QUARTERLY REPORT APRIL 1 – JUNE 30, 2017

Moldova Competitiveness Project

1

QUARTERLY REPORT

YEAR 2 QUARTER 3 (FY2017 Q3)

APRIL 1 – JUNE 30, 2017

JULY 14, 2017

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

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

Bhavana World Project www.bhavanaworldproject.com

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

DISCLAIMER

The report was prepared by the Competitiveness Project. The contents are the responsibility of creator and do not necessarily reflect the views of USAID, the United States Government or Sida and the Government of Sweden

COVER PHOTO PHOTO CREDIT: MCP PHOTO CAPTION: An MCP supported event for development: the open-air classical music festival DescOPERA, in Butuceni, June 10, 2017

2 TABLE OF CONTENTS

ACRONYM LIST ...... 5 EXECUTIVE SUMMARY ...... 7 SECTION I ...... 13

PROJECT TECHNICAL INTERVENTIONS DURING FY17 Q3 ...... 13 A. ACCOMPLISHMENTS, SCHEDULES, AND PROBLEMS ...... 13 A1. and Tourism ...... 13 Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ...... 13 Activity 1: Support Development of the Stauceni and Excellence Center (WEC) .. 13 Activity 2: Design Wine of Moldova (WoM) Academy ...... 13 Activity 3: Assist upgrade of wine quality ...... 14 Activity 4: Support Moldovan Tourism Product Development ...... 16 Activity 5. Better Trained Workforce and Modern Skills in the Tourism Industry ...... 22 Objective 2: Expanded Market Linkages ...... 22 Activity 1: Build Wine of Moldova Brand Equity and Increase Awareness about Moldovan ...... 22 Activity 2: Foster Business Linkages and Expand Wine of Moldova Exports ...... 23 Activity 3: Export Support Program (ESP): increased wine sales on target markets ...... 26 Activity 4: Develop domestic wine market and enhance wine culture ...... 26 Activity 5: Enhance awareness about Moldova as a Tourism Destination ...... 29 Activity 6: Foster Business Linkages and Increase Demand for Moldovan Tourism Products on Target Markets ...... 29 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ...... 30 Activity 1: Support continued policy upgrading and legal regulatory reforms in the wine industry ...... 30 Activity 2: Strengthen the role of ONVV as the main professional organization of the wine industry ...... 31 Activity 3: Develop and strengthen the PGI wine associations ...... 32 Activity 4: Upgrade Tourism Sector Policies and Reform Regulatory Framework ...... 33 Activity 5: Strengthen ANTRIM’s Role in the Tourism Sector ...... 34 A2. Light Industry ...... 35 Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ...... 35 Activity 1: Develop the ZIPhouse Accelerator and Raise Skills through Education ...... 35 Activity 3: SMART (Streamline Manufacturing, Accountability, Resource efficiency, and Transparency) Factory program ...... 39 Objective 2: Expanded Market Linkages ...... 43 Activity 1. Reposition Moldova as a Full Product Manufacturing Partner and Support Internationalization of Moldovan Fashion Brands on Regional Markets ...... 43 Activity 2: Consolidate the Din Inima Umbrella Brand and Expand Domestic Market ...... 44 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ...... 46 Activity 1. Assist APIUS to Develop an Industry White Paper and Advocate for Policy or Regulatory Changes ...... 46 A3. Information and Communications TECHNOLOGY (ICT) and CREATIVE SERVICES INDUSTRY (CSI) ...... 47 Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ...... 47 Activity 1: Adapt University-Level ICT Education to Industry Needs ...... 47 Activity 2: Improve STEM Education and Promote Tech Careers at the Secondary Education Level ...... 49 Activity 3: Link ICT VET with Labor Market Building practical skills to VET students ...... 52 Activity 4: Develop an Entrepreneurial Ecosystem for the ICT Sector ...... 53 Activity 5: Create IT infrastructure ...... 53 Activity 6: Enable training and certification for professionals and executives ...... 54 Activity 7: Create an enabling ecosystem for creative industry development ...... 54 Objective 2: Expanded Market Linkages ...... 56 Activity 1: Accelerate Adoption and Use of Technology by SMEs and Other Non-IT Sectors ...... 56 Activity 2: Implement marketing coaching programs ...... 56 Activity 3: Enhance global positioning of Moldova as IT Destination ...... 57 Activity 4: Profile the creative services industry and define export market opportunities ...... 57 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ...... 59

3 Activity 1: Improved public policies for technology ecosystem ...... 59 Activity 2: Capacity building for ATIC ...... 59 Activity 3: Facilitate business support organizations that represent the creative industry ...... 60 A4. PRECISION ENGINEERING...... 61 Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ...... 61 Activity 1: Increase productivity and efficiency for manufacturing companies ...... 61 Activity 2: Development of Makers Space to foster product design, prototyping and startup for creative industries, engineering, and technology ...... 61 Activity 3. Support the Technical University of Moldova establish partnerships with leading technology and engineering international companies...... 62 Objective 2: Expanded Market Linkages ...... 63 Activity 1: Improve marketing skills and export capacity for more developed and higher value markets .. 63 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ...... 63 Activity 1: Map high precision engineering cluster ...... 63 A5. OTHER TECHNICAL Activities to Support Implementation ...... 64 Access to finance through special channels/USAID Development Credit Authority (DCA) ...... 64 B. DELIVERABLES ...... 64 SECTION II ...... 65

PROJECT-LEVEL OUTCOMES AND RESULTS ...... 65 Sector Engagement, Enhancement, and Development (SEED) Fund ...... 65 Inclusive Development ...... 66 Monitoring & Evaluation ...... 67 A. Progress towards quantitative indicators targets ...... 67 B. Qualitative results ...... 70 SECTION III ...... 75

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY17 Q4 (JULY– SEPTEMBER 2017) ...... 75 Wine and Tourism Industry ...... 75 Light Industry ...... 75 Information and Communications Industry and Creative Services Industry ...... 76 Other Technical Activities ...... 76 SECTION IV ...... 77 PROJECT ADMINISTRATION ...... 77 Level of Effort Report ...... 77 Administration and Finance ...... 77 Project Communications ...... 77

4 ACRONYM LIST

AA Association Agreement ANTRIM National Association for Inbound Tourism ANAT National Association of Travel Agencies of Moldova APIUS Employers Association of Light Industry ASEM Academy of Economic Studies of Moldova ASW Association of Small Wineries ATIC Moldovan Association of Private ICT Companies B2B Business to Business B2C Business to Company BSP Business Service Provider C&M Cut & Manufacture CEE Central-Eastern European CEED I & II Competitiveness Enhancement and Enterprise Development I & II CIS Commonwealth of Independent States COP Chief of Party CRM Customer Relationship Management DCFTA Deep and Comprehensive Free Trade Agreement DCOP Deputy Chief of Party DMC Destination Management Company DO Development Objective ECP Expert Coaching Program EIB European Investment Bank EU ICT Information Communication Technology IR Intermediate Result ISSPA State Inspectorate for Controls over the Wine and Alcoholic Products ICT Information and Communications Technology ICTCE ICT Center of Excellence (Tekwill) KPI Key Performance Indicators JAA J.E. Austin Associates LOP Life of Project MAFI Ministry of Agriculture and Industry MCCI Moldovan Chamber of Commerce Industries M&E Monitoring and Evaluation MICE Meetings, Incentives, Conferences, and Events Tourism MIEPO Moldova Investment and Export Promotion Organization MODART Modular Arrangements of Predetermined Time Standards MOE Ministry of Economy MOU Memorandum of Understanding NTA National Tourism Agency ONVV National Office of Vine and Wine PDO Protected Designation of Origin PGI Protected Geographical Indication PIRS Performance Indicator Reference Sheet PMP Performance Monitoring Plan PMU Project Management Unit PPP Public Private Partnership PR Public Relations RFP Request for Proposal SEED Sector, Engagement, Enhancement, and Development Fund SME Small and Medium Enterprise STTA Short-term Technical Assistance

5 SWM Startup Weekend Moldova TCB Tourism Country Brand TOR Terms of Reference TOT Training of Trainers TR Technical Regulation ULIM Free International University of Moldova USP Unique Selling Point TUM Technical University of Moldova USAID United States Agency for International Development USD United States Dollar USG United States Government VET Vocational Education Training WFD Work Force Development WoM Wine of Moldova

6 EXECUTIVE SUMMARY

During Y2, MCP expanded outreach to another 100 firms, and collectively assists more than 350 SMEs to adopt new technologies, increase targeted marketing, and make critical investments in equipment and their workforce. Workforce development initiatives are benefiting over 3,500 professionals and youth.

Wine & Tourism

Wine of Moldova Academy ensures updated skills for over 200 industry professionals from 71 companies. With MCP support, National Office for Wine and Vine (ONVV) started to address the need of continuous education in the wine industry by instituting Wine of Moldova Academy initiative. During 2017, trainings covering various critical aspects in vineyard management, wine production, and marketing.

Over 350,000 USD were leveraged as investment commitments from small and start- up wineries, under the project’s SEED grants fund. These wineries committed to invest two dollars for every one dollar contributed by the project. These funds will be invested in minimum critical equipment for stratup wine production, tourism facilities, as well as productivity upgrades. This is a positive sign that winemaking is becoming an attractive opportunity as small ‘family-owned’ business, bringing the gains of this industry to vineyard growers and rural communities.

Transitional mid-sized wineries will invest $800,000 in critical technological upgrades, uplifting their competitiveness on EU and other high quality markets. These investments were incentivized through MCP’s Product Quality Upgrading Program (PQUP), and will support producers to switch from low value bulk to high value bottled production, reorient exports to EU and other markets, aiding resilience from ban.

In 2017 Moldovan wines received 232 awards at reputable international wine contests, such as Decanter, Mundus Vini, International Wine Challenge. To note that 37 awards were received by Moldovan wineries that are first time competition entrants, and were greatly supported by MCP to improve quality and marketing. This demonstrates progress in quality as one of the prominent effects of sustained donor technical assistance over the recent years.

MCP assists a large wine marketing promotion effort in , with spillover effect on tourism. The campaign included 109 outlets of Carrefour and Selgros. Immediate exports totaled $320,000 of high-quality Wines of Moldova during April-June 2017. MCP supported ONVV to implement this first multi-channel export marketing campaign, including promotion in retail trade, amplified by immersive virtual tours through Moldovan touristic sites and social media, the later having generated an estimated $180 worth of free media exposure in Poland.

MCP has facilitated the imitation of sectorial strategy development “Wine of Moldova 2030”. To secure and streamline its sustainable development, MCP initiated the first inception reunion of the entire wine sector during which sector representatives have signed a resolution asking Ministry of Agriculture to initiate the national strategy development “Wine of Moldova 2030”.

MCP kicked off pilot projects with regional producer associations and ONVV to support improved vineyards management practices. Meteorological stations will be installed on four demonstration plots in different wine regions, and will help management of weather and climate risks in vineyards. In addition, vineyards will be diagnosed for diseases

7 through the use of advanced technology (drones, spectral aerial photography, GIS data). Moldovan vineyards face an epidemic threat caused by two destructive infections, Flavescence Doree and Bois Noir, that may cause yield losses of up to 80 percent. Over the last five years, these two diseases have spread dramatically over 20,000 hectares, or 20 percent of the vineyards.

With MCP support the open-air classical music festival DescOPERA reaches a new attendance record of 5,000 people. Approximately 5,000 people attended the second edition of DescOPERA open-air classical music festival in Butuceni village, Orhei Vechi that took place on June 9-11, 2017. Minister of Culture Monica Babuc, U.S. Ambassador James Pettit and Swedish Ambassador Signe Burstaller opened the festival. Over 500 artists delighted the audience with classical music on three different stages in the natural amphitheater of Orhei Vechi, which is the most important tourism attraction in Moldova. MCP played a leading role in the conceptualization of the event from its first edition. The number of tickets for the festival reached a record in sales, 20 times more than the first edition. DescOPERA has the potential to position Moldova as an authentic cultural tourism destination, and bring the gains of tourism to rural communities.

The spring familiarization tours for Polish and Italian media promoted Moldova as a tourism destination on these target markets. Led by ANTRIM, these press tours heavily engaged social media resulting in 11 articles about Moldova, including 8 in Poland and 3 in Italy, and more publications are expected to appear. Now, the hashtag #DiscoverMoldova has almost 5,500 photos, while the Moldova: Discover the Routes of Life page reached 13,000 followers.

MCP put on hold support for the Tourism Agency, including Moldova’s Tourism Master Plan, due to concerns with the new draft law on tourism promoted by the Agency. These concerns were shared by the World Bank and business associations. The new draft law, adopted in the first reading by Parliament in December, imposes additional regulatory constraints hampering Moldova’s emerging tourism sector. Donors and the private sector requested that law be recrafted to effectively address industry regulation and governance.

Light Industry

Ambassadors, journalists and public figures modeled for Moldovan fashion brands at Fashion Soirée Resort Collections 2017. A total of 14 Moldovan designers presented their 2017 resort collections in an open-air fashion show featuring public figures as one-time models and gathered more than 300 people. Organized by the Light Industry Employers Association (APIUS) with MCP support, Fashion Soirée is a satellite event for the bi-annual Moldova Fashion Days events and aims to strengthen the capacity of the local Moldovan brands, increase local sales and raise the profile of Moldovan fashion.

MCP leverages an additional $1 million USD in technological innovation investment from Moldovan apparel companies. MCP supported the participation of seven progressive Moldovan apparel companies at TexProcess, the leading trade fair for international garment manufacturing in Frankfurt, Germany during May 2017. Participating companies selected innovative equipment such as specialized machines, computer added design and cutting machines (CAD/CAM), and ironing equipment worth more than $1 million USD. This will support advancing factory efficiency and productivity, which is the main goal of MCP’s SMART factory assistance program, and where Moldova lags compared to regional standards by an estimated 30 percent.

MCP supports expansion of Moldovan fashion brands on the EU markets. MCP supported local fashion designers position themselves as exporters on the high-value European Union markets. Thanks to MCP support, Moldovan fashion brand Julia Allert is

8 expanding its presence on the EU market. After successfully kicking off sales in the Czech Republic at KABO style fashion fair in February 2016, in May MCP supported Jullia Allert’s participation at the Czech Design Week and Prague Design Market. Now the Moldovan brand is displayed in four stores from two countries: having established collaborations with a prestigious showroom in Prague and signed agreements with Slovac multibrand store Rena Exclusiv.

Moldovan apparel producers are sourcing better quality fabrics for their own collections. During the third quarter, apparel companies independently visited the fabric stocks in Carpi, Italy, and bought raw materials valued at around $178,000, two times more than in the previous quarter. MCP supports access to better-quality fabrics and accessories, by facilitating visits to EU-based suppliers. This directly impacts the quality of the final product. The assistance provided by the project in this field has already become sustainable, as companies started to undertake these visits independently from their own costs.

ICT and Creative Services Industry

MCP supported a high-level ICT mission to Asia to learn about government ICT development policies and build trade cooperation with Moldova as an IT destination. MCP supported the Government of Moldova in developing a strategic roadmap for the ICT sector. The roadmap revealed that Asia presents a promising potential for Moldovan ICT companies for the adaptation and localization of Asian ICT services and products to the European market. A delegation comprised of USAID, MCP, and Moldovan Association of ICT Companies (ATIC) representatives conducted a study visit to Singapore, South Korea, and Japan. The visit was centered on government policies and support programs; successful models of ICT ecosystems such as tech incubators, accelerators, and co-working spaces; and best practices for ICT sector development. Moldovan IT companies have the potential to reach a market of US $50 million out of an estimated total Asian market size of US $12 billion.

School teams become change agents to digital transformation of schools in Moldova. MCP scaled up its innovative STEM initiatives, given the growing commitment from the Moldovan Government and educational institutions, and the maturing readiness of the private sector to contribute. During 2017, MCP crafted an educational partnership with Orange for a joint Future Classroom Lab initiative, whereby the telecommunication firm will bring technology expertise and cash for school endowments worth $100,000. This initiative was kicked off by an innovative workshop, on May 10th, where 38 educators and school managers from different regions of Moldova were challenged to rethink the role of technology and design in their future classrooms. Twelve schools were selected afterwards to pilot the concept during 2017-2018, preparing youth for a career in STEM related fields and equipping them with necessary skills to enter the workforce.

Moldovan robotics team scored 20 out of 119 for Robot Game at the Open European Championship 2017. Upon winning the robotics FIRST® LEGO® League national competition in February 2017 held in Chisinau, the RoboRangers team represented Moldova at the FIRST® LEGO® League Open European Championship 2017, on May 26-28 in Aarhus, Denmark. The participation was co-funded by Ministry of Education, MCP and partners. The Moldovan team competed along with 1200 participants from 49 countries. Moldova scored on 20th place out of 119 for Robot Game, demonstrating the effectiveness of robotics initiative. MCP-supported educational robotics is now being implemented in 76 schools and benefits over 3,000 children. Children exposed to robotics are two times more likely to choose an engineering or technology career.

More than 400 students attended the Guest Lectures program, promoting digital education and tech entrepreneurship. The pilot program of 11 guest lectures were

9 conducted by successful IT professionals, entrepreneurs, and managers. The speakers shared their knowledge and gave talks on how IT influenced the transformation of other sectors and provided insights on which could be the opportunities for aspiring entrepreneurs to design specific IT products for improving the respective sectors. In total, 419 students from three main universities attended the Guest Lectures.

MCP successfully engaged the Ministry of ICT and the private sector in streamlining the business environment. The Startup Visa legislation, simplifying work and stay permits for foreign technology professionals and investors was finally adopted by Parliament on June 30, following many months of preparation and debate in Government and Parliament committees. In June, the Ministry of ICT kicked off development of a new ICT Industry Competitiveness Strategy. Moldova’s IT Sector Strategic Roadmap, developed with MCP assistance by Avasant global technology consulting firm, revealed opportunities for ICT growth and will feed into the new strategy. MCP will continue its support in the next months for development of the national ICT Strategy and passing of the secondary legislation for Law on IT Parks by Parliament, that will unlock its implementation.

The ongoing reforms of the Moldovan Government slowed down key policy initiatives. Two important MCP counterparts will be affected, i.e. Ministry of ICT that will be merged into Ministry of Economy, and Tourism Agency that will supposedly be absorbed by Ministry of Culture. MCP is also using the reforms as an opportunity to advise the Government on ways for enhancing governance for these two important economic sectors, such as appointing a State Secretary for ICT matters within the Ministry of Economy, and mandating one of its ministries with digital-related policy implementation.

MCP inspired creative services firms to collectively address challenges and opportunities for this nascent sector. The first Association of Creative Firms was established in June 2017, with support of MCP and an initiative group of eight leading design firms. The Association will further act as a platform to represent the creative entrepreneurial sector of Moldova, both locally and internationally.

Academy of Arts unused campus will be transformed into a Creative Hub. The winning architecture concept, by Maxim Calujac, was unanimously voted by its two benefiting partners, Academy of Music, Theatre and Arts, and Association of Creative Industries. The architect proposed low-cost and energy efficient solutions integrated in contemporary design, through use of rusted metal and industrial architecture, that would be apealing to creative proffesions. Expected to open doors in 2018, the Moldova Creative Hub will be a flagship platform of practical education and collective workplaces for designers, filmmakers, app developers or start-up entrepreneurs.

Precision Engineering

The worldwide technology festival Maker Faire was organized for the first time in Moldova. MCP supported the successful organization of the first edition of Chisinau Mini Maker Faire, gathering about 600 participants, 13 speakers from the UK, Germany, , , and Moldova, and over 30 national and regional makers. Fourteen workshops were organized on soldering, pottery, painting on recycled bags, Arduino programing, and 3D printing. As a result, the participants became aware of international trends in technology and in-country possibilities for showcasing their inventions.This shall boost creativity and foster innovation. In addition, young makers and experienced crafters displayed their potential and inventions. This further helps cultivate entrepreneurship, especially among youth.

MCP and Technical University kicked off refurbishment works for the Makers Space, positioned to embolden engineering and creative sectors, which primarily attracts youth. This

10 came after several months of finalizing blueprints and engineering plans, whereas MCP and University teams worked together to find low-cost solutions. For instance, the teams identified an alternative fire protection solution that resulted in budget savings of $70,000, that will be re-directed to lab equipment. Expected to open doors in November 2017, Makers Space is located next to Tekwill, to ensure synergies through cross-pollination of technology, industrial design, electronics, science, and manufacturing sectors.

11

SECTION I

PROJECT TECHNICAL INTERVENTIONS DURING FY17 Q3

Chemonics International Inc. (Chemonics) and its partners, J. E. Austin Associates, Inc. and Bhavana World Project, are pleased to submit to the United States Agency for International Development in Moldova (USAID/Moldova) and and Swedish International Development Cooperation Agency (Sida), this Quarterly Report that covers the period from April 1 through June 30, 2017.

In Section I, we describe the progress to-date by target industries, including project accomplishments, problems (if encountered), and solutions. We also list all deliverables submitted during the period. In Section II, we present project-level outcomes and results and report progress against Performance Monitoring Plan (PMP) targets. Section III contains a summary of our planned activities for the next quarter. Section IV contains Project administration information.

A. ACCOMPLISHMENTS, SCHEDULES, AND PROBLEMS

A1. WINE AND TOURISM

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Activity 1: Support Development of the Stauceni Viticulture and Winemaking Excellence Center (WEC)

The project seeks to ensure transparent and efficient implementation of the anticipated funds from EIB, following the WEC concept as proposed in the feasibility study developed by MCP. In addition, the project seeks to improve teaching quality and content by providing technical assistance to update curricula and teaching techniques which must be in line with international standards and industry realities. This activity was postponed until the reorganization of Stauceni College is initiated and.

Activity 2: Design Wine of Moldova (WoM) Academy

Develop WoM Academy operational framework. The project is assisting ONVV to develop an appropriate and sustainable institutional and operational framework necessary to sustain WoM Academy activities. The Wine of Moldova (WoM) Academy aims to address the continuous education needs in the wine industry. The design of the academy will integrate the lessons learned from MCP’s Skills Gap Analysis and the industry’s objectives. It is envisioned as a private sector service under ONVV, and as a supporting program for the wine industry’s educational institutions.

During the reporting period, ONVV with MCP support organized four trainings and seminars conducted by local and foreign winemaking experts. The seminar “Modern trends in red wine production” enhanced the knowledge of wineries staff on the modern preferences in the styles of red wines and specific winemaking techniques of productionThe seminar “Hygiene in winemaking” addressed the most common mistakes during the preparation for wine bottling, mainly sanitizing and cleaning the bottling line segment in order to minimize the risks of wine deterioration.The“Rosé” Seminar included improving the participants’ knowledge and workforce skills.

13

Photo credit: ONVV Photo caption: Photo collage form seminars and workshops held under “Wine of Moldova Academy” during April – June 2017

The seminar “Mechanization of vineyard works” took place in 2 stages: a practical part, exhibiting the functioning of machinery, vineyard planting and engineering specifics (for mechanization of procedures) based on Salcuta vine plantations. And the second, theoretical segment, held in Causeni, on best local practices on work mechanization, and disease and calamity prevention using modern equipment held in Causeni.

Moreover, within the ASW Mentorship, PQUP and Start-up tourism programs, MCP conceptualized and deployed an initiative aimed to train and stimulate communication of assisted companies in social media during the reporting period. As such, in its launch phase, MCP organized two seminars on the “Basics of communication in social networks” which included modules on the technical side of creation and management of a dedicated page, as well as practical tips for content creation.

As a result, over 200 employees from 71 companies and institutions upgraded knowledge enabling companies to better understand modern production techniques and ways to market rose wines, minimize alteration risks, produce wine that corresponds to modern consumers’ preferences, and become familiarized with modern technologies in vineyard caring and protection.

Activity 3: Assist upgrade of wine quality

Identify new small wine producers and support their successful startup (ASW Mentorship Program). Within the ASW Mentorship Program implemented in collaboration with the Association of Small Winemakers, MCP assists the development of newly launched small wineries (first intake) and seeks to identify new small wine producers to enter the program. Additionally, to create a sustainable ecosystem for the emergence and development of small wine producers, the Project offers ongoing support for ASW’s development and promotion. The aim is to increase trust from existing members and generate interest for peasant wine producers to institutionalize and adhere to ASW.

During the reporting quarter, MCP continued to support ASW Mentorship program beneficiaries from the first intake group, selected in 2016. As a result, four small start-up wine producers (Est Euro Vitis, Mihai Sava, Fragolino, CGL Prim) developed their brand

14 identities and launched their wine labels during Wine Vernissage spring edition. Following the successful launch, all assisted wineries reported verbal arrangements from restaurants and wine shops to ensure distribution of the newly launched wines. MCP also supported the development of the existing, active members. As such, MCP worked with 10 wineries, SEED grantees (Gogu Ilie, Fragolino, Sava Mihail Ion, Iurco Nicolae, CGL-Prim, Unicorn Estate, Teba Prim, Est Euro Vitis, Vinfoteca&Co, Crama Domneasca) to formulate their further development strategies and plans. The beneficiaries were advised to either develop their touristic products or continue developing their production capacities. As a result, all companies updated their grants applications and budgets and received USAID endorsement for grant incrementation.

Moreover, MCP launched the second intake of the ASW Mentorship program, and seven small winemakers applied for SEED grants (Pelikan Negru & Co, Leuntea Vin, THG-Tronciu GT, Aghenie Tudor, Iurco Roman Petru GT, Vinaria Nobila, Luca Nicolae GT). Upon USAID approval, MCP assistance for this second in-take will begin. Notably that through grants, MCP attracted for each invested dollar over 1.5 dollars from the grant beneficiary.

MCP is also dedicated to ensuring institutional capacity development of the Association of Small Winemakers. Thus, during the reporting period, with MCP support, three important members’ reunions were organized: second General Assembly of Small Wine Producers, during which 2017-2018 activity plans were discussed and vetted, and two sessions of the Coordination Council during which the Executive Director was named. Considering the new executive force and the vetted plans, MCP will tailor its assistance for 2017-2018.

Product Quality Upgrading Program (PQUP) and Flying Winemakers’ Program (FWP).

The goal of this activity is to support ‘transition wineries’ in adopting the ‘quality over quantity’ paradigm by enabling program beneficiaries to convert their business models from bulk wine to production of bottled wines with higher added value.

Photo credit: ONVV, Agrici.wine, Locals.md, Vinia Traian, 6N wines, Agro TV, Wine-and-spirits.md Photo caption: Photo collage of a snapshot of activity results and publicity achieved for PQUP Program participants intake one. April-June, 2017

Within the reporting quarter, MCP continued support to the first intake group of wineries aiming to ensure proper bottling, through extended support of local winemaking experts, as

15 well as branding of the wines produced in the 2016 harvesting season. As a result, six assisted wineries (Vinaria Hincesti, Vinaria Milestii Mici (Agrici.wine), Tartcomvin, Vinia Traian, Doina Vin and CVC Milestii Mici) were present at the Wine Vernissage with upgraded quality wines and new brand identities. Additionally, during this period, the Project received the first qualitative results from the first intake group of the PQUP program: the wines of nine assisted producers (Vinia Traian, Doina Vin, Vinaria Milestii Mici (Agrici.wine), Salcuta, CVC Milestii Mici, Vinaria Hincesti, Migdal-P, Vinuri de , Basarabia L-Win Invest) received mentions and/or medals at local and international wine contests.

MCP also supported wineries from the first in-take to diversify their income sources through initiating the development of basic hospitality facilities (Vinuri de Comrat and Tartcomvin) and enhance their productivity through enlarging their production capacities by expanding the pool of their stainless-steel fermenters (Vinaria Milestii Mici and Vinia Traian wineries). All of these activities were submitted for grants extensions being approved by USAID. Through this, MCP managed to leverage an additional investment in modernization of these companies’ worth over $500,000 USD.

Furthermore, MCP and ONVV experts’ consultancy determined three new PQUP program wineries to improve the quality of their wine before inceasing. production quantity. In result, the wineries entered the second in-take and decided to invest in upgrading the production segments and equipment pieces. Since thesehave imminent impact on product quality. The following decisions were made by the companies: • Migdal-P - to invest in procurement of modern winemaking pneumatic presses; • Tomai Vinex - to procure pneumatic presses and small volume stainless steel fermentation tanks for production of exquisite wines; • Saiti - to start the complex modernization of their entire production facility which will enable the company to shift their business model from exclusive bulk wine production to sales of their first lots of bottled wines. All three companies submitted their strongly grounded applications for SEED grants, which were all pre-approved by the Selection Committee. Considering the scale of the enterprises, their investments’ commitments are even more impressive. It isanticipated that for each invested one dollar by MCP, prospect grantees will allocate five dollars in the form of direct investments.

Activity 4: Support Moldovan Tourism Product Development

Develop wine tourism destinations. Today only about 5 to 7 wineries are organizing wine tours and serve tourists. Thissupply needs to be expanded. MCP aims to double this number by assisting wineries in becoming attractive tourist spots and developing new, attractive products for tourists. For this reason, MCP initiated the “Wine Tourism Accelerator Program” in ten wineries through an intervention matrix including technical assistance, workforce development, service quality upgrading, and a grant component via the SEED Fund.

During the reporting period, six wineries (, Milestii Mici, TartComVin, Vinuri de Comrat, Migdal-P and Branesti) had mystery visits from the MCP wine tourism consultant, Diana Isac, who evaluated the availability and the quality of touristic services within each winery. Following this, each assisted winery received an Action Plan for implementation in order to enlarge the touristic offer and achieve upgrading of existing tourism products.

To help wineries implement the recommendations included in the Action Plan, the consultant started to organize individual and collective workshops. For example, as a result of the first individual workshop organized for Castel Mimi, the company registered significant progress. A new touristic product, “wine blending workshops”, was developed and started implementation by Castel Mimi. Through these workshops tourists expand their knowledge

16 on wine and vine processes, having the opportunity to prepare their own wine by mixing several types of wine varieties. This type of workshop gives the winery an advantage in terms of tourism product diversification, increasing the period tourists stay at winery, thus increasing company’s revenues. Also, as a result of received consultancy, the company optimized the number of provided tasting packages, improved the menu, and adjusted prices when providing more touristic products in one package.

In respect to Migdal-P winery, the individual workshops help the company make significant progressA new tourism program was defined, the texts for the guides were improved and a wine activities calendar was developed. These workshops give the wineries an important orientation in how to define and promote the winery as a tourism destination.

In addition, Et Cetera winery has been awarded a grant to further improve its tourism offer to provide a wider range of services to clients visiting the winery. With MCP support, the company is starting a new bike routes project that will connect other wineries and tourism sites in the Purcari area.

Develop regional tourism hubs around main wine attractions. During the reporting quarter, MCP provided continued assistance to the six rural pensions as part of its strategy of building tourism service networks around the central wine attractions by prototyping best practices for rural tourism and disseminating them throughout regions. MCP supports the development of tourism products (wine tours, rural activities, gastronomic activities, handicrafts) in rural areas in order to minimize the seasonality of tourism and to increase the time tourists spend during vacations. More time spent by tourists positively impacts socioeconomic development in rural areas. Within the MCP Grants Program, five proposals were pre-approved including projects aiming to upgrade wine and rural tourism as well as soft adventure products.

During the reporting period, the rural pensions that are MCP grants beneficiaries - Casa din Lunca, Casa de Sub Stanca and Casa Verde, continued to be assisted by MCP local consultants (an architect and a designer) working at expanding and upgrading their rural tourism facilities, taking advantage of the 2017 tourism season.

Photo Credit: Facebook, Casa de Sub Stinca Photo Caption: Map of the countries of origin of the guests that visiting Casa de Sub Stinca rural pension

17 The grantees continue to announce an increase of about 30% in demand for their services and tourists coming from a wider number of countries.

Develop cultural and traditional tourism events. Inbound tourism development is one of several strategic areas in which MCP is working in Moldova to improve the country’s economic development and competitiveness in the region, and supporting cultural and traditional tourism events development is a way to achieve the established objectives. MCP supports local tourism events’ development, considering this a way to develop the tourism industry’s competitiveness and to increase awareness of Moldova as a touristic destination. The attraction of Moldova for the foreign visitor lies in the unique range of experiences it offers, namely discovering the rich heritage, culture, folklore, history, and character of Moldova through direct participation and human interaction.

During the reporting period, MCP supported the „Since I started my mission in your organization of the second edition of the Moldova country I discovered the uniqueness of Tourism Gala. Thegala celebrated the Moldova, its traditions, , rural achievements of the tourism stakeholders and life and the hospitality of people – the awarded the most important initiatives that elements that support tourism country promote Moldova as a tourism destination. The brand „Tree of Life”. event took place on April 7, 2017 and highlighted the best practices and promoters of Moldova’s Moldova is new on international tourism tourism industry and awarded prizes in 20 market, but has all the ingredients to develop a vibrant tourism industry” categories. The rankings were made based on two voting processes: the public vote on the web- SIGNE BURGSTALLER, site (www.galaturismului.md) and the scoring of a Swedish Ambassador in Moldova specialized jury. Around 100,000 votes were received through the website, demonstrating interest for tourism initiatives in Moldova. US DCM Julie Stufft and Swedish Ambassador Signe Burgstaller awarded the prizes for top three accommodation units and tourism projects outside of Chisinau, among which ranked rural pensions and wineries supported by MCP. The “Wine of Moldova” country brand and “Din Inima” brand of textile industry, both developed with USAID support, were announced as the top country brands promoting Moldova.

Tree of Life events agenda. The attraction of Moldova for the foreign visitor lies in the unique range of experiences it offers, namely discovering the rich heritage, culture, folklore, history and character of Moldova through direct participation and human interaction. Local events to be promoted Therefore, MCP continues to support local under Tree of Life country brand events with tourism potential to develop and increase awareness and the number of • Orheiul Vechi Bike Marathon - May 6, visitors. As such, an agenda of supported 2017; local events was updated and the events • Mai Dulce Festival - May 21, 2017; organised during the reporting period passed • Duminica Mare Domulgeni - June 4, successfully. 2017; DescOpera - June 9-11, 2017; • • Traditional Carpet Festival - During the reporting period, the following six June 18, 2017; events were implemented with MCP support: • Folk Costume National Day - June 25, 2017; • Orheiul Vechi Mountain Bike • Ia Mania - July 8, 2017; Marathon, organized in Orheiul Vechi • Pottery Fair - July 16, 2017; and the neighboring villages, offering to • Cucuteni - July 22, 2017; its more than 200 participants wonderful • Youth Orchestra Concerts - La La Play nature, but also infrastructure, and #bemyguest; includingrural pensions and restaurants • National Wine Day - October 7-8, 2017.

18 where the participants could enjoy the authentic food and spend time after the competition.

• Mai Dulce festival was organized in Chisinau and was branded as “The Sweetest Festival in Eastern Europe”, gathering over 50 local amateur cooks that competed for the top prize in the dessert contest “Cherry on the cake”. “Mai Dulce” organizer, Nata Albot, was awarded with the 3rd prize for the East European category of the Gourmand World Cook Book Awards for the book "Eat Like ", the first ever cook book translated to English about Moldovan . Nata Albot presented and wines at the award ceremony in Yantai, China in front of over 100 food & wine journalists from a dozen countries, increasing awareness about Moldova as a travel destination among travel professionals.

Photo Credit: Nata Albot Photo Caption: Nata Albot presenting Moldovan cuisine and wines at the award ceremony of Gourmand World Cook Book in Yantai, China

• Duminica Mare festival in Domulgeni, celebrated the most important Sunday of the year in local culture and welcomed thousands of guests with a traditional setting and cuisine, a handcrafts fair, a bessarabian carpet exhibition and an interactive folk dance program.

• The Bessarabian Carpet Festival was organized in the Clişova Noua village, Orhei region by the MCP grantee, "Rustic Art" handicraft Center. Hundreds of visitors have discovered the beauty of traditional Bessarabian carpets during the fourth edition of the event, held this year under the title "Traditional carpet – part of UNESCO heritage" and focused on promoting young, aspiring artisans. The festival was organized by the Rural Women Association in partnership with the Ministry of Culture, National Center for Preservation and Promotion of Intangible Cultural Heritage (CNCPPCI) Orhei Section, Ciocâlteni town hall and with MCP support. The festival entailed a sales exhibition of Moldovan carpets with over 70 authentic symbols, a handcraft school for children and a folklore display program with music and dances.

• The Folk Costume National Day was organized by the Ministry of Culture hosted by the National Museum of Ethnography and Natural History in Chisinau, with Photo credit: Valeriu Istrati MCP support. The purpose of the Photo caption: “Arta Rustica” handcraft center founder, event is to harness the cultural Ecaterina Popescu (right), giving an interview while visitors richness of folk costume, raise of the Bessarabian Carpet Festival are visitng the carpet exhibition and inspecting the displayed carpet weaving stands.

19 awareness about the meaning of the symbols and colors used and to promote the art of making traditional costumes localy and internationaly. After the event Inauguration with “Fluieras” orchestra, Ministry of Culture, Monica Babuc, USAID Moldova Mission Director, Karen R. Hilliard and Estonia Folk Culture Center director, Aivi Lintnermann greeted the event participants.

• DescOpera is the first open air Opera Festival in Eastern Europe that welcomed approximately 5,000 people at its second edition. The festival was organized under the patronage of the Ministry of Culture, in partnership with National Theatre of Opera and Ballet “Maria Biesu” and National Philarmonic Hall “Serghei Lunchevici”, part of the Memorandum of Understanding signed with the Ministry of Culture. The festival offered the audience a truly wonderful opera, harmoniously combining rural atmosphere, wines, and local cuisine. Visitors enjoyed classical divertissement “From baroc to romantism” conducted by master Friedrich Pfeiffer from Austria; the classical opera in 4 acts, Bizet, directed by Andrea Battistini, Italy and conducted by Friedrich Pfeiffer; and the magnificent Johann Strauss, in the interpretation of the symphonic orchestra of the National Philarmonic Hall, directed by Friedrich Pfeiffer. After the performances, guests were welcomed with traditional dishes in the rural pensions of Orheiul Vechi, paired with local wines.

Organized in Butuceni village in the natural-cultural reservation Orheiul Vechi, the festival yet again gathered lovers of classical music, high-ranking officials, ambassadors, representatives of international organizations, and foreign tourists from Poland, Italy, Sweden, Romania, Austria, and Germany.

Photo Credit: MCP DescOpera was promoted Photo Caption: Visual of 2017 DescOpera festival; US through media banners on more Ambassador James D. Pettit delivering a welcome speech than 20 online platforms. The during the opening ceremony; Anatol Botnaru (center), Butuceni Eco Resort rural pension owner and partner of the main event had nearly 100,000 festival and Diana Lazar (far left), MCP COP applauding after reach, 12,000 views and 3,000 the first day “Baroc to romantism” classical performance. attending responses. About 40

20 journalists, bloggers, photographers and operators were present at the event which was featured in more than 80 articles, TV shows, and reportages. With MCP support, ticket sales tripled from last year, paving the road to the self-sustainability of the event.

Furthermore, the event was synchronized with the 2 press trips organized in partnership with ANTRIM, with journalists from Poland and Italy, the main tourism target markets for Moldova. The synchronization allowed participants to attend and document the event to further disseminate and promote the 2018 edition of DescOpera in Poland and Italy.

While events can be a major attraction for the tourism industry in Moldova, the preservation and promotion of Moldova’s cultural heritage requires a holistic and professional approach. MCP facilitated a study visit to Moldova from the Smithsonian Institution, the world's largest museum, education, and research complex, in order to evaluate the possibility of support in preserving the cultural patrimony of the country in order to make Moldova a more attractive tourism destination.The delegation met with the USAID Mission, Ministry of Culture and Ministry of Agriculture representatives, visited major museums, main churches, monasteries, fortresses, cultural sites, and wineries of the country.

Photo credit: Irina Didenco Photo caption: The Smithsonian Institution Delegation visiting the 16th century Orthodox Church in Causeni.

Develop the tourism infrastructure in the ‘Orheiul Vechi’ site. ‘Orheiul Vechi’ is currently under assessment by UNESCO to become a world heritage site. Since 2016, USAID provided critical assistance that helped move Orhei Vechi towards the top of national priorities, including the site zoning and tourism development plans, working with local communities to reap economic benefits, upgrading rural pensions, and developing the premiere DescOpera classic music festival that attracted more than 4,000 visitors in 2016 and 5,000 in 2017.

During the reporting period, MCP supported the Ministry of Culture to call for joint action in preservation and sustainable tourism development for the Orheiul Vechi heritage site. On April 4, 2017, Minister of Culture Monica Babuc led a multi-stakeholder roundtable with central and

21 local government officials, embassies, and donors. Robert Travers, a well-known tourism expert provided by MCP, developed and presented the first Destination Management Plan for Orheiul Vechi, which could become the backbone for its sustainable development. The most visited tourism destination in Moldova with more than 15,000 visitors annually, the ‘Orheiul Vechi’ site may become the flagship of rural and cultural tourism. It can serve as a catalyst for wine tourism in the Codru region, potentially tripling tourism revenues within the site, and can become the engine for employment in the rural community.

Minister Babuc acknowledged the significant assistance provided by USAID and the Swedish government, and invited other partners to align resources in five key areas: heritage protection, infrastructure, tourism, community, and marketing.

Activity 5. Better Trained Workforce and Modern Skills in the Tourism Industry

Improved workforce for the tourism industry. The Tourism Industry skills gap assessment organized by MCP in FY2016 indicated that local hotels face a lack of skilled personnel. To support workforce development within the hospitality segment, MCP worked together with ANTRIM and conceptualized the” Hospitality+Moldova” program aiming to provide support to Moldovan hotels in upgrading the professional skills of their staff and improve guests’ experiences. During the reporting quarter, the “Hospitality+Moldova” program was publicly announced and six hotels registered for assistance.

Objective 2: Expanded Market Linkages

Activity 1: Build Wine of Moldova Brand Equity and Increase Awareness about Moldovan Wines

Increase Wine of Moldova (WoM) brand awareness through strategic international communication activities. In addition to activities on targeted export markets, Wine of Moldova needs to develop international awareness contributing to continuous market diversification and minimizing risks related to dependence on certain markets. Furthermore, the WoM international communications strategy underway shall support continuous promotion efforts to raise the country’s recognition and communicate the recent qualitative improvements in the Moldovan wine sector.

Within the reporting quarter, MCP expert and one of the top influencers in the international wine market, Robert Joseph, conducted a workshop with ONVV for finalizing the framework of the international PR & Communication master plan.

During the formalization of the master plan, MCP supported ONVV in organizing an activity branded “Rose Competition”. The contest was conducted by a tasting panel of top international experts, among them Robert Joseph (wine writer and expert taster) and Nathalie Pouzalgues (Oenologist at Research and Experimental Center for Rosé Wines, ).

As such, the 10 best rosés of Moldova wines were identified, (five being PQUP program participants’ wines) and tasted during the Wine Vernissage. The participation of internationally renowned figures as well as post-Vernissage public relations events are steps for building international awareness of Moldova as a high-quality wine producing country.

Additionally, with the reporting period, MCP assisted ONVV to deploy the first guerrilla marketing campaign in its history following a key recommendation of Mr. Joseph: to create content that could generate viral spread amongst international media. As such, following the poll conducted by a local youth news portal #Diez.md asking readers to vote for several options of the name for Chisinau International Airport, and considering the fact that “Wine of

22 Moldova” option collected one of the most votes, MCP and ONVV invested in the dissemination of this news to local and international press adding a photorealistic retouched image of the airport to the distributed press kit.

The results of this campaign were immediate and impressive. In three days all social media posts generated over 1,665 reactions and shared over 60 times; the websites that hosted and reposted the news received over 6,500 free direct clicks; and the story of the choice of the Moldovans hit two of the most reputed wine industry magazines: Decanter and Meininger Wine Business International. Initial data shows that each invested dollar in primary dissemination brought $14US of free media, worth an estimated total Photo credit: Decanter.com; twitter.com, Instagram.com, facebook.com Photo caption: Press clipping from guerilla campaign. June 27-29, 2017 over $28,000 USD.

Activity 2: Foster Business Linkages and Expand Wine of Moldova Exports

Support generic participation under the Wine of Moldova country brand at wine exhibitions and trade events. Participation at international wine exhibitions and business- to-business (B2B) trade events remains the main and most efficient tool for building wine sales.

Under the ongoing Wine of Moldova promotional campaign on the Polish market, MCP supported ONVV to participate with a country booth at FMCG Congress 2017, one of the most important events in Poland dedicated to retail trade. The event gathered over 700 professionals from retail chains, mainly category managers, buyers, regional directors, and CEOs.

Photo credit: MCP Photo caption: Wine of Moldova booth at FMCG Congress, Hotel Hilton, May 23, 2017, Warsaw

23 MCP selected 12 wineries for support: eight ‘Exporting Champions’ companies that generate over 85% of Moldova’s wine exports were helped to introduce their wines from superior price segments; four ‘New Generation’ wineries which capitalized from awareness of the first pool of companies were helped to establish and enlarge their distribution to ‘modern trade’ chains.

The Wine of Moldova stand was highly visible during the events being attended by the executives and CEOs of most important retail chains in Poland, including: Carrefour, Tesco, Spar, Selgros, Jeronimo Martins (Biedronka). Thus, all four ‘New Generation’ wineries reported the establishment of 3-5 important business contacts that will be developed in the upcoming period pursuing listing of the wines in the above-mentioned retail chains.

Improve the image of Moldova’s wine quality by Results from regional and supporting participation at international wine international wine contests contests. Participation in renowned international wine contests is an excellent tool to bring awareness to the • 37 companies assisted under this improved quality of Moldova’s wine. During the first year activity of its activity, the project implemented a program that • 232 medals and mentions won in motivated wineries to submit more samples to a span of 2017; • 207 medals won in the reporting the most reputed international wine contest, generating quarter; astounding results. Two-thirds of submitted wines • 24 medals won by PQUP and ASW received medals or special mentioning. program participants; Name of international Number of medals and Number of medals for MCP supported specialized competition awards for Moldovan wines wineries Mondial du Rose 4 medals (two golds and two Two medaled companies were PQUP program silvers) beneficiaries (Migdal-P and Salcuta), serving as proof of the quality and impact of MCP interventions; Challenge International du Vin 11 medals (10 Gold and one 11 medals (10 Gold and one silver) at Challenge silver) International du Vin received by Purcari Winery, Bostavan Winery and Albastrele Wines. Concours Mondial de Bruxelles 12 medals (3 gold and 9 One gold medal - for Gogu Winery for Sauvignon silver) Blanc 2016 a small wine producer supported by USAID since it was a start-up; one silver medal - for Vinuri de Comrat for Plai -Bastardo 2015, a PQUP program beneficiary Decanter World Wine Awards 36 awards (1 platinum, 1 gold, 3 silver, 14 bronze and 17 “commented” distinctions) International Wine and Spirits 22 medals (2 silver and 20 Competition bronze) International Wine Challenge 16 awards (2 silver, 3 bronze and 11 “commented” distinctions) International Wine Contests 67 medals (30 gold and 37 7 medals were won by the first in-take of PQUP Bucharest silver) program participants Oenoforum International Czech 14 medals (1 Grand Gold, One gold medal in this competition was won by competition and 13 gold) Vinia Traian – MCP’s PQUP Program participant. Galicja Vitis International Wine 17 medals (2 Champion gold Four gold medals and one champion gold medal Competition, Poland medals, and 15 gold medals) brought by MCP assited transitional wineries, under PQUP program Portugal Wine Trophy 6 medals (4 gold and 2 silver) One gold medal for Albarino wine from F’autor winery – serving as a proof of increasing skills of the local winemakers Global Masters 2017 and 2 medals (2 bronze) 2 bronze medals won by Chateau Vartely at the Global Global Merlot Masters 2017 and the Global Masters 2017 organized “The Cabernet Sauvignon Masters 2017 organized Drink Business Magazine” “The Drink Business Magazine” 31 medals and awards received by MCP 11 wine contests 207 medals and awards supported wineries

24 These impressive results serve as an excellent reference point while communicating the ‘quality improvement’ of Wine of Moldova during communication campaigns on target markets and on the international market. This program is ongoing, continuing with 5 additional contests by the end of the calendar year 2017.

Support trade marketing activities to expand the WoM portfolio on target markets. Moldovan wineries are striving for more sales of quality dry wines on EU markets, focusing mostly on up-trading to new product segments to ensure higher added Chart. Exports of premium wines under trade value. MCP supports ONVV in retail promo in Carrefour and Selgros promo in development and implementation of bottles. Total: 160 thousand bottles country-level trade marketing 70000 57600 60000 campaigns. These campaigns are 50000 aimed at increasing the demand at 40000 26400 the wholesaler, retailer, and 30000 23202 19158 20000 10584 12900 11000 distributor levels and shall be 10000 coupled with the WoM generic 0 campaign to create awareness and sustain the need at the consumer end.

During the reporting period, MCP experts, Witold Franczak and Irina Bistritchi, assisted ONVV with assuring a successful launch of the long anticipated retail promotion in Poland, which included: special placement on Wine of Moldova stands, separate islands or ‘gondola’ ends of a special selection of Moldovan Wines in 109 outlets from Carrefour and Selgros chains; Promoteam sales support in 24 outlets including immersive virtual reality experience with 360° tours through Moldovan wineries; special point-of-sale printed materials (brochures, bottlenecks, posters). Specifically, the experts paid special attention to implementation of the supporting PR and communication plan which encompassed social media activity, press works, organic and paid articles in most important written online and printed media.

Resulting from the PR activity, Wine of Moldova witnessed increased interest from local media and press. As such on June 21, Wine of Moldova participated in the 2017 “Manager Magazine Gala”, following the respective request received from the publication, ensuring visibility among top managers’ community in Poland. It is anticipated that the cumulative effect of in-store activity and supporting PR campaigns Photo credit: ONVV Photo caption: Collage of pictures from retail promotion in Carrefour and will generate over two Slegros. Poland. April-June 2017 hundred thousand bottles sold of high-quality Moldovan wine on the Polish market till the end of third quarter of 2017.

25 Considering the lessons learned from the organized activity in Poland, MCP initiated the replication of the program in Romania. As such, MCP and ONVV, performed a scoping visit to Romania during the ReVino festival in Bucharest, and negotiations with importers and distributors were conducted as well as several implementing counter parts identified. Additionally, Selgros and Kaufland chains showed interest in hosting retail promotion events and activities akin to those implemented in Poland.

Activity 3: Export Support Program (ESP): increased wine sales on target markets

Support new generation wineries (NGW) in developing market penetration strategies. MCP identified several NGW with a clear vision to invest in accessing new markets for their wine or expanding on penetrated markets. Through its holistic assistance, MCP supports the beneficiaries from the concept to the execution of their marketing strategy for the selected markets.

During the reported participation at FMCG Kongres in Poland, MCP conducted negotiations with three new generation wineries and representatives of their importers and distributors to develop marketing and promotion activities in order to introduce new SKUs and expand existing distribution. Hence, during the reporting period, MCP received the marketing plan from Asconi Polska and started negotiations with Gateway and Partners for implementing a program aiming to launch the export of premium wines produced by ‘transitional wineries’ that enhanced their product quality Photo credit: Screenshot from esquire.pl website in the PQUP program. In addition, Photo caption: Famous Esquire magazine (Polish edition) MCP convinced ONVV of the need recommends Chateau Vartely wines as one of the best to introduce 4 NGWs in the ‘summer drinks’. May 24, 2017 anticipated second wave retail promotion in Poland.

Support wine champions in developing export markets. Another module of the MCP export support program is oriented towards “Export Champions”, or companies that have already entered targeted EU markets and have constant importers and sufficient distribution. These “export champions” can benefit from MCP support to implement “pull” strategies to increase their sales in these markets.

During the reporting period, MCP provided support to the ongoing ‘success story’ of Gitana (Vinaria Tiganca) wines in Romania. In order to capitalize on the growth momentum achieved through previous activities (series of dedicated events and promotional activities previously supported by MCP), the Project decided to support Gitana winery with the organization of a series of food and wine pairing events hosted by Romanian super star Adi Hadean, the first of which was organized in May for a very select audience. In addition, MCP offered ongoing support to Chateau Vartely with implementation of their annual communication plan for the Polish market. This campaign ended in June 2017 and the results will be reported accordingly.

Activity 4: Develop domestic wine market and enhance wine culture

Promote wine culture and upgrade the quality of the wine services in local hospitality facilities. The domestic wine market research and consumers’ survey demonstrated poor

26 knowledge about bottled wines and a low level of awareness of wine brands and varieties. MCP is keen to organize communication campaigns aiming to raise pride and trust for locally-produced wines as well as contribute to increased service levels and offer variety in hospitality facilities.

During the reporting quarter, MCP organized a communication campaign on the domestic market entitled “La Vie en Rose”, which included the Rosé Competition and Seminar, Wine Vernissage spring edition, and the Wine Friendly campaign. As such, and considering the ‘educational component of the Wine Friendly’ program, MCP and ONVV, in partnership with the Association of European Sommeliers (ASE), School of Sommeliers of Moldova, and with the support of Technical University of Moldova implemented a multi-layered program aimed to: - Enhance the quality of studies in formation of sommeliers and wine service professionals; - Implement wine service standards in Hotels Restaurants Cafes (HoReCa) segment; - Promote wine culture on the domestic market.

As part the ongoing effort to promote a wine culture in Moldova, the Project assisted the School of Sommeliers of Moldova in organizing training courses for the European Sommeliers Diploma (DSE), as well as a series of trainings and accreditations for restaurants under Wine Friendly Program organized jointly with ONVV. These events were implemented with assistance from two international wine & food experts- Brigitte Leloup, Maître sommelier, Vice President of ASE, and Alain Leloup, Chef, France. The program included: • Formation courses and exams for DSE diploma for 12 sommeliers, which received the internationally recognized accreditation from European association of sommeliers. • Accreditations and trainings for Wine Friendly restaurants. The Wine Friendly program extended in the country’s regions toBalti. • A Master Class on wine and food pairing for chefs from Wine Friendly accredited restaurants, journalists, and food bloggers.

Photo credit: Maxim Ciumas Photo caption: European sommelier class 2017. Group picture after certificate award ceremony during spring Wine Vernissage, April 27, 2017

As a result of this activity, 30 restaurants (of which 10 new restaurants) and over 150 waiters and bartenders were trained for higher standards in wine service enhancing hospitality workforce skills; 17 chefs, journalists and food bloggers participated in master classes; and

27 12 sommeliers that successfully passed the examination received their DSE certificates during the award ceremony within the Wine Vernissage.

Increase awareness about wines and boost Wine Vernissage Results domestic sales. In partnership with the ONVV and wine producers, the Project organized the • record-breaking number of wineries – 47 spring edition of the Wine Vernissage. The event companies was entitled “Spring Waltz”, and was dedicated to • 10 of which premiered their wines for the Eugen Doga, whose masterpieces are first time at the Vernissage recognized as international cultural patrimony by • 1,200 people participated • supporting PR and social media UNESCO in recognition of his outstanding campaign generating a reach of over 80 achievements in music. MCP provided support in thousand people. all event components-from concept development • journalists and wine professionals from to its implementation. Poland, Ukraine and Romania,

The event brought notable results, demonstrating the growing popularity of the event as a touristic product with high export potential.

Additionally, following the Wine Vernissage, MCP assisted ONVV with the organization of the sixth wave of the ‘Wine Friendly’ campaign. This campaign is dedicated to white and rose wines with PGI denomination and awards at local and international contents.

During this edition, 14 master classes were organized, gathering over 300 people who had the opportunity to taste a record breaking number of wines: 65 wines from 28 wineries, amongst which were four ASW Mentorship program grantees (Gogu Winery, Kara Gani, Sava Mihai, Unicorn Estate) and six PQUP program ‘graduates’ (Agrici.wine, Basarabia Lwin Invest, Doina Vin, Migdal-P, CVC Milestii Mici and Slacuta). The wineriesused this Photo credit: Maxim Ciumas occasion to launch their upgraded quality wines Photo caption: Photo collage of pictures form on local market. In premiere, two of the Wine Wine Friendly Master Classes under the campaign “La vie en rose” April - June, 2017 Friendly events were organized in Balti municipality. Through this expansion, the campaign reached new regions and MCP further contributed to national wine culture awareness. The Wine Friendly campaign will last until August.

Support wine tourism facilities and wine culture hubs. The WoM marketing and the evolving wine culture encouraged the emergence of several specialty gastronomic and wine shops, which are important elements of tourism. MCP supports making these places more tourist friendly ensuring high service, authentic cuisine, and quality wine listings. During the reporting quarter, MCP assisted Decanter Vinotheque and Branesti “Stone Age” cave restaurant to elaborate their development plans and formulate their grant applications. As such, both presented applications and were pre-approved by the Selection Committee.

28 Activity 5: Enhance awareness about Moldova as a Tourism Destination

Develop PR and communication campaigns and increase awareness about . MCP developed concepts for two complex promotion campaigns (#discoverMoldova and #beatouristinyourcountry) deployed in the Polish and Italian markets, as well as on the domestic market. An introductory campaign began in May on foreign markets, aiming to raise interest and position Moldova among tourism professionals and travelers. As a result of the communication campaign and other MCP activities, 40 articles were published in the international media during the reporting quarter, 12 in Polish and 21 in Italian.

Enhance Moldovan tourism and products’ online presence. MCP is continuing the implementation of 360-degree videos for the top 11 tourism destinations to improve the quality of online promotional materials that promote Moldova as a tourism destination. These videos will allow travelers from all around the world to discover Moldova’s tourism attractions and experience them from their computers. These videos will be integrated into an online platform and on moldova.travel website for future promotion through dedicated campaigns in target markets.

Develop tourism information centers. Since Moldova does not have any Tourist Information Centers (TICs), MCP initiated the opening of such a center in Chisinau, in collaboration with ANTRIM and UNDP project “Support to Confidence Building Measures Programme (IV)”.

After signing the Memorandum of Collaboration on March 9, 2017, between Chisinau General Mayor, Dorin Chirtoaca and ANTRIM Chairman, Emilian Dzugas, during the reporting quarter, the space for the Tourist Information Center has been identified within the Chisinau City Hall building and works towards the refurbishing and furnishing of the office have been initiated. It is estimated that the Tourism Information Center will open its doors in the fall of this year and will serve about 2,000 tourists monthly, which will have a direct impact on the tourists’ circulation in Chisinau and surrounding areas.

Activity 6: Foster Business Linkages and Increase Demand for Moldovan Tourism Products on Target Markets

Promote Moldova as a tourism destination under the TCB Tree on target markets. According to the Tourism Marketing and Promotion Strategy, developed by the UNWTO marketing expert provided by USAID, the top tourism source markets for Moldova are Poland and Italy, whose tourist numbers can increase by 50% in the next three years if appropriate promotions are organized under the tourism country brand “Tree of Life”.

As such, in order to raise awareness on tourism target markets, with MCP support, National Inbound Tourism Association (ANTRIM) organized two press familiarization trips, for a Polish and an Italian group of journalists, bloggers and photographers. In addition, the press trips were organized on the dates of the DescOpera open-air music festival in Orheiul Vechi, this being an opportunity to promote the event on the tourism source markets. The press trip agenda included a 4-day visit in Moldova, including sites visits: Chisinau city tour, Orheiul Vechi, Chateau Vartely Winery, Et Cetera Winery, Cricova, Tiraspol, Casa Olarului, Casa Parinteasca, Curchi Monastery, Catholic Church in Orhei, and the classic music festival DescOpera. During the reporting quarter, already eleven articles were published in Polish and Italian languages.

29 During the reporting period, MCP organized the visit of the TVN film crew, a Polish commercial television network with 10.65% audience share in Poland. TVN visited Moldova nine times and filmed three episodes showcasing Moldova’s wine, cuisine, and culture to be broadcasted within the TV network in the summer and autumn of 2017.The first episode highlighting the traditions of Moldova already aired on TVN on June 17, 2017 as part of the Good Morning show. Photo credit: Screenshot, TVN Photo caption: First episode about Moldova’s traditions on the Good Morning show on TVN channel MCP also supported the visit of GRAY OUT, an Italian TV Production Company, authors of the known TV documentaries series “Il Mondo Sieme” (The world together) that is broadcast on TV2000, an Italian station. The crew filmed six reports in Moldova, that are to be consolidated into three documentaries for broadcasting as part of the “Il Mondo Sieme” series during autumn-winter 2017. In addition, these documentaries will be used within the communication and promotion campaigns to be implemented on the Italian market, promoting Moldova as a travel destination, starting Fall 2017 into Spring 2018. One of the reports features a Moldovan girl that lives with her family in Italy, but came to re-discover Moldova and Photo credit: Tatiana Lazar invites her Italian friends to visit. It is Photo caption: GRAY OUT film crew filming a report at important to engage the diaspora as a Orheiul Vechi marketing channel, since Italy is a top destination for Moldovan labor migrants, with an estimated half million Moldovans or 15% of Moldova’s population.

Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1: Support continued policy upgrading and legal regulatory reforms in the wine industry

Sustain continuous improvements to legal and regulatory framework reform. The project supports MAFI, ONVV, and private sector associations in implementing the new technical regulations into subordinated normative acts. Also, MCP supports upgrading the wine products’ controlling procedures and organization of these in a more efficient and less redundant manner to increase the quality of wines on the market and diminish unfair competition.

In the reporting period, the Government announced important reform of its structure of Ministries, for this reason ONVV, MAIA and MCP decided to delay the initiatives on improvement of the regulatory base of the wine sector.

Developing a national strategy for the wine industry (2017-2030). Over the last four years the wine industry, supported by USAID, implemented the White paper “Rethink Wine

30 Industry” (2010), and a sector-wide consensus was formed regarding the future of the industry. Now, to secure and streamline its sustainable development, the wine sector needs to develop a comprehensive wine industry development strategy for the next 20 years. Thus, MCP is dedicated to support MAFI, ONVV, and the private sector in developing a sectorial strategy by providing international expertise and managing a participatory consultation process.

During the reporting period, MCP initiated the first meeting of stakeholders from the entire wine sector: nursery and rootstock producers, vine growers, winemakers, distilleries, government, and academia. MCP expert, Marco Tiggleman, presented the outlined action for the wine industry strategy development process. As a result all sector representatives signed a resolution asking MAFI to initiate the legal process of strategy development for “Wine of Moldova 2030.”

Photo credit: Maxim Ciumas Photo caption: Wine Sector meeting on the development of a sectorial strategy “Wine of Moldova 2030,” June 22, 2017

Activity 2: Strengthen the role of ONVV as the main professional organization of the wine industry

Support the development of the ONVV institutional capacity. The project continues supporting ONVV in the implementation of appropriate business processes, including planning, reporting, monitoring and evaluation, PR and communication, transparency of decision making, and public-private dialogue platforms. MCP is also providing support for ONVV to define its lobbying and advocacy role in representing the wine industry’s interests and streamlining MAFI’s supervisory role.

Currently ONVV is in the process of internal restructuring, mainly in the marketing and export promotion department. To ensure continuity of and inclusion of the newly recruited staff, MCP expert, Marco Tiggleman, mentored new team members and monitored the implementation of the annual activity plan ensuring institutionalization of processes into procedure. Unfortunately, the execution of the expert’s duties was delayed by senior ONVV management due to a lack of understanding of the anticipated results of this intervention. Nevertheless, MCP will continue providing all needed support to ensure proper execution of annual activity plans, staff skills development, and increasing ONVV’s institutional capacity. Assist ONVV in developing and providing wine sector intelligence services. ONVV is positioned as the main professional organization of the wine industry and is expected to provide expertise and consultancy to the private sector. During the reporting period, MCP

31 consultants developed for ONVV the marketing summaries for Moldova’s secondary target export markets – Sweden, Germany, Finland, Norway, Slovakia, Latvia, Estonia, Lithuania, US, and India based on most recent Euromonitor reports. In addition, MCP reinitiated the design of all Business and Marketing Intelligence reports that ONVV will circulated to the sector in 2017-2018.

Enhance skills of ONVV staff. MCP supports capacity building and skills enhancement for ONVV personnel in line with the new organizational chart and job descriptions. As a result, each staff member develops unique and narrow expertise that responds to the industry’s needs. The project supports participation in trainings, conferences, and experience exchanges so that the ONVV staff can grow their knowledge and expertise. Considering the ongoing restructuring, as well as negative evaluation of performance of some ONVV staff from both management and MCP experts, MCP decided to postpone this initiative, until the team structure and performance of each employee can be officially appraised, to ensure return on investment from the anticipated supporting programs.

Activity 3: Develop and strengthen the PGI wine associations

Upgrade PGI Technical Specifications and develop extension services within PGI Associations. The PGI associations are operating according to PGI technical specifications developed before the wine technical regulation was approved by the government. Consequently, these need to be upgraded to define the specifics of each wine region. In order to assist wine producers to conform to PGI wines quality standards, PGI associations need to provide extension services to their members aiming to develop specific viticulture and winemaking techniques that adjust to the terroir of the wine regions.

During the reporting period, ONVV and MCP assisted the PGI Associations in developing their first winemaking and viticulture activities that will have a significant impact on the sector. As such following projects were designed and approved for SEED Grants funding: • “Best ” – a project of PGI Association Valul lui Traian that includes establishing experimental plots to define optimal vine form, optimal load, etc. by continuous observation and monitoring of climate and pests’ conditions, and sharing best practices with local vinegrowers; • “FlaveDor” – a project of PGI Association Codru for performing industry scale assessment of the impact of vine epidemic diseases such as "flavescence doree" and "bois noir", by using cutting edge and yet cost-effective technology - flying drones with spectral cameras; • “Terroir” – a project that will be implemented by PGI Association Stefan Voda aiming to define and establish the first Denominations of Origin (DOP) in Republic of Moldova.

Increased awareness about the PGI concept and promotion of PGI wines. Local consumers are not acquainted with PGI’s new quality standard. Therefore, the producers need to promote its values and particularities. To this end, the project works with ONVV in developing a common promotion and communications plan, and supports the associations in developing necessary marketing materials.

During the reporting period, MCP embedded promotion of PGI concept and PGI wines into all public communication initiatives, particularely into all activities and progams under “La Vie en Rose” campaign. In addition, MCP supported ONVV with the development of the concept note and draft budget for the first public oenogastronomic festival dedicated to PGIsto take place in August. This event will feature wine producers form each PGI zone paired with other agri-food producers that are characteristic to this zone.

32 Activity 4: Upgrade Tourism Sector Policies and Reform Regulatory Framework

The existing tourism sector legislation needs a systemic structural reform to incentivize the small and medium size entrepreneurship, mainly in rural areas, to provide tourism services and to participate in the consolidation of an attractive tourism product offer. Today, the small service providers, namely rural pensions, small wine producers, tourism guides, craftsmen and other small operators are facing burdensome procedures and regulatory conditions that are discouraging business initiatives and preventing the development of tourism in Moldova. In addition, the regulations related to accommodation units and tourism agencies aren’t compliant with international best practices and impose excessive formalities to Moldovan enterprises, negatively impacting the competitiveness of Moldovan tourism services on the international market.

In addition, the Tourism Agency has promoted a draft law initiative no. 302 that amends the tourism legislation with additional administrative requirements and regulatory conditions. This legislative initiative has been approved in the first reading by the Parliament, on December 23, 2016 and is pending second and final reading. However, the private sector associations, supported by submitted official letters to the Parliament of Republic of Moldova requesting to uphold the draft law initiative and to readdress the regulatory issues based on a more liberal approach. In response, the Parliamentary commission responsible for the draft law no.302/2016 has called a public debate on March 1st and established a working group to improve the draft law.

USAID announced its readiness to offer international expertise to support the Parliament working group and the private sector tourism associations to improve draft law no. 302 and find the most suitable solutions for the Moldovan tourism industry legal regulatory environment.

MCP identified an international expert, Mathieu Hoeberigs, to assist with the legal and regulatory aspects of tourism. Mr. Hoeberigs is a lawyer with 23 years of experience within the European Union Commission and served as head of office responsible for sports, tourism and leisure policies. He also participated in the negotiations for EU enlargement with Central and Eastern European countries, including Moldova’s accession application process. Mr. Hoeberigs has a wide range of experience and in-depth understanding of the tourism directorate and possesses knowledge about Moldovan tourism legislation.

MCP supported a scoping visit for Mr. Hoeberigs, in order for him to get more acquainted with the specifics of the tourism legal framework of Moldova and the draft law debates. During his visit he met with the representatives of the tourism business associations, AmCham and EBA, the Ministry of Agriculture and , and the ONVV. Mr. Hoeberigs worked with MCP and USAID to understand the challenges and opportunities of the Parliamentary public debate process.

As a result of this scoping visit, MCP and Mr. Hoeberigs are in the process of defining the scope of work for a future collaboration on the legal regulatory tourism framework. MCP, through AmCham legal expertise, supported the public-private dialogue on the improvement of the draft law no. 302/2016 that amends the tourism legislation and proposes additional burdensome barriers and business regulations. The special working group established by the Parliamentary committee responsible for the draft law no. 302 received two additional proposals of amendments from the ‘Tourism Development Platform’, formed by seven private sector associations of the tourism sector. In addition, the Ministry of Economy submitted a thorough position paper that refers to the same conceptual regulatory issuesraised by the tourism private sector. The working group closed its sessions and transferred the matter to the Committee for final decision.

33 Activity 5: Strengthen ANTRIM’s Role in the Tourism Sector

Legal regulatory improvements to tourism. Since 2013, USAID, through its competitiveness projects, has been supporting the private sector through the National Inbound Tourism Association of Moldova (ANTRIM), which engages the main stakeholders from the inbound tourism sector such us tour operators, hotels, wineries, and pensions.

During the reporting period, MCP continued offering support to ANTRIMfor the grant implementation. With MCP support, ANTRIM has succeeded in further developing its institutional capacities, expanding its membership support program with additional services and assistance. As such, ANTRIM continued to implement a vast number of activities to promote Moldova as a tourism destination and support its members to develop and increase their market linkages. These activities include: organization of press tours, support for members’ familiarization tours, and participation at international tourism exhibitions. Moreover, both the Executive director, Natalia Turcanu, and Project Manager, Onorina Soric, participated during the reporting quarter in a series of workshops delivered by EBA and AmCham aimed to develop a position paper on behalf of the industry and learn best practices in initiating and maintaining a dialogue with public institutions. As a result, ANTRIM was able to act as a leader in forming the inbound tourism industry Platform, on which the position papers regarding law no.302 were based on and then submitted to the parliament.

ANTRIM’s growing importance in the tourism industry was also highlighted during the Moldova Tourism Awards ceremony, where the association earned a prize for the www.moldova.travel website as the second-best tourism information platform. Executive Director, Natalia Turcanu was awarded in the best representative of the inbound tourism category.

34 A2. LIGHT INDUSTRY

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Activity 1: Develop the ZIPhouse Accelerator and Raise Skills through Education

Launched in late 2015, ZIPhouse is the flagship institution in workforce development, and supports an industry transition to higher value added. The Center was created with USAID support, and is managed by the Technical University from Moldova (TUM) in close cooperation with the industry association APIUS. MCP supports ZIPhouse to become a viable institution, focusing on capacity building and content development.

Enhance ZIPhouse institutional capacity. Text Box. ZIPhouse Results Connecting ZIPhouse to the global fashion during April-June 2017 network is an important step to strengthen ZIPhouse’s position as a national platform for • 420+ total number of beneficiaries; creativity, education, and innovation in fashion. • 50+ companies participating at least MCP supports ZIPhouse to become a leader on once in trainings and workshops; absorption of global development trends, which • eight advanced technical trainings for will grow the competitiveness of Moldovan light 200+ participants, with 90+ training industry. hours, provided by 30+ teachers from 3 educational institutions; In this respect, MCP supported ZIPhouse • 15 startups in Fashion Acceleration Executive Director, Angela Scripcenco, to Program, with 17 mentors; two business camps, with 11 participate at the WEAR Sustain (Wearable • sessions for 55 participants; technologists Engage with Artists for Responsible • one Fashion Show organized Innovation) project launch event organized in May featuring 20 students’ collections; in London, UK. WEAR Sustain is a twoyear • Eight community building events with project funded by the European Commission 100+ participants; Horizon 2020, a research and innovation initiative • 25 access cards sold; to engage art, design, and creative industries to • $3,300 US revenues; work more closely with technology and • 2,930 Facebook followers engineering industries to shift the development of the wearables and e-textile landscape towards a more sustainable and ethical approach.

As a result of this participation, Mrs. Scripcenco enhanced her knowledge on the global industry trends in terms of innovation, wearable technologies, and sustainability. In her capacity as ZIPhouse Director and teacher at the Technical University of Moldova (TUM),

Mrs. Scripcenco will share this knowledge to the academic sector to integrate these trends and will translate them into practical activities at ZIPhouse. Also, Mrs. Scripcenco presented a TUM team four years’ research project on an innovational product – cloths for patients in the medical sector, finding potential partners for collaboration.

The most important thing to be mentioned is that as a result of this participation, Moldova was included in the list of eligible countries for the WEAR Sustain project, and ZIPhouse was connected to the project network for future collaborations.

Boost fashion creativity, startup and community building. To build the emerging fashion community and promote fashion entrepreneurship, MCP is providing support to ZIPhouse for implementation of the 2017 community building plan. This plan consists of activities ranging from community meet-ups to complex events such as contests, conferences, and the startup acceleration program.

35 To help the growth of fashion startups, MCP assisted ZIPhouse with the February 2017 launch of the Fashion Acceleration Program (FAP) in Moldova. This is a partnership with the Fashion Technology Accelerator from Milan, Italy, and APIUS. FAP aims to accelerate several high potential fashion startups to succeed on both local and international markets. ZIPhouse succeeded with engaging 15 professionals from the private sector as judges, mentors, and coaches. The identified professionals are ready to contribute, pro bono, to the expansion of entrepreneurship in the fashion industry.

During the reporting period, six start-ups involved with FAP received guidance on “During four months of participation in FAP, we establishing their businesses and their key succeeded to extend our business creating four performance indicators for achieving new jobs (from 1 to 5 employees), develop the established objectives. The startups logo, define the brand strategy, … now successfully passed the modules related to preparing for our first visit to the International marketing, communication, and other topics Lengerie Exhibition Interfiliere, in Paris, to related to boosting sales and strengthening identify suppliers, for insuring a quality product”. brand identity. Valuable insights on the Carolina Tulgara, fashion industry and tailored support was FAP participant, provided through one-on-one sessions by brand manager their international mentor, Leekei Tang, “Antigona” startup motivating the startups to boost their concentration and to stay focused on their acceleration .

Within the FAP, ZIPhouse planned a series of Business Camps focusing on the main topics of starting or developing a business in the fashion industry. During the reporting period, two business camps (“Design Your Smart Business” Camp and “Smart Marketing for Fashion” Camp) with 11 sessions in total were organized for 15 FAP assisted startups, as well as other interested startups. These two business camps gathered 55 participants in total. Ten local speakers supported the FAP pro bono, and committed to further support entrepreneurship development in fashion.

Photo credit: Marina Gospodarenco Photo caption: Participants at the "Smart Marketing for Fashion” Camp, June 16-17, 2017

ZIPhouse succeeded in strengthening its position as a unique fashion community platform through organizing community-building and knowledge-sharing branded events on a regular basis. During the reporting period, eight such events gathered about 100 participants.

36 In addition, working to strengthen the collaboration between the academic media and private sector was undertaken within a newly launched platform for internships and job opportunities. ZIPhouse also acted as a partner for the “Students’ Fashion Show 2017”, organized during in the reporting period. The show featured 20 collections created by the students of Technical University of Moldova and was attended by more than 200 people, including representatives from 30 light industry companies looking for new talents. A jury comprised of academic staff, private sector, and APIUS representatives awarded nominations for the best collections. The event was organized at Tekwill, strengthening the collaboration between the organizations and positioning Tekwill and ZIPhouse a hub of Excellence at TUM.

Develop industry skills through quality advanced technical education and training. To support the industry’s transition to higher value added, ZIPhouse Photo credit: diez.md provides quality, practical technical Photo caption: Catwalk during the "Students’ Fashion education for industry professionals Show” of Technical University of Moldova organized at Tekwill, TUM, June 24, 2017 through training sessions and workshops enhancing the skills and abilities of local specialists. MCP supports the Center to develop the Fashion Leadership Program and ZIPhouse Fashion Academy.

Within the Fashion Leadership Program developed by ZIPhouse with MCP support, in April, Moldovan light industry representatives had the opportunity to participate at “Vogue UA Conference: Fashion & Business” organized in Kiev, Ukraine. The Conference had international speakers from the Council of Fashion Designers of America (CFDA), Google, Polimoda, and other renowned organizations.

Photo credit: Geo Lupascu Photo caption: participants attending “Vogue UA Conference: Fashion & Business” hold on April 26 in Kiev, Ukraine

37 The group from Moldova had 16 participants, three TUM teachers and one from the industry association, APIUS, to ensure knowledge transfer and linkages building. The participants learned about global fashion industry trends, consumer analysis, as well as discussed challenges and strategies for the fashion business development. The participants also had the opportunity to network with Ukrainian fashion cluster representatives.

Another educational aspect highlighted by the Fashion Leadership Program is the enhancement of English language knowledge for teaching staff at fashion related faculties from the Technical University of Moldova. In this respect, with MCP support, the second level session on “English for Fashion Industry” was organized in April. Ten teachers who attended the course significantly improved their level of professional English. All beneficiaries provided positive feedback and expressed the necessity of organizing such courses on a regular basis to overcome the language barrier.

ZIPhouse aims to strengthen its position as the platform bringing advanced technical education and training to the fashion industry. From April to June 2017, under the label ZIPhouse Fashion Academy, 250 participants representing both local companies and teaching staff from TUM and other educational institutions benefited from eight practical workshops led by international trainers, with 98 hours of training in total.

Table. Advanced Technical Trainings for light industry in April-June 2017

Training Training subject Trainer Training Topics level Trends and use of nano technologies Angela Scripcenco, and e-textiles in textile and apparel "Advanced technologies in more than 20 years of industries; new generation of textiles; apparel industry" experience in teaching innovation in the specialized equipment apparel industry topics for the apparel industries. Larisa Cristian, Creating new clothing silhouettes "Constructive modeling of Moldova, 25+ years in through the modeling process; apparel" industrial modelling of constructive and decorative manufacturing elements in clothing products. “Auto CAD for pattern making of womenswear, based on Nina Utochkina, English method of designing and English method Winifred Moldova, ZIPhouse modeling of women's clothes Aldrich” Mariana Raileanu, “Eficiency enhancement in Methods and technics of efficiency Romania, expert in clients-work process” increase; work with foreign clients apparel, 15+ years Aura Mihai, Romania, Products’ customizing; products "Design and engineering of Advanced expert in footwear competitiveness; evaluation indicators; footwear" level design & engineering. design and prototyping the footwear. Dmitry Ditchkovsky, Value chain components; value chain "Fashion Industry Value Belarus, expert, 15+ function of business model; product Chain" years of experience in development, supply, logistics and retail; apparel industry increasing efficiency and added value. Maria Balan, Romania, Supply in the production schemes; “Supply system of production. expert in apparel, with logistics department role, functions and Calculation of raw materials more than 15 years of responsibilities: pricing in production and accessories” experience. schemes. Time management -work and operations Olga Rudi, Romania, “Timing for operations in timing; methods and techniques; expert in apparel apparel. Methodology” comparative analysis of the practical production company. issues; personnel motivation. Demian Usanli, local Practical methods and techniques of expert, professor at “Productivity increase” increasing productivity in case of a low Technical University of qualified or new operator. Moldova

38 Activity 3: SMART (Streamline Manufacturing, Accountability, Resource efficiency, and Transparency) Factory program

Create brands and products aligned with fashion trends. To become competitive on local and international markets, MCP supports light industry companies to improve product design and create products aligned with fashion trends. Adding design capabilities is key to Moldova’s upgrade into higher value-added segments.

During the reporting quarter, MCP “Flying Designers” Program facts continued to implement the “Flying Designers” program, in which international • 14 companies, including five start-ups, were designers provide multiple, intermittent assisted; consultancies to Moldovan apparel and • 17 designers improved their design skills; footwear companies. The goal of these • three emerging designers and two start-up consultancies includes improving designers developed five collections to be designers’ skills and collections and presented at famous international enhancing companies’ competitive exhibitions in Millan, Paris and London; positions. Within this program, two MCP • 40 sketches developed for footwear international designers, Kelly DeNooyer companies; and Luisa Fazio, assisted 14 apparel and • four footwear companies developed their footwear companies in developing Fall firstwell-structured collections - Fall 2017/2018. 2017/2018 collections.

With design coaching assistance from Kelley DeNooyer, five apparel companies (six brands - Alina Bradu, Sekana, Katea Gri, My Revival, Tricon and Move) developed Fall 2017/2018 collections based on learning and implementing the following concepts: collection planning process, whole sales templates, design and production calendar, mood boards, inspirations and trend research, range planning, brand signature, high-fashion techniques, and technical finishes.

Figure. The Mood board for Move brand created with the support of the international consultant Kelly DeNoyeer

Due to the fact that three companies (Katea Gri, Loconic, and Move brands) have emerging designers, and to increase their sustainability, design assistance was continued. Design mentorship support was also launched for five start-ups (Mara, Lavielace, EHO, Jippeto, and Sophie brands).

The designers were assisted to: identify their personalized Spring-Summer 2018 seasonal theme , start the creative process and create mood boards; increase the value of the collection by adding details, embroidery, printing and handmade details that reflect the

39 brand, and to correctly execute the design “We have had some technical innovation process. All start-ups provided positive for us, major discoveries for how to utilize feedback on this assistance. our embroidery machinery. Kelly makes us try things we never thought about and The MCP international footwear designer, ways to use our machinery!” Luisa Fazio, assisted four footwear companies (Oldcom, Cristina, Hincu, and Alina Bradu, Olsa Shoes) to develop the Fall 2017/2018 Alinia-Art company designer, selected as emerging designer collections. All four companies were assisted in Flying Designers program with collection theme selection and deciding the collection structure and collection development. This helped the assisted companies to implement the design process

Photo credit: Luisa Fazio Photo caption: Left picture- International designer’s ideas proposed to Cristina company regarding the design, materials and finishes for shoes. Right picture- Prototypes executed by Cristina company with new interior branding correctly. In addition, the international designer developed up to 10 sketches for each assisted company, which were integrated in 2017/2018 collections developed by local designers. All sketches were based on creating “themed” groups of products to make a coherent collection and establish a design DNA for each brand.

Patternmaking is one of the most important processes in the light industry value chain because it ensures proper inclusion of designer’s ideas into the product, and also ensures a proper fit. To help local patternmakers with developing their abilities in patternmaking, MCP expert from Germany, Eva Hillers, started assistance to eight apparel companies in June. Two of these companies produce children wear.

In four footwear companies, MCP international designer, Luisa Fazio, worked with patternmakers and craftsmen from the companies to evaluate the construction, technical issues, hardware details, and materials that can affect the product design, and explain any issue that would impact the final product. Since all assisted companies executed prototypes, the international designer provided feebacked based on the prototypes and explained to assisted designers how important is to verify if the pattern maker and the craftsman properly transposed the sketch into the finished product. Thanks to the assistance of Luisa Fazio,

40 Moldovan designers improved their knowledge and design skills, and are now prepared to develop competitive collections.

Ensure access to quality textiles and accessories. Access to quality textiles and accessories strengthen sourcing skills and support factory upgrades to higher segments of value chain. Since Moldova does not manufacture textiles or have significant domestic warehouses, MCP assists numerous companies, including start-ups, in strengthening sourcing skills and “opens the doors” to new, regional and affordable suppliers. During the last two years MCP supported companies to visit international sourcing exhibitions: Premier Vision and Texworld in Paris and warehouses in Italy.

The assistance provided by the project in this field has already become sustainable and durable. This is demonstrated by the fact that companies that visited stocks of fabrics and accessories previously with MCP assistance now continue to supply from the same sources independently. During the reported period, six apparel companies (Mobile, Ridiager, Vistline, Sram, Portavita, and Tricon) independently visited the stocks in Carpi for sourcing fabrics and purchased raw materials valued at around 3.5 million MDL, or about $195,000 USD.

Assist companies to implement complex innovative methods for productivity growth. Productivity improvement and efficiency remain a top priority for Moldova’s light industry competitiveness. To increase companies’ productivity, MCP implements a Productivity Enhancement Coaching Program that includes a complex productivity and efficiency approach, combining local and foreign consultants.

During the reported period, MCP continued the The innovative methods implementation results implementation of the coaching program in four • Six assisted companies, 100+ production specialists improved their skills in apparel companies (Premiera • streamline manufacturing Dona, Infintextil, Maicom, and • 1,000+ operators increased productivity Mobile). The main focus of • 40% registered increased productivity of cutting room in assistance provided by the Maicom company due to the implementation of complex MCP international consultant, innovative methods for productivity growth Martin Bucher, included: time • More than 20% increased performance indicators for new study, performance operators in Infinity company in result of implementing development, cutting innovative methods for productivity enhancement engineering, quality control, • 40 production specialists, supervisors and technologists and a payment and incentive from 11 companies received knowledge in productivity system. enhancement

The companies’ specialists learned innovative productivity enhancement methods to be applied. For example, at Infinitextil, the production manager implemented quality control at random procedures and statistics. As a result, the product quality improved and eliminated production flaws, while production output and productivity increased. Another example of innovative productivity includes the Maicom company following the recommendation of the international consultant to reorganize the cutting room. This helped to increase productivity and included several elements such as: cutting and spreading parallel and simultaneously in use: cutting section’s method, straight edges and slightly rounded and notches at these edges with straight knife: two straight knives parallel in use at the beginning of cutting; distribution and parallel work of straight knife cutting and band knife cutting; and cut removal from cutting table. In parallel, Maicom benefited from a MCP grant for purchasing a cutting machine. Putting in use the new machine and the created advantages as a result of cutting department reorganization, a 40% increase in labor productivity was observed.

41 Local consultant, Demian Usanli, supported companies to achieve results on the tasks established by the international consultant. In this respect, the consultant trained both, the managers (trainers) assigned to supervise the operators and the first team to be trained within each company. The trainers were trained to conduct the whole complex of works such as testing operators’ work quality and enhancing his/her capacity to provide in-company trainings. The preliminary analysis of trainings conducted in Infinititextil shows their high efficiency. The company began regularly using testing and training for trainees and as a result of four trainings, the performance indicators (increase in speed) of some trainees increased from 7% to 26%. Since the in-company trainings were organized for employees but also for students from vocational school and college looking for a job, those which provided the best results were employed. Thus, this activity, supported by MCP, had a considerable impact on improving employees’ skills within the company, but also created new jobs for youth.

Photo credit: Demian Usanli Photo caption: Training on productivity enhancement within Infinititextil company, in May 2017

To disseminate the new methods for productivity enhancement to other companies from the sector, the local consultant Demian Usanli provided a training session in June at which more than 40 production specialists, supervisors, and technologists from 11 companies participated.

Support companies to implement innovative technological solutions. MCP continues supporting light industry companies through its grants program to implement new technologies and new equipment. In the reported period, four companies (Artizana, Olga Ceban, Olsa Shoes, and Arilux) selected equipment suppliers and made the first payment installment. The total investment will be around $195,000 USD, of which $155,000 USD are companies’ funds.

MCP support to Moldovan apparel companies for technical innovation provided in the reported period determined companies to make important private production-related investment, exceeding one million dollars. With MCP support, seven progressive Moldovan apparel companies (Ional, Maicom, Olga Ceban, Oldcom, Ponty, Mobile, and Infinititextil) learned about the textile technology of tomorrow at TexProcess, the leading trade fair for

42 international garment manufacturing. TexProcesshat took place in Frankfurt, Germany in May 2017.

Moldovan companies were exposed to the latest manufacturing innovations and connected with global suppliers for further production-related investments. They had the opportunity to see 20 product groups presented at the exhibition follow the entire value creation chain – from design and progressing to preparation, processing, logistics, finishing, and disposal. In result, Moldovan companies planned future equipment acquisitions totaling US $1,110,000 (995,000 Euro). The managers and technicians of these companies selected equipment for fusing, setting and manufacturing preparation, embroidery machines, stitching machines, highly-developed fastening and zip-fastening systems, ironing equipment, as well as equipment for ironing and steam pressing, catting equipment. Returning home, the companies started the negotiation process with the selected suppliers for purchasing selected equipment. These purchases will support advancing factory efficiency and productivity, which is the main goal of MCP’s SMART factory assistance program, and where Moldova lags behind regional standards by an estimated 30 percent.

Support factories with implementation of international social compliance and production standards. During the reported quarter, MCP continued the implementation of an Integrated Quality System focusing on ISO 9001:2015 and Occupational Health and Safety Management System (OHSAS 18001:2007) in Steaua Reds Company. The MCP local consultant, Ala Oberst, assisted the company in implementation of the main procedures required by international standards such as: personal evaluation, identifying and analyzing customer requirements, customer satisfaction assessment, supplying, OHSAS risk management, emergency preparedness, and response capacity. The implementation of these procedures contributed to increasing the transparency of the enterprise's activity, which was highly appreciated by the foreign clients.

Objective 2: Expanded Market Linkages

Activity 1. Reposition Moldova as a Full Product Manufacturing Partner and Support Internationalization of Moldovan Fashion Brands on Regional Markets

Find new key customers through apparel supplier performance evaluation. To help companies find new key customers and generate business, MCP supports theTrigon Select Performance Evaluations and Promotion Program. The evaluation and promotion program consists of up to 280 criteria and four rating levels and enables Trigon Select to evaluate the capabilities and the performance of apparel manufacturers by recognized and objective standards.

In the reporting period, the companies signed individual contracts with Trigon Select for promotion in selected export markets (Germany, UK, Italy, France and the Netherlands). As a result, the Fashion Associations Photo credit: Mariana Lapusneanu, APIUS Executiv Dirctor from selected markets Photo caption: Prezentation of Moldovan light industry companies, allowed Trigon Select to evaluated by British Trigon Select's experts, on June in Cologne, Germany

43 make presentations of Moldovan companies in each country to the associations’ members. The first presentation took place in June in Cologne, Germany and to members of the German Fashion Association. The event brought together 15 international textile companies, including buyers, manufacturers of protective clothing, accessories, technical distributors, as well as representatives of fashion associations from Germany and the Netherlands.

Support Internationalization of Moldovan Fashion Brands on Regional Markets. Julia Allert, a Moldovan apparel manufacturer, strengthened market positioning in Czech Republic and regionally, by establishing collaborations with a prestigious fashion showroom in Prague and signing agreements with Sllovac multibrand store Rena Exclusiv. This is due to the designer’s participation at two significant fashion and design events, “Czech Design Week” May 8-14, 2017 and “Prague Design Market” May 13-14, 2017 for which MCP provided support. Previously MCP supported Julia Allert’s participation on the Czech market through the Kabo exhibition in Brno, which resulted in an appearance of the Moldovan brand in a prestigious concept store in Brno and Prague, a prestigious fashion showroom in Prague, and multibrand store in Slovak Republic.

Georgette, a local womenwear brand, showcased their Summer 2017 resort collection at Odessa Holiday Fashion Week in Ukraine on June 18, 2017, an event organized by Ukrainian Fashion Week. This participation offered the company the possibility to test Ukrainian customer interest toward Georgette products. Participation of Moldovan designers at regional fashion events also raised the profile and notoriety of the Moldovan fashion industry on the regional markets.

For the first time five apparel companies (Intercentre Lux, Ionel, Ridiager, Mobile and Fashion Textil) participated in SVP Fashion international exhibition in London in June. SVP exhibition is the only sourcing exhibition in London. It was successfully launched in 2012 and now attracts many visitors including leading names, in addition to growing smaller brands and buyers. Moldovan apparel companies provide services for several brands such as Marks & Spencer, New Look, Orsay, and Next. It was a pleasure for UK buyers to meet Moldovan companies at the exhibition. Moldovan participants in this exhibition established around 35 new contacts, which they hope to transform into new contracts. Mobile company attracted a new client, which agreed to visit the company to discuss the future collaboration.

Activity 2: Consolidate the Din Inima Umbrella Brand and Expand Domestic Market

Support APIUS in implementing Din Inima awareness campaigns. Moldovan fashion brands typically develop and manage their own retail, which can lack critical elements of success, i.e. merchandising, lighting, good design/layout, and service. This results in untapped sales and consumers leaving empty handed. At the same time, international trends show that “consolidation” is the name of the game in retail. Therefore, domestic

Figure: Advertising image from the #iweardininima campaign as shown on billboards in Chisinau

44 fashion retail improvement is a priority for MCP assistance with a focus on joint retail under the Din Inima brand.

A large advertising campaign #euportdininima (#iweardininima) was launched by MCP jointly with APIUS to inform customers about the new spring/summer collections of the 20 local brands. The campaign objectives are to raise the Din Inima umbrella brand’s visibility to stimulate interest in wearing local brands, and to increase local companies’ sales. The advertising campaign lasted two months and used outdoor advertising instruments including billboards, big boards and banners, totaling about 30 surfaces in Chisinau.

Through the APIUS grant, MCP continued to support innovative promotional activities, such as look books, video look books, and five fashion listicles. During the reporting period, 34 product and campaign images and 21 video look books were produced for light companies. Companies used these materials while promoting their spring/summer collections on social media, catalogues etc. Qualitative images raise the profile of the fashion industry in Moldova and inclines the local people to buy more fashion products made in Moldova.

Also, MCP supported APIUS in the organization of two pop-up shops branded DIN INIMĂ: - 10 local brands (Crème Brulee, Georgete, Lia Fia, Mallena, Vasconi, MilyMia, Olsa shoes, Oldcom, O’Blank, Amarena Secret) participated at “Mai Dulce 2016 Festival” in Chisinau. This generated 100,000 MDL in sales and contributed to the enhancement of the notoriety of the umbrella brand DIN INIMA. - Ten local brands (Vitalie Burlacu, Premiera Dona, Milabrega, Julia Allert, Georgette, L. Storojuc, EHO, Crème Brulee, Olsa Shoes) organized in premiere a pop up shop in the region - in Balti city, to enhance the notoriety of the umbrella brand DIN INIMA regionally, and to warm up the market in anticipation of opening of a DIN INIMA common store in Balti this year.

Support APIUS to raise industry profile. “Fashion Soiree” introduced the mood of summer in the city of Chisinau for the fashion lovers. Organized once a year by APIUS, with MCP strategic support, Fashion Soirée is a community event organized in addition to the spring and autumn Moldova Fashion Days. It acts as a satellite event that connects Moldovan designers with the public by engaging well-known public figures. The main purpose is to increase the visibility of brands through the participation of these public figures as ambassadors of local brands. It also gives designers an opportunity to directly interact with the members of the community who are their customers and promoters. Photo credit: Berlizzo Events Photo caption: Swedish Ambassador Signe Burgstaller Held in an open-air format, the 2017 featuring a dress of the local designer Alina Bradu, edition of the Din Inima Fashion Soirée during the «Din Inima Fashion Soirée” catwalk, June 8, presented Resort Collections of 14 2017

45 Moldovan brands: Alina Bradu, Sekana, Premiera Dona, Georgette, L. Storojuc, Katea Gri, Julia Allert, Amarena Secret, Vitalie Burlacu, EHO, O’Blanc, Vivi Art Boutique, Etnika and Valentina Vidrascu. About 80 well know public figures such as members of the business community, diplomatic corps, Moldovan government, journalists and artists acted as models for the community catwalk, to manifest support to the Moldovan fashion industry and local designers. The event gathered about 300 people and registered high outreach and media coverage. An impressive PR push was generated, with more than 20 appearances presenting and commenting on this fashion event.

Expend domestic markets. In year one, MCP supported light industry companies in opening their own stores by training companines to correctly implement merchandising elements that determine sales increases. This activity has become sustainable and durable. As a confirmation, in the reporting quarter, the small childrens wear company Maxikids opened a new store in Ialoveni city, investing $ 5,000 USD of its own resources. Now the company has five stores in total.

Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1. Assist APIUS to Develop an Industry White Paper and Advocate for Policy or Regulatory Changes

MCP supported the development of a White Paper that contains the main direction for advocacy and regulatory changes which APIUS shall initiate. As a result, during the reporting period, European Business Association (EBA) and American Chamber of Commerce (AmCham) provided mentoring and coaching as well as advocacy support to APIUS representatives. APIUS representatives participated in the following events organized by AmCham: - How to organize and conduct the advocacy activity – AmCham’s experience - The communication tools for increasing the visibility of business associations (2 modules) - Training on identification and prioritization of advocacy initiatives.

As well, APIUS participated in the following events organized by EBA: - Workshop on strategic organizational issues related to Business Support Organization’s’ management; - Public event with the representatives of the European Commission DG Trade, Head of the EU Delegation in Moldova, Mr. Pirkka Tapiola and Deputy Prime Minister O. Calmac dedicated to presentation of an analytical report developed by EBA presenting the key private sector issues; - Meeting with APIUS and other associations focused on strategic organizational issues of the organization: sector committee structure, how committees are elected, how members are participating how position paper are developed and approved etc.; - Meeting with the Consultative Committee of the Customs Service.

46 A3. INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT) AND CREATIVE SERVICES INDUSTRY (CSI)

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Activity 1: Adapt University-Level ICT Education to Industry Needs

Designing and endowing a cluster of tech labs. MCP focuses on developing and implementing activities that impact workforce development in ICT. Within this, MCP directs its efforts to support the Technical University of Moldova (TUM) in setting up new laboratories for ICT and engineering faculties as well as for defining the operational model of the Makers Space that is currently under development.

MCP supported the representatives of the Technical University of Moldova and State University from Balti to undertake a study visit to Armenia. The objective of this visit was to learn from Armenian best practices in developing ICT and Engineering education and entrepreneurship programs, which are implemented as partnerships between the government, private sector, and education institutions.

Photo credit: Dinu Turcanu Photo caption: Representative of Technology & Science Dynamics TSD Educational Research Center demonstrating an application to Moldovan delegation

The Moldovan delegation visited ICT universities from Yerevan, excellence centers, makers’ hubs, regional innovation centers as well as other organizations implementing extra- curricular activities in partnership with multinational corporations such as Microsoft, IBM, and National Instruments.

The information and knowledge acquired during the study trip to Yerevan allowed the Technical University from Moldova to design its programs in line with industry needs for increasing the technical and entrepreneurship skills of its students.

47 As result of this visit and several Site visits organized for Moldovan delegation within consultations with stakeholders, the study visit to Armenia including MCP, TUM decided to cluster the practical labs on one ✓ TUMO - Center for Creative Technologies floor which must be fully renovated ✓ Ayb Fab Lab and refurbished. MCP offered ✓ Innovative Solutions and Technologies Center support in designing the spaces ✓ Armenian National Engineering Labs and advise with renovations. ✓ Microsoft Innovation Centre Several private partners, ✓ GTC – Gyumri Technology Center ✓ Vanadzor Technology Center production companies, including ✓ Technology & Science Dynamics Inc. microelectronics, control ✓ Enterprise Incubator Foundation engineering, automotive, and others expressed their willingness to contribute to this activity by providing content and expertise for integration into University curricula.

Promoting digital education and Tech entrepreneurship among students. During April - May 2017, MCP supported an initiative of iHub and of two student organizations- AISEC and BEST, to pilot the Guest Lectures program. The program consisted of a series of events which took place at three largest higher education institutions: State University of Moldova (SUM), Technical University of Moldova (TUM), and Academy of Economic Studies (ASEM). A total of 419 students attended the 11 lectures conducted by successful ICT professional, entrepreneurs, and managers. The speakers shared their knowledge and gave talks on how ICT influenced the transformation of other sectors and provided insights on existing opportunities for aspiring entrepreneurs to design specific IT products for improving the respective sectors. Also, a special emphasis was put on digital marketing, as competences in this field on the labor market are rather weak, while the demand for professionals is high and increasing. The Guest Lectures program was promoted on social media and youth news portals.

Credit: TRIO studio Caption: Vitalie Esanu, successful tech entrepreneur, speaking to students from TUM about his experience in building international scalable startups

The feedback from the program was very positive, students rated it at 9 out of 10 points and expressed their interest in attending more similar lectures, also stating they would recommend them to friends and colleagues. Also, the lecturers involved in the program were very impressed how guest lecturers presented the topics and expressed their openness to receive guidance in making their courses more relevant to the economic environment and current business practices, since they understand that this will make their students more prepared for employment. As a result of this activity, other universities requested to host the program during the next academic year.

48 Activity 2: Improve STEM Education and Promote Tech Careers at the Secondary Education Level

Participation of Moldovan robotics team at the FIRST® LEGO® League Open European Championship 2017. MCP supports educational robotics as part of the STEM Education initiatives in Moldova that contribute to the increased awareness and interest in future careers in IT and engineering. Upon winning the robotics FIRST® LEGO® League national competition held in Chisinau in February 2017, the team RoboRangers represented Moldova at the FIRST® LEGO® League Open European Championship 2017, May 26-28, 2017 in Aarhus, Denmark. The Moldovan team competed along with 117 other teams from 50 countries and five continents. The event was attended by more than 1,200 participants and more than 1,000 coaches, volunteers and guests.

The RoboRangers team ranked #20 out of 118 teams at the Robot Performance category. The Moldovan team was highly appreciated by the international jury in the following categories: Programming (Robot Design), Innovative Solution (Project), Gracious Professionalism and TeamWork (Core Values).

Photo credit: Hao Yin (right up picture), Veronica Esanu (left up and bottom) Photo caption: Moldova team participating at First Lego League Open European Championship on May 26- 28, 2017 in Aarhus, Denmark

Piloting the Future Classroom Lab project. MCP, in collaboration with Orange Moldova Foundation, initiated a pilot project Future Classroom Lab (FCL) aimed at increasing the quality of STEM education in schools through the establishment of several demonstration classes. FCL is an inspirational learning environment where smart technology and interdisciplinary approach is used to improve the learning outcomes. These will be redesigned and endowed with modern education equipment and software. The Future

49 Classroom Lab concept is implemented in several EU and non-EU countries, in different formats, adapted to local specifics and financial possibilities.

In April, MCP and Orange Moldova Foundation representatives conducted a study visit to Belgium, to meet the representatives of the European Schoolnet, the project team of Future Classroom Lab as well as Belgian schools included in the network of FCL Ambassadors.

Photo credit: Ionela Titirez Photo caption: Representatives of the Moldovan delegation to Brussels discussing with Future Classroom Lab Pedagogical Advisor and Business Development Manager

As result of this study visit to Belgium, MCP and Orange developed a clearer understanding of how to design the Future Classroom Lab implementation plan, so that it becomes a leading force of the digital transformation of the Moldovan educational system.

While researching for potential partnerships and regional examples of FCL implementation, MCP found a very similar concept of Microsoft - Microsoft Schools and Microsoft Showcase Schools - a global community of schools engaged in digital transformation to improve learning outcomes. This program is widespread in many countries, including neighboring Ukraine and many Western European countries. MCP consulted the representatives of Microsoft in Ukraine, who kindly shared their experience and explained the implementation of this initiative in their country. MCP will continue to work with Microsoft Moldova, to engage them in our local initiative. In addition, while visiting Sweden, an MCP representative visited a Microsoft School in Stockholm and learned about their experience in digital innovation. Even though this was not a specialized STEM school, and ICT is not a mandatory subject in Swedish schools at all, ICT was very well integrated into curricular activities. The teachers used digital technologies extensively for educational activities and all the students were provided with laptops. The visit to the Swedish school brought a different perspective on the FCL concept implementation for implementing partners- MCP and Orange Moldova.

To kick-off the project, MCP, in close cooperation with the Ministry of Education, organized a workshop for school managers and leading teachers with hands-on activities, aimed at designing the Future Classroom Lab (FCL) in Moldovan schools. The workshop familiarized the educational community with the FCL concept and helped the school leaders develop their vision on how it can be adapted to their institutions.

Educators and school managers were challenged to rethink the role of pedagogy, technology, and design in their classrooms. The workshop took place at Tekwill and had 38 participants, representing 15 selected institutions: 14 high schools, and the State University, the main university preparing and training in-service teachers. The institutions were selected together with the Ministry of Education, as the most advanced and pro-active in

50 implementing pedagogical innovations, based on digital technologies. The workshop was conducted by Mart Laanpere, an MCP expert from Estonia, contracted to • TO UNDERSTAND THE • TO DEVELOP JOINTLY assist in implementing the AIMS OF FUTURE WHOLE-SCHOOL CLASSROOM LAB POLICIES THAT digital innovation in SUPPORT FCL, 21ST CENTURY LEARNING Moldovan education and AND 1:1 COMPUTING ST improvement of STEM 21 WHOLE-SCHOOL CENTURY POLICY FOR ONE- education. LEARNING: TO-ONE CREATIVE & COMPUTING AND Following the workshop, COLLABORATIVE PBL KNOWLEDGE MCP expert Mart Laanpere BUILDING visited some schools, the State University and the CREATING, USING & Ministry of Education, to MAKING SENSE OF EVALUATING inquire on the current DIGITAL LEARNING LEARNING IN FCL: ASSESSMENT situation with digital RESOURCES innovation at the school level • TO TEACH SCHOOL • TO ENGAGE TEACHERS TEAMS TO ANALYSE and to further develop IN FINDING, CREATING THEIR PROGRESS, AND USING LEARN FROM MISTAKES recommendations for MCP RESOURCES, TOOLS & AND MAKE SENSE OF and Orange Moldova on how METHODS FOR FCL EXPERIENCES to implement the FLC concept most effectively in Picture. Training Program concept Moldova. The project aims to support digitally capable Moldovan pilot schools in setting up Future Classroom Labs that are: • inspirational open learning spaces that foster interdisciplinary, collaborative, creative and agile project-based learning; • equipped with transformative learning technologies (e.g. robotics kits, sensors, 3D-printers, ICT kits, BYOD-compatible presentation and data collection tools); and • replicable in other Moldovan schools.

Based on the expert’s recommendations, MCP launched a contest to select the initial pool of schools to pilot FCL starting with the next academic year. The selection process took place in June, with close involvement of the Ministry of Education. Based on the applications, 12 theoretical lyceums (LT) were selected for the inclusion in the first phase of the FCL project.

Nr. Name of the Institution Community Number of students 1 LT V. Alecsandri Bălți 1254 2 LT G. Coșbuc Bălți 1104 3 LT Gh. Asachi Chișinău 1809 4 LT M. Viteazul Chișinău 1500 5 LT I. Creangă Chișinău 1500 6 LT M. Eliade Chișinău 1084 7 LT M. Eminescu Leova 681 8 LT I.L. Caragiale Orhei 1142 9 LT M. Sadoveanu s. Giurgiulești, r. Cahul 365 10 LT Măgdăcești s. Măgdăcești, r. Criuleni 832 11 LT Ștefănești s. Ștefănești, r. Florești 260 12 LT Ștefan cel Mare s. Taraclia, r. Căușeni 463

They will receive small financing for initial prototype of their own FCL. Empahsis will be placed on providing digital equipment with transformative potential (robotics, sensors, 3D

51 printers), schools team training, networking and exchange of best practices between schools: online community, face-to face meet-ups, webinars, peer-mentoring between pilot schools, and assigning a mentor from innovative industry partner to each pilot school. An important part of this project is training educators and school managers that will take place in several phases during implementation with various goals.

In addition to piloting the FCL concept in schools, as the experience from other countries shows, it is vital to build a national teachers’ training center in FCL concept, to serve as focal point for digital innovation in the whole education system. After consultations with stakeholders, as well as visits to potential partners, it was decided that such a center should be placed at the Institute for Educational Sciences, which is currently retraining over 7,000 in-service teachers from Moldova.

Piloting the Robotics for STEM & Creativity project with ESI CEE. MCP collaborated with the European Software Institute for Central and Eastern Europe (ESI CEE) to implement a pilot activity with self-building robotics kits, based on Arduino, to increase the young studnets (age 7-13) interest in STEM subjects and improve their creativity. The project aims to teach theoretical concepts from science, technology, engineering, and mathematics through their practical application.

In April and May of the school year, five schools from the eight in the pilot, completed the activity in several classes which were first selected for implementation.

The feedback from the activities proves that the classes are very interesting and motivating for the pupils. The average mark given by participants for the overall impression after the activity so far is 4.95 (out of 5). At the same time 47% (or 99 participants) were girls, and their results do not differ from the boys. Even though they had to deal with microelectronics and programming, as the activity was designed especially for the young age group, participants did not encounter major difficulties in completing the tasks.

Promoting digital skills via Coder Dojo. During the quarter, the Coder Dojo Chisinau program, a free-of-charge volunteer-based coding club, expanded to a new location - East Europe Foundation - with MCP support. The foundation offers a conference room, where every Saturday children learn to code. A group of twenty teenagers joined the program and were taught basic ICT skills using a project based approach by three volunteer mentors. Thus, 160 youths were involved in Coder Dojo activities, led by 17 volunteers in five locations.

Activity 3: Link ICT VET with Labor Market Building practical skills to VET students

MCP worked with the DNT Association, on the implementation of the official curricula from Arduino - Creative Technologoes in the Classroom (CTC) 101, which is Arduino’s one-of-a- kind STEAM (Science, Technology, Engineering, Arts, and Mathematics) program for upper secondary education. As a part of this program, students are introduced to the foundations of programming, electronics, and mechanics through a series of playful, well-documented projects and easy-to-assemble experiments.

DNT negotiated with the official distributor of this equipment and signed an agreement to become the CTC Educational center in Moldova, and, with MCP support, to offer training for trainers in Moldova, for implementation of this curricula. During the summer, DNT will run a series of trainings for VET trainers, focused on micro-electronics and 3D printing, to be followed by a pilot project for providing technical endowment for practical laboratories with Arduino based kits. These kits will be used for didactical purposes to construct and program simple embedded systems and will be available for implementation in the 2017-2018 academic year.

52 Activity 4: Develop an Entrepreneurial Ecosystem for the ICT Sector

Support for startup ecosystem building initiatives. To increase the number and success rate of startups in ICT, MCP supports the emergence of co-working sites, accelerators, and other support institutions for technology entrepreneurship.

Photo credit: Pysoding Photo capture: Mentors from the Sperik Accelerator are presenting the program to Moldovan startups

Following the support provided to a local IT company, Pycoding, to develop a co-working space specialized in cloud-based technologies called “404 Not Found”, MCP supported Pycoding to organize a “Startup evening @404 Moldova” event on cloud technologies in May. The event was organized in partnership with Spherik Accelerator, part of the Spherik IT Park from Cluj, Romania, and gathered about 30 IT professionals and IT start-ups. The objective of the event was to launch a tech startup program in Moldova supported by Spherik Accelerator from Romania.

In May, MCP explored the possibility of expanding some of the community-building initiatives in the ICT sector by starting a collaboration with USAID IREX Moldova Project. The collaboration aims to create and develop regional community innovation centers located in libraries that combine co-working spaces and training zones. The community innovation centers will attract youth and IT enthusiasts from rural locations, Participants will receive training to enhance their knowledge and receive guidance on existing ICT opportunities at the national level.

Activity 5: Create IT infrastructure

Development of Regional Innovation Center. For expanding MCP assistance in the country’s regions, MCP partnered with Balti Municipality, the University “Alecu Russo” from Balti, and the Regional Development Agency “Nord” (ADR Nord) for establishing a Regional Innovation Center in Balti.

MCP had a major contribution to this initiative by convincing the partners Photo credit: Sergiu Rabii Photo capture: Building on the campus of the University on the necessity of such a center, “Alecu Russo” that will be transformed into a Regional providing its concept and its vision. Innovation Center.

53 As a result, the University agreed to locate the Innovation Center on its campus while the Regional Development Agency “Nord” allocated financial resources for finalizing the construction of the building. To increase the added value of the Agency’s and University’s investments in the Regional Innovation Center development, MCP engaged an architect for the elaboration of the Center exterior and interior design and started to develop program content for tech education, entrepreneurship, and ICT events. The Center is designed to have training areas for IT and engineering, laboratories, maker space, co-working spaces, event spaces, and small offices for innovative startups.

Development Community Innovation Centers. In order to create a reliable system for preparing tech talents to become a part of the IT ecosystem, the country has to have in place a hierarchical structure of ecosystem components with its specific role and target groups. With the support of USAID, the Tekwill IT Excellence Center was launched in Chisinau, providing the most qualitative IT education programs, tech entrepreneurship activities, startups incubation, and industry specific events. Despite Tekwill’s quality of services for the industry, it still has limited capacity to meet the demand of the industry. In this regard, MCP promotes the development of Regional Innovation Centers (i.e. at Balti University) and Community Innovation Centers. Community Innovation Centers will be the smallest hubs and will focus on technological skills of the local communities and tech entrepreneurship. Community Innovation Centers will serve as the first stage which will prepare and filter the talents for the Regional Innovation Centers that will continue their activity at the Tekwill Center of Excellence. Having this system in place, MCP will ensure tthat a wider population has equal access to IT and innovation ecosystem components.

During the reporting period, MCP developed the concept of Community Innovation Centers and initiated coordination with another USAID project in Moldova lead by IREX which has the common goal of improving the quality of services of the local libraries. Community Innovation Centers will be developed based on some libraries that meet a certain set of requirements such as available space, willingness of the local public authority to develop the Centers, and their commitment to commit funds for Center’s maintenance and also the existence of an active community in the region. MCP consultant, Irakli Kashibadze, who developed the concept, had several discussions with the representatives of the regional libraries in order to guide them in their plans for developing the innovation centers. MCP developed the list of necessary equipment necessary for the endowment of the libraries in order to become Community Innovation Centers. From July to August, MCP, in cooperation with IREX Project, will select the libraries to be transformed into innovation centers. Activity 6: Enable training and certification for professionals and executives

Support local IT companies to obtain internationally recognized training and certifications. MCP is helping Moldovan IT companies obtain international certifications. In cooperation with USAID Regional Economic Growth Project, MCP developed a program for supporting the Moldovan companies to obtain trainings and certifications in IT. The program is designed to be implemented through ATIC, since the association was awarded a grant for that. During the reporting period, ATIC identified the courses to be provided based on the survey among the Moldovan IT companies. First courses will take place in July 2017. Activity 7: Create an enabling ecosystem for creative industry development

Given the growth on the global market of the game development sub-sector, MCP identified the need to address the lack of educational initiatives that would introduce youth to game design. Most workers involved in game design are currently self-taught and lack a comprehensive learning curricula. As such, this affects the quality of work and deliverables standards. In Moldova, the demand for lectures in game design has been tested through a few workshops organized previously with the support of MCP. This generated high interest

54 from students, freelancers, and professionals within the industry. Consequently, during the reporting period, MCP supported the following activities:

• Game Design curricula development presentation divided into separate modules that can be taught in multiple institutions and can be easily adjusted and updated based on the needs of the target audience. As such, during the reporting period, the curricula were presented to participants and potential beneficiaries of the course: students, young professionals, and professors, as well to the interested parties such as academic institutions: TUM and Step IT Academy.

• Game Design workshop, organized at Tekwill and hosted by Game Factory in collaboration with the gaming company GD Cuffs, included a two- day, in-depth training session on subjects such as differences between crafting life games and computer games, game design, sound in game design, game design plot, and making a game interesting. The game design- focused workshop was conducted by international speakers. As a result of these workshops, 45 young Photo credit: Vasile Braga, Game Factory Photo caption: Workshops announcement design in the professionals in game design top photo, and participants listening to lectures enhanced their technical skills in game design and became more aware of international trends in game building.

With MCP support, two hub concepts have been developed for further implementation within the creative sector - the Creative Hub and the Architectural Hub.

- Creative Hub development. Following the elaboration of the Creative Hub general concept, during the reporting period, MCP focused on identifying the architectural concept of the Hub. In this respect, MCP, together with the Academy of Music, Theatre and Arts, and the Association of Creative Industries organized the contest for an architectural solution, and selected the best concept in terms of scope and overall architectural vision for the Creative Hub. The concept of the architect Maxim Calujac was unanimously selected.

- Architectural Hub 3D interior design concept development. MCP is supporting the remodeling of an old industrial building into a co-working place for architects. With the support of a few local entrepreneurs, an old industrial building will become the next architectural hub of the city. The place aims to gather youth that are passionate about architecture and design to share ideas and create a common space for work. MCP is providing support for the 3D interior design model that will be attractive for the target audience who will inhabit the place, architects and landscape designers from Moldova.

55

Photo credit: Maxim Calujac, Architect Photo credit: Maxim Calujac, Architect Photo caption: Architectural concept for the Creative Hub Photo caption: Architectural concept for the Creative at the Academy of Music, Theatre and Fine Arts Hub at the Academy of Music, Theatre and Fine Arts

Objective 2: Expanded Market Linkages

Activity 1: Accelerate Adoption and Use of Technology by SMEs and Other Non-IT Sectors

Implementing information technology solutions. In partnership with the European Bank for Reconstruction and Development, MCP launched a program to supporting Moldovan SMEs in adopting information technology solutions within their companies. SMEs will benefit from up to 75% of total costs for implementing internal information technology solutions. During July – August, 2017, the joint evaluation committees composed of members from MCP and EBRD will evaluate and select projects for co-financing.

Activity 2: Implement marketing coaching programs

Growing the competitiveness of creative companies. MCP launched the Marketing Coaching Program to support local ICT and creative companies increase their competitiveness locally and internationally. The program is implemented in collaboration with Revthink - the leading consultancy company in creative industries from the U.S. The program concept and available opportunities were presented to 35 creative entrepreneurs who can now apply and benefit from networking with international experts to increase their competitiveness.

Photo credit: PARC Communications Photo caption: Tim Thopmson, Revthink consultantancy company CEO during the Creative Coaching Program presentation interacting with Moldovan entrepreneurs.

56

During the reporting quarter, MCP assisted three Moldovan companies to participate at the Nordic Game 2017 Conference that took place on May 17-19, 2017 in Malmo, Sweden. All companies (Nebuloasa Asti Studio Spooky House) are specilaised in electronic game development, the ICT sub-sectro that has a high export growth potential. Nordic Game is one of the most concentrated meeting place for the highly successful game developers of Denmark, Finland, Iceland, Norway and Sweden. This year, Nordic Game had a special offer for both businesses seeking partners and opportunities in the Nordic countries, and experienced game developers interested in relocating to work for one of the many successful game studios in the region.

Activity 3: Enhance global positioning of Moldova as IT Destination

In June 2017, the Ministry of ICT initiated the development of the ICT Industry Competitivess Strategy based on the Global Positioniing Strategy developed by MCP. During the next quarter, MCP will develop a market access master plan that will target Asian markets of ICT products and services synchronized with the MCP’s efforts on the Startup Visa legislation that facilitates the obtaining of work visas and residency permits for foreign IT professionals, startups, and investors.

Activity 4: Profile the creative services industry and define export market opportunities

Support local companies to expand market linkages. Creative services companies are usually small, about five to 20 employees, mostly young, and self-taught. Export opportunities are very important for these businesses as they can channel economic growth and professional development. Nevertheless, to begin exporting companies require careful preparation. To help companies define export market opportunities, MCP suports their participation in international events:.

• The Pictoplasma International Conference in Berlin, Germany on May 10 -14, 2017 was attended by three Moldovan creative studios (Kurilov Creative Studio, Imago and Cu Drag). This leading conference focuses on animation, graphic design, and game character design. As a result of their attendance, companies displayed their portfolio during the Character Forum Talent market track and met with representatives of The Disnay Channel UK, Studio AKA London, Passion Films Paris and other internatational studios. Moreover, they upgraded their skills and interacted with cutting-edge graphic, toy and game designers, and leading animation filmmakers. The lessons learned by the participants were shared with the public via online articles, multiplying the reach of the MCP’s support.

• School of Film Agents workshop in Photo credits: Dumitru Marian Tbilisi was atended by the president of the Photo captions: Dumitru Marian, AltFilm Association AltFilm. The training aimed to Association president receiving participation certificate at the School of Film Agents workshop strengthen national film industries in

57 Europe, helping participants develop ideas into concrete project packages ready to apply for funding. The Moldovan representative, Dumitru Marian, met private investors and film funding representatives such as Petri Kemppinen, CEO of Nordisk Film & TV Fund, and Simay Dinc, Angel Investor in creative sub-sectors, as well as experts in implementing projects such as Tamara Tatishvili - Georgia’s representative in CoE Film Fund Eurimages.

In addition, to expanding market linkages, MCP supported Umbrella Production to go on a business “We are very impressed by the dialogue, trip to Bucharest, Romania where 22 B2B meetings client service and Umbrella Team. We were conducted by the company’s CEO to establish hope we can fruther collaborate for additional projects " initial contacts in the Romanian market. As a result, Umbrella Production attracted two clients and signed Adrian Preda sales contracts for collaboration. Moreover, the Managing Director TBWA/Friends Agency company learned about other opportunities to enter Romanian client of Umbrella Production the Romanian market based on the absence of creative suppliers in 2D animation for advertising.

Supporting growth by developing competitive advantages. MCP supported the local creative company Dax-Tandem, also known as “Youbesc Creative Institute”, to upgrade its studio space to surround 5.1 audio system which is not available in Moldova and allows the company to generate creative services meeting international standards. Local companies are using 3.1 audio system which generates low-quality services and are not accepted by international buyers. Thanks to the upgraded sound system the studio is now most competitive in sound editing and sound mixing. In the following months, the studio will be leading workshops for students from the Academy of Music, Theatre and Arts, and will organize a demonstration event in the studio to welcome donors and interested parties.

Photo credit: Sergiu Cumatrenco, Youbesc Creative Institute Photo caption: Youbesc Creative Institute studio upgrade and appreciation on social media of MCP support that made this possible.

58 Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1: Improved public policies for technology ecosystem

Startup Visa Policy development. MCP is working closely with the Ministry of ICT to improve sector-enabling policies. On June 23, 2017, the Parliament approved in the second reading the amendments to simplify the regulations for obtaining residency and working permits by foreign IT professionals, investors, and entrepreneurs. The initiative for “brain gain“, called Startup Visa, was inspired by international best practices suggested by startup ecosystem influencers from 16 countries after the MCP supported Changers Challenge workshop in 2016.

According to these policy modifications, ICT CEOs may spend up to 6 months without a temporary permit, tech investors – 3 months, and tech professionals - 6 months.

Startup Visa creates opportunities for IT projects with European and Asian countries, and positions Moldova as a competitive IT hub. By eliminating barriers for IT specialists, managers, and entrepreneurs, Moldova is fostering innovation, skills and knowledge transfer, and creating a favorable environment for the development of the IT industry. MCP supported the Ministry of ICT with expertise in legislation drafting process, policy impact analysis, governmental approvals.

Support the implementation of IT Parks Law. In June 2017, the Parliament approved the first reading of the Law on IT Parks. MCP demonstrated to Ministry of Finance and International Monetary Fund (IMF) representatives that the law will not negatively impact the state budget and, consequently, the Government approved the law. Approved amendments to the law included fiscal incentives to attract private sector investment.

Activity 2: Capacity building for ATIC

MCP engaged two of the strongest business associations in Moldova, American Chamber of Commerce (AmCham) and European Business Association (EBA), to provide coaching and advocacy support to ATIC and the other associations that represent the MCP supported industries: ANTRIM, APIUS, and ONVV. AmCham and EBA coached ATIC in advocating for amendments to legislation that impacts members of the association.

During April and May, EBA joined ATIC and AmCham to develop a position paper presented to public authorities, including the Prime Minister regarding an unexpected amendment presented in Parliament that would negatively impact the industry. EBA also delivered a practical workshop on strategic organizational issues related to BSO management, focusing on the need to design and implement internal procedures, member structure, member Board, election procedures, and communication processes.

59 Activity 3: Facilitate business support organizations that represent the creative industry

The Association of Creative Industries was created on May 29, 2017 by seven companies and one NGO, laying the foundation to represent the creative entrepreneurial sectorand serve as a platform for organize industry conferences, workshops, and events to enhance competitiveness.

MCP organized a workshop on creative industries international trends for the members of the association, held by international consultant Ragrar Siil, an expert on cultural policy and creative industries, and Andrei Chistol, State Secretary of the Ministry of Culture. The workshop enriched the participants with new knowledge and awareness about international events, networks, and focus areas to consider when developing the association’s strategy. Photo credits: Olga Radu Photo caption: Creative Industries Association official registration certificate

60 A4. PRECISION ENGINEERING

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Activity 1: Increase productivity and efficiency for manufacturing companies

Based on the experience gained at the Hannover Messe exhibition, CRIS Hermetic Pumps developed a roadmap for improvements, compliance, and equipment needs. The project launched several common initiatives to identify adequate consultants to address all the identified issues by SES (Senior Experten Service). Selection of the candidates for specific technical assistance tasks is currently underway.

Activity 2: Development of Makers Space to foster product design, prototyping and startup for creative industries, engineering, and technology

Strengthening the capacity of the makers’ community. For continuous capacity enhancement of the makers’ community, MCP supported the organization of the first edition of Chisinau Mini Maker Fair in May 2017.

Chișinau Mini Maker is part of the international series of makers’ events, organized for the first time in California in 2006 celebrating the makers’ movement and becoming a festival of invention, creativity, and resourcefulness worldwide. The event was a result of MCP collaboration with the Association Makers Moldova, known as “Atelier 99”, that aims to give visibility to the projects and ideas that are creative to foster innovation in engineering, creative services, internet of things (IoT), and robotics, among others.

The event’s goal was to raise awareness about the makers’ movement in Moldova and around the world, and inform about the latest trends in technology, innovation and creativity. The event was held at the newly built Tekwill center and gathered 600 tech enthusiasts,

Photo credit: Atelier99 Photo caption: Volunteers and makers during the Chisinau Mini Maker Fair, May 29, 2017.

61 crafters, educators, engineers, artists, and students. Thirteen speakers from the UK, Germany, Romania, Ukraine, and Moldova were invited and more than 30 national and regional makers presented their work and shared their knowledge. Fourteen workshops were held on soldering, pottery, painting on recycled bags, Arduino programing, and 3D printing.

Collaboration within Makers Space for 3D Printers development. MCP implements a joint activity with the Makers Movement to involve young engineers and TUM students in a pilot program to build 3D printers and other computer numerical control (CNC) machines for educational purposes and for the makers’ community needs. The 3D printers and CNC engravers are fabricated manually for subsequent use to create and prototype products. The entire program is structured through workshops that include theoretical and practical skills and knowledge development.

Atelier 99 finalized the program of 3D printer building by completing the final assembly and successfully testing the printers at the Chisinau Mini Maker Fair. The two newly constructed printers are now placed in the Makers Space temporary location and are being used for various low and high-tech projects.

Tech awareness rising activities within Makers Space. Before launching the space, it is pivotal that the capacity of the makers’ community is strengthened. MCP supported Atelier 99 in organizing the “Repair Café” workshop that provided basic skills on electronic devices functions and repairs. MCP supports this activity to develop skills to integrate technology into creative industries and engineering. This workshop allowed participants to bring different objects to be repaired, including headphones, computer mouses, lamps, and others. Eighteen people participated in the event, mainly students from Technical University of Photo credit: Atelier 99 team Moldova, graduates, and Photo caption: 3D building program participants attending theoretical workshops young specialists with engineering backgrounds.

Activity 3. Support the Technical University of Moldova establish partnerships with leading technology and engineering international companies.

MCP organized several scoping missions to the Technical University for five technology and engineering companies. The project is looking to match the academic education at TUM with industry demand and global trends by involving the private sector into either curriculum development or direct investments into educational high-tech laboratory infrastructure.

In the context of the “Moldova Automotive Days” event in June 2017, MCP identified several international companies interested in establishing small engineering bureaus in Moldova: • Miele Technica (Romanian branch), one of the twelve factories in the Miele Group, provides Miele with the need for electronic components and subassemblies for intelligent home appliance control units with which Miele has earned its reputation.

62 • P+Z Engineering (Germany), one of the leading global developers of production lines for the automotive industry. • ARRK (Germany), specialized in transmissions and gearboxes development. • MBtech Bohemia (Czech Republic), specialized in car interiors’ design and production technologies. • AKKA (Germany?), specialized in automotive and aerospace components engineering.

Companies’ representatives had constructive discussions with the university’s management team. To identify future collaboration with TUM, the guests visited Tekwill, ZIPhouse, and other departments, highlighting the importance of partnerships with academia in the successful development of the engineering higher education institutions.

Objective 2: Expanded Market Linkages

Activity 1: Improve marketing skills and export capacity for more developed and higher value markets

Support the leading Moldovan pump manufacturer to establish new market linkages. MCP supported Cris Hermetic Pumps to participate in the leading industrial trade fair “Hannover Messe 2017” in April 2017. The company specializes in the development and manufacturing of canned centrifugal electrical pumps destined for the chemical, petrochemical, gas, nuclear, pharmaceutical and transportation industries.

Thanks to MCP’s support the company was better showcased at the fair, achieving impressive results. A total of 53 contacts were established, including 30 direct potential clients, as well as 16 manufacturers’ representatives and other industry relevant value chain representatives.

Among the direct sales contact points, the company gathered important information on the requirements and product features expected for Western European market compliance standards. Considering these results, MCP decided to further support Cris Hermetic Pumps in setting up a market entry strategy.

Objective 3: Improved Sector- Enabling Environment and Increased Photo credit: Grosu Ion, Capacity Photo caption: Cris Hermetic Pumps company stand at Hannover Messe 2017 Activity 1: Map high precision engineering cluster

This activity was completed with the development of a database with all the companies related to engineering and industrial goods manufacturing. It was decided to postpone the cluster or association creation. However, the technical team is periodically updating the database, gathering information on newly identified companies, their employees number, exports, markets, and technical capacities.

63 A5. OTHER TECHNICAL ACTIVITIES TO SUPPORT IMPLEMENTATION

Access to finance through special channels/USAID Development Credit Authority (DCA)

MCP assists the Development Credit Authority (DCA) loan guarantee programs to improve access to finance in Moldova. There are two DCA guarantees that MCP supports: - USAID DCA guarantee to promote industry growth in Moldova which enabled almost $3.9 million in lending. It operated with three financial institutions (Comertbank, Rural Finance Corporation and Prime Capital) from September 2011 until March 2016, that was the final date for placing loans under guarantee. - A joint $3.5 million USAID-Sida guarantee to support lending to the energy sector and is operated with Prime Capital from 2013 until 2027. By encouraging local channels of financing, USAID and Sida empower individuals to improve their lives and Moldovan entrepreneurs - to grow their businesses and increase sector competitiveness - a pillar for economic growth.

MCP continued its ongoing support to financial institutions with USAID DCA agreements. While these institutions do not place additional loans under the guarantee, they provide reports and monitor the outstanding loans. To date, there are no defaulted borrowers and USAID received zero claim requests. In May, USAID reviewed Prime Capital’s entries into the Credit Management System (CMS). As a result, Prime Capital was informed to make corrections to the two loans placed under the guarantee

Under the energy efficiency guarantee, three new loans were placed. during April-June 2017, seven new loans were placed under guarantee totaling 66,000 USD of which 56,000 USD were disbursed. As result, by end June 2017, Prime Capital placed 50 loans valued at $540,100 USD under guarantee, of which 529,966 USD were disbursed.

In addition, USAID is advancing with the procedures for a DCA loan guarantee associated with the Digital City investment project with a DCA Mission from Washington is visiting to Moldova in July 2017. The goal is to partially guarantee a loan to Starnet company for implementing the expansion of the park from Moldova AgroindBank (MAIB), the partnering financial institution. The upcoming mission will conduct the required risk assessments of MAIB and Starnet. MCP collaborated with the borrower and the financial institution for establishing individual meetings with top managers, as well as to submit the standard financial information for the risk assessment which is an indispensable part of the guarantee granting process.

Launching a DCA with financial institutions for expanding access to finance for SMEs is also under consideration. MCP established meetings with eight interested financial institutions for the upcoming DCA Mission.

B. DELIVERABLES

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

1. MCP Quarterly Report for FY17 Q2 2. MCP Monthly Report, April 2017 3. MCP Monthly Report, May 2017

64 SECTION II

PROJECT-LEVEL OUTCOMES AND RESULTS

Sector Engagement, Enhancement, and Development (SEED) Fund

During the quarter, MCP worked on implementing the US$5 million SEED fund through several channels: • The Project continued to make grant disbursements for a total of US$295,986, including payments for 24 active grants covering the tourism, fashion, wine, ICT, and creative industries, as well as one crosscutting grant focused on support for business associations in target sectors. • To date, the SEED fund disbursed a total of US$1,557,366 or 53 percent of total grant awards and 31 percent of the total SEED Fund budget. • The Project awarded 17 new grants: o Eight in-kind grants to two non-guvernamental SEED Fund Performance through June organisations (Makers 2017 din Moldova and DNT), to three companies (Artizana, Vinfoteca & Total Co, Crama Domneasca), Awarded* and three PGIs (PGI $2,088,053 Codru, PGI Stefan Voda, $2,911,947 Total PGI Valul lui Traian); Disbursed o FAA grant to one to the association (Drupal), and $1,557,366 o Simplified grants to six Remaining companies (Poiana Budget Codrilor, Ampelos Plus, Migdal P, Olsa-Shoes, *at the June 2017 ER rate of 1 USD = 18.08 MDL Arilux, Olga Ceban) one youth run community Grant Allocation by Industry through supporting innovation June 2017 (by value) and startups (Dreamups), and one 2% Wine industry association 9% 0.4% Tourism (ATIC) which is a 22% collaboration with USAID ICT REG project. • The Project executed 11 39% 16% Fashion funded grant modifications Creative with Gogu Winery, 11% Fragolino, GT Sava Mihail, Precision CGL Prim, Teba Prim, Vinia Traian, Tartcom Vin, Vinaria Crosscutting Milestii Mici, Est Euro Vitis, Vinuri de Comrat S.A., and Unicorn Estate.

65 Inclusive Development

All the Moldova Competitiveness Project activities use a non-discriminatory approach and aim to increase inclusiveness. In this respect, the Project designed activities that include groups that have been historically excluded or disadvantaged, especially women and youth. The Project also collaborates with companies from all Moldovan regions.

In the wine and tourism sector, several activities were organized involving companies from and regions, as follows:

• Vinuri de Comrat, PQUP program participant and one of the largest wine producers and exporters from the Gagauzia region benefited from a grant extension to upgrade its touristic facilities, participated in the Wine Vernissage “Spring Waltz” edition to showcase their newly launched white and rose wines, and was represented at the FMCG Congress in Warsaw that enabled them to establish direct contacts with several major retail chains. In addition, company representatives participated in the “Hygiene in winemaking” seminar held under Wine of Moldova Academy and, within the Wine Tourism Accelerator Program, winery staff received individual training on improving and developing their tourism options.

• GCL Prim, a small wine producer from Vulcanesti supported under the ASW mentorship program, received a budget increase to develop of its touristic facility located in the household. Also, GCL Prim showcased its wines at Wine Vernissage and used this event as the official launch platform. Moreover, with MCP support, Kara Gani (GCL Prim’s brand name) wines were presented during the ongoing edition of Wine Friendly campaign by certified sommeliers to a selective public of connoisseurs. The company will become the subject of a documentary about Moldova to be broadcasted on Italian TV posts as a result of MCP support.

• Kvint, the large wine producer from Transnistria presented its wines at Wine Vernissageand with improved knowledge and skills through participation in WoM Academy trainings and seminars. It also hosted visit of eight Italian journalists, photograthers, and bloggers, which included Transnistria into the promotional materials preenting Moldova as a tourism destination.

• Tomai Vinex, a transitional winery from Gagauzia was assisted through the PQUP program and selected to receive a SEED fund grant. Tomai Vinex also participated in Wine Vernissage and benefited from upgraded workforce skills resulting from WoM academy seminars.

• Tartcomvin, a winery in the Tartaul village benefited from an incremental grant funding to enlarge the inventory of oak barrels. The grantee was assisted on marketing and the interior design of their wine shop. The official launch of the range of bottled wines under Novak trademark was organized at Wine Vernissage, receiving media coverage. Immediately after the event, Novak wines were listed in several wineshops and restaurants from Moldova. Additionally, Tartcomvin’s representative participated in two seminars organized by ONVV under Wine of Moldova Academy initiative. Also, within the Wine Tourism Accelerator Program, winery staff received individual training on improving and developing their tourism options.

In the reporting quarter 2,729 people participated in MCP-supported capacity building programs, by almost 1,000 people more than in previous quarter. Also, increased the number of women participanting in these activitites -from 49% -in previous quarter to 68% in

66 the reported quarter. The share of youth participants (up to 35 years) is high- achieving 72% of all participants.

Table. Women and Youth participating in project activities in the reporting period, by industries

Light Description Wine Tourism ICT CSI PE TOTAL industry

Total participants per 1382 297 12 1332 93 32 3148 industry 1253 131 5 719 24 10 2142 Women 958 47 6 1277 78 32 2398 Youth

In the light industry, where 90 percent of employees are women, MCP local and international consultants provided in-company trainings implementing the coaching program for apparel companies to increase productivity based on implementation of high-end production engineering. Also, MCP supported activities within ZIPhouse, a current platform for students, young designers, start-up companies, as well as professionals from the light industry through professional trainings and community building events. For the first time, Also, in-company were organized in light companies by. MCP supported a “Students’ Fashion Show”, where 20 students from TUM’s fashion design faculty presented to the private sector and academia their collections produced as licensed work. More than 200 people attended the event, of which about 60 percent were youth and 80 percent women.

All the ICT activities target youth and women. A total of 1,332 people attended the events organized by MCP or partners in the sector, of which 54 percent were women, 96 percent were youth. The activities aimed to promote digital education and Tech entrepreneurship (Guest Lectures program), to develop basic IT skills (Coder Dojo trainings) and design Future Classroom Lab (through workshops for school principals and teachers).

Monitoring & Evaluation

During the reporting quarter, all activities implemented with MCP support were documented and included in M&E database. Also, the bi-annual data on sales, investments, jobs and financing accessed were collected from the monitored companies in the M&E system.

In addition, a meeting on mapping MCP activities was held with USAID representatives (Lucia Martinenco, Program Development Specialist, USAID Moldova, and Weber Wang, Desk Officer, USAID/Washington). As part of a discussion on the power of mapping in understanding situations and in storytelling, the project activities were analyzed in terms of inclusion in a geographic information system (GIS) project. Following this, on June 15-16, 2017, MCP representatives participated at the "Geographic Approach to Data Driven Decision Making" training learning how to create web-based maps. In result MCP was involved in the first mapping exercise, preparing and submitting to USAID an initial data set.

A. Progress towards quantitative indicators targets

The following table presents the project’s progress to-date against the targets set.

67 Table. Performance Monitoring: Targets versus Results

Performance Monitoring: Target vs. Actual

YEAR 1 YEAR 2 Indicator Cumulative Cumulative Cumulative Y1 Target Result Y1 Target Y1 Result Target Target versus versus Achieved Established Achieved Established Result Result (Y1+Y2Q1- (Y1+Y2) (Y1+Y2) 3) Project Purpose: Grow and Expand Targeted Competitive Industries

Value of domestic Data reported Data reported 1 and export sales $ 500,000,000 TBD in Q4Y2 TBD in Q4Y2 $530,000,000 annually annually in targeted sectors

Increased value of sales facilitated on Data reported Data reported 2 $ 20,000,000 $ 28,206,615 $ 8,206,615 $ 50,000,000 behalf of assisted annually annually enterprises

Value of new private sector Data reported Data reported 3 investment in $ 8,000,000 $ 10,380,233 $ 2,380,233 $ 24,000,000 annually annually assisted enterprises

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) IR 2.2: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.2.1: Increased Productivity Number of enterprises receiving assistance to 4 improve 150 255 105 250 412 162 knowledge, processes, technologies and practices Assisted enterprises applying improved 5 60 152 92 130 225 95 knowledge, processes, and technologies

Assisted enterprises following 6 10 32 22 30 40 10 recognized product or process standards

Individuals receiving job skills 7 3,000 3,427 427 7,000 9,287 2,287 aligned with industry needs

68 Percentage change in specified Data reported Data reported 8 productivity +2% +34% +32% +4% annually annually measure (sales per employees)

Objective 2. Expanded Market Linkages IR 2.2: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.2.2: Expended Market Linkages

Number of enterprises with 9 sales facilitated 50 141 91 120 233 113 through USG assistance

IR 2.1: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.1.2: Expended Market Linkages

Number of assisted enterprises in Data reported Data reported 10 targeted industries 20 87 67 60 annually annually with increased financing

Financing accessed Data reported Data reported 11 by assisted $ 600,000 $ 23,931,866 $ 23,331,866 $ 1,300,000 annually annually enterprises

Number of assisted enterprises in Data reported Data reported 12 targeted industries 20 83 63 60 annually annually with increased investment

Objective 3. . Improved Sector –Enabling Environment and Increased Local Capacity IR 2.1: Improved Economic Foundation for Growth Sub-IR 2.1.1: Improved Business and Trade Enabling Environment Number of regulations and administrative procedures 13 4 6 2 11 8 eliminated, - 3 streamlined or simplified with USG support

Number of Public- Private 14 5 6 1 15 7 Partnerships - 8 established

Value of Public- Private 15 Partnerships $ 300,000 $ 6,394,226 $ 6,094,226 $ 1,000,000 $7,120,718 $6,120,718 established

69 Improved capacity +10% over +20% over Data reported Data reported 16 TBD in Q4Y2 TBD in Q4Y2 of local institutions baseline baseline annually annually

Project-assisted public-private 17 sector dialogue 4 15 11 8 23 15 platforms conducted

Increased number of market linkages 18 50 976 926 100 3,130 3,030 established with donor assistance

B. Qualitative results

Wine and Tourism Industries’ Results

• Wine of Moldova Academy updated the knowledge and skills of over 200 employees form 71 companies. MCP supported ONVV in organizing four trainings conducted by local and foreign experts, focusing on winemaking, vinegrowing and marketing, and two seminars dedicated to small wineries and rural pensions aimed to initiate or enhance their presence in social media. • ASW Mentorship program was extended to seven small winemakers and start-up wineries, as part of the second intake. Wineries were assisted to formulate their development plans. • Half million dollars leveraged in investments for continuous technological upgrade of transitional wineries. Through grants to four PQUP wineries from the first intake, MCP secured the continuation of technological development and product quality upgrade. • Three hundred thousand dollars commited to procurement of equipment by three new PQUP program participants. This equipment is critical for transition to high added value bottled wine production model. • Over US$28,000 worth of earned media with international coverage attracted through implementation of first guerrilla marketing campaign. • MCP-assisted companies received 207 awards at international wine contests. From 207 awards, 24 were won by participants of the PQUP and ASW programs. • Wine exports to Poland totaled 160,000 bottles and US$320,000 as a result of a country- wide campaign. • 2.6 million Poles reached by over 83 media hits worth an estimated USD 180k under the PR campaign promoting the national country brand Wine of Moldova. This monitoring data were provided by Media Forum from Poland, subcontracted by MCP, to implement the PR campaign. • Twelve Moldovan sommeliers received European certification and 30 restaurants upgraded their hospitality services. As an integral part of part of the Wine Friendly Program implemented in partnership with the Association of European Sommeliers, MCP organized fclasses for Diploma of European Sommelier as well as wine service courses for accredited venues and restaurant from waiting list. • Wine Vernissage had an audience of 1,200 attendees and almost 300 wines form a record breaking number of participating wineries: 47 companies, 10 of which premiered their bottled wines. • Fourteen wine tasting master classes were attended by more than 300 persons under the fifth wave of “Wine Friendly – La vie en Rose”.

70 • Two rising stars (wine hubs) of Moldovan wine culture emerged. MCP assisted Decanter Vinoteque and Piventele Branesti’s “Stone Age” cave restaurant to elaborate their development plans. • Eight market intelligence reports on export markets were finalised and provided to ONVV for dissemination to the wine sector. The reports relate to the primary and secondary export markets and were prepared based on Euromonitor data. • Three cross-sectoral initiatives launched by PGI associations with ONVV and MCP support aimed to record and share best vinegrowing practices, assess the impact and prevent vine diseases, and establish first denomination of origin. • Three Moldovan tour operators increased their B2B partnerships though familiarization trips. Moldova’s biggest tour operators increased their business partnerships with foreign partners while organizing these tours. Local companies expect a flow of up to 200 tourists from each partner in 2017, while upscaling the supply from low-cost to premium experiences and extending the tours regionally. • Six out of 10 local cultural-tourism events increased visibility at the national and international levels. More than 16,000 people participated in events organised with MCP support: Orheiul Vechi Bike Marathon, Mai Dulce, Duminica Mare Domulgeni, DescOpera, Traditional Bessarabia Carpet Festival, Folk Costume National DayMai Dulce Festival, DescOpera Festival, iProsop, Lavender Fest, and Frumos Covor Basarabean. More than 10 wineries participated under the Wine of Moldova brand, 20 local textile producers promoted their products under the Din Inima court, and more than 100 local artisans showcased at these events. These initiatives showcased traditions, promoted local cultural and artistic events, and positioned Moldova as a tourism destination domestically and internationally. • The spring familiarization tour for Polish and Italian media promoted Moldova as a tourism destination on target markets. Led by ANTRIM, these press tours also engaged social media and resulted in 11 articles about Moldova, including eight in Poland and three in Italy. The hashtag #DiscoverMoldova has almost 5,500 photos, while the “Moldova: Discover the Routes of Life” facebook page reached 13,000 followers. • Two wineries upgraded tourism products. With MCP support, the Castel Mimi and Migdal-P wineries optimized the number of tourism packages, added wine blending workshops, upgraded the guides’ scripts and developed wine events calendars. • Six documentaries about Moldova filmed by Polish (TVN) and Italian (GRAY OUT) TV production companies will promote Moldova as a tourism destination on target markets. The documentaries will be broadcasted on Polish channel TVN and Italian channel TV2000 during summer-fall of 2017. • Approximately 70 new business contacts created at the “Borsa Internazionale del Turismo (BIT)” in Milan. Tourism Exhibition. With MCP support, three tour-operators (Slavion Travel, Tatrabis, and Ways Travel), and two wineries (Purcari and Castel Mimi) promoted their products and services, and Moldova under the tourism country brand “Tree of Life” at BIT Milano, one of Italy’s leading travel tradeshows. • Two proposal of amendments from the ‘Tourism Development Platform’, formed by seven private sector associations of the tourism sector were submitted to Parliament of Moldova. With MCP support, the ‘Tourism Development Platform of Moldova’, represented by five leading inbound tourism associations have efficiently engaged into advocacy related to the draft law #302, participating in public debates and working group meetings within the Parliamentary Committee and submitting comprehensive position papers on the most important regulatory issues of the tourism industry.

Light Industry Results

• Four Moldovan footwear companies enhanced their design skills and learned how to correctly create a shoe collection. With assistance from international designer Luisa Fazio, the four companies correctly implemented the design prosess which included:

71 market and competitor research, collection structure/range plan, design direction, creating seasonal mood boards and inspiration, design and development, sketches and design packs, materials selection and development, prototype evaluation, and amendments with technical personnel to ensure the look adheres to the original design. • MCP leveraged an additional $1 million USD in technological innovation investment from Moldovan apparel companies. MCP supported the participation of seven apparel companies at TexProcess, the leading trade fair for international garment manufacturing in Frankfurt, Germany during May 2017. Participating companies selected innovative equipment such as specialized machines, computer added design and cutting machines (CAD/CAM), and ironing equipment worth more than $1 million USD. • Moldovan apparel companies are acquiring more and more fabrics for their own collections, demonstrating that MCP raw materials acquisition coaching to local companies proved to be sustainable. Apparel companies which were assisted by MCP in strengthening sourcing skills to new regional and affordable suppliers of quality textile continue to independently visit these stocks for purchase of necessary raw materials. Six apparel companies bought raw materials from the fabrics’ stocks in Carpi valued at $178,000 USD. This result demonstrates further buy-in and sustainability and is double the result registered in the previous quarter by other local companies visiting these fabrics. • 17 designers from 16 apparel companies, including 5 startups enhanced their designer’s capabilities. MCP design coaching assistance helped apparel company designers to develop Fall 2017/2018 collections based on learning and implementing the collection planning process, mood boards, inspirations and trend research, range planning, creation of the variety in the range, brand signature, and high-fashion techniques and technical finishes. • MCP supported 5 emerging and startup designers to enhance their designer’s skills, who developed their collections through the MCP Flying Designer Program. The disigners are now focusing on presenting them at prestigious international exhibitions in Millan, Paris, and London. • MCP supported the implementation of the SMART (Streamline Manufacturing, Accountability, Resource efficiency, and Transparency) Factory program in six apparel companies. With MCP local and international consultancy support, the assisted companies (Infinitextil, Premiera Dona, Mobile, Maicom, Mobile Jet, Ionel) learned and implemented SMART- appropriate production engineering which includes streamlining factory layouts and workplace engineering. Thishas a direct impact on productivity increase and cost cutting. • MCP supported the implementation of complex, innovative methods for productivity growth in apparel companies. The support for Maicom company that materialized in the reorganization of its cutting department, combined with a MCP grant for procuring cutting performance equipment determined a 40% increase in labor productivity at the Maicom company. • Moldova was included in the list of eligible countries for the WEAR Sustain project and ZIPhouse was connected to the project network for future collaborations. ZIPhouse’s Executive Director presented a TUM team fouryear research project on an innovative product: cloths for patients in the medical sector, finding potential partners for collaboration. • ZIPhouse is acting as a bridge between the academic and private sectors. The center acted as partner for the “Students’ Fashion Show 2017”, featuring 20 collections created by the students of Technical University of Moldova. The show was attended by 200 people, includingrepresentatives of more than 30 private companies. • 15 startups motivated to boost their concentration and to stay focused on their acceleration. About 15 local and 3 international mentors have been involved in mentorship and coaching sessions. Two business camps, with 11 sessions in total, have been organized within FAP. The events targeted all 15 FAP assisted startups, as well as

72 other interested startups, gathering in total 55 participants. Significant impact has been registered in the accelerated startups. • ZIPhouse Fashion Academy brings advanced technical training to local professionals. Led by local and international experts, the center provided eight technical trainings for 211 industry professionals, from 50 local companies and educational institutions’ teaching staff. • 16 representatives of light industry learned about global fashion industry trends and strategies for fashion business development. MCP supported light industry representatives to attend “Vogue UA Conference: Fashion & Business” held in Kiev, Ukraine. The Conference had international speakers from renowned fashion organizations. • Outcomes and results from the Fashion Acceleration Program. The Antigona company, “B’Queen” brand, a startup within FAP, developed their graphic identity and logo. MCP support consisted sharing 50% of the costs and due to this acceleration created 4 new jobs. • Georgette, a local womenwear brand, showcased their summer 2017 resort collection at Odessa Holiday Fashion Week in Ukraine. This event participation offered the company the possibility to test the Ukrainian market and its interest towards Georgette products, but also to raise the profile and notoriety of the Moldovan fahion industry on regional markets. • The image of the Moldovan fashion industry was raised through using attractive and innovative promotional instruments. With MCP support, local light industry companies produced 34 look books of product and campaign images and 21 video look books. Approximately 15 brands have been promoted through fashion listicles published online. • The #euportdininima (#iweardininima) campaign salutes the appearance of new spring/summer collections of the 20 local brands. The campaign was launched by MCP jointly with APIUS, on 30 outdoor bill boards in Chisinau. The campaignaimed to raise the Dininima umbrella brand’s visibility stimulating interest in local brands. • Notority raised and sales increased for dininima brands as a result of participation at “Mai Dulce 2016 Festival” in Chisinau. 10 local brands (Crème Brulee, Georgete, Lia Fia, Mallena, Vasconi, MilyMia, Olsa shoes, Oldcom, O’Blank, Amarena Secret) participated at the festival under a common stand branded dininima and generated 100,000 MDL in sales. • “Fashion Soiree” introduced the mood of summer in the city of Chisinau. The 2017 edition of the Din Inima Fashion Soirée presented Resort Collections of 14 Moldovan brands. About 80 high profile individuals such as members of the business community, diplomatic corps, Moldovan government, journalists, and artists acted as models for the community catwalk to encourage support to the Moldovan fashion industry and local designers. The event gathered about 300 people. • Dininima extended its presence in the region. Ten local brands organized their first pop up shop in the Balti city region to enhance the notoriety of the umbrella brand DININIMA, and to warm up the market in anticipation of the opening of a DININIMA common store in Balti this year.

ICT Industry and Creative Services Industry Results

• Moldovan robotics team participated at the FIRST® LEGO® League Open European Championship 2017. Upon winning the robotics FIRST® LEGO® League national competition in February 2017, the RoboRangers team will represent Moldova at the FIRST® LEGO® League Open European Championship 2017, on May 26-28 in Aarhus, Denmark. The Moldovan team will compete along with 112 teams from 49 countries and 5 continents. • Twelve schools were selected to pilot the Future Classroom Lab concept, inspirational open learning spaces that foster interdisciplinary, collaborative, creative, and agile

73 project-based learning; equipped with transformative learning technologies (e.g. robotics kits, BYOD (bring your own device)-compatible presentation and data collection tools) and replicable in other Moldovan schools. • New pilot on educational robotics for creativity and STEM was tested in 5 schools. Five out of eight piloting schools conducted innovative educational activities with 212 students, from 2nd to 8th grade, proving that students are very interested and motivated by hands-on learning. The average grade given by participants for the overall impression of the activity so far is 4.95 (out of 5). 47 percent (99 p.) of the participants were girls, and their results do not differ from the boys. • The CoderDojo Chisinau program was extended. A new location – East Europe Foundation, was added to the CoderDojo program. As a result, the total number of 160 children, ages 8 to 16, joined the free-of-charge, volunteer-based coding clubs and started learning the basics of IT. Seventeen volunteers, young IT professionals, and students are mentoring these classes. • 419 students attended the 11 guest lectures, conducted by successful IT professionals, entrepreneurs and managers. The students were from the three largest higher education institutions: State University of Moldova (SUM), Technical University of Moldova (TUM), and Academy of Economic Studies (ASEM). • 45 young game design professionals upgraded their technical skills in game design and are more aware of international trends in game building due to MCP support offered for the organization of an in-depth two-day training. The training session offered specific techniques on the following topics: the illusion of balance; differences between crafting life games and computer games; game design from prototyping to building; sound specifics in game design; hame design plot; and making a game interesting. • MCP launched the first Creative Coaching Program in response to industry needs to increase local companies’ competitiveness locally and internationally. The Program was presented to 37 participants, 30 of which were creative companies’ CEOs and will be implemented in collaboration with the leading consultancy company in creative industries from the US, Revthink. • One creative company, Umbrella Production, managed to attract two clients and signed contracts for collaboration in Romania, as a result of MCP support to expend market linkages. MCP supported the company to go on a business trip to Bucharest, Romania where the company conducted 22 B2B meetings aiming to establish the company’s first contacts on the Romanian market. Another result is the fact that the company gained a stronger understanding of opportunities for penetrating the Romanian market. • The first collaboration of a local creative company, Piko Creative, with a Polish client was established with MCP support. As a result of the participation of Piko Creative at the ProWein International Faire in Germany in March, for presenting its wine labeling design, the company was contacted by Publicon of Poland for collaboration.

Precision Engineering Industry

• The first edition of “Mini Maker Faire” has been organized in Chisinau. The event gathered 30 participants from the growing Makers community and attracted 600 visitors. • 32 students and young specialists with engineering background participated at Atelier 99’s Repair Café 5th edition and 3D printing seminars.

74 SECTION III

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY17 Q4 (JULY– SEPTEMBER 2017)

Wine and Tourism Industry

• Develop visual identity for WoM Academy (local STTA, subcontractors- TBD); • Deploy vinegrowing and winemaking in-kind support for second intake of ASW Mentorship program (local STTA – TBD); • Review the marketing vision and communication plan of the Association of Small Winemakers (ASW) (local STTA – TBD); • Deploy vinegrowing and winemaking in-kind support for second intake of PQUP program (local STTA – TBD); • Organize and deploy international communication campaign according to master plan for National Wine Day (associated budget: $20,000 USD) • Develop concept note for improving online and social media presence and upgrading WoM brandbook (int STTA - TBD); • Support ONVV in implementation of the second communication campaign in Poland, and deploy benchmarked activity in Romania (associated budget: 20,000 USD) • Deepen in-kind support for New Generation Wineries, as a group and individually to increase penetration on target export markets (int STTA – Witold Franczak; associated budget: $20,000 USD); • Deploy in-kind supporting program for Exporting Champions wineries to extend distribution, increase market share and sales on target export markets (int STTA – Witold Franczak; associated budget: $20,000 USD) • Update Business and Marketing Intelligence framework of ONVV, develop a list of regular deliverables, identify information sources (local STTA – TBD); • Organize a series of up-scale events for promotion of results achieved by ASW & PQUP wineries, promote other small winemakers, promote PGI concept (associated budget: 8,000 USD); • Select new beneficiaries for MCP Program “StartUp Tourism Moldova” (Int. and local STTAs – TBD); • Continue support to rural pensions in the development of their visual, marketing, and promotional campaigns (associated budget - $2,000 USD); • Assist ANTRIM strengthening organizational capacities in implementing its activities: Tourism Informational Center, Incoming Tourism Forum opening (associated budget - $35,000 USD). • Deployment of local campaign #fiioaspetelemeu and #beourguest campaign for foreign target markets (Int. STTA – Nadia Pasqual); • Support the institutionalization and launch of MICE Moldova Convention Bureau (Local STTA- Oleg Utica, associated budget- $7,000 USD); • Implement the Roadmap for Guides workforce development program (Local STTA- TBD, associated budget- $10,000 USD); • Develop legal pocket guide for tourism service (local STTA- TBD).

Light Industry

• Support companies to participate at Ia Mania festival under common stand (associated budget - 1,000 Euro); • Assist APIUS to organize promotional activities and autum edition of the Moldova Fashion Days;

75 • Support companies to participate at international exhibitions (MODA exhibition in New York City, sourcing Premier Vision Manufacturing CPM Moscow, Fashion Central Asia Kabo expo, Czech Republic, Kiev Leather and Shoes (associated budget – $62,300 USD); • Assist apparel companies and start-up designers to visit row materials warehouses in Italy and Dubai (associated budget – 6,000 Euro); • Finalise the Flying Design Program and Pattern maker assistance (international STTA- Kelly Denooyer and Luisa Fazio) • End the assistance for Steaua reds in implementation of Integrated Quality Management System (local consultant Alla Oberst); • Finalise the productivity enhancement program in apparel companies (international STTA- Martin Bucher and local STTA- Demian Usanli); • Support ZIPhouse in organizing professional workshops, community building events and fashion contests (Fashion Photography Challenge, Contest on Vitrinistics); • Assist ZIPhouse in implementing Fashion Acceleration Program; • Define Oldcom shoes company retail strategy (international STTA - Dmitry Ditchkovsky).

Information and Communications Industry and Creative Services Industry

• Work with TUM on the practical labs project; • Continue working on the Future Classroom Lab pilot – clarify the implementation plan with Orange Moldova Foundation and Ministry of Education, organize school teams training and procure equipment for the selected schools (international STTA – Mart Laanpere, associated budget – 40,000 USD); • Organize a summer camp for Robotics; • Work with ATIC on the annual IT Career media campaign: production and publication of the new video and other PR materials; • Work with Takedu on the organization of GirlsGoIT Summer Camp (associated budget $12,000 USD); • Initiate the pilot on Arduino CTC101 for VET in collaboration with DNT and ATIC (associated budget - $10,000 USD); • Work with Dreamups Innovation Campus on finalization of Founder Institute pre- acceleration program • Initiate first intake of Creative Coaching Program’s applicants; • Support FloAcademy design (associated budget $1,200 USD); • Support for the Creative Industries Association coaching (local STTA -Mila Milairau); • Provide support for the Creative Hub development (local STTA - Maxin Calujac).

Precision Engineering

• Initiate equipment procurements for the Makers Space and TUM labs; • Finalize construction activities at the Makers Space; • Initiate the architectural design for the Regional Innovation Hub in Balti and TUM labs centre in Chisinau (local STTAs – Maxim Calujac, Dumitru Carbuni); • Organize the summer camp on “Embedded systems development”;

Other Technical Activities

• Provide ongoing support to Prime Capital for the energy efficiency DCA agreement; • Provide support to DCA mission from Washington for meeting with the managers from the financial institutions.

76

SECTION IV

PROJECT ADMINISTRATION

Administration and Finance

The project’s administrative and financial systems are running smoothly.

Project Communications

During the reported quarter, MCP developed a corporate presentation in PowerPoint and video format with animated effects. The presentation was delivered by Sergiu Botezatu, USAID Senior Project Manager at the USAID regional conference in Asia. The project presentation had an artistic view focusing on the beneficiaries and people positively influenced by the project activities. It also presented the justification of the industries MCP is supporting, their importance for the Moldovan economy, MCP’s approach to increasign competitiveness in these industries, and raising the country’s profile on regional and global markets. The project presentation ended with the impact data and announcement of the future plans that will impact MCP beneficiaries directly.

Media coverage. The project was largely presented in press during the reported quarter due to tourism events such as Tourism Award, DescOpera, and several regional festivals including: “Duminica Mare”, “Festival of traditional carpet”, and “National Day of Traditional Costume”. For all the tourism events media partners covered pro-bono the topics, placing promo videos, organizing TV shows and attending the events with large reportages. Partners of the tourism events supported by MCP include: TVR Moldova, Canal 2, Publika TV, AgroTV, Noroc TV, Moldova1, Publika TV, Agora, Diez, Radio Noroc, Radio Moldova, and Madein.md.

77

A large pre, during and post PR campaign was developed around the second edition of the DescOPERA Festival. A press conference and an event for bloggers raised the interest of media and influencers. Pro bono web banners were placed on more than 20 online platforms, an extensive social media campaign with ambassadors, ministers, and celebrities promoting the festival and encouraging people to attend the festival. Thus, a record number of tickets was sold (300% more than at the first edition). The pre-event PR campaign included participation at numerous TV shows, national TV stations, and online portals. Minister of Culture, Monica Babuc, USAID COR Sergiu Botezatu, and MCP DCOP Diana Lazar were the main spokespeople of the DescOpera PR campaign.

Communicating and promoting the three-day festival on social media (Facebook) had a great impact on the event, as seen on internet. The “DescOPERA” festival had over 2,200 thousand people interested in the event on social media. One of the videos published during the second evening show had a reach of almost 800 views. A video prepared by one of the bloggers promoting the event, Geo Lupascu, was viewed by over 1,680 people. Moreover, this video was spread and shared on Facebook as a great opportunity of spending a day in Orheiul Vechi, exploring the possibilities of having a nice time at the reservation. Many visitors shared their visits on social media, and the photos promoted the key message of the event: the artists, the natural amphitheater, the natural appeal ofOrheiul Vechi, and happy people that attended the event.

Figure. Social media screenshots from the DescOpera festival Facebook event

78