USAID EMPOWER PRIVATE SECTOR ACTIVITY - IN PARTNERSHIP WITH SIDA QUARTERLY REPORT #20 Project Year 5, April 2019 – June 2019

B2B meetings between Albanian diaspora and Kosovo businesses kicked off the Economic Conference of Albanian Diaspora, held during May 24 – 25, 2019, in Prishtina. The Conference was co-organized by EMPOWER, the Albanian Diaspora Business Networks (ADBNs) from Europe, and the Ministry of Diaspora and Strategic Investments of the Republic of Kosovo. More than 250 meetings were held and $440K in new sales have been reported, with more deals and offers expected to materialize in the following months.

July 31, 2019

USAID EMPOWER Private Sector Activity in Partnership with Sida

QUARTERLY REPORT #20

APRIL 2019 – JUNE 2019

Submitted by: Cardno Emerging Markets USA, Ltd.

Submitted to: USAID/Kosovo

Contract No.: AID-167-C-14-00005 EMPOWER Private Sector

DISCLAIMER This report is made possible by the support of the American people through the United States Agency for International Development (USAID), in partnership with the Swedish International Development Cooperation Agency (Sida). The contents of this report are the sole responsibility of Cardno Emerging Markets USA, Ltd. and do not necessarily reflect neither the views of USAID, or the United States Government, or Sida.

EMPOWER Private Sector - Quarterly Report #20 Y5 - April - June 2019_Final.docx

CONTENTS 1. Summary of Progress ...... 1 1.1 Summary for Quarter 20 ...... 1 1.1.2 Key Highlights ...... 1 1.1.2 Progress versus Performance Management Indicators ...... 3 1.1.3 Analysis of Sales and Job Growth by Sector ...... 5 1.1.4 Summary of Impact by Support Area ...... 6 1.1.5 Allocation of Assistance Budget ...... 7 2. Activities and Tasks VS. Workplan ...... 8 2.1 Component 1: Competitive SMEs ...... 8 2.1.1 Wood Sector ...... 9 2.1.2 Apparel Sector...... 11 2.1.3 Energy Sector ...... 13 2.1.4 Other Production Sectors ...... 16 2.2 Component 2: Workforce Development ...... 17 2.2.1 ICT Sector ...... 17 2.2.2 WfD Activities in Other Sectors ...... 19 2.3 Markets and Export – Diaspora Linkages...... 22 2.4 Cross-Cutting Issues ...... 27 2.4.1 Women ...... 28 2.4.2 Youth ...... 29 2.4.3 Minorities and North Kosovo ...... 30 2.4.4 Microenterprises ...... 31 2.4.5 Donor and GoK Collaboration ...... 32 2.4.6 Environmental Compliance ...... 33 2.5 General and Administrative ...... 33 2.5.1 Strategic Activities Fund Management ...... 33 2.5.2 Public Events and Communications ...... 34 3. Results vs. Performance Management Indicators ...... 37 3.1 Results vs. PMIs Detail ...... 38 3.2 PMI Summary ...... 42

EMPOWER Private Sector - Quarterly Report #20 Y5 - April - June 2019_Final.docx

ANNEXES Annex 1: Year 5 Workplan and Results to Date Annex 2: EMPOWER-Funded Activities Status Report Annex 3: Strategic Activities Fund Investments Summary Annex 4: Expansion Grants Signed Annex 5: Supplemental Tables Annex 6: Communications – Success Stories and Facebook Postings Annex 7: Quarterly Financial Report

Table 1: Key PMIs by Sector ...... 4 Table 2: PMIs – Targets vs. Actual – Cumulative ...... 4 Table 3: EMPOWER Investment vs. Sales Impact by Sector ...... 5 Table 4: EMPOWER Investment vs. Job Creation Impact by Sector ...... 6 Table 5: EMPOWER Investment vs. Impact, by Support Area ...... 6 Table 6: Supported Activities through Q20 ...... 7 Table 7: Supported Activities in Q20 ...... 7 Table 8: Component 1 Summary – Q20 and Cumulative ...... 9 Table 9: Wood Sector Activities & Impact, in $000s ...... 9 Table 10: Apparel Sector Activities & Impact, in $000s ...... 11 Table 11: Energy Sector Activities & Impact, in $000s ...... 13 Table 12: Other Production Sector Activities & Impact, in $000s ...... 16 Table 13: Component 2 – WfD Summary ...... 17 Table 14: ICT Sector Activities & Impact, in $000s ...... 17 Table 15: Job Creation – Priority Populations ...... 27 Table 16: North Kosovo Activities & Impact, in $000s ...... 30 Table 17: SAF Grants Approved by Type – through Q20 ...... 34 Table 18: Estimates of Kosovo Multipliers ...... 37 Table 19: PMI Summary through Q20 Actuals—Targeted Indicators ...... 42 Table 20: PMI Summary through Q20 Actuals Additional Tracked/Non-Targeted Indicators ...... 43 Table 21. EMPOWER-Supported Trade Fairs Results ...... 45

Figure 1: Sales Growth through Q20 ...... 5 Figure 2: Distribution of EMPOWER Interventions by Sector through Q20 ...... 8 Figure 3: Co-Financing for Activities Initiated through Q20 ...... 32

EMPOWER Private Sector Activity

1. SUMMARY OF PROGRESS EMPOWER Private Sector (“EMPOWER,” or “Project”) is a USAID-funded project, in partnership with the Swedish International Development Cooperation Agency (“Sida”), dedicated to job creation and Kosovo’s economic growth. It is a five-and-a-half-year project that started in July 2014 with an original budget of $9.8M, which was later expanded to $14.3M through an additional Sida and USAID contribution. By June 30, 2019, EMPOWER’s team comprised of 18 staff members and three interns. The Project is headquartered in the capital city of Prishtina and has a branch office in North Mitrovica. It is implemented by Cardno Emerging Markets USA, Ltd., with subcontractor Crimson Capital, a U.S.- registered small business. EMPOWER’s overarching objective is job creation. Job creation usually comes from businesses that have concrete market opportunities where they need to increase their employment in order to produce more goods and services to meet growing demand. To support job creation, EMPOWER aims to help firms expand and improve their capacities to sell into identified opportunities, while helping individuals obtain skills demanded by growing firms. These themes are reflected in EMPOWER’s two principal intervention components: (1) small- and medium-sized enterprise (SME) competitiveness; and (2) workforce development (WfD). This report fulfills contractual requirements for quarterly reporting of project progress. It covers results from April 1, 2019 to June 30, 2019, which represents quarter 20 (Q20) since Project inception.

1.1 Summary for Quarter 20 1.1.2 Key Highlights During Q20, EMPOWER continued to pursue its core goals of improving SME competitiveness and WfD. Activities during this quarter centered on advancing business interests by continuing to build business relationships, providing tailored technical assistance, supporting improvements in quality through certification, and more generally fostering the conditions for job creation and growth.

B2B Diaspora Conference Yields Concrete Commercial Deals EMPOWER, in collaboration with the European Chapters of the Albanian Diaspora Business Networks (ADBN) and Kosovo Ministry of Diaspora and Strategic Investments, co-organized the Economic Conference of Albanian Diaspora from Europe – B2B, which was held during May 24 – 25, 2019, in Prishtina. Forty-seven (47) Kosovo companies hosted the B2B meetings with diaspora businesses, representing key sectors of wood processing, apparel, energy, information and communications technology, food and beverages, and others. A total of 144 companies from diaspora (including those Forty-seven Kosovo companies from hosted B2B meetings from Austria, Germany, Finland, Italy, Norway, with hundreds of diaspora businesses during the Economic Switzerland, and Belgium) were registered on Conference. the first day of the opening of the Conference. More than 250 meetings were held and more than $440K in new sales have been reported. Six (6) additional initial deals and offers were made throughout the B2B meetings, which were facilitated through an online pre-registration platform. One such preliminary agreement by Jaha Solar envisages exporting 210 PV panels to a diaspora-owned

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EMPOWER Private Sector Activity company in Switzerland, Alba Solar, as well as plans to send a separate offer to export PV panels to IBS Systems, another diaspora-owned company from Switzerland.

Export Readiness Assessments Completed in a Pilot Activity At the end of 2018, EMPOWER initiated an activity titled Export Readiness and Promotion Assistance (ERPA), aimed at evaluating the export readiness of targeted Kosovo companies, coupled with concrete action planning for export market penetration, including through targeted industry research. The pilot of the export assistance package is being implemented with a limited number of export- ready private sector companies, focusing on enterprises with high growth and export potential. During Q20, three export readiness assessments were finalized for Kosovo companies of Berto, a wood processor; Jasin, a stainless steel HORECA inox appliance manufacturer; and Wear & Go, an apparel producer. The export readiness assessments examined a range of factors affecting export competitiveness of the companies and provided the beneficiary companies with an examination of which areas they need to focus on to improve export readiness. The significance of this intervention is to transfer knowledge to the private sector on tools they can use, and consulting services they can draw on, to improve export competitiveness.

First Ever Certification Program on Solar Panel Design and Installation Initiated in Kosovo For the first time in Kosovo, EMPOWER initiated the delivery of a certification program on photovoltaic (PV) solar panel design and installation for Kosovo’s solar installation companies. This initiative intends to generate the first batch of certified Kosovo PV solar panel designers and installers, boosting competitiveness in local and other markets for local producers and installers. With a recognized TUV certification, local companies are better positioned to win and execute bigger PV solar projects in export markets. The training and certification program is organized and co-funded by PV certification training, site visit at Jaha Solar, on June 7th, EMPOWER in partnership with Sida and the 2019. Production Manager, Saranda Bytyqi explaining Swiss-funded Enhancing Youth Employment production process. project. The activity is also supported by the renewable energy sector association, KIMERK. The first week of the training started on June 3, 2019, while the second leg of the training will continue during August 19 – 30, 2019.

Jaha Solar Executes First Test Exports to Italy and Switzerland Kosovo solar energy company, Jaha Solar, executed its first test export orders in two EU countries, namely, Italy and Switzerland, with expectations to further grow sales in this critical market. Italy was identified as a critical new market during a visit at the Intersolar Fair in May 2019, which was supported by EMPOWER. Within a month of the fair participation in June 2019, Jaha Solar concluded a contract and made an export to Italy worth $81K.

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EMPOWER Private Sector Activity

Critical Technical Assistance Provided to the Wood Industry

During Q20, the Project delivered crucial parts of a technical assistance program to the wood sector related to activity-based costing and price list construction. An international short-term technical advisor (STTA) was engaged to deliver this assistance to wood sector companies of Albed, Graniti, Sela Impex, Tefik Çanga and Tiki. This activity is particularly relevant for companies that are exporting and planning to gain access to international markets. It involved delivering firm-level assistance to selected Kosovo wood processors on methods to undertake activity-based costing. The assignment involved mentoring five wood processing companies and providing them with tools to analyze costing functions. In short, it also mentored companies on how to prepare future commercial offers and bids to clients using a standardized and accurate costing method. Standard costing templates and tools for costing and exporting purposes were provided to companies.

Youth Complete On-the-Job Trainings and Find Jobs

In Q20, under the On-the-Job (OTJ) Training Program, a total of 63 youth trainees from the municipalities of Gjilan, Kacanik, Hani i Elezit and Viti, successfully completed their in-company trainings at selected Kosovo enterprises. On June 18, 2019, the certification ceremony was organized in Hani Elezit for the 17 trainees from Han i Elezit and Kacanik municipalities who conducted their OTJ training at companies Sharrcem, Oxa Group, and Euro Thesi. On June 19, 2019, the certification ceremony was held in Gjilan for 30 trainees from this municipality that successfully completed their training at companies Flexograf, Fluidi, Menakon, Gan Dizajn, and Euromodel. In additon, also on June 19, 2019, 16 trainees from Viti municipality were certified for the completion of OTJ training in companies Vinex, Euroarti, and Eurofisi. Out of the 63 trainees that completed the training, 33 trainees were retained by the companies in full-time employment, increasing Certification ceremony in Gjilan Municipality held on the total number of employed trainees since the June 19, 2019. activity’s implementation to 40.

1.1.2 Progress versus Performance Management Indicators The Project approved and initiated 254 interventions through Q20, covering six discrete focus sectors (see Table 1 below), plus “other.” The principal results of these interventions in terms of SME competitiveness and WfD are provided in Table 1 below, highlighting EMPOWER’s top-line Performance Management Indicators (PMIs) and organized by focus sector. Table 1 presents the PMI additions for Q20, as well as cumulative results of the Project, since its outset through June 30, 2019. Through Q20, EMPOWER committed $4.9M in resources and disbursed $4.48M, which was complemented by $19.2M in co-financing from beneficiaries, other donors, Government of Kosovo (GoK) agencies, and financial institutions. These interventions generated a total of 4,492 jobs and an estimated $184M in new sales through Q20, of which 335 were new jobs (also refer to “note” in Table 1 for additional information) and $22.2M were new sales realized in Q20 alone. There were 301 new participants in EMPOWER-supported workforce skills training programs and follow-up activities during Q20, bringing the total to 3,919 since Project outset. In activities where EMPOWER invested in training personnel or subsidized stipends, it attributes only the direct results. In activities where EMPOWER

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EMPOWER Private Sector Activity

invested in equipment, EMPOWER also attributes all workforce development-related results after the activity is completed.

Table 1: Key PMIs by Sector # of Jobs** Sales Growth $000 WfD Participants, # Sector Q20 Cuml Q20 Cuml Q20 Cuml Apparel 26 569 1,248 11,707 - 478 Energy 62 398 2,125 29,239 19 123 ICT 83 1,390 4,203 35,861 163 2,330 Metal 6 112 1,445 14,803 - 62 Other* 69 559 2,931 21,489 107 730 Tourism 1 109 5 1,256 - 70 Wood 88 1,357 10,281 70,379 12 126 TOTAL 335 4,492 $22,239 $184,733 301 3,919

NOTE: * “Other” includes general activities that involve beneficiaries from more than one EMPOWER sector. ** The column “Cumulative” (“Cuml”), under the heading of “# of Jobs,” reflects the overall number of new and attributed jobs at Primary Beneficiaries (PBs). The column “Q20” represents the number of jobs created (in gross terms) at PBs but is not the net difference between cumulative jobs in Q20 versus Q19, as other PBs have reduced the overall number of their employees due to seasonality or other reasons. The net increase in the number of jobs from Q19 to Q20 is 253, while the overall cumulative total number of jobs, expressed as an increase in net terms, since project inception, amounts to 4,492. Also, noteworthy, in Q18, EMPOWER harmonized its methodology of calculating seasonal and inferred jobs with USAID project AGRO. The methodology ensures employment sustainability while taking into consideration that a full-time equivalent (FTE) is a new job even when EMPOWER does not have further information on the continuation of the job; thus, EMPOWER calculates seasonal and inferred employment based on the level of engagement and sales and reports only increases as they happen.

As shown in Table 2, the Project exceeded almost all targeted PMIs in Q20, which represents the third quarter of Year 5. Table 2: PMIs – Targets vs. Actual – Cumulative Y1 Y2 Y3 Y4 Y5 PMI Unit Target Actual Target Actual Target Actual Target Actual Target Actual Number of # 150 91 260 183 300 256 350 426 400 629 enterprise (340*) (433*) (571*) beneficiaries Attributed $000 64,981 134,393 97,471 254,176 150,000 373,116 aggregate sales Aggregate sales $000 6,608 1,065 61,824 15,580 28,000 56,029 56,000 106,003 100,000 184,733 increase Aggregate exports $000 3,102 738 16,755 8,208 10,304 25,345 30,837 49,933 50,000 85,012 increase Business size # 5 4 10 16 15 23 20 28 25 39 expansion New geographic # 10 26 20 111 30 169 40 242 50 273 markets entered New products # 10 16 20 48 30 156 40 257 50 328 introduced Companies # 26 20 38 40 48 60 55 80 95 investing in new technologies

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EMPOWER Private Sector Activity

Table 2: PMIs – Targets vs. Actual – Cumulative Y1 Y2 Y3 Y4 Y5 PMI Unit Target Actual Target Actual Target Actual Target Actual Target Actual Total new jobs # 250 465 2,800 1,272 2,250 2,473 3,250 3,608** 5,000 4,492 Investment ratio 3.0x 5.5x 3.0x 5.8x 3.0x 5.02x 3.0x 5.4x 3.0x 5.20 leverage

* Including supplier beneficiaries (SBs): direct suppliers of production inputs to growing PBs. ** The actual total number of jobs is higher when “indirect effects” are accounted for. See Section 3 of the report.

1.1.3 Analysis of Sales and Job Growth by Sector The following chart highlights the Project’s impact on beneficiaries’ sales through Q20, which is the main driver of job creation.

Figure 1: Sales Growth through Q20 $000 200,000 180,000 $185 million actual sales growth by companies receiving 160,000 competitiveness and WfD assistance from EMPOWER 140,000 through Q19 120,000 100,000 80,000 60,000 40,000 20,000 - Apparel Energy ICT Metal Other Tourism Wood Totals Organic Domestic 329 13,655 695 11,861 2,572 5 24,397 53,515 Import Substitution 9,441 6,762 343 1,549 3,481 - 24,933 46,509 Exports 1,937 8,818 34,823 1,392 15,481 1,251 21,231 84,933 Totals 11,707 29,235 35,861 14,803 21,534 1,256 70,561 184,957

Exports Import Substitution Organic Domestic Totals

The wood sector remains a leading sector in terms of sales growth. Significant results can also be seen in the ICT, energy, and “other” sectors. Total export sales through Q20 are the highest in the wood and ICT sectors. The following table compares attributable sales growth to project investments by sector.

Table 3: EMPOWER Investment vs. Sales Impact by Sector Sector # of Activities EMP Inv $000 Sales Increase $000s ROI Sales/EMP$ Apparel 40 625 11,707 18.7 Energy 40 706 29,239 41.4 ICT 27 367 35,861 97.7 Metal 7 176 14,803 84.3 Other 56 1375 21,455 15.6 Tourism 23 274 1,290 4.7 Wood 61 1,473 70,379 47.8 TOTAL 254 $4,996 $184,733 37.0

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EMPOWER Private Sector Activity

In Q20, the average return on investment (ROI) for EMPOWER investments across various sectors is 37, ranging from 4.7 for tourism to over 97.7 for the ICT sector. The Project expects the average ROI across sectors to rise further in the remaining period, as beneficiaries continue to increase their sales and employment over the project lifecycle, in large part due to EMPOWER support. Table 4 presents ROI in terms of job creation. In addition to actual new jobs through Q20, it also shows the expected life-of-project (LOP) ratios, since it is on that basis that EMPOWER ranks and selects interventions for support.

Table 4: EMPOWER Investment vs. Job Creation Impact by Sector

ROI ROI Sector EMP $000 Jobs Actual LOP EMP$/Jobs Actual EMP$/LOP

Apparel 625 569 414 1,099 1,512 Energy 706 398 435 1,775 1,626 ICT 367 1,390 787 264 467 Metal 176 112 121 1,574 1,451 Other* 1,375 559 626 2,460 2,195 Tourism 274 109 57 2,526 4,803 Wood 1,473 1,357 1,183 1,086 1,245 TOTAL 4,996 4,492 3,623 $1,112 $1,379

To date, EMPOWER has invested an across-the-sector average of $1,112 for each job created, which has gone down from last quarter’s average of $1,150, meaning the number of jobs created has continued to increase relative to EMPOWER’s original investment. Over time, as beneficiary firms continue to grow thanks to the Project’s assistance, EMPOWER expects this ratio to drop to an average figure of around $1,000.

1.1.4 Summary of Impact by Support Area Table 5 shows the breakdown of impact by support area and some indicators of ROI.

Table 5: EMPOWER Investment vs. Impact, by Support Area # Beneficiaries* New Jobs Sales Increase $000 Support Area Q19 Cuml Q19 Cuml Q19 Cuml Prod. Expansion - 118 153 2,380 16,293 120,412 Markets - 220 58 529 1,788 27,775 WfD/Skills - 85 115 1,511 3,975 34,580 Quality - 14 9 72 182 1,967 Business Env’t - 41 - - - - TOTAL - 478 335 4,492 € 22,238 184,733

*It does not include SBs. Production Expansion (PE) interventions accounted for 2,380 new jobs through Q20—over half of the total number of jobs attributable to EMPOWER support. Of these interventions, 153 jobs were created in Q20 alone, expressed as gross jobs, while estimated sales increases for this reporting period (Q20 only) reached $16.3M. EMPOWER’s Connection to Markets (CM) interventions have also shown a high multiple ROI coefficient in terms of sales dollars per dollar of project investment. The Project has supported

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EMPOWER Private Sector Activity beneficiaries to become export-ready and enabled them to present their products at major European and global trade shows. Actual sales realized through Q20 due to project-supported participation in 98 CM activities (out of which 71 were trade fairs) amounted to $27.7M in total cumulative sales.1 As seen in Table 5 above, WfD activities also accounted for a substantial share of job creation: a total of 1,511 jobs were created since the beginning of the Project, of which 115 (gross jobs) were created in Q20 alone. Under Quality and Productivity, EMPOWER substantially increased the provision of short-term technical assistance (STTA) to its focus sectors, especially with a key intervention on activity-based costing in the wood sector. Additionally, EMPOWER continued to program funding to a number of beneficiaries for the attainment of relevant certifications necessary for market access.

1.1.5 Allocation of Assistance Budget EMPOWER provides its support through technical assistance combined with grants and procurement activities from its $4.8M Strategic Activities Fund (SAF), complemented by other project budgetary resources for technical assistance, meetings, international travel, and long-term technical staff. Since project inception through Q20, EMPOWER designed and initiated a total of 254 activities. The budget committed for these activities is over $4.8M, with most of the funds, or close to 52.8%, committed to Production Expansion interventions. Connection to Markets comprises the second highest share of the committed interventions: 22.8% of funds are committed to these types of interventions.

Table 6: Supported Activities through Q20 Intervention Category # of Activities Budget Committed Share Production Expansion 79 2,635,948 52.8% Connection to Markets 101 1,136,893 22.8% Workforce Development 32 983,136 19.7% Productivity and Quality 24 90,857 1.8% Business Environment 18 149,665 3.0% Total 254 4,996,499 100.0%

In Q20 alone, EMPOWER initiated a total of five new activities. By number of activities in Q20, most of the planned interventions relate to Connection to Markets. In total, the project committed $84.8K toward activities initiated in Q20.

Table 7: Supported Activities in Q20 Intervention Category # Activities Budget Committed Share Production Expansion 0 $- 0.0% Connection to Markets 3 $64,629 76.4% Workforce Development 0 $- 0.0% Productivity and Quality 2 $19,936 23.6% Business Environment 0 $- 0.0% Grand Total 5 $84,565 100.0%

1 Detailed list of the fairs and results is in Table 21 of this report.

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EMPOWER Private Sector Activity

Figure 2: Distribution of EMPOWER Interventions by Sector through Q20

Number of activities approved Value $000 (total $4.99 MM) (total 254) Apparel , Apparel , Wood , 625, 13% 40 1473, Wood , 29% Energy , 61 706, 14% Energy , 40, ICT , Tourism Tourism , 367, 7% 274, 5% , 23 Metal , ICT , 27 Other , 176, 4% Other , Metal , 1375, 28% 56 7

2. ACTIVITIES AND TASKS VS. WORKPLAN The following section of the report is organized according to EMPOWER’s Year 5 workplan. The narrative sections below summarize activities and results in the main task areas. Annex 1 includes a tabular representation of the Year 5 workplan, which demonstrates actual and expected results to date for each item.

2.1 Component 1: Competitive SMEs EMPOWER’s work in Component 1 involves direct support to businesses with market opportunities for firm-level growth. The Project provides company support under four major categories: expanding production capacities, connecting to markets (export and import substitution), improving productivity and quality, and obtaining skilled workers (WfD). Component 1 covers the first three of these categories, while Component 2 (on WfD, see relevant section below) includes the fourth category. Companies targeted under Component 1 are mainly in the wood, apparel, energy, tourism, and "other” sectors. EMPOWER has become one of the most knowledgeable actors in Kosovo with regards to the status and potential of Kosovo businesses as a result of direct site visits to over 400 companies and interventions with 478 primary beneficiaries and 151 secondary beneficiaries. The Project has information on Kosovo’s every significant productive sector and is heavily involved in several of them: when a new investment opportunity arises, it is often possible to evaluate it vis-à-vis similar firms and connect it to other companies in its value chain for business. In Q20, EMPOWER continued to help companies facing excess demand to expand their production capacities, and continued assistance to establish market connections.

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EMPOWER Private Sector Activity

Table 8 provides an overview of Component 1 activities, as well as both Q20 and cumulative results.

Table 8: Component 1 Summary – Q20 and Cumulative Support # of Activities EMP Inv. $000s Co-Finance $000s # of New Jobs Sales Increase $000s Area Q20 Cuml Q20 Cuml Q20 Cuml Q20 Cuml Q20 Cuml Product - 79 2,636 13,160 153 2,380 9,052 100,340 Markets 3 101 65 1,137 134 1,975 58 529 361 25,754 Quality 2 24 5 91 5 243 9 72 1,859 Bus. Env. 18 150 315 - - TOTAL 5 222 $70 4,013 $139 $15,693 220 2,981 $9,412 127,953

2.1.1 Wood Sector Based on Kosovo customs data, export sales of the wood processing sector are growing rapidly, from $3.2M in 2015 (when EMPOWER Private Sector started), to $15.7M of export sales estimated in 2017. Meanwhile, 2018 data received for the purpose of the previous Wood Industry Convention (up to November 2018), estimated $25.8M in exports sales of the wood processing industry. Table 9 summarizes EMPOWER’s assistance to the Kosovo wood sector from project outset through Q20.

Table 9: Wood Sector Activities & Impact, in $000s Period # of # of Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Activities Cuml 61 66 1,473 7,708 1,357 70,379 126 Q20 2 - 3 5 88 10,281 12 *Includes SBs.

Of the 61 activities approved since project outset, two took place in Q20, amounting to an EMPOWER investment of $3K. The activities implemented in Q20 helped create 88 new jobs in the sector and contributed to an estimated $10M in new sales. New activities attracted an estimated $5K in co- financing in Q20 alone. Production expansion is key for the further expansion of the wood sector and additional job growth. Transfer of new technology and solutions are crucial to further increase production capacities of the wood industry to reach export markets, especially to the EU and Switzerland, as two of the most promising markets for Kosovo wood processors. To be able to respond to existing and potential demand from EU countries and be in line with market trends and developments, a few Kosovo wood producers completed new investments in physical capital (i.e. further production expansion), including A visit by a business delegation of the Albanian diaspora adopting the latest technology. Namely, Ciao at Ciao Berto, and presentation by owners of the Berto, Sela Impex, Candeo and Mobileria Prishtina company’s production capacities and potential. are now in new state- of-the-art production facilities and are ready to respond to significant new demand.

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EMPOWER Private Sector Activity

Connection to Markets remains of key importance to wood processors. During Q20, EMPOWER continued to focus on leveraging the international market for solid wood products and Kosovo companies. Working with the solid wood and sofa processing producers and contracting furniture actors, and in partnership with the Kosovo wood industry association, AWPK, Kosovo’s investment promotion agency, KIESA, and the German international development agency, GIZ, the Project identified important international trade shows for this industry and helped bring qualified potential exporters to such fairs. During the quarter, the Project, together with AWPK, and in coordination with GIZ and KIESA, continued to prepare selected wood sector companies (i.e. Kelmendi, Albed, Elnor and Dardania Model) for participation at the upcoming MOW international fair, in Bad Salzuflen, Germany, to be held on September 15 – 19, 2019. The exhibiting companies already have significant experience with exporting and sealing stable business partnerships in the EU market and continued efforts to expand further business links remain critical for long-term growth.

Also during Q20, EMPOWER, together with AWPK, organized a trade mission to Brussels, Belgium, held during May 15 – 17 2019, for five selected businesses from the Kosovo wood processing industry (i.e. Ciao Berto, Albed, Candeo, Elnor and Shehu). The Kosovo Embassy in Brussels assisted in organizing the trade mission, including arranging visits with preidentified potential buyers at the premises of the Kosovo Embassy itself. Immediately after the visit, a delegation of two businesses, one being a representative of an Albanian diaspora business and the other a Belgium buyer, visited Kosovo table production companies. As a result, Kosovo wood processor, Elnor, secured a small contract valued at $2,600 for a restaurant (diaspora-owned), as a test order. Under Quality and Productivity, during Q20, EMPOWER successfully managed to complete technical assistance activities within the wood processing sector related to activity-based costing and price list construction. The activity was initiated in the previous quarter in close collaboration with wood processing companies. An international short-term technical advisor (STTA) started implementation of the activity at Albed, Graniti, Sela Impex, Tefik Çanga and Tiki. This activity was particularly relevant for companies that are exporting and planning to gain access to international markets. A B2B meeting in Namur, Belgium, during a trade mission involving Kosovo wood processing companies.

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EMPOWER Private Sector Activity

During Q20, EMPOWER continued to successfully implement most of the planned 52-day assignment, which involved delivering firm-level assistance to selected Kosovo wood processors on methods to undertake activity-based costing. A joint workshop with participants from the broader wood sector was held with six wood processing companies (Tiki, Graniti, Candeo, Genkor, Dijamanti and Lumi). The assignment involved mentoring five wood processing companies and providing them with tools to analyze costing functions, and to ensure that future commercial offers to clients are made based on a more rigorous cost-accounting approach. The international STTA will complete the final report by early Q21. In addition to this assignment, the selected international STTA is planning to bring a group of Irish investors to Kosovo to visit companies from the Kosovo wood processing industry. This planned B2B is expected to occur during the middle of October 2019. In Business Environment, EMPOWER’s main activity in Q20, in close collaboration with AWPK, was the finalization of work for the fourth edition of the Wood Industry Convention, including fundraising for the event. Up to now, GIZ has shown interest to cover all costs of the venue and hotel accommodation. In addition, it is expected Training workshop for Kosovo wood processing companies that GIZ will support a group of potential on activity-based costing and price list construction. German buyers to visit the Wood Industry Convention, including a possible visit to selected Kosovo wood processing companies. KIESA is also expected to contribute to the event, which is planned to take place on October 16, 2019. The day after the Convention, namely October 17, 2019, is set for visits to Kosovo businesses by visiting international buyers.

2.1.2 Apparel Sector Table 10 summarizes EMPOWER’s assistance to the Kosovo apparel sector from project outset through Q20.

Table 10: Apparel Sector Activities & Impact, in $000s Period # of # of Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Activities Cuml 40 45 625 1,240 569 11,707 478 Q20 2 - 14 9 26 1,248 - *Includes SBs. In Q20, activities in the apparel sector generated a total of 26 new jobs and $1.24M in new sales. The total number of new jobs through Q20 stands at 569 in the apparel sector, which is expressed in net terms. Total EMPOWER investment through Q20 amounts to $625K, leveraging over $1.2M in co- finance by companies.

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EMPOWER Private Sector Activity

During Q20, activities under the Connection to Markets, were the highlight of the apparel sector. Namely, EMPOWER focused its attention on a study visit and B2B activity in Turkey. EMPOWER, together with the Kosovo apparel sector association, KAMA, KIESA and the Kosovo- Turkish Chamber of Commerce, supported four Kosovo apparel producers to visit apparel sector factories in Turkey. This activity also consisted of a B2B event in Istanbul and Bursa. The purpose of the visit was twofold: gain knowledge about best practice production processes from successful

Turkish factories, and meet with potential buyers. Participating companies from Kosovo Introduction meeting of Kosovo apparel companies with the Foreign Economic Relations Board of Turkey, DEIK, included Arta tex, Arta tex Group, Wear&Go and and 24 Turkish companies, including three textile NGOs. Cro-Fashion.

During the four-day visit, the Kosovo delegation met with the Istanbul Chamber of Commerce, and the Foreign Economic Relations Board of Turkey (DEIK), which is the equivalent to Kosovo’s KIESA, and held 50 direct meetings with Turkish companies (40 in Istanbul and ten in Bursa). Moreover, the Kosovo delegation visited five textile factories in Bursa. The study visit was deemed by the visiting Kosovo delegation to be of significant importance to gain important insights about ways in which companies in the Turkish apparel sector are operating successfully. The factory visits were of B2B meetings in Turkey: Arta tex Group in focus followed particular importance to allow Kosovo by Wear and Go and Cro-Fashion. companies to better appreciate challenges and opportunities of entering the EU market and working with the CMT-based model. As a result of the study visit, Kosovo apparel producers, Arta tex and Arta tex Group, made their first order of raw materials from a Turkish company, known as Arkan Factory, which is based in Bursa. During the trade mission, Arta tex and Arta tex Group also discussed with a few Turkish companies from Istanbul on the potential of starting production of trousers for the construction sector. Companies in Turkey consider Kosovo, North Macedonia and Albania, to be cheaper than Turkey for production of specific garments, or parts of the production process. Demonstrating the production process for inserting special tape on a t-shirt during a factory visit as part of the trade mission in Turkey. A critical insight from the trade mission was a clear statement by Turkish companies that investment in research and development is of critical importance for a country’s apparel sector competitiveness and ability to break into export markets.

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Also, Turkish companies stated the importance of accurately accounting for costs, which remains a challenge for the Kosovo apparel sector. Moreover, obtaining quality certifications was also mentioned as a critical aspect of improving competitiveness. According to the United Brands Association of Turkey, 20% of all textile production in Turkey is outsourced aboard, which presents a potential market opportunity for Kosovo. During Q20, EMPOWER and KAMA met with DEIK representatives in Kosovo to initiate collaboration for the upcoming third edition of the Apparel Industry Convention. It is expected that at least three companies from Turkey will attend the B2B component of the Convention and may take part in planned panel discussions on success stories. EMPOWER and KAMA also initiated meetings with KIESA and other stakeholders for the upcoming Apparel Industry Convention, planned to be held on October 14, 2019. In addition, EMPOWER started to visit Turkish company, Zumrut, showing its production potential participating companies for the management system to Arta tex Group and Wear&Go. exhibition component of the Convention. During the visits, EMPOWER learned that Kosovo company, Purple Mouse, is in negotiations with a potential buyer who took part in last year’s edition of the Apparel Industry Convention. A few samples have been sent to the Koswi company, which is based in Switzerland, and Purple Mouse expects a positive response.

Under Technical Assistance, in Q20, EMPOWER continued to measure the performance of the apparel sector beneficiaries as part of the production management systems (PMS) assistance the Project provided in the previous two quarters. A month after the intervention, Wear and Go reported an increase of 43% in labor productivity due to the implementation of PMS methods.

2.1.3 Energy Sector The following table summarizes activities and impact within the energy sector through Q20.

Table 11: Energy Sector Activities & Impact, in $000s Period # of # of Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Activities Cuml 40 57 706 1,774 398 29,239 107 Q20 1 1 1 6 62 2,125 19 *Includes SBs. During Q20, EMPOWER initiated one intervention in this sector, and sector beneficiaries created 62 new jobs, leading to a reported expansion of sales of nearly $2.2M. During Q20, a number of energy sector beneficiaries created a considerable number of jobs: Green Steam created six new jobs reaching a total of 39 attributable jobs; Decon created five new jobs; Osa Termosistem created four new jobs; Enrad created four new jobs; while Jahar Solar was able to re- hire 42 employees out of 47 which they laid off in the last quarter. In addition, Jaha Solar reached two new export contracts in the EU market (Italy and Switzerland). The total amount of test exports in both countries for this period was reported at $105K. Significant results were also reached from the

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Intersolar fair visit in May, which EMPOWER supported, concluding with a test export order to Italy reported at $81K. In Q20, Jaha Solar also finalized their solar energy project in Montenegro and is in the final implementation phase for a Kamenica plant of 3MW capacity.

Under Connection to Markets, during this quarter, with the support of EMPOWER, four solar energy companies, namely Jaha Solar, S-Imeri (ESKO), ProGroup and SunVolta Energy, attended the Intersolar Fair, which is part of the so-called Smarter E Europe, held during May 15 – 17, 2019, in Munich, Germany. The Smarter E Europe 2019 is Europe’s largest platform for the energy industry. Participating Kosovo solar cluster companies had the chance to meet new potential clients and seek expansion of their businesses in different regions outside of Kosovo. At the fair, the Kosovo businesses held 93 business meetings and established valuable contacts. As a result, Jaha Kosovo company representatives and EMPOWER staff Solar secured an export sales contract with an at the B2B pavilion of the Intersolar Fair, on May 16, Italian buyer amounting to a reported value of 2019. $81,756, two potential export deals were made between Jaha Solar and clients from the USA and Italy (contract with Italy already concluded), S-Imeri made a supply deal in the amount of $28K, a favorable deal was made with Sun Volta supplier, and the Kosovo companies obtained several contacts related to the solar carport/electric vehicle charger project concept. The participating Kosovo companies learned about several important trends in the EU energy sector. There is an increasing trend of electric vehicles and solar power integration in the EU and E-mobility was part of each pavilion. Energy storage is another trend which is highly linked with e-mobility. With the increased electric vehicle production and usage, the storage capacities will increase as well, thus providing additional market opportunities and challenges to the overall energy sector. Therefore, production of batteries is expected to witness a significant Solar Carport/electric vehicle charger, e-port booth, at increase in the near feature. The energy sector is the Smarter E Europe, Intersolar Fair, Munich, Germany. rapidly changing with a focus on renewable sources, energy storage and e-mobility. Another new innovation is the so-called Vehicle-to-Grid (V2G) technology that enables bidirectional charging, i.e. where an electric vehicle can both charge from and discharge into the grid. Thus, electric vehicles can play the same role as static batteries managing the local loads and participating in the energy market value stream. During Q20, preparations for the fourth edition of the Green Festival continued. The lead implementer of the Green Festival, the Kosovo Manufacturing Club (KMC), confirmed support of $22.6K from donors (i.e. GIZ, EBRD Green Economy Financing Facility, known as GEFF, the Embassy of the Kingdom of the Netherlands, and ProCredit Bank) and is in the process of confirming $27K from other donors (including TEB Bank, financing agency known as AFK, Prishtina Municipality, and Kosovo

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Ministry of Economic Development). Exhibiting companies will also cost share with around $16K. The total cost of this event is estimated to be over $90K. The event’s tentative date is set for September 11 – 13, 2019. Meanwhile, the handover of the Green Business web platform and Facebook page will occur in July, 2019. The Green Business Facebook page has reached 3,798 followers in a period of less than three years. From January 2019, the Green Business web portal had 24,044 visits and 10,867 unique visitors. Under Quality and Productivity, the first week of the solar photovoltaic (PV) installers and designers training started on June 3, 2019 and concluded on June 7, 2019, with a site visit at Jaha Solar factory, the first PV panel producer in the Western Balkans. During the first week, the TÜV Rheinland trainer, Mr. Volker-Hense, who has been working in the PV industry for 27 years, covered a comprehensive curriculum with detailed technical knowledge and practical examples from different case studies. A total of 19 participants, which included representatives of 12 local solar companies, A site visit by training participants and German trainer at Jaha attended the first week of the training which Solar on June 7, 2019, as part of the PV certification training. covered the following topics: Production of PV Systems from Cell to Module; PV System Quality, Audits and Warranty; Site and Building Evaluation; Solar Radiation and Shading; System Planning and Design; Construction and Installation Law, Technical Standards and Regulation; Lightning and Fire Protection; Evaluation of Buildings and Roof Statics; Detection and Evaluation of Failures; Monitoring of PV Systems; System Commissioning and Documentation; Operation and Maintenance; Preparing Reports and Safety at Work, etc. The training was also highly focused on international standards for PV production, installation, building construction, measurements and maintenance. At Jaha Solar, participants were guided by company representatives through the production process of a PV panel. The second and third week of the training will continue during Q21 (starting on August 19, 2019) with a practical hands-on training on PV planning, installations and measurements. On the final day, the trainees will undergo an exam to test their learned knowledge and become certified as PV experts by TÜV Rheinland, the EMPOWER-engaged implementor of the activity. The activityv is also co- financed by the Swiss-funded Enhancing Youth Employment (EYE) project, and is facilitated by the renewable energy sector industry association, KIMERK. Participating Kosovo private sector companies are also cost sharing 38% of the total cost of the training and certification program, which validates their demand for such trainings. The total cost of the training and certification program for the PV installers and designers is $56K. Prior to the training, TÜV Rheinland conducted the pre-assessment of the candidates on May 3, 2019. Sixteen (16) candidates took part in the pre- assessment test and group interview. Based on the PV plant inspection in Peja, as part of the pre- assessment visit by TÜV Rheinland expert Mr. Volker results of the tests and the group interview of what Hence and Elen staff.

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EMPOWER Private Sector Activity the candidates expected to learn from the PV training, the TUV expert modified the training curricula. The pre-assessment of the training equipment, training facility and the training PV sites was done on May 2, 2019. The TUV expert visited a ground-mounted PV plant installed by Kosovo energy company, Elen, in Peja and Sllatine (Bylmeti). The expert gave some feedback on the installation and proposed to use the Peja site for a one-day visit during the training program to complete some practical measurements at the PV site.

2.1.4 Other Production Sectors To date, other supported sectors include metal, food processing, health and beauty products, paper products, and automotive parts. Table 12 summarizes activities and impact through Q20.

Table 12: Other Production Sector Activities & Impact, in $000s Period # of # Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Activities Cuml 63 205 1,550 4,735 670 36,292 792 Q20 3 - 55 71 75 4,376 107

* “Other” includes other sectors, metal, and general.

In Q20, EMPOWER conducted three new interventions in the “other” production sectors. In this sector, beneficiaries created 75 new jobs in Q20 alone. Related to Production Expansion, under “other” sectors, Koshi Group continued to expand its operations, hiring five employees, in addition to six employed last quarter, reaching a total number of 45 attributable employees. Initial plans to move in the new factory in May-June, 2019, have been postponed to August, due to additional time needed to complete ongoing construction work. Meanwhile, metal sector beneficiaries, Jasin and Rroni Fer, jointly created five additional jobs. During Q20, a visit to KIVO was organized on June 25, 2019 for the Deputy Chief of Mission (DCM) Coleen Hyland and USAID Mission Director Lisa Magno. KIVO specializes in the production of bread bags, printed films and garbage bags, mainly for export to the Dutch, Belgium, German and several Western Balkans markets. DCM Hyland and Mission Director Magno learned about the rapid expansion of the company since its establishment in 2014. Currently, six in every 10 bread loaves made in the Netherlands are packaged in bags made by KIVO in Kosovo. Since receiving grant support from Deputy Chief of Mission Colleen Hyland and USAID Director Lisa Magno visited plastics company KIVO, on June 25, 2019. EMPOWER, the company has created 47 new jobs, and currently employs over 118 people. The owners are now planning to open the largest plastic recycling plant in the Western Balkans, in Kaçanik, and expect to create many new jobs. A visit to EMPOWER beneficiaries Ultra Cosmetics and Bibita was organized on April 29, 2019, for Sida representatives Markus Johannesson and Lena Rupp.

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2.2 Component 2: Workforce Development EMPOWER’s Component 2 focuses mainly on in-company trainings, in the form of on-the-job trainings and internships, and courses in educational and training institutions for skills that are relevant for the labor market. The following table summarizes WfD interventions.

Table 13: Component 2 – WfD Summary Activities Trainees Jobs EMPOWER $000s Type Q20 Cuml Q20 Cuml Q20 Cuml Q20 Cuml Institutional 0 15 19 933 0 205 - 412 In-Company 0 11 241 2,232 107 1,287 - 442 Systemic 0 6 29 84 8 19 - 130 TOTAL 0 32 289 3,249 115 1,511 - 983

In Q20, EMPOWER beneficiaries engaged 289 trainees and created 115 new jobs (expressed in gross terms). Since its outset, the Project has initiated 32 activities in this sector, resulting in a total of 1,511 jobs, expressed in net terms, for this project component.

2.2.1 ICT Sector The following table captures results and impact during Q20 for the ICT sector.

Table 14: ICT Sector Activities & Impact, in $000s Period # of # of Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Activities Cuml 27 65 367 1,435 1,390 35,861 2,330 Q20 2 2 12 120 83 4,203 163 *Includes SBs. Through Q20, ICT sector beneficiaries reported the addition of 83 new jobs and $4.2M in new sales in Q20 alone. In Q20, call center services company IQ to Link, reported 62 new jobs out of 125 individuals trained, resulting in a total of 907 new staff employed by the company since EMPOWER support. In Q20, IQ to Link signed two new contracts with new clients: Adidas and Axel Springer Ferlag, both from Germany. It was expected that the activity would generate 400 sustainable jobs in three years, but actual results are more than double than expected. During Q20, EvroTarget, which operates in the outsourcing service sector in communications, customer care, and claim management, trained 26 new employees. Currently, the company has a total of 178 employees. The Project expected EvroTarget to hire around 150 new employees by the end of EMPOWER’s term, but those expectations were also exceeded. Under Connection to Markets, in Q20, EMPOWER supported the attendance of eight Kosovo IT service providers and one representative from Kosovo ICT association, STIKK, to the Smart Cities Conference in New York (SCNY19), USA, during May 13 – 15, 2019. This event allowed Kosovo ICT companies to learn about market opportunities and trends, and to promote their services to a wider potential client base. The conference is considered North America’s leading global IT conference which attracts industry professionals seeking business and suppliers. The purpose of the visit in New York

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EMPOWER Private Sector Activity was: to support to build of the brand of the Kosovo IT industry, business development and B2B export promotion (nearshoring); exchange of experience and joint learning on IT entrepreneurship and innovation; establish strategic partnerships and cooperation with incubators and accelerators; establish strategic partnerships with IT associations and institutions; visit IT events; market intelligence and networking. EMPOWER covered the expenses for accommodation for nine people estimated at $9,856, while beneficiaries covered expenses for travel and per-diem estimated up to $29,792. Other partners/ministries and KIESA covered expenses for booth exhibits amounting up to an estimated $61,600. Up to now, the companies received more than 30 potential contracts/inquiries as a result of their attendance at the Conference, and more than 100 contacts were made. The value of the contracts that have been reportedly negotiated by participating Kosovo ICT companies with US partners stands at $113,000. In Q20, EMPOWER supported the organization and delivery of the Girls in ICT Day and Doku.Tech technological conference, organized by IPKO Foundation and American University in Kosovo – Training and Development Institute (AUK-TDI). The estimated cost of the conferences was $28,560. EMPOWER agreed to support this activity with $2,240 to cover expenses for stage branding and production. The Girls in ICT Day was held on Friday, April 26, 2019, on the RIT Kosovo campus and gathered around over 250 girls interested in the field of ICT. At the event, young girls and women from all over Kosovo had the opportunity to hear local and international speakers share their personal success stories and inspire them to thrive in the field of ICT. The conference was composed of keynote speeches, workplace skills workshops, networking breaks and a job fair where 25 local companies scouted for new employees. Two full time jobs and one part time job have been reported as a result of the job fair which was an integral component of the overall event. Through these activities, the Opening speech by USAID Mission Director Lisa Magno, at the participants had the opportunity to exchange Girls in ICT Day 2019. interests, experiences and become exposed first-hand to the available opportunities in Kosovo. In addition to supporting Girls in ICT, in Q20, EMPOWER also supported this year’s edition of Doku.Tech. The two-day event took place during June 8 – 9, 2019, with a focus on digital innovation, internet freedom and data economies in Kosovo. Doku.Tech explores and challenges the social implications of technological innovations through connectivity, content, openness and security. The event gathered reputable speakers, observers, explorers and builders from around the world to talk about open knowledge, digital security, privacy, social entrepreneurship and business. The joint Doku.Tech 2019, as per tradition, involved audiences effort between IPKO Foundation (Prishtina), mainly from the region of Kosovo, with participants also Share Foundation (Belgrade) and Dokufest from neighboring countries, as well as international participants.

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(Prishtina) builds upon events organized individually by the partnering organizations. This year’s audience was comprised of students, technology entrepreneurs, innovators, online activists, social entrepreneurs, marketers, business leaders, artists, bloggers, movie enthusiasts, gamers, media, Do it Yourself (DIY) makers and students numbered over 900 participants in total. This year’s edition of Doku.Tech 2019 marked a significant rise in female participation and interest. As a result, out of all participants of this year’s edition of Doku.Tech, 51% of them were females and 49% were males. This came as a result of extensive outreach sessions, both nationally and internationally.

2.2.2 WfD Activities in Other Sectors As reported in the previous quarters, EMPOWER supported the establishment of the BONEVET Makerspace in Prishtina in April 2018 and BONEVET Makerspace in Kacanik in January 2019. The BONEVET Makerspace in Prishtina provides new types of trainings that help children and youth to develop knowledge and skills required by the ICT and other sectors. In Q20, BONEVET Prishtina reported 217 new individuals trained. To date, a total of 862 individuals have been trained, of whom 84 individuals are of 18+ years of age. Only in Q20, 29 individuals aged 18+ were trained. In addition, during June 28 – 29, 2019, BONEVET organized at Salla 1 Tetori in Prishtina, the Super Finals of the Educational Robotics Competition “Kosova Makers League (KML),” where more than 100 schools and 600 students from more than 15 municipalities in Kosovo competed at KML SuperFinals. The KML SuperFinals are organized under the patronage of the Municipality of Prishtina, as part of the so-called “20/20 activities,” marking the 20th anniversary of Prishtina’s liberation. The winners of the KML Creative Challenge received various technological prizes, like 3D printers, while the winners of KML Open, besides technology tools, won all-paid tickets to represent Kosovo in the Regional Educational Robot Competition in Croatia. A good performance there further qualifies them to continue their journey at the World Educational Robot (WER) Competition in China by the end of 2019. As reported in Q19, EMPOWER approved and signed a grant to support the establishment of BONEVET in Kacanik. The Project is supporting the BONEVET training center in Kacanik with $49K to set up two modules out of 10 and office equipment. A newly built and child- friendly space of 300m2 in the center of Kacanik has been leased for the needs of BONEVET Kacanik. The adaptation, safety installations, space division and other works have already been implemented and in Q20, BONEVET Kacanik reported 61 individuals trained, all under 18 years of age. In the next quarter, trainings are planned for individuals aged above 18. In BONEVET Kacanik, four full time jobs and three part-time jobs have Working space at BONEVET Kacanik. been created. Other workforce development activities by EMPOWER in Q20 included: • Quality and Productivity in Energy Sector: During Q20, the first week of the solar photovoltaic (PV) installers’ and designers’ training started on June 3, 2019 and was concluded with a site visit at Jaha Solar factory. Nineteen (19) participants, that include representatives of 12 local solar companies, attended the first week of the training. The second and third week of the training will continue on August 19, 2019, with a practical hands-on training on PV planning,

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installations and measurements. On the final day, the trainees will undergo exam to test their knowledge gained and will be certified as PV experts by TÜV Rheinland. • Technical Assistance on Activity-Based Costing in Wood Processing Sector: During Q20, EMPOWER continued implementing and successfully completed most of the planned 52-day assignment, which involved delivering firm-level assistance to selected Kosovo wood processors on methods to undertake activity-based costing. Six wood processing companies (Tiki, Graniti, Candeo, Genkor, Dijamanti and Lumi) participated in a joint workshop with participants from the broader wood sector. The assignment involved mentoring five wood processing companies and providing them with tools to analyze costing functions, and to ensure that future commercial offers to clients are done based on a more rigorous cost- accounting approach. The international STTA will complete the final report in Q21. In addition to this assignment, the selected international STTA is planning to bring a group of Irish investors to Kosovo to visit companies from the Kosovo wood processing industry.

2.2.3 Countering Violent Extremism (CVE) activities / Systemic Activities in WfD In 2018, EMPOWER commenced new activities aimed at supporting at-risk, vulnerable and marginalized youth in Kosovo. The activities were designed to empower Kosovo youth and help them escape a sense of disillusionment, which fuels, in part, radicalization. EMPOWER commenced with three new programs: On-the-Job Training Program; Self-Employment Program combining grant finance with business training; and the Tailored Training Program aimed at equipping youth with skills for employment in the booming ICT and call center industries.

During Q20, under the On-the-Job Training Program, the main activities were chiefly related to identifying new companies that would agree to place trainees in the training program, thus increase the total number of trainees completing the training. In April 2019, 15 trainees were placed in three companies in four municipalities. Upon finishing of this phase of the training, the certification ceremonies were organized for trainees from Gjilan, Kacanik, and Hani i Elezit municipalities that successfully completed the training. As such, on June 18, the certification OTJ certification ceremony in Gjilan municipality held on June 19, 2019. ceremony was organized in Hani i Elezit for 17 trainees from Hani i Elezit and Kacanik municipalities (who conducted their OTJ training at companies Sharrcem, Oxa Group, and Euro Thesi). The Deputy Mayor of the Hani i Elezit municipality, Mr. Mazllum Qajani, Deputy Mayor of Kacanik municipality, Mr. Ylber Bajra, and EMPOWER and Kosovo Manufacturing Club (KMC) representatives were present in the ceremony.

Similarly, on June 19, the certification ceremony was organized in Gjilan, for 30 trainees from this municipality that successfully completed the training at companies Flexograf, Fluidi, Menakon, Gan Dizajn, and Euromodel. Present in the ceremony were the Director of Economic Development in the Gjilan municipality, Ms. Valbona Tahiri, and EMPOWER and KMC representatives. Also, on June 19, as a separate event, 16 trainees from Viti municipality were certified for completing the training in companies Vinex, Euroarti, and Eurofisi. Present in the ceremony were the Deputy Mayor of Viti municipality, Mr. Hasan Aliu, and EMPOWER and KMC representatives.

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In May, nine new trainees, and in June 55 new trainees started the three-month OTJ training. Out of the 63 trainees that completed the training, 33 trainees were retained in employment, increasing the total number of employed trainees to 40.

Under the Self-Employment Training Program, during Q20, activities were focused on conducting environmental checks for equipment to be purchased for grant beneficiaries; finalizing agreements with 49 grant beneficiaries; and finalizing documents required for the procurement procedures to be opened in July. To this end, following a positive USAID environmental check, on May 29, the signing ceremony with 12 beneficiaries took place in Gjilan, and with 12 beneficiaries in Viti. Similarly, Signing of agreements with grant beneficiaries in on May 30, a signing ceremony with 11 Hani i Elezit municipality on May 30, 2019. beneficiaries took place in Hani i Elezit, and with 14 beneficiaries in Kacanik municipality. Ceremonies were organized in the presence of municipal mayors/deputy mayors, USAID and EMPOWER representatives. During this period, all the documents required for initiating procurement of the grant equipment, produced by HELP, were confirmed by EMPOWER and finalized, so that during July, the bidding process for interested companies will be opened.

Under the Tailored Training Program, during Certification ceremony in Gjilan Municipality held Q20, AUK/TDI continued with the training of a on June 19. total of 132 trainees from four municipalities.

During this period, the training on Java programing, web development, and German language were delivered. In June, all planned training modules as part of the training were completed. In July, all trainees that completed the

training in ICT and German language will undergo German language training as part of the Tailored tests in order to become certified. Training Program in Gjilan.

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2.3 Markets and Export – Diaspora Linkages In Q20, on May 24th and 25th, 2019, the Economic Conference of Albanian Diaspora from Europe - B2B was hosted by the Albanian Diaspora Business Networks (ADBNs) from Europe, in collaboration with EMPOWER and the Kosovo Ministry of Diaspora and Strategic Investments. The main purpose of this event was to connect Kosovo businesses with businesses from diaspora and identify investment and export opportunities for Kosovo-made products and services. Hundreds of businesses attended the two-day conference. Through this activity, EMPOWER aimed to further strengthen the relationships between Kosovo and diaspora businesses and enable the pursuit of new opportunities between them, in search of

business deals leading, inter alia, to new job growth, and more broadly supporting the sustainable economic growth in Kosovo. B2B meetings between diaspora and Kosovo businesses kicked off the Economic Conference Kosovo solar energy company, Jaha Solar, participating in of Albanian Diaspora from Europe, organized in the B2B meetings, organized on May 24, 2019, as part of Prishtina. More than 250 meetings were held the Economic Conference of Albanian Diaspora from and $440K in new sales have been reported thus Europe, in Prishtina. As a result of the meetings, Jaha Solar far, with more deals and offers expected to will be sending separate orders to Switzerland for two materialize in the following months. Forty-seven different Albanian diaspora-owned businesses. (47) Kosovo companies hosted the B2B meetings with diaspora businesses, representing key sectors of wood processing, apparel, energy, information and communications technology, and food and beverages. On the other hand, 144 companies from diaspora were registered on the first day of the opening of the Conference (out of which, 27 were from Austria, 61 from Germany, 34 from Finland, 15 from Italy, four from Norway, two from Switzerland, and one from Belgium).

Three (3) contracts and a cooperation agreement were signed as a result of the B2B activity: i) a contract between Kosovo company offering accounting services, Buchaltung - Discount Service, and the Albanian diaspora-owned company from Germany, AO Dienstleistung GmbH, amounting reportedly to approximately $107K for one year (according to the involved parties, these services will be extended beyond one year); ii) a one-year contract between Kosovo company Alstone and

IBS System Home from Switzerland, Kosovo company, Buchaltung Discount Service, participating in the amounting to reportedly $221K for B2B meetings, organized on May 24, 2019, as part of the Economic production and supply with prefabricated Conference of Albanian Diaspora from Europe. Buchaltung concrete elements; iii) a contract Discount Service signed a contract with the Albanian diaspora- owned company from Germany, AO Dienstleistung GmbH, between Kosovo company Prime amounting to approximately $107K for one year. Logistics offering transportation and other logistics-related services and the diaspora owned company from Austria, Montscher und Partner

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GMBH; and iv) a cooperation agreement between four Kosovo companies from the apparel sector: Puntex, Arta Tex, SSprint, Arta Tex Group, and the Austrian chapter of the ADBN.

Six (6) other initial deals and offers were made throughout the B2B meetings held on May 24, 2019. As a result of the meetings held, Kosovo company Agro- Butrinti made a pilot deal with company

Heby Brandschutz GMBH in Germany,

expected to be implemented following the completion of the construction of a building in Germany, reportedly amounting to $24.6K for the material, and $89.6K for installation. Moreover, as a result of deals made at the Conference, Kosovo company

Kosovo company, Elnor, participating in B2B meetings, Jaha Solar will be exporting 210 PV panels organized on May 24, 2019, at the Economic Conference of to a diaspora-owned company in Albanian Diaspora from Europe. Switzerland, Alba Solar, it also plans to send a separate offer for export of PV panels to IBS Systems, another diaspora-owned company from Switzerland. Additionally, three deals were made between Kosovo company Elektrostublla and a diaspora-owned company from Austria, SB Elektronik, for export of electric materials; a diaspora-owned company from Finland, LVI-Nordic, for the production of inox parts; and a diaspora-owned company from Switzerland, IBS Systems, for the production of boxes for concrete. Moreover, a Kosovo company from the wood processing sector, Greatwood, reported being in the process of finalizing a deal for a request for specific furniture with diaspora-owned business from Belgium, Group Daedalus. Additionally, out of the rest of the B2B meetings held, 24 meetings were labeled as “offers to be made,” as a result of B2B meetings, with both groups of companies (from Kosovo and diaspora) committed to following up with concrete actions. Another 15 meetings were labeled as “meetings where potential collaboration may follow,” where Kosovo companies are expected to follow-up on the meetings.

The predefined B2B meetings were held every 15 minutes, with a 5-minute break between meetings, amounting to a total of 13 rounds of meetings. A team of moderators, and experts of participating sectors assisted during the B2B meetings, including guiding diaspora-owned business representatives that did not have prescheduled meetings to identify potential business partnerships and investment interests with Kosovo host businesses.

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The pre-registration for B2B meetings was done via an online platform built specifically for these meetings, https://konferenca.rrjeti.biz/, which has since been transferred to the Albanian Diaspora Business Network chapters from Europe for sustainability purposes. EMPOWER administrators screened requests from diaspora-owned

businesses to meet with Kosovo companies. EMPOWER, as well as ADBN chapters in Europe, shared this platform with the Kosovo and diaspora-owned businesses who

had responded positively to The pre-registration for B2B meetings was done via an online platform attending the Conference, as well as built specifically for these meetings: https://konferenca.rrjeti.biz/. A total the B2B meetings. Additionally, the of 236 meetings had been scheduled manually and in an automated manner via the platform prior to the event. 2019 Catalogue: Our Products - Kosovo Ready to Export, containing profiles of 116 export-ready Kosovo businesses, was also prepared specifically for the event and distributed before and during the event to the diaspora businesses attending the Conference.

An agreement was also signed between a Kosovo wine-producing company, Theranda, and the Finnish Chapter of the Albanian Diaspora Business Network (ADBN), as part of the Gala Dinner hosted by the ADBN branches from Europe, and the Kosovo Ministry of Diaspora and Strategic Investments, which

occurred on the evening of the first day of the Conference. Moreover, a Memorandum of Cooperation was also signed amongst the Kosovo Ministry of Diaspora and Strategic Investments, the Ministry of Trade and An agreement was signed between a Kosovo wine-producing company, Theranda, and the Finnish Chapter of the Albanian Industry, and the Union of Albanian-German Diaspora Business Network (ADBN) on May 24, 2019, at the Businesses in reference to the creation of the Economic Conference of Albanian Diaspora from Europe. industrial park in Malisheve in Kosovo.

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The second day of the event, May 25th, consisted of panel discussions and site visits. Two panel sessions were held: namely, “Diaspora as an intermediary agent for doing business in foreign markets,” and “The activity of the ADBN chapters in

Europe.” Following the panel discussions, the Mayor of the Vushtrri municipality hosted a working lunch for the diaspora businesses delegation. This was followed by site visits to EMPOWER beneficiary companies, Ciao Berto, Tiki Mosaic and Binni. Binni, as a diaspora-invested company, hosted a cocktail and the closing of the Conference at its premises.

The second day of the Conference, on May 25, 2019, consisted of panel discussions and site visits. The diaspora delegation visited EMPOWER beneficiary companies, Ciao Berto, Tiki Mosaic and Binni, where the closing event of the Conference was also held.

A month after the Conference, the Head of the Economic Conference organizing chapters of ADBN, Mr. Yll Blakaj from Austria, (who is also concurrently the Head of Austrian Chapter of ADBN) visited Kosovo with the purpose of following up on a concrete business linkage opportunity between two Austrian partners and Kosovo wood processing company, Ukaj. Mr. Blakaj’s two Austrian-based associates were greatly impressed with As a result of the Economic Conference of Albanian Diaspora from the quality of products during their visit Europe, two Austrian partners of Albanian businessman in Austria, of company Ukaj in Peja. They discussed Mr. Yll Blakaj, visited company Ukaj in Peja at the end of June 2019. They were impressed with the factory and have started a pilot deal the needs they have for their markets, with Ukaj. as well as a potential order of several thousand doors from Ukaj. The agreement is in the process of being finalized.

In Q20, EMPOWER continued work to improve access to external markets. At the end of 2018, it initiated an activity titled Export Readiness and Promotion Assistance (ERPA), aimed at evaluating the export readiness of targeted Kosovo companies, coupled with concrete action planning for export

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EMPOWER Private Sector Activity market penetration, including through targeted industry research. The pilot of the export assistance package is being implemented for a limited number of export-ready private sector companies, focusing on enterprises with high growth and export potential. As part of the ERPA pilot activity, during Q20, EMPOWER, through a contractor: (i) assessed and produced export readiness reports for three Kosovo exporting companies (Lot 1); (ii) selected markets and developed market strategies and entry plans for three export goods (Lot 2); and (iii) prepared general and industry-specific international market information for a group of products produced by the wood processing cluster of Kosovo exporters (Lot 3). In ERPA Lot 1, three (3) Export Readiness Assessments were finalized for the following Kosovo producers or exporters: Berto company (kitchens, furniture, plastic doors and windows, wooden doors); Jasin (stainless steel HORECA inox appliances manufacturer); and Wear & Go (jeans, textile). The produced export readiness assessments consist of an export planning assessment, including the assessment of finances, marketing and promotion, as well as the demand potential in the EU market for the top three products of the company with the potential for export. Each assessment outlines the current situation and recommendations for the three companies. These companies have been provided with a clear picture of their potential, opportunities, and required actions; improved knowledge and skills on developing export strategies; including assessed enterprises’ export readiness, gap identification and addressed change. In ERPA Lot 2, market entry strategies for three selected export goods (Kosovo-made products) were developed: i) Product: Customized Kitchens (Company: Berto company, Vushtrri); ii) Product: Bedroom furniture (Company: Tiki Home, Prishtina); and iii) Product: Healthy drinks (Company: Bibita, Peja). In ERPA Lot 3, general industry market research was undertaken titled as International Prospects of Kosovo Furniture, which focuses on groups and sub-groups of products in the wood industry, as specified under Section 20, Chapter 94 of the International Harmonized System Codes (IHSC). The research consists of size, trends, key players, dynamics, concentration, distribution channels, margins, competitors/ exporters, buyer power, and recommended potential buyers, including intermediaries and installers suggested through expert advice for selected industry.

In line with ERPA Lot 3 report’s scope and results, and as a result of an interactive B2B activity of the third edition of the Wood Industry Convention, EMPOWER focused its attention to organize a trade mission for selected Kosovo wood processing companies. MDA, as part of ERPA Lot 3 activity, provided a list of furniture stores and retailers in Belgium, i.e. potential buyers with potential of collaboration with Kosovo companies. The Business Trade Mission to Brussels for five selected Kosovo businesses from the wood processing industry took The Business Trade Mission to Brussels for five selected wood processing businesses organized in May 2019, in collaboration with place in May 2019. The purpose of the the Kosovo Embassy in Begium. mission to Belgium was to connect Kosovo businesses with foreign partners in Belgium and the region, as well as diaspora businesses there. Kosovo companies Ciao Berto, Elnor,

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Candeo, Albed and Shehu, participated in this trade mission that sought to identify investment and export opportunities of Kosovo products and services. The Kosovo Embassy in Belgium cooperated with EMPOWER to assist in organizing the mission. In Q20, EMPOWER also facilitated the participation of eight Kosovo businesses at the Albanian Diaspora Business Fair in Vienna 2019, hosted by the Albanian Diaspora Business Network chapters. The event took place on April 27, 2019. The purpose of this activity was to connect Albanian diaspora from Austria and the region with businesses in Kosovo and identify investment and export opportunities of Kosovo products and services. Kosovo businesses that participated and exhibited at the fair included: Albed, Shehu, Lumi, Diamanti, and Elnor (wood processing industry); Puntex and Wear and Go (apparel industry); and

Rrota (ICT sector). Fair participants involved Albanian Diaspora Business Fair in Vienna, April 2019, where about 60 businesses owned by Albanian eight business from Kosovo also participated and exhibited. diaspora, who exhibited at the event. These businesses came from various sectors, such as construction, including businesses providing renovation services, encompassing electricity and water installations, painting, producing furniture, windows and doors, as well as gastronomy, catering, IT, sports, and more. The fair was open to visitors, foreign and Albanian, including the Albanian community in Vienna, as well as other neighboring cities. The follow up of this event, was noted in the Economic Conference of the Albanian Diaspora from Europe held in May in Prishtina. As a result, Kosovo businesses are expanding their access to the European markets and other new market opportunities through diaspora businesses in Europe.

2.4 Cross-Cutting Issues The following affirmative cross-cutting objectives feed strongly into EMPOWER’s selection of competitiveness and WfD interventions: (i) advancing the economic engagement of priority populations, including women, youth, and minorities (including North Kosovo); (ii) supporting microenterprise development; (iii) facilitating collaboration in economic growth assistance with other donors and the Government of Kosovo (GoK); and (iv) promoting environmental sustainability, including ensuring protection of the environment in project activities. The following table demonstrates that EMPOWER’s support for job creation benefitted all priority populations in Q20 and cumulatively. Women accounted for more than a third of all new jobs created since the beginning of the project, while youth accounted for around 30%. It is important to note that these categories overlap. Minorities account for over one-tenth of the jobs created.

Table 15: Job Creation – Priority Populations Total Women Youth Minorities Women in Mgt Sector Q20 Cuml Q20 Cuml Q20 Cuml Q20 Cuml Q20 Cuml Apparel 26 569 22 454 11 261 - 33 1 19 Energy 62 398 16 63 - 67 1 50 - 1 ICT 83 1,390 34 652 32 501 7 56 6 51

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EMPOWER Private Sector Activity

Metal 6 112 5 13 - 15 4 33 - - Other 69 559 25 201 23 100 9 231 - 3 Tourism* 1 109 ------Wood 88 1,357 10 272 23 420 7 62 - 12 Total 335 4,492 112 1,655 89 1,364 28 465 7 86 * Job creation in tourism is inferred and it is not possible to break it down across categories.

2.4.1 Women EMPOWER continued to strive for the empowerment of women in Kosovo and their engagement in the workforce in Q20, through various activities that supported, trained, and increased job opportunities for women. EMPOWER’s interventions resulted in the creation of 112 jobs for women in Q20, where, among others, 34 jobs were created in ICT, 22 in the apparel sector, and 16 in the energy sector.

During Q20, EMPOWER supported the International Girls in ICT Day for the fourth year running. The one-day event held on April 26th in Prishtina, was attended by over 250 young women. The annual Girls in ICT Day is celebrated around the world to inspire and motivate girls and young women to consider education and careers in the ICT sector. The event served as a place for women and girls to connect and network with local and international ICT women leaders. It included inspirational speeches and interactive workshops. More than 137 ambitious Kosovo Young women attending workshops during the Girls in ICT girls and women participated in the Day held at RIT Kosovo on April 26, 2019. workshops and received certificates. The event also included a job fair where the young women were given the opportunity to meet with 25 Kosovo companies who were looking for potential employees. Out of the 20 women who were interviewed at the job fair, two were hired by Raiffeisen Bank and one by BONEVET Prishtina. EMPOWER’s IT beneficiary companies are thriving and increasingly creating more jobs for women. During this quarter, IQ-to-Link created 30 jobs and 54 internships for women, EvroTarget created two new jobs and 14 internships for women, BONEVET Prishtina employed two women and trained 29, and BONEVET Kacanik employed three women in Q20. EMPOWER-supported apparel companies also created a considerable number of jobs for women in Q20: ArtaTex created eight new jobs for women, Cro-fashion employed five women and Solid created six new jobs for women. Several wood- processing beneficiary companies also created many jobs for women in Q20: Tiki employed three women in their new factory, Mahagoni employed two women and Te Naseri created three new jobs for women. From the energy sector, EMPOWER’s beneficiary Jaha Solar hired 13 women, Dekon hired three and Jasin Metal created four new jobs for women during Q20. As a result of the trainings completed through the On-the-Job Training Program, three women found jobs at various companies. In Q20, 72 women were trained on general skills and German language through the Tailored Training Program.

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2.4.2 Youth In Q20, EMPOWER tackled youth unemployment through a variety of interventions. In particular, it intentionally oriented WfD and internship programs toward youth (18-24 years of age). In Q20, the ICT and wood sector accounted for the largest percentage of new jobs for youth. EMPOWER continued to implement its three youth WfD programs during the quarter. The programs aim to train and improve the skills of vulnerable and marginalized youth in Gjilan, Hani i Elezit, Kacanik and Viti, and enhance their chances of finding sustainable jobs in the future. In Q20, 63 youth completed the On-The-Job (OTJ) Training Program. They completed their three-month trainings at companies Sharrcem, OxaGroup, Eurothesi, Fluidi, Menakon, Gan Dizajn, EuroModel, EuroART, Participants from the municipality of Han i Elezit upon the Vinex and EuroFisi. completion of training as part of the Self-Employment Training Program. Also, in Q20, 49 youth from the municipalities of Gjilan, Viti, Kaçanik, and Hani i Elezit were selected as grant beneficiaries under EMPOWER’s Self- Employment Program. Their selection follows the successful completion of a training program on business skills. The beneficiaries will receive grants in the form of equipment, allowing them to open a new business, or expand an existing one. During Q20, the Project organized training for youth on the Design and Installation of PV Solar Systems. The first of its kind activity in Kosovo, started in June, where 19 youth were trained for 15 days on the design and installation of solar PV systems. The training will continue in the next quarter and the successful candidates will receive Youth visited Jaha Solar to get familiar with solar-energy TÜV certificates upon training completion and products, as a part of Design and Installation of PV Solar testing. System training.

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EMPOWER Private Sector Activity

In Q20, EMPOWER also supported DOKU.TECH, one of the biggest annual technological events in the region. Held at the youth-run building, Termokiss in Prishtina, on June 8th and 9th, 2019, the event brought together more than 900 participants and 20 local organizations and companies. The conference served as a place to gather tech enthusiasts from all around the world through inspiring talks, masterclasses and innovative workshops. Participants also attended the Do It Yourself (DIY) Fair, where more than 30 organizations showcased their work and hands- on products created by Kosovo’s youth. The ICT sector is continuously growing in Kosovo, and young people are becoming more interested in gaining experience in this sector and increasing their employability. During Q20, EMPOWER beneficiaries continued to train youth in ICT: IQ- to-Link trained 30 youth interns, BONEVET Do It Yourself (DIY) Fair during DOKU.TECH 2019 edition at Prishtina trained 22 youth interns and EvroTarget Termokiss, Prishtina. trained eight youth interns and created 19 new jobs for youth. EMPOWER beneficiaries from the apparel sector also created a considerable number of jobs for youth: Artatex hired four youth, Solid hired four youth and Cro-fashion created two new jobs for youth during Q20. In addition, wood-processing company Albed created three jobs for youth, Mahagoni created two and Te Naseri created three new jobs for youth in Q20. Through EMPOWER’s On-The-Job Training Program, four youth found new jobs, while 89 youth were trained through the Tailored Training Program in this quarter.

2.4.3 Minorities and North Kosovo

Table 16: North Kosovo Activities & Impact, in $000s Period # of # Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Activities Cuml 23 83 728 1,324 466 12,477 101 Q20 1 - 2 5 25 1,316 - *Includes SBs. Out of EMPOWER’s 23 interventions, one occurred in Q20. Total EMPOWER investment amounting to $728K in activities foster business competitiveness and WfD in North Kosovo (NK) helped generate nearly $1.3M in new sales and 25 new jobs in Q20. In total, $12.4M in new sales and 466 new net jobs have been created since project inception.

During Q20, under Production Expansion, Agro Art from Lesak, Leposavic municipality completed its processing facility mainly intended for raspberry processing. The company has its own raspberry production and processing capacities which makes them independent from other similar processors. The installed cooling and freezing equipment of 200t capacity will be sufficient for Agro Art’s needs in the next two years and will provide the opportunity for small raspberry producers to supply the company with their produce. In addition, Agro Art successfully implemented the MAFRD-approved activity by purchasing high quality equipment for its processing facility. The second EMPOWER beneficiary which successfully implemented the MAFRD-supported activity is Agro Centar, which purchased equipment needed for the maintenance of apple orchards. Agro Centar is planning to expand its apple orchards by an additional 1,5ha of new fuji apple variety and 1ha of nuts.

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Evro Katic, the second wood pellet production company in north Kosovo (NK), finished the installation of a new automated press, as one of the most important parts in its production line, worth more than $114K. It is expected that this advanced production line will increase production capacities up to 1t of wood pellet produced per hour. Company Markovic, one of the smallest wood processing companies in the north, offers solid wood products with ornaments mainly intended for individuals but also for monasteries, such as icons, entrance doors, chairs, etc. A marketing company from Serbia, which was attracted by solid wood icons the Kosovo company is producing, offered Markovic the possibility of preparing a marketing campaign and helping them with connections with potential buyers. Godzi, the leading wood processing company in north Kosovo, had invested in an edge bender machine which enabled the company to accelerate production and be fully contracted until the end of October 2019. Godzi employed four (4) new workers in Q20. A highlight of support by EMPOWER to NK companies is the fact that, by providing required support to 16 directly supported companies, the Project supported the transition of many of these companies from being micro-enterprises to small- and medium-sized companies. Under Productivity and Quality, EMPOWER initiated discussions with EBRD to consider providing support to NK beneficiaries to obtain relevant certifications. EMPOWER visited north Kosovo to evaluate their readiness for quality standards introduction. As a result, eight companies from NK were recommended to be considered for potential support. Following the conclusion of the assessment phase, As Promet was selected to be supported by EBRD, as well as by EMPOWER. During the previous quarter, EMPOWER supported Peppermint International (PI) LLC to visit the BIOFACH Fair, which is considered as the world’s leading trade fair for organic food. The fair was held in Nuremberg, Germany, during February 13 – 16, 2019. During the visit, PI made a deal with company Peter Lendi from Switzerland for the first distribution of products and a three-year contract for medicinal and aromatic plants (MAPs). During the reporting period, PI applied for certification from Albinspekt, which is reportedly considered a prerequisite for the company to be able to export to Switzerland. Once the certification issue is resolved, PI is expecting to export products worth $220K by the end of year. In the meantime, the company started packaging dried spice and aromatic herbs which will be first offered in the Kosovo market. By expanding the number of farmers who are cultivating MAPs (30 farmers currently), introduction of new products (teas, spices and aromatic herbs), and activities related to collection centers, PI created six (6) new jobs during Q20. During Q20, EMPOWER continued to follow up the situation with NK farmers and companies that benefited under a MAFRD support scheme. During Q20, out of the 26 approved activities, only five completed projects in the total amount of $330K and sent to MAFRD a request for reimbursement of the MAFRD’s co-financing part. The date of July 15, 2019 is the deadline for the other 21 farmers to implement and complete all required documents. Farmers who were interested to apply for the 2019 MAFRD grant scheme were connected with the previously engaged STTA for advice needed in the preparation of the application package.

2.4.4 Microenterprises

EMPOWER supports SMEs of any size, including microenterprises, if their investment-to-job ratios are satisfactory. EMPOWER’s efficient procedures for grant selection and implementation make it possible to accommodate smaller companies. These include microenterprises which employ less than 10 employees. Through Q20, EMPOWER approved 75 activities that benefitted 178 microenterprises,

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EMPOWER Private Sector Activity accounting for 28% of the project beneficiaries, or approximately 26% of the total Project budget. Microenterprise activities created nearly 764 jobs for the Project to date.

To date, 178 PBs, for which EMPOWER has detailed information, were microenterprises defined as “PBs that had <10 employees at the time they applied for EMPOWER support, which means the submission date of the (first, if more than one) Concept Note.”

In Q20, EMPOWER-beneficiary microenterprise Markovic transitioned into a small business. Located in North Kosovo, the company has 14 years of experience in the production of wooden Markovic’s wood-processing facility in Zubin Potok doors and windows. In cooperation with the Municipality, North Kosovo. largest furniture retailer in North Kosovo, the company sells dining and living room tables, chests and other furniture items. Through Q20, the company increased its revenue by 62% and expanded their product range. Markovic created one new job in Q20, bringing its total number of employees to 10.

2.4.5 Donor and GoK Collaboration Investment Leverage: This indicator is defined as the total cash cost of an EMPOWER-supported activity divided by the EMPOWER cash investment, excluding EMPOWER staff and operational costs, aggregated across all funded activities. The 5.28x is a result of $4.48M disbursed by EMPOWER to date, plus the $19.2M provided in co-financing by private companies and collaborating institutions.

Figure 3: Co-Financing for Activities Initiated through Q20

Actual Activity Co-Finance through Q20

$25,000 $20,000 $15,000

$10,000 Thousands $5,000 $-

Appare Energy ICT Metal Other Touris Wood Totals l m Totals $1,834, $3,499, $1,807, $1,121, $5,172, $629,56 $9,614, $23,680 Donor/GoK $ $26,320 $60,172 $555,00 $1,995 $435,92 $255,46 $698,66 $2,033, FIRM-FIN $1,238, $2,833, $894,85 $946,33 $3,657, $96,881 $7,492, $17,160 EMPOWER $569,21 $605,87 $357,68 $173,39 $1,079, $277,22 $1,423, $4,486,

Totals EMPOWER FIRM-FIN Donor/GoK $

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2.4.6 Environmental Compliance The Initial Environmental Examination Document DCN: 2015-KOS-036 applicable to EMPOWER Private Sector sets out the environmental reviewing, monitoring and reporting tasks for each activity subject to an environmental compliance procedure. Section 4.8.2 of the IEE provides that Implementing Partners (IPs) shall report on environmental compliance requirements as part of their routine project reporting to USAID. EMPOWER conducts environmental compliance reviews, as required, for all grant-funded interventions. In this quarter, five (5) activities were categorized as “negative determination with conditions”, for which Environmental Review Checklists (ERCs) and Environmental Mitigation and Monitoring Plans (EMMPs) were reviewed. During Q20, two (2) activities were classified as “categorical exclusion”, having no environmental impact, requiring neither EMMP nor ERC. Environmental Monitoring: EMPOWER undertook monitoring visits to inspect the implementation of environmental measures, as indicated at the ERC-EMMP for each company/organization. Monitoring is based on environmental impacts, mitigation measures and monitoring indicators, as set out at the EMMPs for each activity. The monitoring visits included: o Visual observation and photographs related to physical impacts, air emissions, water use, waste management, use of personal protective equipment (PPE), fire safety measures, ventilation, wastewater collection and discharge, hazardous materials storage. o Interviews with the owners or managers of companies, related to the progress made on the completion of environmental permits, plans for implementing the mitigation measures. EMPOWER prepares and files an Environmental Monitoring Report for each monitoring visit. There were no monitoring visits during this quarter.

2.5 General and Administrative 2.5.1 Strategic Activities Fund Management

Through the end of Q20 EMPOWER launched three Annual Program Statements, receiving 1,485 applications in total for SAF funding. In response to the first call for applications - Annual Program Statement #1, EMPOWER received 791 applications in total for SAF funding. All 791 concept notes were been reviewed, where 728 were not accepted and 63 were approved. The call for applications was launched in January 2015 and closed in May 31, 2015. EMPOWER received an additional of 281 applications in total in response to its second request for applications – Annual Program Statement #2, where Sida partnered with USAID to provide $2.0MM additional funding. The call for applications was launched in June 8, 2016 and closed in December 31, 2016, where all 281 concept notes were reviewed, of which 258 were not accepted, and 23 were approved. The third request for application for SAF funding - Annual Program Statement #3, was launched on June 01, 2017 and closed on December 31, 2017. In response to the third request for applications EMPOWER received 413 applications seeking $15 million in finance. By the end of Q20, 26 concept notes were approved, 387 of them were rejected.

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In March 2018 EMPOWER has launched three RFAs. In response to those RFAs three grants were approved and signed, where total SAF funding was $ 364K. In addition to three Annual Program Statements through Q20 additional 15 activities including unsolicited applications seven (7) were approved where total SAF funding is $194.7K. The following table provides SAF status as of the end of Quarter 20:

Table 17: SAF Grants Approved by Type – through Q20

Status Number SAF Co-Finance # Jobs Leverage EMP / JOB Final COR Approved 168 $4,428,180 $16,045,224 3,530 4.6 $1,254

TEC Approved 4 $44,688 $121,856 8 3.7 $5,586 Grand Total 172 $4,472,868 $16,167,080 3,538 4.6 $1,264 Production Expansion 78 $2,626,092 $12,991,596 1,909 5.9 $1,376 Connection to Markets 41 $712,006 $1,286,963 552 2.8 $1,290 Workforce 27 $958,935 $1,546,595 1,009 2.6 $950 Development

Productivity and Quality 17 $90,858 $251,207 68 3.8 $1,336 Business Environment 9 $84,977 $90,720 - 2.1

Grand Total 172 $4,472,868 $16,167,080 3,5 38 4.6 $1,264 Of which: North Kosovo 20 $725,872 $1,319,967 446 2.8 $1,628 Microenterprise 52 $1,095,134 $2,679,706 721 3.4 $1,519

168 grants for a total of $4.4 MM in SAF funds were approved and signed by the end of Q20. Of the total 168 SAF grants approved and signed through Q20, 146 grants or 87% of them were completed and 22 or 13% of them are in process, where 81 equipment financed by EMPOWER were installed and two (2) others are in process of procurement. At $1,264/job overall through Q20, EMPOWER continued to be close to the nonbinding guideline of $1,000 in SAF investment per new employment.2

2.5.2 Public Events and Communications

Regular EMPOWER progress communications: Facebook, Website and Newsletter – In Q20, a variety of mediums were used to promote Project activities, including the EMPOWER webpage, USAID/Kosovo and EMPOWER Facebook page, newsletter, factsheet, business catalogue, events featured on TV and online news portals, and videos. Factsheet - A visually appealing infographics Factsheet highlighting the achievements of the Project up to the end of Q19 was developed. Printed copies of the Factsheets are exhibited in the Project office and were distributed at meetings and the various events that occurred during the quarter.

2 Annex 3 provides a list of all SAF-funded grants by EMPOWER through Y5/Q19.

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Newsletter - EMPOWER prepared a two-page newsletter highlighting news and successes of the Project and its beneficiaries. The newsletter was distributed to more than 900 contacts through email, was published on EMPOWER’s website in three languages and is exhibited in the Project office. Business Catalogue - During Q20, EMPOWER prepared the 2019 edition of the business catalogue “Our Products - Kosovo Ready to Export” in the Albanian language. The catalogue contains the profiles with photos of 116 export-ready Kosovo companies, as well as updated sector summaries. It was uploaded online on www.yumpu.com and was distributed electronically through Facebook, email and EMPOWER website prior to the Economic Conference of Albanian Diaspora from Europe – B2B. The printed catalogue was

distributed at the Conference and served as an The 2019 edition of the business catalogue “Our Products - aid for the pre-arrangement of the B2B Kosovo Ready to Export” was prepared during Q20. meetings before and during the Conference. After the Conference, the catalogue was distributed to various Diaspora contacts such as the Association of Wood Processors of Kosovo, Kosovo Apparel Marketing Association, Kosovo Chamber of Commerce, Kosovo Manufacturing Club, Albanian Global Diaspora Business Network, Ministry of Diaspora and Strategic Investments, and foreign embassies in Kosovo. The catalogue was well-received, with the Kosovo Ministry of Foreign Affairs requesting to distribute copies throughout its 44 embassies around the world, to use it as a tool to attract foreign investors in Kosovo. The electronic catalogue has reached over 1,600 views online and was extensively shared on Facebook. The previous Albanian version of the catalogue containing 90 company profiles reached over 13,700 views, while the English version reached over 2,500 views. The English version of the 2019 catalogue will be published in the next quarter. Events – The Project organized 17 events in Q20. These highlighted the achievements and milestones of beneficiaries and promoted EMPOWER’s objectives. The events organized included visits by the U.S. Ambassador in Kosovo, Mr. Philip S. Kosnett, Deputy Chief of Mission, Ms. Colleen Hyland, USAID Mission Director, Ms. Lisa Magno, Economic Growth Office Director, Mr. Brian Martalus, Global President of Cardno Online news portal “Bota Sot” and several other media International Development, Ms. Marian published the story on Kosovo companies’ trade mission to Boreland and representatives from Sida, Mr. Belgium organized by EMPOWER. Markus Johannesson and Ms. Lena Rupp. EMPOWER also organized grant signings with metal company Jasin Metal and apparel company Wear & Go. In addition, EMPOWER organized two certificate ceremonies for trainees from Gjilan, Hani i Elezit, Viti and Kacanik who completed training as part of the On-the-Job Training Program and Self-Employment Program. All events were extensively captured through photos; the Project sent the photos, accompanied by short written summaries, to USAID/Kosovo for posting on Facebook. The Project also shared all posts on the EMPOWER Facebook page. Project staff also uploaded all blogs and photos from the events to

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EMPOWER’s website. Press releases were also prepared and sent to media prior to several of the Project’s events including the Economic Conference with Albanian Diaspora from Europe - B2B and the Kosovo wood-processors’ trade mission to Belgium. These were published by several online news media.

In Q20, the Project organized the Economic Conference of Albanian Diaspora from Europe - B2B in Prishtina. The Conference served as a place to gather and connect businesses from Kosovo with businesses from Diaspora, with the aim of creating new business deals to increase exports of Kosovo products and services. The Conference was opened by the USAID Kosovo Economic Growth Office Director, Mr. Brian Martalus and the Chair of the Albanian Global Diaspora Business Network branch in Austria, Mr. Yll Blakaj. After the opening, B2B meetings were held, which were pre-arranged through the online platform https://konferenca.rrjeti.biz/, developed specifically for the purpose of the Conference. The opening ceremony of The Economic Conference of Through the platform, and aided by the Albanian Diaspora from Europe - B2B, held on May 24, business catalogue, 236 meetings were pre- 2019. scheduled for the B2B activity. Over 144 Diaspora companies from Austria, Germany, Finland, Italy, Norway, Switzerland, and Belgium, and more than 47 Kosovo companies took part in the Conference and held over 250 B2B meetings together. The Conference was extensively covered by local media and Diaspora media, where over ten media were present at the opening ceremony and Gala dinner. Several TV and online media conducted interviews with participants and took video footage during the B2B meetings. The event was featured more than 13 times on major TV channels in Kosovo during the main news and current-events programs, and more than 23 online news portals covered event. The event was extensively promoted through the Project’s Facebook and website, a story on the

Conference was published by online portals prior The USAID Kosovo Economic Growth Office Director, Mr. the event (as sent by the Project), and electronic Brian Martalus talked about the business catalogue banners were placed on three of the most viewed prepared by EMPOWER during his remarks at the opening online portals in Kosovo and Diaspora. ceremony of the Economic Conference of Albanian Diaspora from Europe - B2B. The opening ceremony and B2B meetings were live-streamed on the online news portal Kosova Press and EMPOWER’s Facebook page, reaching over 5,000 views. Interviews were arranged prior to the Conference on RTK1’s morning program and Radio Kosova morning program. A one-hour program on the Conference and Diaspora linkages was organized and screened the day before the conference on RTK1’s “55 Minuta” prime-time program. The two discussion panel sessions held on the second day of the Conference were also live streamed on the Project’s Facebook page reaching more than 3,000 views and were transmitted live on major TV channels such as Klan Kosova and RTV21. The organized visits to Kosovo companies Ciao Berto, Tiki

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EMPOWER Private Sector Activity

Mosaic and Binni, organized as part of the Conference as well as the closing ceremony were shared on Facebook throughout the day.

Facebook and Website - Facebook continued to be a powerful communications tool for EMPOWER during Q20. EMPOWER events, success stories, and grantee profiles, were featured on the USAID/Kosovo and US Embassy Facebook page, with nine posts being attributed to the Project. These postings were shared on the EMPOWER Facebook page. The Project also shared relevant postings on news and achievements of Green Business Kosovo, and the Kosovo Apparel Marketing Association, the Association of Wood Processors of Kosovo, and posts from magazines, other media and beneficiaries. The EMPOWER Facebook page had 74 posts in Q20, and currently has a following of 6,510 people. The EMPOWER website was continuously updated with all Project news and events that occurred in Q20. In addition, the website served as the primary channel for soliciting responses to requests for proposals and project job vacancy announcements.

3. RESULTS VS. PERFORMANCE MANAGEMENT INDICATORS EMPOWER Private Sector made significant advances toward its quantitative and qualitative objectives during Q16. The original targets failed to take into account the fact that impact would be limited during the first year, due to the requirements for initial assessments before activities supporting economic growth could begin. Companies receiving grants also required time to order and install equipment before sales and job growth impact could be achieved. In addition, the original targets were developed with the expectation that USAID would engage a local partner to work alongside EMPOWER, with substantial additional grant funds and personnel, through a separate procurement, as the original RFP for EMPOWER stated. However, background information and EMPOWER’s Performance Based Management System (PBMS) reveal a significant impact on indirect beneficiaries: businesses that are not direct participants but, through their linkages with PBs, benefit from increased business growth and WfD. Existing targeted and tracked indicators, including interviews with direct beneficiaries, confirm the positive effects on indirect beneficiaries. As the existing project data underestimates the impact on indirect beneficiaries, EMPOWER has started to use economic impact multipliers. Economic multipliers estimate how a change in Table 18: Estimates of Kosovo Multipliers one sector will impact output and employment elsewhere in the region or the economy as a Employment Sales whole. Multipliers measure the impact on output Apparel 1.37 1.47 and employment for businesses that represent backward of forward linkages from the Energy 7.25 1.52 perspective of the direct beneficiary. These ICT 1.57 1.56 effects occur when increased sales experienced by the beneficiary lead to a boost in sales for the Metal 1.85 1.75 primary supplier or induce additional business Other 2.73 1.63 activity for forward-linked businesses. These are indirect or secondary effects. Tourism 2.26 1.71 When national and regional multipliers do not Wood 2.09 1.74 exist, it is appropriate to adapt previously constructed input-output tables and to use multipliers developed in other contexts. EMPOWER has conducted thorough research to find comparable multipliers specific to the sectors in which its activity is concentrated. When drawing on multipliers from other countries, EMPOWER prioritized selecting

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EMPOWER Private Sector Activity economies among Kosovo’s regional neighbors that most closely resemble today’s Kosovar economy. In the process, EMPOWER avoided sourcing multipliers from highly industrialized and OECD economies because their crowding out and import-dependence factors are expected to be significantly different from those of Kosovo. EMPOWER averaged the sourced multipliers to produce a single multiplier estimate for each of the sectors in which EMPOWER identifies direct beneficiaries. EMPOWER can, however, confirm the presence of these significant indirect effects through data tracked by the project and anecdotal evidence from EMPOWER beneficiaries. To take these factors into account, the project revised timelines and PMI targets in PBMS Revision #6, and USAID approved this revision on December 21, 2016. Following approval from USAID on the introduction of multipliers, EMPOWER has incorporated the indicators on sales, sales increases, and employment for beneficiaries (PBs and SBs), and has removed the indicators for overall economic impact on the tourism sector as the multipliers substitute such indicators.

3.1 Results vs. PMIs Detail

Table at the end of this section list all of EMPOWER’s PMIs from its PBMS. The following are highlights: Number of beneficiary entities: The PMI cumulative target for the number of entities through the end of the project is 400. The PBMS defines these companies as “bodies that have participated in or obtained support from any Project Activity.” In terms of companies that received material assistance directly from EMPOWER, the number of these PBs was 478 through Q20. Counting companies, NGOs, and individuals that domestically produce and supply direct production inputs to companies that received production expansion grants from EMPOWER—SBs, whose sales must grow if those receiving grants grow—adds an estimated 151 unique companies, bringing the total number of enterprise beneficiaries (PBs and SBs) to 629. Attributed aggregate total sales of PB companies: EMPOWER introduced this new indicator in Q10 to better reflect its impact on PBs. The attributed sales of PBs, beginning in the quarter in which they become EMPOWER beneficiaries, aggregated over all such beneficiaries is $373 million through Q20. The PBMS target for five years is $150 million. Attributed aggregate sales increase of PB companies: $184 million cumulative through Q20, versus a cumulative target of $100 million through Year 5. The indicator is defined as “attributed annual increased sales of PBs over their Baseline sales, aggregated over all such beneficiaries. For the purpose of this and other EMPOWER PIRS, a Baseline year is Y for any Activity that was initiated from 1-Sep-Yn through 31-Aug-Yn+1.” This indicator was revised in Q10 to better reflect EMPOWER’s timelines and the realistic economic potential of beneficiaries identified so far. Aggregate exports increase of PB companies: $85 million cumulative to date, versus the PBMS target of $50 million through Year 5. This indicator is a subset of aggregate sales increase and was also revised in Q10. Business size expansion (PBs): The PBMS defines this indicator as “PBs transitioning to a larger size category: micro-to-small (<10 to 10 or more employees), small-to-medium (10–49 to 50 or more), and medium-to-large (50–249 to 250 or more) from the time that the Beneficiary applied for EMPOWER support.” On that basis, the cumulative target through Year 5 is 25. To date, 39 companies have expanded, where 21 companies transitioned from micro to small, 14 companies transitioned from small to medium, and four companies transitioned from medium to large. New geographic markets entered by PBs: This indicator counts domestic regions or countries to which PBs sell as a result of EMPOWER assistance. The cumulative target through Year 5 is 50. Already, PBs have achieved 273 new market entries, of which 10 in Q20. New geographic markets for a number of

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EMPOWER Private Sector Activity companies included regional neighbors (Albania, Montenegro, Macedonia, and Serbia), Western Europe, countries with large Kosovar diaspora populations (Switzerland, Germany, Sweden, France, and Italy), Africa (Senegal), and the United States. New products sold by PBs: This indicator counts product types that PBs sell as a result of EMPOWER assistance. The cumulative target through Year 5 is 50. PBs have achieved 328 new product entries through Q20, of which 13 occurred in Q20. Number of PBs adopting new technologies: The revised PBMS targets new technologies and defines it as “PBs that have adopted new hardware or software technologies. New hardware includes technologies of the type or purpose that the company did not previously possess, and new production lines.” The cumulative target for Year 5 is 60. To date, 95 beneficiaries have adopted new technologies as a result of EMPOWER support of which 5 occurred in Q20. New jobs at PBs: This is EMPOWER’s most important indicator. Jobs are considered attributable when they are generated by EMPOWER support for production facilities and consequent sales expansion, for trade show attendance producing sales contracts, or for skills training/internships leading to employment. Jobs are (i) full-time; (ii) part-time where two part-time jobs equal one full- time job; (iii) seasonal full-time equivalent calculated as 1,800 hours/year; and (iv) inferred employment calculated based on PB sales increase at market development activities that have not been reported otherwise. Beneficiaries created 335 new (gross) attributable jobs in Q20, bringing the cumulative total since the beginning of the project to 4,492, while the Year 5 cumulative target is 5,000. In Q18, following USAID/Kosovo representatives’ recommendations, EMPOWER revised its methodology on calculating seasonal and inferred employment in order to match the methodology used by USAID AGRO in Kosovo. Considering that EMPOWER aggregates all new/net full-time employment at individual companies quarterly, EMPOWER will continue with the same calculation for full-time employment. The methodology on calculating full-time equivalent (FTE) from seasonal employment was ‘1,800 hours/year over 3 years’ and from inferred employment was ‘sales / industry ratios / 3years’. However, harmonizing the methodology with USAID AGRO, EMPOWER has redefined its methodology to ensure employment sustainability while taking into consideration that a FTE is a new job even when EMPOWER does not have further information on the continuation of the job. For example, for seasonal employment, EMPOWER ensures that the 1,800 hours/year criteria is met, and if in one period there are 5 FTEs from seasonal workers and in another there are 7 FTEs, EMPOWER reports 5 FTEs in the first round and only 2 more in the second round as the initial 5 is considered to be sustained employment. Nonetheless, if in another period there are 3 FTEs from seasonal workers, EMPOWER does not report an increase. At the same time, for inferred employment, EMPOWER calculates employment based on sales for year one, and then reports an increase only when there is an increase. Investment leverage: The indicator is defined as the total cash cost of an EMPOWER-supported activity divided by the EMPOWER cash investment, excluding EMPOWER staff and operational costs, aggregated across all funded activities. The cumulative Year 3 target was 3.0x, and the project actually achieved 5.28x through Q20. The 5.28x is a result of $4.48 million disbursed by EMPOWER to date, plus $16.47 million provided by private companies and $2.03 million provided by collaborating institutions. EMPOWER also tracks but does not target certain other indicators, as follows: Number of primary beneficiaries: A subset of PMI #1, this indicator reports only on PBs that have “participated in or obtained direct support from any Project Activity.” To date, 478 of the beneficiary companies were PBs. The indicator counts beneficiaries as unique companies, controlling for duplicates from EMPOWER activities in a former period or in more than one activity.

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EMPOWER Private Sector Activity

Number of primary microenterprise beneficiaries: To date, 178 PBs, for which EMPOWER has detailed information, were microenterprises defined as “PBs that had <10 employees at the time they applied for EMPOWER support, which means the submission date of the (first, if more than one) Concept Note.” Number of start-up PBs: 19 of our PBs were start-ups, no more than one year before the date that they applied for EMPOWER support through Q20. Number of domestic supplier beneficiaries: The revised PBMS includes as a separate tracked, but not targeted, PMI the number of domestic supplier beneficiaries defined as “a domestic company, non- governmental organization, and individual that supplies production inputs to Primary Beneficiaries (PBs), confirmed through interviews with PBs.” Currently, the number of estimated SBs is higher, yet 151 SBs have been confirmed through interviews. CI Finance: Total collaborating institution (donors and local government) cost-share of EMPOWER- supported activity investment through Q20 is $2.03 million. Aggregate Private Institutional Finance: Based on interviews with PBs and accepted as part of companies’ cost-share through EMPOWER’s Grants Department, the cumulative “increase in aggregate total new loans or investments from financial institutions of PBs from the time they became EMPOWER beneficiaries” through Q20 was $5.53 million. Value of Foreign Direct Investment: To date, one EMPOWER PB received $280,000 as Foreign Direct Investment (FDI). Value of Private Investment: Private co-finance in EMPOWER-supported activities by PBs and other non-institutional investors is $11.34 million. This cost-share is cumulative through Q20. Total Impact – Sales at Beneficiaries (PBs and SBs): Sales of beneficiaries are defined as “Attributed sales of beneficiaries, aggregated over all such beneficiaries, calculated based on sector multipliers and sales of PBs. Multipliers are averages of sector relevant multipliers developed in Kosovo’s regional neighbors that most closely resemble today’s Kosovar economy.” This indicator was introduced in revision #7 to better reflect the overall economic impact of EMPOWER’s activities. (For sector multipliers, see Table 19.) Based on to-date sales of PBs, the total sales impact is $610 million through Q20. Total Impact – Sales Increase at Beneficiaries (PBs and SBs): Sales increase of beneficiaries are defined as “Attributed sales increase of beneficiaries, aggregated over all such beneficiaries, calculated based on sector multipliers and sales increase of PBs. Multipliers are averages of sector relevant multipliers developed in Kosovo’s regional neighbors that most closely resemble today’s Kosovar economy.” This indicator was introduced in revision #7 to better reflect the overall economic impact of EMPOWER’s activities. (For sector multipliers, see Table 19.) Based on to-date increase of sales of PBs, the total sales increase impact is $303 million. Total Impact – New Jobs at Beneficiaries (PBs and SBs): Similar to total impact of sales and sales increase, new jobs at beneficiaries are calculated based on multipliers and jobs at PBs. Based on 4,492 new jobs at PBs and sector multipliers outlined above, the total job impact at PBs and SBs is 10,590 through Q20. Number of new product quality certifications obtained by PBs: To date, 16 PBs obtained 51 formal certifications for product quality/safety. Skills certifications: 913 individuals received skill certifications after attending EMPOWER-supported activities through Q20. Person-hours of workforce skills training: Individuals attended 480K hours of workforce skills training.

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EMPOWER Private Sector Activity

Jobs – Women (PBs): The revised PBMS tracks the aggregate number of new jobs for women created by PBs and attributable to project activities. To date, women filled 1,655 of the new jobs, 112 of which were created in Q20. Jobs – Youth (PBs): Cumulative Q20 actual jobs for youth are 1,364, of which 89 were created in Q20. Jobs – Minorities (PBs): Cumulative Q20 actual jobs for ethnic minorities are 465, of which 28 were created in Q20. Minorities are ethnicities (other than Albanian in south Kosovo), including Serbs from NK. Jobs – North Kosovo (PBs): EMPOWER’s interventions in business competitiveness and training in this priority region created 465 new jobs—25 in Q20 alone—in NK. Women in Management (PBs): EMPOWER encourages its PBs to promote social inclusion in job creation, including creating jobs for women in management. To date, beneficiaries have created 86 new management jobs for women, of which 7 were created in Q20. Trainees (PBs): To date 3,919 individuals participated in project-supported workforce activities. 1,715 women 1,707 youth (aged 18–24) 165 ethnic minorities 126 in NK In Q20, 301 individuals participated in these activities. 111 women 99 youth (aged 18–24) 1 ethnic minorities - in North Kosovo Interns/Apprentices (PBs): 2,441 individuals participated in internships/apprenticeships in project- supported WfD activities. 1,084 women 1,258 youth (aged 18–24) 57 ethnic minorities 21 in North Kosovo In Q20, 241 individuals participated in these activities: 107 women 80 youth (aged 18–24) 1 ethnic minorities - in North Kosovo

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EMPOWER Private Sector Activity

3.2 PMI Summary Table 19: PMI Summary through Q20 Actuals—Targeted Indicators

Target (Cumulative) 2015 2016 2017 Reporting Data Total Frequenc Source Sourc 2018 2019 Increase y e / Performance Target Actual Targe Actua Target Actual Targe Actual Target Actual Component/ AO # AIR1 Indicator Unit t l t Beneficiaries 1 Custo Number of # 150 91 260 340 300 433 350 571 400 400 Quarterly, Activities 629 m beneficiary entities Annual 2 F / all Attributed aggregate $000 64,981 134,393 97,47 254,176 150,00 150,000 Activities, 373,116 sales of PBs 1 0 Surveys 1. 3 F / all Attributed aggregate $000 6,608 1,065 61,82 15,58 28,000 56,029 56,00 106,003 100,00 100,000 Competitiveness sales increase of 4 0 0 0 184,733 PBs 4 F / all Attributed aggregate $000 3,102 738 16,75 8,208 10,304 25,345 30,83 49,933 50,000 50,000 exports increase of 5 7 85,012 PBs 5 Custo Business size # 5 4 10 16 15 23 20 28 25 25 Quarterly, 39 m / all expansion (PBs) Annual 6 CDCS Number of new # 10 26 20 111 30 169 40 242 50 50 / all geographic markets 273 entered by PBs 7 CDCS Number of new # 10 16 20 48 30 156 40 257 50 50 328 / all products sold by PBs 8 F / Number of PBs that # 26 20 38 40 48 60 55 80 80 all have adopted new 95 technologies 2. Job Creation 9 F / # 250 465 2,800 1,272 2,250 2,473 3,250 3,608 5,000 5,000 Quarterly, Activities, 2.1, New jobs at PBs 4,492 Annual Surveys 2.2 Leverage 1 Custo ratio 3.0x 5.5x 3.0x 5.8x 3.05x 5.05x 3.0x 5.4x 3.0x 3.0x Quarterly, Activities, Investment leverage 5.2x 0 m Annual Surveys 1AIR = Activity Intermediate Result (see PBMS causal model) 2Total activity funding from all sources divided by EMPOWER investment. Note: Monetary values originally in € and converted to $ at 1.12.

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Table 20: PMI Summary through Q20 Actuals Additional Tracked/Non-Targeted Indicators

Reporting Data Cumulative Component/ Performance Indicator Unit Frequency Source AO # Source / AIR 2015 2016 2017 2018 2019 1. 1.1 Custom Number of Primary Beneficiaries # 91 183 256 426 478 Competitiven Number of Primary Microenterprise 1.1.1 Custom # 64 111 125 176 178 ess Beneficiaries 1.1.2 Custom Number of Start-up PBs # 11 19 19 19 1.2 Custom Number of Domestic Supplier Beneficiaries # 157 177 145 151 10.1 Custom CI Finance $000 1131 1135 1678 2034 10.2 F, Custom Aggregate Private Institutional Finance $000 3735 3297 5388 5533

10.3 Custom Value of Foreign Direct Investment $000 280 280 280 280 Quarterly, Activities 10.4 Custom Value of Private Investment $000 3759 7804 9558 11347 Annual Total Impact – Sales at Beneficiaries (PBs 11.1 Custom $000 and SBs) 414,735 610,708 Total Impact – Sales Increase at 11.2 Custom $000 Beneficiaries (PBs and SBs) 173,288 303,134 Total Impact – New Jobs at Beneficiaries 11.3 Custom # (PBs and SBs) 8,702 10,590 12 F / 1.1 Number of new product quality # 1 7 21 32 51 certifications obtained by PBs 2. Job 13 F / 2.1 Number of workers with certified job # 35 380 674 757 913 Creation skills/qualifications 14 F / 2.1 Person-hours of workforce and 000 115 225 329 343 480 management skills training Quarterly, Activities 9.1 F, Custom / Jobs – Women (PBs) # 255 630 943 1306 1655 Annual 2.21 9.2 Jobs – Youth (PBs) # 289 672 1030 1186 1364 9.3 Jobs – Minorities (PBs) # 27 144 212 361 465 9.4 Jobs – North Kosovo (PBs) # 21 116 202 390 465

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Reporting Data Cumulative Component/ Performance Indicator Unit Frequency Source AO # Source / AIR 2015 2016 2017 2018 2019 9.5 Women in Management (PBs) # 28 47 51 86 15 Trainees (PBs) # 503 878 1474 2291 3919 15.1 Trainees – Women (PBs) # 328 512 812 1137 1715 15.2 Trainees – Youth (18–24) (PBs) # 354 561 900 1191 1707 15.3 Trainees – Minorities (PBs) # 6 65 93 110 165 15.4 Trainees – North Kosovo (PBs) # 1 54 75 75 126 16 Interns/Apprentices (PBs) # 383 559 1004 1800 2441 16.1 Interns – Women (PBs) # 243 329 500 812 1084 16.2 Interns – Youth (18–24) (PBs) # 280 421 706 998 1258 16.3 Interns – Minorities (PBs) # 5 10 38 53 57 16.4 Interns – North Kosovo (PBs) # 1 22 21 21

1 Jobs, trainees, and interns/apprentices in subcategories are not additive: they overlap; also, interns/apprentices are a sub-category of trainees.

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Table 21. EMPOWER-Supported Trade Fairs Results

EMPOWER-Supported Trade Fairs Results # Trade Fair Sector Location Date # PB firms Sales $000 Assistance $000 LoP Actual EMP Co-Fin

1 IF Wedding; TEXPO Apparel Izmir; Istanbul Feb 15 3 2 4

2 ITB 2015 Tourism Berlin Mar 15 5 127 4 31 3 Furniture Tirana 2015 Wood Tirana Mar 15 4 622 446 6 10

4 Destinations Nature Tourism Paris Mar 15 4 26 8 10 2015 5 Energetika Energy Zagreb Apr 15 1 421 1,361 4 7 6 Textile, Facon and Apparel Tirana Jun 15 8 538 113 13 46 Fashion 7 MOW Germany 2015 Wood Hanover Sep 15 2 1,680 1,296 21 36

8 Adventure Travel Tourism Chile Oct 15 2 2 5 2 World Summit 9 A+A 2015 Apparel Dusseldorf Oct 15 3 187 250 2 6 10 Investment & Trade ICT Chicago Nov 15 2 3 - Conference 11 World Travel Market Tourism London Nov 15 5 109 18 20

12 SwissBau 2016 Wood Basel Jan 16 3 2,352 1,551 28 52 13 IMM Cologne Furniture Wood Cologne Jan 16 5 1 5 Fair 2016 14 GDS Fair Apparel Dusseldorf Feb 16 2 909 1 5 15 ITB 2016 Tourism Berlin Mar 16 7 343 9 20 16 Furniture Tirana 2016 Wood Tirana Mar 16 6 1,483 524 11 26

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17 Destinations Nature Tourism Paris Mar 16 5 73 3 12 2016 18 Skopje Furniture Fair Wood Skopje Mar 16 3 519 391 10 25 2016 19 Skopje Fashion Apparel Skopje Apr 16 2 1 8 Weekend 20 Wire & Tube Fairs Metal Dusseldorf Apr 16 5 8 1 7 21 Milan Furniture Fairs Wood Milan Apr 16 4 2 4

22 Xylexpo Furniture Fair Wood Milan May 16 0 0.4 -

23 Green Festival Energy Pristina May 16 15 23 18 24 Bern Workwear Fair Apparel Bern Jun 16 3 54 63 20 26

25 International Foods Other Tampa, Jul 16 2 11 21 EPPS Fair Florida 26 MOW 2016 Wood Hanover Sep 16 5 1,652 1,033 21 28 27 Premier Vision, Paris Apparel Paris Sep 16 4 112 - 1 6

28 Adventure Travel Tourism Anchorage, Sep 16 4 168 11 11 World Summit, Alaska Alaska

29 The Digital Show, ICT London Sep 16 1 202 9 3 2 London 30 Emilia Romagna, Other Emilia Sep 16 1 95 34 1 1 Motorfest Romagna 31 Kosovo Wood Industry Wood Pristina Oct 16 17 20 4 Convention 2016

32 STIKK B2Bs, Germany ICT Cologne; Nov 16 7 4 17 Frankfurt; Darmstadt

33 Performance Days Apparel Munich Nov 16 4 4 6 34 BAU Energy Munich Jan 17 6 112 1 7 35 IMM Cologne Furniture Wood Cologne Jan 17 4 4,200 1,096 55 99 Fair 2017

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36 Gulfood Fair Other Dubai Mar 17 2 1 4 37 JEC World 2017 Other Paris Mar 17 1 336 482 5 7 38 ITB 2017 Tourism Berlin Mar 17 8 560 300 7 29 39 Destinations Nature Tourism Paris Mar 17 4 143 12 4 7 2017 40 Furniture Tirana 2017 Wood Tirana Mar 17 2 336 - 2 9

41 Skopje Furniture Fair Wood Skopje Mar 17 2 336 105 7 8 2017 42 B2B Macedonia Apparel Tetovo Apr 17 4 17 95 0.3 1 Workfair 43 Ligna Fair - Technology Wood Hanover May 17 12 5 8 and Forestry

44 Green Festival 2 Energy Pristina Sep 17 22 824 69 18 45 A+A 2017 Apparel Dusseldorf Oct 17 3 125 1,237 17 25 46 STIKK B2Bs, Germany ICT Munich; Oct 17 11 224 5 33 Nuremberg 47 ECRM Other Miami, Nov 17 1 336 66 12 11 Florida 48 Kosovo Apparel Apparel Pristina Nov 17 22 62 112 Industry Convention 2017 49 Tirana International Energy Tirana Nov 17 4 168 10 3 3 Fair 50 Diaspora Economic General Pristina Nov 17 133 336 527 29 24 Forum 51 Belgrade Furniture Fair Wood Belgrade Nov 17 11 29

52 Kosovo Wood Industry Wood Pristina Dec 17 21 2 1 Convention 2017

53 IMM Cologne Furniture Wood Cologne Jan 18 3 1,120 1,784 34 144 Fair 2018 54 SwissBau 2018 Wood Basel Jan 18 7 3,640 5,322 31 67 55 ITB 2018 Tourism Berlin Mar 18 5 - 29 717

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56 Destinations Nature Tourism Paris Mar 18 1 - 23 188 2018 57 Light + Building Energy Frankfurt Mar 18 1 112 125 - - 58 Ibatech Fair Other Istanbul Apr 18 1 17 - 59 Adriatic Fair Energy Budva Apr 18 1 56 59 1 1 60 EuroCucina Wood Milan Apr 18 11 17 11 61 Automechanika Fair Energy Frankfurt Sep 18 1 112 29 34 8

62 Green Festival 3 Energy Pristina Sep 18 30 70 40 42 63 Western Balkans ICT Talinn, Oct 18 2 2 1 Business Forum Estonia 64 Kosovo Apparel Apparel Pristina Nov 18 22 18 - Industry Convention 2018

65 STIKK Match-Making ICT Nuremberg Nov 18 10 4 36 B2B 66 Kosovo Wood Industry Wood Pristina Dec 18 22 23 8 Convention 2018

67 IMM Cologne Furniture Wood Cologne Jan 19 4 1,792 193 11 215 Fair 2019 68 ISM Fair Other Cologne Jan 19 3 1 2 69 BIOFACH Fair 2019 Other Nuremberg Feb 19 1 2 3 70 BIOFACH Fair 2018 Other Nuremberg Feb 18 1 391 1 71 Intersolar Fair Energy Munich May 19 6 81 1 6 72 Vienna Fair General Vienna Apr 19 8 - 9 73 Mission to Belgium Wood Brussels May 19 5 - 3 5 74 NY Conference ICT New York May 19 8 10 - 94 75 Economic Conference Other Prishtina May 19 49 336 96 32 42 of Albanian Diaspora

76 Green Festival 4 Energy Prishtina Sep 19 - - TOTAL 619 $ 25,053 $ 20,618 $ 1,301 $ 2,480

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