USAID ECONOMIC RESILIENCE ACTIVITY: YEAR THREE IMPLEMENTATION AND COORDINATION PLAN

This publication was produced by the USAID Economic Resilience Activity under Contract No. 72012118C00004 at the request of the United States Agency for International Development. This document is made possible by the support of the American people through the United States Agency for International Development. Its contents are the sole responsibility of the author or authors and do not necessarily reflect the views of USAID or the U.S. Government.

USAID ECONOMIC RESILIENCE ACTIVITY

YEAR THREE IMPLEMENTATION AND COORDINATION PLAN

Program Title: USAID Economic Resilience Activity

Sponsoring USAID Office: USAID Ukraine

Contract Number: 72012118C0000472012118C00004

Contractor: DAI Global, LLC

Submission Date: August 31, 2020

Author: DAI Global, LLC

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TABLE OF CONTENTS

ACRONYMS AND ABBREVIATIONS 5 EXECUTIVE SUMMARY 9 INTRODUCTION 11 BRIEF SUMMARY OF OBJECTIVES 11 ACTIVITY LOCATION AND CONTEXT 12 COLLABORATION, LEARNING, AND ADAPTATION (CLA) 13 WORKPLAN ACTIVITIES AND DELIVERABLES 14 1.0. INCLUSION 14 1.1. INCREASING CAPABILITIES 14 1.2. INCREASING OPPORTUNITIES 20 2.0. MSME GROWTH 30 2.1. MARKET EXPANSION 30 2.1.1. BIOFUELS GROWTH SECTOR 30 2.1.2. HONEY GROWTH SECTOR 33 2.1.3. INNOVATIONS FOR MANUFACTURING (IM) GROWTH SECTOR 36 2.1.4. IT GROWTH SECTOR 39 2.1.5. SEA OF AZOV TOURISM GROWTH SECTOR 41 2.1.6. VEGETABLES GROWTH SECTOR 45 2.1.7. GROWTH – CROSSCUTTING 51 2.2. INVESTMENT ACCELERATION FOR MSMES 52 3.0. TRANSFORMATION 55 3.1. INTRAREGIONAL INTERVENTIONS 57 3.2. REGION 1 – LUHANSK OBLAST 65 3.3. REGION 2 – NORTHERN DONETSK OBLAST 68 3.4. REGION 3 – CENTRAL DONETSK OBLAST 70 3.5. REGION 4 – MARIUPOL 72 3.6. REGION 5 – AZOV SEA COAST 75 CROSSCUTTING ISSUES 77 4.1. COMMUNICATIONS 77 4.2. ENVIRONMENTAL COMPLIANCE 78 4.3. ADAPTIVE MANAGEMENT LEARNING 81 PERFORMANCE INDICATORS AND TARGETS 84 MANAGEMENT 86 RISKS AND ASSUMPTIONS AFFECTING IMPLEMENTATION 91 COORDINATION PLAN 93 ANNEX A – WORKPLAN SUMMARY OF INTERVENTIONS 98

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INDEX OF TABLES

Table 1: "MODEL CITIES" STUDY RESULTS 56 Table 2: SCHEDULE OF PAUSE AND REFLECT SESSIONS 82 Table 3: ERA PERFORMANCE INDICATORS 84 Table 4: ERA BUDGET FY 2021 91 Table 5: ERA COORDINATION PLAN 94

INDEX OF FIGURES

Figure 1: ERA SITES WITHIN 20 KM OF THE CONTACT LINE 2020 13 Figure 2: INDICATIVE PIPELINE FOR 4 INVESTMENT TRANSACTIONS 54 Figure 3: MAP OF ERA SUBREGIONS 56 Figure 4: GoU FIVE-STAGE PLAN FOR REMOVING QUARANTINE RESTRICTIONS 88 Figure 5: TECHNICAL TEAM ORGANIGRAM 89 Figure 6: OPERATIONS TEAM ORGANIGRAM 91

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ACRONYMS AND ABBREVIATIONS

AGRO Agriculture Growing Rural Opportunities

AMELP Activity, monitoring, evaluation, and learning plan

ARDS Agriculture and Rural Development Support

APS Annual program statement

ATO Anti-Terrorism Operation

BEO Bureau Environmental Officer

B2B Business to business

CAP Credit for Agricultural Producers

CEP Competitive Economy Program

CIS Commonwealth of Independent States

CLA Collaboration, Learning, and Adaptation

COP - Chief of Party

COR Contracting Officer’s Representative

CSO Civil society organization

CSR Corporate social responsibility

Dahl Volodymyr Dahl East Ukrainian National University

DCOP Deputy Chief of Party

DCCI Donetsk Chamber of Commerce and Industry

DFID Department for International Development (UK)

DG East Democratic Governance East

DNTU Donetsk National Technical University

DO Donetsk Oblast

DO/LO Donetsk and Luhansk Oblasts

DOSA Donetsk Oblast State Administration

DRC Danish Refugee Council

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EBRD European Bank for Reconstruction and Development

EDCARP Entrepreneurship Development for Conflict-Affected Rural Population - We Prosper (Canada)

EIB European Investment Bank

EMMP Environmental mitigation and monitoring plan

ERA Economic Resilience Activity

ERC Environmental review checklist

ESP Energy Security Program

FAO Food and Agriculture Organization

FHI 360 Family Health International 360 (NGO)

G.A.P. Good Agricultural Practices

GBV Gender-based violence

GCA Government-controlled area

GoU Government of Ukraine

HACCP Hazard Analysis and Critical Control Point

ICA Independent Consultant Agreement

IDP Internally displaced person

IEE Initial environmental evaluation

IFC International Finance Corporation

IFI International financial institution

IM Innovations for Manufacturing

IOM International Organization for Migration

IT Information technology

JFO Joint Forces Operation

KfW Kreditanstalt für Wiederaufbau

LGBTI Lesbian, gay, bisexual, transgender, and intersex

LNAU Luhansk National Agrarian University

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LO Luhansk Oblast

LOSA Luhansk Oblast State Administration

M&E Monitoring and evaluation

MEL Monitoring, evaluation, and learning

MEO Mission Environmental Officer

MERP Municipal Energy Reform Project

MoES Ministry of Education and Science

MoU Memorandum of understanding

MSME Micro, small, and medium enterprise

MSRA Market systems resilience assessment

NGCA Nongovernment-controlled area

NGO Nongovernmental organization

NIP Neighborhood Investment Platform

OTI Office of Transition Initiatives

PLEDDG Partnership for Local Economic Development and Democratic Governance

PSTU Pryazovskyi State Technical University

PULSE Policy for Ukraine Local Self-Governance

PYD Positive Youth Development

RFA Request for application

RFP Request for proposal

RTC Regional training center

R&D Research and development

SFSCPS State Food Safety and Consumer Protection Service

SME Small and medium enterprises

SoW Scope of work

STTA Short-term technical assistance

TA Technical assistance

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TVET Technical vocational education and training

UCBI II Ukraine Confidence Building Initiative II

UCMC Ukraine Crisis Media Center

UNDP United Nations Development Programme

UNFPA United Nations Population Fund

UNHCR United Nations High Commissioner for Refugees

USAID United States Agency for International Development

UUCU Ukrainian United Credit Union

VET Vocational education and training

WFD Workforce development

Y1 Year 1

Y2 Year 2

Y3 Year 3

ZO Zaporizhzhia Oblast

ZOSA Zaporizhzhia Oblast State Administration

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EXECUTIVE SUMMARY

The residents of eastern Ukraine have suffered greatly since armed conflict started and eastern oblasts were severed in 2014. The United States Agency for International Development (USAID) funded the Economic Resilience Activity (ERA) to help stabilize and rebuild the eastern Ukrainian economy. The COVID-19 virus was declared a pandemic in March 2020 as it spread quickly throughout the world and upended economies globally, including in eastern Ukraine. In August 2020, USAID funded a 12-month extension of ERA to continue assistance stabilizing the economy of eastern Ukraine, mitigate the economic impact resulting from the COVID-19 pandemic, and support economic recovery through August 2024.

The ERA team enters Year 3 (Y3) by refocusing its efforts, scaling up its most successful interventions, and beginning new interventions to support the people and micro, small, and medium enterprises (MSMEs) of eastern Ukraine adjust to the constraints of COVID-19 restrictions on assembly and movement. The Inclusion, Growth, Transformation, and Communications teams will meet the challenges of Y3 with a tightly integrated plan that will support eastern Ukrainian transformation in an economic environment that has become even more difficult in the last six months of program Year 2 (Y2).

ERA’s work in its Inclusion component aims to bring more people into the economic life of eastern Ukraine by providing them with the capabilities to realize their potential in the economic sphere, with a special focus on including members of vulnerable and hard-to-reach populations.

In Y3, the Inclusion team will strengthen the small business ecosystem for vulnerable populations by: • Increasing the capacity of nongovernmental organizations (NGOs) to serve marginalized populations with an emphasis on improving their project and management capabilities as well as their training abilities • Providing training in professional and business skills through NGOs • Promoting social entrepreneurship and corporate social responsibility through training and consultations • Supporting the expansion of MSMEs owned by or employing vulnerable populations through training on the business-to-business (B2B) sector

As part of the Inclusion component, ERA’s Workforce Development (WFD) team aims to include more residents of eastern Ukraine into the workforce by providing them with better opportunities for education and careers that will allow them to lead productive and satisfying lives in the region. ERA’s WFD interventions are designed to:

• Align skills with the demands of the labor market by strengthening linkages between educational institutions and business, updating curricula, and developing opportunities for dual education and practical training • Attract and retain workers and future graduates to the region by upgrading university career services, training employers on strategies for employee retention, supporting businesses and universities to engage more effectively with young people, and raising young people’s awareness of educational and professional opportunities in the region • Invigorate the development of an innovation ecosystem by modernizing the curricula and technical facilities of selected educational institutions, such as Luhansk National Agrarian University (LNAU), Pryazovskyi State Technical University (PSTU) and Volodymyr Dahl East

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Ukrainian National University (Dahl), and supporting science, technology, engineering, and mathematics (STEM) education centers in the Donetsk and Luhansk Oblasts (DO/LO).

As part of ERA’s COVID-19 response, the Inclusion team will: • Support victims of gender-based violence (GBV) by aiding shelters and providing training to increase their economic resilience • Support members of vulnerable populations, educational institutions, and local governments switch to more online communication by upgrading skills and, in the case of educational institutions, providing equipment

The MSME Growth team has identified many important initiatives taking off across the Activity’s growth sectors:

• The Biofuels team will develop biofuel production projects to serve as models for the region’s consolidated communities and farmers to collaborate on the production of green energy. • In the Honey sector, ERA will improve the quality and availability of inputs for the region’s beekeepers by partnering with hive and other equipment manufacturers to offer discounted inputs, supporting local bee breeding, and production of inputs lacking in the region such as bee syrups and honeycomb bases. The Activity will increase beekeepers’ ability to offer higher value-added products such as organic honey. It will also continue its work combating bee mortality by promoting cooperation with farmers. • The Innovations for Manufacturing (IM) team will offer online core marketing training and coaching to selected companies to reach new markets and then provide them with grant support to realize their plans. • Our IT activities will focus on building IT association and cluster capacity, including supporting IT centers such as Mariupol 1991, foster stronger private sector/education sector linkages, support IT firms’ market expansion efforts, and incentivize their transition from outsourcing to product development. • The Tourism team will continue to plan for the future and support the Sea of Azov region in developing new tourism products, establishing a regional brand, improving local skills and training, and supporting nascent tourism associations. It will also provide substantial support to improving the recreational offerings of Meotyda and Pryazovskyi National Nature Parks. • In the Vegetables growth sector, ERA will continue to scale up its support of cooperatives to new growers’ clusters and assist them expand and diversify their markets. As part of its response to COVID-19, ERA will provide support for new direct-to-consumer (D2C) channels, support farmers’ increased use of online communication, launch an “Eat Local” campaign, improve the sanitation and aesthetics of urban markets, and provide consulting support for pivoting to new markets. • ERA will be accelerating MSME investment through Y2 grants to the Ukrainian United Credit Union (UUCU) and the Western NIS Small Enterprise Fund (WNISEF), increasing the engagement of MSMEs in the 5-7-9 Loan program, providing demand-driven transaction advisory services, and developing an investment vehicle with DAI Capital.

The Transformation team has a four-pronged approach to supporting eastern Ukraine: driving vision/planning, promoting innovation/supporting educational institutions, beautification /attractiveness, and infrastructure investment. These workstreams are based on the recommendations of the Y2 study that ERA commissioned about Pittsburgh and other U.S. and European “Model Cities” that have undergone successful economic transformations, and they distill the factors for those cities’ successes. We have developed these four workstreams for the region as

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well as for its five subregions—the Luhansk Oblast (LO), the Northern Donetsk Oblast (DO), the Central Donetsk Oblast, Mariupol, and the Sea of Azov Coast.

• Driving Vision/Planning—ERA will support the seven “Coal Cities” in the Central Donetsk Oblast develop a common vision and transformation strategy and continue support of Mariupol’s strategic plan development. It will get the word out to a wider public about the visions and plans developed in Y2 with partner communities and support local leaders develop contacts with their counterparts in “Model Cities.” It will support DO and LO develop a strategy for their most promising areas for innovation (SMART specialization), and it will begin visioning and strategic plan development with the city of Kramatorsk. • Promoting Innovation—The interventions of the WFD team to improve the educational institutions of the region are a key aspect of the Transformation team’s work and will occur in each of the subregions. They include supporting Donetsk National Technical University (DNTU) create an Accelerator for Youth Innovations and equipping laboratories at Dahl University and Pryazovskyi State Technical University. • Beautification/Attractiveness—ERA is supporting several construction projects, including an ice-skating rink in Bakhmut, landscaping in Berdiansk, and an upgrade of bus stops in Mariupol. It will also organize public events, such as “Screen on the Green,” to increase cities’ attractiveness for the local population. • Infrastructure Investment—ERA will focus on supporting our partners in the region obtain financing from international financial institutions (IFIs) and the Ukrainian state budget. ERA plans, circumstances permitting, to organize a forum for international investors in Kramatorsk. ERA will continue its work supporting the Luhansk Oblast State Administration (LOSA) develop documentation for European Investment Bank (EIB) financing for several social infrastructure projects. It will provide project support as well for the railway connection of the LO eastern districts to the Ukrainian national rail network. ERA will also provide training and consultations for city and oblast staff on the financing application process and monitoring and evaluation requirements.

The Activity will accompany all this with Communications support that is tightly integrated into each team’s work. The work of the Communications team will increase participation in our programs among members of vulnerable populations, raise these groups’ profile, promote their participation in the region’s economic life, and assist enterprises in our growth sectors better market their products. We will get the message out about the region’s transformation activities— the new visions, the strategic plans, the increased investment, the public events, the increased social and recreational facilities, the improved education—to improve residents’ and investors’ perception of eastern Ukraine as a great place to live, work, and invest.

INTRODUCTION

BRIEF SUMMARY OF OBJECTIVES The six-year (2018–2024) ERA was designed to improve the economy of eastern Ukraine in light of the conflict with Russia-backed forces in the east, which has cost more than 13,000 lives, upended the economy of the region, displaced 1.5 million people from their homes and jobs, and left millions of Ukrainians economically distressed. ERA’s target geographic regions include the Ukrainian Government-controlled areas (GCA) of Donetsk and Luhansk Oblasts—the oblasts most affected by the eastern conflict—and selected cities in the Azov Sea region. The latter were added in 2019 in

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response to the Russian Government’s intermittent blockade and other shipping restrictions in the Sea of Azov.

ERA’s work is centered on three pillars that correspond to the three main contract objectives and are the names of the Activity’s core teams: 1. Inclusion: building the capabilities of vulnerable populations—such as women, persons with disabilities, and ethnic minorities—to participate in the economic life of the region and supporting educational and career development opportunities for the population in general that will result in the growth of the region’s MSME sector. 2. Growth: helping MSMEs in six sectors—honey, information technology (IT), vegetables, innovative manufacturing, biofuels, and tourism—diversify markets, reach new buyers, attract needed investments, grow, and create new jobs. 3. Transformation: working with coalitions and leaders to articulate a vision for the future and put in place a modern, diverse, and MSME-friendly economy that can attract the significant infrastructure funds needed to support that vision.

ACTIVITY LOCATION AND CONTEXT In Y3, the team will continue to focus its interventions on the government-controlled areas (GCAs) of the Donetsk and Luhansk Oblasts and the towns spanning the Azov Sea coastline in the Donetsk, Zaporizhzhia, and Kherson Oblasts. With the Contracting Officer’s Representative (COR)’s concurrence, ERA expanded its work in 2020 to the Kherson Oblast’s coastal Henichesk Raion, which allows for the inclusion of the Crimean Tatars at the edge of the Crimean Peninsula.

In the Activity contract, “eastern Ukraine” refers to the Donetsk, Luhansk, Kharkiv, Dnipro, Zaporizhzhia, Odesa, Kherson, and Mykolaiv Oblasts. As the Activity progresses and dynamics in the region evolve, the team may expand the geographic focus to other eastern oblasts, with the approval of the COR. The focus on eastern Ukraine does not limit the geographic scope of the Activity, since interventions will also link eastern Ukraine with other parts of the country, the European Union, and other international markets.

ERA has made a special effort to support the GCA close to the contact line with the nongovernment-controlled area (NGCA). Below is an overview of the growth sectors and grant sites within 20 kilometers of the Contact Line, including the recent additions of Sartana and Pavlopil near Mariupol.

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Figure 1: ERA SITES WITHIN 20 KM OF THE CONTACT LINE 2020

COLLABORATION, LEARNING, AND ADAPTATION (CLA) The Activity team takes a CLA approach to all interventions and can serve as a model to other donor projects. To illustrate how engrained this approach is in adaptive project management, the ERA team organized more than 10 pause-and-reflect sessions in Y2. Meanwhile, interventions build off of analysis of data gathered during rapid assessments, and Y3 interventions will build off of lessons learned during Y1 and 2. The team meets at critical junctures for these sessions, where it develops hypotheses and designs interventions based on the team’s assessment of which approaches have the most potential going forward in light of what we have learned. After the pilot interventions are completed, the team carries out purposeful reflection and analysis about whether anything could have been done better. If successful, the interventions are then scaled up. A learning harvesting log helps the teams be strategic about plans to test hypotheses and share learning with donors, partners, and partner projects. The Monitoring, Evaluation, and Learning (MEL) section below goes into more detail on plans for CLA during the coming year.

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WORKPLAN ACTIVITIES AND DELIVERABLES

1.0. INCLUSION

Total Y3 Grants Budget: $2,966,680 Total Y3 Procurement Budget: $401,600 Total Local Consultant Days: 362 Total Foreign Consultant Days: 35

ERA’s work in its Inclusion component aims to bring more people into the economic life of eastern Ukraine by providing them with the capabilities to realize their potential in the economic sphere. ERA has a special focus on including members of vulnerable and hard-to-reach populations, among them women, youth, the elderly, internally displaced persons (IDPs), the lesbian, gay, bisexual, transgender, and intersex (LGBTI) community, Roma, Anti-Terrorism Operation (ATO) and Joint Forces Operation (JFO) veterans, and people with disabilities.

Also, in this component, ERA’s WFD team aims to include more residents of eastern Ukraine into the workforce by providing them with better opportunities for education and careers that will allow them to lead productive and satisfying lives in the region. The WFD team will work intensively with the business community and educational institutions to align educational programs with business needs, retain workers and future graduate in the region, and invigorate the development of an innovation ecosystem.

1.1. INCREASING CAPABILITIES

In Y3, the Inclusion team will focus on improving the business ecosystem for vulnerable and hard-to- reach populations by expanding the capabilities of the business associations and nongovernmental organizations (NGOs) that serve them. ERA will support the private sector to explore and implement social entrepreneurship programs and to integrate the practice of corporate social responsibility (CSR). The Inclusion team will also continue supporting the development and expansion of MSMEs owned by or serving vulnerable populations. As part of this work, it will conduct trainings on the opportunities for MSMEs in the business-to-business (B2B) segment. To this end, it will also raise the profile of vulnerable populations by promoting success stories in the media that will also increase awareness of ERA programs among vulnerable populations. And as part of our COVID-19 response, we will work to improve the computer literacy of vulnerable populations. We will also provide special support to women who have suffered due to the increase in GBV as a result of the pandemic.

1.1.1. Strengthen the small business ecosystem for vulnerable and hard-to-reach populations

1.1.1.1. Improve the capabilities of NGOs targeting vulnerable and hard-to-reach populations

Implementation Mechanism: Grants, procurement Grants/Procurement Budget: $589,500 Cross-Team Linkage: Growth, Transformation

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External Partner Linkage: Local NGOs

To support those marginalized groups—including the closed LGBTI and Roma communities—that were underrepresented in previous years, ERA will intensify its activities with NGOs that already work with these groups to increase their involvement in the economic life of the region. Online and in-person, we will strengthen the capacities of these NGOs in program development, project implementation, management, training, and community relations. In addition, ERA is developing two noncompetitive grants, for the NGOs Ukrainian Resource Center and Ecology and Social Protection, for approval and implementation in Y3. These grants will target underrepresented and marginalized groups such as the Roma ethnic minority and representatives of the LGBTI community.

At the beginning of Y3, ERA will issue grants to these NGOs to support capacity building and subsequent business skills training for representatives of the target groups. ERA will continue to partner with local NGOs that can provide development of competencies among marginalized groups. In the spring of 2021, ERA plans to hold an “open space” for local authorities, NGOs, and our staff to plan joint activities and develop effective methods of reaching and assisting the representatives of these populations.

1.1.1.2. Increase engagement of businesses and NGOs practicing social entrepreneurship and corporate social responsibility

Implementation Mechanism: Procurement Grants/Procurement Budget: $246,000 Cross-Team Linkage: Growth, Transformation External Partner Linkage: Local NGOs and MSMEs, Competitive Economy Program (CEP), United Nations Population Fund (UNFPA)

Social entrepreneurship is an approach where individuals, groups, startup companies, or entrepreneurs develop, fund, and implement solutions to social, cultural, or environmental issues. Their actual line of business may be directly related to solving these issues, or they may use their profits to contribute to these solutions. Good corporate governance is an essential feature of these businesses.

Civil society organizations (CSOs), for example, can become less dependent on grants and increase their sustainability by establishing their own social enterprises, by adding economic activities to fund their main objectives, or by developing partnerships with businesses. CSOs, businesses, and startup initiatives that take part in ERA trainings on social entrepreneurship and CSR will be able to apply for grant support to launch social entrepreneurship programs.

To help us identify local partners for this initiative, we plan to issue an RFA in the first quarter of Y3 and submit documents to USAID for grant approval by the end of 2020. Our goal is to sign grant awards with at least four partner organizations during the first quarter of 2021.

And since social entrepreneurship is one way of improving the sustainability of NGOs that support marginalized groups. ERA plans to provide training on business skills with a focus on social entrepreneurship for NGO representatives online and, if possible, in-person.

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Also, during Y3, ERA plans to organize events for networking and experience sharing to promote CSR among local businesses. This will be done through online information sessions on social responsibility as a marketing instrument, as well as through a two-day forum for business in September 2021.

1.1.1.3 Support expansion of MSMEs owned by or employing members of vulnerable populations

Implementation Mechanism: Procurement Grants/Procurement Budget: $12,000 Cross-Team Linkage: Growth, Transformation External Partner Linkage: Local MSMEs, consultants

ERA plans to develop and conduct training for MSMEs—with a special emphasis on those created by, employing, or serving marginalized populations—to open new market possibilities in the B2B segment in the Donetsk, Luhansk, and southern Zaporizhzhia Oblasts. This assistance will include mentorship support, study tours, and training sessions. The mixed form of learning will include both online sessions and in-person training.

1.1.1.4. Upgrade the professional and business skills of vulnerable and hard-to-reach populations

Implementation Mechanism: Procurement, Grants Grants/Procurement Budget: Y2 $932,902, Y3 $1,046,126 (Grant), Y3 $202,000 (Procurement) Cross-Team Linkage: Growth, Transformation External Partner Linkage: NGOs, initiative groups

During Y3, ERA will provide grant support to NGOs to develop and conduct skills training for marginalized and underrepresented groups. These could include soft skills, such as how best to present oneself at an interview, or hard skills, such as computer and digital literacy. To promote networking and coordination, ERA will organize roundtables for entrepreneurs and NGOs employing members of vulnerable populations. In addition, ERA may also organize direct training interventions for skills improvement.

In Y2, ERA began implementation of several grants to NGOs for improving the professional and business skills of various underrepresented groups. In Y3, we will continue this grant support for the Ukrainian Women’s Fund, Global Compact Network, Ukrainian Leadership Academy, Shift, and Social Boost.

ERA is finalizing several NGO grants for submission to USAID that would start in Y3. They are to the Azov Development (Platform TU), Mariupol Youth Union, Terre des hommes, and Consultative Information Center for Women (ZOIA).

Apart from MSME and NGO grants, ERA will continue working with the lyceums that were supported under a separate RFA in Y2. One more grant—to Higher Vocational School № 94 in Lysychansk—is still under development; some repairs for the school will in addition be done under the ERA Construction Component. Five other lyceum grants will also continue and be completed in Y3.

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1.1.1.5. Implement grants to MSMEs and NGOs selected under the Annual Program Statement (APS) during Y2

Implementation Mechanism: Grant Grants/Procurement Budget: $ 1,338,697 (Y2) plus $ 238,325.5 (Y3) Cross-Team Linkage: Growth, Transformation External Partner Linkage(s): N/A

We currently have 11 MSMEs grants that are receiving material assets, and we will continue to work with them and track the results, the beneficiaries, and the USAID indicators. In addition, we have 10 Concept Notes (nine MSME and one NGO grant support) from the Y1 annual program statement (APS) that we are working on and we will submit these during Y3. We do not anticipate adding to this workstream in Y3.

1.1.1.6. Conduct gender mainstreaming in all ERA interventions

Implementation Mechanism: Procurement Grants/Procurement Budget: $30,000 Cross-Team Linkage: Growth, Transformation External Partner Linkage: All ERA beneficiaries

One of the essential underpinnings of the ERA Vulnerability and Gender Integration Strategy is conducting gender mainstreaming in advance of all interventions and for all grantees. This will identify possible gender and vulnerability issues that ERA staff and grantees need to consider and will allow us to develop mitigation strategies for any possible problems that could arise.

1.1.1.7. Share success stories from ERA business beneficiaries through ERA and partner media channels

Implementation Mechanism: Procurement Grants/Procurement Budget: N/A Cross-Team Linkage: Communications External Partner Linkage: Facebook and media partners Democratic Governance East (DG East)

The ERA Vulnerability and Gender Integration Strategy emphasized the importance of building positive perceptions of marginalized and underrepresented groups to deflect existing stereotypes and increase acceptance and recognition. Publicly sharing the success stories of ERA beneficiaries from these groups, both business owners and employees, will help weaken social prejudice. ERA will find success stories and funnel their strong messages through our main communication channels, such as Facebook, to reach a wide internet audience.

1.1.1.8. Promote ERA-related opportunities

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Implementation Mechanism: Procurement Grants/Procurement Budget: $36,000 Cross-Team Linkage: Communications External Partner Linkage: Facebook, media partners, Ukrposhta

To increase participation in our programs, ERA will promote the opportunities it provides for marginalized populations through targeted campaigns in social media and Viber.

To reach vulnerable groups living in remote, rural areas who have no access to social media, ERA will spread the word about training and grants opportunities through advertisements in village post offices as well as outdoor advertisements in those areas.

1.1.2. Strengthen the ability of vulnerable and hard-to-reach populations to deal with COVID-19 challenges—COVID-19 Response

1.1.2.1. Enhance computer and digital literacy among project beneficiaries (vulnerable and hard-to-reach populations, local government officials) for better online integration-COVID-19 Response

Implementation Mechanism: Procurement, Grant Grants/Procurement Budget: $152,000 Cross-Team Linkage: Growth-IT, Transformation-Driving Vision External Partner Linkage: Local IT companies, universities, NGOs

One lesson that ERA learned over the past six months of quarantine restrictions is that not all beneficiaries have been able to switch to online communication to receive information and participate in activities. Computer and digital literacy skills are underdeveloped or absent among a significant number of beneficiaries. This problem is particularly acute in rural areas and among vulnerable populations living close to the contact line. To provide them with the needed level of skills, ERA will find a partner within either the local or national IT industry to implement a program aimed at a very broad range of potential beneficiaries. As a result, those marginalized and underrepresented groups will increase their access to online resources for self-development.

Another lesson learned from ERA’s beneficiaries among the local authorities is that there is a clear gap in digital and computer skills among municipal employees. ERA recognizes the need for up-to- date computer and digital competencies and will provide training to interested municipalities. Similar to the approach above, ERA will select a partner IT organization that will equip office employees with the IT skills most relevant to their job responsibilities. We will use our existing contacts with ERA partners in consolidated communities and educational institutions to identify the skills that are most needed.

1.1.2.2. Assist GBV survivors build their economic resilience—COVID-19 Response

1.1.2.2.1. Assist GBV survivors through grant to NGO Slavic Heart

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Implementation Mechanism: Grant, Procurement Grants/Procurement Budget: $200,000 Cross-Team Linkage: Transformation, Growth External Partner Linkage: Local NGO Slavic Heart

Since the outbreak of COVID-19 in Ukraine, the registered number of domestic violence cases has increased dramatically. Quarantine restrictions often resulted in short-term or permanent job loss among primary household breadwinners, and this led to increased violence towards family members, predominantly towards women. The abrupt decrease of household income makes GBV survivors even more dependent on their abusers, and the accompanying stress and hardships, combined with close contact with the abuser, often provoke more instances of violence. ERA will address this surge in GBV by providing holistic support to survivors. This will include psycho-social support, legal and job counselling, as well as additional economic opportunities to help victims detach from their violent environment. This intervention will be co-implemented with the local NGO Slavic Heart, which has extensive experience working with GBV issues in the Donetsk Oblast.

1.1.2.2.2. Capacity building and material improvements for providers of social services to GBV survivors

Implementation Mechanism: Grant, procurement Grants/Procurement Budget: $100,000 (G) + $11,000 (P) Cross-Team Linkage: Transformation, Growth External Partner Linkage: Local authorities, NGOs

As a part of the grant to NGO Slavic Heart, the organization will build the operational capacity of the municipal service providers that normally serve GBV survivors, such as the government-run Donetsk Regional Center for Mother and Child and the Centers for Social Services for Families, Children and Youth in Druzhkivka and Kostiantynivka. In addition to training for employees of these institutions, ERA will organize workshops for them to compare experiences and discuss best Ukrainian and international practices for organizing shelters.

To promote networking with the business community, ERA will also conduct regular meetings for CSOs and businesses of the DO that are willing to support institutions providing services to GBV survivors. ERA will work with interested businesses and social services organizations to help match GBV survivors with job opportunities and alternative living options.

1.1.2.2.3. Build a network of institutions supporting GBV survivors

Implementation Mechanism: Grant, procurement Grants/Procurement Budget: $30,000 Cross-Team Linkage: Transformation, Growth External Partner Linkage: Local authorities, NGOs, United Nations High Commissioner for Refugees (UNHCR), UNFPA, International Organization for Migration (IOM), Save the Children, People in Need

Building a network of organizations providing support to GBV survivors will facilitate coordination of efforts, the exchange of experience, an increase in the quality and sustainability of services offered, and the development of synergies. Potential stakeholders among the local authorities are the Main

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Policy Department of Donetsk Oblast, the Internal Policies Department of DOSA, the DOSA Department of Family and Youth, the Donetsk Oblast Center of Social Services for Family and Youth, and the Druzhkivka and Kostantynivka City Councils. Among potential NGO partners are UNHCR, UNFPA, IOM, Save the Children, DRC, People in Need, the local NGOs Proliska and Anticrisis Media Center, the State Service Bureau for Free of Charge Legal Aid, and the Donetsk Chamber of Commerce and Industry (DCCI).

ERA plans to organize meetings online and, if possible, in person with CSOs providing support to GBV survivors in other oblasts. If possible, it will organize visits to similar organizations with valuable experience in the Lviv, Dnipro, and Zaporizhzhia Oblasts.

In spring 2021, ERA plans to organize a “Forum on Gender-based Violence Survivor Services: Advocacy, Shelter/Housing, and Therapy” to further grow the network of stakeholders, exchange experience, and organize advocacy efforts.

1.1.2.2.4. Investigate issues impacting GBV survivors and support advocacy for regulatory solutions

Implementation Mechanism: Procurement Grants/Procurement Budget: N/A Cross-Team Linkage: Transformation, Growth External Partner Linkage: Local authorities, NGOs

To complement its focus on individual victim assistance, ERA will identify the major issues that impair the lives of GBV survivors to strengthen advocacy for solutions. The ERA Advocacy officer will, based on grassroots research, analyze the problems and how they affect the GBV beneficiaries of ERA (these issues are often legal bottlenecks.) As a result, ERA will form coalitions, draft position papers on specific advocacy points, and pass them on to stakeholders and advocacy partners. After that, we will help each coalition develop action plans to best realize change.

1.1.2.2.5. Strategic communication campaign to address GBV and promote gender equality

Implementation Mechanism: Grant Grants/Procurement Budget: N/A Cross-Team Linkage: Communications External Partner Linkage: Local authorities, NGOs, media partners, other USAID-funded projects in Ukraine

Using subcontractors and grantees, we will implement a strategic communication campaign to address issues of gender equality and prevention of GBV. The intervention will include use a variety of information channels, including video public service announcements on social media platforms and TV and radio shows. Our goal is to, with the maximum impact, influence perceptions and understanding of gender equality issues and bring about changes in behavior.

1.2. INCREASING OPPORTUNITIES

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ERA’s WFD team will continue to build linkages with local universities to strengthen their understanding of how important it is to align training and skills development programs with the needs of the private sector. ERA will also continue to build linkages with businesses to strengthen their understanding of the advantages of collaborating with universities and technical vocational education and training (TVET) institutions. The WFD team will continue this two-pronged approach, begun in Y2, to ensure sustainable collaboration and positive results for ERA’s current interventions.

In this section, ERA describes a series of continuing and expanding interventions to strengthen the capacity and skills of eastern Ukraine’s workforce. Our goal is to make it attractive for students, young people, and workers to remain in eastern Ukraine to realize their potential and build the region’s future. We aim to drive innovations that will allow workers and employers to contribute to the economy with greater productivity. Under the Y3 Inclusion component, ERA will concentrate on interventions to:

1) align skills with the demands of the labor market 2) attract and retain workers and future graduates to the region 3) invigorate the development of an innovation ecosystem

The WFD team will also implement interventions under ERA’s growth and transformation components in all targeted regions. ERA will continue to support pandemic response activities that will ensure that university and TVET partners are able to deliver quality skills to students preparing to work in ERA growth sectors.

1.2.1. Align skills to demand of local labor market and employers

ERA’s WFD interventions seek to align the training and skills development at educational institutions with the demands of the private sector labor market. Institutions of learning need to understand the needs of the private sector to ensure that the existing—and future—workforce possesses the skills that employers require. To achieve this, the WFD Team will continue to work with ERA’s educational and training partners, such as universities and TVET schools, to align their curricula and training capacity with the skills needed by employers in ERA’s target industries. The team will also support and, where possible, develop applied learning strategies that include dual education (work/study) and industry awareness opportunities for students. In addition, the WFD team will work on how to better connect the skills of existing business development service providers to the firms that need them. It will also support the development of data collection tools at employment centers to improve their usefulness both to employers and educational institutions. Developing this feedback loop between employers, the employment centers, and educational institutions will result in an institutionalized mechanism for relaying real-time data about skills needs to the institutions that provide the training for those skills.

1.2.1.1. Support implementation of the Agrokebety Master’s Program

Implementation Mechanism: Grants, procurement Grants/Procurement Budget: $134,500 Cross-Team Linkage: Communications, Growth External Partner Linkage(s): NGO Ukrainian Club of Agribusiness, DOSA, LOSA, Luhansk National Agrarian University (LNAU), Dmytro Motornyi Tavria State Agrotechnological University (TSATU), local agricultural companies, USAID Agriculture Growing Rural Opportunities (AGRO), Food and Agriculture Organization (FAO)

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Agrokebety is a master's program developed by the Ukrainian Club of Agribusiness (UCAB) with agribusiness companies and international experts. The program aims to improve agricultural production in eastern Ukraine by preparing highly qualified specialists at the Luhansk National Agrarian University (LNAU) and Dmytro Motornyi Tavria State Agrotechnological University (TSATU). The curricula will be aligned with agrobusinesses’ needs. Representatives of the business sector will mentor students while they earn their degrees. In addition, the grant will cover advanced learning for university teachers to create a content database that will allow distance learning opportunities and ensure the sustainability of the program.

If conditions permit, ERA also plans to organize a student conference called “What is Modern Agriculture?” in January. This conference foresees the participation of business representatives for students to get acquainted with new trends in agriculture and raise the prestige of working in the sector. With the goal of increasing student engagement in the agriculture sector, this will be an opportunity for students to meet agrobusiness owners, learn about the market, and explore different entry points in the sector.

1.2.1.2. Support implementation of dual education (applied skills training)

Implementation Mechanism: ICA Grants/Procurement Budget: $3,000 Cross-Team Linkage: Growth, Communications External Partner Linkage(s): Ministry of Education and Science (MoES), Friedrich Ebert Foundation, Association of Marketing, Training-Methodological Center of Pre-Tertiary Occupational and High Education, Scientific (Training) - Methodological Centers of VET of DO and LO, local companies, AGRO, United National Development Programme (UNDP)

Dual education provides students with the opportunity to work in the field they are studying and receive academic credit for their work and obtain officially recognized employment experience. It strengthens the relationship between universities and private sector employers and helps align student skills with market needs. The WFD team will engage a consultant on dual education who will report on legislation currently governing dual-education partnerships in Ukraine, how to establish those partnerships, and what the best practices are for running such a program. The Activity will then provide support to companies and institutions that wish to use this approach to either establish a dual-education program or a program for on-the-training.

1.2.1.3. Increase alignment of TVET technical offerings with sector needs through improved training equipment and activities

Implementation Mechanism: Grant Grants/Procurement Budget: $42,000 Cross-Team Linkage: Communications External Partner Linkage(s): MoES, FAO, AGRO, local TVETs, Scientific (Training) - Methodological Centers of VET of DO, LO, and ZO, local companies, ZOSA, UNDP, Goethe-Institut in Ukraine, Senior Expert Service (The German Federal Ministry for Economic Cooperation and Development (BMZ), The German Federal Ministry of Education and Research (BMBF)

ERA has established an ongoing working relationship with six TVETs. In past years we have provided them with a combination of material and technical assistance. There is one TVET that is still to

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receive material assistance through an ERA grant approved in Y2. Thus, in Y3 ERA will support the purchase of a tractor/combine simulator (as opposed to a real tractor/combine) for one agricultural college in the Zaporizhzhia Oblast to improve students' practical skills in a cost-effective manner.

ERA will organize events for the region’s TVETs to share their experience and discuss best practices in student engagement, curriculum design, equipment acquisition, and partnerships with the private sector.

1.2.1.4. Support the consulting ecosystem through building the network of university- based case clubs in the region

Implementation Mechanism: ICA Grants/Procurement Budget: N/A Cross-Team Linkage: Communications External Partner Linkage(s): USAID Competitive Economy Program (CEP), DG East, USAID Ukraine Confidence Building Initiative II (UCBI II), ERA Partner Universities, local companies

In Y2, ERA identified a need to develop the cultural awareness and use of consulting services, especially those that can support business development. ERA intends to support consulting skills development as well as to make the case for their use in the region. One of the approaches we will take is to establish case clubs (CCs) in ERA partner universities. CCs enable university students to collaborate with local enterprises to develop business school-type cases based on actual problems the firms need to solve. ERA will engage a consultant to advise ERA partner institutions on how to set up and operate CCs; train and mentor CC teams; bring companies on board to create cases based real-life problems; and develop a toolkit or handbook for CC staff. This intervention, in close collaboration with Career Development Centers (CDCs), will promote a new generation of strategic consultants, facilitate an additional pathway of university-industry collaboration, and develop students’ ability to respond to relevant challenges in Ukrainian business.

1.2.1.5. Evaluation of Employment Center Data Collection

Implementation Mechanism: ICA Grants/Procurement Budget: $6,000 Cross-Team Linkage: Inclusion-increasing capabilities External Partner Linkage(s): UNDP, Luhansk Employment Center

Now that UNDP’s study of employment centers is complete, the WFD team will evaluate the capabilities of employer data collection tools in selected DO/LO employment centers. The current tools appear to severely limit the centers’ ability to gather detailed and pertinent data from employers about their current and potential skills needs. Improving these data collection tools and ensuring more robust and effective data collection from employers is a particularly crucial follow-on to the capacity building that ERA has already engaged in with employment centers. ERA can support training for key staff at employment centers to build their skills for data collection. The ultimate goal of this intervention will be to build the capacity for employment centers to collect more relevant data from employers, to feed that data back to educational and training institutions, and to thus improve the alignment between the supply and demand sides of the labor market.

1.2.2. Attract and Retain Workers

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One of the biggest threats to the labor market in eastern Ukraine is the dwindling pool of young talent entering the workforce. ERA’s WFD team aims to attract and retain future graduates and workers to the region by making universities and other learning institutions innovative and competitive, and employers more appealing. Graduates of educational institutions and training programs do not view employers in their region as innovative or exciting, and they will often seek employment outside of the region. To complement ERA’s focus on promoting innovation and applied research and development (R&D) among universities and firms, ERA must also ensure that there are places for graduates within the region where they can apply their talents and contribute to their employers’ growth. To accomplish this objective, ERA will undertake activities to increase enrollment at ERA’s partner institutions, develop the skills needed to work in ERA target sectors, and support employers to better understand how to retain employees and work with young people.

1.2.2.1. Develop strategy and pilot engagement on how firms can strengthen employee retention

Implementation Mechanism: ICA Grants/Procurement Budget: $2,500 Cross-Team Linkage: Growth External Partner Linkage(s): CEP, local companies

The WFD team aims to strengthen companies’ ability to attract, retain, and develop employees. While companies may recognize that high turnover cuts into profit margins, many do not know how to develop a work environment that reduces employee turnover. To support firms that need to improve employee retention, ERA will identify barriers to employment retention beyond salary, identify best practices for employee retention, and build companies’ capacity to achieve this goal. ERA also aims to support and strengthen companies’ capacity to appeal to a new generation of workers who may be looking for jobs in the target sectors but have a different outlook on professional development. Given the importance of engaging employers, this intervention will require close collaboration by the WFD team and the Growth team.

1.2.2.2. Support development of university-based CDC resources and network to improve job match and retention

Implementation Mechanism: ICA (four consultants) and procurement Grants/Procurement Budget: $11,600 Cross-Team Linkage: Communications External Partner Linkage(s): UCBI II, Ministry of Education and Science (MoES), UNDP (for VETs), ERA Partner Universities, TVETs of DO and LO, Scientific (Training) - Methodological Centers of VET of DO/LO, DOSA and LOSA, local companies

In Y2, ERA identified the needs, challenges, and skills gaps for developing university-based CDCs. ERA will support the creation of a toolkit for CDC staff with a standardized, detailed plan for developing an effective CDC in Ukraine. This can then be used by other CDCs to upgrade their activities to provide better career services for students. ERA will support the improvement of CDC staff internet skills, as well as work to create a regionwide CDC association. Subject to demand and feasibility, ERA will work to launch a virtual CDC platform that can connect CDCs at partner institutions and serve as an access portal for career information and guidance for people throughout eastern Ukraine. This portal could allow employers to access a vetted pool of job applicants and

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allow students to access postings on internships and apprenticeships. Improving university CDCs should strengthen linkages to private sector employers, increase the likelihood of better “fit” so that employees remain employed longer, and result in companies trusting the CDCs to provide skilled employees. Through this intervention we will aim to work directly with eight to 10 CDCs, potentially benefitting 15,000 students in the region.

1.2.2.3. Youth Engagement

Implementation Mechanism: Staff engagement Grants/Procurement Budget: Staff LoE Cross-Team Linkage: Growth, Transformation, Communications External Partner Linkage(s): UNDP (for VETs), UCBI II, UNITY, local companies, educational institutions, NGOs

Due to a lack of employment opportunities, required skills, and support in finding employment, young people and students in eastern Ukraine often migrate to other parts of Ukraine or leave the country altogether. For current and future workers to remain in the region, it is essential for employers, the private sector, universities, and training providers to understand the needs and interests of young people in terms of employment. Often WFD interventions are designed for youth but with minimal involvement or feedback from young people. Under this intervention, the WFD team aims to ensure that existing WFD workstreams align with youth needs to overcome the barriers for employment in ERA’s selected sectors.

The WFD team will support partner educational institutions build capacity on how to work with young people, understand their needs, and develop training programs and the resources that directly address those needs in a youth-friendly way. Using proven USAID approaches to working with young people, the team will conduct Positive Youth Development (PYD) training for professors and educational staff on the best practices for engaging youth. Following the training, the team will work with the participants to identify opportunities for youth ownership and engagement.

To strengthen employee retention, the WFD team will engage with employers on how to work with young and emerging professionals, who have different needs for professional development than more experienced professionals. Through training, ERA will build the capacity of employers to better work with young professionals. With an increased understanding of their needs, employers will be more likely to engage with universities to provide students with mentorship, internships, and other skill- building opportunities—and eventually to hire them.

The WFD team plans to engage with local youth organizations and young professional associations to deepen their collaboration with universities and employers, as well as to connect youth with additional employment and skill-building opportunities.

The WFD team will train other ERA technical staff of ERA on PYD to share the best approaches for youth engagement through a WFD lens.

1.2.2.4. Making unattractive professions attractive

Implementation Mechanism: Grant or procurement Grants/Procurement Budget: $150,000 Cross-Team Linkage: Growth, Transformation, Communications

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External Partner Linkage(s): MoES, DOSA and LOSA, ERA partner universities, local TVETs and companies

To attract more young people to pursue technical education, ERA plans to provide informational support to all activities related to ERA’s support of partner universities. After equipping ERA’s technical and agricultural partner institutions with state-of-the art labs and innovation centers, and after improving outdated training curricula to meet the needs of current realities and employer demands, ERA plans to help change young people’s perceptions of certain professions through a nationwide campaign via social media, television, and outdoor advertisement. This campaign will highlight opportunities and career pathways with the Agrokebety program as well as those developed in ERA-supported vocational lyceums and technical universities. The campaign will also highlight the prospect of employment with large companies in the agrobusiness and engineering sectors to increase the prestige of these specialties among Ukrainian youth.

1.2.3. Strengthening the Innovation Ecosystem

A country’s ability to develop innovative ideas and technologies can play a large role in its overall economic development and its employment opportunities. ERA will help strengthen the innovation ecosystem in eastern Ukraine, improving the region’s capacity to support innovation by upgrading infrastructure, changing perceptions, and building R&D partnerships between universities and companies in ERA’s target sectors. The key aim is to create a sustainable system with a strong supply of new research skills, helping employers drive economic competitiveness and growth. Consequently, ERA will catalyze university-industry collaboration on applied R&D projects to increase firm-level innovation, growth, and job creation.

A crucial component of strengthening the innovation ecosystem is improving the technical skills education and the delivery mechanisms of regional universities. This, in turn, will improve how they are perceived as potential partners by the private sector. To achieve this, ERA will continue to support universities, as well as the TVETs and lyceums they encompass, better prepare qualified specialists by improving their technical capacity, updating their curricula, and developing short-term courses in ERA target sectors. These efforts will lay the foundation for the university-industry collaboration needed for innovative R&D. The WFD team, together with the Growth team, will place a special emphasis on upgrading education for specialists in agriculture to promote modernization and innovation in that sector.

Supporting the transformation of ERA’s target cities is directly connected with upgrading the capacity of their universities and training centers to provide students with up-to-date, high-quality engineering and manufacturing skills. The main obstacles to providing skills development in engineering and manufacturing are outdated technical infrastructure, equipment, and teaching approaches. To address these problems, ERA will continue, through ongoing and new grants, to support universities to provide better and modern conditions to properly skill students. With relevant and high-quality training, university graduates will be able to contribute to innovative developments in the engineering and manufacturing sectors that have historically played a major role in the region’s economy.

1.2.3.1. Implement pilot activities based on R&D strategy

Implementation Mechanism: ICA, procurement Grants/Procurement Budget: $5,550

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Cross-Team Linkage: Growth, Communications External Partner Linkage(s): DG East, UCBI II, CEP, ERA partner universities, local companies

Building on the ERA strategy for engaging universities and private sector employers in sustainable R&D partnerships in Y2, ERA will promote R&D partnerships between our partner universities and private sector actors from the ERA targeted growth sectors. We will begin by identifying potential firms that might participate in pilot R&D partnerships, as well as which universities might be best matched with them. The WFD team will pilot, test, and review these partnership models. It will then disseminate information on the results of the pilots and work to establish further links between universities and businesses.

ERA will also organize two online-offline conferences on R&D partnerships, one of which will focus on agriculture technology to build interest in R&D opportunities among universities, firms, technical specialists, and students.

1.2.3.2. Strengthening and modernizing agrarian education

Implementation Mechanism: Grants, procurement Grants/Procurement Budget: $268,794.00 (grant Y2), $200,000 (grant Y3) and $1,500.00 (procurement Y3) Cross-Team Linkage: Growth-Vegetables, Growth-IT, Communications External Partner Linkage(s): AGRO, FAO, MoES, DOSA and LOSA, LNAU, TSATU, Dahl, PSTU, local agrarian companies

In Y2, the WFD team implemented a capacity-building grant with LNAU aimed at supporting the revival of agricultural higher education in eastern Ukraine. Under this grant, which is still ongoing, ERA is supporting LNAU in critical advancements to restart the university in Donetsk and Luhansk Oblasts (this displaced university was initially relocated to Kharkiv and then moved again in 2019 back to different campuses in DO and LO). The grant covers the creation of two modern laboratories, one for food processing and another for veterinary medicine. Under the grant, admission offices and consulting centers will be fully equipped for admission and informational campaigns in both LO and DO. Moreover, classrooms and administrative offices will be equipped in order to continue the learning process in a new location. To support the sustainability of this effort, ERA will create a system of electronic document circulation between several campuses of LNAU in both LO and DO and support the creation of printed materials for information campaigns.

While this first grant covered the basic needs of the university and enabled it to operate again, a follow-on grant will further enhance its capacity to provide demand-driven skills by advanced training for staff, modernization of teaching approaches, and supporting promising areas related to ERA growth sectors (IT in agriculture and instructional farms, for example). It should be noted that, although ERA had anticipated the need for additional assistance through Y3, it intentionally split its grant-funded assistance into two tranches to reduce risk in the event that the relaunch of LNAU failed and the university folded.

ERA also plans to hold a conference on innovations in agricultural production, with a focus on the use of IT, to raise awareness of professions in this field and to establish links with businesses for joint research and for student employment opportunities. The WFD team plans for ERA partner- university professors to present at the conference and use the information discussed there to

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improve curricula. Businesses and students will have gathered information about new technologies in the agriculture sector, thus promoting innovative development in the sector.

1.2.3.3. Implementation of the grant "Co-working and training space UNIVER"

Implementation Mechanism: Grant Grants/Procurement Budget: $62,438 (Y2) Cross-Team Linkage: Communications External Partner Linkage(s): CEP, DG East, UCBI II, PSTU, companies of Mariupol

In Y3, the WFD team will expand the existing grant to PSTU "Co-working and training space UNIVER." ERA will complete equipping the laboratories and provide technical support to update the curricula of major courses. As a result of this grant, the university will improve its ability to provide a wider range of training and services to foster entrepreneurial skills and allow students to be more competitive on the labor market.

1.2.3.4. Implementation of the grant “Modernization of Engineering Education to Support Competitiveness of Luhansk Oblast Industry”

Implementation Mechanism: Grant Grants/Procurement Budget: $162,604 (Y2) Cross-Team Linkage: Grants, Procurement, Communications External Partner Linkage(s): CEP, LOSA, Dahl, local engineering company Chemproject, and other local companies

Under an ongoing grant for Dahl University, ERA will support the displaced university create two computer laboratories with modern engineering software. The grant will bring in an engineering company to develop a professional course to be first given for teachers and then to be included in the student curriculum. This will improve students’ practical skills and knowledge, since the course will showcase employers’ needs in this sector. In Y3, ERA will continue to work with the university to conduct activities aimed at strengthening relations between the university and local companies. ERA will lead working groups with potential employers on curricula adaptation, hold presentations of adapted curricula, and arrange visits of company representatives to the university to meet with engineering students and teachers who work with the adapted curricula.

1.2.3.5. Strengthening technical education to support regional economic development in the Sea of Azov region

Implementation Mechanism: Grant Grants/Procurement Budget: $100,000 Cross-Team Linkage: Grants External Partner Linkage(s): CEP, FAO, ZOSA, TSATU, local companies

To support economic development in Melitopol and the Zaporizhzhia region, ERA will help create a Regional Training Center (RTC) in partnership with TSATU. ERA will provide computer numerical controlled training machines and training to students on how to work with this and other equipment involved with generating electricity from renewable sources. The RTC will provide this training to

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students of TSATU as well as to workers who are currently employed. By providing equipment and modern training for use in the field of green energy, ERA will give specialists the ability to improve both the quality of export-oriented products and the provision of services in the electricity- producing and machine building sectors.

1.2.3.6. Support innovations development via STEM education and robotics

Implementation Mechanism: Grant Grants/Procurement Budget: $34,851 (Y2), plus $16,906 (Y3) Cross-Team Linkage: Grants, Communications External Partner Linkage(s): CEP, DG East, UCBI II, private entrepreneurs, PSTU, DOSA and LOSA

With the aim of developing technology-oriented mindsets and skills among students in eastern Ukraine, ERA will support the private sector to provide training in science, technology, engineering, and mathematics (STEM), and robotics. ERA will support the development of a STEM education center in Vuhledar, open two more centers in Kurakhove and Volnovakha, and support the establishment of a Center of Innovative Education in Toretsk. These centers will help popularize STEM knowledge and education, with the goals of: inspiring youth to choose technical majors at universities; providing essential technical skills needed for a modern workforce; and creating the foundation for students to eventually develop and launch their own technologically innovative startups. This expanded network of STEM education centers in the Donetsk Oblast will help create a more innovative and technologically aware workforce.

ERA plans further steps to strengthen STEM education and robotics in the Luhansk Oblast and more details are provided in the Transformation section (3.2.2.2). ERA plans to provide follow-on grants to experienced ERA grantees that are successfully functioning as STEM centers in DO to extend this intervention into LO.

1.2.4. Support educational institutions to adapt to COVID-19—COVID-19 Response

Implementation Mechanism: Grant, Procurement Grants/Procurement Budget: $109,806 (Y2) and $32,822 (Y3) Cross-Team Linkage: Communications External Partner Linkage(s): MoES, UNDP (for VETs), ERA Partner Universities

COVID-19 has had a disruptive effect on education delivery across the globe. As schools in Ukraine were shut down because of quarantine measures, the MoES challenged Ukraine’s higher education institutions to independently solve how best to reorganize classes at their institutions. However, not all educational institutions were ready to make the leap from in-person to distance learning. Many of Ukraine’s eastern universities find themselves facing several challenges to full adoption of online education delivery. Universities often lack the institutional strategies, equipment, and technical know-how to move learning online. Limited experience and expertise of the teaching staff and/or lack of digital proficiency also present obstacles to implementing distance learning. Finally, student IT infrastructure is an issue, with disadvantaged students often lacking internet access and appropriate computer equipment to quickly adapt to online learning.

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ERA will support distance learning initiatives at higher education institutions throughout the project’s target oblasts by procuring necessary equipment and technologies (infrastructure) and increasing the capacity of professors and instructors to deliver online courses effectively. To complement equipment provision, ERA will also build the capacity of professors and instructors at each of the partner universities to develop and deliver high-quality training content for distance learning. The equipment supplier will provide onsite, informal training on the correct and efficient use of equipment for up to 50 professors/instructors of each university. In addition, ERA will provide training on the basics of distance learning, developing distance learning content, and proper software use.

2.0. MSME GROWTH Total Y3 Grants Budget: $ 3,266,000 Total Y3 Procurement Budget: $ 567,200 Total Y3 Construction Budget: $ 1,075,000 Total Local Consultant Days: 771 Total Foreign Consultant Days: 122

In Y3, the Growth team will build on its extensive work in Y2 to support the businesses in its six industry sectors—biofuel, honey, innovations for manufacturing, IT, tourism, and vegetables—to increase their sales, expand their markets, and gain better access to credit to finance that expansion. To respond to the negative economic impact of the COVID-19 pandemic in eastern Ukraine, the Activity has introduced four additional interventions in its Growth component. It will provide direct-to-consumer support for local small agricultural producers, promote “Eat Local” sentiments among residents of eastern Ukraine and Sea of Azov Region, improve sanitary and aesthetic conditions at urban markets, and provide strategic consulting services to help MSMEs pivot their operations to withstand the crisis and find new markets and opportunities.

2.1. MARKET EXPANSION

2.1.1. BIOFUELS GROWTH SECTOR

2.1.1.1. Information Campaign to Promote Biofuels

Implementation Mechanism: Grants, ICA Grants/Procurement Budget: $18,000 Cross-Team Linkage: Driving Vision External Partner Linkage(s): ESP, LOSA, potentially DOSA, EBRD

LOSA approached ERA in July 2020 with a request to organize an oblastwide roadshow to inform farmers that the government is serious about regulations prohibiting the burning of straw in wheat fields after harvest. (Uncontrolled straw burning was thought to be the cause of the recent wildfire that killed five people in the village of Smolianynove and destroyed or damaged more than 8,000 hectares of forests near Sievierodonetsk.) ERA will present biofuels production as an alternative to straw burning that is also a revenue-producer for farming enterprises (a potential title for the road show is “Stop Burning Straw. You Can Sell It!”). ERA and LOSA will take this message to small groups of 10 or fewer farmers across the region, while also organizing small study tour groups to

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visit ERA partner SMEs in Kalmykivka (Starobilsk Raion) and Kolomyichykha (Svatove Raion) that already make biofuels from waste straw.

2.1.1.2. Support biofuel development projects that engage agricultural SMEs and local consolidated communities

Implementation Mechanism: Grants, ICA Grants/Procurement Budget: $450,000 Cross-Team Linkage: Transformation External Partner Linkage(s): Consolidated communities, possibly ESP (municipal heating support), EIB

ERA currently has eight accepted concept notes in the grants pipeline related to biofuels development projects. These agricultural SMEs and municipal enterprises demonstrate three to four different models of biofuels production from wheat straw and wood waste. Each has clear end markets for the fuels produced, which are in many cases the public buildings of their local consolidated community or municipality. ERA will launch all these grants during Y3, beginning with the SME Rozivske Farm, which will produce straw-based biofuels for sale to the consolidated community of Kolomyichykha, where it is located.

ERA selected these concept notes specifically to demonstrate these various models, so we do not see the need to add a significant number of further grants in this growth sector. Instead, ERA will focus on communicating the success of the first eight grants, demonstrating the business case for these models and focusing in Y4-5 on encouraging “early adopters” who will adopt these business models with only consulting assistance from ERA. Our working hypothesis is that this growth sector will develop its own momentum once there are clear success stories in the region, as occurred in central and western Ukraine.

2.1.1.3. Develop woody biofuels production capacity to address the consequences of LO forest fires

Implementation Mechanism: Grants, ICA Grants/Procurement Budget: $50,000 Cross-Team Linkage: Transformation External Partner Linkage(s): LOSA, ERA partner communities in LO, UNDP, EU4Business

One model for biofuels production that ERA will investigate for inclusion in this growth sector is the production of wood pellets from small-diameter wood salvaged from burned forests. As a result of the above-mentioned forest fires in July 2020 and even larger fires in October that burned 20,000 ha across the oblast, huge volumes of dead pine timber are now available for “salvage logging.” A small proportion will be salvageable as sawtimber for making lumber and a significant proportion can be sold directly as firewood. A very large proportion of this volume, however, will be in small stems and branches that are not suitable for any of these products but could be used to make wood pellets.

ERA will engage a consultant(s) to study the potential volumes of available raw material and assess how the Novoaidar and Sievierodonetsk Forest Management Units (part of the national State Forest Fund) can sustainably salvage this material without putting at risk natural ecosystem regeneration and

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the important habitat areas that survived the fires. (Such experts are available at the Eastern Europe Fire Monitoring Center at the National Bioresources University in Kyiv.) Furthermore, these experts will assess what sources of material will be available after three to five years, when the resource created by the fires is exhausted. This could include tops and branches from timber harvesting or small-diameter trees cut during forest thinning.

If these analyses reveal an economically and ecologically sustainable model, ERA will pursue grant co- creation with the local forestry authorities to provide pellet-making equipment.

2.1.1.4. Alternative solid fuel greenhouse field trial

Implementation Mechanism: Procurement Grants/Procurement Budget: $1,200 Cross-Team Linkage: Transformation External Partner Linkage(s): Ovochi Stanychnykiv

In 2019–2020 three greenhouse farming households in the Ovochi Stanychnykiv cooperative in Stanytsia Luhanska tested the use of biopellet stoves instead of traditional natural gas, coal, or firewood stoves. This experiment was intended to assess the feasibility of widespread transition to locally produced biopellets, as availability of traditional fuel types continues to decline.

In November 2020, ERA will summarize the results of the full winter/spring and early fall heating seasons and analyze the costs and benefits of biofuels use. Initial monitoring suggests that the system produced major benefits (healthier plants with higher yield, more even growth, significantly reduced time spent on feeding stoves), although there are technical questions regarding the reliability of the equipment and the cost and quality of available pellets. It is likely that another season of testing will be necessary, using the already-installed stoves but with changes in certain elements of the experiment such as the source of pellets. Conclusions are not yet clear enough to justify a large- scale intervention aimed at a transition to biopellets, but initial results suggest that potential is high. The experiment should continue and be completed in Y3, with clear recommendations on whether and how to scale up the results to be made by October 2021.

2.1.1.5. Economically viable biogas production and utilization

Implementation Mechanism: ICA Grants/Procurement Budget: N/A Cross-Team Linkage: Transformation External Partner Linkage(s): DOSA, LOSA, EBRD, EIB, local farmers

ERA has not yet identified nor onboarded SME partners to produce biogas. Nonetheless, we remain committed to identifying commercially viable models for biogas production in the region and will engage consultants, as needed, to investigate opportunities that could be supported through grants. Among the opportunities we will study is biogas production for localized use—in heating greenhouses, for instance—as part of a larger, integrated business operation.

2.1.1.6. Development of training materials on biofuel issues

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Implementation Mechanism: Procurement Grants/Procurement Budget: $400 Cross-Team Linkage: WFD External Partner Linkage(s): AGRO, FAO, TSATU, local TVETs

As part of the planned grant to TSATU (section 1.2.3.5.), ERA plans to support the creation and development of training modules for the disposal of solid waste from crop production by incineration. It aims to provide up-to-date information in courses related to alternative energy in targeted universities and TVETs. It will also disseminate the manuals among farmers and other stakeholders to prevent the uncontrolled burning of crop residues in the fields.

2.1.2. HONEY GROWTH SECTOR

2.1.2.1. Improve coordination among farmers and beekeepers to reduce bee mortality from pesticides

Implementation Mechanism: ICA, grants Grants/Procurement Budget: $100,000 Cross-Team Linkage: N/A External Partner Linkage(s): State Food and Safety Consumer Protection Service (SFSCPS)

ERA will assess the impact of the “Grand Expert” online system for farmer-beekeeper coordination that the Activity rolled out in four test raions of the Donetsk and Luhansk Oblasts in Y2. COVID-19 impeded our outreach efforts, but the registration of farmers and beekeepers nonetheless moved forward. If we determine at the end of the 2020 honey season that there was a positive impact, ERA will work to spread the use of this system in partnership with the veterinary service of the State Food Safety and Consumer Protection Service (SFSCPS). This agency helps determine the cause of death of domestic livestock (including bees) and the damages that bee owners might claim if the party responsible for the damage is identified. Grant support for SFSCPS cooperation with the Grand Expert NGO could also include funding for improved stationary and mobile laboratory equipment to determine the cause of bee mortality.

2.1.2.2. Increase MSME capacity for value added products and retail sales

Implementation Mechanism: ICA, grants Grants/Procurement Budget: $125,000 Cross-Team Linkage: Transformation External Partner Linkage(s): N/A

Eastern Ukraine and the Azov Sea region have a number of promising family brands of honey products that would allow MSMEs to capture more value added through the marketing of: monofloral honey; honey in the comb; honey beverages; beeswax products; and related products such as dried herbal teas.

As part of our goal to develop more sophisticated brand identity and direct to consumer (D2C) retail among agricultural SMEs, ERA will provide five to 10 family honey businesses in the region with

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intensive consulting services and grant funding to develop their brands, improve packaging, and boost their online presence and customer loyalty. This initiative will begin with a series of seminars by ERA's honey growth sector lead and speakers from Honey Brothers, the first Ukrainian honey firm to use the European Union’s system of geographic indication that identifies the origin of food products and allows consumers to confirm their authenticity and begin developing positive geographic associations. We will emphasize experience sharing between the participating MSMEs, several of which have already adopted some advanced practices.

The seminars will be followed by a series of grants to participants for further consulting assistance and, potentially, investment in packaging equipment. At this point in the program, ERA generally seeks to avoid small-value grants, but we have chosen the participants in this intervention based on their potential to demonstrate viable models to other MSMEs in the region. ERA will focus on publicizing and spreading their examples in Y4, and it will engage the grant recipients in experience sharing events to inspire early adopters of these marketing and D2C practices.

As a further effort to help beekeepers increase value, ERA is also co-creating a grant with Ukrainian Bee, the largest aggregator and exporter of organic honey in Ukraine. The grant would aim to educate regional beekeepers about the economic benefits of organic certification, which, on average, provides sellers with a 33 percent premium from buyers. The training program should end with the preparation of at least 15 beekeepers from ERA’s three oblasts to join the eight beekeepers already certified in the Luhansk Oblast. Together they will form a “pathfinder” group whose success ERA can demonstrate to other beekeepers in the region with an eye towards early adoption in 2021– 2022.

2.1.2.3. Investments in market actors (service providers, input and equipment suppliers, aggregators, exporters, processors) to strengthen the value chain

Implementation Mechanism: Grants Grants/Procurement Budget: $425,000 Cross-Team Linkage: MSME Finance External Partner Linkage(s): UK Department for International Development (DFID)

ERA is currently co-creating grants with two medium-sized enterprises for the production of two new inputs that could improve bee survival and increase profitability of honey micro-businesses: winter feeding syrups and pressed beeswax bases (for beehives) in a honeycomb pattern that speed hive construction by bees. We propose that both grants should be on a 50/50 co-financing basis; for one of them, we anticipate attracting outside finance. The companies are Mir Medu in Starobilsk and VRM Agro in Melitopol, honey aggregators and traders that are expanding into input production for the thousands of beekeepers who supply them. These grants will result in solid sales and return on investment for both companies while improving access to modern inputs for the sector. Anticipated grant size is around $100-150,000 each.

In July to August 2020, ERA opened an RFA for manufacturers of key beekeeping inputs (wooden and plastic hives, barrels, trailers) willing to offer regional beekeepers a 30 percent discount. ERA will cover two-thirds of that discount through grant support for the input production process; the companies will provide the rest of the discount at their own expense as a means of developing customer loyalty. These discounts should allow hundreds of beekeeping microbusinesses reach a more sustainable scale faster than possible at current market prices for inputs. ERA will assess the five applications received from input manufacturers in LO, DO, and ZO and co-create grants with

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those firms that offer viable approaches to the discounted input model (ERA anticipates three to four grants at $35,000 to $100,000 each). ERA will then work with these companies to spread information about the discounts throughout the beekeeping community and will closely monitor how the program effects the operations of the individual beekeepers taking part in the program. If the results of this first round are positive, ERA will organize a second (potentially expanded) round in the second half of Y3.

To expand access to quality inputs, ERA will support access for beekeepers in eastern Ukraine and the Azov region to certified, quality-controlled bee breeding. At present neither region has certified bee breeders of the most popular breeds, Ukraine steppe bee and Karpatka, and many eastern beekeepers purchase from unlicensed, unregulated breeders. If they wish to have greater certainty about the purity and vigor of the bees they are purchasing, they must travel to central and western Ukraine and transport the bees across the country at significant expense (and health risk for the bees). ERA has accepted a concept note from the Luhansk Oblast Beekeepers Union to assess existing unregistered bee breeders in the region and identify those with the greatest potential to become certified breeders. (This will involve gathering bee samples from each for genetic purity testing.) The assessment will also seek optimal breeding locations that are properly isolated from other apiaries. One ideal location would be on the long narrow “spits” that extend into the Sea of Azov in the Donetsk and Zaporizhzhia Oblasts. After we complete this assessment, ERA will investigate how to support one or more regional SMEs obtain licenses and begin selling bee colonies of verified breed and quality in Y3 or Y4.

2.1.2.4. Creation of a sustainable pollination base through planting honey crops/herbs/trees

Implementation Mechanism: Grants Grants/Procurement Budget: $60,000 Cross-Team Linkage: Transformation External Partner Linkage(s): Harveast agricultural company, which will also finance grant partners, AGRO

In discussions with beekeeping value chain actors in the Azov region, ERA experts learned that although market access is strong (both for export and in the Mariupol retail market), the pollination base is insufficient due to the shortage of natural ecosystems. Almost all land is under intensive agricultural production with only small scraps of natural steppe and forest, and there is a shift by large farmers to sunflower varieties that do not require bee pollination. As a result, beekeepers are limited in the amount of honey they can produce.

ERA has combined two concept notes from the Azov region of DO into one grant now in co- creation to pilot efforts to increase the pollination base by planting unused land in the Pavlopil consolidated community with pollen-rich herb, shrub and tree species. Some of these are also hay species that can be used by local farmers to feed livestock. This effort will be supported by the large agricultural company Harveast, which wishes to see the villages near its lands become more economically self-sufficient. The company will provide planting material, while the two grants from ERA will focus on planting equipment. The sustainability of this intervention is based on the community then hiring out this equipment, so others can cultivate pollinator plants in additional consolidated communities across the Azov region.

2.1.2.5. Support workforce development in beekeeping

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Implementation Mechanism: Procurement Grants/Procurement Budget: $12,400 Cross-Team Linkage: Communications, WFD External Partner Linkage(s): DG East, FAO, LOSA and DOSA, “Young Ecologist” organizations in DO/LO, local training providers

ERA will conduct a series of educational events (e.g. career guidance and InfoDays) with DO/LO youth organizations that are active in environmental issues and beekeeping.

In addition, ERA is going to introduce the short courses it developed earlier to regional educational institutions, e.g. universities and TVETs. Its support for implementation will include demonstration beehives. For this purpose, ERA will organize a series of events (roundtables, meetings, consultations) to provide informational support on dual education, career guidance, and professional development for beekeeping.

2.1,2.6. Study tour for local tourism and beekeeping actors on apitourism issues

Implementation Mechanism: Procurement Grants/Procurement Budget: $1,200 Cross-Team Linkage: Tourism, Communications External Partner Linkage(s): AGRO, FAO, local beekeepers, local tourism actors, DG East

ERA will also organize a study tour for the local tourism and beekeeping actors on apitourism issues to help create additional value for the tourism and beekeeping sectors.

2.1.3. INNOVATIONS FOR MANUFACTURING (IM) GROWTH SECTOR

2.1.3.1. Business development coaching program in an online format

Implementation Mechanism: Procurement Grants/Procurement Budget: $100,000 Cross-Team Linkage: WFD External Partner Linkage(s): N/A

ERA will move the ambitious strategy development training and coaching program by Roland Berger that was slated to take place in April 2020. ERA decided to see if quarantine restrictions would be lifted in time to conduct the program in the summer of 2020, but when it became clear that they would not, the Activity began preparations to move the program online to begin in September 2020. This strategy development program will carry over well into Y3. The first cohort of IM companies covers a diverse geography from Sievierodonetsk to Mariupol and includes machine building and metal goods manufacturers, chemical and plastics producers, garment manufacturers, industrial automation firms, and pharmaceutical companies.

Fifteen manufacturing firms will participate, and some of the firms that will be part of the next wave of IM companies will be silent listeners. ERA also intends to invite other consultants and business

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service providers who will work with the 15 companies so that they see how the strategies are developed that they will help implement.

ERA identified the business development coaching program as a necessity for manufacturing firms in the region during our assessment in 2019. Many manufacturers can identify tactical needs that would address short-term bottlenecks, but often lack strategic vision to identify the most impactful investments that ERA could take a part in supporting. For this reason, ERA will first foster strategic planning in these firms, and then use the resulting strategies as a road map for developing individualized programs of consulting and grant support.

2.1.3.2. Facilitate market expansion of IM program participants

Implementation Mechanism: Grants, ICA, procurement Grants/Procurement Budget: $600,000 Cross-Team Linkage: Communications External Partner Linkage(s): N/A

ERA has already brought concrete benefits to IM companies through consultants as part of its Rapid Response intervention. ERA will continue to provide consulting and grant support to manufacturing companies and will diversify the range of consulting services offered to complement the more “solid” grant support for needed equipment.

After ERA provides companies with the training in section 2.3.1. and individualized coaching, the companies will have a strategy document providing roadmaps for their development and for their relationship with ERA. The team will develop a mixture of direct consulting support and grant assistance for these companies to help them realize their strategies. In many cases they will address the barriers to reaching new export markets that manufacturers need to compensate for reduced access to the Russian/Commonwealth of Independent States (CIS) countries and the fluctuations of the domestic mining and metallurgy sectors.

2.1.3.3. “Innovative Manufacturers” PR campaign

Implementation Mechanism: Procurement Grants/Procurement Budget: $12,000 Cross-Team Linkage: Communications External Partner Linkage(s): N/A

Following the Roland Berger training and the awarding of grants, ERA will provide PR support to these enterprises, write success stories, and publicize them in regional, national, and international media outlets. The campaign should attract attention of Ukraine and beyond to the innovative projects, which have potential to transform the local economy, bring positive changes to the welfare of the communities, and shift the image of the eastern region from purely industrial to the center of IM. ERA will use a variety of distribution channels (social media, newspapers, magazines, TV, and radio). Through this activity we plan to reach an audience of at least 500,000 people in Ukraine and abroad.

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2.1.3.4. Capacity development for industrial property management and the establishment of industrial parks

Implementation Mechanism: Grants Grants/Procurement Budget: $72,058 (Y2) Cross-Team Linkage: Transformation External Partner Linkage(s): NGO Go Local, LOSA, DOSA

In July 2020, ERA signed a grant agreement with the NGO Go Local to implement an industrial park and industrial property management training course for oblast and municipal officials, business leaders, and civil society stakeholders in eastern Ukraine and the Sea of Azov region.

This intervention should raise awareness of best practices for industrial park establishment and management, while also explaining the drawbacks that have kept earlier industrial park projects (especially brownfields) from success.

Attracting new manufacturers and helping existing firms expand is a crucial element to economic recovery in eastern Ukraine. Many cities have turned to industrial parks, but for the most part they exist only on paper. As efforts move forward in the Verkhovna Rada to improve Ukraine’s national legislation on industrial parks, the time is right to build the capacity for designing greenfield and brownfield projects and understanding the economic incentives available.

Go Local works closely with the Bila Tserkva Industrial Park, widely considered one of Ukraine’s most successful greenfields. One of the managers of this park will be the lead trainer. The training will emphasize the service-oriented approach needed and the importance of incentives from local and national governments to attract tenants. The training will include field trips to Bila Tserkva and, if COVID-19 rules permit, to a mature industrial park in Serbia that was established in similar economic conditions to those of eastern Ukraine.

Participants in the trainings (grouped by location) will be able to work with the trainers to develop early-stage concept notes on industrial parks in their cities. The best of these will receive extra coaching and the chance to present their concepts to ERA and other invited donor project and IFI representatives. ERA could consider supporting the establishment of a well-designed and economically justified industrial park in eastern Ukraine or the Sea of Azov region.

2.1.3.5. Upgrading the technical level of Dahl University students by creation of an ElectroLab and FabLab

Implementation Mechanism: Grant Grants/Procurement Budget: $125,000 Cross-Team Linkage: Communications, Transformation External Partner Linkage(s): CEP, DG East, LOSA, Dahl, local enterprises and companies

In Y3, ERA plans to provide another grant to Dahl University to create two technical laboratories— an Electric Laboratory and Fabrication Laboratory. The displaced university lost its technical facilities because of relocation from the NGCA. The approximate budget for the anticipated grant is about $250,000.

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The popularity of engineering majors is very high in the region, and several large enterprises in various sectors need highly qualified specialists in electro energetics, electric engineering, electromechanics, automatization, and computer-integrated technologies. Unfortunately, the existing technical capacity and curricula of the university does not meet the necessary standards for training a qualified workforce. The university therefore applied to ERA with a request to renovate the laboratories. Both laboratories will operate in close cooperation with the largest regional enterprise to adapt curricula, provide new technical capacity, and train university teachers. This will increase students’ practical skills, promote majors in technical specialties, and provide research opportunities for young scientists.

2.1.4. IT GROWTH SECTOR

2.1.4.1. Support the establishment and strengthening of regional IT associations and clusters

Implementation Mechanism: Grants, ICA Grants/Procurement Budget: $40,000 Cross-Team Linkage: Inclusion, WFD External Partner Linkage(s): CEP

ERA supported the establishment of the Mariupol IT Cluster association in Y2 and is currently organizing with DOSA the signing of memoranda to establish an association known as the Kramatorsk IT Cluster. To the maximum extent possible, ERA will channel its assistance to the IT sector through these organizations, since so many of the barriers to sector growth are at the “ecosystem” level and require joint action. ERA will engage these cluster associations for all the interventions described below to build their capacity to inherit and continue the ecosystem building activities that ERA is supporting.

Cluster activities will include educational programs; engagement with universities on modernization of IT curricula and development of internship programs; advocacy with municipal and oblast authorities; and organization of social and training events for programmers. ERA will provide a mixture of direct organizational assistance for cluster activities, consultants for training and capacity building, and grant assistance to realize key ecosystem interventions like those described above.

2.1.4.2. Strengthen the IT ecosystem

Implementation Mechanism: Grants, ICA Grants/Procurement Budget: $100,000 Cross-Team Linkage: Inclusion External Partner Linkage(s): CEP

In Y1-Y2 ERA made a significant investment in Mariupol’s IT ecosystem through the renovation and equipping of the 1991 facility, where Social Boost provides IT startup support and mentoring programs. This programming continues under the Inclusion component of ERA.

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ERA will pursue other key ecosystem investments that help address systematic barriers to sector growth that cannot be addressed at the level of firms or individual IT professionals.

For example, the newly forming IT association for northern Donetsk Oblast (“IT Donetchina”) has put forward the concept of an “IT Sandbox” as a need for their community, a combination co- working and B2B space for the city’s freelancers to congregate and offer IT solutions to regional businesses.

ERA will offer the region’s IT associations, clusters, and other stakeholders the opportunity to apply for funding of ecoystem-enhancing projects either through a targeted RFA or through the next APS.

2.1.4.3. Support IT firms' market expansion and diversification efforts

Implementation Mechanism: Grants, ICA Grants/Procurement Budget: $100,000 Cross-Team Linkage: Inclusion External Partner Linkage(s): CEP, USAID EO Business Incubator

One of the goals of capacity building in the sector is to encourage more firms to move from an outsourcing/outstaffing model to full-cycle product development, which ERA’s value chain assessment identified as a more sustainable economic model. With this goal in mind, ERA will open an RFA for three to five grants to support product concepts among regional IT firms. These grants could include funding to bring in technical experts needed to strengthen the final product, engage consultants to develop valid business plans and financial models for the new products, and develop marketing materials for pitching to investors. Though ERA generally avoids small grants to individual firms in its Growth approach, it is important to stimulate more activity on product development by supporting and publicizing “pathfinders.”

A discussion with the newly forming Kramatorsk IT Cluster revealed that there are several product concepts in incubation/development among cluster members including the following:

1) Vovcha, an application for automatic (objective) reporting of utility meter readings that saves time and removes the human error factor for both customers and utility employees; 2) HR at Work, a package of programs for firms too small for a full-time HR department that helps organize recruiting, hiring, and compliance with labor laws; 3) UkrERP, an online financial reporting and accounting program offered as an alternative to 1C, the Russian program that is now being phased out in Ukraine for data security reasons.

ERA’s partner Social Boost will continue providing IT startup support and mentoring programs for new IT professionals through a followup grant developed with the ERA Inclusion team.

2.1.4.4. Fostering stronger linkages between the IT private sector and educational institutions

Implementation Mechanism: Grant Grants/Procurement Budget: $178,912 (Y2) Cross-Team Linkage: WFD, Transformation, Communications

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External Partner Linkage(s): DOSA and LOSA, LLC Sikorsky Challenge, ERA partner universities, local IT companies, CEP, UCBI II

ERA aims to support a university-based innovation and entrepreneurship ecosystem for eastern Ukraine with a grant to LLC Sikorsky Challenge (SC) for a total amount of $178,912. In Y3, SC plans to train startup teams consisting of students and professors from ERA partner universities in innovative entrepreneurship, startup ideas development, digital marketing, and sales. Students will learn the necessary skills for product development and IT entrepreneurship, communication, and pitching their ideas to potential investors at local competitions. Professors will acquire skills in coordinating students’ startup and innovation development activities. There is a great need for a qualified IT workforce and a significant gap between the skills of university graduates and the needs of employers. Previous collaborations between universities and local IT companies in the Donetsk Oblast have not been particularly successful, and the SC provides an opportunity to facilitate better partnership for universities and companies.

2.1.4.5. Develop an academic accelerator/incubation program for Luhansk Oblast

Implementation Mechanism: Grants Grants/Procurement Budget: (Budget expenditures anticipated for Y4) Cross-Team Linkage: Inclusion, WFD, Transformation External Partner Linkage(s): LOSA, potentially MoES

In 2018, LOSA identified IT educational capacity as one of the oblast’s priorities for development. The IT sector in LO is presently underdeveloped, with a few hundred professionals spread between SMEs, engineering firms and freelancing, but oblast leadership believes that economic recovery will be impossible without building up a tech workforce and tech-based entrepreneurialism.

In 2019, ERA, LOSA and Dahl studied options for IT education, including two visits to Kyiv and Kharkiv to observe the “Unit City” model of task-based IT training. ERA conducted an RFA for a feasibility assessment for an IT education and incubation platform based out of the university, and the NGO Go Local was chosen as implementor. (Go Local has a close relationship with the management of Unit City.) Go Local determined that there is a modest but dependable quantity of university IT students and young adults looking for career change who could form the student body at an advanced IT education and MSME incubation program at Dahl using some of the Unit City principles. To create economic sustainability for the center and integrate it with the local economy, they further recommend offering IT business services through this center to the region’s manufacturing and engineering companies.

In the early months of Y3, Go Local will present a more detailed concept note, management model, and budget for this center, which ERA will discuss in depth with Dahl, LOSA, and other regional stakeholders. ERA will carefully consider its role in funding the establishment of this center (possibly in concert with other donors) and will potentially present a grant proposal to USAID. If approved, grant and construction work could commence in Y4.

2.1.5. SEA OF AZOV TOURISM GROWTH SECTOR

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The Tourism Growth Sector includes a variety of interventions involving grant support for tourism SMEs, trade associations, museums, and other stakeholders. ERA will aim to fold all of these into a single large RFA to minimize procedural efforts, but they are described separately below.

2.1.5.1. Promote tourism product development

Implementation Mechanism: Grants, Construction Grants/Procurement Budget: $425,000 Cross-Team Linkage: Transformation (Construction) External Partner Linkage(s): CEP

In Y2 ERA engaged leading Ukrainian experts to train tourism SMEs in the Azov Sea region from Henichesk to Mariupol on new product development. ERA will follow up this training program with an RFA to provide grants for new tourism products in the Azov Sea region in such season-extending and season-deepening subsectors as: nature tourism focused on marine landscapes and birdwatching; meetings, incentives, congresses, events (MICE) services; and wellness/health services including sanitoria and spas. These grants will include both the consulting services needed to bring the products to the market as well as equipment necessary for implementation.

ERA will offer support to the two national nature parks in the region that have responded positively to ERA outreach: Meotyda and Pryazovskyi. Support for the national parks is intended to capitalize on the premier natural landscapes of the Azov Sea region, which at present are well protected but only minimally accessible to tourists in a sustainable and manageable way. The Tourism sector lead will work closely with the environmental and construction teams to scope out the most appropriate infrastructure projects within these parks to enhance the tourist experience. These may include boardwalks in the attractive but fragile dune ecosystems, birdwatching towers, and camping sites. This direct construction assistance will be supported by grant assistance for equipment, signage, and interpretation boards.

ERA will make special efforts to support cultural and historical tourism in the diverse Sea of Azov region. Consultants have already been engaged to coach museums, historical sites and ethnic minority communities (Greek, Bulgarian, Tatar, Jewish) to improve their messaging and infrastructure to attract more tourism. After this work is completed, ERA will open an RFA to provide support for these institutions to upgrade their facilities.

In Y3, ERA will complete its investigation of potential sites for one or more Tourist Information Centers. The Tourism growth sector lead will engage municipal and private sector stakeholders in a dialogue about the placement, financing, and managing of the center(s) and will develop a concept note for a construction project to launch the center(s).

2.1.5.2. Promote destination marketing of the Sea of Azov region

2.1.5.2.1. Develop the Sea of Azov Brand

Implementation Mechanism: Procurement Grants/Procurement Budget: $124,000 Cross-Team Linkage: Transformation (Driving Vision) External Partner Linkage(s): Ministry of Culture, Ministry of Youth and Sport, Ministry of Transport

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ERA will build on its production in Y2 of a professional, attractive Azov Sea promotional video by procuring the services of a professional brand developer to design a logo and brand book for the region’s unified tourism identity. A unified brand will be a valuable tool for the tourism associations that ERA will support. It can be used domestically, together with the promotional video, in public transport and in local and social media. New tourism products can use the brand book to correctly identify themselves with the regional brand, thus increasing their visibility. By the beginning of Y3, ERA will also have developed a promotion plan for the new brand that will guide further procurements in Y3 such as billboard advertising.

ERA will introduce a “Become a Vlogger Series” to promote the Sea of Azov brand. Much like the Australian tourism campaign of the Best Job in the World, we plan to source the best travel vloggers in Ukraine with high social media followings to tell us why they should make a travel video about one of our five partner areas—Kramatorsk, Mariupol, Berdiansk, Kyrylivka, and Arabat Spit—and to report on all the great things each city has to offer.

Through a PR/media agency ERA will support a nationwide marketing campaign focused on promoting tourism in the Azov region that will feature the attractions, energy, and atmosphere of the resort’s cities and national parks and advertise its health, water sport, and cultural tourism destinations. In July 2020, the ERA team produced a video promoting attractive destinations in the Sea of Azov region. During the next months we plan to launch the distribution of the video in social media and via the online resources of tourism associations, as well as on the platform of Travel in Ukraine, a new national initiative implemented by the State Agency of Tourism Development. We plan to work with the Ministry of Transportation to request their support in placing the video on the screens of Intercity trains and Ukrainian airports.

2.1.5.3. Improve destination excellence (service quality)

2.1.5.3.1. Workforce Development and skills strengthening for tourism sector development

Implementation Mechanism: Grant, ICA, and Procurement Grants/Procurement Budget: $33,200 Cross-Team Linkage: Growth External Partner Linkage(s): DG East, UCBI II, UNDP (for VET), Berdiansk State Pedagogical University, local tourism companies, tourism faculties of local universities and TVETs

To further propel the growing tourism sector and the skills of the workforce, ERA will support the strengthening of skills for tourism sector development. One of the key challenges identified in Y2 is the misalignment of skills needed by tourism employers and the skills provided at educational institutions. Based on these findings, ERA will provide a grant to Berdiansk State Pedagogical University to improve the theoretical and practical skills of teachers in the tourism sector. Initial interventions include tourism training development and delivery, with study trips to other educational institutions and businesses in the tourism sector. We will use grants to organize a series of training and seminars for tourism specialists in VETs to fill the gaps in curricula and align them with the requirements of the labor market.

In Y2 ERA identified gaps in teachers’ knowledge and skill set. In Y3 ERA will conduct online training sessions to improve the knowledge of teachers who work in universities and VETs of LO, DO, and ZO. As a result of this activity, teachers will be able to improve and subsequently develop at least

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one course which will be aligned with modern labor market requirements. ERA expects to train 10 representatives of universities and VETs.

Based on discussions with tourism employers, there is a need for short-term courses for the private sector, especially those to expand the skills of seasonal workers. To address this gap, ERA intends to support the development of the business relationships between educational institutions and the tourism business through the provision of short-term educational services. ERA will provide training to VETs and universities on how to create and sell short-term courses for the private sector that are modern and aligned with tourism workforce needs. ERA will provide vouchers1 to tourist businesses to partially pay for courses taken by seasonal staff to facilitate partnership between educational institutions and private entities.

2.1.5.3.2. Development of digitization skills to promote the regions’ tourism, history and culture

Implementation Mechanism: Grant Grants/Procurement Budget: $130,000 Cross-Team Linkage: WFD, Communications External Partner Linkage(s): DG East, PSTU

In collaboration with DG East, ERA will support the development of digitalization skills to promote the region’s tourism sector, history, and cultural heritage. ERA and DG East will support the creation of a virtual laboratory at PSTU which will digitize the historic and tourist attractions in the region into resources such as videos and photo shows. PSTU’s participation will ensure that access to the newly equipped virtual laboratory will continue for the next generation of students and be a resource for them in their university education. The lab will motivate students to further create tourism promotional materials for the region and provide additional monetization possibilities to PSTU e.g. the students’ work can be sold to businesses in the tourism sector.

2.1.5.4. Promote tourism industry partnerships

Implementation Mechanism: Procurement, grants Grants/Procurement Budget: $14,000 Cross-Team Linkage: Transformation External Partner Linkage(s): CEP

ERA has engaged consultants to support nascent trade associations and industry groups in the Sea of Azov with capacity building, advocacy, joint marketing, etc. Once COVID-19 restrictions allow, ERA will organize the first Sea of Azov Tourist Forum, which will include as one of its topics joint efforts by industry associations to raise the region’s profile and improve advocacy regarding transportation

1 Vouchers are widely used by humanitarian projects as a money equivalent to facilitate various business processes and integration of innovations in a sustainable manner. ERA plans to give vouchers to the tourist business interested in training their staff. Use of vouchers in this project will enable a wide range of businesses establish relationships with educational institutions for training their staff on a permanent basis.

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infrastructure. This event should also serve as an introduction to the marketing materials that ERA will help produce, and potentially show off new tourism products supported with ERA grants. In the case that restrictions remain in place for long periods, ERA will investigate innovative approaches to conducting a large-scale online expo.

In addition, ERA will support tourism associations and partnership initiatives through an RFA.

2.1.6. VEGETABLES GROWTH SECTOR

2.1.6.1. Pathfinder clusters support

Implementation Mechanism: ICA, construction, grants Grants/Procurement/Construction Budget: $175,000 Cross-Team Linkage: Transformation External Partner Linkage(s): EDCARP, World Bank

ERA will accelerate progress in developing new pathfinder clusters in the vegetable and fruit sector to match the accomplishments of the Ovochi Stanychnykiv cooperative in Stanytsia Luhanska.

In Kruhle (Svatove Raion, Luhansk Oblast) and the Azov Greek community of Sartana (near Mariupol) vegetable cooperatives suffer from the absence of irrigations systems (torn out for scrap metal by armed forces in 2014 in the case of Sartana) and vegetable storage capacity. In addition to the broad range of consulting services offered by ERA to all pathfinder clusters described below, specific steps will be taken to assess the potential to restore irrigation systems and build storage facilities with ERA construction team capacity and experienced consultants. This will result in concept notes on potential construction projects that could be initiated in Y3 if they are approved.

ERA will seek to activate the Vasiukivka cluster in the Soledar consolidated community (Donetsk Oblast), which has received agronomic consulting from the Vegetable growth sector lead during Y2. This cluster is made up mostly of members of the Meskhetian Turkish diaspora, who feel discriminated against in access to land (our assessment suggests they may indeed be paying inflated rental rates for land). This cluster requires complex assistance: potential legal support in obtaining land in one location to move away from the scattered rented plots they currently cultivate; investment in irrigation and storage infrastructure if land for that can be obtained.

In Dmytrivka (Azov region of Zaporizhzhia Oblast) ERA will support a fruit cooperative, many of whose members are from the local Azov Bulgarian diaspora. The have strong production capacity but have trouble organizing joint sales due to the absence of refrigerated storage capacity. ERA’s construction team will study this case and develop a concept note for consideration.

In Polovynkyne (Starobilsk Raion, Luhansk Oblast) ERA will support the newly formed “Veteran” cooperative (made up of local ATO veterans) in its initiative to develop a commercial apple orchard. One of the members is a trained orchardist who has established modern high-yield orchards for farming enterprises. He now wishes to do so on land the cooperative members received for their service in the ATO. This will complement other ERA efforts in Polovynkyne to support agricultural MSMEs, such as the “Strawberry Paradise” grant that is presently under co-creation. Polovynkyne has also been identified as a community where the World Bank might make investments in

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agricultural product storage capacity to complement its $200 million investment in improving road quality in the Luhansk Oblast. ERA will continue coordinating with the World Bank on this project.

In addition to these specific technical efforts in each cluster, ERA will provide a joint capacity building approach based on the “four Ps”—Product, Price, Place, Promotion—to identify the most promising end markets and the best means to reach them. A clear 4P strategy can be followed up with ERA’s B2B support, connecting the clusters directly to buyers in national retail and wholesale.

Most, if not all, of these clusters will need to integrate the certification systems of Global Good Agricultural Practice (GlobalG.A.P.) for production and Hazard Analysis and Critical Control Point (HACCP) for storage, processing and packaging to gain access to maximally diverse end markets. ERA will provide direct consulting with this goal and can provide grant funding and construction assistance to make necessary changes to facilities.

The experience of Ovochi Stanychnykiv also demonstrates that pathfinder farmers require direct assistance in legalization and registration. They currently work in the shadows but need to become legal entities to work with such clients as supermarkets or export aggregators. ERA will also provide consulting in this area.

Finally, ERA will engage the capacity of the Canadian-funded EDCARP (implemented by the Dnipropetrovsk Agricultural Consulting Service) that is being extended to eastern Ukraine to support cooperatives and pathfinder groups to improve their internal governance and coordination.

2.1.6.2. Building the Stanytsia cold chain

Implementation Mechanism: ICA, construction, grants Grants/Procurement/Construction Budget: $75,000 Cross-Team Linkage: External Partner Linkage(s): EDCARP

ERA will culminate three years of intensive support to the Ovochi Stanychnykiv agricultural cooperative by assisting it develop the physical infrastructure needed to engage in the national and export markets that the Activity connected it with in the 2019–2020 agricultural seasons.

Specifically, this is a logistics hub in Stanytsia Luhanska where sorting, packing, cold storage, and loading can take place. The cooperative offers land owned by one of its members on which this hub could be constructed. This hub would entail a cement pad, two cold storage containers, an enclosed sorting space, and potentially outbuildings for equipment storage and insulation for a fruit dryer the cooperative received from a different donor. In Y3, ERA will conduct a field assessment and develop a concept note for consideration. Simultaneously ERA will provide direct consulting and bring in independent consultants and other projects, including EDCARP, to develop the governance structure for this logistical hub and incorporate best practices from southern Ukraine into hub management.

ERA will continue B2B facilitation and consulting to reinforce the end market diversification that the cooperative began in 2019–2020 with its first shipments to national retail and wholesale buyers in Kyiv.

2.1.6.3. Support agricultural SMEs to expand sales and diversify end markets

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Implementation Mechanism: ICA, construction, grants Grants/Procurement/Construction Budget: $550,000 Cross-Team Linkage: Transformation External Partner Linkage(s): N/A

ERA will support small and medium agricultural enterprises to expand sales and diversify end markets through a mixture of consulting support on the 4P principle; B2B support; support for developing online sales; and grant support for key investments in facilities and equipment.

Two ERA partners have developed detailed concept notes for large-scale (up to $500,000 each) grants: Perspektiva Farm in Dobropillia (borscht vegetables, apples and sour cherries) and Sady Donbasu in Kurakhove (apples and sweet cherries). Both companies propose 50/50 co-investment in sorting, packing, and storage equipment that will make possible new sales relationships in Ukraine and abroad. ERA has engaged an experienced private sector business consultant to develop full financial modelling of these business concepts to justify the final grant package. These grants will be implemented in Y3.

ERA will conduct an RFA to onboard and co-create grants with other enterprises from the Azov region, most of which did not have time to take advantage of the APS once the Azov region was added to ERA’s mandate. Identified candidates include Famberry (Tokmak, Zaporizhzhia Oblast), the largest cornel berry (kizil) orchard in Europe, which needs to ramp up its marketing and export strategy to accommodate a fivefold increase in yield over the next five years. ERA is also looking at Magistr Life and Mekhteev Farm in Berdiansk, which have hundreds of hectares of diverse orchards poised for export.

These companies will receive consulting support on D2C practices as part of ERA’s Rapid Response to the economic impacts of the COVID-19 pandemic (described in detail in section 2.6.4.). D2C capacity is essential to compensate for the instability of traditional market channels such as produce markets, which the pandemic showed are vulnerable to unexpected shocks. ERA’s intervention will assist many MSMEs, but even sophisticated firms like those described above require assistance to make the move to effective online marketing and sales. Consultants will conduct audits of these firms’ existing online presence, analyze how online and offline business are integrated, and help develop effective online sales platforms and practices.

These firms will also receive consulting on preparation for, participation in, and followup after international trade fairs, building on the remarkable results for Sady Donbasu in Berlin and Dubai in Y2. The disruption of such events by the COVID-19 global pandemic (the largest food expo in the world, SIAL Paris, was recently put off until 2022) means that ERA must help companies find and participate in the multitude of smaller online expos that are replacing traditional trade fairs. An ERA consultant is currently accumulating a list of such events for use with ERA partner companies.

2.1.6.4. Direct to Consumer (D2C) support for agricultural producers-COVD-19 Response

Implementation Mechanism: ICA, grants Grants/Procurement Budget: $75,000

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Cross-Team Linkage: Vegetable and Honey Growth Sectors External Partner Linkage(s): World Bank

As part of our commitment to help MSMEs pivot to new markets after economic disruption of COVID-19, ERA will offer targeted support to agricultural producers to increase their market share in the urban centers of eastern Ukraine and the Sea of Azov region. One means to do this is through support for new D2C channels such as online sales, home delivery, micro-stores, and kiosks. All these new channels require developing a brand identity and appealing to the inherent preference of many consumers for local produce.

ERA will assist agricultural producers not only in our priority growth sectors of vegetables/fruit and honey, but also in milk and meat production after obtaining USAID approval for engaging new sectors. These sub-sectors also show significant promise, and efforts to promote local food will be more effective if a broad range of food products are available from regional farmer brands.

ERA will provide consulting assistance on integrating online marketing and sales into traditional offline agricultural business, as well as on developing effective websites and events to engender customer loyalty.

We will make efforts to develop the home delivery model, which is both attractive to middle class consumers and potentially important for vulnerable populations during market disruptions. Thus far, ERA has identified one particularly strong partner, Reven Lavka, which is a Zaporizhzhia-based company that delivers farmer-grown produce to middle-class customers and is looking to expand into Berdiansk and Mariupol. ERA has begun providing consulting assistance to the company to improve its logistics model and will potentially co-create a grant in Y3. We will also pursue other partners for home delivery of produce.

Through this initiative we will also assist some of the SMEs ERA mentioned above in the honey and vegetable growth sectors. Two examples are Svoya Pasika (Novooleksandrivka, Luhansk Oblast), which is receiving consulting on exporting honey in the comb to Japan, and Famberry, the cornel berry producer, which will receive consulting on brand development and export promotion. Among the other companies in this cross-cutting initiative will be Pryvilie, a milk and meat processor from the Luhansk Oblast that needs to expand its retail network to achieve profitability and increase use of its processing capacity from the current 33 percent. In Y3, ERA anticipates supporting D2C development for 10 MSMEs through consultants and grants.

2.1.6.5. Promoting “Eat Local” sentiments among residents of eastern Ukraine and the Sea of Azov Region—COVID-19 Response

Implementation Mechanism: ICA, grants Grants/Procurement Budget: $ 30,000 Cross-Team Linkage: Transformation, Communications External Partner Linkage(s): N/A

ERA will work on increasing the branding sophistication of agricultural MSMEs and improving the perception of “farmer brands” by regional consumers.

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To encourage the Eat Local mentality and foster D2C connections, ERA plans a series of Local Farmer Fests to follow up on those co-organized with Reven Lavka in Berdiansk and Mariupol in August and September. No less than 75 percent of vendors will be eastern Ukrainian and Sea of Azov producers, all of whom must have established brand identity and an online sales presence (ERA will provide technical assistance to those who need to catch up.) The goal is not only on-site sales, but also establishment of client relationships that will continue online. This model is how Reven Lavka launched its home delivery business in Zaporizhzhia.

ERA will draw lessons on how to improve these events, and then assess the COVID-19 situation regarding the organization of further Fests (three to five) in Y3. Events will be proposed and organized only if significant improvement in current conditions of the pandemic is observed.

2.1.6.6. “Doing business—Doing it right—Making it digital” Campaign—COVID 19-Response

Implementation Mechanism: Procurement Grants/Procurement Budget: $30,000 Cross-Team Linkage: Communications External Partner Linkage(s): N/A

The goal of this campaign is to help local farmers and food producers gain basic marketing skills to later transfer their sales online

To reach a wide audience for this campaign, we will develop a concept and brand for the local farmer fests and support a series of these events in ERA partner-cities throughout the year. Through the work of photographers and marketing specialists, during these festivals we will be helping our beneficiaries to produce business cards and product promotion materials to allow them later to get onto digital platforms and sell their products online. (The first of such events will be organized in late August and the end of September in Berdiansk and Mariupol respectively). After that we will develop a model to follow and will adjust promotional strategies to organize these events in other ERA partner cities during Y3.

Through a subcontractor we will develop and launch a digital marketing support campaign to help our partner MSMEs adapt more quickly to the current demand for online sales. We will engage the sub-contractor to develop targeted marketing strategies for ERA beneficiaries. This should enable them to develop attractive product branding and improve promotion via online marketplaces such as www.rozetka.com.ua, and svoi.market. The company would also help create Facebook or landing pages and start Google Ads lead campaigns for at least 10 of our SMEs.

2.1.6.7 Improving sanitary and aesthetic conditions at urban markets--COVID- 19 Response

Implementation Mechanism: ICA, Construction Grants/Procurement/Construction Budget: $600,000 Cross-Team Linkage: Transformation External Partner Linkage(s): Mariupol City Administration

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The competitive position of urban produce markets has been steadily weakening as supermarkets and online sales expand their popularity in Ukraine. Produce markets maintain a loyal clientele among elderly Ukrainians, but they struggle to attract the young and middle class, who often perceive them to be unsanitary, crowded, and old-fashioned. Produce markets, however, are critical outlets for smallholder farmers because of the low barriers to entry. Improving their competitive position is important so that farmers do not lose this critical D2C channel.

The COVID-19 pandemic and related restrictions further complicated this picture, as produce markets were shut down while supermarkets could continue operation. This further worsened public perceptions. ERA will support initiatives to improve both the sanitary and aesthetic conditions at private and municipal markets across the region. This could include installation of refrigerated display cases for milk and meat products, improved on-site cold storage, renovation of pavilions, and construction of attractive lavki (booths) in the place of shared counters. All these interventions will emphasize the attractiveness of local agricultural producers and accentuate local sourcing.

ERA has begun a joint assessment of potential market upgrades in Mariupol with the city’s administration, focusing on three markets spread across both sides of the Kalmius River that divides the city’s districts. During Y3, ERA will develop construction concept notes and negotiate with market owners and the city to develop co-financing approaches to these construction projects.

ERA remains committed to supporting market infrastructure in Sievierodonetsk, the crucial market hub of the Luhansk GCA. In August 2020 President Zelenskyy established a civil-military administration in the city to wipe the slate clean and improve local governance. ERA will continue its dialogue with the new administrative bodies to find a suitable means to improve produce markets in the city, particularly the Universal (Radost) Market on the city’s southern edge.

ERA will also assess other market infrastructure opportunities in eastern Ukraine and the Sea of Azov region, including the proposed new market for Dobropillia City. By the end of October 2020, we will have selected several potential market improvement projects for concept note development in order to put one to three market projects into the Y3 construction pipeline.

2.1.6.8. Develop short courses based on best practices from ERA Years 1-3 for transfer to partner VETs and universities

Implementation Mechanism: ICA Grants/Procurement Budget: $800 Cross-Team Linkage: WFD External Partner Linkage(s): UNDP (for VET), AGRO, FAO, LNAU, Scientific-Methodological Center of VET of the Luhansk and Donetsk Oblasts, local farmers, EDCARP, CoopAcademy

To support the growth of the agriculture sector in eastern Ukraine, ERA will develop a short training course, “Modern Vegetable Farming/Growing.” For this purpose, ERA will hire a consultant with high-level methodological skills to turn all of ERA’s best practices and lessons learned in agriculture into a training course for university and TVET students. This course will be provided to ERA partner educational institutions to aid in their efforts to update the curriculum they have for agrarian majors.

The WFD and Growth teams will create a training course "Basics for Cooperatives" for TVETs and universities. The course will draw on ERA’s experience in supporting regional cooperatives as well as

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the future activities of EDCARP, which will support the creation of cooperatives in the region. ERA will use a consultant to ensure the professional level of training materials. The course will help align student skills with market needs and support the development of business skills in the agricultural sector.

2.1.6.9. Phyto-Sanitary Laboratory, Rubizhne

Implementation Mechanism: Construction Total Budget: $293,740 Cross-Team Linkage: Transformation External Partner Linkage(s): N/A

The laboratory does seed and plant testing of imports and exports, and it also provides seed and plant analysis for commercial growing, storage, and processing sites. It is used by approximately 100 business entities annually, from small proprietor farms to large processing and storage operations. It is the only such laboratory in the Luhansk oblast, which is a burden for farmers who have to travel long distances for such services. The renovation of the laboratory will accelerate testing throughput and decrease waiting time for clients. The renovation of approximately 162 square meters will include upgrading the growing room, the virology and bacteriology testing room, a sanitary dining and shower area, the boiler room, and the sample storage facility. At the beginning of Y3, ERA will submit for approval the renovation of an additional 48 square meters (office space and an entryway) requested by the beneficiary.

2.1.7. GROWTH – CROSSCUTTING

2.1.7.1. Consulting services to help MSMEs pivot to new markets – COVID 19 Response

Implementation Mechanism: ICA Grants/Procurement Budget: $500,000 Cross-Team Linkage: All growth sectors External Partner Linkage(s): N/A

Numerous MSMEs in the region experienced severe market disruption as a result of the COVID-19 pandemic, which was another in a long series of disruptions that have scrambled the market landscape since 2014. ERA has identified the need for end market, market channel, and client diversification across all the growth sectors. Experience shows that well-targeted consulting can unleash potential in these MSMEs, and so, in the framework of ERA’s Rapid Response to the pandemic, a special fund for consultants to provide “market pivot consulting” will operate in Y3.

MSMEs from ERA’s growth sectors will apply through an expression of interest (EOI) process for consulting services. We will select the best applications and match the MSMEs with consultants from ERA’s growing pool of experts, for which we have an open call for resumes. When we do not have the needed expert in the pool, ERA will conduct a tender.

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We will report the results of these targeted consultancies through the various growth sectors and report the anticipated results through the sales and possibly employment indicators. We plan up to 50 such consultancies for Y3.

2.1.7.2. Promotion and Marketing Support for MSME Beneficiaries

ERA will continue empowering eastern Ukrainians to establish new and support existing MSMEs in promising sectors and help them to expand into new markets across Ukraine, the European Union (EU), and other international markets. ERA ensures that its approach is inclusive of internally displaced persons (IDPs), women, young adults, Roma, and other underrepresented groups among its beneficiaries and that they also prosper from the region’s economic growth. ERA will work closely with local and regional stakeholders to create and support a new vision for the future of the region’s economy.

We will complement these activities with our ongoing ERA-wide regional and national media campaign through which we will disseminate our success stories and achievements and promote the idea of the reemerging east as a center for innovation, creativity, and successful entrepreneurship. We will focus our ongoing communications support for the growth sectors and eastern communities not only on those living in the east, but also on potential business partners, tourists, and investors throughout Ukraine and abroad. To that end, the team will be moving forward through ‘big picture’ events to create ‘buzz’ and support a variety of exciting outreach campaigns on the regional and national levels.

The Communications team will support a variety of interventions and development of multiple promotional and marketing materials for our beneficiaries. These materials will integrate positive messages with the visual identity of USAID and CXID Campaign. We will distribute the materials on public outreach platforms, including Facebook, YouTube, online media outlets, and websites of our partners and stakeholders. Information materials will include: one-pagers for MSMEs, entrepreneurs’ profiles, a variety of online and offline infographics, brochures, plaques, certificates, online banners to promote our trainings, PowerPoint templates, success stories, and videos.

2.2. INVESTMENT ACCELERATION FOR MSMES

2.2.1. Increasing access to credit union loans for small farmers, beekeepers, and tourism businesses

Implementation Mechanism: Grants Grants/Procurement Budget: $100,000 (awarded in Y2) Cross-Team Linkage: Honey and vegetable growth sectors External Partner Linkage(s): CAP

ERA awarded a grant in Y2 to the UUCU, the “credit union for credit unions,” for it to pass the money on to participating eastern and Azov credit unions, which in turn will provide loans at less than market rates of interest to beekeepers, smallholder farmers, and MSME’s in the tourism sector. This program began after the spring season, when demand for credit is highest among smallholder farmers, and so the uptake of loans has thus far been modest. ERA predicts an uptick in participation

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in the autumn, when the harvest is in and farmers feel more confident taking out loans for the next season.

If goals for the grant (38 loans) are met, ERA can consider a second round of funding to increase access to these reduced-rate loans in the region. The “theory of change” for this intervention is to change perceptions of credit availability in the region among smallholder farmers, and to encourage them to begin using credit unions to finance their micro-businesses as they did before the armed conflict, so that this effect will outlast ERA, even as interest rates are no longer subsidized.

2.2.2. Loan financing for socially responsible enterprises

Implementation Mechanism: Grants Grants/Procurement Budget: $100,000 (awarded in Y2) Cross-Team Linkage: Inclusion, Transformation External Partner Linkage(s): WNISEF

ERA’s sub-contract with WNISEF to support three subsidized Oschadbank loans to regional SMEs with socially responsible business models has begun implementation and will take place mostly during Y3. ERA will monitor the progress of this intervention to assess whether the impact created justifies extension, which ERA could do as a grant awarded to a Ukrainian legal entity that WNISEF has established—Ukraine Charitable Foundation—that can continue promoting this financing model going forward. In coordination with USAID, ERA may help build the capacity of the Ukraine Charitable Foundation as a complement to any further grant assistance.

2.2.3. Improving participation rate of eastern SMEs in national 5-7-9 credit program

Implementation Mechanism: ICA, procurement Grants/Procurement Budget: $40,000 Cross-Team Linkage: Growth-Market Expansion, Transformation, Inclusion External Partner Linkage(s): Regional branches of Oschadbank, Privatbank and Ukrgazbank, Ministry of Development of Economy, Trade and Agriculture, CAP, DOSA, LOSA, EU4Business

At the request of the Ministry of Economy and Trade, the administrator of the 5-7-9 Program, ERA will conduct 10 small group roadshow events across eastern Ukraine to raise awareness of the loan program among MSMEs. This will take place in the final months of Y2. If successful, ERA will extend its information campaign in Y3.

Luhansk Oblast has the worst participation rate in the President’s “5-7-9” reduced rate credit program in the country, and the Donetsk Oblast’s participation rate is not much higher. It is clear that the cautious attitude of banks towards loans in the oblasts that border the conflict zone plays a role, but when ERA’s Access to Finance team consulted with regional branches of the participating state banks, it learned that there is a dearth of quality applications. Each bank can identify applicants that appear to have a valid business model but cannot meet the basic level of financial literacy needed in a loan application.

In Y2, ERA engaged a loan application consultant (“Credit Counselor”) to assist a pilot group of SMEs in eastern Ukraine, who are interested in applying to 5-7-9 or to traditional loan programs, develop rigorous and competitive loan applications. This approach has already resulted in one loan

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obtained (for 8 million UAH) for a farming enterprise and two more are under consideration. The goal for this pilot intervention was to attract 10 million UAH in loans. ERA will study the results of the pilot and, if warranted, extend the Credit Counselor’s work into Y3, and potentially engage additional consultants to focus on specific geographic areas.

The working hypothesis for this intervention is that, as success stories accumulate (which ERA should actively disseminate), regional SMEs will begin to perceive these kind of business services as an investment that pays dividends and be motivated to pay for them without donor assistance.

2.2.4. Demand-driven transaction advisory services

Implementation Mechanism: Fixed price purchase order Grants/Procurement Budget: $393,290 Cross-Team Linkage: Growth sectors, Transformation External Partner Linkage(s):

Private equity is nearly absent from the financing toolbox for SMEs in eastern Ukraine, except for investment by relatives or close acquaintances. The level of knowledge among investors in opportunities in the region and the level of comfort of SMEs with this financing model have historically been very low.

ERA will manage, oversee, and support two transaction advisory firms that will assist SMEs (particularly medium enterprises) to raise long-term growth capital by facilitating both debt and equity transactions.

ERA has accumulated an initial “pool” of potential clients for the transaction advisory firms through its value chain assessments and through business databases such as Ruslana that permit analysis of key business indicators. The advisory firms will conduct further research to refine this pool and then will begin individual firm assessments to identify a longlist that will eventually become a shortlist of about 10 SMEs that will receive intensive pre-investment support.

By the end of Y4, transaction advisory firms shall coordinate support for at least four transactions for a total amount of at least $4,500,000 in transactions for SMEs in ERA’s area of operation.

Figure 2: INDICATIVE PIPELINE FOR 4 INVESTMENT TRANSACTIONS

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2.2.5. Supporting innovative investment vehicles (Catalytic Capital in Ukraine)

Implementation Mechanism: Purchase order, ICA Grants/Procurement Budget: N/A Cross-Team Linkage: Growth sectors, Transformation External Partner Linkage(s): DAI Capital, CEP

The transaction advisory intervention described above should help attract some of Ukraine’s existing private equity to eastern SMEs. The overall volume of private equity in the country is, however, quite limited and generally aimed at deals that are larger than those involving ERA partners. The transaction advisory companies will be hunting for the best deals in a relatively small pool.

ERA is studying how the Activity can enable the entrance of a blended finance investment vehicle into Ukraine with specific investment targets in the east. To add value to the current financing landscape it should be willing to consider deals in the “medium enterprise gap” of $1 million to $10 million investments.

Together with DAI Capital, ERA is developing a white paper on options for such an instrument. These include developing one from scratch in partnership with CEP, or working with an existing fund, Gazelle, which successfully closed out a fund in Georgia and Armenia initiated with USAID support and is now seeking new locations in eastern Europe. ERA could potentially provide technical assistance funding to help cover the due diligence costs, which are proportionally higher in relation to the transaction amount for deals with medium enterprises than for traditional larger deals. In exchange, ERA would require that the fund commit to investment targets in eastern Ukraine and the Sea of Azov region.

ERA will complete this white paper by the end of September 2020 and present it for discussion to USAID to determine what the next steps should be.

3.0. TRANSFORMATION Total Y3 Grants Budget: $ 388,174 Total Y3 Procurement Budget: $ 299,936 Total Y3 Construction Budget: $ 3,100,460 Total Local Consultant Days: 680 Total Foreign Consultant Days: 278

To better focus its support for the Transformation of eastern Ukraine and tailor its interventions to local needs, ERA divided its target area in Y2 into five subregions. The first region, the Luhansk Oblast, is focused on agriculture and the chemical industry. The Northern Donetsk Oblast, the second region, is primarily urban, while the Central Donetsk Oblast, the third, was traditionally a center of the coal mining industry. The city of Mariupol, the fourth region, is actively promoting innovation and developing IT and tourism, while the Sea of Azov coast, the fifth region, is a major tourist destination.

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Figure 3: MAP OF ERA SUBREGIONS

In Y2 ERA completed a study of “Model Cities” (American and European cities that had once been heavily industrial but had been forced to transform themselves when they lost their industrial base), which serves as this component’s guiding strategy document. Based on the recommendations for successful transformation and the key success factors identified, ERA has developed four workstreams for its Transformation work in the region, as well as for each of the five subregions. The workstreams are: Driving Vision/Planning, Beautification/Attractiveness, Promoting Innovation/Supporting Educational Institutions, and Infrastructure Investment Table 1: "MODEL CITIES" STUDY RESULTS

RECOMMENDATIONS KEY SUCCESS FACTORS WORKPLAN WORKSTREAMS 1. Help match potential sources of 1. Cleanup 1. Driving funding to city strategies and plans Vision/Planning 2. Support leadership skills training, 2. Local leadership study tours, and city twinning 2. Promoting 3. Support advocacy for a national 3. Leaders became Innovation/ fund for environmental cleanup skilled at finding Supporting 4. Build capacity of local leaders to funding Educational make the case for investments Institutions 5. Build capacity of local leaders to 4. Supported university attract strategic investors and help expansion and links 3. Beautification/ them identify potential investors Attractiveness 6. Support university expansions and 5. Made cities more linkages attractive 4. Infrastructure 7. Support research and development Investment 8. Provide support to make cities 6. Supported more attractive entrepreneurial cultures and SMEs

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The Transformation team will work with institutions and coalitions from civic society and the private and public sectors to promote and implement the visions and strategic plans developed in partner communities during Y2. It will support the development of strategies and visions with our partners in the coal cities of the Central Donetsk Oblast and the city of Kramatorsk. It will also organize further interventions to promote infrastructure investment, innovation, and beautification to support the region’s transformation from one traditionally dependent on heavy industry to one that is innovative, attractive for investors and businesses, and a more comfortable place to live and work.

3.1. INTRAREGIONAL INTERVENTIONS

3.1.1. DRIVING VISION/PLANNING – Intraregional

During Y2, the Transformation team supported the development of Luhansk Oblast’s Economic Development Strategy 2020–2027—with new visions, transformation plans, and prioritization of infrastructure investments—as well as individual strategic plans for the communities of Starobilsk, Bakhmut, Dobropillia, and Pokrovsk. In cooperation with DG East, ERA began work on strategy development for the city of Mariupol. In Y3, ERA will continue this work with the city of Kramatorsk as well as with the seven “coal cities” in the Central Donetsk Oblast—Dobropillia, Myrnohrad, Novohrodivka, Pokrovsk, Selydove, Toretsk, and Vuhledar—that have joined together into the “Platform for the Sustainable Development of the Donetsk Oblast Coal Cities” to develop a common vision and transformation strategy. Regionwide, the ERA Transformation team will continue to support the communities we worked with in Y2 promote their visions to wider local audiences. Our goal will be to make more people aware not only of the content of these visions and plans for the future, but to highlight local governments’ responsiveness to the population’s needs and wishes during the strategic planning process. This will help to demonstrate that conditions are indeed improving in eastern Ukraine, and that it is becoming a better place to live and work, with increased opportunities for personal and business growth. Strong local leaders are critical to successful transformations, for it is they who must drive the implementation of the vision and present it to the wider public. Their leadership skills are crucial to the process. To build these skills, ERA will support them with online conferences, study tours, and skills-building training. ERA will work with international partners such as the European Union and World Bank to support exchanges for leaders of coal and industrial cities in eastern Ukraine with leaders from successfully transformed foreign cities to provide resources for transformation to Ukrainian city officials.

ERA will work to raise the profile of these progressive communities, as well as that of local entrepreneurs and innovators from our Growth sector interventions. Individuals in the region, especially youth and the unemployed, need to have positive role models and know that others like themselves have improved their lives despite the challenges of the region. Publicizing the increased inclusion of vulnerable populations through the work of our Inclusion component will reinforce the vision of eastern Ukraine as a region where all groups can participate in the economy of the region. ERA works on the formula of Inclusion plus Growth equals Transformation. In tandem, information about the activities of our Inclusion, Growth, and Transformation components will create a constant

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“buzz” contributing to changing perceptions of the east, promoting it as a vibrant and promising region.

3.1.1.1. Driving Vision Media Campaigns 3.1.1.1.1. Overarching Driving Vision Campaign

Implementation Mechanism: ICA Grants/Procurement Budget: N/A Cross-Team Linkage: Inclusion, Growth, Communications External Partner Linkage(s): GoU, DOSA, LOSA, DG East, Ministry of Culture

ERA will create an overarching Driving Vision Campaign, within whose framework we will create and channel messages addressing the needs, and showcasing the opportunities, of the areas that ERA supports. The campaign could have a slogan such as “Choose a successful future,” appealing to our target audiences to follow paths leading to optimism, confidence, success, and prosperity. At the same time, this campaign would call for people to act and take responsibility for their own futures, as well as for the futures of their communities and region. The messages will identify and reinforce the CXID of Opportunities Campaign, which recent surveys have shown is not as clear to the general public as we had hoped. All outreach materials and public documents will be in line with the CXID communications campaign developed by USAID. In our public communications, we propose the following messages: 1. Help transform challenges in your community into successful, high-priority, community- identified projects Support the ‘Model Cities’ Approach—Choose a Successful Future! 2. Use modern educational opportunities to create the best of yourself. Take Advantage of Innovations—Choose a Successful Future! 3. Get a new profession! Sign Up—Choose a Successful Future! Driving vision efforts will be supported by interventions at the community, municipal, and national levels. ERA will organize public events (TEDx shows, forums, festivals, hackathons, innovative technology contests, roundtables, trainings, trade exhibitions, press conferences, study tours, roadshows) for decision makers, community leaders, small businesses, entrepreneurs, IDPs, vulnerable groups, youth, and media. We will bring celebrities into the campaign to become spokespeople for its themes and promote the region as attractive for business and living. Through our interventions, we will disseminate information about opportunities (including those ERA offers) for people in eastern Ukraine for business and professional development. ERA will support the community, city, and regional administrations, employment centers, learning hubs in partner- educational institution, STEM centers, robotic labs, and the Sikorsky Challenge initiative with training events, promotional materials, and targeted campaigns in social media. Depending on the limitations imposed by COVID-19, we will assist in organizing public events, online and off. At the same time, we will help ERA’s team, partners, and grantees to adapt to new and existing public outreach platforms and applications to digitalize planned activities on Facebook, YouTube, Viber, Telegram, online media outlets, educational platforms, and online marketplaces. 3.1.1.1.2. Influencer Video Series

Implementation Mechanism: Procurement Grants/Procurement Budget: $75,000

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Cross-Team Linkage: Inclusion, Growth, Communications External Partner Linkage(s): PR/Media agency

We will transfer previously planned “big picture” in-person events with global celebrities and well- known Ukrainians to a series of online video events. Local and international leaders will focus on important subjects to help influence and inspire young people, our beneficiaries, and our partners to achieve great things. 3.1.1.1.3. East Ukrainians who Glorified their Home Region Documentary

Implementation Mechanism: Procurement, grant Grants/Procurement Budget: $25,000 Cross-Team Linkage: Inclusion, Growth External Partner Linkage(s): Movie making/production studio

To revive the pride of eastern Ukrainian citizens, and to demonstrate that the traditionally industrial region also has a rich history talented and world renown Ukrainians in the creative and cultural spheres, we will create a 30- to 45-minute documentary about musicians, writers, painters, photographers, and other creative artists who were born, lived (live) or worked (work) in eastern Ukraine. We will organize the premiere of the documentary in the Cinema House in Kyiv and will ensure comprehensive promotion of the documentary via YouTube and Facebook.

3.1.1.2. Promote the “Model Cities” transformation experience

Implementation Mechanism: Procurement, ICA Grants/Procurement Budget: $17,000 Cross-Team Linkage: Communications External Partner Linkage(s): International Mayors Summit, DG East

For successful regional economic transformation, local and regional government officials need to improve their capacity to think “bigger” regarding their visions and the investments needed to build infrastructure, modernize current industries, and attract new industries in the future. To promote the “Model Cities” experience, we will create an infographic to visualize the study and gather motivational videos about the successful transformation of cities similar to those in eastern Ukraine. We will promote this experience through conferences and forums for regional and local coalitions to discuss how to adapt the study’s recommendations for practical use in ERA partner communities. We are in discussions with the International Mayor’s Summit on how we can use its expertise and contacts to transfer international transformation experience to eastern Ukraine. 3.1.1.3. Organize and hold study tours to “Model Cities”

Implementation Mechanism: Procurement, ICA Grants/Procurement Budget: $0,00 Cross-Team Linkage: Communications External Partner Linkage(s): ERA partner cities, US/EU model cities To improve local and regional leaders’ capacity to implement their visions and strategies, we will organize study tours for groups of local coalitions to similar cities with successful transformation experience. Key goals are to inspire the participants, promote discussion, develop ideas, and create

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relationships to strengthen local and regional coalitions. To implement this task, we will contract a consultant to help us select participants and develop a program in three or four foreign cities that have gone through a successful economic transformation. The tour participants will then develop action plans and present them for discussion at a regional learning forum. (This is conditional on a fundamental change in the current COVID-19 health situation and the ending of travel restrictions from Ukraine to the European Union and United States.) 3.1.1.4. Support DO/LO SMART specialization strategies

Implementation Mechanism: Grants Grants/Procurement Budget: $104,050 (Y2) Cross-Team Linkage: Growth, WFD External Partner Linkage(s): DOSA/LOSA, NGO Ukrainian Institute for International Politics

The Donetsk and Luhansk Oblasts have already approved regional development strategies based on the results of a cursory SMART specialization analysis of the economy, but there are no action plans. The aim of a SMART specialization strategy is to determine the most promising area for supporting innovation in the economic sphere; it is based on an analysis of the region’s research and innovation capacity, as well as of the businesses and educational/scientific institutions located there. ERA will support the development of full SMART specialization strategies and action plans for the Donetsk and Luhansk Oblasts based on European Union methodology (the Entrepreneurial Discovery Process). These action plans will be appended to the regional development strategies. As part of the process of developing these specialization strategies, ERA will involve local authorities, academia, business, and civil society. 3.1.1.5. Transformation experience transfer from Europe and western Ukraine into eastern Ukraine

Implementation Mechanism: Grants Grants/Procurement Budget: $169,174 Cross-Team Linkage: Growth, Communications External Partner Linkage(s): NGO Public Center Business Initiatives, ERA partners – Bakhmut, Novopskov, Bilovodsk, Dobropillia Consolidated Communities, cities of Kramatorsk, Starobilsk, Pokrovsk and Berdiansk

The Transformation team will acquaint eastern Ukrainian local governments and businesspeople with successful examples of European and western Ukrainian regional development and project development. Should the travel restrictions due to COVID-19 be lifted, ERA will propose a grant for trainings and study tours to western Ukraine and Poland in spring 2021. There we will show examples of government and business working together not only on regional development plans, but on developing projects to spur economic growth. Study tour participants will develop, present, and discuss their follow-up workplans at a final conference in Kramatorsk. Based on this, we will develop and distribute manuals with methodological recommendations for practical use by ERA partner communities. This will be part of a grant that we will continue to implement in Y4. 3.1.2. PROMOTING INNOVATION / SUPPORTING EDUCATIONAL INSTITUTIONS - Intraregional Universities were drivers of transformation in the Model Cities that ERA studied, and support of university expansion and modernization is a key to the future of the region. Upgrading curricula, adding faculty and departments, and improving conditions for universities—including those relocated

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from Donetsk and Luhansk—will be critical for the region. Support of research, development, and innovation will lead to startups and economic opportunity. ERA will assist city and university leaders’ efforts to advocate for oblast and national funding. We will continue to provide matching grants to fund labs and equipment for universities and ERA will support the renovation of LNAU facilities that were relocated from the NGCA. More about our work with educational institutions is found in the Inclusion-Opportunities section (1.2), as well as in the sections below devoted to the individual subregions. The ERA-supported STEM education centers will become an integral part of the innovation ecosystem in the Donetsk Oblast (section 1.2.3.6) and we will begin working on this in the Luhansk Oblast (see section 3.2.2.2. below). 3.1.2.1. Promotion of innovation centers

Implementation Mechanism: Procurement Grants/Procurement Budget: $ 50,000 Cross-Team Linkage: WFD External Partner Linkage(s): DGEast, UCBI-II, PR/Media agency

We will develop a campaign in social media (including Facebook and Instagram) to promote science, technology, engineering, and math centers (STEM) centers, robotics labs (Inclusion-Opportunities, section 1.2.3.6.), and the Sikorsky Challenge (Growth-IT, section 2.4.5.) initiative to inspire the younger generation to choose STEM careers at an early age and stimulate replication of such centers in other eastern Ukrainian cities and communities. 3.1.3. BEAUTIFICATION/ATTRACTIVENESS - Intraregional Improvements of a city’s appearance, services, and recreational possibilities are a key step in demonstrating to residents that positive transformation is indeed occurring. They also provide visual evidence to people from outside the region, including investors, that the city is becoming a more attractive place not only to live but to work and invest. ERA will support infrastructure and grants projects in partner cities to make them not only appear more attractive, but also provide improved recreational possibilities for residents. In order to build confidence and get buy-in for its work on the regions’ individual beautification projects, ERA will coordinate closely with UCBI II and DG East to take maximum advantage of their experience and partnerships with civic groups, students, and public officials. More about the individual projects are in the sections on the subregions. 3.1.3.1. Support design competitions to architecture and urban planning students with follow-on implementation of winning projects

Implementation Mechanism: ICA, Construction Grants/Procurement/Construction Budget: $100,000 Cross-Team Linkage: DG East, UCBI II, WFD, Inclusion, Communications External Partner Linkage(s): Donbas National Academy for Construction and Architecture, ERA partner cities

ERA will engage with universities to sponsor competitions among architecture and urban planning students to develop project ideas for community beautification. We will work with local coalitions, civic groups, and students to develop ideas and identify potential spaces for beautification projects. We will also provide master classes and workshops for students and professors to support them in

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these efforts. Through a competition among students from Donbas National Academy for Construction and Architecture in Kramatorsk, we will select the best beautification projects for possible implementation with ERA support. 3.1.3.2. Screen on the Green

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $150,000 Cross-Team Linkage: Communications External Partner Linkage(s): ERA partner cities

We will investigate organizing a “screen on the green” or open-space cinema concept. This could be easily set up in parks or squares where families can spend time watching movies, listening to lectures, and participating in master classes. The screens and the spots in the parks can be branded with the CXID campaign identity and can potentially serve as open space hubs or scientific labs for youth and children. For this purpose, ERA will select a sub-contractor to develop pilot projects in each of the three oblasts (Donetsk, Luhansk, and Zaporizhzhia). The company will create a unified "screen on the green" concept and branding for all sites, design the project in each oblast, assure purchasing and set up of LED screens (2x3 m), audio equipment, and stages.

3.1.4. INFRASTRUCTURE INVESTMENT - Intraregional Community visions and strategies, together with the priorities of city officials, should drive what infrastructure is funded in a community. ERA will help to match potential sources of funding with partner cities’ strategies and plans. ERA will focus on supporting our partners in the region obtain financing from the European Investment Bank (EIB), through the Ukraine Recovery Programme and the Ukraine Public Buildings Energy Efficiency Project, and the World Bank, though the Eastern Ukraine—Reconnect, Recover, Revitalize (3R) Project. ERA will continue to assist our partners from eastern Ukraine develop and obtain financing for infrastructure projects in the following sectors:

• Water and sewerage • Energy • Urban development (constructing, restoring and renovating public buildings) • Transport and storage • Public building energy efficiency • Roadside infrastructure (at present only in LO) • Regional roads and bridges (at present only in LO) ERA will continue to support city and oblast officials: 1. Select, prepare, and present projects for financing from IFIs 2. Advise on the most effective involvement of civil society for project development 3. Prepare local authorities to work more effectively with IFIs, including coaching officials to pitch social projects to EIB 4. Prepare full documentation (concept notes, construction documentation, legal documentation) for proposed projects

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5. Advocate for these projects with the EIB and the Ministry of Regional Development of Ukraine 6. Launch and manage projects 7. Attract regional architectural and construction companies to participate in tenders and organize international tenders . ERA will provide training and consultations for city and oblast staff on the application processes and monitoring and evaluation requirements. ERA will provide technical assistance to explore and develop public-private partnerships in partner communities as well. The Activity will also organize a forum to bring national, oblast, and city officials together with donors and IFIs active in eastern Ukraine to discuss their strategies and priorities. The goal will be to help city officials understand who can fund what, so they can better organize their approach and tailor proposals to potential funders.

As we describe in greater detail below (section 3.2.4.1.), ERA will support LOSA in preparing submissions for already identified projects to EIB, as well as offer post-submission and post-approval support. We will make use of this experience in our training and support of DOSA officials. In addition, ERA will use its construction budget in Y3 for high priority, community-identified projects that were developed in Y1 and 2 that are listed below. More detail about these projects is in the workplan components that they support.

• Phytosanitary Laboratory, Rubizhne (Growth-Vegetables) • LNAU Slovyansk Doors and Windows replacement (Northern Donetsk—Promoting Innovation/Supporting Educational Institutions) • Tech Club, Bakhmut (Central Donetsk-Promoting Innovation/Supporting Education Institutions) • Ice skating rink, Bakhmut (Central Donetsk-Beautification/Attractiveness) • DOSA Expo Center, Kramatorsk (Northern Donetsk-Infrastructure Investment) • Spalah IT Hub, Mariupol (Mariupol-Beautification/Attractiveness) • MAF Bus Stop Kiosks, Mariupol (Mariupol-Beautification/Attractiveness) • Expo Center, Melitopol (Azov Sea Coast—Infrastructure Investment) • Conference Hall, Berdiansk (Azov Sea Coast-Beautification/Attractiveness)

3.1.4.1. Support local and oblast administrations obtain financing from IFIs for critical infrastructure projects

Implementation Mechanism: ICA, SSTA Grants/Procurement Budget: N/A Cross-Team Linkage: Growth External Partner Linkage(s): DOSA, ERA partner cities, EIB, World Bank, EBRD

ERA will work to unlock IFI financing for critical infrastructure projects using the same approach currently being implemented in Region 1 (Task 3.2.4.1.). ERA proposes to create a pipeline to source, select, support, and promote local infrastructure investment. During Y3, ERA will create an infrastructure investment portfolio for advocacy to IFIs. 3.1.4.2. Support local municipalities obtain financing from national funds for critical infrastructure projects

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Implementation Mechanism: ICA, procurement Grants/Procurement Budget: $10,000 Cross-Team Linkage: Growth External Partner Linkage(s): ERA partner cities, “EU4Business”

ERA will increase the capacity of local officials to use government funds to implement their strategic development plans. After the state budget is approved, an ERA consultant will gather information on how to finance local projects under the new budget and develop recommendations with a list of state budget funds and regulations. We will provide training and advisory support for representatives of partner communities to prepare project applications for state funding. Due to the expected contraction of the Ukrainian economy and falling tax revenues, the availability of Ukrainian government funds may, however, be very limited in Y3. 3.1.4.3. Creation of investment portal and capacity building for investment promotion (Establishing investment promotion best practices)

Implementation Mechanism: ICA, SSTA, procurement Grants/Procurement Budget: $ 9,936 Cross-Team Linkage: Growth, Driving Vision External Partner Linkage(s): DOSA, LOSA, ERA partner cities

ERA will support DOSA in presenting and promoting local SMEs and infrastructure investment projects. Not only will we create an investment portal using the best models from eastern Europe and other similar investment environments, we will build the capacity of local investment promotion agencies by providing international level consultations. 3.1.4.4. Investment forum

Implementation Mechanism: Procurement Grants/Procurement Budget: $25,000 Cross-Team Linkage: Growth, Driving Vision External Partner Linkage(s): DOSA, LOSA, ERA partner cities, UNDP, EBRD, GIZ, EIB, USAID CEP, DFID, EU4Business

ERA will organize a two-day international investment forum for 500 people in Kramatorsk, subject to the COVID-19 situation and clearance from the Ukrainian government. The forum will promote SMEs and infrastructure investments in the ERA region. Jointly with DOSA, we will the develop the agenda, presentations, as well as select and prepare the venue. 3.1.4.5. Provide technical assistance to explore public-private partnerships (PPP)

Implementation Mechanism: ICA, procurement Grants/Procurement Budget: $ 8,000 Cross-Team Linkage: Growth External Partner Linkage(s): ERA partner cities

To increase ERA partner communities’ capacity to develop PPPs, we will organize a roundtable to inform interested local city government officials on PPP options. An ERA consultant will: conduct

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research on PPP laws, rules, regulations, and active PPPs in Ukraine; explore situation potential PPP opportunities; and provide training and consultations to launch PPP projects.

3.2. REGION 1 – LUHANSK OBLAST We will spread awareness of the Model Cities study and focus on implementation of the study recommendations for Ukraine. (The Luhansk Oblast Regional Development Strategy identified agriculture and chemicals as priority sectors.) ERA will support the implementation of small-scale beautification projects, and we will work on improving access to finance for large infrastructure projects for Luhansk Oblast. 3.2.1. DRIVING VISION/PLANNING – Luhansk Oblast 3.2.1.1. Promote Vision of Luhansk Oblast to a wider audience

Implementation Mechanism: Procurement Grants/Procurement Budget: $8,000 Cross-Team Linkage: Communications, Growth, Inclusion External Partner Linkage(s): LOSA, UNDP Ukraine, UN Women, GIZ GmbH, USAID Policy for Ukraine Local Self-Governance (PULSE), DG East To build on the Luhansk Oblast Regional Development Strategy that was developed with ERA support in Y2 and formally adopted in February 2020, ERA will work with Luhansk Oblast State Administration to help promote the attractiveness of the region among potential investors—both domestic and international. We will disseminate the three-minute video we have already created via a variety of information channels. We will also work closely with the press departments of LOSA to distribute stories about economic successes and opportunities offered by ERA. ERA will organize a conference for representatives of regional coalitions about strategy implementation and how they can more effectively attract investment.

3.2.2. PROMOTING INNOVATION/SUPPORTING EDUCATIONAL INSTITUTIONS - Luhansk Oblast In addition to the interventions below, the IT team will be supporting an academic accelerator/incubation program for Luhansk Oblast described in more detail in section 2.4.5.

3.2.2.1. Support Volodymyr Dahl East Ukrainian National University in becoming an integral part of the Luhansk Oblast’s development

Implementation Mechanism: Procurement Grants/Procurement Budget: $1,500 Cross-Team Linkage: Inclusion-Increasing Opportunities, Communications External Partner Linkage(s): CEP, UCBI II, DG East, UNDP, LOSA, ERA partner universities, local companies

ERA plans to hold a DemoDay on the “Modernization of Engineering Education to Support the Competitiveness of Luhansk Oblast Industry” as part of its grant to Dahl University (Inclusion- Opportunities, section 1.2.3.4.). It will showcase university-business collaboration in the

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modernization of engineering education. It will present the updated curricula and information on new opportunities for students. We will use the event to attract other companies for closer relations with the university to align university curricula with business needs. We will also include the local authorities so they can see how the university’s recent reforms align with their regional development strategy.

3.2.2.2. Support innovation development via STEM education and robotics

Implementation Mechanism: Procurement Grants/Procurement Budget: $2,000 Cross-Team Linkage: Increasing opportunities, Communications External Partner Linkage(s): CEP, DG East, CEP and UCBI II, LOSA, ERA partner universities, local companies and entrepreneurs We will be introducing the concept of STEM education centers from our work in the Donetsk Oblast (Inclusion-Opportunities, section 1.2.3.6) into the Luhansk Oblast through a DemoDay to share the experience of ERA-supported STEM centers and partner universities in the Donetsk Oblast.

3.2.3. BEAUTIFICATION/ATTRACTIVENESS - Luhansk Oblast By the end of Y2 we plan to submit to USAID concept notes for the following three projects. If approved, ERA will begin work in Y3. 3.2.3.1. Implementation of "Mobile Stage" project in Starobilsk

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $12,160 Cross-Team Linkage: Communications External Partner Linkage(s): Starobilsk City Council Direct beneficiaries: 10,000 Indirect beneficiaries: 10,000

As part of the Starobilsk Economic Development Strategy 2025, this project will provide additional possibilities for seasonal agricultural fairs, annual festivals, and other regional and local events. These events will support the development of SMEs and provide an opportunity for entrepreneurs from different cities to exchange their experiences. 3.2.3.2. Implementation of the "Green Kiosks" project in Starobilsk

Implementation Mechanism: Construction Grants/Procurement Budget: $4,540 Cross-Team Linkage: Growth, Communications External Partner Linkage(s): Starobilsk City Council Direct beneficiaries: 20 Indirect beneficiaries: 10,000

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For one of Starobilsk’s parks, ERA will purchase and install “green kiosks” for retail trade at local festivals and fairs. These will not only enable more public events to be held, they will improve the appearance of the city park area. 3.2.3.3. Implementation of Novopskov Market (open air)

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $153,400 Cross-Team Linkage: Growth, Communications External Partner Linkage(s): Novopskov City Council Direct beneficiaries: 8,000 Indirect beneficiaries: 8,000

As part of the Novopskov Consolidated Community Development Strategy 2025, the market creates a modern public space near the river Aidar. Creation of this space will provide local entrepreneurs, beekeepers, and masters of folk art with an attractive public space to promote their products among community residents.

3.2.4. INFRASTRUCTURE INVESTMENT - Luhansk Oblast

3.2.4.1. Support Luhansk Oblast social infrastructure project concepts developed for the EIB with ERA support

Implementation Mechanism: ICA, SSTA Grants/Procurement Budget: N/A Cross-Team Linkage: Growth, Inclusion External Partner Linkage(s): DOSA, ERA partner cities, EIB, World Bank, EBRD

In Y2 with ERA support, LOSA presented 10 social infrastructure projects to IFIs at the Mariupol Investment Forum. LOSA and ERA have continued to develop these projects and have completed concept notes and project presentations. LOSA has already begun pulling together the legal documentation for the projects as well as a search for sites. In Y3, ERA will continue to support LOSA unlock EIB financing for these projects under the €100 million Ukraine Recovery Programme. These projects include:

1. construction of a regional clinical hospital and oncology center in Sievierodonetsk 2. construction of a rehabilitation center for children with disabilities in Kreminna 3. construction of a sports and athletics arena in Kreminna 4. reconstruction of the central regional sports stadium in Rubizhne 5. improvements to the social welfare system and reconstruction of assisted-living facilities for senior citizens in the Luhansk Oblast 6. renovation of the displaced Luhansk National Agrarian University in Starobilsk and Vesele

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3.2.4.2. Project support for the railway connection of the eastern districts of the Luhansk Oblast to the Ukrainian national rail network

Implementation Mechanism: ICA, procurement, Grants/Procurement Budget: $250,000 Cross-Team Linkage: Growth, Inclusion External Partner Linkage(s): LOSA, ERA partner cities in Luhansk Oblast, EIB, EBRD

ERA will continue to help LOSA solve one of the most important infrastructure problems in the Luhansk Oblast: the construction of a railway line to connect the central and eastern raions of the Luhansk Oblast with the rest of the Ukrainian railway network. We will support the preparation of an ERC and feasibility study to select the optimal route and cost, and we will work with the Ukrainian authorities and IFIs to attract funding for the project.

3.3. REGION 2 – NORTHERN DONETSK OBLAST The northern region of the Donetsk Oblast is urban and industrial, with a developing SME sector and potential for tourism sector development. 3.3.1. DRIVING VISION/PLANNING – Northern Donetsk Oblast 3.3.1.1. Support the development of Kramatorsk Strategy to prioritize investments

Implementation Mechanism: ICA, procurement Grants/Procurement Budget: $10,000 Cross-Team Linkage: Growth, Inclusion, Communications External Partner Linkage(s): Kramatorsk City Council, USAID DG East, GIZ GmbH Should the city administration confirm its request for support after the autumn elections, ERA will assist Kramatorsk form a new vision for the city through the development of a strategy and action plan. While we foresaw that we would not be taking on new work supporting the development of visions and strategies for communities, we have received a request for such assistance from the city of Kramatorsk. As the acting capital of the Donetsk Oblast NGCA, the city has been subject to unique challenges and growth pressures. It will also be facing the challenges of territorial expansion due to consolidation with surrounding communities. ERA feels that it needs to respond positively to the city’s need to develop a vision and strategy because of the city’s important economic and political role in the region. We will work with a local coalition of business and community leaders, NGOs, and universities to identify “growth points” to prioritize investments in the new consolidated community.

3.3.1.2. Support promotion of tourism and investment attractiveness of the Lyman СС

Implementation Mechanism: Grant Grants/Procurement Budget: $21,901 (Y2) Cross-Team Linkage: Growth-Tourism External Partner Linkage(s): Lyman City Council

The Transformation team plans to support tourism and investment attractiveness of the Lyman Consolidated Community (CC). We will produce a promotional video and create outreach products

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for visitors. Representatives of Lyman CC will learn from the successful experience of other oblasts in rural and green tourism via a study tour to the Poltava Oblast. We will sponsor a promotional tour to the Lyman CC for representatives of other Ukrainian oblasts.

3.3.2. PROMOTING INNOVATION/SUPPORTING EDUCATIONAL INSTITUTIONS - Northern Donetsk Oblast In addition to the workstreams below, ERA will promote innovation in the Northern Donetsk Oblast through the opening of the Sikorsky Challenge Start-up School in the Sloviansk affiliate of LNAU (Growth-IT, section 2.4.5), and STEM Education (Inclusion-Opportunities, section 1.2.3.6.). 3.3.2.1. Support the “Tech Club” in Bakhmut

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $76,700 Cross-Team Linkage: WFD, Inclusion External Partner Linkage(s): Bakhmut City Council Direct beneficiaries: 200 Indirect beneficiaries: 150

The Bakhmut City Department of Education proposed this project, which is aligned with the Bakhmut Consolidated Community Development Strategy. It provides for the creation of a Tech Club as an open space equipped with the latest technology for the educational development of young people from Bakhmut. The project will involve facility renovation and the purchase of computer equipment, furniture, and presentation equipment. 3.3.2.2. Renovation of LNAU in Sloviansk (Phase 1)

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $646,724.00 Cross-Team Linkage: WFD, Construction, Transformation External Partner Linkage(s): CDM Engineering Ukraine Direct beneficiaries: 1,228 Indirect beneficiaries: 20,000

This project involves winterization of the exterior façade of the main administration/classroom building and dormitory on the Sloviansk campus. A larger campus-wide renovation is planned, including a heating system retrofit (phase two), renovation of roofing systems and exterior cladding/insulation (phase three), and larger-scale renovation of some unoccupied buildings (later phases). The phasing approach is intended to break the project into manageable tasks and will scale up as previous phases are successfully completed. ERA anticipates completion of Phase 1 in Y3.

3.3.3. BEAUTIFICATION/ATTRACTIVENESS - Northern Donetsk Oblast 3.3.3.1. Mobile Ice-Skating Rink in Bakhmut

Implementation Mechanism: Construction

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Grants/Procurement/Construction Budget: $439,660 Cross-Team Linkage: Communication, Growth External Partner Linkage(s): Bakhmut City Council Direct beneficiaries: 30,000 Indirect beneficiaries: 30,000

As part of the Bakhmut Consolidated Community Development Strategy 2027, this project envisions an open ice rink with a roller rink for warm weather to create a modern, attractive space for the community as well as creating a tourist attraction. The proposed construction will be on a greenfield space within an existing city park. The park currently includes several electric amusement rides that are mostly in disrepair. A new utilities building will be required to support refrigeration, electrical, and maintenance equipment. A nearby steel canopy structure is planned for renovation to support vendors, skate rentals, ticket sales, and waiting area. 3.3.4. INFRASTRUCTURE INVESTMENT - Northern Donetsk Oblast 3.3.4.1. Expo Center in Kramatorsk

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $250,000 Cross-Team Linkage: Growth, Communications External Partner Linkage(s): DOSA Direct beneficiaries: 270 Indirect beneficiaries: 55,000

ERA will support DOSA in Y3 to design and plan an Expo Center. This project has been identified as a high priority for the Donetsk Oblast. With the loss of convention/exhibition space in the city of Donetsk, there is no proper exhibition space in the GCA of the Donetsk and Luhansk Oblasts. Such an Expo Center is an important piece of infrastructure for the long-term economic recovery of the region. The project involves the renovation of a building, creation of new parking spaces nearby, landscaping, placement of roads and driveways, and the purchase and installation of equipment, machinery, and furniture. It will create a venue for exhibitions, trade fairs, congresses, and other large events in the oblast.

3.4. REGION 3 – CENTRAL DONETSK OBLAST This region historically has been dependent on the coal mining industry, which has been in a state of decline since Ukraine transitioned to a market economy. Only enormous state subsidies kept the mines afloat. Since the 1990s, closures of coal mining enterprises have negatively impacted local municipalities, and the authorities have not developed comprehensive socio-economic strategies to support this region’s monocities. 3.4.1. DRIVING VISION/PLANNING - Central Donetsk Oblast 3.4.1.1. Support the development of a Transformation Strategy for coal cities

Implementation Mechanism: ICA, procurement Grants/Procurement Budget: $14,500 Cross-Team Linkage: Growth, Inclusion, Communications

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External Partner Linkage(s): “New Energy–New Possibilities for the Sustainable Development of Donbas,” a consortium of local and international NGOs including Alternativa and Ecoaction, led by Germanwatch, EU4Business, partner cities of Dobropillia, Myrnohrad, Novohrodivka, Pokrovsk, Selydove, Toretsk, and Vuhledar, World Bank

In view of the importance of the transformation of the region’s coal cities, three international projects—ERA, New Energy—New Opportunities for Sustainable Development of Donbas (Germanwatch, Alternativa, NGO Ecoaction), and EU4Business Creating Better Business Environment—will provide technical support for the development of a Transformation strategy. Our partners will be the seven “coal cities” in the Central Donetsk Oblast—Dobropillia, Myrnohrad, Novohrodivka, Pokrovsk, Selydove, Toretsk, and Vuhledar—that have joined forces to create the “Platform for the Sustainable Development of the Donetsk Oblast Coal Cities.”

3.4.2. PROMOTING INNOVATION/ SUPPORTING EDUCATIONAL INSTITUTIONS - Central Donetsk Oblast 3.4.2.1. Support Donetsk National Technical University in creating an Accelerator for Youth Innovations

Implementation Mechanism: Grant, procurement Grants/Procurement Budget: $131,000 Cross-Team Linkage: Grants, Communications External Partner Linkage(s): “New Energy–New Possibilities for the Sustainable Development of Donbas” a consortium of local and international NGOs including Alternativa, Ecoaction, led by Germanwatch, EU4Business, World Bank, DOSA, Pokrovsk City Administration, DNTU, local companies and NGOs

The Transformation and WFD teams will support the creation of an Accelerator for Youth Innovations at the Donetsk National Technical University (DNTU) in Pokrovsk. The accelerator will facilitate the development of engineering creativity and entrepreneurial activities among youth, the promotion of MSME development, and the creation of an innovation ecosystem in the Donetsk Oblast. For this purpose, ERA will purchase equipment for two laboratories and coworking spaces and facilitate study tours and training for university staff and students. This a significant grant for the city of Pokrovsk, and it is included in the city’s strategy. Down the line, this grant will promote economic diversification in a city that is one of the above-mentioned coal cities.

3.4.3. BEAUTIFICATION/ATTRACTIVENESS - Central Donetsk Oblast 3.4.3.1. Dobropillia “Dream Park” Project

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $297,000 Cross-Team Linkage: Inclusion, Communications External Partner Linkage(s): Dobropillia City Council Direct beneficiaries: 8,000 Indirect beneficiaries: 26,000

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The project involves the construction of a 2,625-square-meter park and recreation zone, with installation of a pump track and facilities for renting roller skates, bicycles, and skateboards. The track would permit young people to engage in various types of recreation in safe and comfortable conditions. It would also allow the city to hold extreme sports competitions. Part of the Dobropillia 2030 strategy, it will create an attractive new urban space and allow the city to further promote its image as the sports capital of the DO.

3.4.4. INFRASTRUCTURE INVESTMENT – Central Donetsk Oblast 3.4.4.1. Coal Cities infrastructure transformation pilot project

Implementation Mechanism: Construction, ICA Grants/Procurement/Construction Budget: $300,000 Cross-Team Linkage: Growth External Partner Linkage(s): “New Energy–New Possibilities for the Sustainable Development of Donbas” a consortium of local and international NGOs including Alternativa, Ecoaction, led by Germanwatch, EU4Business, World Bank, partner cities of Dobropillia, Myrnohrad, Novohrodivka, Pokrovsk, Selydove, Toretsk, and Vuhledar.

In Y3 ERA will support the “coal cities” develop infrastructure projects based on priorities identified through the planning and visioning process for presentation to IFIs. ERA will also work with its international and local partners on identifying and potentially co-financing pilot infrastructure investment projects to support coal sector transformation activities in line with the national strategy for coal sector transformation.

3.5. REGION 4 – MARIUPOL Mariupol is the most populous and economically important city in the Donetsk Oblast GCA. In addition, the quality of public services, as well as the appearance of public spaces, has improved greatly over the past five years. However, a lack of educational and diverse employment opportunities persists as a reason that citizens cite for wanting to leave the region. In Y3, ERA and DG East will support the city develop a clear plan to transform its economy to meet contemporary post-industrial demands. ERA will also focus on promoting innovation and improving the environment and infrastructure for SMEs. 3.5.1. DRIVING VISION/PLANNING - Mariupol 3.5.1.1. Support of Mariupol 2030 Strategy development

Implementation Mechanism: Procurement, ICA Grants/Procurement Budget: $4,500 Cross-Team Linkage: Communications, Growth, WFD External Partner Linkage(s): DG East, IFC, Mariupol City Council At the beginning of Y3, there will be municipal elections throughout Ukraine (including in Mariupol). In line with USAID’s recommendations, ERA will focus on consulting support for Action Plan development instead of public activities during this period (September and October 2020). The strategic planning committee plans to organize a “buy-in” session with the newly elected city council and achieve approval of the document by the end of the calendar year.

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ERA and DG East are uniting their efforts to ensure that the new strategy and action plan meet community priorities and that the city can effectively monitor its implementation. 3.5.1.2. Support the connection of Mariupol and Pittsburgh to adapt lessons from the Model Cities Study

Implementation Mechanism: Procurement, ICA Grants/Procurement Budget: $20,000 Cross-Team Linkage: Communications, WFD External Partner Linkage(s): DG East, Mariupol City Council, International Mayors Summit, UNDP, USAID UCBI

Building on a presentation of the Model Cities Study in January 2020 and a study trip to Pittsburgh in 2019 (funded by USAID through the UCBI-II program), we will organize an online conference for Mariupol City Council officials with city leaders from various periods in Pittsburgh’s transformation. Mariupol City Council officials will be able to communicate directly with their colleagues from Pittsburgh to help them clarify questions and develop detailed roadmaps on how to implement transformation over the next years. ERA will promote communication between the municipalities and support them if they wish to establish long term formalized cooperation, including with a sister city program.

3.5.2. PROMOTING INNOVATION / SUPPORTING EDUCATIONAL INSTITUTIONS - Mariupol 3.5.2.1. Support Pryazovskyi State Technical University in becoming an integral part of Mariupol’s development

Implementation Mechanism: Grant, ICA Grants/Procurement Budget: $40,000 Cross-Team Linkage: WFD, Grants, Transformation, Communications External Partner Linkage(s): DG East, UCBI II, CEP, Mariupol City Council, PSTU, and local companies

As part of the City Development Strategy Mariupol 2030, ERA will support the development of an action plan to improve the ecosystem of R&D, startups, and monetization of scientific research. Based on this action plan, the Transformation and WFD teams will support the creation of a PSTU- based Regional (City) Training Center for shared use by the university, city, and businesses of Mariupol. In Y3, ERA is going to support local stakeholders create a grant proposal, based on lessons learned in “Model Cities” like Pittsburgh, that meets the needs of educational institutions, city government, and business for staff training and consulting services. We expect that the grant will provide equipment and training for the center.

3.5.3. BEAUTIFICATION/ATTRACTIVENESS - Mariupol 3.5.3.1. “Spalah IT HUB” Façade

Implementation Mechanism: Construction

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Grants/Procurement/Construction Budget: $237,000 Cross-Team Linkage: Growth, Communications, Inclusion External Partner Linkage(s): Mariupol City Council Direct beneficiaries: 180 Indirect beneficiaries: 5,000

This project follows the successful USAID-funded grant for interior renovation implemented by the Mariupol City Council. The facility, a symbol of the IT industry in Mariupol, currently supports the ongoing activities of the Spalah Chess Club and the Beetroot Academy’s IT school, coworking space, and SME startup programs. A renovated façade aims to improve the image of the neighborhood, city, and the activities inside the building. Construction activities include design review and renovation of the façade to reflect the modern image of Mariupol. 3.5.3.2. Bus Stops with Vendor Kiosks

Implementation Mechanism: Construction Grants/Procurement Budget/Construction: $280,000 Cross-Team Linkage: Growth External Partner Linkage(s): Mariupol City Council Direct beneficiaries: 36,000 Indirect beneficiaries: 36,000

To support local small businesses, ERA plans to create 16 prefabricated bus stops with vendor kiosks for leasing to SMEs. The project supports the ongoing transformation of Mariupol City in accordance with the Mariupol Development Strategy 2021 and is included in the city’s SME development program for 2019–2021. The project will significantly increase the comfort and level of convenience for riders of public transportation and allow for MSME expansion. ERA support will involve design development of the current site-adaptable design for each of the proposed bus stop locations. A prefabricated approach (construction in a factory, assembly on-site) will reduce construction times, improve quality control, and promote a unified design approach across the city. 3.5.4. INFRASTRUCTURE INVESTMENT - Mariupol 3.5.4.1. Support the Mariupol SME Support and Development Center

Implementation Mechanism: Procurement, Grants Grants/Procurement/Construction Budget: $250,000 Cross-Team Linkage: Growth, Communications External Partner Linkage(s): Mariupol City Council

To form a sustainable SME development infrastructure in Mariupol, ERA will support the establishment of a new, independent, nonprofit organization—the Mariupol SME Support and Development Center. Its main goal is to create favorable conditions for entrepreneurship in Mariupol. The center will: develop new, and implement existing, SME support programs; organize and conduct training; and provide consulting services. We estimate the number of beneficiaries to be 200 people.

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ERA will provide training for SME Center staff to help them develop a three-year business plan, a detailed annual work plan, and a budget. Moreover, ERA will help identify potential long-term partners. ERA will provide aid to equip the center and support public events and training.

3.6. REGION 5 – AZOV SEA COAST The Transformation team plans to work with the cities of Berdiansk and Melitopol to assist the implementation of their already existing strategic plans (Berdiansk’s until 2027, and Melitopol’s until 2030). In Y2, ERA identified priority infrastructure and beautification projects in these two cities and will begin work on them in Y3. On the coastline, the priority growth sector for Berdiansk and Henichesk is tourism. ERA is helping Berdiansk improve its infrastructure to extend the tourist season and offer new tourist attractions. 3.6.1. PROMOTING INNOVATION / SUPPORTING EDUCATIONAL INSTITUTIONS – Azov Sea Coast 3.6.1.1. Support Tavria State Agrotechnological University in becoming an integral part of the Zaporizhzhia Oblast’s development

Implementation Mechanism: Procurement Grants/Procurement Budget: $2,000 Cross-Team Linkage: WFD, Communications External Partner Linkage(s): AGRO, FAO, UCBI II, CEP, Melitopol City Council, TSATU, ERA partner universities, local companies and NGOs

ERA plans to hold an info event on “Promotion of Regional Technical Training Centers for Regional Economy Development” under a grant to TSATU. The main objective is to showcase university- business collaboration in the alternative energy sector. With the participation of local authorities and business, it will summarize the results of Training of Trainers courses as well as present updated curricula and new opportunities for both students and businesses.

3.6.2. BEAUTIFICATION/ATTRACTIVENESS – Azov Sea Coast 3.6.2.1. Berdiansk Landscaping

Implementation Mechanism: Procurement Grants/Procurement Budget: $10,000 Cross-Team Linkage: Growth-Tourism, Communications External Partner Linkage(s): Berdiansk City Council

The landscaping of Berdiansk is a priority for the community. ERA will support the development of a detailed concept for improving existing green spaces and creating new ones. It will also help build the capacity of the utility company responsible for the landscaping. ERA plans a series of trainings, online coordination calls, and study visits to other Ukrainian cities (Mariupol, Odesa) as part of this activity. In addition, ERA will support the development of documentation for one of the zones in the concept that can serve as the basis for allocating city funds and potentially attracting private sector investment.

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3.6.2.2. Berdiansk Conference Hall

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $443,000 Cross-Team Linkage: Growth-Tourism, Communications External Partner Linkage(s): Berdiansk City Council Direct beneficiaries: 16,000 Indirect beneficiaries: 117,000

The creation of a conference hall in Berdiansk will permit the visitors season to be extended by providing a venue for out-of-season roundtables, briefings, workshops, and presentations. It will also function as a platform for small business information support. Construction involves the interior renovation of an existing theater space to create a modern conference hall. 3.6.2.3 Support to organize effective Conference Hall management

Implementation Mechanism: Procurement Grants/Procurement Budget: $10,000 Cross-Team Linkage: Growth-Tourism External Partner Linkage(s): Berdiansk City Council

ERA plans to train the staff of the Berdiansk City Council to effectively operate the Conference Hall. This will involve a series of trainings and study visits. In addition, we plan to hold several meetings with business representatives to understand what their specific needs are for the conference hall.

3.6.3. INFRASTRUCTURE INVESTMENT – Azov Sea Coast 3.6.3.1. Melitopol “Expo Centre”

Implementation Mechanism: Construction Grants/Procurement/Construction Budget: $457,000 Cross-Team Linkage: Growth-Tourism External Partner Linkage(s): Melitopol City Council Direct beneficiaries: 35,000 Indirect beneficiaries: 105,000

The purpose of the project is to create a new expo center space to promote the products of Melitopol and Zaporizhzhia Oblast producers through regular thematic exhibitions. The goal is to expand producers’ relationships with businesses in other regions; foreign enterprises; financial institutions; and nongovernmental organizations. The project involves refurbishing the premises of a defunct refrigerator factory in a Melitopol industrial park. 3.6.3.2. Support for the Expo Center operator - Melitopol Development Agency

Implementation Mechanism: Grants Grants/Procurement Budget: $50,000

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Cross-Team Linkage: Growth-Tourism External Partner Linkage(s): Melitopol City Council, PLEDDG

The Melitopol Development Agency helps businesses, through trainings and seminars, reorient themselves and seek new markets, in Ukraine and abroad. In line with its development strategy, the Melitopol City Council plans that the Melitopol Development Agency will operate the Expo Center. Agency employees, however, need additional training on how to effectively operate the Expo Center. A grant for training will facilitate the efficient launch of the center.

CROSSCUTTING ISSUES

4.1. COMMUNICATIONS Communications is an integral part of ERA’s technical work and approach, cutting across all components and interventions. The Communications team will work closely with all ERA sector leads, technical staff, and beneficiaries to help plan and adjust interventions due to changing conditions and priorities under COVID-19 restrictions.

To keep our management and staff updated regarding the COVID-19 situation in Ukraine and abroad, the team will continue issuing daily updates.

To support all components of ERA achieve their workplan goals, the Communications team will provide multiple types of promotional and marketing materials. These materials will integrate positive messages with the visual identity of USAID and the CXID Campaign, and they will be distributed on public outreach platforms, including Facebook, YouTube, Viber, Telegram, and other online media outlets. We will help define the outreach approaches, target audiences, messaging, information channels, outlines interventions, tools, and instruments to be used for the Y3 workplan outreach efforts.

The team will ensure that all offline and online events, information materials, and presentations are branded in accordance with USAID regulations, that quarantine requirements are met, and that communication channels, such as new social media, education and marketplace platforms, are approved by USAID.

To ensure sustainable impact, the ERA Communications team will coordinate its activities with USAID, participating in biweekly online reporting sessions on activities, progress, and achievements. We will take the lead on complying with regular ERA contract reporting requirements, such as the weekly activity reports and the monthly future activities calendars. We will also stay in contact with USAID regarding its participation in ERA’s activities and will organize their attendance in accordance with the appropriate policies and requirements.

To provide comprehensive coordination of ERA outreach efforts, the Communications team will serve as a liaison between ERA’s technical leads and consultants with the representatives of DOSA, LOSA, and DCCI; ERA partner-cities’ press services; community leaders and active local civil society organizations; and NGOs working with media, such as the Ukrainian Crisis Media Center and Internews. We will continue to coordinate with our “sister” activity, DG East, and representatives of USAID and other donor-funded projects, such as UCBI II and CEP, to discuss the status of outreach activities implementation, avoid duplication, and make necessary adjustments.

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The Communications team will work closely with ERA’s Grants team to review grantees’ branding and marking plans, outreach and branded materials, publications, and videos to make sure they correspond to the requirements of USAID’s graphic standard regulations.

ERA will regularly produce success stories to raise awareness about our champions of change and publicize them on the Activity’s Facebook page. The sustained approach to producing success stories in the past year made ERA’s Facebook page a valuable source of information for regional and national media outlets. We plan on expanding our media audience during the next year by spreading the word about exciting new campaigns that are planned for Y3 to drive positive visions of eastern Ukraine and bring news about the region to national and international audiences. (Please, see Driving Vision/Planning, section 3.1.).

ERA will continue issuing its monthly newsletter to reach out to foreign audiences, our peer projects, international financial organizations, USAID, and the U.S. Embassy.

Using a variety of information channels, the Communications team will continue to manage planning and implementation of the Activity’s public outreach strategy and media activities to: draw the public’s attention to Ukraine’s eastern region; disseminate information about opportunities that ERA offers to support professional and business development, and attract investments benefiting the eastern Ukrainian economy.

4.2. ENVIRONMENTAL COMPLIANCE

In April of Y2, USAID and ERA worked together to develop an amendment to the Initial Environmental Examination (IEE). The purpose of this amendment is to cover additional activities under Objective 2: Support the Sustainable Development of SMEs in Eastern Ukraine and Objective 3: Build Confidence in the Future of the Eastern Ukrainian Economy. This amendment also adds a positive determination for large-scale construction activities under Activity 3.8. Feasibility studies and construction activities are also envisioned under this Amendment. This revised amendment was incorporated into ERA’s prime contract through Contract Modification No. 3 on August 12, 2020.

Per USAID policy, “construction” means construction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms “buildings, structures, or other real property” include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels. Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property.” During the life of the ERA, including Y3, construction activities may include but are not limited to building of waste-sorting lines, bridges, premises for biofuel storage, cooling chambers, educational and public buildings, farmers markets, railroads, roads connection, and viewpoint places as part of tourism infrastructure development. Categorical Exclusions A categorical exclusion threshold determination is recommended for the following identified activities under 22 CFR 216.2(c)(2): ● A categorical exclusion pursuant to 216.2(c)(2)(i) for education, technical assistance, or training programs except to the extent such programs include activities directly affecting the

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environment (e.g. construction of facilities) is recommended for activities 2.10, 2.11, and 2.13 (nonequipment purchase grant activities) from the Section 5 tables. ● A categorical exclusion pursuant to 216.2(c)(2)(iii) for analyses, studies, academic, or research workshops and meetings is recommended for nonequipment purchase grant activities.

Negative Determination with Conditions: Under 22 CFR 216.3(a)(2)(iii), a negative determination with conditions will be recommended for feasibility studies and small-scale construction and rehabilitation.

Positive Determination: Under 22 CFR 216.3(a)(2)(iii), a positive determination is recommended for large-scale construction and rehabilitation only. For large scale projects that require an Environmental Impact Assessment (EIA), ERA plans to engage a Ukrainian expert consultant with experience and success in providing such Assessments for projects of similar scale and type.

All activities that involve or may lead to construction will adhere to “Construction Risk Management: A Mandatory Reference for USAID ADS Chapter 201.” (file name: 201maw_100517). ERA has reviewed and will comply with USAID’s Sector Environmental Guideline on Construction (2017).

For all activities that fall under the Negative Determination with Conditions or Positive Determinations categories, ERA will engage an environmental specialist or a knowledgeable person on staff that can identify the potential for environmental impacts of the activities. Each professional will have appropriate experience in the specific activity sector (e.g., construction).

For feasibility studies, equipment purchases under grants activities, and small-scale construction and rehabilitation, ERA will complete an Environmental Review Checklist (ERC) and Environmental Mitigation and Monitoring Plan (EMMP) for each project and submit it to the Mission Environmental Officer (MEO) and Bureau Environmental Officer (BEO) for approval prior to implementation of the projects. ERCs and EMMPs will be valid for the feasibility studies only and will not constitute approval of USAID interventions that are the focus of the studies (which will need to be analyzed separately and receive separate approvals). After ERA has finalized its activities at a specific site, ERA shall sign a Record of Compliance with the EMMP certifying that the organization met all applicable EMMP conditions and submit it to the COR. The COR shall keep the original for the activity files and provide a copy to the MEO and BEO.

Objective 1: Provide Assistance to Stabilize the Economy of Eastern Ukraine The April 2020 Amendment to the ERA IEE does not include specific reference to Objective 1 activities. Objective 1 Activities from the 2018 IEE are summarized here:

• Interventions that increase net investment in supported businesses and industries. Activities will include business plans development, grants, investment promotion conferences, and workshops. • Interventions that increase the number of new businesses in supported industries. Activities will include grants, business training, and connecting firms in similar industries. • Interventions that increase the number of jobs in supported businesses and industries. Activities will include job training, grants, and designing new training and educational curricula.

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• Intervention for rapidly assessing and responding to the immediate economic needs of entrepreneurs and SMEs in eastern Ukraine. Activities will include technical and expert assessments of businesses and the eastern economy and grants. • Interventions for assessing and responding to small-scale infrastructure needs as it pertains to economic growth in the region. Activities will include technical and expert assessments, feasibility studies, and grants. • Small-scale rehabilitated infrastructure. Activities will include small grants for small-scale infrastructure and equipment purchase damaged by the conflict. • Interventions that improve the economic resilience and increase economic opportunities for IDPs and other vulnerable groups. Activities will include grants to micro businesses and business.

All the activities above appear to be included within the scope of activities for Objectives 2 and 3 in the April 2020 IEE, and this Work Plan will address the former Objective 1 activities in the Workstream activities for Objectives 2 and 3. Objective 2: Support the Sustainable Development of small and medium enterprises (SMEs) in Eastern Ukraine The following intervention categories fall under the purview of environmental mitigation, according to the Y2 Amendment to the IEE: Interventions to develop feasibility studies ERA will prepare study-specific ERCs and EMMPs to further describe project activities and reaffirm environmental determination(s). Approval of the Europe and Eurasia BEO of the completed ERC/EMMP will be required.

Interventions that increase the liquidity of on-lending to united credit union(s) and provide administrative cost ERA will prepare a site-specific ERC/EMMP for equipment procurement under grant activities. Equipment procured by the activity should include warranties and health and safety certificates, where appropriate, and should comply with Ukrainian standards for use. Packaging materials and old equipment should be properly disposed of (or recycled, where available).

Interventions that provide loan portfolio guarantees to increase access to credit for SMEs, private entrepreneurs, householders and other economic individuals. ERA will ensure that partner financial institutions (lenders) have internal procedures in place that reliably identify loan applications that may involve support for environmentally sensitive activities. If the financial institutions do not have internal procedures in place, ERA will help them to develop and implement an environmental due diligence process. ERA will provide to the COR and BEO the environmental due diligence plan or protocol to implement the requirements above. For equipment procurement under grants, ERA will prepare a site-specific ERC and EMMP. Interventions that facilitate access to new forms of equity and debt capital, including the establishment of investment funds, which may include providing seed funding (i.e., grants) to start the fund and/or provide first-loss capital. ERA will prepare a site-specific ERC and EMMP for equipment procurement under grant activities. Equipment procured by the project should include warranties and health and safety certificates, where appropriate, and should comply with Ukrainian standards for use. Packaging materials and old equipment should be properly disposed of (or recycled, where available)

OBJECTIVE 3: Build Confidence in the Future of the Eastern Ukrainian Economy

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Construction activities For all construction or rehabilitation activities, ERA will prepare an ERC and EMMP per Annex B, which will reaffirm the environmental determination.

For construction and rehabilitation activities that have a potential for significant impacts, ERA will also conduct a Scoping Statement (SS) and obtain approval by the BEO before an EA can begin per USAID and Government of Ukraine requirements. The completed EA will be provided to the BEO for review and approval and then the project can be implemented.

4.3. ADAPTIVE MANAGEMENT LEARNING

The CLA approach is one of the core principles in design and implementation of the Activity interventions. The adaptive, evidence-based methodology will continue supporting both immediate- impact interventions and forward-looking initiatives geared toward diverse, inclusive, and resilient market system development.

The Activity team will collaborate with local stakeholders and counterparts to launch and plan for interventions to ensure that they meet local needs and do no harm.

The Activity team will continue to regularly monitor leading indicators such as beneficiary participation and MSME production, capture results, and share learning from interventions to ascertain what works and does not work through regular pause-and-reflect sessions. Based on that learning and on evolving local behaviors, beliefs, and capacities, we will adapt interventions—either replicating and scaling them up, closing them down, or shifting their focus.

As Y3 presents a midway point in the project, the pause-and-reflect topics will shift to (1) focusing the team on scaling up the work that reaps the largest benefits and (2) beginning to orient the team on planning well in advance for sustainability of results after the project is over. During Y3, the team will reflect on progress toward achieving objectives, revalidate the strategic approach, and use knowledge and learning to adapt accordingly. Some touch points, including pause-and-reflect sessions and annual workplan preparation, will proceed on a pre-identified schedule. Others, such as after- action reviews and partner meetings, may be more ad hoc and less frequent.

The team will keep monitoring and updating the learning harvesting log where sub-intervention teams list their hypotheses to be tested, the method to test the hypothesis, the expected learning, and how and with whom they will share lessons learned.

In addition, the MEL team will facilitate collecting in one place, the Adaptive Management Log, the adaptive management changes that have been made based upon learning and evolving conditions. The MEL team will monitor the status of these efforts and make sure that the team is purposeful in articulating its learning and adaptive management steps, as well as sharing with relevant partners.

4.3.1 Special studies

4.3.1.1 Special study on general public perceptions regarding economic opportunities in ERA target regions (mid-term assessment)

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During Y3, the Activity team will conduct a study to monitor progress towards ERA performance indicator “3.2 Percent of population in target communities who think that in five years there will be more or better economic opportunities in the region which allow residents to stay/live in the region.” ERA will conduct the study in late spring—beginning of summer 2021 to inform the Activity team of the results for Y4 workplanning2.

Furthermore, the team may continue the market systems resilience assessment special study in additional value chains after the vegetables value chain pilot is completed and assessed in a pause- and-reflect session in the fall.

4.3.2 Adaptive management learning

During Y3, the Activity team will conduct a series of pause-and-reflect sessions to analyze and discuss the results of special studies and the progress of the interventions’ implementation towards the Activity Objectives. The management team will introduce adaptive management steps, if needed, to assure better performance and Objectives achievements.

Table 2: SCHEDULE OF PAUSE AND REFLECT SESSIONS

PAUSE-AND-REFLECT SESSION TIMELINE Pause-and-reflect session on the impacts of multiple October 2020 shocks and stresses, what this means about who are the most vulnerable, and what the programmatic implications are Pause-and-reflect session on business service November 2020 providers sustainability planning Pause-and-reflect session on the Market Systems November 2020 Resilience Assessment (MSRA) of the fruit and vegetables sector in eastern Ukraine Pause-and-reflect session on the efficacy of online vs. December 2020 in-person training delivery Pause-and-reflect session on ERA mid-term results, March 2021 lessons learned, and directions for future programming (internal) Pause-and-Reflect session on the results of ERA mid- June 2021 term evaluation by Resonance Pause-and-reflect session on access to finance lessons June 2021 learned Pause-and-reflect session on Y4 workplanning July 2021

2 ERA schedule the study for Year 3 as per revised AMELP approved on March 26, 2020. After the MEL team revises AMELP accordingly to Modification 03 and gets USAID Ukraine approval later this year, the Activity team will amend relevant sections of the Year 3 workplan.

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4.3.2.1. Pause-and-reflect session on the impacts of multiple shocks and stresses, what this means about who are the most vulnerable, and what the programmatic implications are

The Activity team will gather to discuss the impacts of multiple shocks and stresses (i.e. military conflict in the East, and COVID-19) and what this means for the most vulnerable groups—who they are, what programmatic implications the team faces, what new vulnerable population groups have emerged in light of the COVID-19 quarantine restrictions and 2020 economic downtown, and what pre-existing conditions have made them more vulnerable.

4.3.2.2. Pause-and-reflect session on business service providers sustainability planning

The team will hold a session in November 2020 to discuss which specific services in each value chain are 1) needed to support growth, 2) not available in the region and 3) could be provided by a local company. As part of early sustainability planning, the team will determine whether it is feasible to target the development of missing service providers for ERA Growth Sector support.

4.3.2.3. Pause-and reflect session on the Market Systems Resilience Assessment of the fruit and vegetables sector in eastern Ukraine

In November 2020, the MSRA team will present the results of its surveys and interviews of market participants and its assessment of the factors affecting the resilience of the fruit and vegetables sector. The Activity team will discuss the implications of the assessment for future programming.

4.3.2.4. Pause-and-reflect session on the efficacy of online vs. in-person training delivery

After mid-March 2020, the ERA team had to move Y2 interventions online and make plans to organize the majority of Y3 interventions online. We will study the efficacy of assistance delivered online vs. assistance delivered offline (specifically training interventions and technical consultations) and discuss best practices and lessons learned.

4.3.2.5. Pause-and-reflect session on ERA mid-term results, lessons learned, and directions for future programming

In March 2021, the team will gather internally to analyze and discuss the results and lessons learned of the first two and one-half years of implementation. If needed, it will undertake steps to adjust current interventions. Based on the conclusions drawn, the team will integrate lessons learned into further programming.

4.3.2.6. Pause-and-Reflect session on the results of ERA mid-term evaluation by Resonance

In June 2021, Resonance will present the results of the ERA mid-term evaluation to discuss with the ERA team key findings of the evaluation, achievements, lessons learned, and recommendation for future ERA programming.

4.3.2.7. Pause-and reflect session on access to finance lessons learned

In June 2021, the team will gather to discuss success stories and lessons learned from various access to finance interventions. This will help to narrow the Activity’s focus going forward into next years.

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4.3.2.8. Pause-and-reflect session on Y4 workplanning

All aspects of Activity strategy will be examined during the Y4 workplan development meeting. This will be an opportunity to look back at the first half of the Activity’s implementation progress and discuss lessons learned, success stories, and best practices. Then the team will look forward and develop interventions for Y4. The session will take place in July 2021.

4.3.2.9. Other

The Activity team will also incorporate additional periodic opportunities to reflect on progress as needed, such as after-action reviews, partner meetings, program reviews, or stocktaking with other international partners and non-USAID stakeholders.

PERFORMANCE INDICATORS AND TARGETS The table below shows the Y3 indicators and targets as per the revised AMELP submitted to USAID for review on September 17, 2020. The document presents key changes in ERA performance indicators targets considering the Activity cost and time extension approved in mid-August 2020. Although USAID/Ukraine has not approved the revised AMELP yet, the Y3 workplan is based on these new anticipated targets.

Table 3: ERA PERFORMANCE INDICATORS

ERA PERFORMANCE INDICATORS

INDICATOR TITLE INDICATOR DEFINITION TARGET FY3

1.1 Number of direct and indirect This indicator measures the number of 90,000 individual beneficiaries receiving individuals receiving directly and indirectly a improved infrastructure services as benefit from Activity interventions aimed at a result of USAID assistance improving infrastructure services.

1.2 Number of individual This indicator measures a number of 5,000 beneficiaries from vulnerable and individuals from vulnerable and hard-to-reach hard-to-reach populations in the populations of target regions among the target regions Activity’s beneficiaries. They will include, among others, those stipulated in the Activity contract (denoted with a *) plus a few others added for analysis: People with disabilities (PWD)*, IDPs*, returnees*, host communities*, elderly women of 55+ years old, elderly men of 60+ years old, non- educated youth (youth with incomplete secondary and secondary education), women*, including separate disaggregation for single headed household women, GBTI community*, ATO veterans*, laid-off workers, and other conflict-affected populations*. They may also include youth from NGCAs enrolled to/graduated from the educational institutions located at GCAs of target regions, parents of families with many children and/or children with disabilities, Roma people.

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Sub-indicator GDNR-2 Numerator = Number of female program 60% Percentage of female participants participants in USG-assisted programs designed Denominator = Total number of male and to increase access to productive female participants in the program economic resources (assets, credit, income, or employment). 2.1 Total amount of new This indicator measures the amount of new 4,000,000 investments secured by MSMEs investment secured by MSMEs directly supported by USAID, USD supported by the Activity project.

2.2 Number of individuals with Individuals reporting new or better 2,300 new or better employment as a employment might come from two main result of USAID assistance sources: Individuals who are direct beneficiaries of the Activity, such as those who complete workforce development program (WFD), receive training other than WFD, attend a study tour, trade fair, etc. Individuals who benefit from the Activity- assisted MSMEs that a) add new places of employment, b) MSMEs whose employees report having better employment. 2.3 EG.5-1 USD sales of firms U.S. dollar sales is the total annual revenue of 44,233,850 receiving USG-funded assistance Sub-Indicator EG.5-1 USD sales of firms receiving USG-funded assistance assisted firms for the reporting period, typically for the last 12 months at the point of data collection. This include both domestic sales and exports. 3.1 Percentage of direct This indicator measures a percentage of the 60% beneficiaries who think their Activity’s direct beneficiaries who report that economic situation has improved they think their economic situation improved substantially or somewhat over the over the prior 12-month period. past 12 months Survey participants will be asked “Over last 12 months, how has your economic situation changed?” There will be five potential responses: Improved substantially Improved somewhat Stayed the same Declined somewhat Declined substantially Responses of both “improved substantially” or “improved somewhat” will be counted as “improved” by this indicator. 3.2 Percent of population in target This indicator measures the percentage of 42% communities who think that in five the population in ERA target oblasts who years there will be more or better think that in five years there will be more or economic opportunities in the better economic opportunities which allow region which allow residents to residents to stay/live in the region and make stay/live in the region a livelihood. CC.1 Number of people trained This indicator measures the number of 5,000 during the Activity people trained as a result of the Activity assistance. This includes training through supported business service providers, educational institutions, NGOs, and any other institution to and/or through which the Activity provides assistance to the target populations. CC.2 Number of beneficiaries This indicator measures the number of direct 1,300 utilizing new practices, techniques, Activity beneficiaries who utilize new or business management skills as a practices, techniques, or business result of USAID assistance management skills as a result of the Activity assistance. New practices can include practices,

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techniques, business management (including marketing) skills. Individuals can be obtaining such practices at any Activity event or Activity-influenced infrastructure including training course, study tour, trade fair, grant infrastructure as an incubator, accelerator, etc. Such individuals can also utilize new practices while working in the firms/enterprises that received technical assistance or grants (such as new equipment, that requires training and new practices to operate). CC.3 Achievements made toward This indicator monitors achievements made 40 leveraging Government of Ukraine by the Activity towards leveraging GoU, (GoU), private sector and other private sector and other donor funds for donor funds (cumulative) implementation of infrastructural, business development projects and other interventions (such as events, trainings, and study tours) that help ERA beneficiaries.

CBLD-9 Percentage of U.S. This indicator measures whether USG- 52% Government–assisted funded capacity development efforts have led organizations with improved to improved organizational performance in performance organizations receiving organizational capacity development support.

MANAGEMENT

General Project Management

ERA’s management approach is based on a clear understanding of the Activity’s targeted results and outcomes, the establishment of lines of authority among team members that respond to these results and outcomes, and the maintenance of a highly supportive Activity planning, coordination, financial, and administrative systems. We have defined clear roles and responsibilities for a streamlined technical assistance and management team that will work towards launching interventions and initiatives that create resilient market systems using an adaptive, evidence-based approach. The ERA team will adapt to changing conditions—in large part due to the COVID-19 virus threat—in eastern Ukraine by using flexible systems and developing tools to assess our progress rapidly for results and identify when and how to make corrections. Leveraging collaboration with local partners to launch interventions that meet local needs while providing cost-effective solutions to implementation challenges will be critical for success. Regularly communicating the lessons learned and best practices with our local counterparts, USAID, and other partners will be key to building strong stakeholder relationships.

The internal coordination within the USAID ERA team is extraordinarily important. We will organize it in various ways, and we will:

• Make greater use of web-based video calling and conferencing capacity to not only better manage specific issues and decrease exposure to the COVID-19 virus, but also to facilitate

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open communication, adaptive management, and team cohesion across our many work locations. • Conduct regular quarterly coordination and planning meetings between the four ERA offices. • Conduct Activity-wide pause-and-reflect sessions to discuss progress and potential course adjustments. • Hold regular weekly meeting with the USAID Ukraine team. • Hold ad-hoc technical team coordination meetings as required, depending on the issues raised.

ERA Offices

As the center of Activity management activities, the Kramatorsk office continues to serve as the primary USAID ERA office. The Kramatorsk office also serves as the base for the majority of the Activity’s personnel, the technical DCOP, a large majority of the senior technical specialists, finance and administrative personnel, all of whom work closely with staff in ERA’s other three offices in Kyiv, Mariupol, and Sievierodonetsk.

The Kramatorsk, Mariupol, and Sievierodonetsk offices serve as the Activity’s primary implementation centers for the assistance provided at the local level. The teams from the three eastern Ukraine offices work directly day-to-day with our local partners at the oblast level. These offices have technical teams and are responsible for day-to-day implementation and direct interface with oblast and local government partners. The Mariupol and Sievierodonetsk offices are likewise staffed with senior specialists in areas of program involvement as well as a full complement of finance, administrative, M&E, and logistical support personnel.

The Kyiv office houses a small team of ERA senior management, the COP and DCOP of Operations, several senior technical and operations directors, and a handful of administrative and financial staff. The Kyiv-based team is responsible for liaising with its USAID/Ukraine counterparts, Government of Ukraine officials, capital-based partners, and other national stakeholders.

DAI Field and Home Office Coordination

DAI’s home office will continue to provide support to the USAID ERA team in a variety of ways, including providing technical oversight, responding to USAID requests for contractual information, and issuing accurate invoicing and other financial statements. It provides various services through a Project Director, a Senior Project Manager, and two Project Associates. The Senior Project Director provides overall technical support to the USAID ERA team and serves as the COP’s point of contact in the DAI home office. The home office team organizes quarterly project reviews with senior staff to discuss and resolve management and technical issues or respond to requests for information. They also coordinate home office support (including Finance, Contracts, Procurement, Information and Management Technology, Human Resources, etc.) to ensure that the Activity has the support and resources needed to manage ERA and meet or exceed USAID expectations. Approximately twice a year, the home office also holds a client satisfaction meeting with the COR to ensure that all ERA has properly identified and is addressing all necessary issues.

COVID-19 Mitigation Measures

As of the date of submission of this workplan, the Coronavirus COVID-19 pandemic continues to be a grave health and economic risk across all of Ukraine and the world. Consequently, we have

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developed security protocols for ERA staff to respond effectively to the COVID-19 pandemic. These enhance staff safety, address the dynamic health situation in Ukraine, and support Activity continuity in light of this threat. ERA will constantly monitor the risks to the Activity and its personnel presented by the COVID-19 virus threat. We will obtain information from the Ukrainian Ministry of Health, the Center for Disease Control website, DAI Global LLC resources, and Ukrainian employees at Activity locations. ERA has developed an Activity continuity plan that allows ERA staff to adapt to the current situation, maintain an adequate level of safety, and still achieve the Activity’s goals of boosting the economic resilience of eastern Ukraine. ERA’s overall approach in conducting business operations during the COVID-19 pandemic is to take an incremental and gradual approach that corresponds to, and carefully tracks, the Government of Ukraine (GoU)’s Five-Stage Plan for Exiting the Quarantine and Removal of Restrictions as shown in the table below:

Figure 4: GoU FIVE-STAGE PLAN FOR REMOVING QUARANTINE RESTRICTIONS

Throughout these stages, ERA will remain vigilant about the health and safety of all staff, regardless of nationality or location. We will follow the GoU’s public health agency best practices and recommend that all staff engage in everyday preventive measures to lessen the spread of germs and avoid illness.

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In addition to the Activity continuity plan, ERA has developed safety and security protocols to mitigate risks to Activity implementation during the COVID-19 pandemic, including: • ERA Travel Approval Request (Safety Planning Record)–This request form documents the potential risks that ERA staff may encounter during their travels and creates a plan for mitigating those risks. Staff members must provide their travel itinerary, the safety measures they will employ, and who will accompany them during the trip. Their direct supervisor and a member of senior management must sign the request. • Guidance on Mass Gatherings for events of 10 or more people—Organizers of ERA and ERA-financed events can determine how to safely hold the event and adjust to local circumstances. Because COVID-19 circulation varies in communities, these considerations are meant to supplement national health and safety laws, rules, and regulations with which gatherings must comply. That said, whenever possible, we will continue to hold as many meetings and events online as possible.

Staffing Plan

The ERA team has amassed a collection of highly qualified expat and local staff to support Activity implementation and to achieve or exceed USAID’s goals and objectives. Except for a few long-term operations positions (needed to replace staff that left the project during the latter part of Year 2), ERA is fully staffed for the Y3 Activity period.

The Chief of Party will continue to lead the USAID ERA team during Y3 of the project with the support of a Technical Deputy Chief of Party and an Operations Deputy Chief of Party.

The ERA senior management team will be supported by the technical team identified in the organizational charts below. The structure reflects a matrix approach that technical interventions are based on and is visually presented through two organigrams representing the technical teams and operations teams. (Due to the matrix-like structure of the technical team, certain individuals’ names appear more than once: under a sector and again under a result stream.) These charts also serve to clarify the lines of command and to document the primary responsible party for the technical and operational roles in this Y3 workplan.

Figure 5: TECHNICAL TEAM ORGANIGRAM

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Figure 6: OPERATIONS TEAM ORGANIGRAM

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RISKS AND ASSUMPTIONS AFFECTING IMPLEMENTATION

T he primary assumption for the implementation of the Y3 workplan is that COVID-19 will continue to limit in-person contact for trainings, public events, study, travel, and meetings.

The primary risks for the implementation of the Y3 workplan are that: · the economic consequences from COVID-19 will negatively affect the businesses of our beneficiaries in the Growth sector and severely curtail local and national government funds available for small project or infrastructure investment · the fall 2020 municipal elections will slow down implementation, and perhaps cause significant changes of our Transformation workstreams

Assumption—Continuation of COVID-19 restrictions

The health risks that COVID-19 presents, and the restrictions in place to combat them, have had a huge effect on how ERA plans to organize its programming, as well as on the interventions themselves.

As we enter Y3, the number of COVID-19 infections and deaths in Ukraine has been going up. The GoU has extended the quarantine period until November 1, 2020. The decision by the GoU to operate a hybrid in-person and distance school system at all levels, including university, poses the possibility of a spike in new infections that can lead to another lockdown. Even under the current restrictions of “adaptive quarantine,” we have limited ability to engage in large conferences, public events, trainings, and international study tours and exchanges. We also cannot bring U.S. and third- country nationals as consultants into Ukraine. Should there be another lockdown, ERA would also be unable to implement on-site activities such as construction and grantee assessments. ERA has transferred as many of its interventions as possible to an online format, or to in-person events that permit social distancing. We have developed, in our COVID-19 response detailed in this workplan, interventions to support our growth sector, our partner educational institutions and local governments, and the region’s vulnerable populations acquire the skills and technology to adjust to a life that is far more online than one year ago. The Activity has developed the ERA Continuity Plan, described in the Management section above, to safeguard the health of ERA staff and that of our partners and beneficiaries.

RISK—COVID-19 Economic Consequences

The overall economic outlook for Ukraine in the next year is extraordinarily concerning. The IMF’s April projections of the 2020 economic contraction were 7.7 percent, with a possible upturn in 2021 to 3.6 percent subject to a post-pandemic global recovery. By October 2020, the EBRD was projecting a 5.5 percent contraction in 2020 with 3 percent growth in 2021. Economic recovery is, however, likely to be more gradual as the risk of a new wave of the pandemic will remain until a vaccine or effective treatment of COVID-19 is found.

The economic impact of the COVID-19 crisis on businesses, including those of our partners in our Growth component, will be profound. The number of business bankruptcies is on the rise, many of our partners will be fighting to exist, and many will not be able to earn the funds to coinvest with ERA under planned grant activities. They may not be able to make the contacts to achieve their increased sales goals, in Ukraine and abroad, and inspectors for international certifications of their

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products will not be able to enter the country. The enterprises’ appetite for credit will also decrease.

The economic downturn represents a loss of tax and self-generated revenue at the national and local level. Local partner municipality and budgets have decreased, which will affect the ability to coinvest on beautification projects and cost-share on priority infrastructure projects. We are already starting to see similar problems with our partner educational institutions. The availability of national government funds for regional infrastructure will also decrease.

Risk—Local elections in October 2020

Local elections, for city councils and mayors are scheduled for October 25, 2020, under newly adopted election laws. Due to the still emerging regulations covering the elections and the ongoing process of decentralization, there may be some confusion regarding the local election process. All the partner cities and hromadas with whom ERA has MOUs are holding elections: Bilovodsk, Starobilsk, Novopskov, Bakhmut, Kramatorsk, Dobropillia, Pokrovsk, Mariupol, Berdiansk, and Melitopol. All the “coal” cities will be holding elections as well. There are several hromadas and cities where ERA is active where there will be no elections: Sievierodonetsk (ERA is scoping market infrastructure investment and has IM manufacturing partners); Volnovakha and Sartana (ERA has some fruit and vegetable partners at the early development stage); Lysychansk (ERA might add more IM companies); and Stanytsia Luhanska (support for an agricultural cooperative), Our understanding is that the reason given for not holding elections is security, but there may actually be political reasons for not allowing elections to go ahead at this point. As after any election, ERA can anticipate that a period of time will be required to establish a working relationship with newly elected city councils, mayors, and administrations.

ERA has worked closely and successfully with its partner oblast administrations, municipalities, and consolidated communities to develop plans, as well as to identify and implement projects. In the post-election period of forming new local governments and coalition, ERA may need to adapt plans for projects requested by certain local governments, such as the strategic economic development plan for Kramatorsk, if the local government and council membership changes significantly.

COORDINATION PLAN

As the work of ERA has expanded in eastern Ukraine, the Activity has intensified its coordination with other organizations playing key roles in the region’s economic development. For each workstream in the workplan we have indicated our partners and beneficiaries. Below is a summary table of the ERA workstreams which we are coordinating with other USAID-funded projects, international donor organizations and their projects, as well as with the Government of Ukraine, LOSA, and DOSA.

During its second year, ERA coordinated closely and on a regular basis with other USAID partners including the Democratic Governance East (DG East) program, the Competitive Economic Program (CEP), and the Energy Security Program (ESP). ERA, through its commitment to proactive cooperation, was involved in design and implementation of joint programming with DG East both in development of the Mariupol Strategic Development Plan 2021-2030 and with CEP in research and

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assessment of personal protective equipment manufacturing capacity in Ukraine. ERA will continue to work with DG East and CEP throughout Y3 implementation.

ERA and ESP coordinated at the national and local levels on vital energy and infrastructure issues in eastern Ukraine: together with DOSA leadership and the management of Vodadonbasu we worked to develop of a scope of work for assessing the water infrastructure system. Together with ESP and representatives of USAID, EU, the World Bank, and GIZ, we are coordinating our support on the GoU’s emerging national strategy on coal sector transformation with a focus on seven coal cities in the central Donetsk Oblast.

Table 5: ERA COORDINATION PLAN

Component Workstream Number Partner and Section Inclusion- Increase engagement of 1.1.1.2. UNFPA, CEP Capabilities businesses and NGOs practicing social entrepreneurship and corporate social responsibility Inclusion- Sharing of success stories 1.1.1.7. DG East Capabilities from ERA business beneficiaries through ERA and partner media channels Inclusion- Build a network of institutions 1.1.2.2.3 UNHCR, UNFPA, IOM, Save Capabilities supporting GBV survivors the Children, People in Need, Inclusion- Support implementation of 1.2.1.1. AGRO, FAO Opportunities the Agrokebety Master’s Program Inclusion- Support implementation of 1.2.1.2. AGRO, MoES, UNDP, Friedrich Opportunities dual education (applied skills Ebert Foundation training) Inclusion- Increase alignment of TVET 1.2.1.3. MoES, UNDP, Senior Expert Opportunities technical offerings with sector Service (German Federal needs through improved Ministry for Economic training equipment and Cooperation and activities Development), German Federal Ministry of Education and Research, Goethe-Institut in Ukraine, FAO, AGRO Inclusion- Support the consulting 1.2.1.4. CEP, DG East, UCBI II Opportunities ecosystem through building the network of university- based Case Clubs in the region Inclusion- Evaluation of Employment 1.2.1.5. UNDP Opportunities Center Data Collection Inclusion- Develop strategy and pilot 1.2.2.1 CEP Opportunities engagement on how firms can

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strengthen employee retention Inclusion- Support development of 1.2.2.2. UCBI II, MoES, UNDP (for Opportunities university-based CDC VETs) resources and network to improve job match and retention Inclusion- Youth Engagement 1.2.2.3. UNDP, UCBI II, UNITY Opportunities Inclusion- Youth engagement-Making 1.2.2.4. MoES, DOSA, LOSA, DG East Opportunities unattractive professions attractive Inclusion- Implement pilot activities 1.2.3.1. DG East, UCBI II, CEP Opportunities based on R&D strategy Inclusion- Strengthening and 1.2.3.2. MoES, AGRO, FAO Opportunities modernizing agrarian education Inclusion- Implementation of the grant 1.2.3.3. CEP, DG East, UCBI II Opportunities "Co-working and training space UNIVER" Inclusion- Implementation of the grant 1.2.3.4. CEP Opportunities “Modernization of Engineering Education to Support Competitiveness of the Luhansk Oblast Industry” Inclusion- Strengthening technical 1.2.3.5. CEP, FAO Opportunities education to support regional economic development in the Sea of Azov region Inclusion- Support innovations 1.2.3.6. CEP, DG East and UCBI II Opportunities development via STEM education and robotics Inclusion- Support educational 1.2.4. MoES, UNDP Opportunities institutions meet COVID-19 challenges-COVID-19 Response Growth-Biofuels Information Campaign to 2.1.1. EBRD, LOSA, ESP Promote Biofuels Growth-Biofuels Support biofuel development 2.1.2. ESP, EIB, CEP projects that engage agricultural SMEs and local consolidated communities Growth-Biofuels Develop woody biofuels 2.1.3. UNDP, EU4Business production capacity to address the consequences of LO forest fires Growth-Biofuels Economically viable biogas 2.1.5. EBRD, EIB production and utilization

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Growth-Biofuels Development of training 2.1.6. AGRO, FAO materials on biofuel issues Growth-Honey Investments in market actors 2.2.3. DFID (through DRC) (service providers, input and equipment suppliers, aggregators, exporters, processors) to strengthen value chain Growth-Honey Creation of the sustainable 2.2.4 AGRO pollination base through initiatives planting honey crops/herbs/trees Growth-Honey Support workforce 2.2.5. DG East, FAO development in beekeeping Growth-Honey Study-tour for local tourism 2.2.6. DG East, FAO, AGRO and beekeeping actors Growth-IM Upgrading the technical level 2.3.5. CEP, DG East of Dahl University students by creation of and ElectroLab and FabLab Growth-IT Support IT associations and 2.4.1. CEP clusters Growth-IT Strengthen the IT ecosystem 2.4.2. CEP Growth-IT Support IT firms' market 2.4.3. USAID EO Business Incubator, expansion and diversification CEP efforts Growth-IT Foster stronger linkages 2.4.4. CEP, UCBI II between IT firms and educational institutions Growth-IT Develop an academic 2.4.5. LOSA, MoES accelerator/incubation program for LO Growth-IT Strengthen IT 2.4.5. CEP, UCBI II entrepreneurship delivery to promote new business growth in east Ukraine Growth-Tourism Promote tourism product 2.5.1. CEP development Growth-Tourism Promote destination 2.5.2. UCBI II, Ministry of Culture, marketing of the Sea of Azov Ministry of Transport, Ministry region of Youth and Sport, CEP Growth-Tourism Workforce Development and 2.5.3.1. DG East, UCBI II, UNDP skills strengthening for tourism sector development Growth-Tourism Development of digitization 2.5.3.2. DG East, UCBI II skills to promote the region’s tourism, history, and culture Growth-Tourism Promote tourism industry 2.5.4. CEP partnerships

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Growth- Pathfinder clusters support 2.6.1. EDCARP, World Bank Vegetables Growth- Building the Stanytsia cold 2.6.2. EDCARP Vegetables chain Growth- Direct to Consumer support 2.6.4. World Bank Vegetables for agricultural producers Growth- Developing short course in 2.6.8. EDCARP, UNDP, AGRO, FAO Vegetables agriculture Growth-MSME Increasing access to credit 2.8. CAP Finance unions for smallholder farmers, beekeepers, and tourism businesses Growth-MSME Loan financing for socially 2.9. WNISEF Finance responsible enterprises Growth-MSME Improving success rate of 2.10. Ministry for Development of Finance eastern MSMEs in 5-7-9 Economy, Trade and program Agriculture, CAP, DOSA, LOSA, EU4Business Growth-MSME Supporting innovative 2.12. CEP Finance investment vehicles (Catalytic Capital in Ukraine) Transformation- Driving Vision Media 3.1.1.1. GoU, DOSA, LOSA, DG East, Intraregional- Campaigns Ministry of Culture Driving Vision Transformation- Promote the “Model Cities” 3.1.1.2. DG East Intraregional- transformation experience Driving Vision/Planning Transformation- Support design competitions, 3.1.3. UCBI II, DG East Intraregional- individual regional Beautification/ beautification projects Attractiveness Transformation- Support local administrations 3.1.4.1. EIB, World Bank, EBRD Intraregional- and municipalities in raising Infrastructure financial resources from IFIs Investment for implementation of critical infrastructure projects Transformation- Support local municipalities 3.1.4.2. EU4Business Intraregional- obtain financing from national Infrastructure funds for critical Investment infrastructure projects Transformation- Investment Forum. 3.1.4.4 UNDP, EBRD, GIZ, EIB, CEP, Intraregional- DFID, EU4Business, DOSA, Infrastructure LOSA Investment Transformation- Promote vision of LO to a 3.2.1.1. UNDP Ukraine, UN Women, Luhansk Oblast- wider audience GIZ, PULSE, DG East Driving Vision/Planning

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Transformation- Support the development of 3.3.1.1. DG East, GIZ GmbH Northern DO- Kramatorsk Strategy to Driving Prioritize Investments Vision/Planning - Transformation- Support the development of a 3.4.1.1. Germanwatch, EU4Business, Central DO- Transformation Strategy for World Bank Vision/ Planning coal cities Transformation- Support of Mariupol 2030 3.5.1.1. DG East, IFC Mariupol-Driving Strategy development Vision/Planning Transformation- Support connection of 3.5.1.2. UNDP, UCBI II Mariupol-Driving Mariupol and Pittsburgh to Vision/Planning adapt Model Cities lessons Transformation- Support for the operator of 3.6.3.2. PLEDDG (Partnership for Azov Sea Coast- Expo Center - Melitopol Economic Local Development Infrastructure Development Agency and Democratic Governance, Investment Canada)

ANNEX A – WORKPLAN SUMMARY OF INTERVENTIONS

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