Moldova Competitiveness Project

MOLDOVA COMPETITIVENESS PROJECT

QUARTERLY PROGRESS REPORT APRIL 1 – JUNE 30, 2021

QUARTERLY REPORT

YEAR SIX QUARTER THREE (FY2021 Q3)

SUBMITTED: JULY 3, 2021

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

CAPTION: MoU signing ceremony for Supporting Connectivity and Use of Digital Technologies in Moldovan K12 schools. CREDIT: Moldcell

DISCLAIMER

This assistance is made possible by the support of the American, Swedish, and British people through the United States Agency for International Development (USAID), Sweden and the UK. The contents are the responsibility of the creator and do not necessarily reflect the views of USAID, the American, Swedish, and UK Governments.

TABLE OF CONTENTS

ACRONYM LIST ...... 6 EXECUTIVE SUMMARY ...... 8 PROJECT MAPPING ...... 13 SECTION I ...... 14

PROJECT TECHNICAL INTERVENTIONS DURING FY21 Q3 ...... 14

WINEGROWING INDUSTRY ...... 14

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION) ...... 14 PROGRAM 1. Upgrading quality and driving innovation in viticulture and winemaking ...... 14 Activity 1.1. ASW (Association of Small Winemakers) Mentorship Program - support in emergence and development of small wine producers ...... 14 Activity 1.2. Strengthen and expand PQUP (Product Quality Upgrading Program) ...... 16 PROGRAM 2. Building knowledge and innovation for future growth ...... 16 Activity 2.1. Build upon professional development programs to deliver workforce improvement skills...... 16 OBJECTIVE 2. EXPANDED MARKET LINKAGES ...... 18 PROGRAM 3. WoM International Promotion Program Support ...... 18 Activity 3.1. Build WoM brand equity and foster business linkages ...... 18 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY ...... 21 PROGRAM 4. Support policy upgrades and regulatory reforms in the wine industry ...... 21 Activity 4.1. Support wine industry policy upgrades, legal and regulatory reforms and institutional strengthening sustainable development ...... 21

TOURISM INDUSTRY ...... 23

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION) ...... 23 PROGRAM 1. Start-up tourism Moldova: product development, service quality upgrading and tourism offer diversification ...... 23 Activity 1.1. Strengthen the tourism product development and improve tourism hospitality infrastructure ...... 23 OBJECTIVE 2: EXPANDED MARKET LINKAGES ...... 25 PROGRAM 2. Tree of Life Marketing Program: building awareness for Moldova internationally ...... 25 Activity 2.1. Build international awareness for Moldova’s Tourism ...... 26 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY ...... 31 PROGRAM 3. Sustainable tourism policies and friendly business environment ...... 31 Activity 3.1. Rethink the tourism industry: reformed policies and regulation to ensure sustainable development .. 33

INFORMATION TECHNOLOGY, ENGINEERING AND CREATIVE SERVICES ...... 34

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION) ...... 34 PROGRAM 1. Promoting STEAM education and careers ...... 34 Activity 1.1. Continue supporting the Future Classroom Lab (FCL) concept in Moldovan schools and NCDIE Center (ongoing) ...... 34 Activity 1.2. Continuous support to the educational Robotics program ...... 37 Activity 1.3. Support digital skills building in VET institutions teachers ...... 37 PROGRAM 2. Centers of Excellence development and support ...... 38 Activity 2.1. Strengthen the Artcor Creative Industries Center ...... 38 Activity 2.2. Establish the Mediacor Digital Center ...... 39 Activity 2.3. Support the establishment of the Balti Innovation Center ...... 40

Activity 2.4. Strengthen the FabLab network ...... 40 Activity 2.5 Support the CIRCLE Laboratory Cluster at TUM ...... 41 Activity 2.6. Facilitate communications and event management for Centers of Excellence ...... 41 OBJECTIVE 2: EXPANDED MARKET LINKAGES ...... 42 PROGRAM 3. Grow Moldova as an IT and creative services industry destination ...... 42 Activity 3.1. Support a bridge program for Creative Services Industry ...... 42 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY ...... 44 PROGRAM 4. Legislative and capacity building support for IT and creative services industry ...... 44 Activity 4.1. Support legal efforts and capacity building activities for new institutions ...... 44

LIGHT INDUSTRY ...... 46

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION) ...... 46 PROGRAM 1. Continue strengthening ZIPhouse as the flagship institution in workforce development and fashion startup acceleration ...... 46 Activity 1.1. Solidify ZIPhouse institutional capacity ...... 46 Activity 1.2. Boosting creativity, entrepreneurship and building community ...... 47 Activity 1.3. Developing industry skills through advanced technical education and training ...... 48 PROGRAM 2. Strengthen the SMART (Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency) Factory Program ...... 50 Activity 2.1. Implement complex innovative methods to streamline manufacturing and productivity growth ...... 50 Activity 2.2. Create brands and products aligned with fashion trends ...... 51 OBJECTIVE 2: EXPANDED MARKET LINKAGES ...... 52 PROGRAM 3. Expanding market opportunities ...... 52 Activity 3.1. Reposition Moldova as a full product manufacturing partner and support internationalization of Moldovan fashion brands in regional and European markets ...... 52 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY ...... 56 PROGRAM 4. Assist APIUS to become a strong professional and industry association ...... 56 Activity 4.1. Strengthen APIUS institutional capacity ...... 56

DELIVERABLES ...... 58

SECTION II ...... 59

PROJECT-LEVEL OUTCOMES AND RESULTS ...... 59

Sector Engagement, Enhancement, and Development (SEED) Fund ...... 59 Environmental Protection ...... 60 Anti-Corruption ...... 60 Access to Finance ...... 60 Public-Private Partnerships ...... 61 Inclusive Development ...... 64 Monitoring & Evaluation ...... 67 Project Communications ...... 70 SECTION III ...... 73

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY2021 Q4 (JULY-SEPTEMBER 2021) ...... 73

SECTION IV ...... 74

PROJECT ADMINISTRATION ...... 74

Level of Effort Report ...... 74 Administration and Finance ...... 74

SECTION V ...... 75

ANNEXES ...... 75

ANNEX I. SUCCESS STORIES ...... 76 ANNEX II. RISK ASSESSMENT ...... 81

ACRONYM LIST

ANSA National Food Safety Agency ANTRIM National Association for Inbound Tourism APIUS Employers Association of Light Industry ASW Association of Small Wineries ATIC Moldovan Association of Private ICT Companies B&B Bed & Breakfast B2B Business to Business CIS Commonwealth of Independent States COP Chief of Party COR Association of Creative Industry Companies in Moldova DCFTA Deep and Comprehensive Free Trade Agreement DMO Destination Management Organization DO Development Objective EBRD European Bank for Reconstruction and Development EDGE Economic Development, Governance and Enterprise Growth Project ESP Export Support Program EU European Union EURATEX European Apparel and Textile Confederation FCL Future Classroom Lab FY Fiscal Year GIZ German Agency for International Cooperation HVAA High Value Agriculture Activity Project HoReCa Hotels, Restaurants, and Cafes ICT Information and Communications Technology IMS Integrated management System ISO International Organization for Standardization ITE Institute of Technical Education ITU International Telecommunication Union LOE Level of Effort days LOP Life of Project M Millions M&E Monitoring and Evaluation MIA Moldovan Investment Agency MoEI Ministry of Economy & Infrastructure MOU Memorandum of Understanding MSU Moldovan State University ONVV National Office of Vine and Wine PDO Protected Designation of Origin PGI Protected Geographical Indication PMU Project Management Unit PPP Public Private Partnership PR Public Relations PQUP Product Quality Upgrading Program Q Quarter QMS Quality Management System UK United Kingdom SEED Sector, Engagement, Enhancement, and Development Fund SDC Swiss Agency for Development and Cooperation SMART Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency SME Small and Medium Size Enterprise STEAM Science, Technology, Engineering, Arts and Math

STTA Short-term Technical Assistance TBD to be determined TIC Tourism Information Center ToL Tree of Life TUM Technical University of Moldova TIS Tourism Industry Strategy UNDP United Nations Development Programme, USAID United States Agency for International Development USD United States Dollar USG United States Government VET Vocational Education and Training WoM Wine of Moldova WFTGA World Federation of Tourist Guide Associations Y Year

EXECUTIVE SUMMARY

WINEGROWING INDUSTRY

In Q3Y6, MCP continued to improve the quality of Moldovan wine production through technical training and mentoring. With MCP assistance, Moldovan wineries won 500 awards at international competitions. The project invested in viticulture research and education for key decisionmakers. MCP conducted two trainings on irrigation and wine certification.

Increasing productivity, quality, and skills: MCP strengthened the Association of Small Winemakers and coordinated with the USAID High Value Agriculture Activity (HVAA) to ensure a smooth transition of assistance between the two projects and assisted in organizing the association’s General Assembly. The project also finalized its technical assistance to wineries under two quality improvement programs: The Association of Small Winemakers Mentorship Program and Product Quality Upgrade Program (PQUP).

Improving market linkages: MCP increased the competitiveness of Moldovan wines by assisting ONVV in updating the Unique Selling Proposition of the national wine brand Wine of Moldova. MCP provided technical support for the preparation for the 2021 edition of “National Wine Day” - the most important event of the wine sector. Wine of Moldova continued to diversify and increase share of export to non-traditional markets as ONVV initiated promotional activities in UK backed by MCP’s direct support to New Generation and small wineries to expand in Romania.

Strengthening business enabling environment: ONVV organized the spring edition of its bi-annual conference, improving its transparency and accountability. The revised Law 57/2016 ‘On Vine and Wine’ has been promulgated by the President and published in the Official Gazette. In addition, a motion filed against ONVV was dismissed as unconstitutional by the Constitutional Court.

Credit: Andrei Cibotaru Caption: MCP-supported winery Crama Mircesti vineyards

TOURISM INDUSTRY

In Q3Y6, MCP continued to strengthen Moldova’s unique soft adventure products, tackle the lack of adequate tourism training programs, promote digitalization of the tourism industry, build awareness for Moldova internationally and integrate Moldova’s tourism offerings in regional tourism. MCP continued to support The National Inbound Tourism Association’s (ANTRIM) development and promoted smart regulations and legal improvements to serve as a resilience measure in this challenging time for the industry.

Increasing productivity, quality, and skills: MCP supported the development of five new soft adventure routes in Sipoteni and Nisporeni regions. During the reporting quarter, MCP assisted eight wineries and tourism small and medium enterprises (SMEs) to integrate real-time booking and payment systems on their websites to increase online visibility and market access. The project has also developed a continuous learning professional course for tourism guides that will soon be delivered to students at the Moldova State University (MSU).

Improving market linkages: In Q3Y6, in partnership with ANTRIM, the project deployed several promotional campaigns, including the new “Be Our Guest, Again” campaign, expected to reach several million people. Also, MCP was a strategic partner in organizing the high-level Moldova Tourism Forum, which aimed to support the industry to emerge stronger from the crisis. To help integrate Moldova in regional tourism, the Hospitality Association of Ukraine and ANTRIM hosted a five-day workshop on developing new tourism products targeting Ukrainian travelers, which will be followed by study visits to Kyiv for the training participants.

Strengthening business enabling environment: During this quarter, MCP continued to advocate for the official approval of the Tourism Development Program “Tourism – 2025” by initiating a dialogue with the President. MCP, in collaboration with ANTRIM, continued to promote smart regulations and finalize the development of a Legal Guide, soon to be made available to the private sector. In Q3Y6, ANTRIM organized its 2021 General Assembly and welcomed 26 new members, raising its total membership to 75 tourism businesses.

Photo caption: Moldova Tourism Forum Facebook Cover. Credit: Invest Moldova Facebook Page

INFORMATION TECHNOLOGY, ENGINEERING, AND CREATIVE SERVICES

In Q3Y6, MCP continued to support the development of the ICT, Creative, and Engineering Industries. In addition to Future Classroom and Educational Robotics programs that promote STEAM (Science, Technology, Engineering, Arts and Mathematics) education, MCP facilitated a partnership convening leading internet providers to support Gigabit Connectivity in Moldovan schools. MCP continued to support innovation centers such as Artcor Creative Industries Center, FabLab Chisinau and to work on the development of Balti Innovation Park, Digital Media Production Center Mediacor, and three new regional FabLabs in Singerei, Soroca, and Orhei.

Increasing productivity, quality, and skills: MCP convened Moldova’s leading private telecom and internet providers – Starnet, Orange, Moldcell, and Moldtelecom - MCP’s flagship initiative Future Classroom and Tekwill Project, as well as the Ministry of Education, Culture and Research to sign a Memorandum of Understanding (MoU) supporting connectivity and use of digital technologies in Moldovan schools. MCP conducted a survey to monitor Robotics and Future Classroom Lab programs for the 2020-2021 school year and the implementation of Cisco ITE in VET institutions. More than 12,200 Moldovan youth took part in these programs, 45 percent of whom were girls.

Improving market linkages: Music composer Ilie Gorincioi and 2D animator and storyboard artist Lev Volosin were the first Moldovan creative professionals to receive international certification from renowned audio mastering and animation academies based in Germany and the U.S. Both creative professionals own and are part of creative studios that are members of the Moldovan Creative Industries Association board.

Strengthening business enabling environment: Moldova IT Park approved its development strategy for 2021-2025 to promote Moldova as an attractive IT destination for foreign investors.

Photo caption: Public Private Partners at the MOU signing for Gigabit Internet Connectivity in Schools, June 2, 2021 Photo credit: Future Classroom Lab

LIGHT INDUSTRY

In Q3Y6, MCP supported the consolidation of the DININIMA umbrella brand by investing in brand awareness and sales campaigns through the Employers Association of Light Industry (APIUS) and by creating 12 Facebook shops with over 100 products, reaching about one million impressions to over 246 thousand unique people. More than seven brands launched functional websites through the ZIPhouse Acceleration Program, leading to a 20 percent increase in monthly sales.

Increasing productivity, quality, and skills: More than 670 participants upgraded their business skills at ZIPhouse Fashion Academy through activities such as ZIPhouse Fashion Accelerator, Z Generation Young Designers Competition, and Fashion Business English. Within MCP’s Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency (SMART) program, three companies implemented Integrated Management Systems (IMS) and became internationally certified, ensuring safe working conditions for additional 470 employees. To date, MCP’s SMART factory program has assisted 24 Moldovan factories in obtaining international certifications, ensuring a healthy work environment for over 4,700 employees, and making steady improvements to attract quality-conscious European buyers while increasing long-term sectoral competitiveness.

Improving market linkages: Thanks to the Acceleration Program – Level Up, 12 brands have launched websites oriented towards international markets, especially Romania and EU countries, with international payment systems such as Paypal and international delivery.

Developing the new Post Covid Recovery Vision for the Light Industry: MCP supported Moldova's Light industry to rethink its strategy and understand how to adapt to COVID and a post-COVID world, how to fit into the new reality of the EU and global fashion industry, and how to take advantage of new opportunities. The new strategy describes what actions the Moldovan Light Industry should prioritize to improve the business environment, adapt to regional and global changes in the fashion industry and supply chain, maintain and increase competitiveness, preserve jobs, and advocate for a needed policy or regulatory changes.

Photo Credit: MCP Caption: Fashion Spring Insight Week pop-up at the digital park, on May 28, 2021

COVID-19 PANDEMIC

In Y6Q3, MCP continued to assist Moldova’s tourism, apparel manufacturing, wine growing, and ICT and creative industries to overcome the challenges stemming from the pandemic by providing ongoing assistance and mentorship to business associations and supporting SMEs to embrace digital technologies as a critical tool for their continuity and sales enhancement. MCP focused its efforts on accelerating and scaling up digitization activities, including digital marketing, e-commerce, and online learning, as solutions to mitigate the economic downturn caused by the COVID-19 pandemic and assist associations and individual SMEs in embracing digital transformation.

In this respect, in IT cluster, a Memorandum of Understanding (MOU) supporting connectivity and use of digital technologies in Moldovan schools was signed with MCP support to bring Moldovan schools into the digital age. The partnership is a groundbreaking engagement through which internet providers will work together to offer free high-speed internet to schools and low-income families for a period ranging from 12 months to 5 years with a goal of providing Gigabit connectivity to 600 Moldovan schools (50 percent of Moldovan schools). The lack of high-speed internet in regions was a big impediment during the COVID-19 pandemic, affecting the quality of education and leaving students from rural regions behind in the digital age.

To ensure the sustainable recovery of Moldovan light industry, MCP partnered with Europe's largest Apparel and Textile Confederation (EURATEX) to support APIUS Light Industry Association in developing a post-COVID recovery strategic roadmap. MCP engaged top-notch expertise to ensure that Moldova's recovery path is aligned with EU and global trends at large and textile value chain disruption. The forward-looking strategy is based on sustainability, digitization, and fair trade. In addition, to stimulate online sales, MCP supported a DININIMA digital campaign for the Moldovan fashion brands, 50 of which have developed fully functional e-commerce websites via the MCP-supported E- Commerce Acceleration Program.

MCP supported Moldova’s tourism industry to ensure a safe and sustainable economic recovery in the post-COVID era and use this pause time to accelerate investments in sustainable tourism products. Alongside Moldova Investment Agency, MCP supported the organization of the first Moldova Tourism Forum to promote the country’s strategy and vision on relaunching tourism activities in line with best practices focused on sustainability, inclusiveness, and resilience and reconnecting Moldova to the world tourism circuit.

Photo caption: Presentation of the post-COVID recovery strategic roadmap by EURATEX General Director, Dirk Vantyghem. Credit: MCP

PROJECT MAPPING

SECTION I

PROJECT TECHNICAL INTERVENTIONS DURING FY21 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 (USAID), the Government of Sweden, and UK aid, this Quarterly Report covering the period from April 1 through June 30, 2021.

WINEGROWING INDUSTRY

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

PROGRAM 1. Upgrading quality and driving innovation in viticulture and winemaking

Activity 1.1. ASW (Association of Small Winemakers) Mentorship Program - support in emergence and development of small wine producers

ASW Presents Its Development Objectives for 2021-2025 and Welcomes New Members on Board

The Association of Small Winemakers (ASW) organized its 2021 General Assembly and presented its development objectives for 2021-2025, focusing on building institutional capacity and enhancing industry resilience while supporting the emergence and development of small winemakers. The Association welcomed 15 new members, increasing its total active membership to 47 winemakers. ASW shared its activity plan for 2021-2022 and allocated a budget of three million lei (approx. $175,000) for strengthening the institutional capacity of the Association, enhancing digital marketing activities, building the capacity of its members, and advocating for industry reforms. Regretfully, the General Assembly’s decisions were not voted into effect, as 27 members requested a follow-up session as, due to technical difficulties with the Zoom meeting and online voting. The requestors could not fully express their opinions and vote. The new session is scheduled for June 10; MCP and HVAA technical teams will offer their full support to ASW to organize the Assembly and ensure transparent (anonymous) voting on proposed agenda topics.

Since its launch in 2010, the Association has made significant progress in strengthening its organizational capacity, demonstrating impressive growth and industry confidence. ASW members produce more than 510,000 bottles of wine annually, which is sold on local markets and Screen capture of Chairman Arcadie Fosnea report to ASW General Assembly

exported to 17 countries worldwide. During 2017-2021, the wines produced by small Moldovan winemakers were awarded more than 272 medals at wine competitions.

MCP provided ongoing organizational support to ASW, which is a key pillar of the small- winemaker ecosystem. ASW has procured with MCP support the specialized winemaking equipment that it rents out, which increases small winemakers’ access to technology and provides an income stream for the association. The association has had a transformational impact across the industry, raising the number of institutionalized small wineries seven times (from 7 small wineries in FY15 to 47 wineries in FY21), as a consequence of the fact that more ‘artisanal producers’ were informed of the advantages of institutionalizing their craft to produce wine as a viable business venture.

VinulMeu and #Eposibilacasa Campaigns, as well as the 11th Anniversary of ASW, Generate Media Interest in Small Wineries and the Association.

In April, ASW celebrated eleven years since its creation, with several interviews and review stories arranged with MCP support. During the reporting period, MCP continued implementing the community-driven VinulMeu campaign to promote ‘author wines’1 from ASW members. The campaign has gathered the largest Facebook community Diana Lazar giving an interview about MCP’s assistance to small wineries at Rapsodia Satului TV show on Moldova 1 public TV station in Moldova dedicated to wine Credit: Moldova 1 culture, also gained recognition from state authorities, as in May the recognized the campaign was awarded for its wine tourism promotion efforts at the 2021 Moldova Tourism Forum organized by Moldovan Investment Agency.

MCP and HVAA Conclude Consultations for Small Winegrowers During Bottling Stage of Wine Production Cycle

Through the ASW Mentorship Program, MCP provides technical expertise to small wineries during the most critical stages of wine production. Post-harvesting processing and bottling (including wine conditioning that ensures the chemical and microbiological stability of the wine before bottling) is considered one of the most crucial and risky stages as the wine may alter (i.e., to oxidize, change color, appear sediment) in case of improper practices. To minimize risk and ensure high product quality, MCP has transitioned the provision of consultancy services to HVAA, successfully concluding the assistance delivered by three local consultants to 17 small wineries, participants of intake - one to four of the programs, ensuring the bottling of white and rose wines of 2020 vintage and red wines of earlier harvests. Based on general feedback received from the consultants, the 2020 vintage wines

1 Author wine is a wine produced under one person who controls all production cycle starting with the vineyard to bottling, and usually have ‘signature’ style of the winemaker (more or less acid/mineral/full-bodied etc).

produced by assisted wineries, with very few exceptions, are of very high quality, and the provided consultancy was very well accepted and adopted by small vintners.

MCP Endows Small Wineries with Marketing Assets

Small wineries often lack the resources and capacity to produce the high-quality visual content needed to conduct digital marketing campaigns and provide business-to-business (B2B) partners with promotional materials needed to advertise on export markets. In cooperation with ONVV, MCP has previously endowed Moldovan wineries, particularly small winemakers, with photographic content by engaging a local photographer to take photographs for all MCP beneficiaries. Because video content played such a significant role in the success of the VinulMeu campaign, MCP has decided to produce 3-5-minute-long video stories for all ASW members. As a result, during the reporting period, MCP contracted a video production studio to produce 20 videos, five of which have already shot.

Activity 1.2. Strengthen and expand PQUP (Product Quality Upgrading Program)

Winemaking Consultations Concluded at Two Transitional Wineries

Akin to previously reported activity, during the reporting period, MCP, in collaboration with HVAA and ONVV, concluded the winemaking consultations on bottling for transitional2 wineries. Two winemaking consultants have completed assignments at two transitional wineries over a total of 12 level-of-effort days, contributing to the production of 264 thousand of liters of wine, most of which will be certified according to the PGI quality standard of the total amount produced. 67 thousand liters of ‘fresh’ white and rose wine were bottled and placed on the market, whereas reds were placed for maturation.

PROGRAM 2. Building knowledge and innovation for future growth

Activity 2.1. Build upon professional development programs to deliver workforce improvement skills

Winegrowers’ Skills Improved through Trainings and Seminars Organized Under Wine of Moldova (WoM) Academy

ONVV provides workforce development services through the Snapshot of PQUP program results WoM Academy, developed with MCP on vintage 2020 bottling support. After a brief pause in Q1 FY21, trainings and seminars resumed MCP/HVAA consultants assisted: according to a predefined curricula and 264 thousand liters of wine supervised designed plan, to address and respond 67 thousand bottles to the most crucial needs of the 10 batches of wine sector. ONVV conducted two events 2 transitional wineries assisted during the reporting period: 12 level of effort days delivered

2 Transitional Wineries - enterprises aiming to adopt new business models based on added value.

• Seminar on Certification of Wine Products. Targeting small and emerging wineries, the seminar covered all steps and legally mandated procedures to place the wines on the market. The seminar featured a presentation from the ANSA's Central Laboratory of Testing of Alcohol Produce and Canned Food. • Seminar on Vineyard Irrigation. As global climate change will eventually force Moldovan winemakers to irrigate vineyards, this webinar guided participants towards making decisions, to ensure sustainability of the wine sector in the coming decades. The seminar featured a presentation by Dr. Hernan Ojeda (France) of the Experimental Unit of the National Institute for Agricultural Research (INRA), who informed participants about the results of INRA’s scientific research on vine irrigation over the last 20 years.

Screen capture of training on certification held under WoM Academy Credit: ONVV

ONVV Issues a Phytosanitary Alert Under ‘Best Grapes’ Program

Historically, The Moldovan wine sector has not taken a scientific or evidence-based approach to vineyard management and vine care techniques and assess the impact of climatic conditions on the current state and health of the vineyards. However, with MCP support, ONVV has been implementing the Best Grapes project - a public-private partnership, which uses information from a network of more than 20 demonstration plots, to provide agri-intelligence data to the sector gathered by autonomous meteorological stations. Based on data collected from the sources above, in May 2021 ONVV released in press and its newsletters a phytosanitary alert: based on meteorological conditions such as an abundance of precipitation and lower temperatures, the alert provided concrete recommendations to viticulturists on means to address the risks and vineyard care techniques.

OBJECTIVE 2. EXPANDED MARKET LINKAGES

PROGRAM 3. WoM International Promotion Program Support

Activity 3.1. Build WoM brand equity and foster business linkages

ONVV Advances in the Update of Wine of Moldova Positioning and Unique Selling Proposition

According to the Year 6 workplan, MCP provides strategic support to ONVV to prepare a complex campaign toolkit and update the WoM brand prior to launching an international communications campaign with extensions and adaptations to the targeted export markets. A Legend Alive, the national WoM brand launched internationally in 2014, has since lost its novelty and grown outdated in terms of design and the relevancy of its message to the expectations of international consumers. Moreover, the draft sectoral strategy (released in October 2020 for comment) has outlined several priorities for positioning Moldovan wines in international markets.

NWB – Wine of Moldova on its path to updated USP

ONVV deployed the process of updating one of the core pillars of brand identity – WoM USP A leading specialized PR company contracted – Cube communication

Critical path:

Questionnaire for local wineries 3 rounds of Strategic Group Aggregation Final proposal approval and international experts Meetings with proposals

Figure: Critical path to Wine of Moldova new Unique Selling Proposition Credit: MCP

ONVV has contracted UK-based consulting agency Cube Communications to develop the updated WoM brand pillars: Positioning and Unique Selling Proposition. As of the reporting date, the consulting agency has finalized interviews with sector stakeholders and international marketing experts, aggregated the inputs and results, and provided the first draft of a proposal for review and comment by a working group of wineries. MCP was involved at all stages of the process and provided feedback on all documentation produced under this activity. MCP ensured that Cube Communications sought input not only from reputed Masters of Wine and wine communicators, but also by those who have previously supported the Moldovan wine industry by participating in the development of the current sector strategy and/or Unique Selling Proposition.

The International Expert and Influencer Jamie Goode ready to Host a Presentation of Moldovan Wines

The UK is the second-largest wine importer in the world by value, exceeded only by the US. According to the WoM Marketing and Promotion framework, it is considered a second-tier market (after key export neighboring markets) due to its complexity and difficulty to approach. Still, international wine marketing experts define it as a very important market in building an international reputation, as it houses the most influential wine critics and writers, and wine education institutions such as Wine and Spirits Education Trust (WSET) and Institute of Masters of Wine. As a result, even small successes of a wine-producing country or brand on the UK market may bring international resonance and generate momentum for export growth. ONVV has contracted Cube Communications to conduct promotional and public relations activities in 2021, the first of which is a presentation of Moldovan wine to be hosted by Jamie Goode at the UK embassy in Chisinau in August 2021. The batch of 100 wines to be presented will be pre-analyzed and selected by Mr. Goode, Master of Wine Caroline Gilby (author of the book The wines of Bulgaria, Romania, and Moldova), and two or three other experts. Mr. Goode is a British author with a Ph.D. in plant biology who serves as a wine columnist for The Sunday Express and contributes to wine publications such as Harpers, The World of Fine Wine, Decanter, GrapesTALK, and Sommelier Journal. In 2020 Mr. Goode was named one of the world’s top wine influencers at the Sommelier Choice Awards3.

MCP Contributes to Updated Brand Identity of National Wine Day and Assists with the Development of the Festival’s Concept for 2021

National Wine Day (NWD) is the most important wine industry event in Moldova. It is an official, legally recognized holiday celebrated during the first full weekend of October. The festival promotes the thousand-year-old traditions of winemaking, as well as the latest achievements in the field, gathering wine lovers from all over the world. Attracting tens of thousands of tourists, the event is one of the largest festivals dedicated to wine culture in Central and Eastern Europe.

Since NWD will celebrate its 20th anniversary in 2021, the festival will use the occasion to develop a new visual identity. To make the development process more inclusive, MCP has facilitated the partnership of ONVV and the Association of Creative Industry Companies in Moldova (COR) to hold a competition for graphic designers to propose branding ideas. The general public and a jury of local and international experts in wine branding and marketing will choose the winning concepts.

Due to MCP’s longtime involvement with the organization of the celebration, ONVV requested project assistance to develop the concept for the 2021 festival. The recent lifting of restrictions due to a significant decrease in new COVID-19 cases has made sectors stakeholders optimistic that NWD can be an in-person event. MCP is advocating for maximum inclusivity and asked for organization of wide consultations with wineries and the creative community. Additionally, MCP is working to maintain or scale up the main components of the event originally introduced and supported by USAID since 2013: winery tours, wine school, and wine tastings. These components have transformed NWD from a

3 https://sommelierschoiceawards.com/en/blog/insights-1/top-wine-influencers-in-2019-you-need-to-pay-attention-to- 123.htm

mass celebration into a recognized wine culture festival. Moreover, depending on the public health situation, MCP plans to incorporate the requests of the private sector, including deployment of promotional campaigns on export market, expansion of activities and programs in retail chains and HoReCa via point-of-sale promotion materials and organizing of tastings, and inclusion in NWD agenda of several satellite events such as Chisinau International Marathon, Ravac International Film Festival, and other concerts and happenings as well as an extended duration for the festival (a couple of weeks or weekends).

Export Support Program – Helping New Generation Wineries and Small Winegrowers to Tap into EU Market

Since 2015, MCP has implemented a firm-level Export Support Program complementing the WoM marketing and promotion framework in line with the national brand communication strategy. This tailored support package is adapted to each winery’s size, export readiness, and role in contributing to the national brand equity on export markets; it also considers the anticipated effects of the support on other groups of beneficiaries. The marketing opportunities and support are tailored to both large exporters and small wineries. They require at least a 50/50 cost-share by the company based on realistic and executable marketing plans. Project marketing assistance under the program is also beneficial for the WoM national brand image, resulting in a spillover effect to other Moldovan winemakers.

During the reporting quarter, MCP assisted the following beneficiaries under its Export Support Program:

• Castel Mimi. MCP continued implementing the PR and Social Media promotion campaign with award-winning Romanian communications agency Rogalski & Damaschin. Exports to Romania grew by 126 percent in April 2021 in comparison to the same period of 2020. • Crama Mircesti. After a robust launch on the domestic market, Crama Mircesti made its first export shipments in 2021 to multiple retail chains in Romania. However, to generate sales momentum, MCP financed an accompanying communications campaign by a specialized communication agency. The winery and its distributors committed to covering all trade marketing costs and providing wine samples to importers, distributors, and retailers as in-kind. The campaign included producing and publishing a video interview with owner and winemaker Arcadie Fosnea on websites focused on wines, developing photo content, and promoting Crama Mircesti in specialized articles and newsletters, as well as in press releases and on social media. • Vinaria Hincesti. After changing its importer and distributor in Romania, Vinaria Hincesti lost some of the market shares it had once gained with MCP support. To regain sales, MCP and the winery co-financed a communications campaign on social media. WoM Wins 500 Medals at International Wine Competitions

Participation in international wine contests is one of the few traditional marketing instruments available during the pandemic, the only type of event is still being held in the wine industry. Since 2016 MCP has supported wineries to submit samples to international competitions with increasing participation and ownership by ONVV. In April and May, MCP

and ONVV helped 48 wineries register 89 wine samples and organized consolidated shipping to two international wine contests: Decanter (UK) and International Wine Contest Bucharest/Vinrium (results to be announced in June 2021). Among the assisted beneficiaries, 35 are small winemakers and 9 are transitional wineries assisted by MCP under the PQUP. Since January 2021, Moldovan wines have won 500 medals and awards at 11 international wine competitions, two of which are Grand Gold and 144 of which are gold. Of the total, 101 awards were won by MCP beneficiaries.

OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

PROGRAM 4. Support policy upgrades and regulatory reforms in the wine industry

Activity 4.1. Support wine industry policy upgrades, legal and regulatory reforms, and institutional strengthening sustainable development

Moldovan Wine Industry National Conference Underscores the Role of the Private Sector in Building Industry Resilience and Promoting High-Quality Wines

ONVV, in partnership with the Ministry of Agriculture, Regional Development and Environment (MADRE), organized the fifth annual National Wine Industry Conference. More than 100 industry representatives joined the online event to learn about the industry progress and new trends of the industry, focusing on sustainability, product quality, adaptation to climate change, and diversification of export markets. USAID Mission Director Scott Hocklander provided welcoming remarks and expressed support for the development of the Wine Industry Strategy 2030 while underscoring the private sector’s leadership role in developing a thriving and resilient industry based on high- quality, internationally competitive Moldovan wines.

Despite the pandemic and the severe drought faced by Moldovan winemakers, bottled wine exports registered an increase of 9 percent in volume and value in 2020, despite a dramatic double-digit decrease of 23 percent in bulk wine sales. The main target market continues to be Romania, which USAID Mission Director Scott Hocklander providing welcome remarks at the National Wine increased the imported Industry Conference. Credit: Wine of Moldova, Facebook page. volume and value of Moldovan bottled wines by more than 20 percent in 2020. Moldovan wine exports to EU countries have grown by 36 percent since the signing of the Association Agreement between Moldova and the EU in 2015.

Since the Russian embargoes in 2006 and 2013, MCP has supported ONVV to improve viticulture, winemaking, and quality standards, as well as to build awareness of Moldovan wines on the international market. To date, 75 wineries across Moldova have benefited from MCP’s Quality Program that includes PQUP and ASW Mentorship, with 35 percent of total Moldovan wine production meeting Western quality standards and producing wines compliant with the EU quality framework. MCP supports the institutional development of ONVV as the legacy institution for forward-looking industry resilience and competitiveness, strengthening its role as the main professional organization for the Moldovan wine industry.

Constitution Court Dismisses a Motion Filed by a Member of Parliament that Threatened ONVV Public-Private Partnership (PPP) Model

MCP is committed to safeguarding ONVV and its Public-Private Partnership model. In January, backed by a Gagauzian wine and brandy holding, Member of Parliament Chirill Motpan, filed a motion to Constitutional Court claiming unconstitutional the mandatory levies to vine and wine fund and proposes to defer wineries that are residents in Free Economic Zone from paying to the Vine and Wine Fund as well as challenges the ONVV PPP model. MCP quickly informed its donors and activated all available lobby and advocacy avenues to oppose the motion. On May 18, the Constitutional Court published its decision to dismiss the motion in its entirety.

Amendments to Law 57/2016 ‘On Vine and Wine’ Promulgated by President and Published in Official Gazette

The Court of Accounts concluded in 2019 the audit of ONVV activity revealing several inaccuracies and ambiguities in ONVV’s main governing law No. 57 “On Vine and Wine”, had to be corrected to ensure the effective functioning of ONVV and efficient use of the Vine and Wine Fund. In March 2021, Parliament approved amendments to the law: increasing by three the number of members and State votes in Coordination Council, from which one voting seat in the Council being allocated to ASW, exonerating from mandatory levies for grapes producers which are sold internally, reducing taxes for producers, and replacing the term ’technical regulations’ with ’normative acts’ throughout the law.

The private sector considers some of the approved amendments, especially those adjusting the composition of the Coordination Council, to be inadequate. As a result, in Q3Y6, PGI Associations intended to request that the President not promulgate the amendments but failed to follow the formal process. MCP will transition this activity to HVAA, which will oversee the continued improvements to the law.

ONVV Continues to Experience Staff Turnover as Deputy Director and Marketing Lead Resigns

ONVV has continued to experience management and institutional challenges, and a shortage of qualified senior staff. During the reporting quarter Deputy Director, Mrs. Irina Bistritchi, who led most marketing and promotion activities, resigned; no replacement has been proposed to date and there is no evidence that ONVV is seeking to fill the vacancy.

TOURISM INDUSTRY

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

PROGRAM 1. Start-up tourism Moldova: product development, service quality upgrading and tourism offer diversification

Activity 1.1. Strengthen the tourism product development and improve tourism hospitality infrastructure

MCP Assists Eight Tourism Sites to Improve Efficiency and Customer Interaction through Digitalization

In light of the decrease in tourism caused by the pandemic, the Moldovan tourism industry is looking for options to re-launch and improve economic resilience. In this context, digitalization is a major recovery factor for tourism. However, only a few tourism sites are present online, with tools like direct booking not available to tourists. To counter this

Caption: Milestii Mici winery website.Credit: Milestii Mici Winery challenge, MCP assisted eight wineries and tourism SMEs in integrating real-time booking and payment solutions that facilitate interaction with customers and improve the efficiency of online bookings. This complex digital assistance enables cross-connection with major booking platforms and leads to an increased number of visitors and higher sales. A clear example is the National Heritage Winery Mileștii Mici, which registered sales of over 30,000 lei (approx. $1,500) in only four days after implementing real-time booking and payment solutions features on their website.

As a result of the MCP e-commerce support, major tourism sites ranging from Castel Mimi and Milestii Mici to guesthouses like Eco Resort Butuceni and Casa din Lunca are launching direct booking services to enhance digital sales. To date, MCP has assisted over 20 wineries and tourism SMEs in upgrading their websites and increase their online visibility. The SMEs benefited from e-commerce and digital marketing support, including website upgrades, the development of logotypes, elaboration of content for social media pages, and integration of e-payments. Adopting digitalization enables the Moldovan tourism SMEs to foster customer interaction and expand their market reach.

ANTRIM Launches New Tourist Guide Courses in Partnership with the Moldova State University

Following the MoU between the National Inbound Tourism Association of Moldova (ANTRIM) and the Moldova State University (USM) aiming at developing a series of continuous learning program for tourist guides, signed in March 2021, during Q3Y6, ANTRIM, with MCP support, and in collaboration with the State University professors, developed a Professional Educational Program for the continuous learning of tourism guides, tourism professionals and students. The Program includes three modules, with highly requested courses, such as professional guiding, legal framework, and organization of the tourism businesses, destination Photo caption: The signing of the Memorandum of Understanding between ANTRIM and management and marketing, Moldova State University to boost tour guides’ professional development. Credit: Moldova State sustainable tourism development, University Wine Tourism, Experiential Tourism, Cultural Tourism specifics, etc. The new Professional Educational Program has been finalized and endorsed by the MSU Tourism Department and submitted to the Ministry of Education, Culture, and Research (MECR) for official accreditation and integration into the MSU Education Curricula. The newly developed courses will be delivered to students and tourism professionals starting with the second half of 2021. They will provide participants with valuable, up-to-date information and skills sought after by tourism businesses, aiming to tackle the lack of adequate tourism education and training programs. ANTRIM and MSU aim at achieving international accreditation of the Program under the World Federation of Tourism Guides Association (WFTGA), to which it is an active member since 2019.

Also, during the Q3 period, ANTRIM, with MCP support, finalized the new digital platform for Moldovan tourist guides, to allow for greater visibility and enhanced promotional capacity of the aggregated offer. The platform is being populated with content and ready for launch in the second part of 2021, interconnected with the national tourism portal www.moldova.travel and other local promotion platforms (neampornit.md, beourguest.md, etc.)

Five New Soft Adventure Routes Launched to Respond to New Tourism Trends

Recent research presented by the World Tourism Organization and the European Parliament's Committee on Transport and Tourism indicates an accelerated reshaping of tourism to respond to the preference of millennial travelers for active mobility over motorized modes of transport. As a result, ANTRIM is prioritizing the development of tourist experiences following the Photo caption: Participants at the NTGA trainings that contribute to developing of 4 soft adventure new trends and sustainability routes in the Sipoteni region. Credit: ANTRIM principles.

As part of the Sipoteni Youth Capital 2020/2021 Program, implemented by ANTRIM, the tourism offers of the Codru region, namely around Sipoteni village, is undergoing complex tourism routes infrastructure development, promotion programs, and workforce development activities. ANTRIM is implementing the project within a public-private partnership with co- funding from the MECR, local public authorities, tourism businesses and with strategic MCP support. MCP has been the enabler.

During the reporting period, two training sessions have been delivered to about 70 young people through ANTRIM’s Next Tourism Generation Academy, 16 participants were selected to contribute to the creation of four biking and hiking ecotourism routes: "Codrii Sipoteniului" (21km), “The Valley of Wine” (48 km), “The Royal Post Road” (37 km), "The Charm of the Hills" (47 Photo caption: Nisporeni hiking route signage. Credit: km). ANTRIM, with MCP support, has worked during the ANTRIM reporting period on the routes’ blazing, the digital mapping, and ensuring local authorities’ management for the future. In total, the routes include more than 20 tourism destinations, such as rural pensions, wineries, museums, and other points of interest. ANTRIM will launch the routes in June 2021.

Also, ANTRIM’s experience in routes development has been enhanced by its members, who used the available time adoring the low season in the pandemic period to provide support in developing new tourism routes. A leading Moldovan tour operator Tatrabis has developed a new family-friendly 12 km hiking route in the Nisporeni region. This was possible to ANTRIM’s partnership with a Moldovan Corporation, Efes Vitanta Moldova, who financed a Small Grants Program "Friendship for Tourism". The Program’s concept was developed with MCP support as part of ANTRIM’s grant under MCP and aimed at stimulating corporate social responsibility activities carried out in the tourism industry to encourage Moldovan tourism businesses to enhance their resilience during the pandemics.

OBJECTIVE 2: EXPANDED MARKET LINKAGES

PROGRAM 2. Tree of Life Marketing Program: building awareness for Moldova internationally

MCP has been delivering multidimensional support for destination marketing, including familiarization trips in Moldova for international media, international travel photography camps, participation in important travel events in source markets under the “Tree of Life” country brand, and deployment of numerous viral communication campaigns, bringing international focus on Moldova as a tourism destination. Over the life of the project, MCP has supported 18 promotional campaigns, including the award-winning campaign #BeOurGuest, reaching more than 12 million views on local and international markets; hosted more than 200 international journalists in Moldova, resulting in more than 300 articles promoting Moldova in foreign media outlets; and organized 86 events under the centralized Tree of Life events agenda to bring visitors to rural areas. Additionally, in collaboration with ANTRIM and other partners, including the Investment Agency, MCP

25 assisted 29 tourism businesses in promoting Moldova’s tourism at 26 major international exhibitions.

Activity 2.1. Build international awareness for Moldova’s Tourism

Easter Promotional Campaign Advertises Rural Guesthouses and Wineries

Photo caption: Easter campaign Facebook cover. Credit: Moldova Travel Facebook page

To promote Moldovan Easter traditions and the hospitality of the Moldovan people, MCP supported the development of an Easter campaign entitled “Spiritul Pastelui.” Given the travel restrictions, the campaign mainly targeted local tourists, encouraging them to explore vacation opportunities at rural guesthouses and wineries during the Easter holidays. The campaign aimed to connect the tourism locations and the viewers by sharing traditional recipes prepared during the Easter holidays, traditional Moldovan practices observed during Easter, and pictures that portray the typical Easter atmosphere in rural Moldova. The campaign reached more than 211,000 people through social media channels.

MCP Launches the “Be Our Guest, Again!” Awareness Campaign to Reopen Tourism and Encourage Tourists to Visit Moldova after the COVID Pandemic

In light of the gradual global re- launch of the tourism industry, MCP, in partnership with the National Association of Inbound Tourism (ANTRIM), initiated an awareness campaign called “Be Our Guest, Again!” to encourage tourists to visit Moldova. The campaign aims to promote Moldovan tourism experiences, including soft adventures, wine, Caption: Visual of the MCP-supported “Be Our Guest, Again!” promotion campaign to re- and gastronomy, and inspire launch tourism. Credit: ANTRIM diaspora, international, and local guests to explore national tourist attractions and experience Moldavian hospitality and scenery.

Building on the success of the 2017-2019 “Be Our Guest” campaign, which resulted in a 20 percent increase in the number of foreign tourists, the new campaign announces the relaunch of tourism in Moldova and invites visitors to discover Moldova’s tourism offerings. More than 40 small wineries, 34 rural guesthouses, and dozens of soft adventure tourism companies, hotels, tour operators, and tour guides supported by MCP joined the campaign and opened their doors for visitors. The campaign was developed in partnership with a group of young creatives from Moldova, including Daniela Donici, journalist and Volt cinematography, who produced a video spot to invite former international guests and members of the diaspora to visit Moldova again. The campaign will be held throughout June- July 2021 and will be promoted through TV and online channels, including Youtube, Facebook, Instagram and TikTok.

The global outbreak of COVID-19 has brought the world to a standstill, with tourism being the worst affected out of all major economic sectors. Restrictions on travel and a sudden drop in consumer demand led to an unprecedented fall in international tourist numbers worldwide and global revenue losses of $1.3 trillion. MCP has been providing strategic assistance to ensure a sustainable and resilient recovery for Moldova’s tourism industry in the post-COVID era. The Project’s strategic investments in Moldova’s international awareness and communication campaigns have reinforced the country’s position as an attractive regional tourism destination and registered a 5 million reach among local, diaspora, and regional travelers.

International Publications Recommend Moldova as a Must Visit Destination after Re-Opening Borders for Tourism

ANTRIM launched an international awareness campaign with MCP’s support, promoting Moldova as an attractive tourism destination after the re- opening borders in light of the COVID-19 pandemic. Over 190 international media outlets from 17 countries promoted the campaign, including Yahoo Finance, Markets Insider, International Business Times, and Europa Press, which Caption: News article featuring top 5 reasons to add Moldova to the post-pandemic travel list. have an average potential Credit: Yahoo Finance audience of 62 million views. The press release was disseminated through the international media services provider Cision PR and generated over 20,000 views. The press release highlights the top five reasons to visit Moldova, including slow-life tourism, soft adventure experiences, wine, and gastronomy, and historical and architectural tourist attractions. In addition, it informs the international audience about the 20 Moldovan hotels, rural guesthouses, and wineries, that have received World Travel and Tourism Council ‘Safe Travel’ accreditation, demonstrating their commitment to strict health and safety rules, gaining increased trust from travelers. The campaign mobilized increased support from over

70 wine writers from the U.S., the UK, Italy, Poland, Romania, France, Portugal, and Croatia, who promoted Moldovan wines and tourism destinations on their social media pages and blogs.

MCP supports ANTRIM to expand international awareness about Moldova as an attractive tourism destination in the heart of Europe by deploying complex digital awareness campaigns under the Tree of Life national tourism brand. In addition, MCP has supported the organization of over 50 press visits for over 200 international journalists, facilitating the promotion of Moldova’s tourism potential in over 100 magazines and specialized platforms, including the National Geographic, Vogue, CNN, BBC travel, Euro news, Gambero Rosso, and others.

New Deal Europe – a New B2B Platform to Expand Market Linkages

During the reporting quarter, ANTRIM, in partnership with MCP and the Moldovan Investment Agency, supported six tourism businesses, including hotels, wineries, and tour operators, to participate at the online B2B event New Deal Europe on April 10, 2021. Participants promoted Moldovan tourism offers and pitched their tourist experience packages to travel consumers to foster new business relationships. The event provided a platform to network, exchange ideas, stay informed, and negotiate business deals with market players and tourism service providers from all over the world, despite the COVID- 19 pandemic and current travel restrictions. Given the digital format of the event, ANTRIM offered technical support to the Moldovan participants, helping them better present their offers.

BIT Milano, an event traditionally attended by Moldova, was also held online during the reporting quarter. ANTRIM and MCP facilitated the participation of seven businesses at the event. Still, the tradeshow registered lower satisfaction rates than in previous years due to the difficulties of navigating the digital platform, and an overall digital events fatigue communicated by the participants. Businesses are

eager for the COVID-19 travel Caption: Robert Dee from New Deal Europe, Alisandra Priante from UNWTO and David restrictions to ease up so that Benitez at the online B2B event New Deal Europe. Credit: ANTRIM they can resume physical participation at international tradeshows and B2B events.

MCP has consistently supported Moldova’s participation at international tourism tradeshows, B2B events, roadshows, informational tours for potential partners, and customized business-to-consumer (B2C) events. In total, 29 tourism companies, including tour operators, wineries, event organizers, and other tourism businesses, shared a single country booth under the Moldovan Tree of Life national tourism brand at 26 international tourism fairs in eight countries and delivered multifaceted awareness and promotion activities, including press workshops.

Feature STORY: The Tourism Forum of Moldova organized to raise awareness of the inbound tourism sector and support the industry emerge stronger from the crisis

Moldova Tourism Forum 2021 was held on May 27-28, 2021 by The Moldovan Investment Agency with strategic MCP support. The online event connected sector stakeholders, as well as future tourists waiting to discover an untapped destination. The agenda included discussions, case studies, and workshops related to global trends and best practices, regional initiatives, and success stories of flexibility and compliance.

“Tourism destinations around the world are adopting strategies to cope with the aftereffects of the COVID-19 pandemic, and now is the right time for Moldova to re- strategize. To this end, USAID has been assisting the Moldovan Government in developing a new Moldova Tourism Development National Plan to outline a forward-looking path through 2026. The new tourism strategy capitalizes on recent growth while adapting to new realities. It focuses on interactive tourist experiences while developing tourism infrastructure and spurring innovation. USAID is hopeful that the new tourism strategy will be adopted by the Moldovan Government in the immediate future.” Scott Hocklander, USAID Moldova Missions Caption: Scott Hocklander, USAID Moldova Missions Director. Credit: Director Invest Moldova

International speakers, including H.E. Michael B. Christides, Secretary General BSEC; Alessandra Priante, Director for Europe of UNWTO; Ibrahim Osta, Chief of Party at USAID Developing Sustainable Tourism in Bosnia and Herzegovina; and Friedrich Pfeiffer, Orchestra Conductor at Vienna State Opera and DescOpera; shared their vision, experience, and tools to make tourism more sustainable, inclusive, and resilient. MCP was represented through the participation of Mr. Scott Hocklander, USAID Moldova Missions Director, and H.E. Anna Lyberg, Ambassador of Sweden to the Republic of Moldova, who extended their welcoming remarks during the event opening, as well as by Doina Nistor, MCP Chief of Party, who moderated the first panel - Strategic Vision on Tourism Development Worldwide, and Diana Lazar, MCP Deputy Chief of Party and

“I would like to express my support for the cooperation and dialogue between Moldovan government and the tourism industry and to urge both to be visionary, to find the best way to overcome the crisis and rethink the future sustainable tourism.”

H. E. Anna Lyberg, Ambassador of Sweden to the Republic of Moldova Caption: H. E. Anna Lyberg, Ambassador of Sweden to the Republic of Moldova Credit: Invest Moldova

Tourism Industry Lead, who held a comprehensive presentation of MCP’s strategic support for long-lasting development.

The Forum focused on Moldova’s strategy for relaunching tourism, as well as various initiatives to meet the new tourism demand – marketing campaigns, touristic routes, support packages etc. Lastly, the Forum celebrated the tourism ambassadors, newcomers, and those who transformed the crisis into opportunity during the awards ceremonies that took place at the end of each day.

Integrating Moldova into Regional Tourism

The COVID-19 pandemic has significantly impacted the tourism industry worldwide, generating losses in global revenue of more than $1.3 trillion in 2020. However, despite the travel restrictions, Ukraine welcomed 3.4 million foreign visitors in 2020, one- third of which were from Moldova (933,000 visitors). At

Caption: from left to right: MCP DCOP Diana Lazar, MCP COP Doina Nistor, Invest Moldova the same time, 13.5 percent of Director Rodica Verbeniuc, ANTRIM Executive Director Victoria Bucataru attending the Moldova the tourists visiting Moldovan Tourism Forum 2021. Credit: Diana Lazar, Facebook Page wineries and guesthouses in 2020 came from Ukraine, exceeded only by Romania with 31.4 percent.

The increasing importance of regional tourism amid the international traveling restrictions

prompted MCP to facilitate a successful collaboration between ANTRIM and the Hospitality Association of Ukraine, supported by the USAID Economic Development, Governance, and Enterprise Growth (EDGE) Project. As part of the MoU signed between the two associations, several online public events discussing the prospects of regional tourism, and B2B sessions on the development of common tourism products, and Destination Management Organization workshops have been planned for March-September 2021. MCP has provided consistent technical assistance and support to ANTRIM via the grant and the technical team effort, to conceptualize, plan, implement and expand the new regional partnership between ANTRIM (Moldova) with similar organizations in Ukraine, Georgia, Armenia, Belarus. Also, this shall serve as a bridge towards a future collaboration of ANTRIM with USAID EDGE project, announced to transition tourism industry assistance from MCP from summer 2021.

During the reporting period, the Hospitality Association of Ukraine and ANTRIM hosted a five-day workshop for Moldovan tourism businesses on developing new tourism products targeting Ukrainian travelers. As a follow-up on this activity, ANTRIM plans to Caption: workshop for Moldovan tourism businesses on development of new tourism products organize a few study trips for targeting Ukrainian travelers’ cover. Credit: ANTRIM about 20 tourism professionals to K yiv to test their new skills in action. This study visit is planned to be funded as a follow-on activity by EDGE/USAID, in the second part of 2021.

As part of MCP’s assistance to the tourism industry, namely, within the White Paper on Tourism Regulatory Framework reform and the Draft Tourism-2026 Strategy, ANTRIM was advised and mentored in planning new activities aimed at developing on Destination Management Organizations in Moldova and to play an active role in leading, training.

OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

PROGRAM 3. Sustainable tourism policies and a friendly business environment

Over the life of the project, MCP has been provided extensive technical assistance on legal, fiscal, and economic aspects of amendments to legislation governing the tourism industry, including the elaboration in 2018 of the Tourism Whitepaper and the development of the new Tourism Development Program 2025 which is now in the process of approval. Additionally, thanks to MCP’s Caption: Presentation of Tourism White Paper. Credit: MCP and ANTRIM’s continuous efforts, the authorities have approved legal amendments, easing doing business regulations for small entrepreneurs from rural areas, serving as a resilience measure in these unpreceded times for the industry.

ANTRIM has been MCP’s main counterpart and legacy organization in international marketing, implementing press tours, familiarization tours for foreign businesses, participating in international tourism exhibitions, workforce skill development programs, tourism product development, and lobbying and advocacy activities in the sector. MCP has been assisting ANTRIM through the grant agreement, as well as through the technical assistance, helping it become the leading inbound tourism association and an industry think tank.

New Tourism Strategy Pending Approval amid Political and Health Challenges

Reforming Moldova’s outdated tourism sector policies and regulations is a lengthy, complex, but the much-needed process. MCP engaged local and international expertise to assist the public authorities and private sector associations to develop a strategic vision for the sustainable and robust growth of the tourism industry. As such, in 2017, a common regulatory reform agenda was issued with MCP support, followed by a complex program of developing a White Paper for Tourism Regulatory Reform (published in 2018), implemented later on within several draft legislative initiatives and Government decisions, culminating with fiscal reforms in 2019 (VAT reduction at 10 percent) and business-enabling amendments voted and entered into force in July 2020.

MCP has provided technical assistance and legal expertise to both the Ministry of Economy and Infrastructure and the private sector stakeholders, facilitating a productive public-private dialogue towards a streamlined smart tourism regulatory framework. In 2019, MCP provided extensive expertise with internationally acclaimed consultants and local professional consultants to develop the new National Tourism Development Program “Tourism - 2025”. The policy draft was submitted in September 2019 but got stuck into political instability and transitions to the changing Government.

In 2020, with MCP assistance, the newly developed Strategy was revised to fit with the COVID-19 pandemic outbreak. The updated National Tourism Development Program “Tourism - 2025” and the accompanying Action Plan, have been sent to approval in fall 2020 and got again stalled down due to the political and economic crisis. Meanwhile, in Q2Y6, MCP has provided documents’ translation into Russian and English, which the tourism industry stakeholders actively use to advocate for its prompt approval. Regretfully, the draft policy is placed in a waiting mode until a new government is established after the anticipated Parliament elections in July 2021. MCP has ensured that relevant expertise is placed in both the MoEI and ANTRIM to restart its promotion once the Government is voted (tentatively in September 2021).

During the reporting quarter, ANTRIM, with MCP’s support, addressed a request to the President, asking to represent the tourism industry in the Management of the Economic Council under the President. This public-private partnership would initiate an active dialogue regarding the problems faced by the tourism industry and could catalyze the approval of the new Strategy. USAID mission in Moldova is constantly monitoring the processes around the Tourism Public Policy promotion. MCP is providing constant assistance in building a facilitating dialogue with the public authorities and the private sector.

Legal Guide for Starting a Tourism Business to Assist Entrepreneurs with most Essential Regulatory Information

In June 2020, the Moldovan Parliament approved a set of improvements to the Tourism Law to ease business regulations and enhance the country’s inbound tourism development. These improvements remove the stringent regulations applied to tourism entities and enable Moldovan entrepreneurs to replicate and apply international best practices of doing business. Knowing that entrepreneurs and start-ups in the tourism industry often do not have advanced entrepreneurial education and experience, with the vast majority of them being micro-enterprises, activities on behalf of individuals, or seasonal entrepreneurial activities. MCP offered to assist the Ministry of Economy and Infrastructure (MoEI) to Caption: Arama family at the launch of their guesthouse Casa Veche before the pandemic develop an explanatory legal outbreak in 2019. Credit: MCP guide that could be easily understood by everyone, elaborating on the most essential regulatory issues regarding the

32 initiation and organization of tourist services. The legal guide will serve to inform, guide, and encourage entrepreneurial initiatives with touristic income-generating activities, which will in turn ensure the socio-economic prosperity of Moldova’s regions.

During the reporting quarter, MCP has finalized the development of the document. Currently the Legal Guide is being reviewed by authorities before it is made available to the private sector. The Legal Guide will serve as a handbook for the tourism businesses, delivering them with for the most essential legal requirements applicable in the tourism sector.

Activity 3.1. Rethink the tourism industry: reformed policies and regulation to ensure sustainable development

ANTRIM Tourism Association Welcomes 26 New Members, Increasing Tourism Business Presence during the Pandemic

ANTRIM organized its 2021 General Assembly and welcomed 26 new members, mainly from rural areas, raising the total membership to 75 tourism businesses. Increase of number of members makes ANTRIM the largest and most representative inbound tourism organization in Moldova. USAID representative Brian Wittnebel underscored the Association’s crucial role in developing Moldova’s tourism while encouraging members to advocate for reform and adopt global trends prioritizing digitization, regional travel, and health and safety.

Despite the pandemic, ANTRIM continues to build its institutional capacity and expand its membership, serving as the leading tourism business association in the country and lobbying for institutional reforms to help sustain tourism’s post- pandemic recovery and growth. The new members, including rural guesthouses and handicraft centers from more than ten regions, including one from Gagauzia and three from Transnistria, Caption: Brian Wittnebel, Deputy Director, Office of Economic Growth, USAID, provides will pay a membership fee that welcome remarks at the ANTRIM General Assembly. Credit: ANTRIM will serve as an important income source to the Association’s annual budget. Due to the COVID-19 pandemic, in 2020, ANTRIM members did not generate any revenue for the annual budget, and the General Assembly decided to mandate the Board to plan a waiver concept on raising membership fees, giving the severe economic crisis in the industry.

During the General Assembly, the board also adopted new bylaws and concluded 2020 results while presenting the Association’s plans for 2021, focusing on local and regional

tourism development, capacity building for tourism entities, and the safe re-launch of tourism businesses after the pandemic.

INFORMATION TECHNOLOGY, ENGINEERING, AND CREATIVE SERVICES

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

PROGRAM 1. Promoting STEAM education and careers

Activity 1.1. Continue supporting the Future Classroom Lab (FCL) concept in Moldovan schools and NCDIE Center (ongoing)

On their two-year anniversary, the Future Classroom National Center organized an online event to highlight significant milestones reached throughout the years, and award 25 Moldovan teachers as Digital Ambassadors. With support from MCP, the Digital Ambassadors filmed short videos promoting digital transformation in Moldovan schools and encouraging teachers to employ digital tools and innovation to advance Moldova’s educational system. The videos were filmed as part of the “Teacher-Digital Ambassador” initiative designed by MCP, Orange Moldova, and the Ministry of Education, Culture, and Research in partnership with Soros Foundation Moldova. The event was held online and reached over 26,000 views on social media.

Through online videos, Anna Lyberg, Ambassador of Sweden; Scott Hocklander, USAID Mission Director; and Chris Perkins, Head of Programs at the British Embassy, recognized the Future Classroom Center’s impact on advancing digital education in Moldova and applauded Moldovan teachers’ flexibility and commitment to adopting change and innovation. To date, with support from USAID, Sweden, and the UK, over 1,200 schools across the country have been connected to Google for Education technologies, facilitating remote learning during the COVID-19 pandemic. The Future Classroom Center trained over 20,000 teachers, or 75 percent of the total number of schoolteachers from Moldova, on using Google for Education to advance their digital skills. To respond to the unexpectedly high demand for teacher trainings and school digitization support. MCP has also provided support to expanding the Future Classroom Center with an additional floor to create more space, which is expected to be finalized by the end of June 2021.

In the future, it is expected that nine out of ten jobs will require digital skills. To address this challenge, MCP supports the digital skills-building and literacy of Moldovan teachers and youth, facilitating access to Google Suite for Education and investing in the development of human capital in Moldova.

The Future Classroom National Center (FCC) Continues to Offer Methodological Support and Expertise to the Educational Community.

MCP supported the Future Classroom Center to develop two guides for teachers - FCL Technologies Guide and Guide on How to Design Integrated Lessons - and update the FCL Design Guide for implementing Future Classroom Lab in schools based on the most recent experience. FCC team developed the guides in collaboration with subject matter

experts engaged by MCP. They explain in detail how the FCL concept can be implemented, the methodological background and how active pedagogy can be implemented in FCLs, and how to use digital technologies and engage students in hands- on multidisciplinary projects. The guides were published online on the website https://www.clasaviitorului.md/categorie/resurse/ and are available for the free use of the educational community. The Guide on How to Design Integrated Lessons contains learning activities scenarios developed by the winners of the Teacher – Digital Ambassador program.

Moldovan Teachers Demonstrate High Demand for Google Technologies

The COVID-19 crisis led to an unprecedented shift to online learning, marking a point of no return for using technologies in education. To address the high demand for online learning and digital technologies, in July 2020, MCP facilitated a partnership with Google that enabled over 20,000 Moldovan teachers (75 percent) to access Google Suite for Education and improve their digital literacy skills. However, the closure of K-12 schools throughout the 2021 pandemic year led to an increased demand for trainings from Moldovan teachers. In only three days since the announcement for Google for Education trainings, the Future Classroom Center Caption: Chromebook at Future Classroom Center. Credit: FCL registered 300 applications from Moldovan teachers, six times greater than the available number of training spots. To facilitate the training process, MCP will design a Google tech zone within the Future Classroom Center equipped with Chromebooks, a charging station, and a smart screen. As Chromebooks run Google’s Chrome operating system, these devices make it easier for teachers and students to use Google Classroom and organize their work while schools remain closed.

To respond to the unexpectedly high demand for teacher trainings and school digitization support, MCP has also provided support to expand the Future Classroom Center with an additional floor and re-design the spaces to include six training rooms, offices for the staff, a mini-conference room, a Google tech zone, and a recording studio. MCP supports the digital skills-building and literacy of Moldovan teachers and youth, facilitating access to Google Suite for Education and investing in human capital development.

MCP Convened Leading Internet Providers to Support Gigabit Connectivity in Moldovan Schools

The commitment was sealed in an MoU signed on June 02, 2021. This public-private partnership will bring Moldova’s education system into the modern digital age by supporting digital technologies and connectivity for schools, as well as digital skills for Moldovan teachers and youth, which are crucial to continuity of education adapted to COVID-19 challenges, as well as to longer-term human capital investments in Moldova. MCP convened Moldova’s leading private telecom and internet providers – Starnet, Orange, Moldcell and Moldtelecom - MCP’s flagship initiative Future Classroom and Tekwill Project, and the Ministry of Education, Culture, and Research to sign a MoU supporting connectivity and use of digital technologies in Moldovan schools. This partnership brings competitor internet

providers together to offer free high-speed internet to schools and low-income families for 12 months to 5 years. The parties aim to connect at least 50 percent of Moldovan schools to high-speed internet.

hoto caption: Public-Private Partners at the MOU signing for Gigabit Internet Connectivity in Schools, June 2, 2021 Photo credit: Future Classroom Lab

Gigabit connectivity is the backbone for the digitalization of education. While the majority of Moldovan schools have basic internet connection, less than 10 percent of Moldovan schools have the high-speed internet that is required for today’s digital education, while 76 percent of teachers did not use technologies in education prior to the COVID-19 pandemic. The goal is to provide Gigabit connectivity for 600 (or half) of Moldovan schools by making this internet high-speed, expanding internet coverage to the entire school and making it available for use in classrooms, supporting digital inclusion of disadvantaged students through the internet at home; and developing educational internet packages for affordable Gigabit connectivity in the long- term. Implementation will be demand-driven; schools will apply for these incentive programs and have the opportunity to work with

multiple internet providers. Caption: Scott Hocklander, USAID Mission Director provides welcome remarks at the MoU signing ceremony for Supporting Connectivity and Use of Digital Technologies in Moldovan K-12 schools. During the MOU signing event, Scott Hocklander, USAID Mission Director: “USAID supports the digital transformation of Moldova’s educational system. The MoU sealed today united the efforts of both public and private partners with the common goal to support Gigabit connectivity and the use of technologies in Moldovan schools. USAID commits to align its strategic support for advancing STEAM skills and digitization of Moldova’s education through Future Classroom and Tekwill.”

Future Classroom and Tekwill in Every School will continue to provide trainings and enhance teachers’ and students’ digital skills under this partnership. Future Classroom and Tekwill are USAID’s flagship digital education initiatives that have impacted 200 schools, 20,000 teachers (or 75 percent of all teachers in the country), and 30,000 students to date.

The Ministry of Education will continue to provide laptops to teachers, with 10,000 laptops to be delivered in 2021 (covering 1/3 of teachers).

The quick-wins under the MoU are built around the three key elements of a high- performing digital education ecosystem – Gigabit connectivity (internet), digital equipment & tools, and digital skills for teachers and students.

Activity 1.2. Continuous support to the educational Robotics program

Moldovan Teachers Continued to Conduct Robotics Classes During the Pandemic

The MCP team surveyed schools included in the educational robotics network to collect quantitative data on the program indicators. 122 active robotics teachers participated in the survey and reported that they taught robotics to 4,623 students of different ages, including 1,879 girls (40 percent), over a total of 15,098. Around 18 percent of the lessons were conducted online. The data for the school year 2020-2021 is lower than in previous years; because of the COVID 19 pandemic, not all schools were able to organize hands-on activities or conduct robotics lessons online using web simulators.

Activity 1.3. Support digital skills building in VET institutions teachers

Future Classroom Center Trains 135 Vocational Education and Training Teachers to Use Google Workspace

To respond to the unexpectedly high demand for teacher trainings and school digitization, the MCP-supported Future Classroom Center trained 135 Moldovan vocational education and training (VET) teachers to use Google Workspace to ensure high-quality remote and in- class learning during the pandemic. The trainings were held online as part of the National Digital Literacy Program led by the Ministry of Education, Culture, and Research and implemented by the Future Classroom Center.

During the trainings, participants learned how to use Google for Education applications to better organize the remote learning process. The VET teachers learned to use Google forms to collect data and report to the authorities, Google Drive or Dropbox to store and synchronize large amounts of data and reports, as well as Google Meet and Google Classroom to Caption: Future Classroom Center training on Google Workspace for VET teachers. Credit: facilitate their interaction with FCL. students. The participants are expected to conduct trainings of trainers for VET teachers within the regions and villages. Prior to the pandemic, only 15-20 percent of Moldovan teachers were using digital technologies in their regular educational activities. To address the growing need for digital skills and tools for online education, MCP facilitated a national partnership with Google, which enabled over 20,000 Moldovan teachers (75 percent of

Moldovan school teachers) to access Google Suite for Education and improve their digital literacy skills during the pandemic. MCP supports the digital skill building and literacy of Moldovan teachers and youth, facilitating access to Google for Education and investing in the development of human capital.

Cisco IT Essentials course brings industry-relevant skills for VET students

With the support from the Ministry of Education, Culture, and Research, and the Excellence Center for Informatics and IT, MCP team conducted a monitoring of the implementation of Cisco IT Essentials course. Eleven teachers, who completed the ITE training in summer 2020, reported that they taught two semesters (of a total of two-years course) of the ITE course to 488 VET students. With elements of Cisco ITE, the updated IT course was implemented country-wide in the VET system, and taught to approximately 16,000 VET students, from all the institutions.

PROGRAM 2. Centers of Excellence development and support

Activity 2.1. Strengthen the Artcor Creative Industries Center

COR Association Welcomes Moldcell Foundation as a Strategic Partner Committing $50,000 for 2021-2022 to Ensure the Sustainability of the Artcor Center

Caption: Steven Fisher, UK Ambassador provides welcome remarks during the Irina Strajescu Moldcell Foundation director and Steven Fisher, UK 3rd edition of the Creative Industries Festival organized by Artcor Creative Ambassador at the inaugural of the branding plaque of Moldcell Center. Credit Moldcell Foundation in the Artcor Creative Center. Credit Moldcell

The Creative Industries Association of Moldova (COR) welcomed Moldcell Foundation, Moldova’s second-largest telecom provider, as the first private partner to support community-building activities of Artcor Center for 2021-2022. This was announced during the Creative Industries Festival on June 2, 2021, where Irina Strajescu, Executive Director of Moldcell Foundation, and UK Ambassador Steven Fisher opened the festival. Moldcell Foundation’s philosophy stems from catering towards sustainable prosperity, and it aims to support youth, culture, and creative entrepreneurship in Moldova by co-funding, alongside MCP, the training courses, entrepreneurship programs and cultural events organized by the Artcor Center. MCP facilitated the partnership between Moldcell Foundation and Artcor to spur the development of Moldova’s creative and digital sectors and increase their

competitiveness in the international market. The partnership will equip Moldovan youth with forward-looking digital skills in high-potential creative fields and will support the development of successful creative businesses.

Activity 2.2. Establish the Mediacor Digital Center

The UK's Minister for European Neighborhood and the Americas Visits the MCP-supported Mediacor Technology Media Center and Underscores the Role of Technologies in Advancing Media Development

The UK's Minister for European Neighborhood and the Americas, Wendy Morton, visited Mediacor Technology Media Center (Mediacor) and met with Moldovan media and production studios that expressed their interest in becoming Mediacor residents. The Minister toured the Mediacor Caption: The UK’s Minister for European Neighborhood and the Americas, Wendy Morton, facilities, which are under visits Mediacor Technology Media Center. Credit: Olesea Galusca, MCP. construction, including two From left to right: Stefan Nahaba, CEO at Raketa Production Studio; Steven Fisher, British Ambassador to the Republic of Moldova; Wendy Morton, the UK’s Minister for European video production studios and Neighborhood and the Americas; Igor Sarov, rector of Moldova State University; Alex Stirbu, the training center for the CEO at ASTI Studio; Doina Nistor, MCP COP. Advanced Journalism School. Witnessing first-hand the virtualization technologies used by Raketa Production and ASTI studios, the Minister underscored the importance of adopting cutting-edge technologies to advance innovation and disrupt traditional media. With current funding estimated at $3 million, Mediacor builds on a public-private partnership between Moldova State University and the Association of Creative Industry Companies COR, facilitated and supported by MCP.

The Mediacor Center is under construction and opens in the fall of 2021. Once complete, Mediacor will house high-value pre-and post-production facilities, accessible networking, and co-working and learning areas to foster collaboration between Moldovan digital media start-ups and stakeholders. U.S. data shows that digital media The UK’s Minister for European Neighborhood and the Americas, Wendy Morton, provides revenues increase at a pace remarks during her visit at Mediacor Technology Media Center. From left to right: Wendy of 5 percent per year, while Morton, the UK’s Minister for European Neighborhood and the Americas; Igor Sarov, rector of Moldova State University; Steven Fisher, British Ambassador to the Republic of Moldova. traditional media declines by Credit: MCP 2 percent per year. The

Center will foster novel digital media technologies such as virtual/augmented reality

(VR/AR), surround sound design, motion capture, 3D animation, and social media, which disrupt the traditional media landscape and cater to modern young audiences.

Activity 2.3. Support the establishment of the Balti Innovation Center

The Construction of the Balti Regional Innovation Center Continues to Progress

During the reporting period, MCP facilitated the establishment of a partnership between the National Association of ICT Companies (ATIC)/Tekwill Project and Balti State University to become a resident of the Balti Regional Innovation Center, which is under construction. Draexlmaier, Moldova’s largest automotive company, initiated the procurement process for endowing a training area in the Innovation Center. Starting September 2021, Draexlmaier, in partnership with Balti State University, is planning to establish a new master’s program called Technical Product Management.

Balti Regional Innovation Center will offer laboratories, training rooms, co-working areas, and business offices for startups in ICT, automotive, creative, fashion manufacturing, and other regional industries. The Center will create new opportunities for nearly 4,500 students of Balti University. The Balti Regional Innovation Center builds on a successful $2 million public-private partnership, with the Moldovan Government contributing $1.6 million for the refurbishment of the Center’s building. The National Association of ICT Companies (ATIC) via the Tekwill project made additional investments (an estimated $250,000), the automotive industry via the Association of Manufacturing Industry Employers (APIP) and the Balti Free Economic Zone. The Center has been under development since 2017 and is expected to open in December 2021. Activity 2.4. Strengthen the FabLab network

FabLabs in the Capital and the Regions Continue to Strengthen Their Capacity and Engage Communities in Engineering Activities

FabLabs – open spaces equipped with technical equipment for making and prototyping new products and building engineering skills for students and the community – are key for the emergence of new precision engineering expertise. To drive rural entrepreneurship and ensure access to innovation and technology in the capital and rural regions, MCP supported the regional FabLabs and FabLab Chisinau with necessary supplies for their activities, management support and guidance in the implementation of their initiatives. The Moldovan network of FabLabs includes six regional FabLabs and the national FabLab in Chisinau, linked with over 1,750 FabLabs worldwide. This quarter, the FabLab community was involved in Caption: FabLab Moldova Community more than 70 activities, including the Credit: FabLab Chisinau (fablab.md)

FabLab Academy, which was held exclusively by the FabLab Chisinau, and other activities such as Family Time, which were replicated by all FabLabs across the country. More than 2000 people visited the FabLab facilities, while half of them took an active role in FabLab activities. FabLab Chisinau alone engaged 400 participants during this reporting period.

FabLab Chisinau is one of the largest (700 square meters) small-scale prototyping and production workshops in Eastern Europe. It is equipped with state-of-the-art, computer- assisted equipment and machinery for digital manufacturing, industrial design, and engineering. Among the equipment are sophisticated tools used in the electronics, robotics, furniture, and machine-building industries. MCP focuses on strengthening the institutional capacity and consolidation of the FabLab Chisinau community. This quarter, the FabLab Chisinau team developed a series of activities within FabLab Academy, where 13 young engineers developed their skills and competencies in using the FabLab equipment and microelectronics, as well as strengthened their soft skills (planning, management, and public speaking). The

FabLab Chisinau team also Caption: Participants at Family Time activity ‘Building a Glider’ organized by FabLab developed two Family Time Chisinau. activities for children to Credit: FabLab Chisinau (fablab.md). develop their engineering skills by building gliders and birdhouses

Activity 2.5 Support the CIRCLE Laboratory Cluster at TUM

This activity was completed in Q2 FY21.

Activity 2.6. Facilitate communications and event management for Centers of Excellence

Artcor Residents Monetize the First Creative Cultural Project Developed Through Co-Working

Karen Grigorean and Oxana Capatina, graphic designers and Artcor Creative Industries Center residents, launched a creative cultural project on motion design and projection mapping. Initially specialized in static graphic design, Karen and Oxana partnered to learn and co-create an animated interpretation of a wine legend that was projected on a pyramid of barrels during the Creative Industries Festival. The Chateau Vartely winery funded the motion design services, Caption: Wine legend mapping projection by Karen Grigorean which showed a great interest in interactive and and Oxana Capatina at the Creative Industries Festival, 3rd edition. Credit: MCP. immersive creative technology.

Other Moldovan wineries and tourism businesses attending the festival expressed their desire to replicate this model and collaborate with Moldovan graphic designers to create projection mappings that would help them attract tourists and promote their services. The Creative Industries Festival ended with a sold-out projection mapping show displayed by Karen and Oxana. Caption: from left to right: Olesea Galusca, Creative Industries Development Manager at MCP supports the MCP; Brian Wittnebel, Deputy Director, Office of Economic Growth at USAID Moldova; Madelene Eichhorn, Program Manager at the Embassy of Sweden; Steven Fisher, UK development of Artcor Ambassador; Irina Strajescu, Director of Moldcell Foundation; Diana Lazar, MCP DCOP; Creative Center as a platform Sergiu Rabii, ICT & Creative Team Leader at MCP attend the 3rd edition of the Creative for co-working, learning, and Industries Festival organized by Artcor Creative Center. Credit Moldcell exchanging ideas to enhance the promotion and export of creative services and stimulate collaboration between industries. To date, nearly 2,800 companies work in the creative industries, generating more than $198 million in exports in 2019.

OBJECTIVE 2: EXPANDED MARKET LINKAGES

PROGRAM 3. Grow Moldova as an IT and creative services industry destination

Activity 3.1. Support a bridge program for Creative Services Industry

MCP Supports Moldovan Creative Professionals to Become Internationally Certified by US and German Mastering and Animation Academies

Music composer Ilie Gorincioi and 2D animator and storyboard artist Lev Volosin were the first Moldovan creative professionals to receive international certifications from renowned audio mastering and animation academies based in Germany and the U.S. Attaining this certification enabled them to advance their creative skills and become internationally accredited trainers at the Artcor School, where they provide three-month professional courses in sound design and music production, as well as 2D and 3D animation. Both creative professionals own and are part of creative studios that are members of the Moldovan Creative Industries Caption: Visual with Lev Voloshin, first animator in Moldova certified by Animator Mentor (USA). Credit: MCP

Association board. Ilie Gorincioi is the founder of Tadeus Music Studio. He has previously written music for Disney movies and worked with the German film score composer and record producer Hans Zimmer. With MCP’s support, he took a pro-mixing online coaching course at the Mastering Academy in Germany and became a certified Mastering Engineer.

MCP also supported Lev Volosin, an animator at Simpals Studio and winner of multiple international awards for the animated movie “Aripi” (“Wings”), to attend a storyboarding course and workshops at the U.S.-based online animation school “Animation Mentor” and receive international certification. The six-week course enabled Lev Volosin to fine-tune his storyboarding techniques and improve his portfolio while also establishing connections with creatives from all over the world. Animation Mentor has an alumni community of more than 5,000 students working for studios like Pixar, DreamWorks, Industrial Light & Magic, Laika, and WETA. MCP supports Moldovan creative community members to develop professionally and share their knowledge and expertise through educational programs of global relevance and quality.

Six YEP!Acceleration Startups Compete for the Grand Prize at the Creative Industries Festival

During the Creative Industries Festival, Artcor organized a Startup Battle for the participants of the YEP!Acceleration entrepreneurial program, providing a platform for exchanging business ideas and investing in startups. Six teams competed for the grand prize by pitching their innovative ideas to a local and international jury, including USAID Deputy Head of Mission John Riordan, who evaluated the teams based on such criteria as innovation, scalability, and the use of technology. The winning team, BMD, developed a unique platform to connect creatives from all over the world and enhance their creative potential by helping them deliver high-quality digital services related to photo/video/music production, design, code, marketing, etc. In addition, BMD developed its own currency based on crypto and blockchain technologies to help creative industry workers monetize their time. Other business ideas included the development of a mobile application to find the nearest available car wash, an app to facilitate digital interaction between local small businesses and their buyers, and a platform to help amateur gamers advance their skills through various courses and coaching sessions.

Caption: USAID Deputy Head of Mission John Riordan awards 1st place to BMD team at Startup Battle. Credit: Artcor

The winning team will participate in the international competition YEP!Demo Day, which will be held in Kyiv, Ukraine, on June 30. In addition, BMD received a 2,000 Euro grant and mentorship sessions from Garage48, a startup hackathon series located in Tallin, Estonia, that aims to turn youths’ ideas into working prototypes.

MCP supports Artcor to provide entrepreneurial courses and enhance the creative potential of Moldovan youth. In 2021, nearly 200 Moldovan youth participated in the entrepreneurial development and startup programs Startup semester, Yep! Pre-Accelerator and the Mentorship Program for Artcor residents, receiving targeted guidance and mentorship from international specialists from Estonia, Ukraine, Moldova, Belgium, Romania, and the U.S.

Activity 3.2. Support creative industry companies to implement e-commerce solutions

The activity ended in Y6Q2 with support for the GoOnline initiative, which offered e- commerce assistance to more than 80 Moldovan SMEs, of which more than 50 percent are operated by women. MCP supported the GoOnline initiative to assess the situation in the field of e-commerce, industry legislation, and regulations, thus enabling Moldovan companies to adapt modern e-commerce tools and increase sales. In addition, MCP supported 40 local fashion brands to advance their e-commerce services through the ZIPhouse E-Commerce Acceleration Program, allowing them to develop online shops and build customer loyalty. It is expected that by 2040, around 95 percent of all worldwide purchases will take place online, and Moldova is following the trends. The e-commerce results were presented during an online conference on GoOnline organized with support from MCP in partnership with UNDP, SDC, the Moldova Investment Agency, ODIMM, and the Ministry of Economy and Infrastructure.

OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

PROGRAM 4. Legislative and capacity building support for IT and creative services industry

Activity 4.1. Support legal efforts and capacity building activities for new institutions

Moldova IT Park Approves Development Strategy for 2021-2025 and Promotes Moldova as an Attractive IT Destination for Foreign Investors

The Moldova IT Park organized a General Assembly and presented its new Development Strategy for 2021-2025, allocating to it a budget of 8.3 million lei (approx. $475,000). This budget is almost three times higher than the IT Park’s previous budget. IT Park will use it to expand the role of Moldova IT Park to manage the 7 percent flat tax incentive, facilitate a dialogue with the Government to empower the digital economy and innovation, and promote Moldova internationally as a destination of choice for IT investors and businesses. In 2019, the International Telecommunication Union (ITU) recognized Moldova IT Park as having one of the best global practices in promoting and developing the IT ecosystem. The IT Park is considered a success story of an IT-friendly business environment in Moldova and the region, fuelling significant foreign investments and IT export growth. MCP provided

strategic support for the development of this unique public-private partnership between the Moldovan Government and the private IT sector. The Park is a public institution governed by the private sector.

Caption: Natalia Dontu, Administrator of Moldova IT Park presenting the new Development Strategy for 2021-2025 at the Moldova IT Park General Assembly. Credit: Moldova IT Park

USAID and Sweden’s officials joined Moldova’s Acting Prime-Minister at the General Assembly and provided welcoming remarks, underscoring the role of the Moldova IT Park in administering IT fiscal incentives and improving the business environment to bring local tech firms out of the grey economy and attract new local and foreign investments to Moldova’s IT sector. To date, Moldova IT Park has reached an impressive number of nearly 700 IT and technology-driven firms, creating over 12,000 well-paying jobs on the market.

An independent assessment of Moldova IT Park Law, conducted with MCP’s support in 2019, indicated that Moldova has the most favorable environment in the region for IT firms from a cost perspective. The assessment demonstrated that new company creation and formalization tripled, including those with foreign capital. Moldova IT export growth accelerated from a 12 percent trend to 52 percent per year, indicating at least $62 million of additional exports.

LIGHT INDUSTRY

OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

PROGRAM 1. Continue strengthening ZIPhouse as the flagship institution in workforce development and fashion startup acceleration

Activity 1.1. Solidify ZIPhouse institutional capacity

ZIPHOUSE Launches E-commerce Directly on their Website

During this reporting period, ZIPHOUSE transitioned the hosting of their website to the Technical University of Moldova (TUM) server, which increases its operational capacity and allows the technical IT specialists from TUM to maintain and update the ZIPHOUSE website. With the support of MCP and TUM, ZIPHOUSE launched in March 2021 its online ZIPshop with more than 50 products with ZIPHOUSE and TUM branding, as well as more than 15 online courses on Fashion Design, Pattern Making, Fashion Business English and other events hosted by ZIPHOUSE Fashion Innovation Hub.

E-commerce creates a seamless shopping experience while meeting the changing consumer needs anywhere, anytime. The ZIPshop enables consumers to easily access ZIPHOUSE products, services, courses, and events from anywhere. This practice makes ZIPHOUSE more sustainable through its supply chain and reducing operation costs.

Caption: ZIPHOUSE website screenshot Credit: MCP

Activity 1.2. Boosting creativity, entrepreneurship and building community

Wardrobe of Tomorrow Founder Teaches How to Increase Profit Margins through International Online Marketplaces

Fashion marketplaces and online retail malls offer a flexible space that can fit the needs of the DININIMA brands. Local fashion retailers have traditionally been forced to offer discounts to increase sales and clear previous-season pieces from their stores, but marketplaces allow brands to sell their products at full price Caption: Online banner promoting ZIPhouse’s Events on Facebook . Credit: without the pressure to clear ZIPhouse stock in a certain timeframe. Using local marketplaces, brands can also optimize the product ranges offered in different categories according to local market conditions, thus increasing their profit margin. In April, Laurenti Arnault, CEO of WTVOX Magazine, founder of Wardrobe of Tomorrow marketplace, and international speaker at Moldova in Fashion Conference 2019, conducted an online training for more than 30 participants through MCP’s Level Up Acceleration Program in e-commerce. The training was addressed to all e-commerce merchants and covered how to identify the most relevant marketplaces, the benefits of various international marketplaces and how to expand the online store with a minimum of investment.

MCP Supports the Endowment of Two Photo Studios to Help Moldovan SMEs Develop Their E-commerce Businesses

The global rise of e-commerce makes product photography an essential element in convincing consumers to buy products. To help Moldovan small and medium enterprises (SMEs) advance their e-commerce businesses and attract new customers, MCP supported the endowment of two professional photo studios – PNA and Natalia Mitereva photo studios – that will provide a full range of photo and video services to enhance local businesses’ online presence and visibility. MCP equipped the studios with specialized photo and video equipment and furniture valued at more than $7,500, enabling local SMEs to develop quality visual content that will boost their sales and

Caption: Lightening equipment for Mitereva photo studio. engagement with customers. In order to help Credit: Mitereva.photo studio. Moldovan fashion brands attract new clients, MCP

aims to support DININIMA brands and ZIPhouse residents to get a 30-50 percent annual discount at the photo studios, as an incentive.

A recent study by Justuno, one of the most powerful conversion marketing and analytics platforms in the world, shows that 93 percent of consumers consider visual content to be the key deciding factor in a purchasing decision. By supporting the development of the photo studios, MCP will help Moldovan e-commerce businesses secure more customers and achieve maximum productivity while recreating the offline shopping experience online.

Activity 1.3. Developing industry skills through advanced technical education and training

ZIPhouse Centre of Excellence in Design and Technology Launches Its First Online Fashion Design Course

Valentina Budu, the resident of the ZIPhouse Innovation and Acceleration Hub, launched an online fashion design course for Moldovan students eager to advance their knowledge and skills in fashion. The course consists of ten video lectures on the basics of fashion design, including the history of clothing construction, costume design, fabric principles, fashion Caption: Online banner promoting ZIPhouse’s first Fashion Design Initiation online sketching, and mood board development. As a former student of the Technical University of Moldova, Valentina developed a strong passion for fashion design and has continued to explore this field within the ZIPhouse Innovation and Acceleration Hub. In 2017, MCP supported Valentina to take a course on Fashion Design and Brand Management at Polimoda, one of the top ten fashion schools in the world, where she advanced her skills in launching a fashion brand and developing a fashion business.

Valentina’s Fashion Design Initiation Course is part of the ZIPhouse Fashion Academy, which provides local specialists with advanced technical trainings based on practical knowledge and skills development. To date, MCP has supported more than 900 local industry representatives, of which more than 800 are women, to improve their skills and knowledge with the ZIPhouse professional trainings.

MCP Supports the Development of a 3D Fashion Prototyping Guide to be Implemented within the Technical University of Moldova and ZIPhouse’s Educational Programs

The apparel manufacturing industry is increasingly digitizing, with many global fashion brands embracing digital transformation and 3D creation tools to enhance sustainability along the supply chain. To help Moldovan fashion designers improve design workflow and address waste management issues in the apparel manufacturing industry, during this reporting period, MCP facilitated the development of a 3D fashion prototyping program that will be implemented by the Technical University of Moldova and the ZIPhouse Center of Excellence in Design Caption: 2020 Moldova in Fashion Conference. Credit: ZIPhouse and Technology as part of their curriculum. The guide complies with international best practices in 3D fashion design and was developed by Marielle Pesant, a trainer at Instituto Europeo di Design, the biggest international network of fashion, design, visual communication, and management schools.

Though widely implemented by digitally advanced apparel manufacturers in Romania and other developed countries, 3D prototyping is a new type of virtualization technology that no Moldovan factories have yet begun to use. Introducing the 3D fashion prototyping program in the curriculum will enable Moldovan students to study digital fashion as of fall 2021 and prepare for the future of apparel jobs.

By implementing 3D technology and software, Moldovan fashion designers will eliminate unnecessary physical sampling and waste generated by pattern cutting or fittings while also shortening production and lead times. Adopting 3D technologies will also enable Moldovan manufacturers to create 3D prototypes and use them as final products for e-commerce, thus enhancing online sales and protecting the environment.

MCP Supports 50 Students from Vocational Schools to Improve Their Professional Qualifications in Apparel Manufacturing and Design

More than 50 students from 15 regional Moldovan vocational schools improved their manufacturing and design skills within the MCP-supported national contest “The Best in Haute Couture.” Over two months, the students engaged in a series of workshops and received guidance on modeling, design, and technology, exchanging ideas and learning best practices from local specialists. In the end, the participants created their collections, which

were evaluated in the categories of fashion design, constructive modeling of clothing products, and fashion technology; the collections were also assessed on the level of mastery, competence, and professionalism of the tailor. MCP awarded the winners from each of these categories with materials and fabrics in the value of 2000 MDL (approx. $115) to create their future

Caption: Awarding ceremony of the MCP-supported national contest “The Best in Haute collections. Couture” Credit: MCP.

During the event, the participants learned about the opportunities offered by the ZIPhouse Center of Excellence and Design, which provides a platform for professional growth and future employment in the apparel manufacturing sector, as well as within the ZIPhouse and APIUS (the Light Industry Employers’ Association) networks. With support from MCP, The Excellence Center in Light Industry in partnership with the Ministry of Education, Culture, and Research organized the contest.

MCP supports capacity building and employee development to shift businesses towards sustainability and increase the light industry’s competitiveness on the market. To date, the light industry employs 26,000 people, 85 percent of whom are women, providing an alternative to migration and building a competitive workforce at home in Moldova.

PROGRAM 2. Strengthen the SMART (Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency) Factory Program

Activity 2.1. Implement complex innovative methods to streamline manufacturing and productivity growth

MCP Supports Apparel Factories to Gain International Certifications to Attract New Clients and Qualify for Participation in Moldovan Public Tenders

During this reporting period, MCP successfully concluded its SMART factory program (Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency) that assisted 24 Moldovan apparel factories to implement social compliance, occupational safety, and integrated quality management systems, ensuring a healthy work environment for more than 4,700 women working in the apparel manufacturing sector and making steady improvements in attracting quality-conscious European buyers while increasing long-term sectoral competitiveness.

MCP assisted three apparel companies - Gemini Clothing factory from the Soldanesti district, Coralav Lux from Balti, and Johannes Group from Telenesti district - to receive international certifications and qualify for better working conditions, and improved production efficiency in line with international supply chain demands. The preparation for certification took more than 10 months, with MCP co-funding the cost of the certification and providing critical expertise to improve the factory’s working processes. As a result, both Coralav Lux and Johannes Group, which provide services for international clients, received Integrated Management System certifications according to international standards ISO 9001:2015 (Quality Management System) and ISO 45001:2018 (Occupational Health and Safety Management System). The companies provide jobs for more than 450 employees, most of whom are women, keeping families together and reducing outmigration. The factories produce high- quality womenswear for big-name European clients who are under increasing pressure from customers and shareholders to guarantee that their supply-chain is socially responsible.

As a part of the EU fair trade and sustainability fashion sector policy, social compliance and ISO certifications are becoming prerequisites for EU clients and a non-legal barrier to access to the EU market. After obtaining the international certifications in May, Coralav Lux signed a contract with the French byer IKKS for 2000 garments (1250 women's blouses and 750 dresses). Coralav Lux also received Photo caption: Integrated MS certification received by Moldovan apparel orders from Italian clients Max Mara and factory Coralav Lux. Credit: Coralav Lux. Miroglio.

Obtaining ISO certification has also enabled Gemeni Clothing to qualify for and participate in large Moldovan public tenders to produce disposable protective coveralls and uniforms for border police, which has introduced ISO certification as a compulsory requirement. Considering the requirements of Moldovan public tenders, others three apparel factories that have been certified with MCP’s support, including Ionel, Artizana and Portavita, were eligible to participate in these tenders. Johannes Group noted that certification strengthened its bargaining power with international customers on the price per minute. This pool of certified Moldovan factories has gained a competitive advantage in pursuing international trade opportunities, demonstrating the increased demand for international certification and the need to support more factories in implementing social audits and integrated management systems.

Activity 2.2. Create brands and products aligned with fashion trends

The activity was completed in Q1Y6.

OBJECTIVE 2: EXPANDED MARKET LINKAGES

PROGRAM 3. Expanding market opportunities

Activity 3.1. Reposition Moldova as a full product manufacturing partner and support internationalization of Moldovan fashion brands in regional and European markets

APIUS Light Industry Association Promotes Moldova as a Reliable Apparel Sourcing Destination in Eastern Europe

Moldova’s fashion manufacturing industry has been severely affected by the COVID-19 pandemic, registering an 11 percent decrease in exports in 2020. Leading business partners from Italy, Romania, and France reduced manufacturing orders by 35 percent up to Photo caption: The advantages of sourcing to Moldova featured on APIUS landing page. Credit: APIUS. 60 percent.

To seek new partnerships and investments from international fashion buyers, MCP supported APIUS Light Industry Association to deploy a five-month online Business-to- Business (B2B) campaign and promote competitive advantages of sourcing to Moldova. As a result, nearly 880 EU businesses expressed interest in sourcing fashion manufacturing services to Moldova and visited APIUS’s dedicated website, accessing a database of 170 local manufacturers featured in Moldova’s first Clothing, Footwear & Accessories Manufacturers’ Guide, which was developed with MCP’s support. The manufacturers vary from apparel factories, pattern-making studios, and design bureaus to independent fashion brands. APIUS became a one-stop shop for international inquiries, providing match-making services and putting international buyers in contact with Moldovan manufacturers based on pre-selected criteria, such as production capacity, order requirements, and international certification. Most of the interested fashion buyers were from the Netherlands (191), Sweden (184), and Germany (122), followed by Finland, France, Spain, Austria, Italy, Poland, and Croatia. 125 fashion buyers (14 percent) established contacts with Moldovan manufacturers, while eight others started negotiations for collaboration.

The COVID-19 pandemic led to an unprecedented supply chain disruption, shifting the world fashion industry towards digital transformation. In this context, many EU buyers look for reliable apparel destinations closer to Europe to facilitate apparel production and distribution. Moldova is a good fit, offering a wide range of competitive advantages such as short delivery times (starting from two weeks), flexible orders with no minimum requirements (an important advantage for international buyers who aim to reduce their stocks), and ethical production standards, which demonstrate good working conditions for employees and fair-trade practices.

Six Moldovan Fashion Brands Integrated into the Elephant.md Marketplace

MCP facilitated the integration of Moldovan fashion brands Ponti, Oldcom, Vitalie Burlacu, Odevalle, Brays Décor, and Arillu into the elefant.md marketplace, to raise awareness about DININIMA brands and stimulate online sales on the local market. The partnership enables MCP-supported fashion brands to promote their online catalogs of products and reach an audience of nearly 10,000 users per day. In addition, elefant.md will disseminate a dedicated DININIMA newsletter to its over 100,000 subscribers, allowing Moldovan brands to reach new audiences and attract new customers through their e- commerce shops.

Through the E-commerce Acceleration Program, MCP has supported 45 Moldovan brands to develop fully functional e-commerce websites and build customer loyalty, generating sales of 35,000-70,000 MDL (approx. $2,000 – 4,000) per month. By the end of 2021, 12 Moldovan fashion brands will be integrated into the elefant.md and elefant.ro marketplaces, enabling them to reach a higher number of local and international clients.

Activity 3.2 Promote the Din Inima Umbrella Brand and expand domestic market

Moldova Fashion Days Reinforces the Sustainability and Promise of Moldova’s Fashion Industry 20 Moldovan fashion producers and emerging designers showcased their curated 2021 spring-summer collections at the Moldova Fashion Days, reinforcing the sustainability and

Caption: Anna Lyberg, Ambassador of Sweden, provides welcoming remarks at Moldova Fashion Days: Rebirth. Credit: Moldova Fashion Days

53 promise of Moldova’s fashion industry. The event embraced the new hybrid or “phydigital” (physical and digital) format, trending around the world. It reached an audience of nearly 90,000 viewers in Moldova through live streaming, encouraging Moldovan consumers to support local fashion sales that decreased up to 50 percent during COVID.

Anna Lyberg, Ambassador of Sweden, joined the event to deliver welcoming remarks and underscore Sweden’s support for the development of the Moldovan light industry, while applauding the local designers’ commitment to embrace sustainability and focus on greater ecological integrity and social justice. It is expected that 76 percent of the European retails will employ a sustainable product purchase strategy. Moldovan designers are increasingly adopting sustainability ethos, such as eco fabric dyes (Bombonici apparel factory) and clothing from recycled materials (Ecaterina Verbitkaya fashion designer).

Like Lavielace and Alina Bradu, Niche Moldovan designers are adopting a made-to-measure business model, reducing unsold stock and post-consumer waste. MCP supported designers participating at Moldova Fashion Week to film short videos telling viewers about their brand, inspirations, and the manufacturing process.

Moldova Fashion Days were organized by the APIUS Moldova Caption: Anna Lyberg, Ambassador of Sweden attends Moldova Fashion Days 2021: Rebirth. Credit: Moldova Fashion Days Light Industry Employers Association with support from MCP and local private sponsors and media partners, contributing to its sustainability. The Fashion Days places Moldova on the global fashion calendar, building recognition for Moldovan fashion brands and spurring sales on the domestic market.

MCP Supports DININIMA Digital Campaign to Increase Sales on Local Markets

With MCP’s support, the Light Industry Employers association (APIUS), launched a two- month digital campaign to raise awareness about the e- commerce websites of DININIMA brands and stimulate online sales on the local market. As part of the E- Commerce Acceleration Caption: Online banner of the MCP-supported campaign “DININIMA Comes to Your House”. Program supported by MCP, Credit: DININIMA over 30 mature DININIMA brands have developed fully functional e-commerce websites, building customer loyalty and generating sales of 35,000-70,000 MDL (approx. $2,000 – 4,000) per month. To increase

54 awareness about the e-commerce shops and help Moldovan brands attract new customers, MCP supported the integration of an online shop feature on the DININIMA Facebook page.

The online shop offers access to a range of DININIMA brands and facilitates customers’ interaction with Moldovan fashion products. The final digital campaign has created 12 Facebook shops with over 100 products (Arillu, Ponti, Oldcom, Vitale Burlacu, Anne Popova, Bombonici, Oliseya, Maxikids, Ajoure, Maicom, Vivi Art Boutique, Fashion Privilege Tuxedo) 26 posts on social media reaching around 1 million impressions to over 246 thousands unique people, over 10k clicks on brands shops. In addition, MCP supports the integration of DININIMA brands on local marketplaces such as elefant.md, FromTheHeart.shop, and a1.md, which generate an online traffic of up to 10,000 users per day. Struggling with an 11 percent decrease in production volumes due to the COVID pandemic, Moldovan apparel factories and designers are re-thinking their business models and adopting new fashion trends focused on sustainability and digitization. Through the E- commerce Acceleration Program, MCP supports nearly 50 Moldovan brands to develop fully functional online shops and increase their online sales, by setting up online payment systems, streamlining customs clearances, ensuring customer digital invoicing, and managing international logistics for local and international markets.

APIUS Organizes a Pop-Up Shop to Promote DININIMA Brands and Enhance Domestic Sales

The Moldovan Light Industry Association (APIUS), in partnership with MCP, organized a pop-up shop to promote DININIMA brands and enhance sales on the local market. During the three-day event, eight mature and emerging brands, including Georgette, Sekana, Julia Allert, Haskel, Kate Gri, Odevalle, and LS Design, presented their collections to the public, generating sales of nearly $6,000. The event was held at Digital Park and was attended by more than 300 guests.

MCP supports industry association APIUS to organize innovative promotional activities like pop-up shops to encourage local designers and boost domestic sales. The pop- up shops offer Moldovan brands a platform for promotion and further development towards international exports. In 2020,

Caption: Fashion Spring Insight Week guests browsing through DININIMA pop-up more than 120 local brands collections Credit: MCP joined efforts under the DININIMA country brand and leveraged more than $365,000 investments to enhance sales and increase promotion of Moldovan brands on the domestic market, while MCP invested in DININIMA umbrella visibility and various marketing campaign for brand awareness and sales increase In Q3Y5, MCP supported the brands by facilitating media coverage and producing marketing materials such as photo and video look books. In addition, MCP provided e-commerce support to 30 digitally ready DININIMA fashion brands to reshape their business and increase online store readiness for the domestic market.

OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

PROGRAM 4. Assist APIUS to become a strong professional and industry association

Activity 4.1. Strengthen APIUS institutional capacity

MCP supported APIUS Association Partners with UNDP to Facilitate Cross- River Cooperation

APIUS attracted a new development partner - UNDP, which awarded in February 2021 the association a grant of about $45,000 to facilitate cross-river cooperation and access more opportunities while embracing a circular business model, resulting in the launch of STOCKTEXTIL.MD this quarter. The platform enables APIUS members from the right and left banks of the Nistru River to exchange information about stock leftover from their manufacturing supply chain and compensate for shortages of raw materials and equipment. Stocktextil offers Caption: APIUS Facebook page”. Credit: APIUS Caption: APIUS Facebook page”. Credit: APIUS many benefits to its platform members such as brand visibility and promotion on social networks, resilience in local producers’ raw material supply chain, reduction of storage, the possibility of creating local partnerships, and the possibility to access a wide range of unique products at a symbolic price.

APIUS members participated in a meeting with the President of the Republic of Moldova, Maia Sandu

APIUS is a platform to support and lobby members’ interests and defend their common economic, technical, and legal interests requests to offer them the possibility to conduct the fair and transparent entrepreneurial activity.

The APIUS board members met online on April 8, 2021, with the President of the Republic of Moldova, Maia Sandu, to discuss the crisis in the light industry sector. The meeting participants addressed the following topics:

• Inclusion of light industry in the list of economic sectors most affected by the COVID-19 pandemic. • Attracting external funds and diversifying funding sources to unblock the crisis in the sector. • Creation of a credit guarantee fund by the state. • VAT exemption from the import of raw materials and equipment for production. • Reduction of VAT on domestic sales of clothing, footwear, knitwear, accessories, and leather goods. Caption: APIUS Facebook page”. Credit: APIUS • The future of light industry in e-commerce and the possibilities for recovery and growth.

The head of state expressed her willingness to support the business environment in overcoming the crisis and economic recovery, noting that there is also a great external openness to help us meet the challenges.

Developing the New Post-Covid Recovery Vision for the Light Industry

The COVID-19 pandemic had major social and economic effects on the industry. Moldova’s apparel exports in the year 2020 fell by more than 13 percent, as Moldova’s top business partners in Italy, Romania, and France reduced manufacturing orders. EURATEX, the European Apparel and Textile Confederation, reports a 17 percent fall in its clothing sector turnover and is now developing a new strategy for recovery built on fair trade, sustainability, and digital transformation.

As a rapid response, MCP has been supporting the Moldovan Light Industry to cope with the crisis and define a resilience strategy for medium-term recovery. With MCP funding and EURATEX expertise, APIUS developed a Post Covid Recovery Policy Paper during this reporting period, which reflects the Moldovan Light Industry’s new vision to account not only for the COVID-19 pandemic but also the behavior and mindset of the new generation of consumers that place a stronger emphasis on sustainability. In the long term, the industry should align itself with new technologies, sustainability, and constant innovation without harming the environment since garment manufacturing remains one of the highest polluters in the world. Innovation, digitalization, and a green economy remain key development goals for this industry.

MCP supported Moldova's Light industry to re-think its strategy and understand how to adapt to COVID and a post-COVID world, fit into the new reality of the EU and global fashion industry, and take advantage of new opportunities. The new strategy describes what actions the Moldovan Light Industry should prioritize to improve the business environment, adapt to regional and global changes in the fashion industry and supply chain, maintain and increase competitiveness, preserve jobs, and advocate for the needed policy or regulatory changes.

Caption: Strategic Roadmap document screenshot. Credit: MCP

DELIVERABLES

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

1. Quarterly Report, Q2 FY21 2. Monthly Report, April 2021 3. Monthly Report, May 2021 4. Monthly Report, June 2021

SECTION II

PROJECT-LEVEL OUTCOMES AND RESULTS

Sector Engagement, Enhancement, and Development (SEED) Fund

During the quarter, the SEED Fund focused on implementing the SEED Fund budget of $5.510 million. In April-June 2021, the SEED Fund disbursed a total of $118,871, covering 6 existing grant beneficiaries across all industries. To date, the SEED Fund has disbursed a total of $5,487,428 or 99.6 percent of the total $5.510 million.

SEED Fund Performance through Grant Allocation by Industry through June 2021 June 2021 Wine $5,487,… (by value) Total Disbursed 1% 13% Tourism $0 33% 17% Total Wine & awarded, not 5% Wine yet disbursed* Toursim $22,572 8% Wine To be awarded 23% Tourism

*at the ER of June 2021 of 1 USD = 17.85 MDL 163 grants have been awarded through June

Local Capacity Building Program

MCP works with eleven business associations that together boast more than 1,000 members. To date, MCP’s total core grant support for the five flagship business associations is worth US $2.1 million. MCP directs most of its workforce development and trade assistance through these industry associations to increase their capacity, relevance and ensure self-reliance upon the project’s completion. Additionally, support for and integration among the sectorial associations plays a vital role in developing each industry to ensure their sustainability, despite the changes in Moldova’s government.

MCP conducted Assessment of the improvement of the Association’s capacities in the reporting period via the Organizational Capacity Assessment (OCA) tool, which allows supported sector associations - APIUS, ATIC, ANTRIM, ASW, and COR Association - to reflect upon their successes and identify areas for improvement by assessing themselves annually against the list of criteria, such as governance, management, strategic vision, member services, and satisfaction.

% Increase in Supported Averages of OCA self-evaluation tool capacities 2016 Associations 2016 2017 2018 2019 2020 2021 vs. 2021 ANTRIM 1.73 2.05 2.9 3.07 3.40 3.78 119% APIUS 1.6 2.28 2.33 2.77 3.00 3.33 108% ASW 1.68 2.22 2.6 2.65 3.10 3.40 102% ATIC 2.93 3.18 3.68 3.78 3.87 3.92 34% COR n/a n/a n/a 1.15 2.20 2.72 136% Average 1.99 2.43 2.88 3.07 3.11 3.43 100%

The self-evaluation scores, across project years, show improvements in the associations’ overall capacities to serve their members, advocate for regulatory and legislative changes, secure new sources of revenue to ensure the sustainability of MCP investment, and make streamlined management decisions. OCA allows MCP to compare scores and determine the required level and areas for targeted interventions.

An impressive 100 percent increase of capacities compared to baseline registered by monitored associations. Thus, the LOP target of 60 percent over baseline was overachieved by an additional 40 percent. The association with the greatest increase is the newly assisted COR Creative Services Industry Association with 136 percent, followed by the tourism association ANTRIM -with 119 percent, the light industry association APIUS with 108 percent, Association of Small Winemakers with 102 percent, and the Association of Private ICT Companies from Moldova – with 34 percent since this association started with a higher score and all the improvements were compared to that initial high level.

Environmental Protection

MCP continues monitoring environmental compliance in accordance with the environmental threshold determinations. None of the MCP interventions are expected to have a significant impact on the environment. As part of the environmental compliance monitoring, MCP continues online check-ins with beneficiaries to ensure that beneficiaries follow technical and environmental guidelines and collect photos and videos on progress.

As part of grants’ close-out, MCP finalized Records of Compliance with Activity Specific Environmental Mitigation and Monitoring Plans, certifying that MCP met all applicable ERC/EMMP conditions. By the end of May 2021, MCP submitted records of compliance for 150 closed grants to the COR/AOR and received COR's approvals.

Anti-Corruption

During the quarter, MCP continued to support increased transparency of operations in the selected industries by advocating for appropriate and transparent policies that reduce government rent- seeking. MCP similarly advocates for a level playing field among firms, large and small, to better ensure that firm growth and profits are based on enterprise productivity and innovation and not connections. Furthermore, Chemonics and its employees maintain high ethical conduct standards in the selection, award, implementation, and oversight of Project activities. MCP employees complete on an annual basis the mandatory Chemonics training on “Code of Business Conduct”.

Access to Finance

14 New Loans in Energy Efficiency Aiming to Improve Private Sector Competitiveness and Living Standards Placed under DFC Guarantee

In Q3Y6, 14 new loans valued at $105,492 were placed under guarantee by Prime Capital and $100,882 disbursed to new borrowers. To date, the financial institution has placed 152 loans under guarantee valued at $1,406,781, of which 99 percent has been disbursed. The coverage date for placing loans under guarantee will expire in 2027, and to date, the financial institution has absorbed 40 percent of the guarantee’s amount.

Since its launch, MCP has provided ongoing support for the DCA in Energy Efficiency: Performance implementation of this guarantee. through June 2021 The financial guarantee signed with Total Awarded Prime Capital in 2014 strengthens

this financial institution’s capability $1,406,781 Total Disbursed to finance loans to entrepreneurs $2,120,556 and individuals engaged in energy Remaining DCA efficiency and renewable energy amounts sectors in Moldova, stimulating economic growth. The guarantee $1,388,037 is a 15-year $3.5 million agreement. Each participating agency (USAID and Sweden) takes on 25 percent of the risk – allowing both parties to guarantee larger lending facilities and promote mutual development goals.

Public-Private Partnerships

50 Public-Private Partnerships (PPPs) Designed to Encourage Systemic and Sustainable Change Leveraged $58.13 Million in Resources, with $1.38 Million in Q3Y6

MCP integrated several types of PPPs into the program, including STEM education partnerships, centers of excellence, industry branding, and marketing alliances, which involve various partners including public sector organizations (i.e., Ministry of Economy, ONVV, Ministry of ICT), educational institutions (schools and universities), and private sector companies (e.g., Microsoft, CISCO). In total, MCP facilitated 50 public-private partnerships, which collectively leverage $58.13 million worth of resources for shared objectives in reform, trade promotion, workforce development, and economic growth, with $1.38M million leveraged in Q3Y6. The sustainability of these PPPs is ensured by maintaining strong relationships with government ministries, educational institutions, and private partners.

Table. PPPs progress in Q3Y6

Industry PPP name Progress in the quarter Winegrowing ONVV During Q3Y6, ONVV organized two sessions of the Industry ONVV Coordination Council.

Winegrowing WoM The development of new Wine of Moldova Unique Selling Industry Marketing Proposition advanced and promotional activities in the UK Platform with a spillover effect on a global scale deployed.

Winegrowing WoM Within this PPP, 109 professionals from 36 Moldovan Industry Academy wineries upgrading their skills and increased knowledge through three trainings on wine certification, irrigation, and WoM positioning. Winegrowing Best Grapes Three news bulletins containing agri-intelligence data and Industry one phytosanitary alert were disseminated.

Winegrowing "WoM Under this PPP, the Law 57/2016 ‘On Vine and Wine” was Industry Advocacy amended, promulgated, and published in Official Gazette. platform" An unconstitutional motion threatening ONVV was dismissed in its entirety by Constitutional Court. Winegrowing PQUP MCP’s and HVAA’s winemaking consultants conclude Industry assistance during “bottling season” at two transitional wineries assisting in preparing and conditioning over 264 thousand liters of wine. Winegrowing ASW MCP’s and HVAA winemaking consultants conclude Industry assistance during ‘bottling season’ at 17 small wineries assisting in the production of over 46.6 thousand bottles. Tourism Tourism Although the TIC had to close its physical doors for all Information visitors, the Center stayed active online, answering all Center (TIC) requests, providing recommendations, and promoting tourism destinations from Moldova. MCP contributed to the PPP by funding an upgrade of the 1c accounting software and purchasing tourism guiding equipment, a multifunctional printer, and a projector and screen through the grant with ANTRIM. The City Hall continued to offer in-kind support by providing the location for the TIC. IT, CSI and PE Robotics PPP The MCP team surveyed schools included in the educational robotics network to collect quantitative data on the program indicators. Even during the pandemic, Moldovan teachers continued to conduct robotics classes. Around 18 percent of the lessons were conducted online. MCP team monitored schools included in the educational robotics network to collect quantitative data on the program indicators. 122 active robotics teachers participated in the survey and reported that they taught robotics to 4,623 students of different ages, including 1,879 girls (40 percent) over a total of 15,098 hours. IT, CSI and PE Future Future Classroom Center continued the renovation Classroom works to expand its premises, to include six training Lab (FCL) rooms, offices for the staff, a mini-conference room, a Google tech zone, and a recording studio. Three guides were published on the website: FCL Technologies guide and Guide on How to Design Integrated lessons; and updated FCL Design guide. An online event was organized to celebrate FCC’s two-year anniversary and award the prizes to the digital ambassadors, promoting them in the community. Orange Moldova Foundation conducted a series of trainings for the teachers representing the 11 schools they selected for inclusion in the project in the next school year. IT, CSI and PE Cisco ITE for With the support from the Ministry of Education, Culture VET and Research, and the Excellence Center for Informatics and IT, MCP team conducted a monitoring of the implementation of Cisco IT Essentials course. Eleven

teachers, who completed the ITE training in summer 2020, reported that they taught two semesters (of a total of two-years courses) of the ITE course to 488 VET students. IT, CSI and PE Fabrication During Q3Y6 FabLab Chisinau finalized the FabLab Laboratories Academy course for 13 participants who developed their (FabLabs) competencies on using FabLab equipment and soft skills on time management, planning and public speaking. This activity aimed to grow the FabLab community of engineers. IT, CSI and PE Virtual IT The number of active IT and Creative companies that are Park residents of the Moldova Virtual IT Park exceeded 700 companies. The Moldova IT Park organized a General Assembly and presented its new Development Strategy for 2021-2025, allocating to it a budget of $475,000 (three times higher than the previous budget) to be used to expand the role of Moldova IT Park to manage the 7 percent flat tax incentive, facilitate a dialogue with the Government to empower the digital economy and innovation, and promote Moldova’s IT sector internationally. IT, CSI and PE Balti The construction of the Balti Innovation Hub is in Innovation progress. The construction companies contracted by the Hub Regional Development Agency are on track with the construction schedule. IT, CSI and PE Mediacor The construction works at Mediacor started in September Digital Media 2020 with the relocation of external networks and are in Hub progress. The technical design blueprints for developing Mediacor were developed and cleared by the Chief Architect of the City and submitted to the State University. State University contracted a company for the construction of the filming Pavilion. IT, CSI and PE Gigabit The commitment to support Gigabit Connectivity in Connectivity Moldovan schools was sealed in an MoU signed on June 2, in Moldovan 2021. This public-private partnership will bring Moldova’s Schools education system into the modern digital age by supporting digital technologies and connectivity for schools, as well as digital skills for Moldovan teachers and youth, which are crucial to the continuity of education adapted to COVID-19 challenges, as well as to longer- term human capital investments in Moldova. MCP convened Moldova’s leading private telecom and internet providers – Starnet, Orange, Moldcell, and Moldtelecom - MCP’s flagship initiative Future Classroom and Tekwill Project, and the Ministry of Education, Culture and Research to sign a MoU supporting connectivity and use of digital technologies in Moldovan schools. IT, CSI and PE Artcor Artcor Creative Center attracted Moldcell Foundation as Creative Hub a core private partner to support the center until May 2022. Artcor organized the third Creative Industry

Festival in June 2021 with three days of events for designers, architects, musicians, and video producers. Light Industry DININIMA DININMA pop-up shops offer Moldovan brands a promotional platform for promotion and further development towards campaigns international exports. During the three-day event, eight mature and emerging brands, including Georgette, Sekana, Julia Allert, Haskel, Kate Gri, Odevalle, and LS Design presented their collections to the public, generating sales of nearly $6,000. The event was held at Digital Park and attracted more than 300 guests. MCP provided the DININIMA brands with media support and marketing materials such as print and video look books. Light Industry ZIPhouse During this period, ZIPHOUSE managed to attract Design and another grant from the European Commission in Technology partnership with European Network Hub from Greece, Center which will focus on sustainable activities of young designers, creating a peer-to-peer collaboration, knowledge exchange, and sharing a pool of common partners. Light Industry Moldova In Q3Y6, MFD took place online, where 20 designers Fashion Days from well-known brands and new names in the fashion industry presented the latest trends, chosen colors, bold textures, style, and attitude on April 24, displaying their collections for the spring-summer season at Moldova Fashion Days Rebirth. This event introduced the trend of sustainable fashion and the principles of ecological clothing. During this event, the public had the opportunity to watch a spectacular collaboration between two brands for which environmental protection matters - Julia Allert and Porsche Moldova. Light Industry Fashion E- During this quarter, MCP financed website improvements commerce and promotional packages on online digital channels for 360 Initiative more than ten brands, investing $17,600 in e-commerce efficiency.

Inclusive Development

MCP recognizes and affirms Inclusive Development Highlights, Q3Y6 results our donors’ commitments to inclusive development and  46% of participants in capacity building programs provides all project are women beneficiaries with equal opportunities to participate in  98% of activity participants are youth activities and benefit from project-funded assistance.  42% or 61 of the total 144 enterprises assisted in Through its activities, MCP Q3Y6 are women-owned aims to reduce gender disparities in economic  15 companies from Gagauzia and Transnistria opportunities by empowering involved in MCP supported activities women to enhance their

64 careers, increasing the capacity of women and girls, and cultivating leaders in business. MCP also focuses on youth, as this group demonstrates the highest level of emigration. Therefore, Project activities are designed to interest and attract youth, motivate them to develop their skills and careers in-country and create opportunities for youth involvement. MCP assistance includes Transnistria and Gagauzia, engaging prominent and emerging enterprises in target industries, expanding youth development activities, and promoting tourism in these regions.

Economic Empowerment of Women

In Q3Y6, MCP expanded its outreach to 12 additional enterprises, seven of which are women-owned. The project now assists 988 enterprises, 342 or 35 percent of which are women-owned. The disaggregation by MCP-assisted industries reveals that in the reported quarter, the light industry has the highest share of women-owned companies - 73 percent of the companies participating in project activities. In tourism, the share of women-owned companies assisted by MCP is 33 percent, 32 percent in the winegrowing industry, and 20 percent in the IT cluster. In Q3Y6, 144 enterprises participated in MCP’s activities to improve knowledge, processes, technologies, and practices, and 61 enterprises, or 42 percent were women-owned.

Share of women-owned companies in each sector, % of total

55.4%

34.6% 33.0%

20.9% 20.7%

AVERAGE, All sectors Light Tourism IT cluster Winegrowing

Creating Opportunities for Women and Youth Involvement Project activities are designed to interest and attract women and youth and motivate them to develop their skills and careers in-country, providing an attractive alternative to migration.

All MCP programs focusing on the winegrowing industry seek inclusive development of women and youth. In this respect, the project’s ASW Mentorship program is designed to encourage young winemakers to launch small wineries and/or to support the development of emerging small wineries (Caragia Winery, Carpe Diem, Kara Gani, Domeniile Scutelnic, ATU Winery, Minis Terrios, Gogu Winery, Crama Ulinici, Gogu Winery, Maestru DC, SVC Inter, TeWa, Unicorn Estate SRL). In addition, under the Wine of Moldova Academy initiative, in Q3Y6 MCP supported knowledge upgrade activities and trainings for 92 industry professionals, 48 percent of whom were youth and 43 percent of whom were women.

In the tourism sector, in Q3Y6, thanks to continuous MCP support, 16 young people from Sipoteni region, mostly female, were involved in the development of four new soft adventure routes. Additionally, 30 participants, of whom 15 were women, and ten were youth, were trained during the five-day workshop for Moldovan tourism businesses on developing new tourism products targeting Ukrainian travelers.

Participants in MCP - supported capacity building programs in Q3Y6, by sectors

12,402 TOTAL 5,882 12,672 12,267 IT cluster 5,726 12,442 10 Tourism 15 30 53 Wine 52 109 72 Light industry 89 91

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Youth participants Women participants Total participants

In the IT cluster, ten activities targeting youth and women were reported in Q3Y6: three in IT, four in the Creative Services subsector, and three in Precision Engineering. In IT, MCP conducted three trainings for 202 teachers (86 percent women and 20 percent youth)– two G Suite trainings empowering teachers to incorporate technology and support the development of a technologically savvy workforce and a training for FIRST LEGO League Explore Playmakers Season coaches. Four Creative Services subsector educational activities on graphic design, comics, and actor mood courses gathered 30 participants, of whom 60 percent were women, and 100 percent were youth. Three FabLab educational events gathered 47 participants, of whom 71 percent were youth and 13 percent were women. Because the project conducted a survey of Robotics and FCL programs under the IT sector, the total number of participants reported in Q3Y6 in the IT cluster is 14,491 participants, of whom 48 percent were women and 48 percent were youth.

In the Light Industry, the project provided technical assistance to and supported activities at ZIPhouse - a platform for students, young designers, start-up companies, and professionals in Moldova’s light industry. In Q3Y6, MCP supported five workforce development activities, which resulted in knowledge upgrades and trainings for 670 industry specialists, of whom 86 percent were women, and 70 percent were youth. As part of the ZIPhouse activity plan for Q3Y6, MCP assisted ZIPhouse in conducting mentorships through the Z Generation Contest, where 25 future young designers were guided through the entire creative process until the final stage of collection launch.

Supporting Economic Development of Transnistria and Gagauzia In the winegrowing industry, MCP provided technical assistance to two small winemakers, Kara Gani (CGL Prim) and Wintage, and a transitional winery, Kazayak Vin -- all from Gagauzia -- under the quality improvement program. Representatives from Kazayak Vin participated in the Wine of Moldova Academy seminars. At the same time, MCP assisted

six Gagauzian wineries - Tartcomvin, Kazayak Vin, Bostavan, Vinuri de Comrat, DK- Intertrade, and Tomai Vinex - to participate in international wine competitions.

In the tourism sector, MCP continued to promote tourism locations from Transnistria and Gagauzia which are included in the Wine Routes of Moldova, such as Kvint Distillery in Tiraspol and related points of interest like Sturgeon Complex Aquatir, Sheriff Stadium, and Bender Fortress. In addition, Gagazuaz Sofrasi from Gaguzia, and three B&Bs from Transnistria – Casa Karaman, La Nistru, and Fata Morgana, became members of the MCP- supported National Association for Inbound Tourism and will benefit from the association’s services such as increased visibility, workforce development, product development, and lobbying and advocacy support.

In the IT cluster, the Educational Robotics program continues to be implemented in six schools in Gagauzia and four schools in Transnistria, all of them previously receiving MCP’s support in endowment with LEGO robotics kits and teachers training.

In the Light Industry, MCP supported APIUS to launch in this quarter the new platform stocktextil.md which helps APIUS members from the right and left banks of the Nistru River exchange information about stock leftover from their manufacturing supply chains and cover shortages of raw materials and equipment. Stocktextil offers many benefits to its platform members, such brand visibility and promotion on social networks, resilience in the raw material supply chain for local producers, reduction in storage costs, the opportunity to create local partnerships, and the possibility to access a wide range of unique products at a symbolic price.

Monitoring & Evaluation

Ongoing Monitoring and Evaluation (M&E) activities conducted to document project results and new achievements

During the quarter, all activities implemented with MCP support were documented and included in the project’s M&E database, with results verified for accuracy. MCP collected Bi- annual data on sales, investments, jobs, and financing accessed from over 150 monitored companies, carefully reviewed, and added to the M&E database. Along with other data collection and analysis, MCP generated reports for each indicator showing progress against established targets. Progress against each established target was included in the MCP Quarterly Report, providing an overview of current data and data analysis.

New Achievements Registered by MCP in Q3Y6

MCP expanded its outreach to an additional 12 enterprises, either directly or through its association counterparts. The project now assists 988 enterprises, 342 or 35 percent of which are women-owned. The distribution by sectors is presented in the table. Of these 988 enterprises, MCP assistance has helped 501 unique SMEs increase their sales and establish 17,854 new market linkages. In Y3Q6 alone, MCP implemented six sales facilitation activities benefitting 103 companies, with a total of 134 event participations resulting in 96 market linkages mainly from companies’ participation at NDE and BIT Milano and New Deal Europe B2B events (both organized for tourism-oriented companies online due to COVID-19 related restrictions).

MCP assisted enterprises, by sectors 1200 60.0% 988 55.4% 1000 50.0%

800 40.0% 34.6% 33.0% 600 30.0%

400 342 20.7% 312 20.9% 20.0% 242 233 173 201 200 10.0% 50 77 42 0 0.0% TOTAL Winegrowing Tourism Light IT cluster Total assisted companies Women-owned assisted companies

The project made significant progress in delivering capacity-building programs. In Q3Y6, a total of 12,672 people attended MCP-supported activities aiming to enhance job skills. To date, 71,981 people have participated in MCP-supported capacity-building programs.

MCP develops public-private partnerships and implements initiatives to provide sustainable and scalable local solutions to grow assisted industries. In Q3Y6, $1.38M new funds were leveraged within MCP-facilitated transformational PPPs, of which 34 percent is MCP’s contribution, 18 percent is private companies’ contribution, 21 percent is the public sector’s contribution, and other donors contribute 26 percent. In addition, the project launched a new public-private partnership (PPP) to support gigabit connectivity and the use of digital technologies in Moldovan schools.

To improve the sector-enabling environment, two new project-assisted public-private sector dialogues were conducted in the tourism and winegrowing industries. The Moldovan Investment Agency with strategic MCP support organized Moldova Tourism Forum 2021, to raise awareness about the inbound tourism sector and support the industry to emerge stronger from the pandemic. The online event aimed to connect sector stakeholders and future tourists waiting to discover an untapped destination. International speakers (i.e., H.E. Michael B. Christides, Secretary General BSEC; Alessandra Priante, Director for Europe of UNWTO; Ibrahim Osta, Chief of Party at USAID Developing Sustainable Tourism in Bosnia, and Herzegovina; etc.) shared their vision, experience, and tools to make the tourism sector more sustainable, inclusive, and resilient. In the wine industry, the fifth National Wine Industry Conference allowed more than 100 industry representatives to learn about industry trends, focusing on sustainability, product quality, adaptation to climate change, and diversification of export markets. The Moldovan Wine Industry National Conference underscores the role of the private sector in building industry resilience and promoting high-quality wines. In addition, the business environment in the wine sector was protected by the Constitutional Court’s dismissal of the motion filed by a member of parliament that threatened ONVV’s PPP model.

PERFORMANCE MONITORING: TARGET VS. ACTUAL

MCP INDICATORS

Life of YEAR 6 Project Indicator Y6 Non- Cumulative (LOP) Cumulative Cumulative Result versus Q3Y6 Result Target Result Target LOP Project Purpose: Grow and Expand Targeted Competitive Industries 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 4 assistance to improve knowledge, 700 50 988 288 12 processes, technologies, and practices Assisted enterprises applying improved 5 370 25 392 22 1 knowledge, processes, and technologies Assisted enterprises following recognized 6 180 5 224 44 1 product or process standards Individuals receiving job skills aligned with 7 40,000 4,500 71,981 31,981 12,672 industry needs Objective 2. Expanded Market Linkages IR 2.2: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.1.2: Increased Access to Finance Number of assisted enterprises in Data reported 10 targeted industries with increased 190 5 N/A N/A annually financing Data reported 11 Financing accessed by assisted enterprises $120,000,000 $6,000,000 N/A N/A annually Sub-IR 2.2.2: Expended Market Linkages Increased value of sales facilitated on Data reported 2 $250,000,000 $15,000,000 N/A N/A behalf of assisted enterprises annually Number of enterprises with sales 9 350 15 501 151 14 facilitated through USG assistance Value of new private sector investment in Data reported 3 $170,000,000 $5,000,000 N/A N/A assisted enterprises annually Number of assisted enterprises in Data reported 12 targeted industries with increased 250 30 N/A N/A annually 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 13 procedures eliminated, streamlined or 45 7 51 6 1 simplified with USG support Number of Public-Private Partnerships 14 40 0 50 10 1 established Value of Public-Private Partnerships 15 $35,000,000 $2,000,000 $58,133,751 $ 23,133,751 $ 1,382,066 established +60% over +60% over Data reported 16 Improved capacity of local institutions** N/A N/A baseline baseline annually Project-assisted public-private sector 17 50 2 105 55 2 dialogue platforms conducted

OTHER INDICATORS COLLECTED BY MCP

Life of Project Indicator Y6 Non- Cumulative (LOP) Cumulative Cumulative Target versus Q3Y6 Result Target Result Target Result

Project Purpose: Grow and Expand Targeted Competitive Industries

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 Percentage change in specified Data reported 8 productivity measure (sales per +15% +10% N/A N/A annually employees) Objective 2. Expanded Market Linkages

IR 2.1: Improved Private Sector Competitiveness in Selected Industries

Sub-IR 2.2.2: Expended Market

Linkages Value of domestic and export sales in Data reported 1 N/A N/A N/A N/A targeted sectors annually Increased number of market linkages 18 N/A N/A 17,854 N/A 96 established with donor assistance*

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 innovations supported Data reported 19 170 0 N/A N/A through USG assistance* annually Number of innovations supported through USG assistance with Data reported 20 170 0 N/A N/A demonstrated uptake by the private annually or public sector*

Project Communications

MCP Close-Out Communications Campaign

During Y6Q3, MCP launched a comprehensive close-out communications campaign featuring 60 MCP beneficiaries and highlighting the support provided by USAID, Sweden, and the UK to develop and increase the competitiveness of the winegrowing, tourism, apparel manufacturing, ICT, precision engineering, and creative industries. The awareness campaign #eposibilacasa (It is possible at home) reached nearly 1 million people through television and online media. Throughout the three months of the campaign, MCP developed 20 success stories, emphasizing Moldovan entrepreneurs’ and creatives’ great resilience and work ethic in developing the country’s potential and strengthening the economic competitiveness of Moldova’s key industries. The #eposibilacasa message expressed an idea of unity and success and underscored the results achieved by Moldovan people with support from USAID, Sweden, and the UK. To raise awareness about the

70 campaign and increase its visibility, MCP partnered with Interact Media and developed the #eposibilacasa tag page on the Agora media portal, which featured the success stories developed within the campaign. In addition, the success stories were disseminated on various online media portals, including agrobiznes.md, agromedia.md, locals.md, perfecte.md, realitatea.md, diez.md, unimedia.md, jurnal.md, and others.

Caption: #eposibilacasa visuals of MCP beneficiaries. Credit: MCP.

During the campaign, a series of 60 social media posts, including visuals and interactive videos, were shared on the donors’ social media accounts and dedicated Facebook pages of the MCP-supported associations and Excellence Centers. The social media posts highlighted the beneficiaries’ successes and the progress made in the development of the MCP- supported sectors.

Media - a Tool to Promote Industry Competitiveness and High-impact Project Activities

MCP targeted all media – television, online, written press, and radio - to highlight the success stories of MCP beneficiaries and underscore the strategic support provided by USAID, Sweden, and the UK. As part of the close-out communications campaign, MCP partnered with a range of TV and online media outlets to promote the success stories of winegrowing and tourism SMEs and raise awareness about MCP flagship initiatives, including Mediacor Technology Center, Artcor Creative Industries Center, Future Classroom National Center, ZIPhouse Innovation Hub, etc. The popular Moldovan show “Internetu Graieste” featured ten short reports and online interventions from MCP management and beneficiaries from the winegrowing, tourism, apparel manufacturing, ICT and creative industries. Popular TV and online media outlets including Moldova 1, TRM, TVR, ProTV and Agora developed comprehensive reports and TV shows about MCP flagship initiatives, which were featured during the TV programs “Rapsodia Satului”, “Obiectiv Comun”, “O seara perfecta”, “Prima Ora” and others.

In Y6Q3, nearly 20 national and local TV and online media channels produced more than 80 media pieces about MCP’s beneficiaries and project activities, including an in-depth interview with USAID Mission Director, Scott Hocklander, on the USAID support for the winegrowing sector by Info market media portal.

Industry Events

Photo caption: from left to right: Anna Lyberg, Ambassador of Sweden; Steven Fisher, UK Ambassador; and Scott Hocklanfer, USAID Mission Director provide welcoming remarks during MCP-supported events Moldova Tourism Forum, the Creative Industries Festival, and 2-years anniversary of Future Classroom National Center. Credit: MCP.

During this quarter, MCP continued to actively inform USAID, Sweden, and the UK of the project’s industry events, which are covered by the media to reinforce the role of USAID, Sweden, and the UK in the project’s achievements and its target industries. As the coordinator of industry events, MCP plays an instrumental role in developing scene setters and briefers for USG, Swedish Government, and British Embassy representatives, providing detailed timelines, technical expertise, background knowledge, and talking points/key messages. In Y6Q3, MCP ensured high-level engagement in key online project events and initiatives, such as the UK's Minister for European Neighborhood and the Americas visit to Mediacor; the annual Creative Industries Festival; Moldova Tourism Forum; the signing of a Memorandum of Understanding to support Gigabit connectivity in Moldova schools; Moldova Fashion Days; the National Winegrowing Conference; industry associations’ General Assemblies, to include those of ANTRIM, ASW and the IT Park, among others. The leadership of USAID, Swedish, and UK Governments demonstrated their support to MCP industry representatives through online videos and participation in online events.

Branding

In Y6Q3, the project continued to ensure accurate branding for online events, campaigns, and webinars organized with support from MCP. All events and digital campaigns were branded in line with USAID, Sweden, and UK regulations, reflecting donor logos and disclaimers as needed. Photo caption: Facebook online shop, developed with MCP support for DININIMA brands. Credit: DININIMA.

SECTION III

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY2021 Q4 (JULY- SEPTEMBER 2021)

Light Industry

• Support eCommerce Photo Studio procurement - PNA Software (associated costs ($4,000); • Support Technical University of Moldova and ZIPHOUSE elaborate a 3D guide implementation program (associated costs $4,000); • Support Moda Common Store to renovate DININIMA light panel (associated cost - 1,400$); • Layout of Post Covid recovery Policy Paper (associated cost $1,150).

IT cluster

• Continue support for Artcor School courses and community events (associated costs - $23,000). • Finalize branding for MEDIACOR centre (PO – $760). • Endowment of Future Classroom Center with education furniture, learning, and IT education equipment (associated costs – $14,000). • Support FabLab Academy activities and community building (associated costs -$5,400).

SECTION IV PROJECT ADMINISTRATION

Level of Effort Report

The following table provides a summary of the project LOE utilization and estimated expenditures. CONTRACT Cumulative Remaining LABOR CATEGORY TOTAL Y6Q3 LOE LOE LOE (workdays) Long-Term Technical Assistance - 2,947 97.5 2,854.63 92.37 Key personnel Long-Term Technical Assistance - 1,487 65.00 1,422.00 65.00 Expatriate (Includes TCNs) Short-Term Technical Assistance - Expatriate (Includes TCNs and professional technical assistance from 2,341 22.13 2,287.32 53.68 Chemonics and J.E. Austin Associates home office staff) Long-Term Technical Assistance - 15,149 716.25 14,817.89 331.11 CCN Short-Term Technical Assistance - 7,303 115 7,273.63 29.37 CCN TOTAL 29,227 1,015.88 28,655.47 571.53

MCP Budget and estimated expenditures: Y6Q3 Percentage Contract Expenses Expenses to of Forecasted Obligation Value (Apr. & Jun. Date Obligation Expenses* Estimate) Spent $28,491,372 $28,491,372 $1,025,844.06 $27,094,212.37 95.1% $1,397,159.63 *The forecasted expenses include estimated expenditures only for the 4th Quarter of FY 2021

Administration and Finance

During Quarter 3, the Project's administrative and financial systems continued to run smoothly with key, professional, and support positions aligned to the Project’s needs. As a result of the COVID pandemic, the MCP team continues to work remotely from home. MCP’s budget assimilation is balanced and the resources well-distributed across the remaining Y6, with 95.1 percent of the total obligated amount expended through June 30, 2021. SEED Fund absorption is also on par with the total contract expenditures, with 99.6 percent of the total of $ 5.51 million SEED Fund already expended. MCP will utilize the remaining funds across the remaining period of implementation through September 2021.

SECTION V

ANNEXES

ANNEX 1.

Success Stories

ANNEX 1I.

Risk Assessment

ANNEX I. SUCCESS STORIES

Caption: Alinia Art dress. Credit: MCP

ANNEX II. RISK ASSESSMENT

Risk Risk description Likelihood Impact Risk Risk mitigation Change since last quarter? Category The COVID-19 pandemic and the unfolding economic crisis are major external factors that have brutally intervened globally, disrupting systems, industries, supply chains, and consumer mindsets. MCP’s most affected industries are the tourism, light industry, and creative sectors. The immediate economic impact is huge, with firms losing current and near-term business for 2020 with recovery perspectives only to begin in 2021-2022. Many businesses have shut down for the duration of the pandemic or continue to operate at reduced capacity. The MCP-supported economic sectors experienced a decline in the 2020 annual sales and exports, in particular light industry and winegrowing reduced exports by avg 9 percent, while tourism international travel restrictions remain in place and only domestic travel has sporadically been allowed. ICT seems to be the least affected industry, with exports on the rise and making up for the reduction of domestic IT service sales. The emergency state in Moldova continued until May 30, 2021 (Moldovan Parliament Decision Nr. 49). Implementing partner The global crisis and the will continue to adjust MCP has mobilized industry associations to act as focal points for COVID-19 pandemic are ongoing interventions to industry SMEs and in the dialogue with the Government to define national and impacting Moldova’s External/force the changing global and High High High industry anti-crisis economic policies. Industry associations played a key role in economic and social majeure national economic and supporting business continuity. In the reporting quarter, with MCP support, systems, and MCP-target social context caused by ANTRIM (tourism) continued to implement a Sanitary Guide to help re-opening industries in particular the COVID-19 of tourism businesses under the World Travel and Tourism Council `Safe Travel` pandemic. quality seal, aligned with World Health Organization guidelines, and vetted by the Moldovan Ministry of Health. The `Safe Travel` Moldova Guide has been implemented by 24 tourism businesses, mostly rural guesthouses, hotels, and wineries.

MCP continued to support The National Inbound Tourism Association’s (ANTRIM) development and promoted smart regulations and legal improvements to serve as a resilience measure in this challenging time for the industry. MCP supported ANTRIM’s development as a leading business association offering guidance, legal expertise, funding, technical assistance, and facilitation of collaborations with relevant and important partners. In light industry, MCP partnered with Europe's largest Apparel and Textile Confederation (EURATEX) to support APIUS Light Industry Association in the development of a post- COVID recovery strategic roadmap. MCP engaged top-notch expertise to ensure that Moldova's recovery path is aligned with EU and global trends at large, and textile value chain disruption. The forward-looking strategy is based on sustainability, digitization, and fair trade. In addition, to stimulate online sales, MCP supported a DININIMA digital campaign for the Moldovan fashion brands, 50 of which have developed fully functional e-commerce websites via the MCP- supported E-Commerce Acceleration Program.

MCP redirected its ongoing assistance and funding to support e- commerce as a medium-term remedy to revamp business sales during and post COVID-19. MCP e-commerce support benefits over 250 SMEs in fashion, tourism, creative and other industries. MCP provides comprehensive e- commerce assistance, including the development of e-shops, content, SEO, integration of e-payments and logistics, and digital marketing. As a result of the MCP e-commerce support in tourism, major tourism sites ranging from Castel Mimi and Milestii Mici to guesthouses like Eco Resort Butuceni and Casa din Lunca, are launching direct booking services to enhance digital sales. To date, MCP has assisted over 20 wineries and tourism SMEs in upgrading their websites and increasing their online visibility. The SMEs benefited from e-commerce and digital marketing support, including website upgrades, the development of logotypes, elaboration of content for social media pages, and integration of e-payments. Adopting digitalization enables the Moldovan tourism SMEs to foster customer interaction and expand their market reach.

In the reporting quarter, MCP continued to support the implementation of ZIPhouse E-commerce Acceleration Program. Through the e-commerce Acceleration Program, MCP supported nearly 50 Moldovan brands to develop fully functional online shops and increase their online sales, by setting up online payment systems, streamlining customs clearances, ensuring customer digital invoicing, and managing international logistics for local and international markets. ZIPhouse launches e-commerce directly on their website, transitioning the hosting of their website to the Technical University of Moldova (TUM) server, which not only increases its operational capacity, but also allows the technical IT specialists from TUM to maintain and update the ZIPHOUSE website. With the support of MCP and TUM, ZIPHOUSE launched in March 2021 its online ZIPshop with more than 50 products with ZIPHOUSE and TUM branding, and more than 15 online courses on Fashion Design, Pattern Making, Fashion Business English, and other events hosted by ZIPHOUSE Fashion Innovation Hub. E-commerce creates a seamless shopping experience while meeting the changing consumer needs anywhere, anytime.

MCP also supported ONVV-led initiatives to spur e-commerce, provided technical support to ONVV to develop new international positioning for the

national wine brand, Wine of Moldova, and delivered technical expertise to develop short-term and targeted communication campaigns in the UK.

Looking forward, MCP will adapt the project’s ongoing and future interventions to the changing global and national economic and social context, including but not limited to a stronger focus on digitizing businesses and re-shifting markets to support trade diversification and recover business sales.

Moldova continues to experience ongoing political and Government changes. Government changes directly impact MCP-led policy initiatives. MCP was able to establish working relationships with the Dodon-led Government and re-introduce flagship initiatives. However, these suffered changes once again as a result of newly elected president Maia Sandu and the resulting impact on the Government. Implementing partner The anticipated Parliament elections will be organised on July 11, 2021. will promote business-

driven reforms by - ONVV’s PPP model has been repeatedly challenged, MCP is committed to working with and safeguarding ONVV and its Public-Private Partnership model. In January, backed strengthening business by a Gagauzian wine and brandy holding, Member of Parliament Chirill Motpan associations in target filed a motion to Constitutional Court claiming unconstitutional and proposes industries. The to defer wineries that are residents in Free Economic Zone from paying to implementing partner Political climate is Vine and Wine Fund as well as challenges the ONVV PPP model by claiming will work with business uncertain, and fragility of that the private sector contributions to the ONVV Vine and Wine Fund. MCP associations to improve the pro-European vector quickly informed its donors and activated all available lobby and advocacy Political/ Moderate to Moderate their advocacy skills, threatens economic Moderate avenues to oppose the motion. On May 18, the Constitutional Court published External High to High build formal and informal reforms and its decision to dismiss the motion in its entirety. channels of public-private development in MCP- dialogue for bettering target industries - MCP continued to advocate for the official approval of the Tourism business environment Development Program “Tourism – 2025” which was previously revised in the and aligning with EU context of the pandemic. Regretfully, the draft policy is placed to a waiting framework. Stronger mode until a new government is established after the anticipated Parliament collaboration between elections in July 2021. MCP has ensured that relevant expertise is placed in businesses and both, the MoEI and ANTRIM to be able to restart its promotion once the government will provide Government is voted (tentatively in September 2021). During the reporting direct input to policy quarter, ANTRIM, with MCP support, addressed a request to the President, decisions. asking to represent the tourism industry in the Management of the Economic Council under the President. This public-private partnership would initiate an active dialogue regarding the problems faced by the tourism industry and catalyze the approval of the new Strategy.

Public funding Implementing partner Artcor – The Academy of Fine Arts is honoring its ongoing financial commitment committed for joint Delivery Moderate Moderate Moderate will assist the relevant for Artcor operational costs, and as of January 2021 COR Association started to initiatives, such as Artor, Government cover the utility costs. The Center is demonstrating excellent progress, and all

Balti Innovation Center, counterpart with partners are committed, proactive and engaged, contributing to its success. MCP Future Classroom budgeting, public facilitated a new partnership with Moldcell, the second-largest telecom operator, and/or trade promotion, procurement and other which signed an MOU to become a corporate sponsor for Artcor to allocate its is not disbursed steps to ensure 2021 Corporate Social Responsibility (CSR) budget, estimated at one million MDL, allocation and to fund Artcor. This will mitigate Artcor operational risks and support its overall disbursement of funding. sustainability. Mitigation measures will be included in the MEDIACOR – In addition to the $350,000 contribution allocated from the state activity budget, that and university budget for the development of the MEDIACOR Center, the would allow for the University committed an additional $115,000 (2 million lei) for the construction of completion of the the new media production pavilion to mitigate any risks of exceeding the available activity with reduced construction budget. The refurbishment of the MCP-funded part of the funding. MEDIACOR infrastructure is on track, with 60 percent of the renovation being complete. MCP developed a phased approach for MEDIACOR implementation to reduce the risk. It will complete a portion of the infrastructure to enable MEDIACOR to begin activities in the fall of 2021.

Balti Innovation Center (Tekwill extension) is on schedule, with core funding worth 28 million lei coming from the North Regional Development Agency that has the funding available and continues to make good progress on the construction. MCP has regular meetings with the University and the Agency to ensure progress. MCP provided support in developing the Regulation of the Administration Council of the Center and Regulation of the Center Activity, and coordinated the inter-stakeholder working group meetings. During the reporting period, MCP facilitated the establishment of a partnership between the National Association of ICT Companies (ATIC)/Tekwill Project and Balti State University to become a resident of the Balti Regional Innovation Center, which is under construction. Draexlmaier, Moldova’s largest automotive company, initiated the procurement process for endowing a training area in the Innovation Center. Starting September 2021, Draexlmaier, in partnership with Balti State University, is planning to establish a new master’s program called Technical Product Management. Balti Regional Innovation Center will offer laboratories, training rooms, co-working areas, and business offices for startups in ICT, automotive, creative, fashion manufacturing, and other regional industries. The Center will create new opportunities for nearly 4,500 students of Balti University. The Balti Regional Innovation Center builds on a successful $2 million public- private partnership, with the Moldovan Government contributing $1.6 million for the refurbishment of the Center’s building. Additional investments are being made by the National Association of ICT Companies (ATIC) via the Tekwill project (an estimated $250,000) and the automotive industry via the Association of Manufacturing Industry Employers (APIP) and the Balti Free Economic Zone. The Center has been under development since 2017 and expected to open in December 2021.

Future Classroom Center – As a result of the pandemic-related school closure since March, the Future Classroom initiative is being adapted. MCP and its implementing partners are looking at ways to enhance online learning platforms. During the quarter, to respond to the unexpectedly high demand for teacher trainings and school digitization, the MCP-supported Future Classroom Center trained 135 Moldovan vocational education and training (VET) teachers to use of Google Workspace to ensure high-quality remote and in-class learning during the pandemic. The trainings were held online as part of the National Digital Literacy Program led by the Ministry of Education, Culture, and Research and implemented by the Future Classroom Center. On their two-year anniversary, the Future Classroom National Center organized an online event to highlight significant milestones reached throughout the years, and award 25 Moldovan teachers as Digital Ambassadors. With support from MCP, the Digital Ambassadors filmed short videos promoting digital transformation in Moldovan schools and encouraging teachers to employ digital tools and innovation to advance Moldova’s educational system. In addition, in anticipation of its growing role in digitizing Moldova’s educational system, the Future Classroom Center is expanding to add another training floor, and as a result triple in size to respond to the continuously high demand for teacher training and school digitization support. MCP provided support for redesigning the spaces and is cost sharing on the endowment, while the Pedagogical State University committed to cover the renovation costs from its 2021 budget. Renovations started and are on track.

Moldovan Investment Agency. MCP is working towards strengthening its supported business associations to be able to provide capacity for trade promotion activities to MIA. Because of the COVID-19 pandemic, most regional tradeshows were canceled, and MCP stepped in to help redirect the funds to other meaningful trade support activities. In particular, MIA redirected its funds to e-commerce and digital promotion campaigns in tourism and fashion manufacturing. During the reporting quarter, ANTRIM, in partnership with MCP and the Moldovan Investment Agency, supported six tourism businesses, including hotels, wineries and tour operators, to participate at the online B2B event New Deal Europe on April 10, 2021. At the event, participants promoted Moldovan tourism offers and pitched their tourist experience packages to travel consumers to foster new business relationships. The GoOnline initiative which offered e-commerce assistance to more than 80 Moldovan SMEs, ended in Q2Y3, and in Q3Y6 the e- commerce results were presented during an online conference on GoOnline that was organized with support from MCP in partnership with UNDP, SDC, the Moldova Investment Agency, ODIMM, and the Ministry of Economy and Infrastructure.In tourism, MCP in partnership with ANTRIM and MIA supported in May the National Tourism Industry Forum 2021. Moldova Tourism Forum 2021 was organized by the Moldovan Investment Agency with strategic MCP support to

raise awareness about the inbound tourism sector and support the industry to emerge stronger from the pandemic.

Industry associations and innovation centers switching to online and teleworking. Amidst the COVID-19 pandemic, MCP-supported industry Implementing partner associations and innovation centers continued to telework and upped their abilities will work with the to deliver online services. This includes delivering online training content, holding strongest and most videoconferences, online Board meetings, and partner engagement workshops. representative business MCP supported their internal processes and provided ongoing coaching in this associations in the process, ensuring that these organizations continue to operate. APIUS, ONVV and assisted industries. It is ANTRIM, COR associations held online meetings of their Board, enabling them to key that these are not connect with members from rural parts of Moldova and overcome in-person politically biased. Robust meeting restrictions. Artcor and ZIPhouse continued to deliver skills trainings via capacity building will be online means. Future Classroom National Center continued to deliver its teacher provided, including training courses online. ANTRIM worked to develop the partnership with the embedded expertise, Moldova State University (MSU) to provide continuous learning programs for trainings, and coaching. tourist guides and a digital platform, developed for the guides. Through a targeted OCA (Organizational Assessment of the improvement of the Association’s capacities was Industry associations and Capacity Assessment) conducted in the reporting period via the Organizational Capacity Assessment other key local Delivery Moderate Major Major tool, the implementing (OCA) tool, which allows supported sector associations - APIUS, ATIC, ANTRIM, counterparts display partner will screen each ASW, and COR Association - to reflect upon their successes and identify areas for institutional weakness institution on an annual improvement by assessing themselves annually against the list of criteria, such as basis to ensure governance, management, strategic vision, member services, and satisfaction. The transparent governance, self-evaluation scores, across project years, show improvements in the a strong executive body, associations’ overall capacities to serve their members, advocate for regulatory and and financial legislative changes, secure new sources of revenue to ensure the sustainability of sustainability, as well as MCP investment, and make streamlined management decisions. OCA allows MCP progress on their to compare scores and determine the required level and areas for targeted performance interventions. An impressive 100 percent increase of capacities compared to improvement plan. baseline was registered by monitored associations. The association with the most Grants to local significant increase is the newly assisted COR Creative Services Industry counterparts will include Association with 136 percent, followed by the tourism association ANTRIM -with conditionalities related 119 percent, the light industry association APIUS with 108 percent, Association of to institutional Small Winemakers with 102 percent, and the Association of Private ICT strengthening. Companies from Moldova – with 34 percent, since this association started with a higher score and all the improvements were compared to that initial high level.

Implementing partner Changing economic situation, supply chains and market requirements Assisted enterprises do will undertake a rigorous as a result of the COVID-19 pandemic. The COVID-19 pandemic has caused not meet target market Delivery Moderate Major Moderate assessment of business significant changes to the national and international economic system, from supply requirements readiness to export to chains to markets and consumers. MCP reassessed the all trade-support activities

86 target markets, before to ensure that these are adapted to the new market realities. A stronger focus is engaging in trade being placed on the digitization of businesses and trade, such as e-commerce, promotion assistance. online bookings for tourism, digital campaigns, etc. MCP supported exclusively Complex assistance will digital campaigns in tourism, winegrowing industry, and fashion manufacturing be provided first to during the reporting quarter. MCP’s ICT and Creative beneficiaries become upgrade the popular on social media after featured in the #EPosibilAcasa (#it’sPossibleAtHome) product/service to meet online awareness campaign. In fashion manufacturing, the five months EU B2B market requirements, campaign for Moldova apparel factories continued. Over 880 EU businesses including better expressed interest in sourcing fashion manufacturing services to Moldova and productivity, quality, and visited APIUS’s dedicated website. Easter promotional campaign advertising rural managerial capacity of guesthouses and wineries, “Be Our Guest, again” and My Wine campaigns were businesses. In addition, high impact on Facebook, Instagram, and other social media platforms. As part of the implementing the close-out communications campaign, MCP partnered with a range of TV and partner will work online media outlets to promote the success stories of winegrowing and tourism together with the private SMEs and raise awareness about MCP flagship initiatives, including Mediacor sector to select markets Technology Center, Artcor Creative Industries Center, Future Classroom where existing products National Center, ZIPhouse Innovation Hub, etc. have the highest potential to succeed, for Mitigate the international trade promotion risk for the fashion instance Romania for manufacturing industry MCP supports the implementation of quality standards apparel, or Italy for in assisted Moldovan factories, ISO and BSCI social compliance standards. The tourism. COVID-19 induced crisis points to increased demand from European buyers for ethical and socially compliant factories. In the reporting quarter, within the MCP’s Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency (SMART) program, three companies implemented Integrated Management Systems (IMS). They became internationally certified, ensuring safe working conditions for their 470 employees. To date, MCP’s SMART factory program has assisted 24 Moldovan factories in obtaining international certifications, ensuring a healthy work environment for over 4,700 employees and making steady improvements to attract quality-conscious European buyers while increasing long-term sectoral competitiveness.