Competitive Economy Program

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COMPETITIVE ECONOMY PROGRAM

Year 3 (FY21) Implementation Plan

October 2020 – September 2021

Originally Submitted: September 2020 Re-Submitted: November 2020

Implementation Plan

October 2020 – September 2021

Year 3 (FY 2021)

September 15, 2020

Prime Contractor:

Chemonics International, Inc. http://www.chemonics.com/

Partners:

Berman Group https://www.bermangroup.cz

J. E. Austin Associates, Inc. http://www.jeaustin.com

PMCG https://www.pmcg-i.com

Chemonics International, Inc. prepared this document for review by the United States Agency for International Development pursuant to contract No. 72012118C00002, Competitive Economy Program (CEP).

DISCLAIMER

The author’s 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

APS Annual Program Statement BA Business Association ARDS USAID Agriculture and Rural Development Support Program BEE business enabling environment BSO business service organization CAP competitiveness action plan CDCS USAID country development cooperation strategy CEP USAID Competitive Economy Program CGE Computable General Equilibrium CLA collaboration, learning, and adapting CLDP Commercial Law Development Program Comms Communications (team) CUTIS Canada-Ukraine Trade-Investment Support Project DCFTA EU/Ukraine Deep and Comprehensive Free Trade Agreement DMO Destination Management Organization DO Development Objective DX Digital transformation EBRD European Bank for Reconstruction and Development EIB European Investment Bank EP Export Promotion (team) EPO Export Promotion Office under the MEDTA of Ukraine EU European Union FDI foreign direct investment FS Furniture Sector (team) – part of PSC team GDP Gross Domestic Product GI Geographical indication GoU Government of Ukraine IDP internally displaced person IT information technology JAA J.E. Austin Associates, Inc. LAs Local Authorities MCI Municipal Competitiveness Index MEL monitoring, evaluation, and learning MEDTA Ministry of Economic Development, Trade, and Agriculture MESC Municipal Entrepreneurs Support Center MEST Municipal Economic Statistics Toolkit NGO non-governmental organization NTOU National Tourism Organization of Ukraine PEM pan-Euro-Mediterranean PSC Private Sector Competitiveness Team QA Quality assurance RIA regulatory impact analysis RFA request for applications RFP request for proposals RAM resource allocation model RMIS risk management information system SME small and medium-sized enterprise SRS State Regulatory Service of Ukraine

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STTA short-term technical assistance SWOT Strengths, Weaknesses, Opportunities, and Threats T&M Trade and Marketing TA Technical assistance TFA Trade Facilitation Agreement TOC Theory of Constraints UA Ukraine UAFM Ukrainian Association of Furniture Manufacturers UCCI Ukrainian Chamber of Commerce and Industry UCF Ukrainian Cultural Foundation UNIC Ukrainian Network of Integrity and Compliance UNIDO United Nations Industrial Development Organization UNWTO World Tourism Organization USAID United States Agency for International Development USG United States Government VPP Value Proposition Program VRU Verkhovna Rada of Ukraine WB World Bank WNISEF Western NIS Fund WTO World Trade Organization

Table of Contents Contents Table of Contents ...... 5 Introduction ...... 7 Background ...... 8 Covid-19 and CEP Work Planning ...... 9 Implementation Strategy ...... 10 Project Organization ...... 12 Key Assumptions ...... 12 Year 3 Implementation Plan ...... 12 I. Objective 1: Strengthen Ukraine’s Economy and its Firms ...... 13 IR 1: Increased Private Sector Competitiveness ...... 13 A. Information Technology ...... 14 A1. Sales and FDI growth fostered by extending visibility and reach in international markets 15 A2. Ukrainian SME Digitalization ...... 19 A3. Sustainable growth of the IT sector through increased availability and improved skills and regulatory environment ...... 20 A4: Support to emerging industries and product start-ups ...... 25 B. Furniture ...... 27 C. Tourism ...... 32 D. Food Processing ...... 36 D1. Increasing sales through coordinated new market penetration ...... 36 D2. Developing the human resource capacity of Ukrainian food processing staff ...... 39 E. Film and Creative Industries ...... 41 II. Objective 2: Improved Business Enabling Environment ...... 46 A. IR 2. Anticompetitive measures impacting provide sector competitiveness reduced ...... 46 A1. SME-friendly business laws and regulations developed (Sub-IR 1.1) ...... 46 A2. Improved Business Support Infrastructure ...... 52 A3. Municipal business climates improved by adoption of and application of best practices (Sub- IR 2.2) ...... 55 A4. Competitive Environment Supports Broad-based Growth ...... 60 III. Objective 3: Increased Investment Catalyzed ...... 63 5

IR 3: Increased Foreign and Domestic Investment ...... 63 A. eo Business Incubators ...... 63 B. ProZorro.Sale Auctions (IR 1, 3) ...... 64 C. Economy-Wide Access to Finance (IR 1, 3) ...... 66 D. State Property Fund / Investment Transactions Support (IR 3) ...... 69 E. National Foreign Direct Investment Strategy (IR 3) ...... 70 F. Support the Launch and Development of the Ministry of Digital Transformation’s Diia.City Project (IR 3) ...... 71 IV. Objective 4: Trade Linkages Facilitated ...... 76 A. IR 4: Improved Export and Trade Capacity ...... 76 A1. Cost-effective export promotion programs implemented (Sub-IR 4.1) ...... 76 A2. Trade and customs support provided (Sub-IR 4.2) ...... 83 A2a. Trade facilitation ...... 84 V. Implementation Themes and Tools ...... 88 A. Grants under Contract and Subcontracts ...... 88 B. MEL ...... 89 C. Gender Equity and Social Inclusion ...... 90 D. Communications ...... 92 E. CEP Internship Program ...... 93

Introduction

Two main themes mark the beginning of the USAID Competitive Economy Program’s (CEP or the Program) third year. The first is the strong foundation for growth and results that project staff have built over the previous two years. Three sectors are fully supported and bearing results. Work in two others has begun following an extensive process of assessment and partnership development. Year 3 will be the first to fully bear the fruits of these efforts and will see the acceleration of results planned for in the results framework. Other extensive and largely transformative initiatives are under way in areas such as investment/privatization and access to finance, anti-corruption, and improved institutional and municipal governance. CEP has a full management team in place and is advancing the unified organizational structure planned in Year 2. The second main theme for FY 2021 is Covid-19. The best word to sum up this theme is uncertainty. The effects of Covid-19 on the economy, access to new markets, productivity, company financing, and myriad other areas is simply unknown and is unfolding in real time. In response, in Year 3 CEP will follow an overarching thesis of flexibility across programming, budgeting, sector emphasis, and execution. The possible effects of Covid-19 are ever-present in this workplan, from the sector strategies to the individual sub-tasks. It may be that significant programming changes will not be needed in many areas. However, if it is needed CEP will be prepared to use and shift program resources as efficiently and effectively as possible to achieve program goals. See section IV.B for more details on CEP’s collaborate, learn, and adapt (CLA) approach. The five-year, $42 million program is implemented by Chemonics International, Inc. The Program began on October 16, 2018 and is scheduled to end on October 15, 2023. CEP promotes a strong, diverse, and open economy by improving competitiveness in key industries, removing barriers in the business environment for small and medium enterprises (SMEs), and engaging in transformational initiatives that cut across the economy. The project seeks to encourage growth in small and medium sized enterprises (SMEs) and startup businesses, increase domestic market competition, and support the competitiveness of Ukrainian firms in international markets. To achieve these goals, CEP carries out tasks that fall into four main objectives:

• Improve the business enabling environment for firms across multiple levels: national, municipal, and local. Work includes lowering opportunity for anticompetitive behavior in Ukraine including in raw material sales, inspections, and state intervention in the economy.

• Strengthen Ukraine’s economy and its firms, through engagement in competitiveness improving activities that help firms enter and compete in new markets and expand in existing ones, addressing weaknesses in areas including productivity, human resources, equipment, associations and business service providers, and other areas

• Catalyze increased foreign and domestic investment, by increasing access to finance that allows firms the investment and working capital they need to improve competitiveness and increase sales. CEP activities to streamline privatization and

foreign investment make for a more transparent and efficient process, and therefore more appealing to a wide range of investors.

• Facilitate trade linkages, by providing market access and market information/intelligence for firms to use to increase sales and exports, while actively working to move firms to new markets. CEP also supports transformational customs and trade reforms that streamline business processes, minimize costs, and increase transparency. Years 1 and 2 at CEP were spent designing and consolidating programs, and then moving rapidly into both transactional and transformational activities. Three sectors, IT, furniture, and tourism, are supported and beginning to yield results that contribute to project metrics. Two others, creative industries and food processing, are off the ground and ready to start generating results in the coming years. Numerous transformative initiatives have also been undertaken in the areas of anti-corruption, access to finance, privatization, customs, and the business enabling environment. Project results are detailed elsewhere and will not be repeated here. At the same time, those results are the centerpiece for the strong foundations from which CEP begins year 3 and they inform the workplan at every step. The Year 3 implementation plan outlines how CEP plans to drive project results, building off the strong Year 1 and 2 foundations while managing the risks and opportunities inherent in the Covid-19 pandemic. The plan starts with an overview of the implementation strategy and project organization including any changes in approach from previous years. This is followed by a description of the overall approach to each element of the program, Year 3 tasks, and planned utilization of resources. The Gantt chart included as Annex A details anticipated Year 3 tasks, timing, and resources. This document and the MEL plan will serve as a management tool to ensure that CEP’s activities and resource allocations are geared toward the achievement of results and measurable impact. Background With its abundant natural resources, highly educated workforce, vibrant civil society, and location in Central Europe, Ukraine has the potential to become a major service, manufacturing, and trade hub. In recent years, there has been significant advancement in economic policy and regulatory reforms, as reflected by Ukraine’s rise in the World Bank (WB)’s Doing Business rankings from 152 in 2012 to 64 in the 2020 rankings, up 7 places from 2019. The EU/Ukraine Deep and Comprehensive Free Trade Agreement (DCFTA) has created new opportunities for Ukraine’s export-oriented firms, and a growing number of SMEs representing a new wave of determined entrepreneurs is emerging. EU imports of Ukraine’s products climbed to $22 billion in 2019 compared with under $14 billion in 2015, the year Ukraine lost many of its traditional markets due to Russia’s aggression (UN Comtrade data). Nevertheless, the state of Ukraine’s economy remains tenuous. Ukraine’s nominal GDP per capita in 2019 was just over $3,600 (compared with almost $13,000 in Romania), and GDP growth was 3.2 percent, far short of its 6-7% target (source: IMF). The forecast for 2020 is a -7.7 percent contraction after accounting for fall out from Covid-19. Ukraine’s economy remains strongly dependent on imports, with challenges meeting domestic demand for non-food commodities and energy. Exports are dominated by products and services with low added value. The share of high-tech products and services is only 7 percent, while the share of high-tech

exports globally is 20 percent (source: UNIDO). Other challenges include a low level of investment activity, unemployment, and labor migration to other countries. An added factor hindering Ukraine’s development goals is the ongoing conflict in Eastern Ukraine, which has led to the loss of population centers and markets and the destruction of production facilities and transport infrastructure in the conflict zone. The conflict with Russia has led to a loss of previously major markets that many sectors have yet to recover from. Corruption and lack of transparency is a crosscutting hindrance, decreasing investors’ confidence, increasing the time and financial burdens of conducting business, creating perverse incentives to “cut corners,” inhibiting fair competition, and reducing trust in local institutions and within society at large. Implementing a proactive, inclusive development strategy that catalyzes GDP growth and addresses the root causes of Ukraine’s economic challenges is a prerequisite for sustainable growth, peace, and stability. In CEP, USAID has created a program that helps Ukraine tackle many of these challenges and accomplish key objectives: enhance the competitiveness of SMEs and sectors; elevate skills in entrepreneurship, business acumen, and market competence, and; support both private sector and government institutions to operate in accordance with international standards. Improvements in these areas will drive increases in sales, exports, and job creation in Ukraine. CEP also addresses the overall business climate by facilitating reforms at the national and sub-national level that increase the transparency of government processes, limit discretionary power, shift the nature of public-private interactions, and strengthen accountability mechanisms. In addition, CEP invests resources in developing the capacity of critical market system actors – SMEs; BSOs, associations, and clusters as well as GoU institutions that shape the economy– paving the way for systemic, inclusive economic growth. The political context in Ukraine can be fluid. Year 2 saw a major reshuffling of government counterparts, including several that were in areas of CEP engagement. The Export Promotion Office has seen its funding and capacity rapidly ebb and flow over the timeframe of CEP’s engagement. Customs, the Tourism Organization of Ukraine, and various commissions are also often subject to the whims of Ukrainian politics and budgetary battles. Such fluidity underscores the need for CEP to maintain flexibility in project planning. Covid-19 and CEP Work Planning

The Covid-19 epidemic swept across the world in the first through third quarters of 2020. The virus spread rapidly through China, Europe, the United States, and the rest of the world. Six months after the start of the pandemic, the broader economic implications are still largely unknown. Individual governments continue to struggle with how “open” or “closed” their economies should be to balance the health risks of the disease with dire economic implications. Many countries appear to have mitigated the spread of the disease through mask wearing, social distancing, continued closure of parts of the economy, and contact tracing. Ukraine’s response has followed a similar pattern. However, it is unknown if Covid-19 will make a resurgence once cold weather sets in, people retreat indoors, and more offices return to on-site work. A working vaccine remains the only real “hard stop” to the threat, though mass vaccinations are likely some time away. Two points are evident. The first is that the economic impact of the virus is and will be severe, broad, and potentially long lasting. Firms are working hard and creatively to overcome both the 9

drop in demand for many goods and services and the loss of the personal contact that has traditionally driven new business. The second is that not all parts of the economy are affected the same way. This applies also to the sectors that CEP is engaged in. Below is a brief, informal assessment of the effects of the pandemic on the CEP sectors. The Covid-19 outbreak is expected to affect specific project tasks. Most prominently, restrictions on travel mean a full halt of travel related export development activities until those restrictions are removed. Even following removal, it may take some time before trade shows see pre- epidemic attendance levels. Travel and congregation restrictions also mean either a freeze or a reformatting of a range of meetings, trainings, and project development sessions. CEP staff has worked rapidly to redesign all such tasks to make them suitable for a remote format when possible. This workplan addresses anticipated impacts of Covid-19 on program tasks and how the CEP team is working to adapt. CEP will continue in every way possible to move tasks forward despite Covid-19 restrictions. Assistance to Ukrainian firms is more urgently needed than ever.

Implementation Strategy CEP applies a holistic, market systems approach to implementation. This approach recognizes the limitations of efforts that seek to address firm or industry constraints in isolation, without considering the larger system: the market structure and requirements, the formal and informal rules, supporting entities, and the interplay between market system actors. CEP targets not only the industry actors directly engaged in the exchange of goods and services, but also participants from supporting functions of the value chain and the rules and regulations that govern the system. CEP takes an adaptive management approach rooted in collaborating, learning, and adapting (CLA) principles. Continual learning and improvement is achieved through periodic review of field-generated evidence to inform and iterate adjustments to the CEP work plan. Key elements of our program strategy are summarized below:

• Use data driven analytical tools and methodologies to identify systemic constraints and opportunities through ongoing data collection and consultations with market participants. On a continual basis, CEP collects data from companies and target markets to challenge and then continually refine programming. Most of the initiatives in this document were shaped by this approach.

• Facilitate the implementation of evidence-based, locally driven action plans by public and private-sector partners. To the extent possible, CEP takes a facilitative role when designing and implementing solutions, leverage the incentives and resources of program partners. The CEP team designs exit strategies at the onset of programs, to facilitate the transfer of responsibility to local ownership.

• Co-invest with SMEs and other private sector partners. Aligning incentives with all participants ensures mitigation of risk in piloting new management processes, investing in new technologies and certifications, entering new markets, or addressing workforce shortages. Business owners and industry actors take on much of the risk of departing from established 10

practices by co-investing their resources. Recognizing that most problems require a multi- faceted solution, grants are paired with technical assistance (TA) from industry experts and change management specialists.

• Increase Ukraine’s integration in the world economy through pragmatic analysis of target market data and practices, greater internationalization of firms and the economy at large, improved compliance with trade and free trade agreements, and increased government and private sector capacity to engage effectively in the global trading system.

• Advance progress toward anti-corruption goals. Corruption thrives in environments that are non-transparent, discretionary, and lack accountability measures and mechanisms. CEP addresses corruption by promoting: (1) the streamlining of needlessly complex legal and regulatory requirements; (2) transparency through work with local partners (GOU, industry actors, and NGOs) to publicize laws, regulations, and activities; (3) accountability by adopting performance metrics and harmonizing metrics between levels of government and across institutions; (4) representation of citizens/businesses through public engagement, intragovernmental coordination, and feedback mechanisms, and; (5) service orientation by helping CEP partners provide value to citizens. To translate action plans into tangible results, CEP implements tasks that are feasible in the Ukrainian context and yield both transactional and transformational results. Transactional activities include increased sales, investments, and jobs. Transformational results reflect systemic changes, such as oblast centers adopting best practices and improving their MCI scores, and the adoption of reforms and improved government processes. Over the life of the project, CEP will ensure broad geographic reach by co-implementing activities with Ukrainian public, private, and non-governmental organizations throughout the country. The $12.5 million CEP grants program serves as a catalyst for public and private investment, to impact the business environment, and to strengthen industry competitiveness. Grants enable industry associations and other NGOs to identify and reduce barriers to SME growth; promote innovative ideas and new technologies; assist firms to meet international quality standards; promote collaboration on sector development strategies related to market entry, productivity, quality upgrades, or workforce development, and; fund other research, training, social inclusion, and education activities. Any grants to private sector organizations must contribute directly and substantially to increasing the competitiveness of target sectors, enterprise associations, or value chains, as distinguished from generating financial benefits for a single grant recipient. Our team selects grants that address specific problems and offer practical solutions, requiring cost-sharing and analysis of the sustainability of investments. Grantees address how they will contribute to CEP results and must structure their MEL systems to feed into CEP’s MEL system. Grants are performance-based to maximize capacity building, sustainability, and verifiable results, with disbursements contingent on achievement of predetermined milestones developed by the grantee in the application process. Relationships between implementation tasks, milestones, and disbursements must be clear. Any modifications to CEP approach. In Year 3, CEP will further intensify its focus on private sector work and results. Two additional sectors will be fully supported, creative/film and processed food. With the addition of these two areas and additional senior management, most CEP “cross cutting” resources will be aligned to driving results in the supported sectors. Legal 11

resources from the previously competed Trade work will support regulatory reform in areas most critical to CEP sector companies. Most Export Development activities are also realigned to focus on the CEP priority sectors. Due to Covid-19, CEP expects ongoing, currently unknown, but minor modifications to this approach in Year 3. As a better understanding is gained of Covid-19’s effect on markets access for new companies in new markets, CEP will adjust programming to best suit the needs of companies. While transactional work is more affected by Covid due to travel restrictions, CEP does not expect its critical transformation work to be slowed.

Project Organization The CEP team structure reflects the program’s commitment to facilitating synergies across the entire team. CEP is led by Project Director (Chief of Party) Bill Seas with Deputy Chief of Party Olesya Zaluska. At the end of Year 2, two additional senior managers were engaged. The first, Mr. Karen Isahakyan, replaced an earlier private sector team lead, and will be leading the private sector competitiveness work in the IT, Creative/Film, and Tourism sectors. The second, Ms. Meghan Iorianni, will oversee the food processing and furniture sectors, while also advancing several transformative efforts for CEP (see Section II for more details). CEP’s leadership team also includes technical leads, a MEL manager, grants management, and an operations director. Given the linkages between program components, CEP staff work as a cohesive team, representing the program rather than identifying with specific components or subcontractors. To support the program, Chemonics has partnered with JAA and the Berman Group. The JAA team largely supports the private sector teams and their work. The Berman Group supports CEP’s export promotion activities. In addition, the project draws upon the resources of a variety of local think tanks, NGOs, business service organizations (BSOs), associations, and other groups to support the project’s activities, either through grants or subcontracts. Key Assumptions The CEP team developed the CEP Year 3 implementation plan under the following assumptions:

• CEP’s primary focus will intensify on transformative private sector competitiveness driven tasks, including supportive work driving investment, privatization, and trade linkages. • CEP will remain focused on tasks that support USAID’s anti-corruption development objective, largely though the BEE and efforts to counter non-competitive behaviors. • CEP will provide targeted support to national and local government reform efforts. • Based on consultation with USAID, the CEP team has included recommended adjustments to the MEL plan and indicators in this work plan.

Year 3 Implementation Plan 12

Proposed Year 3 tasks are presented under this heading. A milestone-based schedule for evaluation and review is integrated into the descriptions below as well as the Gantt chart in Annex A. Since this is a work plan, the tasks are organized to reflect how the project is managed rather than by IR. Also, since many tasks are designed to support results under multiple IRs, arranging them by IR would not support a clean categorization. See Annex B for a mapping of the tasks into the supported IRs.

Given project orientation toward private sector and emerging industry tasks, the first section (Section I. Strengthen Ukraine’s Economy and its Firms) in the work plan covers work in the five CEP priority sectors. The work in these sectors cuts across all the IRs, exemplifying the multi- pronged approach needed for true sectoral transformation. Note that most tasks are carried out by multiple teams bringing multiple capabilities to each task. These are noted in the task descriptions.

The second section of tasks (Section II. Improved Business Enabling Environment) contains the stand-alone BEE tasks that sit mainly outside the sector work. These are broader, macro and national-level transformational initiatives. The tasks here mainly support IRs 1 (Anticompetitive Measures impacting private sector competitiveness reduced) though impacts are expected across several others. These are noted in the individual tasks. Work under these tasks also may support the CEP priority sectors but are designed for broader impact. The third section (III. Increased Investment Catalyzed) presents tasks oriented toward increasing investment and access to finance in the Ukrainian economy. These are distinct from the access to finance tasks in the sector work in the first section, in that they work towards transforming the broader system by which investment enters and is disseminated in the Ukrainian economy. These tasks mainly, but do not exclusively, support IR 3, Increasing foreign and direct investment. The fourth section (Section IV. Improved Export and Trade Capacity) covers our export development and trade and customs activities. The fifth and final section of the work plan (V. Implementation Themes and Tools) includes details about implementation tools including grants, subcontracts, MEL, and communications as well as implementation themes including gender equity, social inclusion, and anti-corruption. In addition to the tasks described below, all teams will manage and monitor grants developed in Years 1 and 2, support MEL in results collection and attribution, and lead ongoing outreach and engagement with stakeholders.

I. Objective 1: Strengthen Ukraine’s Economy and its Firms

IR 1: Increased Private Sector Competitiveness

The Year 3 implementation plan contains action plans for the CEP priority sectors based on the foundations laid and results achieved in Years 1 and 2. These tasks mainly support IR 1, increased private sector competitiveness.

A. Information Technology

In the information technology sector CEP has identified both a broad strategy and a set of tasks that seek to address key weaknesses in the sector. These tasks are designed to support the sector at the national, regional, city, IT local ecosystem, and firm level. In this sector CEP has the advantage of working with highly sophisticated and credible counterparts, many of whom are fully aware of weaknesses and remedial actions needed in the sector. The competitiveness action planning process has informed CEP’s focus on the following three main areas.

• Internationalization. Although the Ukrainian IT sector has grown strongly over recent years, Ukraine has yet to establish itself as a major player on the EU/global IT scene. CEP has been in continual contact with IT sector counterparts to ensure that programs are tailored to gaining increased market access in a Covid-safe manner. • Skills improvement. The low supply of IT related skills is a major obstacle to continued growth of the IT sector. A lack of talent and an inadequate level of training have been named as the main obstacle for IT industry development by interviewed IT companies, IT clusters and the IT association in Ukraine. Though the IT workforce has been growing at over 10,000 employees per year, demand for skills is expected to continue to outstrip supply in the coming years. • Support for emerging industries and product start-ups. Ukrainian firms have been adept at basic outsourcing for some time. However, to really capture greater value in global markets firms need to develop their own IP and their own products revolving around that IP. This emerging group of companies are expected to be the industry champions of the next generation.

The CEP IT portfolio is designed to target gaps across the IT industry, from established outsourcing firms to promising start-ups. Taking a broad perspective on the industry allows CEP to reach in and intervene in key areas across this dynamic sector.

COVID Impact. Effects here are complex and depend on the sub-sector, and company stage and financial position. Since IT systems are deemed essential, companies that carry out basic outsourcing tasks may not initially see a large negative effect on their revenue. Effects will depend on the sectors and specific tasks they engage in. Firms have reported some stability in ongoing projects, but fewer opportunities for new ones. Some sectors, mainly those that support remote work and living, may see growth. Gaming, e-commerce, remote monitoring and IoT, and videoconferencing all come to mind. Earlier stage companies without established markets will likely suffer more greatly. Travel restrictions make both revenue expansion and seeking investment problematic. Similarly, the recession that is following the epidemic will likely lead to tighter financing conditions, less funding, and lower revenues for non-essential services. IT companies that can maintain low overheads will be advantaged in this environment. Though more suitable than most sectors for at-home work, IT companies still report problems managing remote employees.

A1. Sales and FDI growth fostered by extending visibility and reach in international markets

For FY 2021, CEP is planning an aggressive but flexible strategy for getting firms to market. In addition to previous opportunities and challenges, two external factors are helping to shape Year 3 tasks. The first is Covid-19. The pandemic presents both challenges and opportunities for Ukrainian firms. The challenges are many, including market uncertainty, the challenges of moving CEP tasks online, and the difficulty of reaching and managing people working at home. However, in many areas globally IT related firms have responded dynamically and flourished during this period. A rush by more traditional “brick and mortar” type firms to expand their virtual presence could present a great opportunity for IT firms. A second external factor is the current unrest in Belarus. Just as previous unrest in Ukraine drove foreign firms to other locations, as a stable country Ukraine stands to gain some of that business.

PS Task A1.4. Support development of a Lviv tech marketplace (Updated task - formerly “Support development of a Lviv Oblast IT cluster B2B marketplace”) Sub-Task 1. Support development of the tech marketplace platform launched and Description managed by Lviv IT cluster. Initially for its 100+ member companies, the platform is designed to eventually include other Ukrainian IT companies. The platform will enable foreign clients to search, screen, verify, and compare companies and their products and services. Companies will be able to offer consortia with combined IT skillsets. The marketplace will promote Lviv and Ukraine to foreign customers.

2. Monitor Lviv tech marketplace implementation, management, and data maintenance. Implementation Note: changes were made to the original design concept to move it away Notes from a focus on the web technology and towards a comprehensive marketing solution for smaller IT firms. Responsible IT Lead, Grants, Comms Teams Counterparts Lviv IT Cluster, micro IT businesses and IT SMEs Resource Budget $149k – grant (Grant no. IKA_027) Expected July 2020 – December 2021 Timeline IR Category 1.2, 1.3, 4.1 MEL Expected • #5.1: USD value of incremental sales attributed to the project Results implementation: $33 million over life of project By September 30, 2021 – $500k • #7.1: New jobs filled in the USG supported industries: 750 over life of project By September 30, 2021 – 0 • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 100 15

By September 30, 2020 – 0

PS Task A1.5. Support to Previously Launched Export Alliances

Sub-Task Three export alliances (“IT Ukraine Alliance”, “Organic Export Alliance” for Description organic food / cereals producers and “Export Media Alliance” for film & creative industries) were formed in FY 2020. The IT Ukraine Alliance aimed to unite groups of IT companies around exploring new markets. The alliance was designed to be scalable and will be open for additional IT companies to join. 1. Assist in development of 12-month export marketing plans for the alliances, including target market research 2. Start implementation of the export marketing plans 3. Find potential sales leads in shortlisted target markets and conduct a series of Covid-19 appropriate (as needed) b2b matchmaking events 4. Implement other sales lead generation activities identified by the export marketing plan 5. Organize (potentially virtually) a campaign encouraging new IT companies to join the alliance

Implementation All subtasks are expected to be completed in Y3. The task may be Notes extended in order to support activities beyond Y3.

CEP will cooperate with EPO, the IT Ukraine Association, NGO Easy Business and Civitta LLC as consortia that formed the export alliance.

CEP will support the beneficiaries through grant assistance, which will be used to mobilize expertise on target markets (such as local internationalization consultants), support b2b matchmaking, training and analyses of target markets

Responsible Export promotion team, IT lead, Grants, Comms Teams Counterparts IT Ukraine association, IT companies, Civitta, Export promotion Office, International chambers of commerce Resource Budget Grant of $120k (FAA 029) Expected Apr 2020 – Sept 2021 Timeline IR Category IR 1.2, 1.3, 4.1 MEL Expected • #5.1: USD value of incremental sales attributed to the project Results implementation: $3 million LOP By September 30, 2021 – $1 million • #6: Number of firms receiving USG-funded TA to export (Output): 10 By September 30, 2021 - 10 • #8: Number of USAID-assisted firms that expanded their export market (Outcome): 8

By September 30, 2021 - 6 • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance (Outcome): 10 By September 30, 2021 - 7

PS Task A1.6. Support international IT conference in Ukraine – Lviv IT Arena 2020 in online format, with an incoming buyer’s mission Sub-Task Lviv IT Arena is one of the most visible IT events in Eastern Europe and Description the most internationally visited Ukrainian IT conference with 25 percent of 4,000 visitors coming from overseas, including leading international tech business speakers.

Conference organizers recently decided to turn this event into an online format (October 8-10, 2020), offering three days of regular conference content for up to 6,000 expected participants. CEP will:

1. Become a partner for 2 out of 4 conference sections 2. Promote CEP IT/Start-up programs by participation in one or more dedicated events at Lviv Tech marketplace; specifically CEP IT sector lead will participate as a judge during the semi-finals pitching session during the “startup” section of the conference 3. Facilitate an incoming buyers’ mission of potential foreign B2B clients, to be matched to Ukrainian IT companies during the conference

The event is scheduled to take place in early October 2020. Almost all tasks and budget expenditures related to supporting this event occurred in FY 2020, but the actual event and results will follow.

Implementation Additionally, organizers will engage the EPO (and other partners, like Notes trade sections of Embassies in Ukraine) to aid the “incoming mission” stream with the goal of engaging up to 75 foreign companies/buyers and match them to up to 75 Ukrainian IT companies (sellers). Responsible IT lead, Comms, export promotion team Teams Counterparts Lviv IT cluster, EPO Resource Budget Event costs of $14K. CEP internal resources. Expected Apr 2020 – October 2020 Timeline IR Category IR 1.2, 1.3, 4.1 MEL Expected • #5.1: USD value of incremental sales attributed to the project Results implementation: $600k By September 30, 2021 – $600k

Task A1.7. Provide transactional support to tech companies in acquiring new clients and business leads Sub-Task 1. Assist up to 25 IT companies in acquiring new clients by funding Description exhibition booths at targeted tradeshows, creating company profiles on global service marketplaces, limited target market visits, VR/AR meeting support, procuring market representative/sales agent services, and facilitating access to international business networks. 2. Organize participation of Ukrainian tech companies in offline and online trade and business matchmaking events (e.g. Consumer Electronics Show or London Tech Week, or organize an online incoming buyer mission for Ukrainian IT companies) 3. Grant program for tech companies (IT outsourcing, IT product and startups) with growing business metrics targeting both mature companies (to grow sales and lead them to next funding round) and early-stage companies (to grow). Areas of activity may include international marketing support, hiring target market reps, fund raising retainers (upfront payments associated with raising/securing investment), third party audits or due diligence, assistance with investment packages and financial forecasts, etc; 4. Export Evolution for IT program. Develop and deliver specialized program for IT companies, and use grant program to assist most promising gradates in increasing their exports.

Implementation The key to success here will be maintaining flexibility and helping Notes numerous companies understand and respond to current market conditions. The more centralized trade show approach must be substituted for a decentralized, flexible approach. The best performing activities will continue to be replicated.

Responsible IT Lead, Grants, Comms, Export promotion Teams Counterparts 1. IT companies, IT cluster/association (to be defined) 2. Implementing grantee (to be defined), tech companies, EPO 3. Tech companies 4. EPO, Marketing Institute of Estonia Resource Budget 1. $75k – Grant (RFA for tech company business expansion/mini-grants) - plus co-funding from IT companies 2. $40k – grant (at least 25% co-funding) 3. $120k – up to 7 grants (at least 25% co-funding) 4. $100k for training program, $150k for grants (flexible, co-funded) Expected October 2020 – September 2021 Timeline IR Category IR 1.2, 1.3, 4.1 MEL Expected • #4: Value of new investments in selected industries: $ 1 million Results By September 30, 2021 – $500k

• #5.1: USD value of incremental sales attributed to the project implementation: $6 million By September 30, 2021 – $1.75 million • #7.1: New jobs filled in the USG supported industries: 10 By September 30, 2021 - 5 • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 15 By September 30, 2021 - 7

A2. Ukrainian SME Digitalization

The domestic market is usually a critical one for national IT companies. This is where new ideas are tested and come to maturity. In the case of Ukraine, outside of financial services and government procurement, the market is vastly underdeveloped compared to that in competing firms’ countries. Ukrainian SMEs generally do not use high levels of technology in their businesses, whether in accounting, production, inventory management, sales, or other areas. The CEP task in this area cannot hope to solve this greater problem immediately. However, by implementing pilot demonstration projects across a range of SMEs, CEP seeks to showcase how IT solutions can improve productivity and profits.

PS Task A2.1. Support digitalization of Ukrainian SMEs Sub-Task 1. Conduct events (workshops / webinars) to develop capacity of small Description companies to identify their digital/IT business development needs (including one or more available to the general public) 2. Select up to 12 non-IT SMEs that would benefit (ie. achieve increased sales or realize improved management practices) from digitalization support microgrants (USD 8,000). Under these grants, CEP will hire local EBRD-verified digitalization consultants to provide consulting support, and prepare SMEs for IT/digital solutions implementation. Consulting support will typically include a) diagnostics of the company, b) developing IT strategy, c) business processes mapping, d) creating a SoW for IT procurement and installation. Note: we will consider grant applications from capable SMEs (with preference to those who commit to co-funding) that could act as role models in IT/digital projects implementation 3. Encourage and promote procurement/sourcing of IT/Digital solutions and services from Kharkiv IT companies 4. Monitor outcomes, identify and document role models and if results are as expected, replicate the experience to other industries and/or regions Implementation This pilot project will involve SMEs (recipients) and IT companies Notes (providers) in Kharkiv. CEP will consider replicating the pilot across other regions and/or industries. CEP will aim to prioritize SMEs in its target sectors (furniture, tourism, film, food, etc.). Most activities will be carried out online and not impacted by Covid restrictions.

Responsible IT Lead, implementing partner – grantee, Grants, Comms Teams Counterparts EBRD, GoLocal - implementing grantee, SMEs/Companies, IT Clusters, Chamber of commerce Resource Budget $110,000 grant to GoLOCAL (including $96K for IT consulting services and $14K for public lectures or webinars) Expected October 2020 – March 2022 Timeline IR Category IR 1.2, 1.3 MEL Expected Note: this is a pilot and if successful can be rolled out for a significantly Results greater cost-benefit ratio. • #4: Value of new investments in selected industries: $175k By September 30, 2021 - $75k • #5.1: USD value of incremental sales attributed to the project implementation: at least $500k By September 30, 2021 - $250k • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 12 By September 30, 2021 - 8

A3. Sustainable growth of the IT sector through increased availability and improved skills and regulatory environment

As noted previously, having access to the right kinds of skills at the right time has been a big challenge for growing IT firms in Ukraine. Though the problem reaches back to the university level, solutions can arise in many areas across the sector.

PS Task A3.2. Build capacity of small IT clusters to create new IT jobs and sales and develop regional IT industries

Sub-Task 1. Support Ivano-Frankivsk IT cluster in introducing a set of services and Description activities for local IT SMEs and employees, focused on IT sales and marketing and other areas as prioritized by local IT firms (see Grant no. Stand_018). 2. Support Rivne IT cluster in activities to increase the number of IT specialists in Rivne via promoting IT as a profession, IT career days, training and workshops. These activities are designed mostly for online format and are expected to increase the size of the IT community, enabling more IT companies to open IT offices in Rivne.

Implementation Notes Responsible IT lead, grants, comms Teams Counterparts Ivano-Frankivsk IT cluster, Rivne IT cluster

Resource Budget APS001 grants worth $50,000 (Ivano Frankivsk IT Cluster grant - STAND_018 + Rivne IT Cluster Grant- TBD) Expected March 2020 – September 2021 Timeline IR Category IR 1.2, 1.3 MEL Expected • #7.1: New jobs filled in the USG supported industries: 75 Results By September 30, 2021 - 40 • #5.1: USD value of incremental sales attributed to the project implementation: $350k By September 30, 2021 - $125k #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 20 By September 30, 2021 - 8

PS Task A3.3. Conduct trainings and business transformation programs to enhance client relations capacity of tech companies leading to their revenue increase Sub-Task Each sub-task is a series of trainings around the topic noted. These are Description carried out through grants to selected institutions. Each is aimed at increasing the firms’ ability to engage in and increase their market share/presence.

1. Build sales and business skills of IT companies’ staff. Targets high level professionals from up to 20 IT SMEs in a long-term, 7-month mentor-led training program 2. Develop growth strategies for IT companies. Targets 10-15 IT SMEs, via 4-month intense consulting engagements with C-level personnel from IT companies 3. Build capacity of late-stage startups to sell to US market. Online training for up to 30 late-stage startups and deep 8-week mentorship for the 7 strongest ones. CEP and grantee will consider a (offline/online) trade mission for these 7 graduates. 4. Support late-stage startups in strengthening their business models. Engage up to 25 product-level startups into 2 online camps by Silicon Valley mentors 5. Provide access to online global business network (a commercial tool maintained by Startup Grind – a network of entrepreneurs) for late- stage startups. Engage 20-25 mature late-stage startups in a global online business network, comprising of entrepreneurs, investors and corporates, supported by a limited offline program to improve business skills. Implementation Most programs will contain a “public component” where the training Notes contents will be made available to a wider audience rather than restricted to those participating in the main training program. Responsible IT Lead, Grants, Comms, Export promotion Teams

Counterparts 1. IT clusters, senior staff of IT SMEs, Study Dive (implementing grantee), trainers, mentors 2. IT clusters, management of IT SMEs, Very Good Advisors Ltd. (implementing grantee) 3. JET accelerator, mentors, late-stage startups 4. Lviv Business School Entrepreneurship Center, US market access center, late-stage startups 5. Startup Grind Kyiv chapter, mentors, trainers, late-stage startups Resource Budget 1. $95k – grant (plus ~25% co-funding from IT companies) 2. $130k – grant (plus ~50% co-funding from IT companies) 3. $38k – grant (followed by a trade mission, to be considered separately) 4. $38k – grant 5. $50k – grant Expected October 2020 – December 2021 Timeline IR Category IR 1.2, 1.3, 4.1 MEL Expected • #4: Value of new investments in selected industries: $1.7 million Results By September 30, 2021 – $400k • #5.1: USD value of incremental sales attributed to the project implementation: $4 million By September 30, 2021 – $1 million • #7.1: New jobs filled in the USG supported industries: 40 By September 30, 2021 - 10 • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 70 By September 30, 2021 - 30

Task A3.4. Strengthen tech ecosystem and increase its global outreach Sub-Task 1. Launch public campaign to attract talent to Kharkiv IT industry. CEP Description will assist the Kharkiv IT industry with public relations and other activities to increase the number of tech students coming from Eastern and Southern Ukraine to Kharkiv for education.

2. Sponsor flagship international conference “Atlas Tech Week” 2021. CEP will sponsor a 2-day ideation and matchmaking conference coinciding with the Atlas Week music festival. 3. Co-sponsor a premier Fintech conference, “UAFIN.tech conference 2020” (in Covid-19 friendly format) planned for December 2020. CEP will support the annual FinTech Conference aiming to bring together financial services providers and IT startup companies. 4. Venture capital investor book. Support an investor book prepared by the Ukraine Venture Capital Association (UVCA), highlighting Ukrainian venture capital funds and venture investments into Ukrainian tech companies. To be distributed with a wide range of international partners. 22

Implementation To be conducted through a series of grants. Notes Responsible IT Lead, Grants, Comms, Export promotion Teams Counterparts 1. Kharkiv IT cluster (grantee) and IT companies, universities, schools 2. Atlas Week organizers (grantee), IT companies, corporations, startups 3. Fintech Association (grantee), financial sector companies, startups, IT companies 4. Ukraine Venture Capital Association (grantee) Resource Budget 1. $30k – grant (plus substantial co-funding from IT companies/cluster) 2. $63k – grant (plus 65% co-funding from other sponsors) 3. $17k– grant (plus substantial co-funding from other sponsors) 4. $7k – grant Expected October 2020 – November 2021 Timeline IR Category IR 1.2, 1.3, 4.2 MEL Expected • #4: Value of new investments in selected industries: $100k Results By September 30, 2021 – $ 0 • #5.1: USD value of incremental sales attributed to the project implementation: $1.5 million By September 30, 2021 – $400k • #7.1: New jobs filled in the USG supported industries: 200 By September 30, 2021 - 40 • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 40 By September 30, 2021 - 40

PS Task A3.5. Identify and Address Regulatory Burdens on the IT Sector

Sub-Task • IT sector lead and CEP legal team will conduct a short survey of Description selected IT cluster membership on legal and regulatory barriers impacting their businesses. • Create a shortlist of priority issues and develop an action plan to address barriers • Engage with industry and counterparts identified via the MCI Survey and collaborate to address regulatory burdens and implement developed action plans • Continue to advise firms on IT-specific trade policy issues, trade defense instruments, and prepare instructional videos as needed

Implementation Notes

Responsible IT Team Lead, Legal Team, Grants team, Comms Teams Counterparts Cluster and association membership Resource Budget Internal CEP staff Expected October 2020 – September 2021. Ongoing activity, Timeline IR Category IR 2.1, 4.2

MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: TBD

A4: Support to emerging industries and product start-ups

This set of tasks was previously part of the Special Initiatives section of the Y2 work plan. Under the new results framework, it was brought under the expertise and management of the CEP IT sector work. These tasks are designed to foster growth of the next generation of companies into the global IT scene. They tend to have their own intellectual property and products.

Task A4.1 Provide transactional support for promising early-stage innovative and tech enterprises

Sub-Task To address the needs of mature product-level startups, CEP will conduct Description activities aimed to help firms scale their sales, enhance product development, and gain and retain market share, etc. Specifically: 1. Continue (from FY 2020) to conduct short-term traction camps for product-level startups in a Covid appropriate format 2. Identify and engage in relevant Covid-appropriate market access activities for promising early-stage innovative and mature product- level tech enterprises. See discussion in task A1.7 for examples. 3. Manage previously launched RFA012 grant program for mature startups to scale-up their business, increase revenues, retain market share, complete product development, and to find new markets.

Implementation See Grant no. FAA 027 for more details. Notes Responsible PSD team, EP team, Comms Teams Counterparts IT clusters, tech ecosystem NGOs, startups Resource Budget Estimates: 1. 60 product-level tech startups participate in traction camps for $60k (FAA_027) 2. Development of a special grants program for up to 15 innovation and tech enterprises for $375,000 (RFA012) 3. APS 1 Grants -- $93K 4. Biosens Grant (STAND 020)- $82K Expected Starting from May 2020 till May 2022 Timeline IR Category IR 1.2, 1.3, 4.1 MEL Expected • #4: Value of new investments in selected USAID-assisted industries: Results $1 million by September 30, 2021 – $500k • #5.1: USD value of incremental sales attributed to the project implementation: $3.75 million by September 30, 2021 – TBD • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance: 30 by September 30, 2021 – TBD

Task A.4.2. Youth-Targeted Entrepreneurship Education (previously titled “Support transformational initiatives focused on innovations and education”)

Sub-Task To develop the tech ecosystem, CEP will support transformational Description initiatives, laying the foundation for an entrepreneurship culture, investment in early-stage enterprises, and bridges between Ukrainian tech and international business and investment circles. For this, CEP is pursuing the following initiatives: 1. Conduct (by YEP) a series of online trainings, workshops, and meetings around entrepreneurship education for students and early- stage entrepreneurs via University clubs, student startup incubator and student startups accelerators. Activities will also include development of a pre-acceleration program as well as launch of pilot courses on entrepreneurship in Ukrainian universities with support of line Ministries

Implementation Activities will be carried out through grants (Grant no. STAND 006) with Notes appropriate, leading institutions Responsible IT lead, Comms Teams Counterparts Startup consulting organizations (e.g. Civitta), Lviv competitiveness council, tech ecosystem NGOs (e.g. Youth Entrepreneurship Partnership - YEP), Ministry of Digital Transformation, Ministry of Education and Science Resource Budget Entrepreneurship education: grants $57,000 (STAND_006) Expected Starting from October 2019 - April 2022 Timeline IR Category IR 1.1, 1.2, 1.3, 4.1 MEL Expected • #4: Value of new investments in selected USAID-assisted industries: Results $500k • By September 30, 2021 –$200k • #5.1: USD value of incremental sales attributed to the project implementation: $120k • By September 30, 2021 – $50k • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance: 25 By September 30, 2021 – TBD

B. Furniture

Furniture production and wood processing is a large and important sector in Ukraine with considerable growth potential. The industry’s dynamism and potential is underscored by its being one of the few manufacturing sectors to fully recover from the loss of Russian and related markets in 2014. However, even greater sales and exports continue to be hindered by several important factors. One is still lagging market access. Ukrainian firms are operating below capacity especially at the higher end of the market. Additional export potential exists in the EU, GCC countries and possibly further afield in the United States. Deficits in market knowledge, export and working capital financing, design, and productivity have slowed progress. In particular, a lack of financing keeps firms from being able to offer market-standard terms to buyers, while inhibiting production upgrades to improve efficiency and quality. Finally, the workforce is still largely trained for and oriented towards the previous Russian and related markets. There are also ongoing issues with the way wood is supplied. Large state-owned industries continue to dominate supply chains, leaving smaller producers with supply that is less certain and with often widely fluctuating prices. Along the same lines, lack of transparency in supply markets and lack of consistent and consistently applied regulations mean that it is often difficult to know if timber is sustainably harvested. These issues are further elaborated on the CEP Competitiveness Action Plans. CEP work in the furniture sector revolves around tasks to address these varied constraints, while taking advantage of the strengths and opportunities of this dynamic sector. COVID Impact. Though initial exports were up in Q1 2020, export markets will likely face a downturn overall. Residential markets are seeking a balance between lower demand due to employment uncertainty, and higher demand due to people investing in their homes while social distancing is in effect. Commercial markets will likely face a more severe downturn as office investment slumps. Some exceptions are in online sales and pre-scheduled, government procurement. CEP is working to improve Ukrainian firms’ access to both markets and is conducting extensive market research to determine how to overcome limitations placed by travel restrictions. Furniture companies are often capital intensive with significant and costly facilities. High overheads put these firms in a potentially precarious position. A lack of working capital facilities in Ukraine may also mean that firms that burn through their cash balances in the downturn will have trouble re-starting production once the market recovers. Production and wholesale costs will be critical across markets as regional companies compete for limited sales.

PS Task B1. Assist furniture companies in targeting markets, establishing market linkages and increase in sales through existing and new channels Sub-Task Covid-19 has made market access more difficult by restricting the amount Description of in-person interaction between buyers and sellers. CEP will start off FY 2021 with a series of market outreach and intelligence gathering activities. These will be conducted on a rolling basis and market access activities will be continuously tailored to changes in market conditions. Currently planned sub-tasks are noted below.

1. Support development along with a leading retailer of an online marketplace for furniture companies, which are currently lacking in Ukraine. This will both assist firms in developing online marketplaces and improve existing ones. Assistance may be in product rendering, call centers, online payments, delivery, and after-sale services. 2. Calling campaign (CEP internal) to contact all potential participants in the now postponed Furniture of Ukraine Business Expo (FUBE) to determine how to continue their interest in Ukrainian producers. This is expected to yield new or altered sub-tasks. 3. Based on current market intelligence, continue trainings on marketing and sales for furniture SMEs (via online platform and direct calls/sales) 4. Provide advisory for targeting buyers to be invited to the April 2021 Furniture of Ukraine Business Expo, support foreign buyer visits to the Fair (postponed from FY 2020) 5. Select companies for participation in trade missions and other events in targeted international markets, provide advisory on target market requirements and product mix. TBD due to Covid, but may include IMM Cologne Furniture Fair, Germany (January 2021); Meble Polska, Poland (February 2021), High Point Market, the USA (April 2021), M.O.W. in Bad Salzuflen (September 2021).

Implementation As noted, flexibility will be the main theme with CEP helping companies Notes adjust to new market conditions Responsible FS lead, EP team, Grants, Communications Teams Counterparts Furniture companies, UAFM, EPO, Other BSOs (associations, chambers, training providers), company “Smart People” for sales and marketing trainings Resource Budget Internal resources, Grants: $60k in grants for a furniture online marketplace development; $75k in grants (STAND_012 ) for matchmaking support and inward buyer attraction for Kiev event; $20K subcontract for training in marketing and sales; $60,000 in grants for international trade event participation; 40 workdays of STTA (est. $36,000) Expected October 2020 - September 2021 for sub-tasks noted above Timeline IR Category IR 1.2, 1.3, 4.1 MEL Expected By September 2021: Results • #5.1: USD value of incremental sales attributed to the project implementation: $7 million; • #6: Number of firms receiving USG-funded technical assistance to export: 50; • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 150

PS Task B.2a. Improved competitiveness, sales and profitability of furniture companies through design-led innovation, increased productivity, and improved quality Sub-Task Note: this task represents a follow-on to what were previously FY 2020 Description stand-alone tasks B2, B3, and B8). Work under this task will complete the programs and then work to make them available to a wider range of firms than those originally targeted.

1. Complete the pilot training on design-led innovation, including supporting product prototyping, and participation in the design exhibition Architectural Practice in Kyiv in November 2. Based on lessons learned from the pilot, adjust the training and conduct additional trainings on design-led innovations and embed “good” design practices into schools supporting the furniture industry. Disseminate “best practice” case studies throughout the industry. 3. Continue operations management and related trainings designed to improve manufacturing techniques and productivity (via online platform) 4. Continue technology training program for furniture manufacturers and work to embed this material and knowledge into the relevant schools 5. Assess the need for a Furniture Technology Training Center, and if positive, perform a Feasibility Study assessing different alternative models of centers 6. Supervise grants for technology/equipment upgrades

Implementation Operations management training will be continued online to increase the Notes number of participating SMEs. In case of the successful pilot started under grant in September/October 2020, technology training program will also be continued in Year 3.

Responsible FS Lead, EP team, Grant, Design Trainer STTA, Comms Teams Counterparts Companies, Industrial Designers, UAFM, Ukrainian association of wood processing equipment, other BSOs (associations, chambers, training providers) Resource Budget Internal resources; Grant funding: $250k, including $200k for equipment/technology upgrade and $50k for design and innovations; including 90 workdays of STTA in one of the grants. (IKA_2019.009) (IKA_020), (IKA_015) Expected Timeline October 2020 - September 2021. IR Category IR 1.1, 1.2, 2.3 MEL Expected By September 2021: Results • #4: Value of new investments in selected USAID-assisted industries: $1.8 million • #5.1: USD value of incremental sales attributed to the project implementation: $5 million • #7.1: New jobs filled in the USG supported industries: 60; • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 100;

PS Task B4. Develop Supply Chains / New Domestic Suppliers for Import Substitution

Sub-Task This task continues work started under task B4 in FY 2020. The Furniture Description Sector Supply Chain Study revealed some segments with development potential (wooden and metal furniture parts, accessories, painting services, logistics). These opportunities will be supported by the grant program (RFA 2020-018 was issued in September 2020). The RFA was delayed due to the negative impact of COVID-19 quarantines and high uncertainty at the market.

Implementation Grant start date is contingent on obtaining required USAID approval and Notes environmental risk assessment determination. Responsible FS Lead, Grants, EP team, Comms Teams Counterparts Furniture sector companies, UAFM, Market Research Company Resource Budget Internal resources plus Grants: $150k Expected Timeline October 2020 – September 2021 IR Category IR 1.1, 1.2, 2.3 MEL Expected By September 2021: Results` • #4: Value of net new investment in selected USAID-assisted industries: $850k • #5.1: USD value of incremental sales attributed to the project implementation: $2 million; • #7.1: New jobs filled in the USG supported industries: 20 • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 4

PS Task B.5. Increase furniture sales through integration of companies into multinational buyer supply chains Sub-Task This task is a continuation of work started under tasks B5 in FY 2020. Description Since March 2020, foreign/multinational buyers of furniture and furniture components have practically stopped visiting Ukraine due to COVID-19 quarantines. Most of the FUBE 2020-related visits of buyers scheduled for April 2020 have been canceled. In July 2020, the FUBE was rescheduled for April 2021. In the furniture market, study visits to furniture factories are a usual prerequisite for starting cooperation. We expect that from the beginning of 2021, quarantine measures will be relaxed, and Ukraine will become more accessible for foreign furniture buyers.

1. Organize multinational buyer visits to selected domestic furniture manufacturers, and/or B2B/meet-the-buyer event with invited companies. (FS lead, UAFM, Multinational). 2. Support companies interested in working with multinationals to complete supplier readiness assessment. (FS lead, UAFM, Multinational).

3. Develop and implement supplier development program in collaboration with companies, including process and technology upgrading (FS lead, UAFM, Grants, Multinational). 4. Investigate other multinational supply chain integration opportunities.

Implementation CEP looks into opportunities of supplying to the multinationals including Notes IKEA, Habitat, Roller, XXXLutz, Otto, etc. Responsible FS Lead, Grants, EP team, Communications Teams Counterparts Companies, Ukrainian Association for Furniture Manufacturers (UAFM), Multinational(s) Resource Budget Internal resources plus Grants: $75k, including STTA Expected Timeline January 2021 - September 2021 IR Category IR 1.2, 1.3, 4.1 MEL Expected By September 2021: Results • #5.1: USD value of incremental sales attributed to the project implementation: $1 million • #6: Number of firms receiving USG-funded TA to export: 3 • #8: Number of USAID-assisted firms that expanded their export market: 3 • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 5

PS Task B.6. Increase furniture sales through improved access to finance

Sub-Task 1. Deliver training on financial management for the furniture Description manufacturing SMEs (via online platform). Finance trainers from the Furniture Management School program will provide training that addresses areas including costing and pricing, working capital management, and use of financing instruments. A focus will be on cash flow management during the Covid slowdown. 2. Promote financial services such as factoring, purchase order financing and leasing to UAFM members and other firms (series of workshops delivered by the commercial bank representatives).

Implementation CEP will work to improve other institutions’ such as the UAFM ability to Notes carry out these trainings and tasks, rather than engaging on a company by company level. Responsible FS Lead, EP team, Grants, Comms, SME Finance program developer Teams (Deborah Fairlamb) Counterparts Companies, UAFM Resource Budget STTA – $10k for development of information Internal resources Expected Timeline November 2020 – July 2021 IR Category IR 1.2, 1.3

MEL Expected By September 2021: Results • #4: Value of net new investment in selected USAID-assisted industries: $500k • #5.1: USD value of incremental sales attributed to the project implementation: $375k • #22: Number of companies with increased access to Finance as a result of USG assistance: 100

PS Task B9. Identify and Address Regulatory Burdens on the Furniture Industry

Sub-Task • Furniture sector lead and CEP legal team will conduct a short survey Description of selected UAFM membership on legal and regulatory barriers impacting their businesses. (initial survey completed) • Create a shortlist of priority issues and develop an action plan to address barriers • Engage with industry and counterparts identified via the MCI Survey and collaborate to address regulatory burdens and implement developed action plans • Continue to advise on furniture-specific trade policy issues, trade defense instruments, and prepare instructional videos as needed

Implementation Engagement in this area will depend on results of survey and relative need Notes versus other sector needs. Does not include the Prozorro.Sale work.

Responsible Furniture Team Lead, Legal Team, Grants team, Comms Teams Counterparts UAFM membership Resource Budget Internal CEP staff Expected September 2020 – September 2023 Timeline IR Category IR 2.1

MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: TBD

C. Tourism

CEP will take a “wait and see” approach with respect to engaging in new tourism initiatives in FY 2021 while continuing to build critical foundations at both the National Tourism Organization and localities. Core aspects of ongoing tasks from Year 2 will be completed, but promotional activities are put on hold. CEP cannot justify increasing investments or making any investments in promotion at this time. Once recovery starts to take hold, CEP may engage in further tasks to build on its foundational work.

COVID Impact. COVID-19 has impacted the Tourism sector considerably, and it remains uncertain when the slump in international tourism is likely to recover as well as what forms tourism is likely to take once recovery starts to take hold. Even where it partially recovered from the spring lock-down, tourism patterns during the summer months have differed from previous years. Visitors tended to eschew the traditional city breaks and crowded beaches and moved to more isolated venues and activities. Travel, accommodations, restaurants, and events have all ground to a halt with the epidemic. It is probably not realistic to expect a recovery of leisure tourists for the better part of a year. Essential business travel may recover quite a bit sooner, but also in a limited way. The interim period is perhaps better spent conserving resources and laying groundwork for an eventual recovery.

PS Task C2. Stimulate the growth of tourism revenues, investment, and job-creation in pilot oblasts through the development, promotion, and delivery of new cultural and heritage tourism products Sub-Task In FY 2020, CEP supported tourism product development in two pilot Description regions including providing mentorship to a total of 20 entrepreneurs who received grants from the UCF (9 in Odesa and 11 in Zakarpattia). In FY 2021 CEP will continue to support these and prepare them to take advantage of a rebound in tourism.

1. Support additional requests received from Zakarpattia and Odesa Oblast in developing tourism products with the focus on generating sales and creating jobs. Note: UCF will identify them thru an open grant competition during December 2020. 2. Pending strong, confirmed results from the pilot, continue to support Ukrainian Cultural Foundation (UCF) with the next CulTouReg Program through sub-grants from the NTOU. Expand mentorship in at least 10 more regions

Implementation This task will be undertaken through a grant. Notes Responsible PSC team, Grants, Comms, Tourism Trainer and Advisor Teams Counterparts NTO and network, Regional Tourism Organization, Tourism Entrepreneurs, UCF Resource Budget Internal resources. $95k; $45k for current active grant (STAND_011) and $50k in new grants; STTA - $10-15k Expected Timeline October 2020 to December 2021 IR Category IR 1.1,1.2, 1.3 MEL Expected • #5.1: USD value of incremental sales attributed to the project Results implementation: $300k - 2.5 million depending on scale of program By September 30, 2021 – $100k • #12: Person-hours of USG-supported training completed in trade and investment: 400 By September 30, 2021 - 100

• #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 10 • By September 30, 2021 – 5 • #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 By September 30, 2021 – 1 • #20: Number of USG-assisted institutions and organizations with improved performance: 1 By September 30, 2021 –1

PS Task C3. Assist in building capacity in the national tourism organization (NTOU) and sub-grantees products

Sub-Task All activities below will be carried out through a grant to the NTOU, to be Description monitored by the private sector lead and the grants team.

1. Provide advisory support and host networking events to strengthen local destination management organizations (DMOs). CEP activities will help DMOs position themselves to attract visitors once restrictions are lifted and people begin travelling again. 2. Develop e-learning course for tourism SMEs on hospitality training and Covid-19 preparation for hotels, restaurants, and attractions. 3. Training on quality and safety standards, and certification (SGS) for SMEs, to reinforce regulations previously passed with CEP support. 4. Collect, analyze and disseminate tourism statistics (using the methodology previously established by NTOU with CEP support) 5. Support development of online service platform “Tourism Jobs” on NTOU’s website. This will offer tourism vacancies and track job placements 6. Develop catalog of all conference facilities in Ukraine to promote MICE Tourism.

Implementation CEP will work to maintain flexibility in both programming and ability to Notes accelerate reengagement in tourism as Covid restrictions are lifted and tourism begins to increase again Responsible PSC team lead, Grants, Comms Teams Counterparts NTO, Regional Tourism Organization, Other tourism associations, Tourism SMEs, USAID ERA, EBRD and other donors, National and Public institutions dealing with tourism issues Resource Budget Internal resources; $183k in grants - $83k in current active grant (STAND_2019.003); $85k in new Co-Creation Tourism grant. STTA up to 70 w-days (included in grant) Expected Timeline October 2020 to December 2021 IR Category IR 1.1,1.2, 1.3 MEL Expected • #4: Value of net new investment in selected USAID-assisted Results industries: $1 million September 30, 2021 - $50k 34

• #5.1: USD value of incremental sales attributed to the project implementation: $5 million September 30, 2021 – 0 • #7.1: New jobs filled in the USG supported industries: 100 (by 2023, LOP) • #8: Number of USAID-assisted firms that expanded their export market: 50 September 30, 2021 - 5 • #12: Person-hours of USG-supported training completed in trade and investment: 2000 September 30, 2021 - 20 • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 50 • September 30, 2021 - 20

PS Task C4. Provide support in improving the business enabling environment for Ukrainian tourism

Sub-Task In FY 2021, CEP will review the tourism Law and provide Description recommendations for the development of a green (Agri) tourism regulatory framework

1. Support a request received from MEDTA's Rural Development Department about domestic green tourism legal framework development 2. Other requests as needed on regulatory topics

Implementation CEP in coordination with METDA Notes Responsible BEE team and Tourism STTA Teams Counterparts METDA Resource Budget Internal resources. 8K STTA

Expected Timeline October 2020 to September 2021 IR Category IR 2.1 MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: 1 • #19 Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 • #20: Number of USG-assisted institutions and organizations with improved performance: 1

D. Food Processing The 2020 CEP Food Processing Workplan laid the foundations for development of two of Ukraine’s key food processing sub-sectors: fruits and berries, and confectionary products. A third sub-sector is under development (TBD). In 2021, CEP will facilitate accelerated exports through: aggressive and research informed tactics to promote and sell products in target markets; facilitating investments to tackle competitiveness constraints; and strengthening human resources required for product development and marketing. CEP will also identify issues and advocate for improvements in the regulatory enabling environment. Selected markets in Europe (Germany, Great Britain, France, Netherlands and Scandinavian countries) will be targeted export destinations for fruits and berries. For confectionary products, per market assessments by the European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization (FAO), CEP will concentrate confectionery sales on the Association of Southeast Asian Nations (ASEAN),1 with the Philippines as the entry market, and the Gulf Cooperation Council (GCC) countries,2 with the Kingdom of Saudi Arabia (KSA) as the entry market. As with other sectors, CEP will take a flexible approach to market access, adapting to COVID-19 related challenges as they arise.

COVID Impact. Food is an essential good and overall demand is not expected to drop significantly. Shipments are still largely moving across national borders. The structure of demand, however, is changing. Across the world food supply chains have needed to pivot from restaurant supply to retail. As a largely wholesale exporter, Ukraine should see continued demand for its products with an ability to supply both restaurant and retail. Closed EU country borders limited crop picking as migrant worker travel was restricted. Should the pandemic resurge in the fall, opportunities may open for Ukrainian suppliers of fresh fruits and vegetables. Problematically, even in the modern world supply chains are often developed based on personal contact, and travel restrictions will make that difficult to achieve. As with the other sectors, CEP is conducting extensive market research to determine the best Covid-appropriate tactics for entering new markets.

D1. Increasing sales through coordinated new market penetration

PS Task D1.2. Expand Food Trade Alliances (FTAs) and continue developing and implementing COVID-19 appropriate sales and marketing strategies in target markets and regions Sub-Task Building on the launch of two FTAs in 2020, CEP will consolidate and Description expand these organizations while implementing market access and promotion plans. CEP will also form one additional FTA, if applicable:

1. UBA (Ukrainian Berry Association) continues executing FTA grant (FAA 028), monitoring market data (i.e. price, logistics) including COVID-19 restrictions, development of virtual and actual promotion

1 ASEAN countries include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. 2 GCC countries include Bahrain, KSA, Kuwait, Oman, Qatar and United Arab Emirates (UAE). 36

events, and facilitation of live and online B2B meetings (see grant for additional detail); 2. UKRKONDPROM (Confectionary) continues executing FTA grant (FAA 032) including hiring Trade Representatives in target markets/regions, facilitation of B2B meetings and live trade missions to Philippine and KSA once COVID-19 restrictions allow (see concept paper or grant for additional detail); 3. With support of ED team, continue to increase leads database and conduct a series of B2B matchmaking events around the leads (mainly virtual) 4. Assess the need for a more comprehensive, grant supported program across multiple sub-sectors to help Ukrainian food companies design and implement Middle East market development plans. Design and execute program if assessment is positive. 5. CEP and FTA members review and integrate additional associations and firms into FTAs on a rolling basis while maintaining communication and coordination as needed between existing members; 6. CEP continues meetings with Ukrainian food processing companies and trade development and marketing associations as needed to develop third FTA in an additional sub-sector based on extensive assessments and field visits carried out during 2019/20; and 7. FTAs develop longer-term sub-sector promotion plans with FTAs in order to promote Ukraine as a reliable source of high-quality products. Implementation CEP expects FTAs to lead design and implementation of promotion Notes activities in target markets and also develop strategies for additional regional expansion in EU, ASEAN and GCC. As noted, CEP will also assess whether a program that supports multiple sub-sectors is warranted for Middle East access. As noted in the introduction to this work plan, CEP will maintain maximum flexibility to adjust rapidly to market conditions. If association/enterprise interest warrants, CEP will support greater formality of FTA management in FY21 and beyond, such as expansion of membership services and budgets based on internal revenues. The Export Development team will play a key role in the FTA market access plans, including facilitating participation in Export Evolution training programs and gathering market intelligence. The EPO will participate as their capacity allows. Responsible FP lead, food processing STTA, ED team, Grants team, MEL, Comms Teams Counterparts MEDTA EPO (advisory services and training) Resource Budget STTA: 77 days: $44,685 Grants during FY21 UBA: $100k (FAA 028) Confectionery: $92k (FAA_032) Third FDA (TBD): $90k (estimated) Middle East program: $200k grants and subcontract Expected September 2020 – September 2021 (likely ongoing) Timeline 37

IR Category I.R. 1.2, 1.3, 4.1 MEL Expected By September 2021: Results • #5.1: USD value of incremental sales attributed to the project implementation (not accounting for contingent Middle East program): o UBA: $4.2 million o Confectionery: $5.4 million o Third FDA: TBD • #8: Number of USAID-assisted firms that expanded their export market: o UBA: 60 o Confectionery: 150 o Third FDA: TBD • #6: Number of firms receiving USG-funded technical assistance to export: o UBA: 180 o Confectionery: 225 o Third FDA: TBD

PS Task D1.3. Create and implement Investment Plans aimed at addressing competitiveness constraints Sub-Task CEP co-develops FTA Investment Plans with lead companies identifying Description potential sources of finance to address competitiveness constraints. This may include working capital, operating expenses for improving raw materials, productivity and quality, and capital assets such as handling equipment related to washing, sorting, grading, and packaging or other items. CEP plans to coordinate closely with the IFC and EBRD in this activity. Plans will evaluate finance options including:

1. Own finance 2. Bank finance 3. Trade finance (documentary Letter of Credit, etc.) 4. Existing investment funds 5. Raising capital in informal equity markets 6. IFC-sponsored Crop Receipts (CR) programs through commercial sources 7. Other source

The plans will rank most viable options for finance and advise on application. Implementation may include use of grant funds to leverage additional financing. Implementation CEP anticipates that FTA members are ready for in-bound investment and Notes will begin to focus on in-bound investor tours, investment promotion to selected sectors and other activities to link alliance members with investors. Responsible FP Sector Lead, STTA Food Processing Advisors, Comms, Access to Teams Finance Advisor Counterparts IFC (advisory services and training), EBRD 38

Resource Budget Internal Resources STTA: 10: $5,000 Expected October 2020 – September 2021, likely ongoing through project Timeline IR Category IR 1.1, 1.2, 3.2 MEL Expected By September 2021: Results • #4: Value of net new investment in selected USAID-assisted industries: o UBA: $1.5 million o Confectionery: $1 million o Third FDA: TBD • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: o UBA: 30 o Confectionery: 75 o Third FDA: TBD

D2. Developing the human resource capacity of Ukrainian food processing staff

PS Task D3.1. Develop the HR capacity of Ukrainian food processing staff to address common sector competitiveness and marketing challenges Sub-Task CEP completes the HR Development Plans co-developed with FTA Description memberships and MEDTA EPO. These are based on self-reported HR constraints in member firms. CEP and FTA membership design and roll-out a series of trainings designed to address the identified constraints. Some of the areas already identified include: financial analyses required to access finance for upgrades, implement market analyses and develop leads in potential new markets, develop high quality promotion and marketing materials, obtain trade credit i.e. negotiate a documentary letter of credit (L/C) or bank guarantees, respond to certification audits for Hazard Analysis and Critical Control Points (HACCP) and others. In both the design and follow-up to trainings, CEP will ensure that training material are available to a wider range of companies than those in the FTAs

Implementation As training needs are identified, grants will be provided to relevant Notes implementing institutions.

Responsible FP Sector Lead, STTA Food Processing Advisors, EP team, Access to Teams Finance Advisor, Grants team, MEL, Comms Counterparts MEDTA EPO, TBD (advisory services) Resource Budget STTA: 10 days, $6,800 HR Skills Development Grants: UBA: $30k 39

Confectionery: $30k Third FDA: $30k Expected September 2020 – September 2021, likely ongoing through project Timeline IR Category IR 1.1, 1.2, 1.3 MEL Expected By September 2021: Results • #7.1: Number of New jobs filled in the USG supported industries: TBD • #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 120

PS Task D3.2. Identify and Address Regulatory Burdens on the Food Processing Industry and CEP Sub-sectors Sub-Task Sector lead and CEP legal team will conduct a short survey of selected Description FTA membership on legal and regulatory barriers impacting their businesses. (initial survey completed)

• Create a shortlist of priority issues and develop an action plan to address barriers • Engage with industry and counterparts identified via the MCI Survey and collaborate to address regulatory burdens and implement developed action plans • Continue to advise on food processing-specific trade policy issues, trade defense instruments, and prepare instructional videos as needed

Implementation With initial surveys already completed with engagement from the two Notes developed FTAs, CEP legal will begin their assessment and development of action plans to address key areas of industry constraint

Responsible FP leads (STTA Food Processing Advisors), FP Team Lead, Legal Team, Teams Grants team, Comms Counterparts FTA membership Resource Budget Internal CEP staff Expected October 2020 – September 2021 Timeline IR Category IR 2.1, 4.2 MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: TBD • #5.1: USD value of incremental sales attributed to the project implementation: TBD

E. Film and Creative Industries

According to Olsberg SPI research, the global screen production market is estimated at $177 billion and growing especially with booming demand for content. The industry in 2019 supported 14 million full time equivalent jobs and generated $414 billion in economic impact in related industries. With an average $10 million weekly spend on a major feature movie, on average 67% of this amount is spent outside of major screen and television productions. Foreign film and TV productions not only have an economic effect in related industries (hospitality, logistics, etc.), but also contribute to development of regions, high-added value employment opportunities, and promoting Ukraine as a destination for film and experiential tourism. CEP research indicates that Ukraine can attract productions thanks to its diverse filming locations, talented production crews, cost effectiveness, and cash rebate incentives supported by the Government of Ukraine (GoU).

Notwithstanding the COVID-19 pandemic, CEP quickly established relationships with major participants in the Ukrainian film industry: companies, associations, the State Film Agency (Derzhkino), the President’s Office, the Ministry of Culture, and municipalities. To consolidate the industry around common goals, CEP hosted Zoom conferences with top-level participants. Additional progress to-date includes recruiting high-level STTA (former 1st Deputy Minister of Culture), publishing and RFP and selected winners for an industry and locations databases, and developing a bundle of RFPs and RFAs for Certification and Licensing activities.

In Year 3, we plan to accelerate against this momentum and help Ukraine unlock its potential as a global Creative and Film destination. Goals include skills development and business environment improvement, strengthening the quality of industry processes, and jointly presenting a “Create in Ukraine” promotion on target markets to attract sales as rapidly as possible.

By 2023 CEP plans to attract several film productions to Ukraine, including: at least one A-class feature film of up to USD 20 million with a share of local spend of at least USD 5 million creating up to 200 jobs; two B-class feature films with budgets of over USD 1 million, and; at least one TV Series with a budget of up to USD 0.5 million per episode. Growth in this industry is also expected to provide ancillary benefits in skills development, national branding, and film tourism.

COVID Impact. The film sector can partially be thought of as an extension of tourism. However, despite similar turmoil some brighter spots may be identified. Film production is a business, not a leisure activity, and as such can expect a more rapid recovery than broader tourism. The pandemic has driven a need for more content as people spend more time at home. As a relatively cost-effective location, newly strapped production companies may find Ukraine more attractive than before. A quick recovery at a handful of Ukrainian studios bodes well. Post- production, 3D, and animation services would be expected to continue largely as before.

PS Task E2. Workforce and Skills Development / Enabling sustainable growth of the Film industry through improved availability and quality skills of talent and crews

Sub-Task 1. Award and manage grant for improving skills for the Film Industry Description through an Excellence Training Program (ETP). Train the trainers seminars (Movie Magic© budgeting/scheduling tool and other management trainings), technical trainings (Patriot Rental) and school for producers (film associations, private schools and training companies) (Grant Activity #1 RFA015) 2. Manage grant to assist Ukrainian companies in receiving software licenses and online certification for Animation, virtual reality (VR), computer graphics (CG), and visual effects (VFX) post-production (i.e. Trusted Partner Network (TPN) and ISO/IEC 27001). These are essential for bidding for and work with US clients (such as Netflix, Amazon, Hulu, Apple, etc.). Assist Ukrainian companies which received accreditation and certifications to market their products to foreign buyers. (RFA019) 3. Support Implementation of semi-formal professional degree programs with top Ukrainian and US Film school(s) Currently CEP is negotiating a partnership between UCLA and LvBS. 4. Develop, disseminate, and promote (domestically and globally) Ukrainian adherence to international film production standards (incl. health and safety certifications). Implementation Increasing supply of skilled talent and crew is quoted as one of the major Notes enablers for sustainable growth of the Film industry in Ukraine (by interviewed companies, associations, Ministry of Culture and State Film Agency (Derzhkino), and specifically addresses in Creative industries Export Strategy, developed by Ministry of Economic Development and Trade (MEDT) and GiZ.

CEP will engage Film associations, service providers and top US and European Film schools in providing high level skills training, to make formal and private training institutions (universities, courses and vocational schools) more relevant to the needs of the sector. Responsible PSC team, Film/Creative Sector Lead, Comms, Grants Teams Counterparts Ministry of Culture, Film Associations, Universities and private companies Resource Budget Internal resources: $121K in grants for trainings (Grant Activity #1 RFA015+ RFA019), $3.5K in STTA costs for Technical assistance. $25k in subcontract or Activity #4 above (health and safety). Expected Timeline October 2020 to September 2023 IR Category IR 1.1, 1.2, 1.3 MEL Expected • #5.1: USD value of incremental sales attributed to the project Results implementation: $2 million, LOP target By September 2021 - $500k • #7.1: USD value of incremental sales attributed to the project implementation: LOP target 500 (by 2023) By September 2021 - 100

PS Task E3. Promotion of Ukraine as a Creative Hub (particularly for Film)

Sub-Task 1. Finalize Film Industry databases, to include production companies, Description directors, producers, technical crew, locations, completed projects, actors, post-production capabilities in Ukraine. 2. Support CREATEinUKRAINE portal with an appropriate organization to enable foreign clients to search, compare companies, their products/services, make orders and develop partnerships. 3. In partnership with Associations, Ministry of Culture, Ministry of Foreign Affairs (+others?), support the development of a promotion strategy, including materials, trade publication articles, creating pitch decks, professional videos, digital promotion at existing Ukrainian and international talent and locations databases, running ads online (top industry resources like Variety) and industry printed magazines (i. e. LMGI). 4. Support the “Fourth Annual International Creative Ukraine Forum” organized by the Ministry of Culture during November 19-20, 2020 5. Support producers’ networking and deal making events at Film Festivals in Ukraine (i. e. OIFF, Kyiv Molodist, Creative Ukraine International Forum etc.), as appropriate during Covid-19. 6. After travel ban is lifted, help organize familiarization trips for ‘buyers’, media, opinion leaders and influencers, location scouts, producers, etc. incl Odesa film festival (OIFF), creative industries forums and events in partnership with Cannes Lions, Creative Europe, Ukrainian Institute and Ukrainian Cultural Foundation. 7. If deemed possible under COVID-19 restrictions, support participation in International Events to promote “Made in Ukraine” to global markets, showcase products, build international profile and find new business partners: Annecy (France), Ottawa International Animation Festival (Canada), Siggraph International, Siggraph Asia, FMX, Beijing Films Festival, VIEW conferences and major international film markets: Berlinale (Germany) 11- 21 February 2021 Cannes Market (France) May 2021 SIFF Market (Shanghai) June 2021 Toronto International Film Market September 2021 Asian Film Market (Busan, S. Korea) October 2021

Implementation CEP is engaging major Film Associations such a (FIAU, UMPA, ARFC) Notes and UI (Ukrainian Institute, TBC), in developing the program. Due to Covid-19 CEP will focus on online and market preparatory work and will move forward in FY 2021 when travel resumes. CEP will also support the 4th Creative Ukraine Forum by providing guess speakers and organizing “Film Panel” Responsible PSC team, Film/Creative Sector Lead, Comms, Grants Teams Counterparts Ministry of Culture, Film Industry Associations (various) Resource Budget Internal resources: up to $126K in grants, $80K in STTA, up to $10K honorarium for two guest speakers during the forum Expected Timeline October 2020 to September 2023 IR Category IR 1.1, 1.2, 1.3, 4.1 43

MEL Expected • #5.1: USD value of incremental sales attributed to the project Results implementation: • $250k (2021) $5 million (2022) $15 million (2023) • #6: Number of firms receiving USG-funded technical assistance to export: 20

PS Task E4. Improved Business Enabling Environment

Task Description 1. Assess development of Association of regional film commissions, as a founder of “NGO Ukrainian Film Commission (UFC)” 2. Train and support regional BSOs (regional film commissions and associations) on legal issues of creation, operations, and best practices for running a BSO. 3. Assistance in development of mechanism for local cash rebates, funded by the national and regional budgets. 4. Support cross-sector b2b meetings for ecosystem building, networking, and knowledge sharing. 5. Assessment of feasibility and effectiveness of measures to encourage production to restart after COVID-19 recovery: • Softened visa and quarantine requirements for foreign cast and crew; • Allowing costs caused by shutdowns to be included as eligible expenses for incentive payment; • Accelerating payments due to production companies (working capital financing) to help ensure that they remain stable during the crisis; • Feasibility study for a global insurance company instruments (production bonds), essential for foreign productions. 6. Continue to help the Ministry of Culture to streamline mechanism for cash rebates

Notes Subtasks will be delivered in partnership with the Ukrainian Film industry Associations, Association of Regional Film Commissions and private companies.

Responsible PSC team, Film/Creative Sector Lead, Comms, Grants Teams Counterparts Ministry of Culture, Film Industry Associations, Association of Regional Film Commissions Resource Budget Internal resources; up to $40k in grants/purchase orders for legal and regulatory advisory; and $25k in STTA costs for Technical assistance Expected Timeline October 2020 to September 2023 IR Category IR 2.1, 1.1, 1.2, 1.3 MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of

USAID assistance: 4 introduced and 2 passed (including Cash Rebates mechanism) • #2: Number of municipalities that adopt best practices in local economic governance with the assistance of the project (Outcome): 5

PS Task E5. Support the Ministry of Culture and Information Policy in Developing the Creative Industries Strategy and Roadmap 2021-2023

Sub-Task 1. Provide short term technical assistance to MKIP as follows: Description A. Strategic advisor aimed at developing the institutional capacity of the Ministry and supporting the Creative Industries (CI) Strategy development B. Support the Ministry of Culture to carry out the CI strategy development by providing CI Team members (CE Team lead, Investment/PPP specialist, and 2 analysts TBC) C. Support analysis of the crafts sector, including identifying investment projects and stakeholder mapping (Crafts STTA) 2. Facilitate high level baseline market analysis of Ukraine’s Creative industry sectors (initially film and post-production, then fashion and design, craft, advertising, video gaming). Intended to be a high-level analysis to derive basic data sets and ROI estimates. 3. Support the CI strategy development with possible coordination with other donors Implementation CEP has received a request from the Ministry of Culture and Information Notes Policy to support the Ministry with the Creative Industry Strategy development. CEP will carry out the baseline assessment of the sector and will provide short-term experts to facilitate the strategy development. Ongoing discussions with GIZ indicate they may consider funding a more comprehensive study/research building on our data/information. Responsible PSC team, Film/Creative Sector Lead, Comms, Grants Teams Counterparts Ministry of Culture and Information Policy, GIZ, Kyiv School of Economics, local NGOs Resource Budget Internal resources: up to $150K in grants, $10K subcontract Expected Timeline October 2020 to September 2021 IR Category IR 2.1 MEL Expected Results captured under PS Task E3. Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: 1 (introduced)

II. Objective 2: Improved Business Enabling Environment

Sector-specific BEE, export development, and trade tasks are featured within Section I “Increased Private Sector Competitiveness“ above. This section addresses non-sector specific BEE, export development, and trade tasks. CEP knowledge of priority sector companies’ regulatory and market access needs is well established. This knowledge will give CEP a clearer and more focused understanding of where problems are and how solutions can be devised and implemented. Work in BEE over the last two years has reinforced the need to maintain maximum flexibility in how programs are designed and delivered. Much of what is presented in this work plan is made contingent on the right political forces being present to ensure success. The Covid-19 pandemic has further reinforced the need for flexibility with timing, ability to coordinate, and government resources all in flux. Work will move back and forth between higher level government driven legal and regulatory reform and assisting CEP priority sector companies as well as a wider range of businesses to improve the environments within which they operate. A. IR 2. Anticompetitive measures impacting provide sector competitiveness reduced

A1. SME-friendly business laws and regulations developed (Sub-IR 1.1)

In FY 2021, CEP will work to assess and consolidate the BEE work done in the first two years. In particular, CEP will focus its policy and legal work on the need to: (1) reduce the administrative burden on business, (2) reduce costs of doing business, (3) ensure market and economic validity, and (4) increase transparency of governmental interventions to regulate economic activity in Ukraine. At the same time, the BEE work will transition to play a greater role in supporting the CEP priority sectors.

TA Task A1.1 Facilitate Key, Identified GOU Policy and Legal Initiatives (started in FY1, formerly CC task) Sub-Task This task is to follow on from previous two years work, beginning with an Description internal assessment and progress to date and incorporating coordination of the efforts across CEP’s portfolio.

1. In CEP’s internal review: a) Catalog progress on previous efforts to review and update regulatory draft laws, including: . Number of regulatory draft laws reviewed and/or commented on . Number of regulatory draft laws introduced and number passed, and their titles . Effect on SMEs of regulatory draft laws introduced and passed

b) Continue to identify specific laws that would still benefit from CEP support and which affect SMEs and/or the CEP priority sectors. With CEP private sector team, identify national level laws and regulations that affect CEP priority sectors. These may be existing laws that need revised, or new laws that need to be drafted. Additionally, in cooperation with the MEDTA, MDT and private sector stakeholders, assist with the development (updating), obtaining public awareness, and advocate for policies in key areas of CEP`s interventions including: - SME Development Strategy (new version) - Digital Economy Development Strategy (new document) c) Develop and release RFAs to engage relevant counterparts to develop, promote amendments to address issues identified in the legislation and regulations affecting SMEs and CEP priority sectors. d) Monitor previously started and ongoing work (providing recommendations on the regulatory draft laws submitted for consideration of the VRU to stop harmful effect and promote useful legal initiatives of SME interests) as needed. This can be done using internal resources of grant funds. 2. Coordinate efforts across CEP’s portfolio with those legislative initiatives identified to date, including: a) In conjunction with the MCIP (TA Task A3.3), identify and propose legislative initiatives tailored to the findings of the five pilot program municipalities; b) Identify and evaluate support to the regulations that would expand and bolster FDI as identified in the development of the FDI Strategy; c) Identify and evaluate mechanisms of support for regulations that buttress the progress proposed under the Diia.City initiative; d) Identify and evaluate support for regulations that would further reform in the timber industry (see IAF Task B1.1; e) In conjunction with the sector legislative evaluations (see Tasks PS Task A3.5, PS Task B9, PS Task C4, PS Task D3.2, PS Task E4), identify mechanism to support legislative reforms specific to CEP’s target sectors. 3. In cooperation with the MEDTA, MPs, BSOs and think tanks, assist in legal drafting and provide recommendations for the developed regulatory draft laws on implementation the Program of Ukraine Economy Stimulation3 4. CEP’s efforts in this Task will remain responsive as new governmental initiatives arise. Implementation This task in Year 3 has been adapted from a focus on revision of general Notes regulatory draft laws to a task focused on targeting specific draft laws

3 In May 2020, the GOU adopted the Program on stimulation of the economy of Ukraine to response negative impact on business in connection with the COVID-19 spread. Among the other program's priorities, more than 100 measures concern SMEs, including the necessary legislative changes, institutional and other measures. 47

(development and updating) especially those affecting SMEs and CEP priority sectors. Work in Year 3 will be much further integrated into the work in and needs of CEP priority sectors as well as requests of the GOU. Special attention of legal work within the BEE component will be focused on the elimination of excessive requirements and administrative barriers in the following areas: • Permits and licensing of economic activity • Business tax administration and reporting • Foreign economic activity (export and investments stimulation) • State control (supervision) of economic activity Within this framework, both individual changes to the current legislation will be proposed, and comprehensive pieces of law will be developed.

In 2020, the SME Development Strategy for 2017-2020 expires. The MDT requests assistance in developing the Digital Economy Strategy as a basis for the development of e-commerce. In FY3, CEP plans partially support these activities. These policies will be the basis for further development of individual pieces of legislation.

Note: CEP also takes into account the challenges associated with the COVID-19 pandemic crisis that has led to a decline in economic activity and had a negative impact on Ukrainian business. CEP will make maximum effort to support large-scale deregulation as well as the adaptation of public policies to the new reality. Responsible BEE Team, Grants, Communications, and PSC teams Teams Counterparts BSOs, GOU (MEDTA), sector associations, VRU (selected MPs and relevant committees) Resource Budget Internal resources, grants $70k (FAA.2019.012), $80K for new RFA, $20K STTA, depending on needs and assessment Expected October 2020 – December 2021 Timeline IR Category IR 2.1 MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: 20 (introduced) and 35 (commented)

TA Task A1.2. Develop and Pilot User-Friendly Regulatory Policy Tools (started in FY2, formerly CC task) Sub-Task 1. Pilot the regulatory policy tools developed in FY 2020 (2 methodologies) Description in 5 selected municipalities, and based on their results, refine the developed methodologies 2. In consultations with the SRS, update the Regulatory Impact Assessment (RIA) Methodology

3. Using updated RIA Methodology and other regulatory policy tools, prepare a training program for municipal public officials 4. In cooperation with the SRS, conduct a series of trainings for the municipal public officials on RIA Methodology and other regulatory policy tools. Implementation At the end of FY2, the SRS, despite the lack of permanent leadership, Notes became more active and showed interest in disseminating knowledge about regulatory policy tools at the local level. This work can be started after the official announcement of the results of the local elections. The main focus of this activity will be focused on conducting trainings for the municipal public officials of municipalities (including amalgamated territorial communities).

Willingness of all participants to fully engage and make this a success will be monitored continually with CEP effort and budget to be adjusted accordingly.

The Competition Compliance Assessment (CCA) Methodology and the Corruption Risks Assessment Methodology (CRA) were developed before the end of FY 2. The RIA Methodology was not updated due to a change of leadership and uncertainty about the status of the SRS, as well as the COVID-19 restrictions. If conditions permit, CEP plans to complete this work in FY3, as well as to disseminate these tools among Ukrainian municipalities. Responsible BEE Team, Grants, PSC team, Comms Teams Counterparts BSOs, GOU (SRS and MEDTA), LAs Resource Budget Internal resources, STTA ($20k), grants ($50k) Expected November 2020 – September 2021 Timeline IR Category IR 2.1, 2.2 MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: 2 changed / updated (national level) and 5 changed / cancelled (local level) • #2: Municipal business climates improved by adoption of and application of best practices (Outcome): at least 5 municipalities

TA Task A1.3. Ukraine’s position in the World Bank’s “Doing Business” ranking improved Task Description 1. In consultations with the MEDTA, develop a detailed action plan (roadmap” for the steps necessary to improve Ukraine's position in the World Bank's “Doing Business” ranking:

• Thoroughly study the list of domains and indicators used to assess the business climate within

• Review the results of evaluations of Ukraine within the World Bank's “Doing Business” ranking over the last 5 years and identify main challenges and obstacles for improving the business climate • Identify the list of legislative and institutional changes need to be implemented to address issues that affect Ukraine's position in the World Bank's “Doing Business” ranking 3. In coordination with the MEDTA and relevant committees of the VRU, identify and create the list of further legislative interventions to improve Ukraine's position in the World Bank's “Doing Business” ranking. Implementation The proposed task will be implemented at the request of the GOU. Notes Despite the GOU`s significant attention to business climate improvement in recent years, the main challenges and obstacles for improving Ukraine's position within the World Bank's “Doing Business” ranking have not been clearly identified. Similarly, no clear action plan has been developed to achieve a more tangible advancement of Ukraine in this international rating. Such an action plan could be adopted as an official act of the GOU.

CEP plans to assist in development of an action plan (roadmap) that will help identify the key areas of legislative intervention and institutional changes that are needed to improve the business climate in Ukraine according to the World Bank's “Doing Business” ranking. Part of these interventions can be undertaken by the CEP in FY3 and FY4, and the GOU can implement the rest of them by itself or with the technical assistance of other international projects (programs).

Responsible BEE Team, Grants, Comms Teams

Counterparts BSOs, GOU (MEDTA), VRU (relevant committees)

Resource Budget Internal resources, grants ($40k)

Expected November 2020 – September 2021 Timeline

IR Category IR 2.1

MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: 1 adopted (national level)

TA Task A1.4. Create Entrepreneurship Data Dashboard (E2D)

Sub-Task 1. Consult with MEDTA, MDT, SRS, other interested public and private Description sector stakeholders on data needs as for the status of business entities, business and investment climate in Ukraine 2. Develop suggestion for legal changes that are necessary for the collection, processing (including intergovernmental communication) and publication of current data on the status of business entities in Ukraine 3. Create a comprehensive interactive “dashboard” that would provide public access to the data on status entrepreneurship development in Ukraine: • Structure and demography of business entities in Ukraine • Employment in different business segments and industries (sectors) • Average salaries in different business segments and industries (sectors) • Sales in different business segments and industries (sectors) • Added value in different business segments and industries (sectors) • Business and / or investment climate in different cities and regions 4. Conduct a broad information campaign on the functions and capabilities of the Entrepreneurship Data Dashboard (E2D). Implementation Currently, data on the status and dynamics of business entities is collected Notes by several government agencies: the State Statistics Service, the State Fiscal Service, the Pension Fund of Ukraine, the State Employment Service, the National Bank of Ukraine, etc. Often this data on the same indicators differ significantly, and some data are not processed or published. Thus, many policies and legislative decisions on regulation of economic activity and investments are made without proper data evidence or in the absence of understanding of the current situation.

At the same time, much of this data could be processed, verified and consolidated automatically, using IT tools. Providing public access to such data could help improve the quality of policies and legislation on entrepreneurship development, as well as improve public awareness of the role of entrepreneurship in the society. However, there are certain legislative, administrative and procedural obstacles to this.

CEP plans to assist in the development of a dataset (and an IT system for its processing) that will promptly reflect the real situation in the field of business development. Existing government data sources will be used to complete such a dataset, and barriers to their processing and use will be removed by changing of the current legislation. Responsible BEE Team, PSC Team, Grants, Comms Teams Counterparts GOU (MEDTA, MDT, SRS), BSOs, International Donors Resource Budget Internal resources, grants ($70k) Expected December 2020 – December 2021 Timeline IR Category IR 2.1 51

A2. Improved Business Support Infrastructure

Ukraine has a poor business support infrastructure, lacking both quality public and private institutions. BSOs are widely recognized as a crucial element of a business development ecosystem. However, in Ukraine they are quite weak, especially at the local level. Businesses consequently have little influence on local economic and regulatory policies and cannot effectively contribute into improving local business climates. CEP programming seeks to increase their institutional capacity (business support infrastructure) through training and mentor support, micro- grants, and dissemination of BSOs best practices.

TA Task A2.1. Develop and present Center for Entrepreneurs Support (CES) model Task Description 1. In consultation with the GOU agencies, develop a Center for Entrepreneurs Support (CES) model as a “comprehensive consulting zone” providing informational, educational and consulting services for businesses: • Conduct assessment of the most requested services from SMEs (based on MCI 2019/2020 results, other surveys and public sources, BSO’s information, etc.) • Identify and describe the organizational structure, staff and its qualification, standard service package and operation procedures 2. Develop a practical manual that will describe the main organizational and operational issues and procedures of the CES work (CES manual) 3. Based on the CES model and the CES manual, prepare and pilot a training program for employees of the 5 existing CES in different regions 4. Create a series of educational videos to train CES staff mplementation n July 2019, CEP received the request from the MEDTA to assist in creation of Notes the unified model of the Center for Entrepreneurs Support (CES) that can be established at the regional or municipal level. The need of such institutions was also confirmed by the regional and municipal authorities contacted by CEP experts.

n February 2020, the MDT started creating a network of "consulting zones" for businesses. As the result, in June, the first consulting zone was opened in Kharkiv; in the following months – in Boryspil, Myoklaiv, Cherkasy and other cities. Based on the initial experience, the MDT requested CEP to help with the creation of a network of "consulting zones" for businesses (later branded as CES) through the developing a unified and standardized approach to create such nstitutions.

CEP plans to support the GOU request through the development of a CES mode and relevant manual and training materials. Responsible Teams BEE Team, PSC and EP teams, Comms Counterparts GOU (MEDTA), LAs, BSOs Resource Budget nternal resources, grants for modeling ($40k) Expected Timeline December 2020 – December 2021 R Category R 2.2 MEL Expected • #2: Number of municipalities that adopt best practices in local economic Results governance with the assistance of the project (Outcome): at least 5 municipalities where CES created

TA Task A2.3. Increase the Influence of Private Sector through the BSOs Capacity Building (started in FY1, formerly CC task) Sub-Task 1. Provide comprehensive training and mentoring support to local BSOs (at Description least 50 organizations) to build or strengthen their capacity to: a. Represent and protect interests of the local business communities before the LAs b. Monitor the LAs` performance in economic development and effectiveness of the LAs` regulatory interventions c. Participate in the community development processes (including formation of the economic and regulatory policies) 2. Design a grant program and award 40 grants for projects from organizations participating in the BSO School. To be implemented under the mentorship of subcontractors – CIVITTA and East Europe Foundation (EEF) 3. Continue and complete implementation of the program focused on identification, description and dissemination of the BSOs activity best practices. Implementation In FY2, CEP developed and launched a comprehensive local BSOs capacity Notes building program (branded as the “BSOs School”) implemented by two subcontractors – CIVITTA and EEF. In FY3, CEP plans to provide micro-grants to support project ideas of the most promising organizations (micro-grants for up to 40 organizations). The implementation of the partner BSOs micro-grants will be accompanied by mentoring and administrative support from subcontractors` consultants. Focus will be on reforms affecting CEP priority sectors. The main focus of these micrograntswill be on involving BSOs in the processes of developing (revising) local policies and regulations in the interests of the business community, as well as the development of business support infrastructure

Identifying, describing and disseminating the BSOs activity best practices is one of CEP’s tools to intensify development of supporting infrastructure for entrepreneurship while promoting innovative business models. In FY1, CEP already selected 4 BSOs with successful practices and innovative models (social entrepreneurship, local deregulation, membership management, business

access to finance, etc.) for further dissemination. In FY2, CEP started the implementation and plans to complete respective activities in FY3. Responsible BEE Team, PSC and EP Teams, Grants, Comms Teams Counterparts BSOs, GOU (MEDTA, SRS, MDT), LAs Resource Budget Internal resources, subcontracts ($175k + $350k), microgrants (40 x $ 7K) Expected February 2020 – January 2022 Timeline IR Category IR 2.2 MEL Expected By September 2021: Results • #2: Number of municipalities that adopt best practices in local economic governance with the assistance of the project: 5

TA Task A2.4 Strengthen BSO Partnership Network to support joint actions of SMEs (started in Y1) Task Description 1. Continue implementation of the program focused on dissemination of the BSOs activity best practices 2. Support BSOs networking activities (conferences, forums and other public events) Implementation Identifying and disseminating BSO best practices is one of CEP’s tools to Notes develop and intensify supporting infrastructure for entrepreneurship while promoting innovative business models. In Y1, CEP already selected 4 BSOs with successful practices and innovative models (social entrepreneurship, local deregulation, membership management, etc.) for further dissemination. In Y2, CEP started implementation and plans to continue respective activities in Y3. Consolidation of the business community (in particular on the platform of BSOs) is one of the priorities for strengthening the voice of SMEs in Ukraine. Business can present its position on policy or regulatory initiatives of the GOU and promote its own «agenda» only at large scale national or regional events. CEP’s grant program will support BSOs public events on issues that are consistent with the CEP`s current priorities. This program will provide grants that cover up to 50% of the costs of relevant public events, and decisions on applications will be made through a simplified procedure. Responsible BEE Team, PSC and EP teams, Grants, Comms Teams Counterparts BSOs, GOU (MEDTA and SRS), LAs Resource Budget Internal resources, grants: FAA_2019.002; SIMP_002 (four grantees selected in Y1 for total budget of $60,000) Expected Timeline December 2019 – October 2021 IR Category IR 2.2, 2.3 MEL Expected • #2: Number of municipalities that adopt best practices in local economic Results governance with the assistance of the project (Outcome): counted in task A2.3 above

A3. Municipal business climates improved by adoption of and application of best practices (Sub- IR 2.2)

The decentralization of power to municipalities has reached a significant level in Ukraine. This has expanded the influence of local authorities in various fields including economic development, business regulations, public infrastructure development, public property management, etc. Most municipalities have obtained more authority in forming local policy, in particular regarding entrepreneurship development and regulation. Local business climates depend on the leadership and efforts of municipalities. They have a wide set of tools to stimulate entrepreneurship. Identifying best practices in local economic governance can disseminate these and reinforce competition among municipalities in establishing favorable business environments.

TA Task A3.1. Develop and Apply “Local Deregulation Model” in Partner Municipalities (started in FY2, formerly CC task) Sub-Task 1. Develop a practical tool for reviewing the local regulatory environment Description (“Local Deregulation Model”) in order to eliminate outdated or ineffective regulations as well as prepare proposals for improving “appropriate” regulations at the local level: a. Elaborate a comprehensive methodology for reviewing the local regulatory environment b. Identify possible options and suggest a model4 to review the local regulatory environment and conduct local deregulation 2. Pilot the “Local Deregulation Model” and support the revision of local regulations that impact SMEs in selected municipalities (5 municipalities): a. Conduct a series of trainings for public officials and local BSOs representatives in selected municipalities on how to use the “Local Deregulation Model” b. Assist with the introduction of “Local Deregulation Model” and planning local regulatory environment review in the selected municipalities 3. In consultations with municipalities, identify 4-5 regulatory "pain points" for local businesses and develop relevant "model regulations", that can be quickly adapted to the needs of each municipality 4. Based on the lessons learned from the pilot, finalize the “Local Deregulation Model” and start a broad training program on its use by Ukrainian municipalities 5. Provide methodological and mentoring support to the joint efforts of municipalities and BSOs to review and "clean up" the local regulatory environment in at least 10 municipalities Implementation In FY2, the CEP planned to start activities aimed on "local deregulation” in Notes Ukraine. However, due to lack of political support, the COVID-19 pandemic, and

4 Experience of Lviv Regulatory Hub and Vinnytsia Open Regulatory Platform will be used for identification of the institutional model and planning algorithm. 55

the approach of the local elections in Ukraine, the launch of these activities was delayed. The start and implementation of this activity will be contingent on full support from all government bodies.

Local authorities, especially in small municipalities, have limited capacity to develop quality regulations. At the same time, their powers have been significantly expanded as a result of decentralization and they need to regulate a number of issues at the local level. CEP plans to help them in preparing such "model regulations" in the most requested areas (access to public property, land use, local taxes and fees, trade, etc.).

In each municipality, at least 4-5 outdated local regulations will be abolished or changed in the first year after introduction of the “Local Deregulation Model”. Through these activities, CEP is also expecting to encourage the development and adoption of higher quality regulations as well as improving public-private dialogue at selected municipalities. Responsible BEE Team, Grants, Comms Teams Counterparts GOU (MEDTA, SRS), LAs, BSOs Resource Budget $50k Grant, depending on GoU support Expected October 2020 – December 2021 Timeline IR Category IR 2.1, 2.2 MEL Expected By September 2021: Results • #1: SME-friendly business laws and regulations developed (Output): 60 changed / canceled (local level) • #2: Number of municipalities that adopt best practices in local economic governance with the assistance of the project: at least 5

TA Task A3.2. Conduct Municipal Competitiveness Index (MCI) Survey (started in Y1, formerly CC task) Task Description 1. Conduct the MCI 2021 survey to evaluate efficiency of economic governance in 45 municipalities encouraging LAs to improve local business climates by: a. Identifying institutional gaps, regulatory barriers, and corruption risks to be eliminated for better efficiency of private businesses b. Identifying best practices in local economic governance and local business environment improvement c. Reinforcing friendly competition among municipalities in establishing favorable business climate 2. Conduct a public presentation(s) of the MCI 2021 Report to demonstrate the dynamics of business climate development in 24 municipalities in comparison with MCI 2019/2020. This will inform 56

GOU, LA’s, business community and the general public on the actual business climate in 45 Ukrainian municipalities

Implementation The MCI 2021 results will provide the ranking for 45 Ukrainian cities (23 Notes oblast centers + Kyiv City+21 most SME populated cities) based on the 10 sub-indices specifying the state of local business climates. As originally envisaged, some of the indicators included in the sub-indices could be partially revised within the MCI 2021. Special attention will be paid to the assessment of corruption at the municipal level.

Being the second survey, MCI 2021 will demonstrate progress/regress of the 24 municipalities surveyed in 2019/2020. The scores will flag areas to concentrate improvements, as well as demonstrate the impact of CEP supported efforts in the selected 5 municipalities (See TA Task A3.3). The MCI ranking is designed to stimulate competition between municipalities, encouraging them to improve local business climates. The same subcontractor selected in Y1 will conduct the field survey. Based on the MCI findings, the subcontractor will compare MCI scores, develop case studies, and publish a set of practical recommendations to improve business climates. CEP will also support the public presentation of MCI 2021 (July -September 2021) to communicate and popularize this tool and enhance the ownership of the municipalities on its use. Note: If the COVID situation allows, CEP will support several regional MCI 2021 presentations

Responsible BEE Team, Grants, Comms Teams Counterparts LAs, BSOs, GOU (MEDTA, MCTD, MDT and SRS), local business communities Resource Budget Internal resources, subcontract, $271k (CEP-2020-149) Expected October 2020 – September 2021 Timeline IR Category IR 2.2 MEL Expected By September 2021: Results • #2: Number of municipalities that adopt best practices in local economic governance with the assistance of the project: at least 5 • #3: Average total improvement in MCI across assisted municipalities: 7% • C9: Percentage of SME representatives who report high levels of informal payments and corruption in annual gross revenue • C10: Percentage of compliance costs for SMEs

TA Task A3.3. Improve Municipal Business Climates Based on MCI (started in Y2, formerly CC task)

Task Description 1. Development and piloting of the Municipal Competitiveness Improvements Programs (MCIP) in 5 municipalities a. Select 5 (pilot) municipalities that applied to CEP after the MCI Report 2019/2020 presentation b. Selecting subcontractor / grantee on the MCIP development c. Developing the MCIP for 5 pilot municipalities d. Facilitating the creation of joint working groups from the municipalities leading the component ratings and MCIP recipients e. Implementation of the MCIP in the selected municipalities including results monitoring 2. Expanding the MCIP to the next 5 municipalities from the first wave of MCI 2019/2020 a. Select 5 municipalities that applied to CEP after the MCI Report 2019/2020 presentation b. Select subcontractor(s) on the MCIP development for the next 10 municipalities c. Facilitate the creation of joint working groups from the municipalities leading the component ratings and MCIP recipients d. Implementation of the MCIP in the selected municipalities including the results monitoring 3. Expanding the MCIP for the 10 participants of the MCI 2021 a. Selecting of 10 municipalities that applied to CEP after the MCI Report 2021 presentation b. Selecting subcontractor(s) on the MCIP development for the 10 selected municipalities c. Developing the MCIP for 10 municipalities (as permitted by circumstances and timing)

Implementation After MCI 2019/2020 Report public presentation CEP will address the Notes mayors of the surveyed municipalities encouraging them to apply for the MCI Program.

The MCI will be a “ready-to-go” implementation tool for the municipalities willing to improve local business climates. Special attention in the MCIP will be focused on overcoming corruption at the municipal level through practical steps of local authorities (in the field of administrative services, regulations, access to public property, etc.) CEP plans that first 5 MCIP will be developed by April 2021, although the local elections in October 2020 may impact the schedule. The program expansion for the next 5 cities MCI 2019/2020 participants is planned for roll out in April-May 2021. After the presentation of the MCI 2021 results (planned for July 2021) a new call for the MCIP will be placed for the 10 municipalities the participated in the second survey. Responsible BEE Team, Grants, Comms Teams

Counterparts LAs, BSOs, GOU (MEDTA and SRS), local business communities Resource Budget Internal resources, $190k grants (20 municipal grants x $9k each and $10k for promotion) (New RFA) Expected October 2020 – October 2021 Timeline IR Category IR 2.2, 2.3 MEL Expected (Same targets with TA Task A3.2) Results • #2: Number of municipalities that adopt best practices in local economic governance with the assistance of the project: at least 5 • #3: Average total improvement in MCI across assisted municipalities: 7% • C9: Percentage of SME representatives who report high levels of informal payments and corruption in annual gross revenue • C10: Percentage of compliance costs for SMEs

TA Task A3.4. Develop and Roll Out Code of Business Conduct (started in FY2, formerly SI Task E1)

Task Description 1. Support the Ukrainian Network of Integrity and Compliance (UNIC) online/offline trainings “Entrepreneurial Ethics for Small and Medium Businesses” including introducing the Code of Business Conduct for SMEs (Code). Follow-up with consulting and support for implementation 2. Engage the SMEs that already implemented the Code into the CEP and UNIC activities to raise awareness and highlight the benefits of its implementation among target audiences, including promotional campaign 3. Expand the partnership network engaging the BSOs and their members to participate in the business ethics trainings and events 4. Launch the promotional campaign using video training materials, success stories and a promotional video clip produced in FY2 5. Continue follow-up consultations and support for the SMEs that completed the trainings but did not approve the Code

Implementation FY2 experience demonstrated that relatively low percent (50%) of the Notes participants that introduced the Code for their businesses. CEP plans to enhance the promotional and communication component by expanding the channels of communication, engaging more speakers from well-known businesses, and broader usage of the video materials produced in FY2. Also, CEP will encourage and facilitate the expansion of the partnership network, inviting major national and regional BSOs to participate as speakers and co-organizers.

To provide a sustainable result CEP will initiate a grant agreement modification for post-training support and ongoing consultations, especially for those SMEs that completed the training but did not introduce the Code.

Responsible BEE, MEL, and Comms teams Teams Counterparts UNIC, BSOs, SMEs Resource Budget Internal resources, grant $45k (FAA_017 to UNIC) Expected October 2020 – December 2021 Timeline IR Category IR 2 MEL Expected By September 2021: Results • #16: Number of assisted companies joining the Code of Business Conduct: at least 30

A4. Competitive Environment Supports Broad-based Growth

Despite the many efforts that have been made by the Government over the last four years to reform the state oversight system, business inspections remain a significant problem for Ukrainian SMEs. The inspections regime can hinder SMEs’ ability to compete when corrupt inspection authorities extract undue payments and even withhold inspections qualifications. This may be to extract payments, or to assist competitor firms by preventing competing in certain markets. Further, business inspections are being carried out in areas where government control is inappropriate or where state agencies lack capacity. Throughout the period of program implementation, CEP will support efforts that aim to reduce both the unnecessary costs and burden of inspections on SMEs and to reduce the systemic corruption that permeates state inspections processes.

TA Task 4.1. Inspections Reform (formerly CC Task F1 in SI) Sub-Task 1. Continue to monitor the results of the grant to BRDO for upgrading Description the current Interactive Inspections Platform. 2. Advise on an ongoing basis on inspections legislation and portal development and development of a complaints platform within the existing inspections portal. 3. If the government revives interest in full inspections reform, work with counterparts to develop an inspections reform plan and support plan implementation.

Implementation CEP will continue to commit to activities in phases to be determined in Notes consultation with BRDO and USAID. Specifically, BRDO proposed a plan that they intended to continue to develop in early 2020 with CEP's coordination; however, inspections reform lost inertia with the removal of the Prime Minister in March 2020. BRDO ceased work on this.

We are keeping this activity in the workplan pending revival from the current or any future government as inspections are a key competitive constraint on CEP’s beneficiaries – SMEs.

Ongoing support requires satisfactory implementation or previously agreed upon initiatives. Responsible Special Initiatives Team Lead, BRDO Subcontractor, Grants, Comms Teams Counterparts MEDTA Resource Budget Internal resources. Expected October 2020 to December 2020. Timeline IR Category IR 2 MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: TBD • #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 • #20: Number of USG-assisted institutions and organizations with improved performance: 1

CEP’s role in supporting the Anti-Monopoly Committee of Ukraine is complementary to USAID’s Competitive Markets Program. While the Competitive Markets Program focuses on building internal AMCU capacity, CEP assists the AMCU in reducing the burden of such tasks as procurement complaints and supporting legislative efforts that limit capacity constraints on the AMCU.

CEP will facilitate AMCU participation in its BSO initiative, providing the agency with a platform for competition advocacy. This effort is private sector facing and municipal level. It complements the Competitive Markets Program initiative, which supports capacity building at the AMCU’s new regional offices.

Finally, CEP is dedicated to reducing the negative competitive impact of existing and future legislation. Such efforts reduce the burden of the AMCU as a competition enforcement agency, increasing capacity for the agency. The legislative focus will be on CEP priority sectors.

CEP will coordinate with and support the Competitive Markets Program in any area in which CEP’s influence would be valuable and where such support would align with the CEP mandate.

TA Task 4.2. Support AMCU in Anti-Monopoly Legislative, Education and Advocacy Efforts (formerly CC Task G1 in SI) Sub-Task 1. Continue to assist the AMCU in disseminating information and Description conducting trainings with the materials previously developed with CEP support. 2. Structure the state aid complaint template and build it in to the existing AMCU State Aid platform 3. Support an advocacy campaign for State Aid challenges in coordination with the BSO Schools (BEE) 61

4. Advise on new and existing legislation that affects the AMCU 5. Develop methodology for performing competition impact assessments in coordination with the AMCU, local and regional legislative authorities, BSOs and the private sector to reduce the negative competitive impact of legislation

Implementation The AMCU is the state agency responsible for state competition law Notes enforcement, competition advocacy, and public procurement dispute resolution. Currently, private sector and public do not have an accurate understanding of competition law, its enforcement, its purpose, and the role of the AMCU. This is a common problem faced by any competition agency where the majority of the population does not understand the workings of the agency and the problems it addresses. As a result, competition agencies are deemed ineffective in the public sphere. This happens with the FTC, DOJ, EC, etc. Therefore, competition agencies often engage in a multiple public outreach efforts emanating from Press Offices to educate the general public, businesses, and courts on the role of the agency and the actions it takes in addressing violations of competition law.

CEP plans to support the dissemination of such information, first, with the development of the materials themselves, and, second, with supporting the AMCU Press Office’s dissemination of the materials. The dissemination will be via the AMCU Press Office.

Further, CEP is in discussions with the AMCU following the first BSO school training to develop a training/outreach program for the business community. Timing will depend on traction of the newly drafted amendments to Ukraine’s competition laws. Responsible Special Initiatives Team Lead, BEE, Comms Teams Counterparts Anti-Monopoly Committee of Ukraine, Regional Offices, and EU State Aid Project Resource Budget Internal resources, estimated $30,000 for software development Expected October 2020 to September 2021 Timeline IR Category IR 2.1 MEL Expected By September 2021: Results #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 (LOP) #20: Number of USG-assisted institutions and organizations with improved performance: 1

III. Objective 3: Increased Investment Catalyzed

IR 3: Increased Foreign and Domestic Investment

The tasks in this section support IR 3, “increased foreign and domestic investment”. These are designed as transformational initiatives that alter permanently the way that investment capital enters, circulates in, and is deployed in Ukraine. A. eo Business Incubators

IAF Task A.1. Support continued incubation and strategic development of eo Business Incubators

Sub-Task 1. Conduct incubation of three more cohorts of start-ups, including: Description • Hold demo day for cohort 4 (Nov 2020) • Recruit start-ups for cohorts 5 (Oct 2020), 6 (tentatively March 2021) and 7 (tentatively July 2021) • Manage incubation of cohorts 5, 6, and 7, including workshops, public lectures, sprints, and demo days. 2. Finalize legal structure and provide arrangements to sustain Incubators for Y3 via an APS Grant. The Grantee will provide administrative, operational, and financial support and will establish the foundation of an independent, sustainable and long-term eo program. 3. Pending the course that Covid takes, eo may relocate Kyiv operations to a co-working facility which will provide them with a permanent space. Kharkiv operations may move to leased space at Kharkiv Polytechnic Institute in Y3 (subject to State Property Fund oversight). 4. Obtain approval of the Incubators’ website.

Implementation From March – September of 2020, eo transitioned to online activities, and Notes will continue online until such time as in-person events and meetings are deemed safe.

The Incubators will recruit cohorts 5, 6, and 7, resulting in 25-30 start-ups for Year 3 via three four-month training cycles, ending with public, on-line demo days.

The Incubator will finalize the legal structure and arrangements to sustain the program. At this time, an APS Grant is the most attractive option for financial support and moving eo toward independence. January 2021 is the target date for awarding the APS Grant.

Responsible eo Founder & Team, Access to Finance Team Lead, Chemonics HO, Teams CEP Comms. Counterparts America House, universities, lawyers and law firms, financial/accounting managers, KPMG, Startup.Network, Ukrainian Startup Fund, lecturers, mentors, start-ups, VCs.

Resource Budget Internal resources: $80k CEP funding for STTA and ODC costs until the execution of a new APS Grant for up to $325k (subject to review) to provide sustainability through the remainder of Y3. (Y4 and Y5 support TBD based on the results of Y3 – potential sources include an extension of the grant, development of a Fund, or CEP internal financing). Up to $50k for legal fees for establishing the UA and US entities. (CMS subk #2020-029 – TO 1) Expected Autumn 2020 –call for co-creation workshop to identify best possible Timeline grant partners; issues grant for APS; finalize eo legal entity structure. IR Category IR 2.1, 2.2 MEL Expected By September 2021: Results • #4: Value of new investments in selected USAID-assisted industries: Est. $800k • #5.1: USD value of incremental sales attributed to the project implementation: Est. $120k • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance: Est. 30

B. ProZorro.Sale Auctions (IR 1, 3)

CEP is funding the development of transparent and competitive auctions of state assets through the ProZorro.Sale platform. In support of the furniture sector, CEP has advised on the development of governing regulations for a new timber auction procedure. This new procedure’s provisions aim to reduce the corruption and anticompetitive conduct pervasive in timber auctions, as well as give SMEs greater access to primary timber. As the timber platform is rolled out, CEP will engage in bringing similar transparency and competition to other state related auctions and work with ProZorro.Sale to support private sector auctions under ProZorro.Sale’s commercial mandate.

IAF Task B1.1 Support ProZorro.Sale – Electronic Timber Auction Platform

Sub-Task 1. Continue to advise ProZorro.Sale in its coordination with the Ministry Description of Environmental Protection to solidify a resolution requiring all timber auctions to take place on an electronic platform according to the procedure CEP proposed with ProZorro.Sale (SI Lead) 2. Pending adoption of new procedures, continue to coordinate with and advise ProZorro.Sale on developing a transparent and competitive auction platform for the sale of timber, including advising on additional modifications (SI Lead) 3. Pending adoption of new procedures, support the incorporation of Forestry Innovation and Analytical Center SE (FIAC) into the ProZorro.Sale marketplace to align all state electronic auction systems into a single transparent, procompetitive, and uniform process 4. Advise ProZorro.Sale on compliance and optimization of operations following passage of new timber inventory law. 5. Coordinate with and advise ProZorro.Sale on auction rules for the sale of other assets on the platform

Implementation FY 2021 activities will be focused on consolidating gains made in Notes previous years, including ensuring on-going functioning and transparency of the platform. CEP will also opportunistically support the platform in the sale of other assets. See for example the support to the SPFU.

Responsible Competition Team Lead (SI Lead), BEE, PSC team, Grants Teams Counterparts ProZorro.Sale, Ministry of Environmental Protection, State Forestry Agency, MEDTA, FIAC Resource Budget Internal Resources; $15,000 in grants Expected October 2020 – September 2021 Timeline IR Category IR 1.1, 2.2 MEL Expected By September 2021: Results • #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: Prospective - 1 CMU Resolution requiring all timber auctions to take place on e-auction platform following proposed auction procedures (TBD – Fall 2020) • #5.1: USD value of incremental sales attributed to the project implementation: (TBD) • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance (TBD) • #21: Number of anti-corruption measures proposed, adopted, or implemented due to USG assistance, to include laws, policies, or procedures (Output): (2 Anticipated) • #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 • #20: Number of USG-assisted institutions and organizations with improved performance: 1

IAF Task B1.2 Support ProZorro.Sale – Privatization and Commercial Sale Auctions

Sub-Task 1. Provide marketing support for the continuation of ProZorro.Sale’s Description privatization and private sector commercial sale efforts (SI Lead) 2. Provide technical support for ProZorro.Sale’s efforts in transparent and competitive private sector commercial sales (SI Lead) 3. Provide due diligence support in the sale of quasi-commercial state- owned real estate assets, if applicable Implementation FY 2021 activities will be focused on expanding upon the progress made Notes in previous years. In FY 2020, CEP provided support to a state sponsored auction platform in the sale of state assets, both timber and small scale privatization. In FY 2021, CEP will focus on applying the same transparent, procompetitive auction procedure for use by the private sector. ProZorro.Sale already has the ability to perform commercial, private sector auctions on the platform; however, very few private auctions have taken place on the platform to date. With the

recent successful auction of the Dnipro Hotel, CEP will direct its efforts to expand the use of this tool into the private sector, recognizing the commercial use of the auction platform could also lead to a sustainability mechanism for the auction site.

Responsible Competition Team Lead (SI Lead), Grants, BEE, PSC team Teams Counterparts ProZorro.Sale Resource Budget $60,000 Procurements in marketing and due diligence materials Expected October 2020 – September 2021 Timeline IR Category IR 1; IR 2.2; IR 3.1 MEL Expected By September 2021: Results • #4: USD value of new investments in selected USAID-assisted industries (TBD) • #5.1: USD value of incremental sales attributed to the project implementation (TBD) • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance (TBD) • #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 • #20: Number of USG-assisted institutions and organizations with improved performance: 1

C. Economy-Wide Access to Finance (IR 1, 3)

IAF Task C.1. Evaluate opportunities to support new investment vehicles to increase investments into Ukraine or provide greater access to capital for SMEs. Sub-Task 1. Identify opportunities to provide new or expanded access to capital Description for SMEs in Ukraine. 2. Partner with CEP Team Leads and other USAID or donor financed programs to expand awareness of existing financial resources to grantees; and evaluate and potentially support sector specific finance opportunities.. 3. Work with existing entities (such as Factoring Hub and Export Credit Insurance) to evaluate and potentially support opportunities for increasing SME access to finance. Finalize Data Privacy grant with the delivery of an EU Adequacy Decision roadmap for the Rada, to prepare for the integration of the new Ukrainian Data Privacy laws with EU regulations. .

Note: this is an ongoing activity expected to continue to the end of the project. All tasks are underway. There are no delays due to Covid-19 at this time. Implementation 1. CEP will continue to monitor the potential for leasing in Ukraine. To Notes bring in foreign capital legal and regulatory issues must be addressed. The USAID FST team is pursuing options here. If/when

these are addressed, CEP will seek new foreign lenders for the Ukrainian leasing market.

CEP will continue to evaluate other access to finance opportunities including: Crowdfunding, expanding Ukrainian Angel Investing, direct ‘matchmaking’ between Ukrainian startups and US investors.

2. CEP has begun conversations with the IFC and will connect with the EBRD and the GoU 5-7-9 program about access to finance. 5-7-9, IFC and EBRD offer a variety of programs and tools that USAID CEP beneficiaries may benefit from.

3. CEP is supporting the pilot of a Factoring Hub to provide factoring from banks to SMEs bidding on government procurement projects on ProZorro. This initiative will increase access to capital for SMEs, allowing more SMEs to bid on ProZorro projects. Once the pilot ends in early 2021, CEP will evaluate opportunities to further expand this project.

CEP will review Export Credit Insurance in conjunction with the Export Promotion Office. Export Credit Insurance is a new initiative and has the potential to support the growth of SME exports. CEP support would help expand resources and marketing of export credit insurance to SMEs.

Responsible Venture Funding and Development Finance Strategy Advisor for Tasks 1 Teams and 3. Task 2 will be completed in conjunction with Furniture and Food Processing Team Leads. Counterparts Furniture and Food Processing Team Leads; Legal support; Other USAID Projects including DAI/FST, EBRD, IFC; Companies in targeted sectors Resource Budget 1. Identify new opportunities: Internal Resources 2. Partnering with other programs: Internal Resources 3. Support ecosystem entities who facilitate SME sales: Potential Enhancements to Factoring $136k and Export Credit Insurance Agency $50k 4. Data privacy initiative, $10k Expected August 2019 to end of project, ongoing Timeline IR Category IR 1.1, 1.2 MEL Expected By September 2021: Results • #4: Value of new investments in selected USAID-assisted industries: (Targets recorded in this Workplan under PS Task B.6 and PS Task D1.3) • #5.1: USD sales of firms receiving USG-funded assistance: $500k via export credit; $10 million for Factoring. • #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 • #20: Number of USG-assisted institutions and organizations with improved performance: 1 67

• #22 Number of companies with increased access to finance: 5 from Export Credit and 500 from Factoring.

IAF Task C2. Develop and Launch a VC Fund Sub-Task Develop and launch a VC Fund that will attract new, private investment Description into Ukraine with the purpose of investing in Ukrainian startups. The target amount the Fund will raise is between 20 - 30 million USD. Money will be raised from private and public investors. This VC Fund will serve two purposes: (i) To provide a means of financial sustainability for the eo Business Incubators, as it will provide funds on a yearly basis to cover the operating costs of eo; (ii) to invest into selected startups that complete the eo Business Incubator, as well as to invest into other Ukrainian startups in the wider ecosystem, to help these companies grow. Tasks include: 1. Update and monitor baseline operating costs needed to provide financial sustainability for eo Business Incubators 2. Continue work with legal teams in Ukraine, and abroad as needed, to determine the best framework for establishing the VC Fund. 3. Identify the Investment Company / Fund Manager who will act as the General Partner (lead Investment Manager) for the VC Fund 4. Ensure legal structure is in place; help to define investment practices and parameters 5. Work with eo Business Incubators to help raise capital for the VC Fund 6. Launch VC Fund and monitor Implementation This task will be delayed due to Covid-19 and changing sentiments of VC Notes and private investors. This Task will remain in the Workplan and will be re-visited later in the year as the investor/investment climate continues to evolve. Above are the original steps outlined to achieve this Task; they will remain in the workplan as a guide for future development if/when appropriate.

In addition to monitoring private investor sentiment regarding this Fund, CEP will continue to investigate other potential funding sources, including VC Fund partnerships and avenues for development.

Responsible Venture Funding and Development Finance Strategy Advisor; eo Teams Founder / Advisor Counterparts Ukrainian legal, Foreign legal, General Partner for Fund Resource Budget Internal resources for Y3 Expected TBD based on investor sentiments Timeline IR Category IR 2.1, 2.2, 2.4 MEL Expected By September 2021: Results • #4: Value of new investments in selected USAID-assisted industries: $0

• #5.1: USD value of incremental sales attributed to the project implementation: $0 • #7.1: New jobs filled in the USG supported industries : 0

D. State Property Fund / Investment Transactions Support (IR 3)

In FY 2020 CEP engaged the SPFU on two major initiatives: (1) the transparent and competitive privatization of one to three “big” small privatization objects; and (2) the development of small- scale privatization procedures for streamlining the SPFU’s efforts in privatizing small state assets. In furtherance of the first initiative, CEP supported the SPFU in its first successful “big” small privatization with the sale of the Dnipro Hotel. For the second initiative, CEP issued an RFP and subsequently selected EY to assist the SPFU in accelerating the privatization of smaller assets. The goal is to assist the GOU through the SPFU to privatize 500 assets by the end of the calendar year 2020. SPFU has already reached this target with the new process in place. The EY scope of work includes both transaction and capacity building support, with an early emphasis on the former.

IAF Task D1. Supporting Privatization efforts with the State Property Fund

Sub-Task 1. Expand and monitor ongoing grants to SPFU and EY for virtual data Description room (VDR), capacity development, and transactions support at SPFU 2. Support VDR on ongoing basis, both technically and conceptually to ensure it is accessible and maximally useful to potential buyers 3. Assess results of grants and need for additional support if results are strong and need still exists 4. Provide support for review of the newly developed small-scale privatization process for legal compliance 5. Assess support of additional significant privatizations (such as the Dnipro Hotel in FY 2020) and support as needed and possible.

Implementation The State Property Fund of Ukraine is a central executive body that Notes implements policies in areas of privatization, lease, use, disposal, and management of state property and corporate rights of the state, and also regulates professional property valuation activities in Ukraine. For the first time, the State Property Fund of Ukraine has published a full list of all objects to be privatized. Responsible Competition Team Lead, Subcontractor(s), Grants, Comms Teams Counterparts State Property Fund, ProZorro.Sale Resource Budget Internal resources, Grant with SPFU (LSGA_001) for $105k to SPFU and $85k to EY (Subk #004) Expected October 2020 to September 2021 Timeline IR Category IR 3.1 MEL Expected By September 2021: Results 69

• #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance (70) • #4: Value of new investments in selected USAID-assisted industries ($20 million) • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance (200 • #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 • #20: Number of USG-assisted institutions and organizations with improved performance: 1

E. National Foreign Direct Investment Strategy (IR 3)

This task has changed shape several times and was previously named the National Investment Strategy and the Coherent Development Strategy. Based on work with the President’s Office and USAID this was refined into development of a transaction and reform oriented foreign direct investment (FDI) strategy. The goal per the released RFP is the “development of an informative and actionable FDI strategy that will strengthen Ukraine’s ability to compete for and attract FDI.”

IAF Task E1. National Foreign Direct Investment (FDI) Strategy

Sub-Task With the finalization of the RFP, most sub-tasks are related to the award Description and management of the subcontract to develop the Strategy.

• Complete award of the National FDI Strategy to the winning bidder. • Manage the process of completion of the scope of work, including keeping in close contact with the selected implementer and the relevant GOU authorities. Tasks will include keeping USAID informed of progress and ensuring that CEP management is aware of any barriers to successful completion of the Strategy. • Monitor the deliverables and ensure that the CEP private sector team is aware of any findings, especially those that can benefit partner firms in the CEP priority sectors. • Assist the GOU in carrying out the recommendations in the Strategy, including issuing any follow grants or subcontracts to facilitate this.

Implementation The scope of work was developed in full coordination with high levels at Notes the GOU. If the political situation changes, CEP and USAID will need to assess the level of commitment at that time. Responsible Deputy Chief of Party, Special Initiatives Team Lead, Subcontractor(s), Teams Comms Counterparts President’s Office, Secretariat of the National Investment Council (an advisory body to the President of Ukraine), , UkraineInvest Resource Budget Internal resources, Subcontract budget of $584,500 Expected October 2020 to September 2021 Timeline IR Category IR 1.1, IR 2.1, IR 3.1 70

MEL Expected By September 2021: Results • Ind #4: Value of new investments in selected USAID-assisted industries, $20 million (continent on GOU follow through) • #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 • #20: Number of USG-assisted institutions and organizations with improved performance: 1

F. Support the Launch and Development of the Ministry of Digital Transformation’s Diia.City Project (IR 3)

IAF Task F1. Support Diia City with donor coordination, communication, monitoring and reporting protocols, and provide strategic input into its operational plan

Sub-Task Support for Diia.City should be considered in pre-launch phase through Description Fall 2020. Specific tasks in the pre-launch phase include: • Set-up a method to track and report on donations for the NGO “Digital Ukraine”. This will enable Diia City to have greater transparency and reporting for donations received and money spent. • Operational Planning. Help Diia City map out what needs to be done in the near term, how it will be done, and ultimately convert their general ideas into a more specific medium-term plan with an eye toward future growth. (Note: this support is not intended to be a comprehensive/sophisticated long-term strategy exercise). • Communications. Work with Diia City donor outreach staff to help with messaging and to create more professional presentations, in English, to help the NGO increase its donor support base. Implementation “Diia City”, which aims to create a first-of-its-kind virtual economic zone Notes (a.k.a “the world’s first virtual business country”) where digital technology companies can benefit from tax and other legal and regulatory incentives. This virtual business environment is intended to offer favorable conditions for the development of innovative and technological businesses that will ultimately enable them to attract investments from abroad and develop cutting-edge competitive products unencumbered by Ukraine’s typical legal regime. Aware of limitations of state budgets and the lack of any specifically ear- marked marketing funds available, Diia will be engaged in ongoing fundraising once Diia City is launched in March 2021. This support will help Diia prepare for this post-launch phase, and such fundraising efforts will help it achieve greater financial sustainability. Responsible Internal Staff (Deborah Fairlamb) Teams Counterparts NGO “Digital Ukraine” Resource Budget Internal resources Expected October 2020 to February 2021 Timeline IR Category IR 2.1, IR 1.1, IR 3.1, IR 4.2

MEL Expected By September 2021: Results • Ind #4: Value of new investments in selected USAID-assisted industries, TBD (continent on GOU follow through) • #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1

IAF Task F2. Support Diia City in the post-launch operational phase

Sub-Task This task is contingent on successful completion of IAF Task F1, and Description further discussions with relevant stakeholders. Additional support under consideration for the post-launch phase (Q1/2021 and beyond) includes: • Grant support to help cover costs for development of the legal and operational structure for Diia.City (This has been an official request from Diia.city) • Support for the development of an investor-friendly regulatory framework for Diia.city (See AID-Venture, USAID program in Belarus in 2016) • Support for entrepreneurial education development (in cooperation with incubators, accelerators, selected Universities). • Support for the development of a national level ‘Digital Economy Strategy’ (MDT Level, not just Diia.City level) (This has been an official request from Diia.city) Implementation Diia.City will have several phases for long term development. Notes Work began approximately one year ago to build awareness for the concept and to develop the legislative and regulatory frameworks needed to provide benefits for the businesses that will register and operate in the Digital Economic Zone of Diia.City. Q1 2021 is the target date for the new legislative and regulatory laws to be passed and approved by the Rada. Once the legal framework is finalized, Diia.City will become operational for companies to register and focus will be on conveying the benefits of Diia.City and attracting residents. Future development focus for Diia.city is likely to include reforms for legislation to enhance the development of the Diia.City ecosystem, including new legislation to attract foreign investors (and VCs). A longer term but no less important vision is for development of entrepreneurial education. Responsible Internal Staff (Access to Finance Advisor and IT Sector Lead) Teams Counterparts MDT Resource Budget STTA, $10,000 Grants, TBD Expected March 2021 – Potentially ongoing through the project. Timeline IR Category IR 2.1, IR 1.1, IR 3.1, IR 4.2 MEL Expected By September 2021: Results #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance (Output) (Contract) #4: Value of net new investment in selected USAID-assisted industries: TBD

#5: USD sales of firms receiving USG-funded assistance: TBD #10: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: TBD #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 # 20: Percent of USG-assisted organizations with improved performance (CBLD-9) -1

G. Support UkraineInvest to Improve Operations, Data Access, and Agency Promotion (IR 3)

This task resulted from the coordinated efforts among USAID, CEP, and UkraineInvest to further support the agency responsible for attracting and facilitating foreign direct investment into Ukraine. In cooperation with CEP’s development of a National FDI Strategy

IAF Task G1. Support UkraineInvest to enhance its operational efficiency, improve data access, and promote the agency’s mandate.

Sub-Task To complement the tasks currently being undertaken as a part of the Description development of the National FDI Strategy, CEP will support UkraineInvest in three key areas:

• Support capacity building by providing a systematic, transparent process for processing FDI applications, maximizing the limited resources of the agency to operate with efficiency and consistency; • Provide UkraineInvest with access to key databases for analyzing investment markets; and • In coordination with the finalization of the National FDI Strategy, support the promotion of UkraineInvest as the agency responsible for attracting and facilitating FDI into Ukraine.

Implementation The subtasks will be undertaken with the consideration of mechanisms Notes that allow for self-sustainability. With the potential for shifts in agency leadership, CEP and USAID will need to assess the level of commitment of any future leadership in UkraineInvest. Responsible Chief of Party, Deputy Chief of Party, Special Initiatives Team Lead, Teams Subcontractor(s), Comms Counterparts UkraineInvest, MEDTA Resource Budget Internal resources, Subcontract budget of $150,000, grant budget of $50,000 Expected November 2020 to April 2021 Timeline IR Category IR 2.1, IR 3.1 MEL Expected By September 2021: Results

• Ind #4: Value of new investments in selected USAID-assisted industries, $30 million (continent on GOU follow through) • #20: Number of USG-assisted institutions and organizations with improved performance: 1

IV. Objective 4: Trade Linkages Facilitated

A. IR 4: Improved Export and Trade Capacity

A1. Cost-effective export promotion programs implemented (Sub-IR 4.1)

The export development section reflects two main themes in the Year 3 work plan. First, export development and promotion activities reflect changes in the CEP organizational structure. A reorganization and consolidation of activities under the private sector work began in Year 2 and will be completed at the beginning of Year 3. As such, most of the sector specific export development work is now reflected in the individual sector work plans. These tasks are to be carried out fully as joint efforts, with export development team members wholly integrated into the broad sector teams responsible for carrying out activities there. Some notes remain here, but the activities themselves are carried out as part of sector work plans.

The second main theme is flexibility. Certain activities will continue as possible. However, the end of Year 2 and the beginning of year 3 has been and will continue to be a time to reflect on how Covid-19 has affected export markets and market access activities. Sector market access activities are being planned and executed following analysis of real-time conditions and data. The CEP export promotion work will be central to supporting efforts to gather and analyse data, plan the best market access programs possible, and to execute them while remaining flexible and willing to change direction should market conditions or information change.

It should be emphasized that the team experienced in export development will be carrying out all the regular activities for which they are known. The difference is that these are now part of sector work plans and more fully integrated with the teams supporting the sectors.

Trade event work will continue with the team conducting lead generation, providing trainings for firms, assisting in grants administration for trade show participation, and leading follow-up assistance and trainings as appropriate for the sector. Collaboration will continue with all relevant parties outside of CEP. CEP will build capacity of local organizations representing sectors and national-level EPO as funding allows. The feasibility and effectiveness of an online trade event will be assessed, particularly for the creative sector where a Ukraine centric event is unlikely to be arranged by others.

Export alliance support will continue in developing market research and marketing plans, assisting in lead generation and follow-up, conducting matchmaking activities, assisting in developing and administering appropriate grants to generate sales results, and building capacity of alliances to continue work outside of and after CEP.

Sector specific programs are expected to continue and intensify and may include programs to access major markets such as the Middle East for food products, or provide specialised “export evolution” trainings to IT firms. As possible, work will further extend outside of Kyiv, especially in the food and furniture sectors.

Numbering of these tasks follows previous conventions, but they are noted as TA instead of ET.

TA Task ET 2.4 Support implementation of export plans by graduates of Export Evolution Training Program and Priority Sector Firms (started in Y2) Sub - Task 1. Conduct coordination and monitoring of the activities implemented by Description Grantees to maximize project deliverables. 2. Maintain ongoing communication with the grantees to ensure successful implementation of the activities under grant and contribute if needed. 3. Assess other market access needs in CEP priority sectors and supplement and/or design appropriate programs.

The task is continued from Y2. In Y2 105 participants completed the Export Evolution Training program (EETP) out of which 56 were considered successful graduates and could apply for a grant to receive co-funding to implement their export plans. The grants encourage businesses to increase international marketing and promotion expenditure and increase international sales. Initially it was expected that up to 50 companies could receive grants for a total budget of $300,000.

All subtasks are expected to be completed in Y3. Implementation CEP will work with successful graduates of the Export Evolution Training Notes Program to establish export operations in target markets. CEP anticipates using the expertise of sectoral experts embedded in the EPO (through Task ET4.1) where needed. CEP will also support other market access activities through the priority sectors on an opportunistic basis.

Grant funded activities may include participation at international trade shows, leads generation, digital marketing, certification, development of high-quality marketing materials, etc.

Where appropriate, CEP will consider collaboration with EPO, BSOs, CCIs and industry associations. Priority for new grants will be given to CEP sectors, though CEP will still opportunistically support strong firms that are not in these sectors.

Responsible Export Promotion Team, Grants, Comms Teams Counterparts Businesses participated in the EETP; sectoral experts embedded in EPO Resource Budget $300k grants (RFA13), internal resources Expected Timeline October 2020 to September 2021 IR Category IR 4.1 MEL Expected By September 2021: Results • #5.1: USD value of incremental sales of firms receiving USG-funded assistance: $5 million+, depending on support level • #6: Number of firms receiving USG-funded TA to export: 25 • #8: Number of USAID-assisted firms that expanded their export market: 20

• #13: Number (verifiable) of private sector firms that have improved management practices or technologies as a result of USG assistance: 20

TA Task ET 4.1 EPO Sectoral Specialization (Continuation of task started in Y2)

Sub - Task 1. Extend the existing grant agreement with NGU Foundation of Support Description of Reforms in Ukraine 2. Evaluate interim results of work delivered by existing experts embedded in EPO 3. Introduce necessary changes related to tasks the experts should focus on (e.g. reinforce transactional vector, establish close alignment with existing CEP sectors and tasks etc.) 4. Add/change experts with accordance to changes introduced. Budget is for five people. 5. Consider change of institution supported, i.e. embedding sector specialists in lead associations if EPO funding continues to be uncertain

All subtasks are expected to be completed in Y3. Implementation CEP will cooperate with EPO, GoU, lead sector associations, and NGU Notes Foundation of Support of Reforms in Ukraine under delivery of this task.

CEP will work to build capacity to provide assistance to exporters aligned with CEP activities and priority sectors

CEP will support the beneficiaries through grant assistance. Assistance will be provided in close alignment with existing CEP tasks and priority industries. Assistance from the Sectoral Experts may include but is not limited to: developing and evaluating market opportunities and leads; identifying needs for additional niche expertise; supporting the identification and development of sales opportunities and linkages with foreign customers.

CEP assumes possibility of collaboration with other donor funded projects if applicable

Responsible Export promotion team, Grants, Comms, private sector teams Teams Counterparts EPO, GoU, NGU Foundation of Support of Reforms in Ukraine Resource Budget Internal resources; $113k in grants Expected Timeline October 2020 to September 2021 IR Category IR 4.1 MEL Expected By September 2021: Results • #5.1: USD value of incremental sales attributed to the project implementation: $250k • #6: Number of firms receiving USG-funded TA to export (Output): 150 • #8: Number of USAID-assisted firms that expanded their export market (Outcome): 100 78

• #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance (Outcome): 100

TA Task ET 4.3 Provide EPO with Access to Market Intelligence Databases

Sub - Task 1. Develop in-kind grant activity to license the databases for EPO. CEP Description is to approve scope and term of database subscriptions as part of the grant and follow up. 2. Purchase the database licenses 3. Align usage of databases with existing CEP tasks

All subtasks are expected to be completed in Y3. Implementation CEP will cooperate with EPO in order to provide the organization with Notes access to Mintel, Statista and Euromonitor analytical databases

CEP will work with above stakeholders to build capacity of EPO to provide comprehensive market analyses to Ukrainian exporters

CEP will support the beneficiaries through grant assistance, which will be used to provide EPO analytical unit access to databases. Access to EPO analytical reports produced by from databases will be prioritized to beneficiaries of CEP activities.

CEP assumes possibility of collaboration with other donor funded projects if applicable

Responsible Export promotion team, Grants, Comms Teams Counterparts EPO, GoU Resource Budget $100k in grants Expected Timeline October 2020 to September 2021 IR Category IR 4.1 MEL Expected By September 2021: Results • #6: Number of firms receiving USG-funded TA to export (Output): 300 • #8: Number of USAID-assisted firms that expanded their export market (Outcome): 90

TA Task ET 5.1 Actively promote e-export opportunities to Ukrainian SMEs

Sub – Task CEP supported creation of a series of e-export educational and Description promotional videos in Y2. The videos will be promoted by the E-export school of UkrPoshta (the main provider of e-export parcel and logistic services in Ukraine). This task is to promote e-exporting to new target audiences and to stimulate increased and more efficient participation of SMEs in e-export.

1. Design and implement promo campaign of e-export educational videos created for CEP in social media 2. Partner with the Ministry of Digital Transportation to promote e-export educational videos on Diya Business portal 3. Prepare an online e-export readiness test focused on specifics of export operations via e-commerce as a new service offered by EPO 4. Prepare system of quick assessment of e-exporters’ online promo (possibly as a new service offered by EPO)

Implementation CEP will work with the EPO, Ministry of Digital Transformation, BSOs and Notes e-commerce experts which have capacities and motivation to develop and deliver services for e-exporters. CEP anticipates collaboration with UkrPoshta to coordinate e-export promotion activities and to benefit from its practical experience.

CEP assumes possibility of collaboration with other donor funded projects if applicable

Implementation of this task creates better conditions for efficient delivery and increased impact of Task ET5.2 E-export Micro-grants Program

Responsible Export promotion team, Grants, Comms Teams Counterparts EPO, BSOs, Ministry of Digital Transformation, UkrPoshta Resource Budget Internal resources; Subcontract $35K Expected Timeline October 2020 to September 2021 IR Category IR 4.1 MEL Expected By September 2021: Results • #5.1: USD value of incremental sales attributed to the project implementation: TBD, based on UkrPoshta data. • #6: Number of firms receiving USG-funded TA to export (Output): 500 • #8: Number of USAID-assisted firms that expanded their export market (Outcome): 50 • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance (Outcome): 150

TA Task ET 5.2 E-export Micro-grants Program

Sub - Task 1. Survey principal needs for funding of e-exporters (identify if possible Description single purpose of the micro-grant program) 2. Define a set of simple “must-have” criteria for e-exporters to qualify for micro-grant program 3. Design RFA that will enable distribution of 100 micro-grants of USD 1,000 with minimum admin burden and costs. This is likely to be outsourced. 4. Pilot the program providing 30 micro-grants and get feedback 5. Distribute remaining 70 micro-grants

CEP supported creation of a series of e-export educational and promotional videos in Y2. The videos will be promoted by E-export school of UkrPoshta. This task is to promote e-export to new target audiences and to stimulate increased and more efficient participation of SMEs in e- export. Implementation CEP will work with EPO, Ministry of Digital Transformation and e- Notes commerce experts which have capacities and motivation to develop and deliver services for e-exporters. CEP anticipates collaboration with UkrPoshta to coordinate e-export promotion activities and to benefit from its practical experience.

CEP will work with stakeholders on a national level in order to attract high level expertise in e-commerce and e-export.

CEP assumes possibility of collaboration with other donor funded projects if applicable

Responsible Export promotion team, Grants, Comms Teams Counterparts EPO, Ministry of Digital Transformation, UkrPoshta Resource Budget Internal resources; $100K in grants Expected Timeline October 2020 to September 2021 IR Category IR 4.1 MEL Expected By September 2021: Results • #5.1: USD value of incremental sales of firms receiving USG-funded assistance (Outcome): $2 million • #6: Number of firms receiving USG-funded TA to export (Output): 100 • #8: Number of USAID-assisted firms that expanded their export market (Outcome): 60 • #13: Number of private sector firms that have improved management practices or technologies as a result of USG assistance (Outcome): 80

TA Task B1.9. Support trade missions, trade shows, Incoming buyer Missions (delivery of at least 12 shows/missions through special grants program on a rolling basis) Task Description 1. Continue RFA grant activity offering support in planning and implementation of trade events. (T&M Expert, EP team lead, Grants) 2. Assist grantees with preparation to participate in trade events: provide advice on selecting appropriate consultants, conduct market analysis (T&M Expert, EP team lead) 3. Implement evidence-based trade events (T&M Expert, EP team lead) Notes The assignments under the grant activity must be co-financed by a grantee. Applications with co-financing from EPO will be prioritized Responsible EP team, Grants, Communications Teams Counterparts Companies, associations, GOU export promotion Resource Budget Grants. Remaining budget of $163K (RFA007): 5 active grants with $23,764.80 remaining, 2 grants pending approval (total $60k), ~$80k remaining in funding for the RFA. 81

Expected January 2020 to December 2020 Timeline IR Category IR 1.2, 1.3, 3.1 MEL Expected • #5: USD sales of firms receiving USG-funded assistance (Outcome): Results $2.4M • #6: Number of firms receiving USG-funded TA to export (Output): 40 • #8: Number of assisted firms that begin exporting or start exporting to new foreign markets (Outcome): 30

TA Task B1.10 Monitoring system in place for overall progress of Ukraine in diversifying exports/export markets Sub - Task 1. Agree the goals and expected outcomes of the activity with Description counterparts at EPO / EEDA, MDT and METDA 2. Draft SOW and select consultant 3. Map up and evaluate existing system of Ukrainian export data gathering, processing, analysing and publishing 4. Identify gaps and problems and suggest possible improvements of the system 5. Prepare all info needed for qualified decision on next steps CEP will complete this task by making a qualified decision on what needs to be done to improve existing or to introduce new monitoring system including resources needed for the implementation Implementation The existing system of gathering, processing, analyzing and publishing Notes data on exports includes State Customs Service, State Statistics Service and the Ministry of Economic Development, Trade and Agriculture and processes that are completed routinely and generate applicable outcomes. The system however does not provide sufficient info on company level (which may not be possible for data privacy reasons) and/or on the export performance of the MSMEs as a specific group of business / exporters that are supported by GoU as well as by international donor programs. CEP will work with stakeholders on the national level to build common understanding of activity’s goals, outcomes and to facilitate support from partner institutions. CEP will implement the task through short-term technical assistance. Selected consultant will map up and evaluate existing and suggest next steps for CEP decision. Responsible Export promotion team, Grants, Comms Teams Counterparts EPO, MDT, METDA, SCA, Resource Budget Internal resources; STTA 15 w-days Expected Timeline April to September 2021

IR Category IR 4.1 MEL Expected Results #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 (LOP)

TA Task B1.11 Monitoring system in place for assessing the effectiveness and cost effectiveness of GOU's export promotion activities Sub - Task 1. Agree the goals and expected outcomes of the activity with EPO / Description EEDA leadership 2. Draft SOW and select consultant 3. Revisit KPIs and monitoring system developed by PWC; suggest and agree on possible changes 4. Implement revised monitoring system for export promotion activities of EPO / EEDA CEP will possibly extend the task if successful implementation of the monitoring system requires more resources and effort. Implementation CEP did not include this Task in its Y1 and Y2 WP. In the meantime, the Notes system for assessing the effectiveness of GOU’s export promotion activities implemented by EPO including KPIs and monitoring system has been developed by PWC and funded by UK government. The system developed in 2019 however was put on hold after significant cut of EPO budget in March 2020 because of COVID-19. EPO is now being integrated in the newly created Entrepreneurship and Export Development Agency (EEDA) and transferred under Office of the Prime Minister. It is supposed to receive proper funding that enables full operations as well as proper application of KPIs and monitoring system developed by PWC. CEP will support the beneficiary through short-term technical assistance. Selected consultant will revisit KPIs and monitoring system developed in 2019 and, modify it and implement in collaboration with EEDA leadership and designated staff. CEP will seek support from the Ministry of Digital Transformation that is coordinating creation of EEDA. Responsible Export promotion team, Grants, Comms Teams Counterparts EPO Resource Budget Internal resources; STTA 20 w-days Expected Timeline January to May 2021 IR Category IR 4.1 MEL Expected Results • #20: Number of USG-assisted institutions and organizations with improved performance: 1

A2. Trade and customs support provided (Sub-IR 4.2)

Ukraine was effectively shut out of many of its longstanding export markets following the conflict with Russia. Entering new markets requires greater engagement with the global trading system that exists outside of the legacy markets tied to the former Soviet Union. Since project inception, CEP has been working in the areas of trade engagement and customs reform to assist Ukraine in making a transition to new export markets.

A2a. Trade facilitation

Reaching new export markets requires knowledge of and engagement in the trading systems that govern those markets. Previous CEP work in this area assisted the Government of Ukraine in conforming to the rules of the global trading system. Most of that work has come to a close, including advising on a trade defense instruments law that is before parliament at the time of writing. However, CEP continues to assist companies, especially in the priority sectors, with understanding their rights and obligations in the global trading system. As with the export development work, most of this work has now fallen under the sector work plans. Activities are mainly carried out on an opportunistic and as-needed basis for CEP priority sector companies using internal resources.

TA 6.3. IT Platform Trade Defense of Ukraine (started in Y2)

Sub - Task Develop, install, and train on the IT platform "Trade Defense of Ukraine" Description (second iteration) which allows managing by MDETA domestic trade defense investigations in real time. CEP’s activities include:

1. Select and hire the subcontractor that will develop, install, and train on the IT platform and monitor regularly / guide the development and deployment of the expanded second iteration of IT platform (case management) / test the functionalities of the IT platform. 2. Guide the preparation of, and review / comment on, the materials (internal and external user manuals and video) prepared to inform the introduction of / explain the new IT platform. 3. Guide the organization and delivery of at least 1 presentation of the new IT platform with the participation of MEDTA and private sector.

Implementation This case management system is second standalone iteration of the IT Notes Platform “Trade Defense of Ukraine”. While IT Platform “Trade Defense of Ukraine” developed by CEP allows electronic submission and document exchange between investigating authority and private sector, second iteration of this platform will serve an important training function for MDEAT staff seeking to keep to the WTO-mandated timeframes for investigations. It should offer investigation calendars customized according to specific domestic requirements, help manage investigations' workflow and deadlines and can be used as a document bank. With this case management system, investigators can create a database of relevant information on national investigations and measures. The system should also produce automatically the various reports required by the WTO, in the required format.

Responsible ET team, Grants, Comms Teams Counterparts Ministry Economic Development, Trade and Agriculture, BSOs and firms. Resource Budget Internal resources, $68k subcontract. Expected Timeline October 2020 to September 2021 84

IR Category IR 4.2 MEL Expected By September 2021: Results #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: 1 #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 1 #20: Number of USG-assisted institutions and organizations with improved performance: 1

A2b. Customs reform and alignment with best practices

The Ukrainian State Customs Service (SCS) is still considered a barrier to freer and more efficient international trade. One of the issues is lack of a clear and coherent organizational structure and well-defined business processes in the customs administration. Improvements in transparency, inspections, decision making, and data collection and analysis are at the core of CEP activities.

In January 2020, the Rada passed a law requiring the SCS to consolidate its central and regional offices into a single legal entity to fulfill an IMF structural benchmark. A clear anti- corruption measure, the restructuring seeks to reduce the time and cost for businesses to comply with customs procedures, digitalize customs processes, and introduce an effective organizational structure. During FY2 CEP subcontracted PricewaterhouseCoopers Ukraine (PwC) to complete a diagnostic review of the existing operating model and define a transformational roadmap. CEP support in Year 3 will be focused on implementing a Target Operating Model (TOM) for the Customs single legal entity, including other items of the action plan such as a communications strategy.

TA Task 7, Implementation of the Target Operating Model (TOM) for the Customs single legal entity, including other items of the action plan and communication strategy

Sub-task 1.1. Support implementation of the Target Operating Model (TOM) Description based on the transformation roadmap developed during FY2. The set of activities within implementation include: • Model the optimal functional structure for SCS (development of three scenarios and validation with SCS), drafting regulations, including delegation of power, provisions and policies that need to be changed in new structure, visual and media instruments, proposed software solutions for an SCS email system and/or Customer Relationship Management (CRM) • Draft policies and regulations for key SCS departments and divisions, policies on signing processes (i.e. signature vs facsimile) for various document types and policy and procedure for appeals • Operational analysis of SCS and redesign according to TOM, develop metrics on optimal workflow and level of effort to perform core functions within regional branches and separate subsidiaries, to identify gaps,

inefficiencies, shortages, and impact of automation processes following transformation to a single legal entity with key KPIs to assess increases in efficiency following transformation to a Single Legal entity; • Draft staffing lists; roadmap on integration/transfer/exchange of experts among subsidiaries; and, draft employment agreements/contracts with SCS officials.

1.2. Support restructuring of the IP rights protection system for more efficient and faster customs clearance of goods: • Building organizational capacity of the customs offices in protection of intellectual property rights. Establishing an operational expert review unit for immediate communication with customs officers, law- enforcement units of the State Customs Service, copyrighters, etc.; • Development the standard methodology recommendations in the form of process algorithms or instructions for the customs officers during control of the intellectual rights compliance. • Production of the educational course on IP rights protection in customs procedures in cooperation with relevant educational institution. • Elaboration of special risk profiles for controlling movement of goods which may violate intellectual property rights. Development of a functioning intellectual property rights database. Conducting short seminars (trainings) on intellectual property rights protection, with involvement of representatives of copyrighters.

The scope and budget of the implementation will depend on Customs progress as of the date of re-establishment of the cooperation. Respective activities will be implemented in coordination with other donors, including the EU, to scope and fund implementation efforts. Note: active cooperation with Customs was put on hold during Q3 FY 2 and renewed in Q4 FY2 after obtaining consent from the USAID.

Implementation The State Customs Service of Ukraine (SCS) is still in the process of Notes consolidating 16 Customs legal entities into one unified legal entity. The Ministry of Finance also completed preparation of the by-laws supporting intellectual property rights protection during cross-border movement of goods. The orders became effective on July 1, 2020. So, there is also the possibility of restructuring of the IP rights protection system, including capacity building of customs officers involved in customs clearance. Implementation of the transformational road map developed by the PWC during Y2 and provisions of the Resolution #569-r will contribute to achieving goals set by the Cabinet of Ministers' Program of Activities, specifically: reducing time and costs for businesses to comply with

customs procedures, contributing towards the digitalization of customs processes, as well as introduction of an effective organizational structure built on functional principles.

Responsible Deputy Chief of Party, Grants, Comms Teams

Counterparts State Customs Service (SCS), Ministry of Finance of Ukraine (MFU)

Resource Budget Internal resources, STTAs, Subcontract; total budget of $125k

Expected Timeline October 2020 to September 2021.

IR Category IR 4.2

MEL Expected By September 2021: Results #1: Number of SME-related laws and regulations to improve business environment developed/introduced/passed as a result of USAID assistance: 5 #19: Number of institutional level initiatives promoted, and actions supported to improve trade and customs operations: 3 #20: Number of USG-assisted institutions and organizations with improved performance: 1

B. Computable General Equilibrium (CGE) Model This tasks originates from CEP’s prior development of a economic tool, a CGE Model, that was used to develop a comprehensive impact assessment of a potential Free Trade Agreement (FTA) between Ukraine and Turkey. In addition to the development of the CGE Model and the Impact Assessment, CEP also commissioned eight sectoral studies for determining the impact of an FTA on the selected industries.

TA Task 8 Computable General Equilibrium (CGE) Model Task Description Assess the impact of a potential future FTA between Ukraine and Turkey through a modern economic tool (i.e. Computable General Equilibrium (CGE) model) developed with CEP’s support and facilitate the use of that tool in the other trade-related research). CEP Year 3 interventions include: • Deliver two seminars to business and GOU and one technical workshop to research institutions, NGOs, academia and think tanks on the results and methodology of the economic tool and trade assessment assess of a potential future FTA; • Prepare the housing and management of the CGE model and trade documentation for posterity purposes with the reputable analytical center - Kyiv School of Economics (KSE) to ensure the control of collected data utilization and support the research for five years. • As needed/requested support further development and utilization the economic tool for various purpose (i.e. taxations, fiscal policy).

Notes CEP envisages the trade dataset produced as the result of impact assessment and the CGE Model as a public good to be accessible for utilization by interested researchers, academics, institutions and individuals. An access to the model results will encourage experts to use it as a reliable source of information for expert discussion and further researches. Provided the data sensitivity CEP will prepare the template Data Sharing Agreement (DSA) and for continuity, CEP (via KSE) would request that any individual or institution expressing interest in utilizing dataset, model or documentation to sign DSA for posterity sake. By signing the DSA any individual would commit to validate the data and provide feedback which in turn would contribute to elevation of the research and analysis to the higher level. Responsible SI Lead, Legal Team, Grants, Comms Teams Counterparts MEDTA, KSE, IER, BSOs and private sector firms Resource Budget Internal resources Expected October 2020 – December 2020 with option to use the models through Timeline the life of the project. See sub-task schedule above IR Category IR 1.1; IR 4.2 MEL Expected • #12: Person-hours of USG-supported training completed in trade and Results investment: 60 • #19: Number of institutional level initiatives promoted and actions supported to improve trade and customs operations: 1

V. Implementation Themes and Tools

A. Grants under Contract and Subcontracts

In Year 3, CEP intends to build on the strong foundations established in Years 1 and 2 with a continuation of current, ongoing grant activities and new solicitations and awards based on the tasks outlined in this document. Taking lessons learned from Years 1 and 2 with regards to grants management, CEP will continue to improve on releasing more targeted and strategic grant solicitations (RFAs and APSs, including a Co-Creation APS that will allow CEP more flexibility in ensuring grantee success) and prioritize grants that have a mix of transactional and transformational impact. CEP will continue to leverage the networks and relationships that our grantees and counterparts cultivate with diverse Ukrainian’ stakeholders to increase the reach of our grant solicitations. CEP will also shift more technical responsibility from the Grants and Subcontracts team to the technical leadership on the project. With sectors teams now fully staffed, this shift will ensure that grants are designed and implemented by the teams closest to the beneficiaries. Lastly, CEP will take a more integrated approach to grants management with greater inclusion of the MEL team inputs into the GUC process. This shift will assist us in effectively measuring success through the life of the project, including facilitating more comprehensive data collection around KPIs and results. CEP will continue its close coordination with USAID to ensure successful implementation of GUCs and the tracking of results. CEP anticipates awarding large, complex grant and subcontract awards in Year 3, including the eo Incubator and the National Investment Strategy. Following our approved Grants Manual, some cases will require approval from CEP’s 88

Contracting Officer, including requests for consent to subcontract in large service subcontracts, in-kind procurements, and/or requests for source/nationality waivers. CEP will continue to rely on close coordination with USAID to implement direct grant awards to government entities in the form of limited scope in-kind grants and/or subcontracts under Memorandums of Understanding. Specific Year 3 grants and subcontracts and associated funding levels are noted throughout this Y3 work plan according to their Sector/Task.

B. MEL

In Year 2, CEP proposed revisions to the developed MEL plan, indicator list, and Performance Indicator Reference Sheets to better reflect the program’s direction. The Year 3 Work Plan will adhere to the revised Results Framework and updated List of Indicators. After its integration in Year 2 into the MEL system, the DevResults software has been properly configured and serves as the consolidated results database for CEP. Moreover, CEP has moved to create an SME database, capturing all assisted companies and CEP activities. Further development into a full customer relationship management (CRM) system will be assessed in Year 3. Under MEL supervision, data collection was improved with the development of multiple tools and fuller integration with technical teams. Given the Covid-19 risks and restrictions, monitoring visits were not undertaken in the second half of Year 2. Rather, tools and procedures for remote monitoring have been laid out. Unless the Covid-19 situation changes, monitoring will largely be remote in Year 3. Also accomplished was the completion of Municipal Competitive Index (MCI) survey. The results will serve as the baseline for 3 CEP indicators and will allow for better overview of municipal conditions and activity planning. “Collaborate, learn, and adapt” (CLA) reflection sessions. To ensure that MEL data is used effectively for project management purposes, senior management will meet on a regular basis (virtual or in-person) to review all data and track activity progress, what is working well, what underlying assumptions have changed that impact the original activity/task design (timing, stakeholders, results, resources needed, etc.). Approximately once per quarter, CEP envisions holding a CLA reflection session with USAID involvement to assess Year 3 activity/task implementation and new priorities that may arise over the course of implementation. Guidelines for the CLA reflection sessions include:

• CLA reflection sessions will be facilitated by the Project Management Unit Director and held virtually. The timing, agenda, and desired outputs of these sessions will be based on advice and inputs from the COP and COR. • Sessions will generally focus on select Tasks/Activities and capture: activity progress, what is working well, what underlying assumptions have changed that impact the original activity/task design (timing, stakeholders, results, resources needed, etc.). Reflections on the progress of those Activities/Tasks as well as any new assumptions or external factors impacting those activities will yield a recommendation on how to proceed. These 89

recommendations may include, among a wide range of alternatives, a recommendation to change, cancel, delay, or discontinue an activity entirely. • Other topics for sessions may include newly requested CEP support (ie. priority requests coming from the GoU or other stakeholders reflecting unique windows of opportunity not previously envisioned for support in CEP’s Year 3 work plan). Select newly requested tasks/activities will be assessed based on the following factors: 1) relevance to CEP’s Objectives and Intermediary Result Areas, 2) in-house skillsets of CEP technical team to manage these activities appropriately, 3) ability to generate significant results as measured by CEP’s currently-adopted performance indicators (including both transformational and transactional impacts), 4) the business case (a.k.a cost-benefit) for CEP undertaking this work, including the overall budget commitment required relative to competing uses of those resources for other ongoing activities, and 5) USAID Mission priorities. • The results of each session will be memorialized in a concise memorandum (no more than 3 pages) to articulate discussions/topics held, decisions made, and actionable next steps for the CEP team to take. These CLA reflection discussions will serve as the official basis for USAID technical direction to CEP, and where necessary, pivoting its ongoing project interventions. Official updates or resubmissions to the CEP Year 3 Work Plan may still be submitted on an as-needed basis (ie. no more frequently than every 6 months), however the intent of the CLA reflection sessions are to avoid more burdensome efforts to update the Work Plan in its entirety.

C. Gender Equity and Social Inclusion

GESI Task C1. Women Business Camps

Sub-Task • Implement a grant activity to hold 5 Women’s Business Camps, Description enhanced based on previous participant feedback. These camps will include multiple age groups to ensure a broad range of female entrepreneurs, but will now be focused on participants from CEP’s priority sectors. The Business Camps’ programs and curriculum will be conducted in in person or online depending on quarantine restrictions and will be tailored to product management and sales skills improvement. The programs are targeted towards producers of goods and providers of services to enhance marketing, communications, and customer service capabilities of participants. • The Business Camps will combine learning, networking, and knowledge-sharing aspects, complementing the emphasis on soft skills and professional capacity development. Implementation This grant program has targeted all established and functioning women- Notes owned businesses within CEP priority sectors, which seek to expand to international or domestic markets through improvement of production and/or operations. Selection criteria for the grant program targeted women-owned businesses where founders were also managers. Responsible Deputy Chief of Party Teams 90

Counterparts Resource Budget In Year 3, CEP plans to award a grant in the amount of of $35,000 to an NGO. Expected November 2020 to September 2021 Timeline IR Category IR 1.1, IR 2.1, IR 3.1 MEL Expected By September 2021: Results • Ind #4: Value of new investments in selected USAID-assisted industries, $50,000 • Ind 11: Number of females who report increased self-efficacy in business conduct as a result of project assistance -TBD

GESI Task C2. Research on Women’s Economic Empowerment

Sub-Task • Award a grant to an NGO to research the status of women’s Description economic empowerment in Ukraine. The research will focus on both barriers and opportunities for women to participate in the economy. Areas of research will include currently known theories and practices, as well as understanding areas which require greater analysis Implementation Special attention will be paid to collection of data on economic Notes involvement of internally displaced person (IDPs) in order to support “data-driven” policy and programming. Organization and voice, and female-led networks and platforms, are vital to women empowerment. Researching these “new unions” which focus on addressing gender concerns in the economy, will highlight areas for assistance and greater attention. The research will also focus on new realities due to COVID-19 restrictions. It will look at the peculiarities of online work and access to remote jobs. Conditions of work will be examined through information on gender-sensitive social protection systems, affordable care options, and other areas related to the female workforce. Legal aspects will also be examined. For example, gender aware labor market policy, childcare policy, and discriminatory laws and regulations. Through this research, CEP will be able to diversify its activity in working on gender equality in Ukraine. Responsible Deputy Chief of Party Teams Counterparts Resource Budget STTA $15,000 Expected October 2020 to September 2021 Timeline IR Category IR 1.1, IR 2.1, IR 3.1 MEL Expected By September 2021: Results • Ind 11: Number of females who report increased self-efficacy in business conduct as a result of project assistance -TBD

As a part of social inclusion activities, the project will continue to provide support to businesses founded by people from vulnerable groups (IDPs, ethnic and cultural minorities) and those that ensure employment of IDPs, minorities and people with disabilities. After the close of APS-001, which contributed to social inclusion during Year 1 and Year 2, the project will continue to find opportunities to integrate social inclusion considerations in other activities for more broad inclusion of those groups. For example, additional evaluation criteria on inclusiveness aspects of the proposed grant projects can be added for applications, where additional employment is envisioned as a result of grant implementation. Additional support for participation in program events for vulnerable groups will be provided when necessary.

D. Communications

During Year 3, the CEP Communications Team will continue to provide strategic communications support for projects and events, ensure proper implementation of USAID branding and marking requirements by grantees, update weekly communications plans, prepare daily, weekly and quarterly reports, and develop public outreach materials - success stories, press-releases, bilingual newsletters, one-pagers and booklets, and presentations.

Building upon successes in Year 2, the Communications Team will continue to increase its outreach (and followers) through social media campaigns. In Year 2 the Communications Team reached over 12,386 Facebook followers, 1,071 LinkedIn contacts, and 105 Twitter followers. During Year 3, the team plans to increase social media followers by approximately 1.5 times as the number of beneficiaries grows and as outreach activities intensify.

The Communications Team will focus on activities conducted around the following areas: export promotion and new market development, the Municipal Competitiveness Index, social entrepreneurship programs, business support organizations (BSOs) best practices, and general tips and infographics on the CEP grant application process. In close collaboration with the CEP technical and grants teams, the Communications Team will carry out two additional campaigns: a) free trade agreements and opportunities for Ukrainian SMEs in a potential future FTA between Ukraine and Turkey, and b) the results of successfully implemented women-owned grants.

Specific campaigns supporting CEP objectives and indicators will depend on the final shape of the sector and cross cutting work plans. However, after initial discussions with team leads, we anticipate carrying out campaigns across CEP program areas including:

• IT and startups, support for: Lviv IT Arena 2020 presenting CEP IT export initiatives and organizing B2B linkages between startups and potentials investors and buyers; roll out of the Lviv IT marketplace platform; promotion of IT training initiatives; the new course on Innovative Entrepreneurship and Startup Project Management for Ukrainian universities. • Furniture: Organization of the virtual trade fair to substitute for the cancelled Kyiv expo; promotion of the ProZorro.Sale timber platform. • Food: promotion of the existing and new export alliances, both internally and in target markets. • Creative: promotion of Ukraine as a Creative/Film Destination; promote and help organize training programs for filmmakers. 92

• Tourism: when timing is right, promote Odesa and Zakarpattya Oblasts within the program “Culture.Tourism.Regions” • Grants: To improve and better coordinate CEP’s grantees’ communications, a detailed and user-friendly memo on public communications policies and procedures will be developed and shared with CEP current and new grantees • Export development activities: on and offline trade events, export trainings, promotion of results from export related grants, e-commerce initiatives and opportunities, assistance with Export Bootcamps promotion, and other areas as appropriate given current market conditions. • “Transformational” and anti-corruption measures: drive campaign on trade defense; help online BSOs with their communications support; promote results from the MCI survey; support privatization activities and the virtual data room; strategic communication support for the Government of Ukraine around a number of areas including the National FDI Strategy.

In supporting ongoing USAID CEP activities, the Communications Team coordinates with USAID CEP’s target audiences, including Government agencies, BSOs, industry and business associations, NGOs, SMEs, and others. As part of these efforts, the team will continue to engage the public, partners, and beneficiaries of USAID CEP ongoing activities via the bilingual USAID CEP Monthly Newsletters. At least 6 success stories will be developed and published in cooperation with grantees to highlight the USAID CEP role in increased SMEs and BSOs competitiveness and capacity. The team will also support CEP leadership participation in online conferences.

During Year 3, the Communication Team will continue work on the USAID CEP website, namely website design and content completion, and production and roll out for cross platform and browser use. The website will keep stakeholders informed about USAID CEP work, assist in finding new partners, and reach out to potential grantees. Additionally, the Communications Team plans to use the Chemonics Yammer Network to share USAID CEP results and successes.

In terms of staffing and resources, USAID CEP plans to hire a Communications Director in the first quarter of FY 2021 and establish a cooperative arrangement with a specialist focused on developing success stories. The team also plans to prolong the work of the Content Visualization Specialist who has been working on a temporary basis. We believe that the improved visualization of data and results have been instrumental in newsletter subscription, social media follower growth, and the CEP position in the TOP-USAID projects mentioned last year in the local media. These additional resources will help smooth and focus USAID CEP external communications and help the team to keep up with the growing amount of project work. The team will also be looking to acquire some additional technical resources such as MediaMonitoringBot and professional software subscriptions.

E. CEP Internship Program

Having benefited from intern contributions from June – August 2020, CEP plans to continue running the paid Internship Program in Year 3. The Internship Program contributes to CEP goals by helping young Ukrainians develop a range of skills in economic competitiveness, trade, and business. The interns, mainly student and new graduates, also build their exposure to a professional, international work environment. Most have an interest in development and the program gives them a potential avenue for pursuing work in that area. The interns help CEP 93

across a wide range of areas, undertaking many research and related tasks that support programs. CEP will announce intern opportunities in the following fields: Business Competitiveness, Emerging Industries, Export Promotion, International Trade, Performance Management, Communications, and Grants Activity. Assignments will last up to 6 months. Depending on pandemic restrictions, the interns will work either from Kyiv office or remotely.

Annex A. Gantt Chart

See Attached Excel

Annex B. Mapping Work Plan Activities to Results Framework.

Task Name IR 1: Increased IR 2: Anti IR 3: IR 4: Private Sector Competitive Increased Improved Competitiveness Measures foreign and Export Impacting domestic and Trade Private Sector investment Capacity Competitiveness Reduced

PS Task A1.4. Support 1.3, 1.4 4.1 development of a Lviv tech marketplace (Updated task - formerly “Support development of a Lviv Oblast IT cluster B2B marketplace”) PS Task A1.5. Support to 1.2, 1.3 4.1 Previously Launched Export Alliances PS Task A1.6. Support 1.2, 1.3 4.1 international IT conference in Ukraine – Lviv IT Arena 2020 in online format, with an incoming buyer’s mission PS Task A1.7. Provide 1.2, 1.3 4.1 transactional support to tech companies in acquiring new clients and business leads PS Task A2.1. Support 1.2, 1.3 digitalization of Ukrainian SMEs PS Task A3.2. Build capacity 1.2, 1.3 of small IT clusters to create new IT jobs and sales and develop regional IT industries PS Task A3.3. Conduct 1.2, 1.3 3.2 4.1 trainings and business transformation programs to enhance client relations capacity of tech companies leading to their revenue increase

PS Task A3.4. Strengthen 1.2, 1.3 4.2 tech ecosystem and increase its global outreach PS Task A3.5. Identify and 2.1 4.2 Address Regulatory Burdens on the IT Sector PS Task A4.1 Provide 1.2, 1.3 4.1 transactional support for promising early-stage innovative and tech enterprises PS Task A.4.2. Youth- 1.1, 1.2, 1.3 4.1 Targeted Entrepreneurship Education (previously titled “Support transformational initiatives focused on innovations and education”)

PS Task B1. Assist furniture 1.2, 1.3 4.1 companies in targeting markets, establishing market linkages and increase in sales through existing and new channels PS Task B.2a. Improved 1.1, 1.2, 1.3 competitiveness, sales and profitability of furniture companies through design- led innovation, increased productivity, and improved quality PS Task B4. Develop Supply 1.1, 1.2, 1.3 Chains / New Domestic Suppliers for Import Substitution PS Task B.5. Increase 1.2, 1.3 3.2 4.1 furniture sales through integration of companies into multinational buyer supply chains PS Task B.6. Increase 1.2, 1.3 3.2 furniture sales through improved access to finance PS Task B9. Identify and 2.1 Address Regulatory Burdens on the Furniture Industry

PS Task C2. Stimulate the 1.1, 1.2, 1.3 growth of tourism revenues, investment, and job- creation in pilot oblasts through the development, promotion, and delivery of new cultural and heritage tourism products PS Task C3. Assist in building 1.1, 1.2, 1.3 capacity in the national tourism organization (NTOU) and sub-grantees PS Task C4. Provide support 2.1 in improving the business enabling environment for Ukrainian tourism

PS Task D1.2. Expand Food 1.2, 1.3 4.1 Trade Alliances (FTAs) and continue developing and implementing COVID-19 appropriate sales and marketing strategies in target markets and regions PS Task D1.3. Create and 1.1, 1.2 3.2 implement Investment Plans aimed at addressing competitiveness constraints PS Task D3.1. Develop the 1.1, 1.2, 1.3 HR capacity of Ukrainian food processing staff to address common sector competitiveness and marketing challenges

PS Task D3.2. Identify and 2.1 4.2 Address Regulatory Burdens on the Food Processing Industry and CEP Sub- sectors

PS Task E2. Workforces and 1.1, 1.2, 1.3 Skills Development / Enabling sustainable growth of the Film industry through

improved availability and quality skills of talent and crews PS Task E3. Promotion of 1.1, 1.2, 1.3 4.1 Ukraine as a Film Destination / international marketing and visibility as a Filming destination PS Task E4. Improved 1.1, 1.2, 1.3 2.1 Business Enabling Environment PS Task E5. Support the 2.1 Ministry of Culture and Information Policy in Developing the Creative Industries Strategy and Roadmap 2021-2023

TA Task A1.1 Facilitate Key, 2.1 Identified GOU Legal Initiatives (started in FY1, formerly CC task) TA Task A1.2. Develop and 2.1, 2.2 Pilot User-Friendly Regulatory Policy Tools (started in FY2, formerly CC task) TA Task A1.3. Ukraine’s 2.1 position in the World Bank’s “Doing Business” ranking improved TA Task A1.4. Create 2.1 Entrepreneurship Data Dashboard (E2D) TA Task A2.1. Develop and 2.2 present Center for Entrepreneurs Support (CES) model TA Task A2.3. Increase the 2.2 Influence of Private Sector through the BSOs Capacity Building (started in FY1, formerly CC task) TA Task A2.4. Strengthen 2.2, 2.3 BSO Partnership Network to support joint actions of SMEs 99

TA Task A3.1. Develop and 2.1, 2.2 Apply “Local Deregulation Model” in Partner Municipalities (started in FY2, formerly CC task) TA Task A3.2. Conduct 2.2 Municipal Competitiveness Index (MCI) Survey (started in Y1, formerly CC task) TA Task A3.3. Improve 2.1, 2.2 Municipal Business Climates Based on MCI (started in Y2, formerly CC task) TA Task A3.4. Develop and 1.1, 1.2 2.1 Roll Out Code of Business Conduct (started in FY2, formerly SI Task E1)

TA Task 4.1. Inspections Reform (formerly CC Task F1 in SI) TA Task 4.2. Support AMCU in Anti-Monopoly Legislative, Education and Advocacy Efforts (formerly CC Task G1 in SI)

IAF Task A.1. Support 1.1, 1.2 continued incubation and strategic development of eo Business Incubators IAF Task B1.1 Support 1.2 2.1 ProZorro.Sale – Electronic Timber Auction Platform IAF Task B1.2 Support 1.2 2.1 3.1 ProZorro.Sale – Privatization and Commercial Sale Auctions IAF Task C.1. Evaluate 1.1, 1.2 3.2 opportunities to support new investment vehicles to increase investments into Ukraine or provide greater access to capital for SMEs. IAF Task C2. Develop and 1.1, 1.2, 1.3 3.2 Launch a VC Fund

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IAF Task D1. Supporting 3.1 Privatization efforts with the State Property Fund IAF Task E1. National 1.1 2.1 3.1 Foreign Direct Investment Strategy IAF Task F1. Support Diia 1.1 2.1 3.1 4.2 City with donor coordination, communication, monitoring and reporting protocols, and provide strategic input into its operational plan IAF Task F2. Support Diia 1.1 2.1 3.1 4.2 City in the post-launch operational phase IAF Task G1. Support 2.1 3.1 UkraineInvest to enhance its operational efficiency, improve data access, and promote the agency’s mandate. TA Task ET 2.4 Support 4.1 implementation of export plans by graduates of Export Evolution Training Program and Priority Sector Firms (started in Y2) TA Task ET 4.1 EPO Sectoral 4.1 Specialization (Continuation of task started in Y2) TA Task ET 4.3 Provide EPO 4.1 with Access to Market Intelligence Databases TA Task ET 5.1 Actively 4.1 promote e-export opportunities to Ukrainian SMEs TA Task ET 5.2 E-export 4.1 Micro-grants Program TA Task B1.9. Support trade 1.2, 1.3 3.1 missions, trade shows, Incoming buyer Missions TA Task B1.10. Monitoring 4.1 system in place for overall progress of Ukraine in

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diversifying exports/export markets TA Task B1.11. Monitoring 4.1 system in place for assessing the effectiveness and cost effectiveness of GOU's export promotion activities TA 6.3. IT Platform Trade 4.2 Defense of Ukraine (started in Y2) TA Task 7. Implementation 4.2 of the Target Operating Model (TOM) for the Customs single legal entity, including other items of the action plan and communication strategy TA Task 8. Computable 1.1 4.2 General Equilibrium (CGE) Model GESI Task C1. Women 1.1 2.1 3.1 Business Camps GESI Task C2. Research on 1.1 2.1 3.1 Women’s Economic Empowerment

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