels to upgrade their digital marketing capacities. Zrda will partner former beneficiaries that have demonstrated a willingness to improve their use of digital tools as well as help new MSMEs (e.g. restaurants, cafes, adventure tourism players etc.) to better promote their services and extend expertise in digital skills. This will help businesses to take full advantage of innovative tools, stimulate sales, better position their brands and businesses, and become global payers with minimal Results/Updates: resources. • During this reporting period, the project selected a program service provider, the Creative Development Center (CDC), to offer training sessions/workshops to Zrda selected beneficiaries. The CDC will identify group leaders to prepare them to be mentors. Additionally, the TIC and the DMO representatives will be involved in the training process and deliver TOT to ensure further assistance for the MSMEs in target municipalities. The CDC will seek and engage relevant partners to beneficiaries to ensure external source of assistance for MSMEs.

Challenges: • No challenges were detected. • From Q2 2020, Zrda will closely cooperate with the CDC to agree on curricula and training material, approve training schedule/timeline, and ensure beneficiaries are categorized and divided into appropriate groups. Next Steps: • Zrda will target approximately 150 MSMEs in total. Trainings and workshops will be held in Gori, Ninotsminda, Akhaltsikhe, Akhmeta, Zugdidi, and Tsalenjikha and will organize advanced and basic level workshops for former beneficiaries and new touristic MSMEs.

ZRDA FY 2020 QUARTERLY REPORT 1 | 17 3002B: Tour Operator and Media Info Tours for Product Development Activity • To encourage cross border cooperation, leading towards the development of new market ready, high-value tourism products, Zrda together with the USAID “My Armenia” program organized a cross-border study tour for 18 Armenian and Georgian inbound tour operators. Within the tour, the participants visited sites promoting community-based and experiential tourism and explored the market potential and best practices to better understand the tourism sector of both Results/Updates: countries. The tour ended with a Business to Business (B2B) session designed to address cross border cooperation between tourism businesses in Armenia and Georgia (Trans- Caucasus) as well as consider how cooperation can be enhanced to better appeal Tour Operators (Photo by to changing consumer demand in tourism. The Chemonics International Inc) initiative will serve as a model of synergy and cooperation between the transcaucasian countries and provide ground for partnership opportunities, improved communication and increased productivity. As a result, 8 companies have successfully launched partnerships to work on consolidated tourism products.

Challenges: • No challenges were detected.

• A follow-up B2B Meeting is planned for Q2, FY 2020 in Armenia. The follow-up meeting wil seek to cement partnerships, address ongoing challenges regarding Next Steps: marketing of the new joint projects, and evaluate additional opportunities for future collaboration on cross-border product development initiatives. This meeting will be hosted by the USAID My Armenia Project.

3002D: Adventure Tourism Product/Routes Development in Zrda Target Regions • The International Federation of Equestrian Tourism (FITE) and French Equestrian Club “A Hue et A Dia” hosted 8 Georgian equestrian guides from Zrda target regions on a 5-day study tour in the province of Burgundy, France. The overall goal of the study tour was to familiarize Georgian equestrian guides with best practices in the discipline and help upgrade their services to meet international standards. During their stay, the tour participants explored the territory of the Equestrian Federation, covering 450 hectares that gathers more than 14,000 horses on major events in summer to perform in 40 indoor and Results/Updates: outdoor arenas. During the meeting with representatives of the federation, the parties discussed opportunities for launching certified courses for Georgian guides under the FITE guidance, which would enable Georgian guides to work across Europe. The study tour also included visits to equestrian clubs “A Hue et A Dia” and “Domaine de Courcelles,” serving as an example of how both big and small size clubs with 120 and 20 horses in each, operate in Europe. At the farms, the guides practiced equine care, feeding, arrangements of tack room, farrier’s work, and tour management. To master the skill of building diversified tours, the guides visited wine cellars and chateaus in Burgundy while conducting horse riding tours.

ZRDA FY 2020 QUARTERLY REPORT 1 | 18 3002D: Adventure Tourism Product/Routes Development in Zrda Target Regions • Zrda negotiated with www.airbnb.com to promote tourist services supported by Zrda across target regions under the newly opened section on the web portal - “Experiences hosted by locals”. To this end, Zrda collected the requisite information and images to develop portfolio for each service provider of the industry for further promotion of their businesses through the portal. Equestrian Study Visit (Photo by • Zrda supported building the adventure guides’ Chemonics International Inc) portfolio web site to reach the right audience and promote standard or tailor- made tours and services on global market. The bilingual website, with a regional catalogue and visual routes, social media profiles, promotional photo/video galleries and online chat solutions, brings together services of guides and instructors in hiking/trekking, rafting, canyoning, diving and equestrian tourism. With final details being updated, the website https://www.adventours.ge/en will be officially launched soon. The Georgian Adventure Tourism Development Association will continue the website further administration. Challenges: • During the study tour in France, the communication was slightly complicated as in most sites English language was not spoken. • Hold meeting with stakeholders to facilitate the establishment of partnership opportunities with FITE to develop and launch a two-year full-time degree program in Equestrian Tourism for Georgian horseback riding guides. • Continue the equestrian trainings for the guides from Tusheti. Next Steps: • Facilitate trainings for kayaking guides, one of the most in demand disciplines in adventure tourism. Zrda will engage international expert from IRF to lead the trainings and help local guides and instructors meet international standards. • Finalize the promotion of adventure experiences in Georgia on www.airbnb.com Zrda will host trainings for the account managers to ensure smooth and transparent operation of the bookings and services.

Activity 3002E: Agro/Eco/Adventure Tourism Product/Service Destination Grant Activity

• During the reporting period, Zrda conducted site visits to monitor and close adventure and community-based grants projects awarded in 2018. Zrda identified and provided financial support to 18 actors across targeted regions in the field of culinary (food and beverage master classes) and outdoor activities to encourage them to create or expand new tourism products and services and Results/Updates: increase revenues. The grants pool was valued at 360,000 GEL with maximum of 24,000 GEL per award. Most of the grant recipients are running their businesses successfully. For example, “Family winery Oda” hosted more than 2,000 visitors from April through October 2019 and generated GEL 150,000 in sales. Nunnery Upper Vardzia reported to host over 1,000 visitors with GEL 300,000 of revenues for the tourist season 2019.

Challenges: • No challenges identified

Next Steps: • Zrda will monitor the grant projects awarded in 2019 and will support broader public outreach to raise awareness and foster the increase of sales.

ZRDA FY 2020 QUARTERLY REPORT 1 | 19 3002H: Kolkhuri Tabla Cookbook Development – completed.

• Zrda printed the “Kolkhuri Tabla” cookbook and transferred to the Samegrelo-Zemo Svaneti DMOs ownership in order to assist the organization in distribution and sales channel management. “Kolkhuri Tabla” is the second book in a series of books that will help to revive the centuries-old traditions of Georgian cuisine from three particular regions. The book includes 50 recipes of unique and historic dishes of Megrelian, Abkhazian, and Svanetian cuisine. Results/Updates: • “Kolkhuri Tabla” was presented to the public at the the Khachapuri Festival in Rukhi in October. The book was created by Zrda together with the Georgian Culinary Academy Photos of the “Kolkhuri Tabla” and Zrda beneficiaries from Samegrelo. The cookbook. (Photo by Chemonics International Inc.) income generated through the book sales will go to the regional Samegrelo Zemo-Svaneti DMO. This is yet another initiative to support the promotion of Georgian traditional gastronomy that complements to gastro-tourism development across Georgia.

Challenges: • Activity on track/no major challenges.

Next Steps: • Support Samegrelo Zemo-Zvaneti DMO to promote the book and develop distribution and sales channel management.

3002J: Supporting sustainable development of tourism in Tusheti

• The Zrda-supported 5-day workshop held in Babaneuri village, Akhmeta municipality involving local government and NGO representatives, and members of central government institutions, tourism businesses, and the Tusheti community Results/Updates: councils. The workshop, led by Zrda international experts, aimed at establishing a management plan for Tusheti’s community Workshop in Babaneuri Village (Photo by Chemonics International Inc.) tourism development in 2020 through engagement of all parties. Zrda Actively collaborates with the Tusheti Protected Landscape Administration (TPLA). The goal of the partnership is to support institutional empowerment of the administration, increase the community’s involvement and the effectiveness of the projects to be implemented in Tusheti.

Challenges: • Activity on track/no major challenges. • Work with relevant stakeholders and support capacity building trainings, workshops and other activities in accordance with the recommendations. • Work with the TPLA and local stakeholders in designing the management plan of the cold room facility. Next Steps: • Carry out procurement procedures for the solar panels and ensure its delivery to Tusheti at the beginning of the next tourism season. • Once the solar panels and cold room facility is installed, work with the vendor in training relevant stakeholders on how to use the facility properly. • To contribute to eco-friendly tourism, work with the local community to identify a camping area in Tusheti.

ZRDA FY 2020 QUARTERLY REPORT 1 | 20 3002K: Agro-tourism Development - NEW

• Due to high demand from international tourists, Zrda started to support agro- tourism development. Agro-tourism is a new sub-sector opportunity for development in Georgia, which is not well understood by either tourism industry actors or policy makers (GNTA). This activity will provide Zrda with the opportunity to pilot a new type of agro- tourism product as well as marketing support to attract visitors to the Agro-Stop in Samegrelo and Akhmeta experiences. (photos by GFA)

• Specifically, Zrda will support partner organization Georgian Farmers’ Association (GFA) to implement the agro-tourism concept “Agro Stop”. The goal of this initiative is to promote rural tourism and agritourism sites in two selected regions of Georgia: Samegrelo- Zemo Svaneti and Samtskhe-Javakheti. Zrda will support the production of three-minute promotional videos targeting tourists interested in low-budget travel via “auto-stop/hitch-hiking” with a focus on a specific agro-touristic site, where tourists can experience agricultural Results/Updates: activities and a meal with a local family. Once created, the promotional videos will be promoted on Instagram, YouTube, and TripAdvisor in Georgian and English languages. Agro-Stop in Akhmeta (photos • GFA in partnership with Zrda will select by GFA) approximately 10 agro-touristic sites in the Zrda target regions to participate in the “Agro Stop” project. Since most potential agro-touristic sites are not yet properly developed, Zrda will also issue small grants to such facilities to build their capacity so that they are able to offer better services and meet minimum quality requirements. • GFA will work closely with the DMOs in Samegrelo-Zemo Svaneti and Samtskhe-Javakheti to also develop agro-tourism routes including the site to be developed. The routes will be marketed via the DMO websites and will be included on information and familiarization tours for tour operators and media.

https://www.facebook.com/აგრო-სტოპი-AGRO-STOP-320520318874267/?tn-str=k*F

Challenges: • Activity on track/no major challenges.

• Collect list of Zrda beneficiaries that can be engaged in the Agro-Tourism business. Next Steps: • Conduct visits to the regions and start shooting the video footage material • Complete the videos and start promotional activites on social and other media sources.

ZRDA FY 2020 QUARTERLY REPORT 1 | 21 3004: Handicrafts and Artisan Sales and Marketing Support Activity

• During QI 2020, the activity “Enhance Artisans/Crafts Makers’ Business Skills” implementation in Shida Kartli and Kvemo Kartli continued and three milestones were completed: a) preparation of survey including preliminary meetings, interviews, database compilation, data analysis and writing the study (Shida and Kvemo Kartli); b) Training in business skills development and provision of Product Development Workshop; c) Product Development and organization of Christmas Fair (for all Zrda beneficiaries). • A one-month Christmas Fair was held at Merani Shopping Mall in Tbilisi from December to mid-January. The Georgian Handicrafts Association (GHCA) presented the Christmas crafts of around 100 Georgian artisans, including beneficiaries (48 members) from all Zrda target regions. A special focus was made on Shida Kartli and Kvemo Kartli regions as craftmakers from these two regions participated in the Fair for the first time. The fair has been promoted through GHCA social media platforms and other media sources. The total sales from the fair reached GEL 30,000. Results/Updates: • The pilot project "Artisan as Destination" was implemented in Akhmeta Municipality (4 grantees) and Samtskhe Javakheti Region(1 grantee). For all 5 grantees, Zrda provided STTA to help arrange workshops and prepare marketing materials, help artisans update their workshops, and figure out how the crafts’ master classes and demonstration processes could be transformed into a tourist package. The STTA will complete the planned activities in spring 2020. • During the reporting period the pilot program "Artisan as Destination" was announced in Samegrelo. 8 application forms were submitted and site visits were performed in Zugdidi and Christmas Fair (photos by Tsalenjikha Municipalities. The selection process Chemonics International Inc.) will be completed in January. Challenges: • Activity is on track, no material challenges • The GHCA started replication of the program in Shida Kartli and Kvemo Kartli, Next Steps: including studies, individual consultations, design of packages and information tags, distribution and marketing of products.

Activity 3005: Tourism Promotional Materials Support Zrda Target Regions

• As a complement to the Designation Management Organizations (DMO) establishment activity and in line with Zrda’s objective to promote Samtskhe- Javakheti and Samegrelo-Zemo Svaneti destinations at national and foreign tourist markets, Zrda supported the development of regional promotional packages for both regions. •The activity was designed to develop a common template for regional promotion that included a well-designed and visually appealing website essential for modern destination management and would be sustained by the DMOs over the long- term. The template included an online regional catalogue, social media profiles, a Results/Updates: promotional video and photo galleries for each region, and e-templates for print media (brochures, catalogues, posters, banners, leaflets, business cards). All materials and online properties were transferred to regional DMO ownership in Samtskhe-Javakheti and Samegrelo-Zemo Svaneti. • Zrda, with support from its subcontractor Gepra, supported the development of well-designed and visually appealing websites and social media channels for the Samegrelo-Zemo Svaneti and Samtskhe-Javakheti regions coupled with training for the local DMO staff. Thus, Gepra fulfilled all its obligations under the task - Development of the Promotional Packages for Samtskhe-Javakheti and Samegrelo-Zemo Svaneti Destination Management Organizations (DMOs) and

ZRDA FY 2020 QUARTERLY REPORT 1 | 22 Activity 3005: Tourism Promotional Materials Support Zrda Target Regions submitted all five deliverables to Zrda and regional DMOs including: Visual Identity Package and Tagline for Samtskhe-Javakheti and Samegrelo DMOs (logo & brand identity kit); Tourism Promotion Videos for Samtskhe-Javakheti and Samegrelo-Zemo Svaneti; Promotional Photo Galleries for Samtskhe-Javakheti and Samegrelo-Zemo Svaneti; Business Templates for Small Tourism Service Providers; and Websites for Regional Destination Management Organization. Zrda’s Communications team actively worked with the Samegrelo-Zemo Svaneti DMO to utilize the tools that Zrda provided to help them build their marketing capacity and promote the region at the national and international level. Zrda Communications team will provide similar support to the Samtskhe-Javakheti DMO staff once fully hired. • In Q1 of FY2020, Zrda continued to supervise the progress of the DMO activities in both regions with an option to prepare a similar package of materials for a third area. Challenges: • Activity is on track, no material challenges. • In Q2 of FY2020, Zrda will continue to supervise the progress of the DMO Next Steps: activities in both regions and provide an option to prepare a similar package of materials for a third area (i.e. Pankisi Valley in Akhmeta Municipality and Mountainous Tusheti).

3006: Community-based Post-Harvest Handling, Packaging, Storage, and Marketing Activity • During the reporting period, Zrda released a new APS to stimulate the establishment of the replication model of community-based storage facilities. The subsidies were changed and Zrda’s maximum contribution per cubic meter of cold storage increased from GEL 100 to GEL 130 for stand alone units in order to provide more support and counteract effects of the depreciating GEL since that last APS was launched. The subsidy increased from GEL 90 to GEL 100 for farmers that want to arrange cold storage inside of the building. • During the reporting period, six cold storage facilities were finalized with a volume of 822 m3. Now farmers will be able to store up to around 274 tons of fruits and vegetables for a longer period of time and sell the product when market prices are high. Under the new APS, 7 applicants were selected and these beneficiaries will finalize the construction of their cold storages by Q2 this year. • Zrda will continue to promote small scale fruit and vegetable drying facilities. Zrda assumes that this activity will develop and promote replicable models for small sized drying operations for fruits and vegetable in Zrda targeted communities. In Results/Updates: FY 2019, Zrda selected 12 beneficiaries to arrange drying facilities with loading capacities ranging from 250kg to 500 kg. Farmers arrange their production area in accordance with food safety standards upon which Zrda will provide drying equipment with relevant training and consultation for Cold storage facility in Kveshi village, dehydration process. Gori Municipality (Photo by Chemonics • Chemonics International expert International Inc.) from Purdue University provided consultation and trainings to the Zrda-supported beneficiaries in Shida Kartli, Samegrelo and Samtskhe-Javakheti regions in the dehydration technology of fruits and vegetables. The trainings covered important aspects of the dehydration technologies like: processing facility layout and unit operations, dried fruit and vegetable production, pre-processing methods for drying fruits and vegetables, moisture content and determination of dryness of dehydrated fruit and vegetables, industrial dryers for fruit and vegetables dehydration, product packaging and labeling guide and facility sanitation, food safety, and workers safety. ZRDA FY 2020 QUARTERLY REPORT 1 | 23 3006: Community-based Post-Harvest Handling, Packaging, Storage, and Marketing Activity Challenges: • One beneficiary from Shida Kartli and two beneficiaries from Kvemo Kartli were not able to make their contribution in the arrangement of drying facilities. • Zrda will finalize the arrangement of drying facilities and provide technical support to the selected beneficiaries; Next Steps: • Zrda is planning to support two small packing house arrangement for berries in Zrda targeted regions. The RFA will be announced in Q2 2020.

3007: Support Modernization of Major Heritage Monument Complexes

• Zrda continued its cooperation with the National Agency for Cultural Heritage Preservation of Georgia to support Vardzia-Khertvisi-Oloda cultural landscape re-nomination for the UNESCO World Heritage List through engagement of international and local cultural heritage experts. During the reporting period, Zrda international expert visited Georgia to provide advisory Meeting with Zrda international expert services and recommendations for improving (Photo by Chemonics International Inc.) management of Vardzia-Khertvisi-Oloda cultural landscape and possible re-nomination for the UNESCO World Heritage List and presented the final report and roadmap for integrated action. Results/Updates: The international expert, together with Local Cultural Heritage Experts assists the National Agency for Cultural Heritage Preservation of Georgia to design a General Development and Management Plan for Vardzia-Khertvisi-Oloda cultural heritage landscape.

• In the framework of the cooperation in Uplistsikhe and Vardzia Historical-Architectural Museum-Reserve, Zrda-supported First Aid and CPR trainings were conducted for the museum staff, outfit/uniforms were handed over, and a fully-equipped first aid facility was finalized. Handover of equipment (Photo • From now on Uplistsikhe and Vardzia Museum- by Chemonics International Inc.) Reserves staff is ready to provide emergency immediate care when necessary.

Challenges: • The activity was implemented with no material challenges.

• Under the MOU, Zrda will equip Vardzia, Uplistsikhe and Borjomi Museums with barcode readers and required software for ticket management system. Next Steps: • Zrda and the Agency will conduct an evaluation meeting in January 2020 as well as discuss areas for future cooperation.

ZRDA FY 2020 QUARTERLY REPORT 1 | 24 3008: Grants program to support museums in Zrda target municipalities – New • Zrda initiated a new activity aimed at building the capacity of museums located in target regions to provide expanded services to visitors to enhance the aesthetics of the museum and improve the overall visitor experience. Recommendations will be made for improvements in display and interpretation services, inclusion of special zones, and activities targeting children and family. Information Session (Photo by • Zrda conducted consultation meetings with Chemonics International Inc.) Results/Updates: the Ministry of Culture of Georgia to determine needs of the museums in Zrda-target regions, as well as the state vision of needed interventions. • In this reporting period, Zrda designed a grants program for the Museums and released the RFA. • Zrda conducted 5 information sessions for up to 30 interested applicants, engaging regional offices, local and regional governments, the Ministry of Culture of Georgia, the Agency of Heritage Protection of Georgia and the National Museum of Georgia. • Zrda also released the RFA to identify a service provider organization to provide trainings for selected museums’ staff members to build their management capacity. Challenges: • The activity was implemented with no challenges.

Next Steps: • Zrda will evaluate applications, identify the best applicants and will proceed with the next steps of the grants program implementation.

ZRDA SUB-PURPOSE 4: PROMOTE LOCAL ECONOMIC DEVELOPMENT BY ESTABLISHING NETWORKS Activities under Sub-Purpose 4 promote improvements of existing networks and the establishment of new networks in the public and private sectors. Sub-purpose level 4 indicators and progress made as of Q1, FY 2020 are provided in Table 5 below.

Table 5: Zrda Sub-Purpose-Level 4 Indicators

SUB-PURPOSE LEVEL 4 INDICATORS

FY 2020 CUM. % FY 2020 LOP INDICATOR ACTUAL (% OF LOP TARGET TARGET OF TARGET) TARGET

4.1.1 Number of local/regional markets or market infrastructure (e.g. storage/cold storage, packing/sorting 10 7 (70%) 60 56 (93%) facilities) facilitated with USG assistance (S) 4.2.1 Percentage change in perception of inclusiveness in decision-making processes N/A N/A 60% 73%

4001: Promote Public Economic/Market & Disaster Mitigation Infrastructure Advocacy Planning with Communities

• Zrda seeks to continue supporting community economic infrastructure and disaster mitigation activities by developing infrastructure design packages for Results/Updates: selected municipal priority projects. As such, Zrda continued cooperation with partner municipalities and signed MOUs and relevant addendums with Adigeni, Khashuri, Ninotsminda, Tsalenjikha and Zugdidi municipalities on developing

ZRDA FY 2020 QUARTERLY REPORT 1 | 25 4001: Promote Public Economic/Market & Disaster Mitigation Infrastructure Advocacy Planning with Communities designs for villages of Varkhani, Akhalubani, city of Ninotsminda, Pakhulani, Lia, Khurcha and Rukhi. • Zrda contractor LTD Acharkapmsheni developed and provided a full package of design documents that were assessed by a Zrda engineer and approved to the partner Mayor’s office for: - Rehabilitation of potable water supply system in village Dirbi of Kareli municipality; - Installation of riverbank reinforcement gabions in villages of Lia and Pakhulani of Tsalenjikha municipality; - Installation of drainage channel in village of Khurcha of Zugdidi municipality. • During the reporting period, Zrda partner municipalities handed over design documents and allocated relevant funds in the local budget to commence rehabilitation for the following projects: - Rehabilitation of three sections of rural road in village Matani of Akhmeta municipality completed; - Rehabilitation of two sections of rural road in village Zemo Alvani of Akhmeta municipality is ongoing;

Matani Road Rehabilitation, Akhmeta Municipality Before&After (Photo by Chemonics International Inc)

• Zrda still continues cooperation with OSCE to facilitate transmission of OSCE funds in the amount of EUR 93,458 to Gori municipality’s local budget so that the local government can implement the rehabilitation of village Tsitsagiantkatri’s potable water supply. The rehabilitation design was developed by Zrda’s subcontractor and approved by the regional expertise of Shida-Kartli region. During the next reporting period, OSCE representatives from Vienna will visit Georgia and discuss formal documents and funding, as well as visit the rehabilitated kindergarten in village Kveshi. • Based on the MOU signed with MRDI to implement 6 infrastructure projects for Kareli, Kakhuri, Zugdidi and Tsalenjikha municipalities, Zrda developed and delivered project designs for three projects in Zugdidi and Tsalenjikha municipalities, and will complete and deliver two projects for Khashuri and Zugdidi municipalities until the end of January 2020. Unfortunately, the development of the design for projects selected through cooperation with MRDI in Kareli municipality were rejected due to negative sample results of

ZRDA FY 2020 QUARTERLY REPORT 1 | 26 4001: Promote Public Economic/Market & Disaster Mitigation Infrastructure Advocacy Planning with Communities water testing that could not meet regulation standards. Zrda will cooperate with MRDI to define a substitute infrastructure project. The implementation funds for the selected 5 projects (water supply, drainage, riverbank reinforcement) total up to GEL 1.4 million.

• State regulations require all the design documents over GEL 50,000 to be reviewed and approved by a selected regional supervision company, and thus delayed some the implementation process of certain infrastructure projects. Challenges: • The rehabilitation of village Ptsa potable water supply system failed due to result of water chemical and microbiological testing, which do not meet the regulation standards. As such, necessary environmental mitigation activities will need to be applied. • LTD Acharkampsheni will complete a full design package on water supply projects for Zugdidi municipality in Rukhi village and for Khashuri municipality in Akhalubani village. They will also provide delivery services to the municipality via MRDI. • Zrda will cooperate with partner municipalities to sign MOUs with Akhalkalaki, Tsalka, and Dusheti for further issuing of task orders to a Next Steps: design company. • Continue cooperation with OSCE and finalize formal documentation on rehabilitation of Tsitsagiantkari water supply project between Gori municipality and OSCE. • Continue cooperation with OSCE/MDF/IFAD/MRDI to seek funding for the developed project designs.

4004A: Beekeeping Cooperative Development (under 4004: Cooperative Development) – completed.

• Zrda project supported six beekeeping cooperatives by officially registering their production brand in the National Intellectual Center of Georgia SAKPATENTI. This will help Zrda-supported cooperatives to promote their production in the Results/Updates: local and international markets. • To date, Zrda-supported 24 beekeeping beneficiaries have produced 56,3 tons of honey and sold local market generating income of 441,596 GEL.

Challenges: • Activity is on track/no challenges. • Zrda anticipates to provide support to its beneficiary beekeeping Next Steps: cooperatives through trainings and consultations from local and international experts.

ZRDA FY 2020 QUARTERLY REPORT 1 | 27 4005: Samtskhe-Javakheti Regional Tourism Development Activity

The Samtskhe-Javakheti Destination Management Organization (DMO) Director was hired and as of now, the DMO is fully staffed and ready for active engagement. • Zrda invited public sector tourism stakeholders as well as the DMO member from Samtskhe-Javakheti Region to take part in a study tour to Czech Republic and Slovakia to get first-hand information on successful destination management approaches in Europe, community-led tourism and how tourism work affects the country’s rural economy, and to better understand the impacts and challenges faced by regional and local level DMOs. To replicate best international practices, the Georgian delegation met with Slovak and Czech officials involved in the tourism industry, as well as received useful information regarding new approaches in the tourism Study Tour in Czech Republic & Slovakia development industry in order to set (photo by Chemonics International Inc) priorities to better position and market Georgia’s regions in the future. The team visited numerous touristic sites as Results/Updates: well, such as UNESCO heritage villages, museums, family breweries, agro- touristic farms, and family wineries to see the tourism industry in practice. • Samegrelo-Zemo Svaneti, Imereti and Kakheti DMO managers, as well as Kvemo Kartli local government members, participated in the study Meeting at Kvemo Kartli Governors office tour together with Samtskhe-Javakheti (photo by Chemonics International Inc)

representatives. • The Samtskhe-Javakheti DMO working group, together with Zrda, continued to produce monthly regional tourism newsletters and monthly calendars of events. • On December 4, Kvemo Kartli Governor’s office and all respective Municipality Mayors hosted Georgian National Tourism Administration (GNTA) and Zrda representatives to discuss the idea and potential of establishing Kvemo Kartli DMO. Rusudan Mamatsashvili, the deputy chairwoman of GNTA made a presentation to the aucience about the DMO role in the region’s tourism development and types of DMO models. The regional government representatives expressed a will to start working on DMO establishement in Kvemo Kartli.

Challenges: • Activity on track/no major challenges. • Hire local STTA, who will work with the DMO team and develop a DMO annual Action Plan. • Based on the capacity needs assessment, provide appropriate technical assistance for both the Samtskhe-Javakheti and Samegrelo-Zemo Svaneti DMO staff, in areas such as presentation skills, fundraising, proposal writing, and trade Next Steps: fair participation. • Together with the DMO team, continued production of the monthly regional tourism newsletters and monthly calendars of events. • Together with the GNTA, continue discussions and identify next steps for potential establishement of the Kvemo Kartli DMO.

ZRDA FY 2020 QUARTERLY REPORT 1 | 28 4007: Capacity Development of Regional Tourism Information Centers

• Zrda and GNTA representatives visited Marneuli from the Kvemo Kartli region where the local municipality and regional governor members discussed the soon- to-be-opened Tourism Information Center (TIC) in the city center. Results/Updates: • GNTA supported the Marneuli TIC construction and design, while Zrda elaborated the list of the equipment and furniture needed to operate the TIC in Tourism information Center Design line with international standards. (Photo by Chemonics International Inc) Additionally, Zrda intends to support Marneuli TIC as well as continue to organize trainings and study tours for TIC’s staff to further capacity building and create a networking platform.

Challenges: • The activity was implemented with no challenges. • Zrda intends to support Marneuli TIC as Zrda and GNTA plan to organize Next Steps: trainings and study tours for TIC’s employees around Georgia to continue capacity building and networking opportunities.

4009: Samegrelo Regional DMO Support Activity

• Zrda, through a local STTA, finalised the development of the Samegrelo-Zemo Svaneti Tourism Strategy and Action Plan. In the following reporting period, the Samegrelo DMO representatives will present the Strategy and Action Plan to GNTA for approval. Once the review the Strategy is finalized, the DMO will start to implement the Action Plan. • Zrda completed the “Kolkhuri Tabla” cookbook and transferred to the DMOs ownership in order to assist the organization in distribution and sales channel management. Zrda invited private sector tourism stakeholders from Samegrelo-Zemo Svaneti as well as the DMO members to take part in a study tour Results/Updates: to Czech Republic and Slovakia to get first- hand information on DMOs and successful Khachapuri Festival in Rukhi (Photo by destination management approaches in Chemonics International Inc) Europe, community-led tourism and tourism work to affect the country’s rural economy, impacts and challenges. • In an attempt to address needs unmet in the marketplace and respond to unique tourism product development in the regions, Zrda and the Samegrelo-Zemo Svaneti DMO, in partnership with the local government and GNTA, Rukhi Trade Center, and Gastronomic Association of Georgia, have introduced a new tourism product. The new product is an annual Khachapuri Festival designed to promote Georgia and one of its most popular culinary products on a larger scale. The festival was held on October 19th in the ABL Rukhi village of Samegrelo and hosted around 3,000 guests with the aim to provide an interesting gastronomic festival featuring amateur and professional cooks from across Georgia, food and beverage companies, tour operators and service industry players, and to celebrate the culture and heritage of the Georgian people. The Festival featured workshops of nationally well-known chefs and ZRDA FY 2020 QUARTERLY REPORT 1 | 29 included competitions in different types of khachapuri-making by region, to identify competition winners in categories like People’s Choice, Best Khachapuri, Most Innovative Khachapuri, and Most Original Khachapuri. • Another product development initiative of the Samegrelo-Zemo Svaneti DMO was a presentation of the new culinary book, Kolkhuri Tabla, created with support from Zrda and the Georgian Culinary Academy. The income generated from book sales will go directly to the regional DMO. This is yet another initiative towards promotion of Georgian traditional gastronomy to complement gastro-tourism development across Georgia. • To enhance the role of the supervisory and advisory boards integrated in the DMO and strengthen their internal and external Kolkhuri Tabla (Photo by coordination, the Samegrelo-Zemo Svaneti DMO Chemonics International Inc) conducted a meeting of its supervisory and advisory board members. The DMO reported on its current and planned activities and shared information on its partner touroperators and tourism sector service providers in the region.

Challenges: • Activity on track/no major challenges. • The Samegrelo-Zemo Svaneti DMO is planning to hold a presentation of the Next Steps: Strategy and Action Plan for GNTA as well as other interested stakeholders in the tourism sector.

4011: Establishment and Capacity Building of Municipal Disaster Risk Reduction (DRR) Working Groups • During the reporting period, the emergency plan design process was finalized in Gori, Tsalenjikha, Kareli, Akhaltsikhe, Zugdidi Municipalities. RDFG DRR Center has already received official letters from partner municipalities that the plan is acceptable and the they are proceeding to the next legal steps to obtain approval of the plan by the municipal council. • The final drafts of Emergency Plans were submitted to Khashuri and Marneuli Municipalities and the DRR Team is expecting a response soon. Up until now, RDFG has received an email from Khashuri Municipality confirming it is generally in agreement with the draft but plans to have more internal revision sessions before initiating the final approval process. Developed plans are attached with the GIS maps of relevant public infrastructure systems (electricity, water, gas, railway). • During the reporting period, the DRR Team commenced the emergency plan Results/Updates: design process in Akhalkaki, Ninotsminda, Borjomi and Kaspi Municipalities, in close collaboration with Emergency Management Service (EMS) local units. • RDFG is permanently updating and coordinating its activities with EMS Units Management at the central level. Two technical coordination meetings were conducted at the EMS HQ to discuss project implementation and RDFG’s other DRR/DM initiatives. RDFG also organized an introductory meeting with the newly appointed head of EMS international relations The meeting with potential DRR department where they presented DRR Group Meeting (photo by RDFG) Center’s activities and discussed the organization of a third Donor Coordination Conference (for the first quarter of

ZRDA FY 2020 QUARTERLY REPORT 1 | 30 4011: Establishment and Capacity Building of Municipal Disaster Risk Reduction (DRR) Working Groups 2020), at the previous request of EMS. RDFG will also begin planning to prepare a Simulation Exercise (SIMEX) in Gori Municipality this spring.

• The primary challenge remains difficulties in working with a variety of municipal stakeholders as well as unstructured information at the local level. Challenges: • RDFG DRR Center is assisting EMS in resolving legal deficiencies caused by recent legislative changes related to decision making authority (the municipal council still needs authorization from central government on certain decisions), which has led to delays in approving respective plans at the municipal level.

• RDFG will continue working with municipal government representatives to finalize emergency management plans in Marneuli, Ninotsminda, Akhalkalaki, Borjomi and Kaspi Municipalities. At the begging of Q1 of 2020, the activities will be focused on Marneuli and then Ninotsminda and Akhalkalaki Municipalities. • In the newly approved Zrda Work Plan, RDFG will implement an emergency Next Steps: response simulation in the city of Gori. During the period of January 2020, DRR Center Team is planning to agree with EMS on final dates of the simulation in Gori Municipality and forma the joint working group to start preparation. The simulation will likely take place in the spring of 2020. • The spring Donor Coordination Conference will likely be held in the first quarter of 2020. The final dates will be agreed with EMS and other line ministries in January 2020.

4012: CSR Shared Value Challenge Fund

• Zrda continues to seek partnership opportunities with private sector organizations, especially those located in or adjacent to ABL communities that currently or wish to implement CSR activities to positively impact social and economic conditions of the community members. Zrda plans to explore establishing a partnership with the CSR Club that is comprised of 90 MSME members that currently operate across Georgia. The CSR and Shared Value Challenge Fund will be an opportunity to engage private sector companies to Results/Updates: respond to social and economic challenges in ABL communities, encourage public-private dialogue, help companies create shared value opportunities, and support the private sector to develop a stronger and more sustainable CSR culture that demonstrates how effective private sector engagement in economic development can support communities while also positively impacting a company’s bottom line. The activity aims to implement five to ten joint projects in the Zrda target locations with the contribution of up to $100,000 USD overall. Challenges: • The activity started with no material challenges.

Next Steps: • Partner NGO will be selected in Q2. • The selected NGO will elaborate concept and process of the activity.

4013: Support Start-Up and Entrepreneurship Ecosystems in Zrda Target Regions • Zrda team conducted working meetings with Start-Up Grind to discuss opportunities of expanding cooperation and facilitate the development of start-up ecosystems in Zrda target regions. Results/Updates: • Building upon Start-Up Grind’s well-established expertise in developing and fostering entrepreneurship networks, Zrda will help Start-Up Grind to identify network partners in Zrda target regions, specifically Zugdidi, Marneuli, Gori and Akhaltsikhe to help expand the Tbilisi network to be inclusive of regions. Challenges: • The activity started with no material challenges.

ZRDA FY 2020 QUARTERLY REPORT 1 | 31 4013: Support Start-Up and Entrepreneurship Ecosystems in Zrda Target Regions • Plan and organize a series of “Start-up/Entrepreneurship Weeks” in Zrda target Next Steps: regions. • Design a grant program together with Start-Up Grind.

CROSS-CUTTING MANAGEMENT OBJECTIVES Crosscutting activities focus communications, donor collaboration, and capitalize on the entrepreneurial, educational, and creative potential of youth and both sexes in differentiated ways. Zrda through baseline, midterm and final assessments will disaggregate data by sex, that will be later used for designing the activities accordingly.

EURO-ATLANTIC INTEGRATION Zrda continues to promote Euro-Atlantic integration across all sub-purposes. The main area of focus was DCFTA and applicable international certifications and standards that are required of producers and processors that seek to target export to the European Union. For example, Zrda has approved the development of an information campaign as part of its activity promoting increased adoption of standards and certifications (Activity 1003, Food Safety & Certification Promotion). As a steppingstone towards European standards, Zrda implementing partner GFA and the MoA are continue working to design a Georgia GAP system that will provide a platform to promote food safety and quality standards at an intermediate level for the domestic market and will begin the process of standards upgrading that aspire to meet EU compliance requirements.

INTEGRATING GENDER AND YOUTH: Specific activities were dedicated to women and youth and implemented during the Q1 FY 2020. Gender and youth integration have been a cross-cutting focus across all Zrda activities, and additional stand-alone activities will be designed as opportunities arise in the future.

9904C: Strengthening Georgia’s Rural Youth through Entrepreneurship

• During Q1 2020, Phase II of the Regional Youth Entrepreneurship Project (Project) was successfully completed. Over 150 young people registered for the local trainings, but only 92 attended the trainings held in the nine target municipalities: Zugdidi, Kaspi, Gori, Borjomi, Adigeni, Aspindza, Ninotsminda, Marneuli and Bolnisi. • Following the 2-day local trainings, Results/Updates: participants were invited to participate in the “Contest of Ideas”. A total of 43 project authors eventually participated and submitted their entrepreneurship project ideas, of which 15 project authors (a total of 17 young people) were identified and invited to the bootcamp, held at Kvareli Training Center of the Ministry of Justice of Youth Program Presentation (Photo by Georgia. Chemonics International Inc) • During the bootcamp, participants underwent intensive entrepreneurship trainings, particularly focused on business plan development. Trainings also included meetings with representatives of state ZRDA FY 2020 QUARTERLY REPORT 1 | 32 9904C: Strengthening Georgia’s Rural Youth through Entrepreneurship

agencies and private sector financing/supporting start-ups and youth projects in Georgia, as well as meetings with young entrepreneur peers and inspirational speakers. • Following the bootcamp, participants were invited to submit their business projects and participate in the “Grant Contest”, which included pitching their ideas and business plans before the Grant Selection Committee. Before pitching day, participants were offered financial consulting services to properly develop the relevant financial statements. Out of 15 trained projects, 14 participants submitted their business projects. • In December, the Committee met to evaluate the submitted projects and out of 14 projects, 5 winners were awarded with the grants. Winners are from Zugdidi, Kaspi, Bolnisi and Gori municipalities. • Phase II was accompanied by an active information campaign where the project met with local youth in universities in Gori, Akhaltsikhe and Zugdidi, TV and radio interviews, including, but not limited to, Marneuli TV, TOK TV, Dia TV, Radio “Nor”, Radio “Atinati”, and Radio Marneuli.. • There is a lack of experience among trainers in the field of entrepreneurship, especially in the regions. • The most significant challenge observed so far was low attendance of the registered youth at the trainings. Challenges: • There is a growing interest among rural youth to be engaged in entrepreneurship and other trainings/activities, which will help them start new businesses or improve their competitiveness on the job market. However, either they lack information on benefits of entrepreneurship and trainings, do not see how they can or will benefit from these trainings, and/or have mistrust that selected projects will even be financed at all based on past experience. • Phase III of the project is scheduled to start in Spring 2020. All project partners remain interested to be engaged. Next Steps: • Follow-up with the selected grantees on implementation of their activities and conduct monitoring activities.

9907C: Youth Volunteer Internships for IDP Support Outreach Activity (under 9907: Internships)

• In previous reporting periods, under the joint project of Zrda and the Livelihood Support Agency (LSA) under the Ministry of Internally Displaced Persons (IDPs), Results/Updates: Labor, Health and Social Assistance (MoH), over 15,000 IDPs (4,667 IDP families) living in 45 settlements from two of the Zrda target regions (Samegrelo-Zemo Svaneti and Shida Kartli) benefited from information campaigns related to social services offered to them by the Georgian Government. • In FY18, due to the merger of two ministries into the single Ministry of IDPs, Labor, Health, and Social Assistance, the LSA has not been able to conduct its activities as originally scheduled. Challenges: • Following the above merger, there are now talks of the LSA merging into another state agency under the MoH. The risk remains that the LSA either may not implement its activities at all or do so later in the year. There is currently no timeline for the activities. • During the previous reporting period, a representative from the LSA contacted Next Steps: Zrda to express interest in applying for further funding to continue activities. Zrda expects to renew this activity for next reporting period.

ZRDA FY 2020 QUARTERLY REPORT 1 | 33 PARTNERSHIP & COORDINATION UPDATES

Zrda has prioritized donor and GoG coordination throughout all proposed activities. Zrda sees collaboration as key to reducing duplication of efforts between partners as well as generating leverage that will increase and expand Zrda’s intended development impact as much as possible. Zrda leverages partnerships with stakeholders across government, civil society, and other donor projects to achieve transformative and sustainable impact in target communities. Zrda has designed its strategic approach to seek partnership and leverage both financial and non-financial resources as the best option to achieve intended project outcomes, with Zrda financial investments used to incentivize and multiply the efforts of Zrda partners for greater impact. During the Q1 FY2020, Zrda continued to establish significant partnerships with private sector entities as well as the international organizations to promote economic development of the regions of Georgia. Ongoing partnerships are not highlighted below, rather new and exciting partnership opportunities are summarized.

Partnership with Enterprise Georgia Zrda continued its partnership with Enterprise Georgia under the existing MOU. The joint goal of the partnership is to support and facilitate regional economic development through promotion of MSME growth and development in Zrda target regions/communities. This will help facilitate MSME access to the programs offered by Enterprise Georgia and support overall effectiveness of these programs. Zrda, through its service provider EXPERTO LLC, provided post-assistance business skills training to Enterprise Georgia beneficiaries through activity1010A. Zrda is involved in the donor coordination process initiated by Enterprise Georgia.

Partnership with Gazelle Fund LP Zrda established a partnership with Gazelle Fund LP (Gazelle Finance), an investment manager that provides growth-oriented risk capital through mezzanine financing and equity investments to promising, high-growth MSMEs in the Eurasia region. Gazelle Finance is interested in improving their outreach and market intelligence and exploring partnership opportunities to support the identification and attraction of reliable MSMEs as potential clients. The goal of the partnership is to support target value chain strengthening and sustainable MSMEs growth in target regions and communities by facilitating access to Gazelle’s financing schemes.

The investment agreement signed between Gazelle Finance and the internet provider ORDUNET in Samegrelo commits an equity investment of USD 500,000.00 to extend its network and coverage area. It is expected that upon completion of project implementation, the current annual turnover of the company amounting to approximately GEL 1,000,000 will increase by 3 times as much. Hotel Lotus, based in Zugdidi, submitted an application requesting $500,000 to Gazelle Finance, which is currently under consideration.

Partnership with Anaklia Development Consortium (ADC) In 2019, the Anaklia Community and Economic Development Program (ACED) continued implementing activities focused on increasing the competitiveness and growth of MSMEs in the region; building a workforce qualified to meet the market demand for both port operations and the wider economy in the region; and facilitating the development of the community infrastructure necessary to meet Anaklia’s and the region’s needs.

Due to the uncertainty around the Anaklia Development Consortium, the current partnership will be officially terminated in January 2020. Both Zrda and ADC have signed an agreement for mutual termination in December 2019 that will result in full termination following a thirty day notice period. Zrda will continue to monitor all ACED grantees for the life of the project and selected training activities initiated under the Anaklia Education Hub Activity will continue for an additional six months of 2020. The Churia/Kolkheti National Park activity will be completed in full as a tourism development activity under Zrda.

ZRDA FY 2020 QUARTERLY REPORT 1 | 34 9990/001: Anaklia Community and Economic Development Program (ACED) – Anaklia Education Hub • In Q1 2020, Anaklia Community and Economic Development Program (ACED) Education Hub celebrated 42 graduates who completed the training program in the following courses - computer skills, housekeeping, entrepreneurship and business administration. The graduation ceremony was held in Zugdidi Techno-Park, where the other 108 training program participants received certificates and The first aid training (Photo by completed a workshop on CV/Resume Chemonics International Inc.) development. • The training courses were conducted by the Community College “New Wave“ and included the following subjects: English language (6 months); Computer skills (5 months); Housekeeping (3 months); Front office (5 months); Entrepreneurship and Business Administration (3 months.) Results/Updates: Overall, up to 150 residents of Anaklia and surrounding villages attended the trainings free of charge. • Additionally, the ACED also provided number of professional trainings, such as: ✓ A training in biodiversity for the Kolkheti National Park Staff. The training was conducted by Shota Rustaveli Batumi, State University Professor. The info- tour in “Paragraph ✓ A general Management course for Zugdidi Resourt and Spa” (Photo by Botanical Garden staff. (Chemonics International Inc.) ✓ The first aid training provided by Red Cross Georgia, for Kolkheti National Park employees (Zugdidi, Poti, Guria and Lantchkhuti districts). • The ACED Program organized experience-sharing informational tours at the 5 - star “Paragraph Resort & Spa”, where the Anaklia Education Hub students observed hotel management practices. Challenges: • Dates for the second round of the training program are currently being planned due to implementation delays. • Anaklia Education Hub plans to continue hosting various workshops outside of Next Steps: the ACED partnership, including bartender, chef assistance and other courses, by the end of the project.

9990/002: Anaklia Community and Economic Development Program (ACED) – Kolkheti National Park Development • Zrda signed an MOU with the Agency for Protected Areas (APA) to support the development of several adventure tourism activities in Kolkheti National Park. • In October 2019, Zrda announced a Request for Proposals (RFP) for the technical design of the Kolkheti National Park Rope Course Recreational Results/Updates: Center. An international consultant was hired by Zrda to provide technical expertise in the proposal evaluation process. • Zrda will work with contractor company AcharCampMsheni to develop the design of the “fishermen’s house” for Kolkheti National Park and will finalize the design by the end of January 2020 upon which APA will be responsible for overall construction of both the “fisherman houses” and the high ropes park.

Challenges: • Delay of project implementation due to the quality of the proposed applications received.

ZRDA FY 2020 QUARTERLY REPORT 1 | 35 9990/002: Anaklia Community and Economic Development Program (ACED) – Kolkheti National Park Development • Finalize the procurement of the Rope Park materials Next Steps: . • Finalize the development of the “Fishermen’s House” design.

9990/003: Anaklia Community and Economic Development Program (ACED) – Business Support Grants • On October 4, 2019, Zrda and ADC representatives visited one of the ACED MSME Grants Program beneficiaries, thenuts production factory by Vladimer Dgebuadze, and monitored the new equipment purchased within the MSME grants program. The financial support received by the program enabled the factory to double its production capacity and employ more of the ADC and Zrda visiting grantees in local workforce. Results/Updates: Anaklia (photo by Chemonics • In this reporting period, the Zrda team visited International Inc). Samegrelo-Zemo Svaneti region to monitor Anaklia MSME Grants Program beneficiaries’ ongoing greenhouse establishement projects. By the end of December 2019, 13 out of 16 MSME Grants Program beneficiaries were already fully furnished, while the rest will receive the remaining deliverables by the end of April 2020.

Challenges: • The complex and long purchasing process of materials caused delays in the program. Next Steps: • Continue monitoring the grants program beneficiaries.

9990/009: Anaklia Community and Economic Development Program (ACED) – Khachapuri Festival • In October, Zrda launched a Khachapuri Festival, a new tourism product designed to promote Georgia’s gastronomic culture and one of its most popular culinary products – Khachapuri at Rukhi Village, Samegrelo. The Festival was organized by the Samegrelo-Zemo Svaneti DMO, with the support of Zrda, Samegrelo-Zemo Svaneti Government, Georgian National Tourism Administration, Rukhi Trade Centre, and Gastronomic Association of Georgia. Results/Updates: • The event involved a Khachapuri cooking contest attracting over 25 amateur and professional khachapuri contest participants from different regions of Georgia. • As a result of the competition, 7 winners were revealed in different nominations, with Khachapuri Festival (photo by “Shin da Gori” restaurant winning the Best Chemonics International Inc). Khachapuri Award. All the winners were awarded with special prizes by the organizers and sponsors. The event also featured masterclasses of famous Chefs: Meriko Gubeladze and Guram Baghdoshvili, as well as a president of Georgian Gastronomic Association Dalila

ZRDA FY 2020 QUARTERLY REPORT 1 | 36 9990/009: Anaklia Community and Economic Development Program (ACED) – Khachapuri Festival Tsatava and a Chairwoman of the Georgian Cheese Makers' Association, Anna Mikadze. • Overall, 70 people were employed, and 11 volunteers involved in the project from the local community. • 5000 people attended the event. • Up to 40 local entrepreneurs participated in the festival which generated 20,000 GEL total in sales. • The Khachapuri Festival was a successful attempt of the Samegrelo-Zemo Svaneti Destination Management Organization to respond to unique gastronomic tourism development opportunities Georgia has to offer. • In December, Zrda signed an MOU with the Gastronomic Association of Georgia and Samegrelo-Zemo Svaneti DMO to set out the terms of cooperation between the parties in order to hold the second Annual Khachapuri Festival in Rukhi (Zugdidi). According to the MOU, the Gastronomic Association of Georgia will assume the responsibility of organizing the event, while Samegrelo-Zemo Svaneti DMO will support the event locally. Challenges: • Managing a large-scale event within a short timeline. • Continue to support the Samegrelo-Zemo Svaneti DMO and the Gastronomic Next Steps: Association of Georgia to start organizational arrangements for the festival in 2020 and promote the event among sponsors and interested organizations.

9990/010: Anaklia Community and Economic Development Program (ACED) – “Young ambassadors to community” Volunteering Program • The ACED volunteers participated and supported the Khachapuri Festival organizational team in promoting the festival among villages and communities of Samegrelo. • During the reporting period, “Young ambassadors to my community” volunteering program representatives also delivered ACED program Results/Updates: brochures to all the target community population including 17 villages. • The brochure summarizes key accomplishments of the program to keep the target audience informed about all project activities.

The volunteers in the target community (photo by Chemonics International Inc).

Challenges: • No major challanges observed.

Next Steps: • Volunteer assignments will end in February 2020 and the activity will be closed.

Partnership with British Petroleum Zrda continues its partnership with British Petrolium to implement a joint community development project in 41 villages of Shida Kartli and Samtskhe-Javakheti.

ZRDA FY 2020 QUARTERLY REPORT 1 | 37 Partnership with British Petroleum (BP): Small Business Development Program (SBDP) in Shida Kartli implemented by Elkana • During the reporting period, Biological Farming Association Elkana –BP’s contracted partner in implementing Small Business Development Program (SBDP) in Shida Kartli— supported 22 villages in Shida-Kartli and continued monitoring small businesses funded Shalva Chinchaladze, Village Kvemo though the first and second cycle. Shakshaketi, Khashuri Municipality (Photo by Elkana) • By the end of the reporting period all 49 small businesses awarded grants have become operational and in total generated GEL 94,828 this quarter, Results/Updates: serving over 3,000 customers with agricultural products and services.

• During the reporting period, Elkana Ketevan Nozadze, Kvemo announced its third small grants Brolosani,Khashuri municipality (Photo program in Zrda’s 22 villages. The by Elkana) introductory meetings were held for 22 village representatives and respective municipal officials in Kaspi, Gori, Kareli and Khashuri. Overall, 101 business ideas were received from target villages and 84 applications met the criteria set in the announcement. An evaluation committee will be held next reporting period and applicants will be selected for the business planning trainings. • Since cooperation began, BP/Elkana reported a total leverage for this period in the amount of GEL 79,721. Challenges: •No major challenges during the reporting period.

• For the next reporting period Elkana will conduct committee meetings for selection of applicants, conduct business plan trainings, and select business plans for the grant award. For the final stage Zrda plans to award up to 30 small Next Steps: grants. • Elkana will monitor on a regular basis the first and second phase beneficiaries and report monitoring data to Zrda for all 49 of them.

Partnership with British Petroleum (BP): Community Development Initiative (CDI) In Kvemo-Kartli and Samtskhe-Javakheti (RDA) • During the reporting period Zrda continued partnership with BP and the local implementing Partner RDA for implementing community Development Initiative (CDI) in Zrda and BP joint villages in Samtskhe-Javakheti and Kvemo- Kartli regions. Results/Updates: • By the end of the reporting period, RDA monitored business operations of all 47 Merab Muradashvili, Village Atskuri, beneficiaries selected through the first Akhaltsikhe municipality (photo by RDA) cycle of competitive process of Small Business Development components. Out of 47 beneficiaries 46 grantees are operational and since the grant award they have generated sales of GEL 331,078.

ZRDA FY 2020 QUARTERLY REPORT 1 | 38 Partnership with British Petroleum (BP): Community Development Initiative (CDI) In Kvemo-Kartli and Samtskhe-Javakheti (RDA) • During the reporting period RDA announced the second round of Small Business Development Component, conducted village information sessions,and in total received 95 applications. For the next reporting period RDA will conduct committee meeting and select applicants for Business Plan writing training. • For the Community Development Component, RDA received and selected 8 Infrastructure Rehabilitation (IR) projects from CBOs. During the first cycle, RDA completed two final projects in Tsalka municipality: the installation of a school heating system in village Akhasheni and the rehabilitation of a school gym in village Kushi in total benefiting 125 local households with the cost of GEL 51,533. RDA also regularly monitored and evaluated the operation of six other completed infrastructure projects to insure sustainability of projects. School Gym, Village Kushi, Tsalka • With the agricultural knowledge center municipality (photo by Chemonics component, RDA continues to build capacity International Inc.) of the agro centers and facilitates agro consultations on seasonal requirements, such aswatering, plants treatment, preparation of plots for next season, and different types of high-quality seeds availability to the farmers. • During the reporting period Zrda leveraged GEL 77,231 from BP to implement joint activities in 19 villages in Kvemo-Kartli and Samtskhe- Javakheti region. Challenges: •No major challenges during the reporting period. • For Small Business Development Component RDA will select applications, conduct business plan writing session and select business plans. Next Steps: • For the community development component, RDA will receive infrastructure projects from the CBOs and conduct committee session for selection of projects.

TELLING OUR STORY/COMMUNICATIONS:

Zrda’s communications objectives are focused on raising awareness and understanding of the project throughout its implementation to ensure favorable public and stakeholder perceptions of Zrda’s accomplishments and agenda. In the reporting period, Zrda designed its communications tools to maximize development impact, project outcomes, and the visibility of the project and project partners. Social Media Platform: The USAID Zrda Activity in Georgia Facebook has been actively promoting the project and publicizing its current initiatives, announcements, and accomplishments to wide audiences of beneficiaries, stakeholders, partners, and the Georgian public. The communication team’s overall objective was to deliver information that helps to improve social media responses and engagement. The communications team regularly reviews and analyzes the Facebook built-in analytics that provide a snapshot of the page’s performance, particularly focusing on different core areas including page likes; post reach; engagement and others. Increase of Total Zrda Page Likes this quarter: The Zrda Facebook page gradually increased its audience from 8,576 in October to 9,274 by the end of December 2019. The graphic below shows

ZRDA FY 2020 QUARTERLY REPORT 1 | 39 audience increase by month, total participants at the start of the period, and monthly totals and period-ending totals.

Average Post Reach/Engagement in Oct’19- Dec‘20: The Reach Graph shows the number of people Zrda’s posts reached and the positive engagement that helps the page reach more people. People continue to gravitate toward visual content because videos, pictures, and graphics are often easier to absorb and share. Based on the below analytics, we can say that with more Facebook users than ever using mobile devices to scan their news feeds, visual posts continue to be increasingly important for sharing Zrda’s stories and impact:

The posts types below generated most engagement from Zrda audiences: Throughout Q1 FY 2020, the Zrda communications team regularly reviewed its post types to determine what resonates most with the Zrda audience. Analyzing the success of different post types based on average reach and engagement, posts on Zrda’s tourism and agriculture development interventions, and new partnerships aimed at community economic development generated the most engagement, as the topics of outmost importance for our audiences. Please see examples below:

ZRDA FY 2020 QUARTERLY REPORT 1 | 40 Facebook post: Zrda-supported Khachapuri Festival at Rustavi 2 TV Channel

Facebook post: Zrda supported greenhouse farmer Giorgi Gergedava from Tsaishi village

ZRDA FY 2020 QUARTERLY REPORT 1 | 41 Facebook post: Highlighting Kist culinary traditions to promote gastronomy tourism

Website: The communications team continued to regularly update the Zrda website that serves as a repository of project information and public documents; structures project achievements and evaluation; and communicates transparency by supplying reliable and accurate information about challenges, successes, lessons learned, calls for grant applications, and other information. Having conducted a “content refresh” of the website that included adding, updating, and even removing pages that weren’t offering value, the communications team reshaped content based on the website analytics and a clear understanding of what is and isn’t working to make informed decisions about where Zrda can achieve the most impact.

Telling our Story: The communications team continues to seek opportunities to share the personal stories of project results with key stakeholders, including USAID/Georgia, GoG, private sector companies, associations and cooperatives, educational institutions, other local entities, and the media. When appropriate, the project develops success stories with a focus on the positive impact of Zrda activities, whether it be on a Zrda-supported new tourism product or an ABL farmer using new agricultural techniques or producing new crops. These stories are also being shared through the ZRDA FY 2020 QUARTERLY REPORT 1 | 42 project’s social media channels with partners and media to generate positive press on the project and its key partners.

Video Stories: During the reporting period, Zrda developed a number of video stories to help Samegrelo-Zemo Svaneti and Samtskhe-Javakheti Destination Management Organizations (DMO) broadly publicize the new tourism products available in the Zrda target regions. In the future, similar videos are expected to become an income-generation activity for both DMOs.

Events: During the reporting period, Zrda hosted high-profile events with the USAID and GoG participation including: ✓ Khachapuri Festival (October 2019) ✓ Cross border Info Tour of inbound Tour Operators from Georgia and Armenia (October 2019) ✓ Study Tour to Czech Republic for Zrda-supported tourism stakeholders (October 2019) ✓ Study Tour to France for Georgia’s horse-riding guides (October 2019) ✓ Guesthouse Guidebook Presentation (December 2019) ✓ Opening of first aid rooms and handover of uniforms at Uplistsikhe (December 2019) ✓ Presentation of findings over Vardzia-Khertvili-Oloda area for international recognition under UNESCO programs (December 2019)

All events were publicized through online media including Facebook and Zrda partner ministry/agency/regional government websites and national television and local broadcasters - Public Channel, TV Pirveli, Imedi, Rustavi 2, Palitra TV; Odishi TV and Radio Atinati in Samegrelo- Zemo Svaneti; and online media channels.

ZRDA FY 2020 QUARTERLY REPORT 1 | 43 Activities/Events planned for Q2 of FY2020: In the second quarter of FY 2020, Zrda will host a number of public events, as well as field-based trainings. Of particular note are the following:

✓ USAID and BP’s visit to the jointly supported sites in Shida Kartli (January 2020) ✓ Presentation of Samegrelo-Zemo Svaneti DMO Action Plan (January 2020) ✓ Presentation of Kolkhuri Tabla Cookbook (February-March 2020) ✓ Opening of Marneuli TIC (February 2020) ✓ International Tourism Exhibition ITB Berlin (March 2020)

ENVIRONMENTAL COMPLIANCE ACTIVITIES: Zrda’s Environmental Specialist (ES) performed environmental assessments of all service providers and sub-awardees with new activities or sub-awards initiated during Q1 FY 2020 including: • For Activity #4001 “Promote Public Economic/Market & Disaster Mitigation Infrastructure Advocacy Planning with Communities”, two infrastructure projects were site-visited together with the Civil Engineer to perform the environmental assessment and prepare the appropriate environmental documents for further development (Rehabilitation of Ninotsminda and the road in village Varkhani, Adigeni), the documents were submitted to MEO/USAID office/BEO for approval; • Upon request of Akhaltsikhe Municipality representatives, the ES together with the Civil Engineer studied the new infrastructural project - rehabilitation of Central Park in Akhaltsikhe. They prepared the environmental assessment memorandum together with the civil engineer’s technical assessment report and submitted to Zrda project for further review. Also, the ES together with the Civil Engineer visited village Odzisi of Dusheti Municipality to perform pre- estimation of the kindergarten building to be rehabilitated by through municipality funds after preparing the project design. The process is ongoing; • During the reporting period the ES and the Civil Engineer visited Ptsa village in Kareli Municipality to estimate the possibility of water supply system rehabilitation. Preliminary studies of water samples indicated that the water contains high concentration of nitrate anions and the values are not in compliance with standards. The municipality offered to find another source of water. The existing source is possible to use only for technical purposes and not for potable purposes; • The designs of infrastructural projects already prepared by the design company and submitted to Zrda project for further review was comprehensively revised by the ES from the environmental point of view, and the appropriate comments were submitted to the design company to update the environmental sections in the project designs. (1.Rehabilitation of water supply system in Gogasheni village, Akhalkalaki Municipality; 2. Rehabilitation of water supply system in Rukhi Village, Zugdidi Municipality; 3. Rehabilitation of water supply system in Akhalubani Village, Khashuri Municipality; 4. Rehabilitation/Installation of drainage channel in

ZRDA FY 2020 QUARTERLY REPORT 1 | 44 Khurcha Village, Zugdidi Municipality; 5. Preparation of design for riverbank protection gabions in Tsalenjikha Municipality, Pakhulani Community, villages Pakhulani and Lia); • All Zrda Agriculture beneficiaries using plant protection means in their activities, based on updated PERSUAP 2017/ Pesticide Evaluation Report and Safe Use Action Plan/ DCN: 2017-GEO- 022/, received packages including hard copies and electronic versions, important brochures and leaflets on safe use of pesticides, and personal protection equipments’ (PPE-Coveralls, gloves, safety glasses and a half-face respirator/air-purifying respirator); • For the Activity# 2005 “Greenhouse Technology Promotion & Trainings” (updated) 21 applicants in Zrda Target regions were evaluated against environmental compliance. For 10 out of 21 producing the vegetables in greenhouses all environmental documents are already approved, appropriate recommendations prepared and delivered to the applicants for action; 11 out of 21 will produce blueberries in greenhouses through implementation o fmodern technologies. Within this activity the relevant documents/EMMPs will be prepared by the ES and submitted to USAID for approval. After the approval, the appropriate recommendations will be prepared and delivered to the applicants; • For the Activity #1008A “Underserved Minority and Geography Small Grants Activity” one already approved applicant (Car repair service/Boris Gvichiani) replaced the existing location, the new location was evaluated against environmental compliance, and appropriate recommendations were prepared and delivered to the applicant; • For the Activity # 2002A Private Sector Extension System Development (Consultation Packages); 15 applicants (5 from Samegrelo and 10 from Samtskhe Javakheti) were evaluated against environmental compliance, and appropriate recommendations will be prepared and delivered to the applicants for action. The appropriate EMMP will be prepared and submitted to USAID/MEO for Approval. • Under the ACED Grants Program, 16 Applicants were monitored on implementation of environmental and food safety requirements to complete the appropriate milestones. • Within the BP and Zrda partnership small grant program, the ES together with the BP team conducted monitoring visits of granted projects from environmental, health and safety point of view.

MONITORING AND EVALUATION: See Annex A for the Zrda indicator tracking matrix that provides results against Purpose and Sub- Purpose level indicators.

ZRDA FY 2020 QUARTERLY REPORT 1 | 45 ANNEX A. ZRDA INDICATOR TRACKING MATRIX

FY 2021 INDICATOR FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LOP NO. NAME TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL

PURPOSE-LEVEL INDICATORS & ILLUSTRATIVE TARGETS Value of sales generated by $0 $0 $6,000,000 $1.667.484 $10,000,000 $9,321,473 $10,000,000 $14,074,705 $6.000,000 $4,430,016 $4,000,000 $36,000,000 $29,493,678 1 MSMEs over life of $0 project (P/F2) Number of MSMEs generating new 0 0 170 189 300 323 220 323 90 65 20 0 800 900 2 sales over life of project (P)

Number of new 3 0 0 400 375 600 314 700 391 500 116 200 0 2,400 1196 jobs created (P)

Number of households 4 increasing income 13,200 7,527 by at least 25 percent (P) Percentage change in Zrda Resiliency Index measuring capacity of +10% 39% 5 beneficiary communities to cope with shocks to livelihoods (P) Number of stakeholders implementing risk- reducing 6 practices/actions to 900 1,244 improve resilience to livelihood shocks as a result

2 FtF Indicator: “Value of incremental sales (collected at farm-level) attributed to FTF implementation (4.5.2-23)” is included herein but also called out separately as a FTF indicator in the table.

ZRDA FY 2020 QUARTERLY REPORT 1 | 46 FY 2021 INDICATOR FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LOP NO. NAME TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL

of USG assistance (P/S)

Total value of funding leveraged from GOG and 7 other sources for $27.556 $27.556 $800,000 $977.441 $1.400,000 $ 1.216.938 $900,000 $629,931 $350,000 $232,198 122.444 $3,600,000 $3,084,064 infrastructure and non-infrastructure projects (P/F3) Number of beneficiaries using 8 improved 0 0 1,800 77 2,500 528 2,500 1060 2,200 $5.979 600 9,600 $7,644 infrastructure services (P)

SUB-PURPOSE 1 LEVEL INDICATORS & TARGETS/ACTUALS

Number of business plans supported as 1.1.1 a result of USG 0 0 50 62 130 131 130 121 30 22 10 0 350 336 assistance (C) Number of MSME-s accessing evidence based market 1.2.1 research through 0 0 600 1.245 1,000 3.525 1700 7,056 800 2,392 400 0 12,500 14,218 associations/BSOs (C) Number of assisted MSMEs that have incorporated updated standards 1.3.1 0 0 40 56 80 24 130 259 15 1 5 0 420 340 to product development as a result of USG assistance (C)

3 FtF Indicator: “Value of new private sector investment in the agriculture sector or food chain leveraged by FTF implementation (4.5.2-38)” is included herein but also called out separately as a FTF indicator in the table.

ZRDA FY 2020 QUARTERLY REPORT 1 | 47 FY 2021 INDICATOR FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LOP NO. NAME TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL

Number of public- 1.4.1 private dialogues 4 4 27 29 90 48 90 21 60 10 29 0 300 112 facilitated (C) Number of MSMEs operating more profitably (at or 1.5.1 0 0 50 103 100 246 200 242 100 209 50 0 780 800 above cost) because of USG assistance (S)

SUB-PURPOSE 2 LEVEL INDICATORS & TARGETS/ACTUALS

Number of households accessing market 2.1.1 data through USG- 0 0 1,570 12.074 30,000 6.134 20,000 31,894 10,000 15,468 3,000 0 64,570 65,570 supported communication channels (C) Number of households and others who have applied new 2.2.1 technologies or 0 0 950 590 1,100 3.644 1300 1,456 900 277 750 0 7,000 5,667 management practices as a result of USG assistance (C/F) Number of individuals who received USG 2.3.1 supported short- 138 138 650 526 1,000 630 800 548 600 282 412 0 3,600 2,124 term agricultural sector productivity training (C) Number of hectares under improved 2.4.1 technologies or 0 0 1,002 347.4 2,000 1.275 1,700 569 900 19 398 0 6,000 2,211 management practices as a result of USG project (F)

ZRDA FY 2020 QUARTERLY REPORT 1 | 48 FY 2021 INDICATOR FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LOP NO. NAME TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL

SUB-PURPOSE 3 LEVEL INDICATORS & TARGETS/ACTUALS

Number of new market referrals 3.1.1 4 4 153 4.136 500 1.465 3,350 723 2,000 2 93 0 7,500 6,3230 established through USG assistance (C) Number of market linkages facilitated 3.2.1 trough USG 0 0 138 1.174 300 705 1,680 398 780 2 22 0 2,920 2,279 Assistance (C)

SUB-PURPOSE 4 LEVEL INDICATORS & TARGETS/ACTUALS

Number of local/regional markets or market infrastructure (e.g. storage/cold 4.1.1 storage, packing/ 0 0 5 4 20 19 17 26 10 7 8 0 60 56 processing/sorting facilities) facilitated with USG assistance (S) Percentage change in perception of 4.2.1 inclusiveness in 60% 73% decision-making processes (S)

FTF INDICATORS & TARGETS/ACTUALS

Number of rural households 4.5.2-13 benefiting directly 258 258 6,000 14.235 30,000 25.763 22,000 41,145 11,000 19,407 3,200 0 80,500 100,808 from USG interventions (F)

ZRDA FY 2020 QUARTERLY REPORT 1 | 49 FY 2021 INDICATOR FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LOP NO. NAME TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL

Number of food security private enterprises (for profit), producer organizations, water users associations, 4.5.2-11 women’s groups, 0 0 40 90 100 65 100 169 30 41 10 0 280 365 trade and business associations, and community based organizations (CBOs), receiving USG-assistance (F) Value of incremental sales (collected at farm- 4.5.2-23 $0 $0 $3,000,000 $258.167 $4,700,000 $3.667.078 $5,000,000 $3,539,627 $3,000,000 3,909,2017 $2.300,000 $0 $18,000,000 $10,684,789 level) attributed to FTF implementation (F) Value of 4.5.2-29 agricultural and $0 $0 $110,000 $193.804 $130,000 $349,033 $ 250,000 $367,114 $ 200,000 $74,791 $90,000 $0 $ 1,000,000 $984,742 rural loans (F) Number of MSMEs, including farmers, 4.5.2-30 receiving USG 0 0 110 72 150 147 170 59 115 21 55 0 600 299 assistance to access loans Value of new private sector investment in the 4.5.2-38 agriculture sector $0 $0 $175,000 $225.961 $250,000 $192.764 $250,000 $529,609 $140,000 $100,974 $25,000 $0 $1,100,000 $1,049,408 or food chain leveraged by FTF implementation (F) Number of private enterprises, producer 4.5.2-42 0 0 35 49 80 60 85 39 20 5 0 225 150 organizations, water users associations,

ZRDA FY 2020 QUARTERLY REPORT 1 | 50 FY 2021 INDICATOR FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LOP NO. NAME TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL

women’s groups, trade and business associations, and 2 community based organizations (CBOs) that applied new technologies or management practices. (F) Number of People gaining employment as a result of 4.6.3-2 participation in 0 0 80 257 300 141 250 3 50 20 0 700 416 USG-funded 15 workforce development programs Number of persons completing USG- 4.6.3-4 funded workforce 0 0 140 1066 850 388 900 466 495 257 15 0 3,200 2,177 development programs

CROSSCUTTING INDICATORS & TARGETS/ACTUALS

Percentage of female participants in USG-assisted programs designed to increase access GNDR2 35% 44% to productive economic resources (assets, credit, income or employment)

ZRDA FY 2020 QUARTERLY REPORT 1 | 51 ANNEX B. SUCCESS STORIES (ATTACHED)

ZRDA FY 2020 QUARTERLY REPORT 1 | 52 ANNEX C. ZRDA ACTIVITY MAP

Note: Zrda Monitoring and Evaluations System offers Zrda activities map with detailed information on Zrda beneficiaries: https://georgiazrda.devresults.com/en/dash/map

ZRDA FY 2020 QUARTERLY REPORT 1 | 53

U.S. Agency for International Development 1300 Pennsylvania Avenue, NW Washington, D.C. 20523 Tel.: (202) 712-0000 Fax: (202) 216-3524 www.usaid.gov

ZRDA FY 2020 QUARTERLY REPORT 1 | 54