USAID EMPOWER PRIVATE SECTOR ACTIVITY - IN PARTNERSHIP WITH SIDA ANNUAL REPORT Y5 INCLUDING QUARTERLY REPORT #21 Project Year 5, October 2018 – September 2019

In Year 5, the activities implemented by USAID EMPOWER Private Sector, in partnership with Sida, included the second edition of the Apparel Convention (pictured in the upper left side); business- to-business meetings between Kosovo and diaspora-based businesses - as part of the Economic Conference with the Albanian diaspora (pictured in the upper right side); the completion of soft skills and ICT trainings for disadvantaged youth (pictured in the lower left side); and practical demonstrations organized as part of a training program that resulted in the certification of 17 individuals from Kosovo solar energy companies in photovoltaic solar systems design and

installation (pictured in the lower right side).

October 15, 2019

USAID EMPOWER Private Sector Activity in partnership with Sida

ANNUAL REPORT Y5 INCLUDING QUARTERLY REPORT #21

OCTOBER 2018 – SEPTEMBER 2019

Submitted by: Cardno Emerging Markets USA, Ltd.

Submitted to: USAID/Kosovo

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

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

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CONTENTS 1. SUMMARY OF PROGRESS ...... 1 1.1 Summary for Year 5 ...... 2 1.1.1 Key Highlights ...... 2 1.1.2 Progress vs. Performance Management Indicators ...... 6 1.1.3 Analysis of Sales and Jobs Growth by Sector ...... 7 1.1.4 Summary of Impact by Support Area ...... 9 1.1.5 Allocation of Assistance Budget ...... 10 1.2 Summary for Quarter 21 ...... 11 2. ACTIVITIES AND TASKS VS. WORKPLAN ...... 12 2.1 Component 1: Competitive SMEs ...... 12 2.1.1 Wood Sector ...... 13 2.1.2 Apparel Sector ...... 16 2.1.3 Energy Sector ...... 19 2.1.4 Other Production Sectors ...... 20 2.2 Component 2: Workforce Development ...... 22 2.2.1 ICT Sector ...... 23 2.2.2 WfD Activities in Other Sectors ...... 25 2.2.3 Preventing Violent Extremism (PVE) activities / Systemic Activities in WfD ...... 26 2.3 Cross-Cutting Issues ...... 31 2.3.1 Women ...... 31 2.3.2 Youth ...... 34 2.3.3 Minorities and North Kosovo ...... 37 2.3.4 Microenterprises ...... 38 2.3.5 Donor and GoK Collaboration ...... 39 2.3.6 Environmental Compliance ...... 40 2.4 General and Administrative ...... 41 2.4.1 Strategic Activities Fund Management ...... 41 2.4.2 Public Events and Communications ...... 42 3. RESULTS VS. PERFORMANCE MANAGEMENT INDICATORS ...... 47 3.1.1 Results vs. PMIs Detail ...... 48

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ANNEXES Annex 1: Year 5 Workplan and Results to Date Annex 2: EMPOWER-Funded Activities Status Report Annex 3: Strategic Activities Fund Investments Summary Annex 4: Expansion Grants Signed Annex 5: Supplemental Tables Annex 6: Communications – Success Stories and Facebook Postings Annex 7: Communications – Newsletters TABLES and FIGURES Table 1: Key PMIs by Sector ...... Error! Bookmark not defined. Table 2: PMIs – Targets vs. Actual – Cumulative ...... Error! Bookmark not defined. Table 3: EMPOWER Investment vs. Sales Impact by Sector ...... Error! Bookmark not defined. Table 4: EMPOWER Investment vs. Job Creation Impact by Sector ...... Error! Bookmark not defined. Table 5: EMPOWER Investment vs. Impact, by Support Area ...... Error! Bookmark not defined. Table 6: Supported Activities through Y5 ...... Error! Bookmark not defined. Table 7: Supported Activities in Y5 ...... Error! Bookmark not defined. Table 8: Supported Activities in Q21 ...... Error! Bookmark not defined. Table 9: Component 1 Summary – Q17, Y4, and Cumulative ...... Error! Bookmark not defined. Table 10: Wood Sector Activities & Impact, in $000s ...... Error! Bookmark not defined. Table 11: Apparel Sector Activities & Impact, in $000s ...... Error! Bookmark not defined. Table 12: Energy Sector Activities & Impact, in $000s ...... Error! Bookmark not defined. Table 13: Other* Production Sector Activities & Impact, in $000s……………………………………….……………20 Table 14: Other* Production Sector Activities & Impact, in $000s ...... Error! Bookmark not defined. Table 15: Component 2 – WfD Summary ...... Error! Bookmark not defined. Table 16: ICT Sector Activities & Impact, in $000s ...... Error! Bookmark not defined. Table 17: Job Creation – Priority Populations ...... Error! Bookmark not defined. Table 19: Estimates of Kosovo Multipliers……………………………………………………………………………………….42 Table 18: North Kosovo Activities & Impact, in $000s ...... Error! Bookmark not defined. Table 20: Estimates of Kosovo Multipliers ...... 47 Table 21: PMI Summary through Q21 Actuals—Targeted Indicators ...... 51 Table 22: PMI Summary through Q21 Actuals Additional Tracked/Non-Targeted Indicators ...... 52 Table 23. EMPOWER-Supported Trade Fairs Results ...... 54

Figure 1: Sales Growth through Y5 ...... 8 Figure 2: Distribution of EMPOWER Interventions by Sector through Q21 / Y5 ...... 11 Figure 3: Co-Finance for Activities initiated through Year 5/Q21 ...... 40

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SUMMARY OF PROGRESS EMPOWER Private Sector (“EMPOWER”, or “the Project”), a USAID-funded project in partnership with the Swedish International Development Cooperation Agency (“Sida”), is dedicated to job creation and Kosovo’s economic growth. EMPOWER is a five-and-a-half-year project that started in July 2014 with an original budget of $9.8M, which was later expanded to $14.3M through an additional Sida and USAID contribution. By September 30, 2019, EMPOWER’s team comprised of 18 staff members and three interns. The Project is headquartered in the capital city of Prishtina and has a branch office in North Mitrovica. It is implemented by Cardno Emerging Markets USA Ltd., with subcontractor Crimson Capital, a U.S.-registered small business. EMPOWER’s overarching objective is job creation. Job creation usually comes from businesses that have concrete market opportunities where they need to increase their employment in order to produce more goods and services to meet growing demand. To support job creation, EMPOWER aims to help firms expand and improve their capacities to sell into identified opportunities, while helping individuals obtain skills demanded by growing firms. These themes are reflected in EMPOWER’s two principal intervention components: (1) small- and medium-sized enterprise (SME) competitiveness; and (2) workforce development (WfD). In Y5, EMPOWER had a substantially greater focus on the provision of technical assistance through Short Term Technical Assistance (STTA). It was the Project’s intention to gradually phase out production expansion interventions, as beneficiaries upgrade their technology and production capacity and focus attention on technical assistance interventions aimed at addressing knowledge gaps that hinder competitiveness of firms. In Y4, EMPOWER scoped key sectors and developed a roadmap of technical assistance interventions in the wood, apparel and energy sectors. The primary focus of these interventions in Y5 has been provision of support to companies to improve production management systems, institute more lean manufacturing methods, and improve cost accounting and pricing strategies. Most of these interventions have been implemented in Y5. This report fulfills contractual requirements for annual and quarterly reporting of project progress. It covers annual results of EMPOWER’s Year 5 (Y5), namely from October 2018 to September 2019. The annual report is also inclusive of results from quarter 21 (Q21) covering the period July – September 2019.1

1 The project started in July 2014. At USAID’s request, the annual report periodicity was realigned to the USAID fiscal year, so that the first annual report covered quarters 1-5, through September 2015. Subsequent reports covered four quarters each (6-9, 10-13, etc.). Due to the fact that the deadline for submitting the annual report is by October 15, 2019, EMPOWER team started collecting data from beneficiaries before the end of September (which marks the conclusion of Q21), therefore most of the data collected from beneficiaries, especially on the project’s principal indicators (jobs and sales), represent results covering the period up to August 31, 2019. Complete data related to September 2019 will be reported in the following quarterly report 22.

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1.1 Summary for Year 5 1.1.1 Key Highlights B2B Diaspora Conference Yields Concrete Commercial Deals EMPOWER, in collaboration with the European branches of the Albanian Diaspora Business Networks (ADBN) and Kosovo Ministry of Diaspora and Strategic Investments, co-organized the Economic Conference of Albanian Diaspora from Europe, which was held during May 24 – 25, 2019, in Prishtina. Forty-seven (47) Kosovo companies hosted the B2B meetings with diaspora businesses, representing key sectors of wood processing, apparel, energy, information and communications technology, food and beverages, and others. A total of 144 companies from diaspora were registered on the first day of the opening of the Conference. Forty-seven Kosovo companies hosted B2B meetings with More than 250 meetings were held and more hundreds of diaspora businesses during the Economic Conference. than $440K in new sales have been reported.

EMPOWER Successfully Concludes Pilot to Improve Export Readiness of Selected Kosovo Companies EMPOWER piloted an activity titled Export Readiness and Promotion Assistance (ERPA) aimed at improving the export-readiness of selected Kosovo companies. The pilot included assessing the export readiness of selected companies; supporting the development of export market entry plans on selected products; and producing targeted industry-relevant research. The pilot of the export assistance package was implemented with a limited number of export-ready private sector companies, focusing on enterprises with high growth and export potential. During Q20, three export readiness assessments were finalized for Berto, a wood processor; Jasin, a stainless steel HORECA inox appliance manufacturer; and Wear & Go, an apparel producer. The significance of this intervention is to transfer knowledge to the private sector on tools they can use, and consulting services they can draw on, to improve export competitiveness. In addition, during Y5, EMPOWER developed export market entry plans for three companies regarding specific products: for Ciao Berto, a wood producer, it focused on customized kitchens; for Tiki Home, a wood producer, it focused on bedroom furniture; and for Bibita, a beverage producer, for health drinks. Finally, in collaboration with the wood processing association, EMPOWER developed industry market research on the “international prospects of Kosovo furniture.”

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Third Kosovo Wood Industry Convention Generates Lucrative Business Deals In Q18, the Association of Wood Processors of Kosovo (AWPK), in collaboration with EMPOWER, organized the third annual Wood Industry Convention to promote Kosovo furniture and support the growth of Kosovo’s wood-processing industry. The event gathered wood processors, government agencies, donors, and international buyers. The Convention consisted of an exhibition of Kosovo wood products by 21 Kosovo wood processing companies, discussion sessions, and a display of the top 40 innovative and practical B2B meetings at the third edition of the Kosovo Wood furniture designs created by Kosovo university Industry Convention, on December 5th, 2018. students. Kosovo wood-processing companies had the opportunity to negotiate business deals and increase exports through the reported 71 B2B meetings that took place during and after the Conventi on with 20 potential foreign buyers. Overall, the Convention reportedly generated $1.93 million, of which over $570K were due to B2B meetings of, and $1.36 million in sales reported between the local representative of SCM Group and Si-Mac wood processing technologies.

Apparel Manufacturers Showcase their Kosovo- made Products at Second Apparel Convention The second annual Kosovo Apparel Industry Convention was organized by the Kosovo Apparel Marketing Association (KAMA) and EMPOWER in Q18. The event included an exhibition of products from 22 local apparel manufacturers. A highlight of the Convention was a 50-minute runway show featuring Kosovo-made apparel from 16 manufacturers. Over 100 people attended the An audience of over 100 people attended the runway fashion show that was held as part of the second edition show, and over 1,100 watched the live stream on of the Kosovo Apparel Industry Convention. Facebook. A Student Design Contest was also held, which provided an opportunity for Kosovo design students to show their talent and compete with their designs. This year’s edition of the Convention put a stronger emphasis on B2B meetings, which resulted in a total of 40 B2B meetings held. EMPOWER supported seven potential buyers from the Netherlands, France, Switzerland, and the region, to travel to Kosovo to meet with apparel producers at the Convention. Some results included sales orders by Kosovo company In-Design to an Albanian diaspora French buyer estimated at over $10K. Additionally, Purple Muse sent trial orders to Switzerland involving knitwear estimated at $2.2K.

For the First Time, 17 Engineers in Kosovo are Certified on Solar Panel Design and Installation

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For the first time in Kosovo, EMPOWER delivered a certification program on photovoltaic (PV) solar panel design and installation for Kosovo’s solar installation companies. This initiative led to certification of 17 PV solar panel designers and installers, boosting competitiveness in local and other markets for local producers and installers. With a recognized TUV certification, local companies are better positioned to win and execute bigger PV solar projects in export markets. The training and certification program was organized and co-funded by EMPOWER in partnership with Sida and the Swiss-funded Enhancing Youth PV certification training, demonstration of PV Employment project. The activity is also supported by panel electricity generation measurements, the renewable energy sector association, KIMERK. August 2019, at Jaha Solar training site.

Carbon Fiber Automotive Parts Producer Opens New Factory and Plans to Expand Hiring During Y5, Koshi Group, a carbon fiber car composite producer, moved to a newly constructed 3,400sqm factory, amounting to a $1.1M investment. Koshi Group has experienced significant growth since first supported by EMPOWER. From an initial 15 employees, Koshi Group has grown to a reported 50 workers, of whom 35 are attributable to project support. Koshi Group plans to reach 60 employees by the end year 2019 and to expand hiring beyond that. Koshi Group is also in the process of building a second factory designated for catamaran boats for racing. The company intends to launch the first boat Koshi Groups’s new factory: a section of autoclave co- product prototype in 2020 with the estimated sale financed by EMPOWER. price of over half a million US dollars.

EMPOWER Pilots Lean Manufacturing in Wood Processing Industry In Q19, Kosovo apparel, wood-processing, and metal companies participated in a two-day training workshop on lean manufacturing tools. EMPOWER provided the training with the aim of improving the operating performance, productivity, and competitiveness of companies in these sectors. Over 30 participants from 24 manufacturing companies were trained on best practice manufacturing techniques including 5S, waste reduction, development of cross functional lean teams, and Kaizan. Importantly, wood-processing company Divani was directly supported to implement lean manufacturing at the firm level. Through lean manufacturing implementation, Divani improved its efficiency and reduced waste by a substantial margin.

Kosovo Apparel Companies Increase Production and Operational Efficiency

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During Q19, EMPOWER supported Kosovo apparel companies with the introduction of a Production Management System (PMS). The intervention targeted seven Kosovo apparel companies, namely Creative, Fashion Network, S//Sprint, Puntex, Artatex, Artatex Group and Wear & GO. The PMS coaching and training was conducted to improve workplace and production line layout, operators’ efficiency and motivation, on-time delivery, line balancing, cost structure and customer relations at each of these companies. An integral part of the training Apparel manufacturing expert training employees of apparel company S//Sprint on the Production Management System, on was the introduction of the Standard February 15, 2019. Allowed Minute (SAM) technique which is widely used by industrial engineers and garment producers in the apparel manufacturing industry around the world. The apparel factory managers at each company were trained on using the SAM to measure task or work content of each garment to establish the standard time of the individual garment operations as well as the whole garment SAM.

Costing and price list construction TA provide critical tools to export-oriented wood processing companies

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

Youth Receive Equipment to Initiate Own Businesses

Under the Self-Employment (SE) Program, EMPOWER provided 200 young entrepreneurs with a business training course, followed by the provision of small-scale grants to a selected number of Kosovo youth. Out of total applications received, 55 youth were selected and 40 were put in a reserve list, to receive equipment. During June and July 2019, the implementing organization, HELP, received, evaluated, and signed contracts with selected bidders for grant equipment. During August and September 2019, the distribution of

equipment to the beneficiaries in the field took A grant beneficiary from Kacanik. place.

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1.1.2 Progress vs. Performance Management Indicators The 259 interventions approved and initiated through Y5 covered six discrete focus sectors, plus “other”. The principal results in terms of SME competitiveness and workforce development of these interventions are provided in Table 1 below, highlighting EMPOWER’s top-line Performance Management Indicators (PMIs), organized by focus sector. Table 1 presents the PMI additions separately for Q21, Y5, and cumulatively from the Project outset through August 2018. As the submission deadline for the annual report is October 15, 2019, the EMPOWER team collected data from beneficiaries before the end of September. Therefore, most of the beneficiary data, especially on two main indicators (jobs and sales) represent results covering the period up to August 31, 2019. Data from September 2019 will be included in the following quarterly report 22.

Table 1: Key PMIs by Sector # of Jobs Sales Growth $000 WfD Participants Sector Q21 Y5 Cuml Q21 Y5 Cuml Q21 Y5 Cuml Apparel 16 118 566 764 4,325 13,165 0 362 478 Energy 51 170 439 1,005 12,635 30,124 0 28 123 ICT 72 290 1462 3,248 17,501 39,228 139 692 2,469 Metal 0 22 107 1,521 9,223 16,547 0 0 62 Other* 120 237 675 1,243 11,597 24,874 61 690 791 Tourism 0 6 109 0 5 1,256 0 0 70 Wood 66 416 1422 7,416 32,050 79,095 0 26 126 TOTAL 325 1,258 4,778 15,196 87,336 204,289 200 1,798 4,119

* The column “Cumulative” (“Cuml”), under the heading of “# of Jobs,” reflects the overall number of new and attributed jobs at Primary Beneficiaries (PBs). The column “Q21” represents the gross number of jobs created at PBs but is not the net difference between cumulative jobs in Q21 versus Q20, as other PBs have reduced the overall number of their employees due to seasonality. The net increase in the number of jobs from Q20 to Q21 is 286, while the overall cumulative total number of jobs, expressed as an increase in net terms, since project inception, amounts to 4,778. Therefore, the cumulative indicator captures the net increase. Through Y5, EMPOWER invested $4.9M from its resources, which was complemented by $19.53M in co-financing from beneficiaries, other donors, Government of Kosovo (GoK) agencies, and financial institutions. These interventions generated a total of 4,778 actual jobs and $204M in new sales through Y5, of which 1,258 new jobs and $87.3M in new sales were realized in Y5 alone. In Y5 alone, EMPOWER disbursed $937K and total co-finance was $2.7M where $2.38M was provided by private companies and $400K by collaborating institutions leading to 3.97x investment leverage. An important indicator that was surpassed by almost twofold compared to the planned target relates to the “aggregate sales increase”. Through Y5, the aggregate sales increase amounted to $204M compared to a planned target of $100M. Extraordinary results were also achieved related to exports increase: the actual reported increase amounted to $87.3M compared to a planned target of $50M. EMPOWER beneficiaries also introduced 328 new products, compared to a planned target of 50, and the number of enterprise beneficiaries (682) already exceeds the Life of Project (LOP) target of 400. EMPOWER achieved and exceeded all but one of its targeted indicators set for Y5. The Project is currently slightly short of meeting the Y5 target indicator of 5,000 direct jobs by 222 jobs. Cumulatively, 4,778 new jobs were created by EMPOWER beneficiaries compared to 5,000 planned through Y5. As noted above, taking in consideration that most beneficiaries were not able to report

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their data for the month of September 2019 (as part of Q21), the actual job creation figure is expected to be higher. Table 2 below depicts the list of indicators with targets and actual results through Y5. EMPOWER has already achieved its LOP targets on 9 out of 10 target indicators through Y5. As noted, EMPOWER’s target indicator of jobs stands at 4,778 out of 5,000 planned and it is expected that this will be achieved by the end of the Project.

Table 2: PMIs - Targets vs. Actual - Cumulative Y1 Y2 Y3 Y4 Y5 PMI Unit Actual Actual Actual Target Actual Target Actual Target Target Target Number of enterprise # 150 91 260 340 300 433 350 571 400 682 beneficiaries Attributed aggregate $000 64,981 134,393 97,471 254,176 150,000 404,087 sales Aggregate sales $000 6,608 1,065 61,824 15,580 28,000 56,029 56,000 106,003 100,000 204,289 increase of beneficiaries Aggregate exports $000 3,102 738 16,755 8,208 10,304 25,345 30,837 49,933 50,000 94,475 increase Business size # 5 4 10 16 15 23 20 28 25 44 expansion New geographic # 10 26 20 111 30 169 40 242 50 279 markets entered New products # 10 16 20 48 30 156 40 257 50 328 introduced Companies # 26 20 38 40 48 60 55 80 95 investing in new technologies Total new jobs** # 250 465 2,800 1,272 2,250 2,473 3,250 3,608 5,000 4,778 Investment leverage ratio 3.0x 5.46x 3.0x 5.8x 3.05x 5.02x 3.0x 5.4x 3.0x 5.13 * Including supplier beneficiaries (SBs): direct suppliers of production inputs to growing PBs. **The actual total number of jobs is higher when “indirect effects” are accounted for (see section 3 of the report).

1.1.3 Analysis of Sales and Jobs Growth by Sector

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The following chart highlights the Project’s impact on beneficiaries’ sales through Y5, which is the main driver of job creation: Figure 1: Sales Growth through Y5

$000

250,000 $204 million actual sales growth by companies receiving 250,000 200,000 competitiveness and WfD assistance from EMPOWER 200,000 150,000 through Q21. 150,000 100,000 100,000 50,000 50,000 - - Apparel Energy ICT Metal Other Wood Totals Tourism Totals 13,165 30,124 39,228 16,547 24,874 1,256 79,095 204,289 Organic Domestic 411 5,481 - 1,064 2,178 68 27,014 36,214 Import Substitution 10,505 15,249 867 13,904 3,879 - 29,197 73,599 Exports 2,250 9,395 38,360 1,580 18,818 1,188 22,885 94,475

Totals Exports Import Substitution Organic Domestic

Figure 1 shows that sales growth continues to be the highest in the wood sector, but significant results can also be seen in the ICT, energy, apparel, and “other” sector. Additionally, the trend of increase in export sales continues to be high in ICT and continued to increase in Y5 for the wood sector. Namely, export sales in the wood sector accounted for approximately 30% of total sales. Expectedly, the ICT sector is the sector that is the most successful in terms of exports, especially due to services provided by call centers. Sales growth in the energy sector has been primarily “organic” i.e. the sector is addressing a growing domestic market (so far mostly for renewable biomass heating fuels), which is considered independent of import substitution. Exports in this sector are also growing significantly, and through this quarter represent almost a third of the total sales reported by our beneficiaries.

Figure 2.A: Sales Growth in Y5

$000 $100,000 $87.33 million actual sales growth by companies receiving $100,000 $80,000 competitiveness and WfD assistance from EMPOWER in Y5 $80,000 $60,000 $60,000 $40,000 $40,000 $20,000 $20,000 $- $- Energy ICT Metal Other Wood Totals Apparel Tourism Totals $4,325 $12,635 $17,501 $9,223 $11,597 $5 $32,050 $87,336 Organic Domestic $131 $4,767 $437 $6,303 $877 $5 $10,101 $22,621 Import Substitution $3,077 $5,393 $277 $1,784 $1,178 $- $12,862 $24,571 Exports $1,117 $2,475 $16,786 $1,136 $9,543 $- $9,087 $40,144

Totals Exports Import Substitution Organic Domestic

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Table 3 compares attributable sales growth to Project investments by sector. Table 3: EMPOWER Investment vs. Sales Impact by Sector # of Activities EMP Inv $000 Sales Increase $000 ROI Sales/EMP$ Apparel 40 576 13,165 22.84 Energy 39 648 30,124 46.51 ICT 27 367 39,228 106.95 Metal 7 176 16,547 94.26 Other* 57 1,390 24,874 17.89 Tourism 23 274 1,256 4.58 Wood 66 1,524 79,095 51.89 TOTAL 259 4,955 204,289 41.23

EMPOWER’s total investment of $4.95M in 259 activities (interventions) has generated $204M in sales growth through Y5. Across sectors, this works out to an average return on investment (ROI) of 41.23, ranging from a ROI of 4.58 for tourism to an ROI of nearly 107 for the ICT sector. The Project expects the average ROI across sectors to rise as beneficiaries continue to increase their sales and employment over the Project’s lifecycle. Table 4 below presents ROI in terms of job creation. In addition to actual new jobs through Y5, it also shows the expected LOP ratios, since it is on that basis that EMPOWER ranks and selects interventions for support. Table 1: EMPOWER Investment vs. Job Creation Impact by Sector ROI Sector EMP $000 Jobs Actual EMP$/Jobs Actual

Apparel 576 566 1,019 Energy 648 439 1,476 ICT 367 1,462 251 Metal 176 107 1,648 Other* 1,390 675 2,059 Tourism 274 109 2,526 Wood 1,524 1,422 1,072 TOTAL 4,955 4,778 1,037

So far, EMPOWER has invested an across-the-sector average of $1,037 for each job created. Eventually, as the beneficiary firms continue to grow due to the Project’s assistance, EMPOWER expects this ratio to drop to around $1,000, which was the operating target for investment selection.

1.1.4 Summary of Impact by Support Area Table 5 below shows the breakdown of impact by support area, and some indicators of return on investment (ROI).

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Table 5: EMPOWER Investment vs. Impact, by Support Area Support Area # Beneficiaries* New Jobs Sales Increase $000 Q21 Y5 Cuml Q21 Y5 Cuml Q21 Y5 Cuml Production 0 0 119 128 672 2,471 11,291 60,769 136,115 Markets 0 14 220 21 99 550 758 9,513 28,559 WfD/Skills 53 71 137 161 428 1,672 3,101 16,629 37,681 Quality 0 5 14 15 58 85 46 424 1,935 Business Env't 0 10 41 0 0 0 0 0 0 TOTAL 53 100 531 325 1,258 4,778 15,196 87,336 204,289

Production Expansion (PE) interventions accounted for 2,471 new jobs through Y5, of which 672 were created in Y5, while sales increase for this area of support is $136M, representing 66% of cumulative sales increase across all interventions. In Y5 alone, sales increase for this area of support was $60M. PE interventions, especially through the Strategic Activities Fund (SAF), have decreased in the remaining period, considering that most of the SAF budget has been awarded and implemented. Under EMPOWER’s Connection to Markets interventions, the Project has supported beneficiaries to become export-ready and enable them to present their products at major European and global trade shows, often for the first time. In January 2019, EMPOWER supported four wood processing companies to exhibit at the IMM fair in Germany. Actual sales realized during Y5 due to Project-supported participation in 14 market connection activities amounted to nearly $16.6.2 As seen in Table 5, workforce development activities also accounted for a substantial share of job creation with 1,672 jobs created since the beginning of the project, of which 428 during Y5 alone. In addition to these three major work areas, EMPOWER worked in support of Quality and Productivity improvements in Y5. The Project engaged STTAs to work with firms in the wood and apparel sectors on quality and productivity improvements. Interventions have included improvements in production management systems of apparel sector companies; trainings and piloting a lean manufacturing model in the wood sector; and provision of support to wood processers in activity-based costing. Under the Business Environment category, EMPOWER worked during Y5 to strengthen the capacities of the Association of Wood Processors of Kosovo (AWPK), and the Kosovo Apparel Marketing Association (KAMA). During Y5, EMPOWER organized the Wood Industry and Apparel Sector conventions, enabling firms from respective sectors to exhibit their products, as well as enabling various stakeholders to engage in relevant discussions aimed at addressing challenges facing both sectors. In addition, EMPOWER organized the third edition of the Green Festival, which included the organization of a Green Forum (featuring international speakers that presented on a host of pressing energy-related topics) over three days. The Green Forum sought to bring together private companies, ministry representatives, and civil society organizations to discuss priority issues related to the policy, legal, and regulatory environment for businesses engaged in clean energy and energy efficiency. Meanwhile, EMPOWER continued to facilitate meetings of clusters in the wood, apparel, and energy sectors, which also elevated needed business environment reforms to relevant GoK agencies. 1.1.5 Allocation of Assistance Budget

2 Detailed list of the fairs and results is in Annex 5 of this report.

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EMPOWER provides its support through technical assistance combined with grants and procurement activities from its $4.8M Strategic Activities Fund (SAF), complemented by other project budgetary resources for technical assistance, meetings, international travel, and long-term technical staff. In its five years of implementation, EMPOWER designed and initiated 259 activities, or approximately 1 activity per week. The budget committed for these activities is over $4.95M, with most of the funds, or 52.9%, committed to Production Expansion (PE) interventions, as evident in Table 6 below. Connection to Markets (CM) accounts for the second highest share of the committed interventions i.e. 21.8% of the funds have been committed to this type of intervention. Table 2: Supported Activities through Y5 Intervention Category # of Activities Budget Committed Share Production Expansion 79 2,621,948 52.9% Connection to Markets 103 1,078,499 21.8% Workforce Development 33 992,025 20.0% Productivity and Quality 25 111,529 2.3% Business Environment 19 151,345 3.1% Total 259 4,955,346 100.0%

In Y5 alone, EMPOWER initiated a total of 35 activities. Most of the interventions were focused on Connection to Markets (16), and Productivity and Quality (11) Table 3: Supported Activities in Y5 Intervention Category # Activities Budget Committed Share Production Expansion 0 - 0.0% Connection to Markets 16 151,324 42.2% Workforce Development 4 83,218 23.2% Productivity and Quality 11 61,152 17.1% Business Environment 4 62,715 17.5% Grand Total 35 358,409 100.0%

Around 42% of EMPOWER support in Y5 was allocated to connection to market interventions. Second highest, by share, is in Workforce Development as a result of three new activities in CVE.

Figure 3: Distribution of EMPOWER Interventions by Sector through Q21 / Y5

Value $000 (total $4.99 MM) Number of activities approved Wood , Apparel , 1524, 31% 576, 12% (total 259) Apparel , Energy , Wood , 40 648, 13% 66 Tourism , 274, 5% ICT , 367, Energy , 7% 39 Tourism , 23 Other , 1390, Metal , 176, 4% ICT , 27 28% Other* , Metal , 7 57

1.2 Summary for Quarter 21 In Q21 alone, EMPOWER initiated 6 different activities.

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Table 4: Supported Activities in Q21 Intervention Category # Activities Budget Committed Share Production Expansion 0 - 0.0% Connection to Markets 2 26,781 30.7% Workforce Development 1 8,960 10.3% Productivity and Quality 2 29,120 33.4% Business Environment 1 22,400 25.7% Grand Total 6 87,261 100.0%

2. ACTIVITIES AND TASKS VS. WORKPLAN

The following section of the report is organized according to EMPOWER’s Year 5 workplan. The narrative sections below summarize activities and results in the main task areas. Annex 1 includes a tabular representation of the Year 5 workplan, which demonstrates actual and expected results to date for each item. 2.1 Component 1: Competitive SMEs EMPOWER’s work in Component 1 involves direct support to businesses with market opportunities for firm-level growth. The Project provides company support under four major categories: expanding production capacities, connecting to markets (export and import substitution), improving productivity and quality, and obtaining skilled workers (WfD). Component 1 covers the first three of these categories, while Component 2 (on WfD, see relevant section below) includes the fourth category. Companies targeted under Component 1 are mainly in the wood, apparel, energy, tourism, and "other” sectors. EMPOWER has become one of the most knowledgeable actors in Kosovo with regards to the status and potential of Kosovo businesses as a result of direct site visits to over 400 companies. The Project has information on Kosovo’s every significant productive sector and is heavily involved in several of them: when a new investment opportunity arises, it is often possible to evaluate it vis-à-vis similar firms and connect it to other companies in its value chain for business. The following table provides an overview of Component 1 activities and results initiated in Y5 and Q21.

Table 9: Component 1 Summary - Q21, Y5 and Cumulative Support Activities EMPOWER Inv. Co-Finance $000 New Jobs Sales Increase $000 Area $000 Y5 Y5 Cuml Y5 Cuml Q21 Y5 Cuml Q21 Y5 Cuml Q21 Cuml Q21 Q21 New Jobs Prod. 0 0 79 0 0 2,622 0 0 13,160 128 672 2,471 11,291 60,769 136,115 Expansion Markets 2 16 103 27 151 1,078 32 507 2,007 21 99 550 758 9,513 28,559 Quality 2 11 25 29 61 112 7 53 242 15 58 85 46 424 1,935 Business 1 4 19 22 63 151 11 84 327 0 0 0 0 0 0 Env’t TOTAL 5 31 226 78 275 3,963 50 643 15,735 164 830 3,106 12,095 70,706 166,608 During Y5, EMPOWER initiated 31 new interventions (including five in Q21), which helped create 830 new jobs (including 164 in Q21) and helped expand beneficiary sales by $70.7M (including $12.1M in Q21). For Y5 activities, EMPOWER committed $275K from its assistance budget (including $78K in Q21), and mobilized $643K in co-financing from beneficiaries, banks, Government of Kosovo (GoK) agencies, and other donors.

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2.1.1 Wood Sector Of the 66 activities approved since the Project outset, 11 took place in Y5, amounting to a cumulative EMPOWER investment of $1.52M. Through Y5, the activities implemented helped create 1,422 new jobs in the sector (with 416 jobs in Y5 alone) and contributed $79.09M in cumulative sales growth (with $32.05M of sales in Y5). These activities attracted $7.78M in co-finance. In total, 126 individuals participated in workforce development programs in the sector. The following table summarizes EMPOWER’s assistance to the Kosovo wood sector from Project outset through Y5.

Table 10: Wood Sector Activities & Impact, in $000s Period #Activities #Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Cuml 66 66 1,524 7,785 1,422 79,095 126 Y5 11 5 109 370 416 32,050 26 Q21 5 0 72 77 66 7,416 0

Under Production expansion, the transfer of new technology and solutions are crucial to further increase production capacities of the wood industry to reach export markets. EMPOWER did not extend further grants to the sector during Y5, but several EMPOWER beneficiaries continued to undertake expansions on their own by completing new investment in physical capital. Namely, Ciao Berto, Sela Impex, Candeo and Mobileria Prishtina are now in new state-of-the-art production facilities and are ready to respond to significant new demand. Based on customs data, export sales of the wood sector have grown Ciao Berto (new factory premises): a visit by substantially in recent years. Exports were at $2.9M in Albanian diaspora delegation and presentation by 2015 (when the Project started) and grew to $18M in owners of the company’s production capacities 2017. In 2018, exports stood at $25M, while based on and potential. th data received for the 4 Wood Convention purposes (up to September 2019), exports of the sector in 2019 already amount to $25M.

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Connection to Markets remains of key importance to wood processors. A total of 13 companies were supported to attend two major fairs and a trade mission. During Q20, EMPOWER continued to focus on leveraging the international market for solid wood products and Kosovo companies. The Project, together with the Kosovo Wood Processing Association (AWPK), and in coordination with GIZ and KIESA, supported the exhibition of four Kosovo wood processing companies (namely, Albed, Graniti, Elnor and Ventius) at the IMM international fair, in Cologne, Germany, in January 2019. Additionally, during Y5, EMPOWER, together with AWPK and in coordination with GIZ and KIESA, supported the exhibition of four Kosovo wood

processing companies (Kelmendi, Albed, Elnor and Miftar Veseli, Mentor Veseli (Co-owners at Albed) and a potential buyer at IMM fair, Cologne, in Dardania Model) at MOW international fair, in Bad January 2019. Salzuflen, Germany, during September 15 – 19, 2019. The exhibiting companies already have significant

experience with exporting and sealing stable business partnerships in the EU market.

During Y5, EMPOWER, together with AWPK, also organized a trade mission to Brussels, Belgium, held during May 15 – 17, 2019, for five selected wood processing businesses (Ciao Berto, Albed, Candeo, Elnor and Shehu). The Kosovo Embassy in Brussels assisted in organizing the trade mission, including arranging visits with potential buyers at the premises of the Kosovo Embassy. Immediately after the visit, a delegation of two businesses, one being a representative of an Albanian diaspora business and the other a Belgium buyer, visited

Kosovo table production companies and two B2B meeting in Namur, Belgium. Presentation of the contracts, worth $22K, have already been signed production capacities to a potential Belgium-based, interested buyer. and are under implementation. Under Quality and Productivity, during Y5, EMPOWER successfully delivered a wood painting and finishing practical training course. The training was part of the Project’s more intense focus on providing producers with technical assistance (TA). EMPOWER engaged two highly experienced international wood industry specialists to deliver a four- day group training course and secured the agreement of Tiki Design Factory to host the group training. The technical course combined conceptual training with practical, hands-on demonstration and was delivered to a total of 14 participants from seven wood processing companies (Sela Impex, Tefik Canga, Tiki Design, Shehu, Mobileria Prishtina, Dekor In, and Ferillak). Participating companies included one from north Kosovo (Dekor In).

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During Y5, EMPOWER designed and completed two key technical assistance activities. The first intervention related to lean manufacturing. Lean manufacturing aims to implement best practice methods aimed at process optimization (reducing waste and focusing on activities and processes that add value to the production process). During Q19, EMPOWER delivered a joint training to 15 wood companies3 amounting to a total of 18 participants. Moreover, a lean manufacturing model was developed, piloted and implemented at the Divani wood processing company from Ferizaj. Significant Presentation of the lean manufacturing pilot by a Divani changes were made in Divani’s internal manager, following working closely with STTA. processes by implementing new techniques and tools such as flow chart mapping of key internal processes, and the drafting of an action plan to reduce unnecessary steps, activities and waste. Other lean tools such as Kanban were also carried out at the company. It is estimated that the lean manufacturing intervention will improve Divani’s operating efficiency by a significant margin, including a significant reduction in waste. The second TA intervention during Y5 related to activity-based costing and price list construction. An international short-term technical advisor (STTA) started implementation of the activity at five wood processing companies. This activity was particularly relevant for companies that are exporting and planning to improve access to international markets. EMPOWER successfully implemented this planned 52-day assignment, which involved delivering firm-level assistance. The assignment involved mentoring five wood processing companies and providing them with tools to analyze costing functions, and to ensure that future commercial offers to clients are made based on a more rigorous cost-accounting approach. A joint workshop with participants from the wood sector was held with six wood processing companies (Tiki, Graniti, Candeo, Genkor, Dijamanti and Lumi). In Business Environment, EMPOWER’s main activity in Y5 was the organization of the third Kosovo Wood Industry Convention (KWIC), which was also co- financed by private companies operating in Kosovo (i.e. SCM, Biesse, Jabawood, Vernilac). AWPK successfully took the lead in organizing the Convention. The Convention, held on December 5, 2018, featured seminars (i.e. the wood processing industry forum), a Kosovo-made products exhibition, and a Student Design Contest. Twenty-one Prime Minister Ramush Haradinaj, USAID Mission Director Lisa Magno, companies displayed their products. and Head of Development and Cooperation at the Swedish Embassy Part of the Convention also the Nasrin Pourghazian, visited company displays and the exhibition of the featuring of 40 finalists of the Best Student Design Contest at the third Kosovo Wood Industry Convention. Student Design Contest, where

3 The companies included: Mobileria Doni, Ciao Berto, Elnor, Shehu, Mobileria Real, Genkor, KoBa, Tefik Çanga, Divani, TEDES, Dijamanti, Albed, Lumi, Deco Home Furniture and Elite Sofa.

Annual Report Y5 including Quarter 21 — October 2019 Page 15 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx students were asked to submit their design concepts for wood-based products. An independent jury evaluated all submissions. A critical part of the KWIC was the business-to-business (B2B) meetings component. Twenty potential buyers, consisting of Albanian diaspora, and other foreign potential buyers participated in the KWIC. EMPOWER facilitated seven buyers from Germany, Switzerland, UK, Austria and Belgium, and 13 were reported by the AWPK. A total of 71 B2B meetings4 were reported. As a result of the B2B meetings during the convention, reported sales of $575K B2B meetings at the third edition of the Kosovo Wood Industry were made. The next day, following the Convention, on December 5th, 2018. Convention, SCM hosted a presentation at its premises for 45 Kosovo companies as part of the KWIC. SCM reported $1.36 million in sales as a result of the third edition of the KWIC. During Q21, preparations continued for the organization of the fourth edition of the Kosovo Wood Industry Convention (KWIC), which will take place on October 15, 2019 and is being planned, organized and implemented by AWPK, with EMPOWER playing an advisory and a monitoring role. The fourth edition will have similar content as previous editions; starting with the 4th edition, the GIZ will be a key donor, which is expected to continue providing support after the end of EMPOWER.

2.1.2 Apparel Sector In Y5, project activities in the apparel sector contributed to the creation of 118 jobs and $4.32M new sales, as shown in Table 11. Table 11: Apparel Sector Activities & Impact, in $000s Period #Activities #Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Cuml 40 45 576 1,240 566 13,165 478 Y5 5 7 36 28 118 4,325 362 Q21 0 0 0 0 16 764 0

Forty activities were approved since the Project outset, including five in Y5, amounting to an EMPOWER cumulative investment of $576K. Through Y5, the activities implemented helped to create 566 new jobs in the sector and contributed $13M in new sales growth. These activities attracted $1.24M in co-finance.

4 The international buyers, who travelled to Kosovo in order to participate in the Wood Convention were: Rehana Ameer, Engineering Management Consulting Entrepreneur, from UK; Arben Kelmendi from company Kelmendi Holzmobel, Germany; Arben Mehmeti from company Desede, Switzerland; Besnik Sahitaj from company Schwyter, Switzerland; Lutfi Gashi from company L & B Joinery, UK; Yll Blakaj, from company Fenster & Turen GMBH, Austria; and Arton Govori from company Europe Zetels Fabrik, Belgium.

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Under Connection to Markets, EMPOWER focused its attention on a study visit and B2B activity in Turkey. During Y5, EMPOWER supported a total of 4 companies to attend a B2B consisting also of study visit. EMPOWER, together with the Kosovo apparel sector association, KAMA, KIESA and the Kosovo- Turkish Chamber of Commerce, supported four Kosovo apparel producers (Arta tex, Arta tex Group, Wear&Go and Cro-Fashion) to visit apparel sector factories in Turkey. This activity also consisted of a B2B event in Istanbul and Bursa. During the four-day visit, the Kosovo Meeting with Turkish Companies under DEIK organization, delegation held 50 direct meetings with followed by individual B2B meetings. Turkish companies. The Kosovo delegation also visited five textile factories in Bursa. Under Quality and Productivity, EMPOWER delivered technical assistance to seven apparel sector companies. EMPOWER designed and implemented a support program on Production Management System (PMS). The intervention was delivered to seven selected apparel companies by establishing simple systems for control over all operations and processes, and training and coaching management in their use at the firm level. Technical assistance was provided to Arta Tex, Arta Tex Group, Puntex, Wear and Go, Fashion Network, Creative and S//SPRINT. The delivered assistance established a baseline for Standard Allowed Minute (SAM) of production for up to five products at each company. The SAM measures the time needed to produce a complete garment, which also allows for certain

time allowances, including labor rest. International STTA at Creative company. As a result of the assistance, the companies set up an inexpensive production management system (consisting of a SAM method) at their operations. It is estimated that the companies’ production efficiency will increase by a significant margin, while also improving the transparency and operations management at the labor level. EMPOWER also organized a training workshop on the Production Management System to transfer this valuable information to a wider audience of the apparel sector. Ten apparel sector companies and entities participated in the workshop: Arta Tex Group, Drenusha Xharra, In Design, Nesa, Puntex, Iliri IGR, S//Sprint, Wear and Go, Cro Fashion, Trekendeshi and InversOne

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Under Business Environment, the highlight of EMPOWER’s support to the apparel sector in Y5 was the organization of the second edition of the Kosovo Apparel Industry Convention, which was led by the Kosovo Apparel Marketing Association (KAMA). The one-day activity was attended by around 200 people. Twenty-two companies exhibited their Kosovo-made products consisting of uniforms, work wear, sportswear, underwear, leather and ready-to-wear apparel at the product The second Kosovo Apparel Industry Convention (from left to exhibition during the Convention. A right): Charge D’Affaries at the U.S. Embassy Colleen Hyland, Runway Show was also held, which Kosovo Prime Minister Ramush Hajradinaj and Purple Muse showcased Kosovo-made apparel apparel company owner Buqe Cana. products of 17 local companies. Another component of the Convention was the Student Design Contest, where 16 student concepts were exhibited at the Convention hall throughout the day. As part of the Convention, B2B meetings that were organized with seven potential international and regional buyers5 and Kosovo apparel producers. Forty B2B meetings were reported to have taken place during the B2B activity at the Convention. To reinforce the B2B’s purpose, KAMA together with EMPOWER, organized and facilitated 14 visits to local apparel factories in the days before and after the Convention on November 13th, 15th and 16th, 2018. Kosovo apparel companies: S//Sprint, IN Design, Fame, Creative, Lunit, Nesa, Fashion Network, Puntex, TexCo, AgnesaTex, Artatex Group and KosovaTex, were visited. Potential future collaborations were noted amongst potential buyers: Marc Pomarat, owner of Sports Challenge in France and Ramush Ashani owner of OTP Solutions in France with Kosovo companies IN Design, S//Sprint and Tercom; a potential long-term collaboration between Rob Kwaspen, Apparel Consultant from the Netherlands with Edi Sejdiu, representative of ND Venture Group and owner of KosovaTex. During Y5, EMPOWER organized a workshop on lean manufacturing for a group of apparel sector participants. The aim of the training was to transfer hands-on knowledge on lean manufacturing methods that can be used to improve the operating performance, and competitiveness of companies in the sector. The following five apparel sector companies attended the workshop: Nesa, Lunit, Creative, Wear and Go and Fame. The workshop also Marc Pomarat, owner of Sports Challenge in included participants from other industries. It was France, Ramush Ashani, owner of OTP Solutions in the first time that apparel producers had a chance France, Rexhep Berisha, Albanian businessman to learn about lean manufacturing methods. from Switzerland visiting Kosovo company Fame.

5 These buyers were: Rob Kwaspen, Apparel Consultant from Ethics BV, Netherlands; Marc Pomarat, owner of Sports Challenge in France and Ramush Ashani, owner of OTP Solutions specialized in sportswear from France; Rexhep Berisha, owner of R.B Import Export from Switzerland; Gezim Thaci, co-owner of KOSWI, a clothing brand from Switzerland; as well as Liljana Karanovic, CEO and Predrag Vučković, Sales Manager at apparel company Karan co from Serbia.

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2.1.3 Energy Sector The following table summarizes EMPOWER activities and impact in the energy sector for Q21 and Y5. Table 12: Energy Sector Activities & Impact, in $000s Period #Activities #Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Cuml 39 57 648 1,766 439 30,124 123 Y5 3 5 25 55 170 12,635 28 Q21 0 0 0 0 51 1,005 0

In Y5, EMPOWER initiated 3 interventions in the energy sector, and sector beneficiaries created 170 new jobs, leading to an expansion of sales by $12.63M. Since the beginning of the Project, this sector has created 439 jobs and increased sales by a cumulative $30.1M. Under Connection to Markets, during Q20, with the support of EMPOWER, four solar energy companies, namely Jaha Solar, S-Imeri (ESKO), ProGroup and SunVolta Energy, attended the Intersolar Fair, which is part of the so-called Smarter E Europe, held during May 15 – 17, 2019, in Munich, Germany. The Smarter E Europe 2019 is Europe’s largest platform for the energy industry. Participating Kosovo solar cluster companies had the chance to meet new potential clients and seek expansion of their businesses in different regions outside of Kosovo. At the fair, the Kosovo businesses held 93 business meetings and established valuable Kosovo representatives and EMPOWER staff at contacts. As a result, Jaha Solar secured an export sales the B2B pavilion of the Intersolar Fair. contract with an Italian buyer amounting to a reported value of $384K (sales from Q20 and Q21), S-Imeri made a supply deal in the amount of $28K, a favorable deal was made with Sun Volta supplier.

Previously supported EMPOWER beneficiaries reported during Y5 an increase in sales as a result of new contracts from previously attended fairs. For example, Enrad reached a total of six new export markets (Moldova, Croatia, Bulgaria, Bosnia, Macedonia and Albania) and $1.3 million in sales. Tiki Mosaic reached eight new export markets (Greece, Serbia, Albania, Montenegro, Macedonia, Romania, Bosnia and Hungary) and $58K in sales, while Elektrostublla reached five new export markets (Montenegro, Croatia, Switzerland, Slovenia, and Albania) and $124K in sales. During Q21, preparations for the fourth edition of the Green Festival continued. The lead implementer of the Green Festival, the Kosovo Manufacturing Club (KMC), confirmed support of $48K from donors (i.e. GIZ, the Embassy of the Kingdom of the Netherlands, TEB Bank, Ministry of Economic Development and the ProCredit Bank). Exhibiting companies will also cost share with around $17K. The total budget of this event is over $66K. As of September 2019, nearly 50 exhibitors have confirmed participation. Meanwhile, the handover of the Green Business web platform and Facebook page to the Kosovo Manufacturing Club occurred in July 2019. As of Q20, the Green Business Facebook page has reached 3,798 followers in a period of less than three years. From January 2019, the Green Business web portal had 24,044 visits and 10,867 unique visitors.

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Under Quality and Productivity, a solar photovoltaic (PV) installers and designers training program was delivered. The training was mainly delivered by Mr. Volker-Hense, with 27 years of experience, who covered a comprehensive curriculum with detailed technical knowledge and practical examples. A total of 19 participants, which included representatives of 12 local solar companies. The program included a practical hands-on training on PV planning, installations and measurements. A practical and theoretical exam was used to test their learned knowledge and become certified as PV experts by TÜV Rheinland, the EMPOWER-engaged PV certification training: demonstration of PV panel electricity generation measurement with shadow effect, August 2019, implementor of the activity. In total 17 at Jaha Solar training site. candidates have been certified. In addition to EMPOWER, this activity has been co-financed by the Swiss-funded Enhancing Youth Employment (EYE) project and is facilitated by the renewable energy sector industry association, KIMERK. Participating Kosovo private sector companies are also cost sharing 38% of the total cost of the training and certification program, which validates their demand for such trainings. The total cost of the training and certification program for the PV installers and designers is $56K. During Q18, two additional interventions related to product certifications were identified in the energy sector. Enrad signed a grant agreement with EMPOWER in December 2018. The grant supported Enrad to obtain CE Mark certifications for three groups of products, including LVD and EMC conformity tests, which are a precondition to obtain a CE mark certification. Conformity test were conducted in Q20, while CE Mark certifications were obtained in Q21. The total cost to attain the certifications is $25K, of which $18.6K has been financed by Enrad and $6.7K by EMPOWER. Last year, the company was in contact with two potential buyers from Croatia, a potential buyer from Slovenia and another one from Greece. These buyers all reportedly request the CE Mark. Elektrostublla reported the need to certify their products with the so-called VDE (a certification for electrotechnical devices, components and systems) and OVE (an Austrian certification for safety and quality of electrotechnical products) in order to penetrate the German and Austrian markets, respectively. The focus of EMPOWER support was placed on the VDE certifications, since they were of a more urgent nature. The company was planning to obtain the VDE certifications for 10 products. The total estimated cost was $16.8K, with each party (namely, the company and EMPOWER), cost-sharing half the cost of the certification. The terms of the grant agreement were discussed in Q18, while the actual agreement was signed in early Q19. This activity was subsequently cancelled in Q21 due to delays of the company to comply with the project’s procurement procedures given EMPOWER’s project lifecycle coming to an end. 2.1.4 Other Production Sectors To date, other supported sectors include metal, food processing, health and beauty products, paper products, and automotive parts. The following table summarizes activities and impact in Y5 including Q21. Table 13: Other* Production Sector Activities & Impact, in $000s Period #Activities #Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Cuml 64 258 1,566 4,735 782 41,422 853

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Y5 11 10 153 158 258 20,820 690 Q21 2 0 18 5 120 2,763 61

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

In Q21, EMPOWER conducted 2 new interventions in “other production sectors”. In this sector, beneficiaries created 120 new jobs in Q21 alone and 258 new jobs in Y5. Related to Production Expansion, under “other” sectors, Koshi Group continued to expand its operations, hiring four new employees, reaching a total number of 35 attributable employees. During Q21, Koshi moved to a newly constructed 3,400sqm factory, amounting to a $1.10M investment. Koshi went through a significant growth pattern since EMPOWER’s support in 2016. The company had only 15 employees when it was supported to exhibit in Italy, its first international fair participation, but now Koshi has grown to 50 employees. Koshi plans to reach 60 employees by the end of 2019. Koshi is also in the process of designing a second factory, designated for catamaran boats for racing. The company is currently designing the first product prototype of the boats and will launch it in March/April 2020. The product’s sale price is estimated at over half a million dollars. The company intends to launch this innovative product in March 2020, at a fair in Miami, USA. Since project support, other beneficiaries have grown in job terms: to name a few, KIVO created in total 47 new jobs, while Embelsia created 26 new jobs. Meanwhile, the metal sector beneficiary with the highest job creation since project support is Rroni Fer, with a total of 43 new jobs. During Y5, there were two significant cases of companies that laid off workers. Rolleo engaged in sweets production dropped from 34 total jobs in Q16 to 9 jobs, while Konditoria, another sweets producer, dropped from 25 jobs in Q17 to 14 jobs. During Q20, a visit to KIVO was organized on June 25, 2019, for the Deputy Chief of Mission (DCM) Coleen Hyland and USAID Mission Director Lisa Magno. KIVO specializes in the production of bread bags, printed films and garbage bags, mainly for export to the Dutch, Belgium, German and several Western Balkans markets. DCM Hyland and Mission Director Magno learned about the rapid expansion of the company since its establishment in 2014. Currently, six in every 10 bread loaves made in the Netherlands are packaged in bags made by KIVO in Kosovo. Since receiving grant Deputy Chief of Mission Colleen Hyland and USAID Director Lisa Magno visited plastics company KIVO, on June 25, 2019. support from EMPOWER, the company has created 47 new jobs, and currently employs over 118 people. The owners are now planning to open the largest plastic recycling plant in the Western Balkans, in Kaçanik, and expect to create many new jobs. A visit to EMPOWER beneficiaries Ultra Cosmetics and Bibita was organized on April 29, 2019, for Sida representatives Markus Johannesson and Lena Rupp. Under Connection to Markets, in Q17, EMPOWER had supported Koshi to exhibit at a major industry fair, namely the Autmechanica in Frankfurt, Germany. As result its participation at the fair, Koshi reported total sales of $28,627. In total, Koshi has reached a total of $544K in new sales from exhibiting in three fairs, supported by EMPOWER. During Q19, EMPOWER, at the request of local Kosovo sweets producers, identified the ISM international fair in Cologne, Germany, as an important venue for Kosovo businesses. The fair took

Annual Report Y5 including Quarter 21 — October 2019 Page 21 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx place during January 27 – 30, 2019, where two local producers, Trosha and Amel, attended, while Embelsia, another sweet producer, was unable to attend due to lack of a visa. Amel reported several interesting meetings and contacts. It contacted Cachet (a brand of Kim's Chocolates, a Belgian chocolates’ manufacturer) to consider becoming Cachet's local supplier and producer in the future to supply the Balkan region. Amel also contacted and reached sales agreements with different suppliers of raw material: namely with a company known as Devan Plastics (Dutch-Belgium company), which sells respirators (machine parts); Barry Callebaut Co (Serbia) and Chocomac Ghana Limited (Ghana), which sell chocolate and cocoa; MFS Chocolate Molds (Turkey), which sell chocolate molds and forms; Aasted (Denmark) and IdeoTecnica (Italy), which sell machines for commercial production; and Dong Dao (China, offices in Holland), and HC Packaging (China), which provide packaging supplies.

In Q19, Bibita exhibited for the fourth time at the biggest food and beverage fair Gulfood, held in Dubai during February 17 – 21, 2019. There, the company was a finalist for the Best Packaging Design award for its new product called DTX WTR (i.e. Detox water). Two years ago, Bibita won two awards at the same fair: Best Innovative Product and Best Packaging Design for its Fitness Water called DUM DUM. Meanwhile, in Q19, Bibita reached an important cumulative milestone: it expanded its exports to a total of 17 countries namely, Kuwait, Bahrain, Jordan, Oman, Greece, Slovakia, Czech Republic, Bulgaria, Albania, Bosnia and Herzegovina, Slovenia, Austria, Italy, Belgium, Netherlands, Luxemburg and the United Kingdom. Their top market are the Benelux countries and their second most important market is in the Middle East. Recently, the company signed a five-year contract with a foreign distributor amounting to $25M and expects a sales increase of at least $1M during 2019 resulting from this contract. Meanwehile, Pure Gulfood fair, Dubai, Power, another EMPOWER beneficiary, an auto filter producer, signed its February 17-21, 2019. first export contract with an Italian buyer. Under Quality and Productivity, in Q18, a key activity in the metal sector was completed. The activity sought to facilitate practical training, examination, and certification of welders. The completion of the activity was followed by a submission of a final report by the local STTA, Mr. Muhamet Disha. The purpose of the assignment was to support metal companies to identify and implement opportunities for quality improvement, productivity increases, and product/company export certifications. The activity focused on the training for certification and certification logistics of 50 welders. The activity resulted in a total of 62 trained welders and 44 certified welders from seven beneficiary companies. Companies covered the certification cost, while EMPOWER covered the costs of the local STTA, who supported the identification of beneficiary companies and facilitated the training and certification process.

2.2 Component 2: Workforce Development EMPOWER approved 3 new WfD activities in Y5, involving 1,299 trainees (trainees are counted in cases where EMPOWER supported beneficiaries, mostly with expansion grants). A total of 428 jobs were created in Y5. These Y5 activities required Project investment of $74K.

Table 14: Component 2 – WfD Summary Activities Trainees Jobs EMPOWER $ Type Q21 Y5 Cuml Q21 Y5 Cuml Q21 Y5 Cuml Q21 Y5 Cuml Institutional 0 1 15 0 411 933 49 62 254 - 17 412 In-Company 0 0 11 200 804 2,432 112 347 1,399 - - 442

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Systemic 0 2 6 0 84 84 0 19 19 - 58 130 TOTAL 0 3 32 200 1,299 3,449 161 428 1,672 - 74 983

2.2.1 ICT Sector Most of EMPOWER’s investment in WfD has generally been focused on ICT skills training, both in- company and through educational institutions. The table below summarizes the interventions in the ICT sector in Y5, Q21 and cumulatively since the Project’s inception.

Table 15: ICT Sector Activities & Impact, in $000s Period #Activities #Firms EMP $ Co-Fin $ New Jobs New Sales $ Trainees Cuml 27 65 367 1,435 1,462 39,228 2,469 Y5 4 5 18 158 290 17,501 692 Q21 0 0 0 0 72 3,248 139

During Y5, EMPOWER initiated 4 new activities in the ICT sector, investing $18K and producing 290 new jobs and $17.5M in new sales. In Q21, the call center services company, IQ to Link, reported 50 new jobs out of 89 individuals trained, resulting in a total of 957 new staff employed by the company since EMPOWER support. In Q20, IQ to Link signed two new contracts with new clients: Adidas and Axel Springer Ferlag, both from Germany. It was expected that the activity would generate 400 sustainable jobs in three years, but actual results are more than double than expected. During Q21, EvroTarget, which operates in the outsourcing service sector in communications, customer care, and claim management, trained 23 new employees. Currently, the company has a total of 198 employees. The Project expected EvroTarget to hire around 150 new employees by the end of EMPOWER’s term, but those expectations were also exceeded. STIKK Training Academy reported in Q21 that they placed 27 individuals in an internship program at different ICT companies. Cumulatively, 130 trainees have undergone the internship program, while 73 have been employed, since the start of the activity. Under Connection to Markets, in Q20, EMPOWER supported the attendance of eight Kosovo IT service providers and one representative from Kosovo ICT association, STIKK, to the Smart Cities Conference in New York (SCNY19), USA, during May 13 – 15, 2019. This event allowed Kosovo ICT companies to learn about market opportunities and trends, and to promote their services to a wider potential client base. The purpose of the visit in New York was: to support to build of the brand of the Kosovo IT industry, business development and B2B export promotion (nearshoring); exchange of experience and joint learning on IT entrepreneurship and innovation; establish strategic partnerships and cooperation with incubators and accelerators; establish strategic partnerships with IT associations and institutions; visit IT events; market intelligence and networking. Up to now, the companies received more than 30 potential contracts/inquiries as a result of their attendance at the Conference,

Annual Report Y5 including Quarter 21 — October 2019 Page 23 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx and more than 100 contacts were made. The value of the contracts that have been reportedly negotiated by participating Kosovo ICT companies with US partners stands at $113,000. In Q21, Sonecto reported cumulative sales of $29,000. In Q18, EMPOWER beneficiary Formon, a manufacturer of 3D printers, won the prestigious German Design Award, a top award in the category of Excellent Product Design, for its 3D Formon Core printer. The German jury rated the 3D printer as "remarkable for the simplicity of its use in creating three dimensional models." The German Design Award is an official federal award that is organized by the German government for products from all over the world and is conferred to by the German Ministry of Economy and Technology. In Q18, EMPOWER facilitated the USAID sponsorship of the seventh edition of the KosICT conference held in October 2018. The conference had an estimated 1,500+ participants. The event was organized by Kosovo’s ICT association STIKK, while EMPOWER was one of the main sponsors of the event. KosICT has become a trendsetting conference in the Balkans related to technology and business development. Contrary to last year’s KosICT, this year’s event also hosted young entrepreneurs in another stage called Developer’s Stage, where they had the Speakers at the seventh edition of the KosICT conference. opportunity to present their projects in front of a smaller audience. In Q20, EMPOWER supported the organization and delivery of the Girls in ICT Day and Doku.Tech technological conference, organized by IPKO Foundation and American University in Kosovo. The Girls in ICT Day was held on Friday, April 26, 2019, on the RIT Kosovo campus and gathered around over 250 girls interested in the field of ICT. At the event, young girls and women from all over Kosovo had the opportunity to hear local and international speakers share their personal success stories and inspire them to thrive in the field of ICT. The conference was composed of keynote speeches, workplace skills workshops, networking breaks and a job fair where 25 local companies scouted for new employees. Two full time jobs and one part time job have Opening speech by USAID Mission Director Lisa Magno, at the been reported as a result of the job fair, which Girls in ICT Day 2019. was an integral component of the overall event. EMPOWER also supported the 2019 edition of Doku.Tech. The two-day event took place during June 8 – 9, 2019, with a focus on digital innovation, internet freedom and data economies in Kosovo. This year’s audience was comprised of students, technology entrepreneurs, innovators, online activists, social entrepreneurs, marketers, business leaders, artists, bloggers, movie enthusiasts, gamers, media, Do it Yourself (DIY) makers and students numbered over 900 participants in total. As a result, out of all participants of this year’s edition of Doku.Tech, 51% of them were females and 49% were males. This came as a result of extensive outreach sessions, both nationally and internationally.

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In Q19, EMPOWER approved and signed a grant to support the establishment of BONEVET in Kacanik. The Project is supporting the BONEVET training center in Kacanik with $49K to set up two modules out of 10 and office equipment. A newly built and child-friendly space of 300m2 in the center of Kacanik has been leased for the needs of BONEVET Kacanik. The adaptation, safety installations, space division and other works have already been implemented and in Q20, BONEVET Kacanik reported 61 individuals trained, all under 18 years of age. In the next year, trainings are planned for individuals aged above 18. In BONEVET Kacanik, four Doku.Tech 2019, as per tradition, involved audiences full time jobs and three part-time jobs have been mainly from the region of Kosovo, with participants also from neighboring countries, as well as created. In Q21, BONEVET Prishtina, another international participants. initiative that EMPOWER supported, reported cumulative figures: a total of 862 individuals have been trained, of whom 84 individuals are of 18+ years of age. Only in Q20, 29 individuals aged 18+ were trained.

2.2.2 WfD Activities in Other Sectors • In the metal sector, in Q18, an activity was completed focusing on the training for certification and certification logistics of 50 welders. The activity resulted in a total of 62 trained welders and 44 certified welders from seven beneficiary companies. Companies covered the certification cost, while EMPOWER covered the costs of the local STTA, who supported the identification of beneficiary companies and facilitated Grant signing ceremony at BONEVET in Kacanik, January 31, 2019; (right to left) Mr. Brian Martulus, USAID EGO the training and certification process. Director, Mr. Vllaznim Xhiha, BONEVET founder, and Mr. The examination of welders was done Skender Rama, EMPOWER COP. according to EN 9606 – 1:2012 (E). In the first round, 38 individuals were trained and attended the examination process in Q16, out of whom 27 individuals were subsequently certified. In the second round in Q18, 24 individuals were trained out of which 17 were certified, bringing the total to 44 individuals certified. The participating metal processing companies included: Vinex (Viti), Daqa (Ferizaj), and Exim Metal (Shtime), Interstil (Pristina) Eurometal (Feriza), Laci (Ferizaj), Metal Export (Shtime).

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• Quality and Productivity in Energy Sector: During Q20, the first week of the solar photovoltaic (PV) installers’ and designers’ training started on June 3, 2019 and was concluded with a site visit at Jaha Solar factory. Nineteen (19) participants, that include representatives of 12 local solar companies, attended the first week of the training. The second and third week of the training continued on August 19, 2019, with a practical hands-on training on PV planning, installations and measurements. On the final day, the trainees participated in exam to test their knowledge gained to be certified as PV experts by TÜV Rheinland, 17 participants has been certified. • Technical assistance on Activity-Based Costing: EMPOWER hired an international STTA, who was approved for a 52-day assignment, most of which included in-country work. The consultant started in Q19 to provide firm-level assistance to five selected wood processing companies (Albed, Graniti, Sela Impex, Tefik Qanga, and Tiki), in order to improve their cost accounting system and methodology and enable the companies to more rigorously construct their export price lists. Additionally, six wood processing companies (Tiki, Graniti, Candeo, Genkor, Dijamanti and Lumi) participated in a joint workshop with participants from the broader wood sector. • Production Management Systems for Apparel Companies: EMPOWER worked at the firm level with seven companies representing the apparel sector in Kosovo. These companies included Creative, Fashion Network, Sprint, Puntex, Artatex, Artatex Group and Wear and GO. The targeted companies implemented the so-called Standard Allowance Minute (SAM) methodology as an integral part of the Production Management System. It allows companies to track the operational efficiency in production and enables worker compensation based on performance. In addition, EMPOWER organized a wrap-up one-day group training attended by 12 participants from 10 apparel companies. • Lean Manufacturing: EMPOWER organized a group training with the aim of improving the operating performance, productivity, and competitiveness of companies in the wood processing and apparel sectors. In total, 30 participants from 24 companies took part in the training. In addition, EMPOWER also piloted and implemented a lean manufacturing model at Divani wood processing company. The total duration of this particular assistance was 25 days, which included a 2-day group training for targeted sectors • Accreditation of VET private training provider in wood processing sector. In Q21, EMPOWER hired a local STTA for 25- days assignment to support company Shehu and provide technical assistance in the process of the accreditation of a private training provider for the Occupational Standard “Carpenter” according to the National Qualifications Authority (NQA) procedures. The private education and training provider in carpentry is expected to increase the overall capacities of a future qualified workforce in wood processing industry in Kosovo.

2.2.3 Countering Violent Extremism (CVE) activities / Systemic Activities in WfD In Y5, EMPOWER continued with activities aimed at supporting at-risk, vulnerable, and marginalized youth, aged 18 – 35, in four Kosovo municipalities of Gjilan, Viti, Kacanik and Hani i Elezit. To achieve this, 3 programs were launched in Y4 of the project: 1) On the Job (OTJ) Training Program, implemented by Kosovo Manufacturing Club (KMC); 2) Self-Employment Program, implemented by HELP Kosovo; and 3) the Tailored Training Program, implemented by AUK/RTI. As a summary, under the OTJ Training Program, which involved a 3-month long in-company training activity, a total of 255 Kosovo youth completed training, of whom 131 were subsequently employed by partner businesses. Under the Self-Employment Program, a business skills course was delivered to 200 youth from the four municipalities, and a total of 79 grants were provided to youth beneficiaries

Annual Report Y5 including Quarter 21 — October 2019 Page 26 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx to open new businesses. Under the Tailored Training Program, 132 youth were trained in soft skills, remedial English, ICT, and German. Through the three programs, 587 Kosovo youth were trained, leading to the employment of 210 individuals, the majority of whom were aged 18 – 24. By individual activity breakdown (and results for Y5 alone), the first program, OTJ Training Program, started in August 2018 and envisaged the placement of 250 youth in 12 businesses for a 3 month in-company training. Out of 250 youth trained, as part of the agreement, KMC pledged to ensure the employment of at least 50 youth from those that successfully completed the in-company training program. The total budget of the program amounts to $254K, out of which $151K are EMPOWER funds, $80K are co-financed by participating companies, and $22K are co-financed by KMC. In Q21, there are 61 trainees that completed the training and another 91 that started the training. In total, up to and including Q21, a total of 178 that attended and successfully completed the training. The total number of trainees that were employed is 81. In order to meet the planned number of trainees that complete the training and become employed by companies, until Q21, the initial agreement with KMC has been modified twice; on May 2, 2019 and on August 5, 2019. The first modification envisages the increase of the number of companies that will engage trainees in the OTJ training program, as the result of which, the number of companies increased from 12 initially planned to 22. The second modification envisages a no-cost extension for another month, ending in November, instead of October. Until the end of the activity, the total number of trainees completing the training, as well of those being employed by companies, is expected to exceed the numbers that were initially planned.

The Self-Employment (SE) Program, started in July 2018, has aimed to prepare and deliver a business skills course to 200 youth from four targeted municipalities, and provide up to 32 self-employment grants to the most successful trained youth. The total budget for the program is $182K, of which $151K are EMPOWER funds and $31K are co-financing from participating municipalities. In total 200 youth received tailored business skills training. The youth that completed the training were eligible to apply for a small-scale grant. A total of 141 applications were received, 49 were approved, and 46 were put in a reserve list, while 46 were rejected. Procurement procedures were launched and equipment was A grant beneficiary from Kacanik. subsequently distributed to beneficiaries during August and September 2019. Since procurement offers received resulted in budget savings, HELP during September started procuring and purchasing equipment for additional six grants for applicants from the reserve list of qualified applicants. Hence, the total number of grants will be 55, which is higher that the number of 32 grants initially planned. The Tailored Training Program (also known as RED-T), which started in September 2018, has been implemented by RIT-Kosovo/AUK-Training Development Institute and has aimed to enhance the skills of vulnerable and marginalized youth. The intervention has consisted of tailored classroom-based training in Soft Skills, Remedial English, ICT, and German language for at least 130 youth from four partner municipalities. The total budget for the program is $71K, of which $61 are EMPOWER funds and $10K are co-financed by RIT/AUK-TDI.

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During December 2018, and January and February 2019, the General Training on Soft Skills for 132 trainees took place. Between April and June, AUK/RIT continued with the training of total 132 trainees from four municipalities on Java programing, web development, and German language. In June, all planned training modules were completed. In July, all trainees that completed the training in ICT and German had to undergo tests in order to get certified, as result of which, 62 trainees Certification ceremony at AUK/RTI were certified in German language training and 67 certified in ICT. The certification ceremony took place on September 20, 2019. USAID Director of Economic Growth Office, Mr. Joshua Mike, participated at the event, along with EMPOWER representatives, and representatives from partner municipalities.

2.3 Markets and Export – Diaspora Linkages In Q20, on May 24th and 25th, 2019, the Economic Conference of Albanian Diaspora from Europe - B2B was hosted by the Albanian Diaspora Business Networks (ADBNs) from Europe, in collaboration with EMPOWER and the Kosovo Ministry of Diaspora and Strategic Investments. The main purpose of this event was to connect Kosovo businesses with businesses from diaspora and identify investment and export opportunities for Kosovo-made products and services. Hundreds of businesses attended the two-day conference. More than 250 meetings were held and $440K in new sales have been Kosovo solar energy company, Jaha Solar, participating in reported thus far. Forty-seven (47) Kosovo the B2B meetings, organized on May 24, 2019, as part of the Economic Conference of Albanian Diaspora from companies hosted the B2B meetings with Europe, in Prishtina. As a result of the meetings, Jaha Solar diaspora businesses. A total of 144 companies will be sending separate orders to Switzerland for two from diaspora were registered on the first day different Albanian diaspora-owned businesses. of the opening of the Conference. The 2019 Catalogue: Our Products - Kosovo Ready to Export, containing profiles of 116 export-ready Kosovo businesses, was also prepared specifically for the event and distributed before and during the event to the diaspora businesses attending the Conference. A total of 13 rounds of meetings occurred.6

6 Three (3) contracts and a cooperation agreement were signed as a result of the B2B activity: i) a contract between Kosovo company offering accounting services, Buchaltung - Discount Service, and the Albanian diaspora-owned company from Germany, AO Dienstleistung GmbH, amounting reportedly to approximately $107K for one year (according to the involved parties, these services will be extended beyond one year); ii) a one-year contract between Kosovo company Alstone and IBS System Home from Switzerland, amounting to reportedly $221K for production and supply with prefabricated concrete elements; iii) a contract between Kosovo company Prime Logistics offering transportation and other logistics-related services and the diaspora owned company from Austria, Montscher und Partner GMBH; and iv) a cooperation agreement between four Kosovo companies from the apparel sector: Puntex, Arta Tex, SSprint, Arta Tex Group, and the Austrian chapter of the ADBN. Six (6) other initial deals and offers were made throughout the B2B meetings held on May 24, 2019. As a result of the meetings held, Kosovo company Agro-Butrinti made a pilot deal with company Heby Brandschutz GMBH in Germany, expected to be implemented following the completion of the construction of a building in Germany, reportedly amounting to $24.6K for the material, and $89.6K for installation. Moreover, as a result of deals made at the Conference, Kosovo company Jaha Solar will be exporting 210 PV panels to a diaspora-owned company in Switzerland, Alba Solar, it also plans to send a separate offer for export of PV panels to IBS Systems, another diaspora-owned company from Switzerland. Additionally, three deals were made between Kosovo company Elektrostublla and a diaspora- owned company from Austria, SB Elektronik, for export of electric materials; a diaspora-owned company from Finland, LVI-Nordic, for the production of inox parts; and a diaspora-owned company from Switzerland, IBS Systems, for the production of boxes for concrete.

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

Meanwhile, at the end of 2018, EMPOWER initiated an activity titled Export Readiness and Promotion Assistance (ERPA), aimed at evaluating the export readiness of targeted Kosovo companies, coupled with concrete action planning for export market penetration, including through targeted industry research. The pilot of the export assistance package is being implemented for a limited number of export-ready private sector companies, focusing on enterprises with high growth and export potential. Under Lot 1, three Export Readiness Assessments were finalized for: Berto company (kitchens, furniture, plastic doors and windows, wooden doors); Jasin (stainless steel HORECA inox appliances manufacturer); and Wear & Go (jeans, textile). Under Lot 2, market entry strategies for three selected export goods (Kosovo-made products) were developed: i) Product: Customized Kitchens (Company: Berto company, Vushtrri); ii) Product: Bedroom furniture (Company: Tiki Home, Prishtina); and iii) Product: Healthy drinks (Company: Bibita, Peja). Under Lot 3, a general industry market research was produced titled as International Prospects of Kosovo Furniture.

A trade mission for selected Kosovo wood processing companies was organized in Y5. MDA, a contractor under ERPA, provided a list of furniture stores and retailers in Belgium, i.e. potential buyers with potential of collaboration with Kosovo companies. The Business Trade Mission to Brussels for five selected Kosovo businesses from the wood processing industry took place in May 2019. The purpose of the mission to Belgium was to connect Kosovo businesses with foreign partners in Belgium and the region, as well as The Business Trade Mission to Brussels for five selected diaspora businesses there. Kosovo companies wood processing businesses organized in May 2019, in Ciao Berto, Elnor, Candeo, Albed and Shehu, collaboration with the Kosovo Embassy in Begium. participated in this trade mission that sought to identify investment and export

Annual Report Y5 including Quarter 21 — October 2019 Page 29 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx opportunities of Kosovo products and services. The Kosovo Embassy in Belgium cooperated with EMPOWER to assist in organizing the mission. In Q20, EMPOWER facilitated the participation of eight Kosovo businesses at the Albanian Diaspora Business Fair in Vienna 2019, hosted by the Albanian Diaspora Business Network chapters. The event took place on April 27, 2019. The purpose of this activity was to connect Albanian diaspora from Austria and the region with businesses in Kosovo and identify investment and export opportunities of Kosovo products and services. Kosovo businesses that participated and exhibited at the fair included: Albed, Shehu, Lumi, Diamanti, and Elnor (wood processing industry); Albanian Diaspora Business Fair in Vienna, April 2019, Puntex and Wear and Go (apparel industry); and where eight business from Kosovo also participated and Rrota (ICT sector). Fair participants involved about exhibited. 60 businesses owned by Albanian diaspora, who exhibited at the event.

Under Connection to Markets, in Q18 EMPOWER also supported the participation of two Kosovo IT companies in a B2B Balkans conference during October 17 – 19, 2018, in Tallinn, Estonia. The purpose of this support was for Kosovo companies to tap into a potential collaboration with IT-companies in Estonia and explore joint solutions for the government and for the private sector in Estonia. The two IT companies from Kosovo, Linkplus and Cacttus, took part in the B2B meetings in Talinn. The two companies also held a presentation on Kosovo ICT growing private sector at the “Countries’ pitching session – opportunities in Western Balkan countries.” With the objective of potentially expanding sales and jobs, EMPOWER scheduled a set of meetings and site visits for the two Kosovo companies, including Kosovo diaspora in the Baltics. In particular, the arranged meeting with the ICT Association in Estonia created room for a constructive follow-up with the association to potentially arrange a visit to Kosovo. An additional highlight is the contact made by the Kosovo companies with the Estonian ICT company Helmes, with more than 300 employees. In Q18, EMPOWER also provided sponsorship and technical support for the organization of a manufacturing industry event, known as the Kosovo Manufacturing Convention, organized by the Kosovo Manufacturing Club for the first time. EMPOWER signed an MOU with KMC in Q18. The convention was held during November 29 – 30, 2018, and provided an opportunity for Kosovo’s manufacturers to discuss challenges and find new business opportunities, as well as learn about the latest developments and trends in manufacturing. The EMPOWER-supported event consisted of forums on export challenges, regional trade, employment and vocational training, as well as Kosovo Manufacturing Convention held on the 29 matchmaking support for all attendees. An and 30th of November 2018 tackled, among EMPOWER representative also presented the others, latest developments and trends in Project’s workforce development activities in manufacturing. one of the convention’s discussion panel .

Annual Report Y5 including Quarter 21 — October 2019 Page 30 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx related to a discussion on skills gaps in the manufacturing sector. In addition, during the Year 5, EMPOWER through DokuFest 2019 edition, provided a unique opportunity tailored for diaspora titled, “DIASPORA @DokuFest.” It offered a specific venue with tailor made packages for diaspora to register for activities but also take part in a questionnaire to better understand the current offer and diaspora needs. It included 3 different packages in the form of a cultural visit, a wine tasting experience and kayaking in Nashec. All events concluded with the gastronomic journey presented by local food enthusiast, Mr. Jeton Jagxhiu, who presented the gastronomic history of local cuisine, particularly focusing on how cultural patterns effected the localization of the food and how it can be used as a

potential for investment. The activities were Albinfo.ch Cover Magazine. promoted through all festival outlets, including Albinfo Magazine.

2.4 Cross-Cutting Issues EMPOWER has affirmative cross-cutting objectives that feed strongly into its selection of competitiveness and WfD interventions. These are: (i) advancing the economic engagement of priority populations, which include women, youth, and minorities (including North Kosovo); (ii) supporting microenterprise development; (iii) facilitating collaboration in economic growth assistance with other donors and the GoK; and (iv) promoting environmental sustainability, including assuring protection of the environment in its own activities. The following table demonstrates that EMPOWER’s support for job creation benefited all priority populations not only in Q21, or for the entirety of Y5, but cumulatively for the Project to date. Worth mentioning: 37% of all new jobs created since the beginning of the Project were taken up by women, and nearly 30% were taken up by youth (note: categories overlap), and over one-tenth have been among minorities. A total of 491 jobs among women were created in Y5 alone; 304 jobs were among youth and 109 jobs among minorities (categories are overlapping). Table 16: Job Creation - Priority Populations Total Women Youth Minorities Women in Management Sector Y5 Cuml Y5 Y5 Y5 Q21 Cuml Q21 Q21 Cuml Q21 Cuml Q21 Cuml Y5 Apparel 16 118 566 8 121 462 2 69 263 0 16 33 0 10 19 Energy 51 170 439 10 34 73 0 15 67 4 12 54 1 1 2 ICT 72 290 1,462 21 120 673 18 63 519 0 11 56 7 23 58 Metal 0 22 107 0 6 13 0 1 15 0 14 33 0 0 0 Other 120 237 675 68 117 269 13 57 113 18 42 249 17 18 20 0 6 109 0 0 0 0 0 0 0 0 0 0 0 0 Tourism* Wood 66 416 1,422 25 93 300 32 99 455 1 14 63 0 0 12 Total 325 1,258 4,778 132 491 1,790 65 304 1,432 23 109 488 25 52 111

2.4.1 Women

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The empowerment of women in Kosovo and their engagement in the workforce is a priority for EMPOWER. Throughout Y5 and Q21, the Project engaged in various activities that supported, trained, and increased job opportunities for women. By the end of Q21 and through Y5, 1,790 jobs out of 4,778 in total created by EMPOWER-supported activities were taken up by women.

Table 16.A: Women employment, training and internships

Jobs for women Women trainees Women interns Sector Q21 Y5 Cuml Q21 Y5 Cuml Q21 Y5 Cuml Apparel 8 121 462 0 80 158 0 0 101 Energy 10 34 73 0 1 6 0 0 60 ICT 21 120 673 54 319 1,258 63 294 2,244 Metal 0 6 13 0 0 0 0 0 0 Other 68 117 269 8 233 305 8 49 163 Tourism 0 0 0 0 0 16 0 0 0 Wood 25 93 300 0 8 35 0 0 100 Total 132 491 1,790 62 641 1,778 71 343 2,668

ICT and CVE activities that are part of the other sector in the table are the sectors with the highest number of training and internships for women. The sectors with highest job creation for women are ICT, CVE and apparel. CVE is the leading sector in training where 495 individuals were trained in Y5 alone. Cases include On the Job Training implemented by Kosovo Manufacturing Club, Tailored Regional Employment Development Training Program (RED Training) implemented by RIT Kosovo and Self-Employment Training Program implemented by Help that have trained 205 women. Through On-the-Job Training, 163 individuals have gone through internships from which 49 were women. These internships led to employment of 81 individuals from which 56 were women. Through Help activity 49 individuals opened their microenterprises, from which 17 are owned by women. ICT is another sector that has the highest number of training and internships. IQ-to-LINK alone has 410 trainees in Y5 and together with Evro Target Baruti and STIKK Training Academy make a total of 692 trainees. From 410 trainees in IQ-to-Link, 162 were women. All the trained individuals went through internships which lead to employment of 212 individuals in Y5 alone from which 89 are women and 22 women in management positions. Evro Target, Baruti and STIKK Training Academy have trained 282 individuals from which 157 were women. These training led to 286 interns from which 132 were women. From these trainings 61 new jobs were created from which 29 were for women including 1 woman in management position. Apparel sector through STTA in Production Management Systems that took place in Q19, has trained 362 individuals from which 80 were women.

In Y5, woman-owned apparel manufacturer Lia Stublla, expanded to new markets and designed dresses for international Hollywood and Bollywood stars. The designer’s dresses were worn by celebrities at the annual Oscars and EMMY award ceremonies in LA, US, creating excellent publicity for the brand. Another success of Lia Stublla during Q21 was her collaboration with Miss Universe Spain, where she designed red-themed dresses for all models in the contest. The fashion designer is the process of exporting to retail stores in Germany and Dubai and continuing to expand exports through its online store to clients in Albania, Macedonia, UAE, USA, France, Italy, India, Russia, Switzerland, Venezuela, Spain, Morocco, Congo and Bulgaria. The EMPOWER-beneficiary has doubled

Annual Report Y5 including Quarter 21 — October 2019 Page 32 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx the number of jobs and sales in Y5, shifting her company from a microenterprise to a small business. By the end of Q21 and Y5, Lia Stublla has 22 women employees and two young women interns. Through Q21 and Y5, the Project’s WfD programs provided training for many women: As a part of the Self-Employment Training program implemented by HELP-Kosovo, 85 women where trained and 17 women received grants for work equipment, enabling them to open new businesses. Through the Tailored Training program implemented by AUK-TDI, 72 women completed classroom-based education training in soft skills, sales and customer care and ECDL Base Module and specialized in either language or ICT, to prepare for employment ICT and call-center industry in Kosovo. Throughout Y5, another training which provided significant

internships and jobs for women was the On-the-Job Training A dress created by Lia Stublla was worn program implemented by the Kosovo Manufacturing Club. during the 2019 EMMY awards. Through the program, 71 women completed in-company training and 66 of them found jobs after the training.

In Q21 and Y5, EMPOWER-beneficiary IQ-to-Link became the biggest employer in Kosovo, reaching almost 1,000 employees. The call-center and customer service provider recently opened its sixth branch in Kosovo, providing services for top international companies such as Adidas, Reebok, DHL, Zalando, Europcar, Strato, Axelspringer, and 1&1 in English, German, French, Italian and Spanish language. The company has made significant efforts to support the recruitment and inclusion of women through activities that involved training and consulting. In Q21, IQ-to-Link trained 89 women and hired nine bringing the total Young women answering calls at IQ-to-Link’s new number of women employees at the company to 413. headquarters in Prishtina.

EMPOWER continued to support the empowerment and inclusion of women in ICT through activities that involved training and engaging women in the ICT sector. In Y5, the Project supported the International Girls in ICT Day for the fourth year running. The one-day event held on April 26th in Prishtina, was attended by over 250 young women. The annual Girls in ICT Day is celebrated around the world to inspire and motivate girls and young women to consider education and careers in the ICT sector. The event During this year’s Girl in ICT event, the job fair gathered served as a place for women and girls to connect more than 25 local companies mainly from the ICT and network with local and international ICT sector. women leaders. It included inspirational speeches and interactive workshops. More than 137 ambitious Kosovo girls and women participated in the workshops and received certificates. The event also included a job fair where the young women were given the opportunity to meet with 25 Kosovo

Annual Report Y5 including Quarter 21 — October 2019 Page 33 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx companies who were looking for potential employees. Out of the 20 women who were interviewed at the job fair, two were hired by Raiffeisen Bank and one by BONEVET Prishtina.

EMPOWER beneficiaries in the ICT sector trained and created a significant number of new jobs for women in Y5. EvroTarget trained nine women and employed 12 women bringing the total number of employed women at the company to 80, Baruti trained 14 women in Q21, and STIKK trained nine women bringing the total number of trained women to 66. Beneficiaries from the apparel sector also created a considerable number of jobs for women in Q21: Cro-fashion created four new jobs for women, and Agnesa Tex hired two women. From the wood-processing industry, company Te Naseri hired 14 women in Q21 bringing the number of women in the company to 89, Ukaj created six new jobs for women, and Sela Impex hired three women. PV solar panel manufacturer Jaha Solar created ten jobs for women in Q21 bringing the total number of women employed at the company to 25 and energy company Decon hired three women during Q21.

2.4.2 Youth In Y5, EMPOWER helped tackle youth unemployment through a variety of interventions. In particular, it intentionally oriented WfD and internship programs toward youth (18-24 years of age). In Y5, the Project created a significant number of new jobs for youth, where the wood sector accounted for the largest share of jobs created among youth in Y5. In Y5, EMPOWER continued the implementation of three workforce development programs to train and improve the skills of vulnerable and marginalized youth in Gjilan, Han i Elezit, Kacanik and Viti, and enhance their chances of finding sustainable jobs in the future. Throughout Y5, the Self- Employment (SE) program implemented by HELP-Kosovo trained 73 were youth in business-skills and provided small grants to 11 of the trained-youth to establish their own start-up businesses. In FY19, USAID, thorough its EMPOWER Private Sector activity, helped tackle youth unemployment through a variety of interventions. Out of a total of 304 youth jobs created during FY19, 99 youth jobs were in the wood sector (33%); 69 youth jobs in the apparel sector (23%); 63 youth jobs in the ICT sector (21%); 57 jobs in the “other” sector (19%); 15 jobs in the energy sector (5%); and one job in the metal sector. Jobs among youth were created as a result of both expansion grants provided to private sector beneficiaries and targeted workforce development programs. During FY19, three workforce development programs targeting at-risk youth in four Kosovo municipalities were implemented. A total of 252 youth were placed in in-company trainings in various industries (including construction, recycling, apparel, metal processing, wood, beverages etc.), out of whom 89 were retained back in employment. Additionally, 200 Kosovo youth underwent a business training course, out of whom 55 obtained a self-employment grant, thus yielding 55 news jobs. Moreover, a total of 132 youth were enrolled in a workforce development program on ICT and language training to improve employability in the ICT and call center industries. In the ICT sector, USAID EMPOWER’s provision of expansion grants solicited the co-funding by ICT companies in the form of in-company trainings; thus, out of 369 youth that were trained by EMPOWER beneficiaries in the ICT sector, at least 58 were retained back in employment.

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Through the Project’s On-The-Job Training Program (OTJ) implemented by Kosovo Manufacturing Club, by the end of Q21 and Y5, 151 youth completed in-company training and 22 of them found employment at local companies after the training. In Q21, through EMPOWER’s Tailored Training program implemented by RIT Kosovo/AUK-TDI, 89 youth completed tailored classroom-based training in soft skills, sales and customer care and ECDL Base Module and specialized on pieces of training in either language or ICT skills. Certification ceremony for 132 youth who completed In Q21, a certification ceremony was held where EMPOWER’S Tailored Training program was held on September 20, 2019 at RIT Kosovo, Prishtina. the 132 youth who completed the Tailored Training program, received certificates of completion. In Y5, the Project also organized training for youth on the Design and Installation of PV Solar Systems. Through the first of its kind activity in Kosovo, 19 youth were trained on the design and installation of solar PV systems, including practical hands-on training at solar-energy company Jaha Solar and at a solar power plant implemented by Elen in Zahaq, Peje. Upon completion of the training, the trainees underwent an exam to test their learned knowledge to become certified as PV experts by TÜV Rheinland, an internationally recognized certificate. A certification ceremony is planned for the next quarter for the candidates who pass the exam.

In Y5, EMPOWER supported DOKU.TECH for the third year running. The event took place twice, during Q20 in Prishtina and in Q21 during Dokufest in Prizren, with a focus on digital innovation, internet freedom and data economies in Kosovo. The event gathered reputable speakers, observers, explorers and builders from around the world to talk about open knowledge, digital security, privacy, social entrepreneurship and business. This year’s audience was gathered over 900 participants marking a significant rise in female participation and interest. As a result, 51% of them Do It Yourself (DIY) Fair during DOKU.TECH 2019 edition at Termokiss, Prishtina. were women and 49% were men.

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To further support kids and youth and better prepare them to make the transition from school to the workforce of the future, in Y5, EMPOWER supported the establishment of the BONEVET Makerspace in Kacanik. BONEVET is a not-for- profit community that encourages imagination, problem-solving, creativity, and team building among youth. EMPOWER grant support enabled BONEVET Kacanik to set up two modules and covered the costs of office equipment and inventory. In Y5, BONEVET Kacanik hired six employees. USAID Economic Growth Office Director, Brian Martalus together with EMPOWER Private Sector CoP, Skender Rama and KIVO’s representatives visited the new Bonevet Makerspace in Kacanik.

The Project continued to engage youth in various activities to empower and inspire them to enter promising sectors which EMPOWER supports. In Y5, as a part of third annual Wood Industry Convention and second annual Apparel Industry Convention, the Project engaged students from various Kosovo colleges and universities to compete with their design concepts at Student Design Contests. Students were asked to submit their design concepts and the finalists’ designs were displayed during the conventions. The top three designs were awarded prizes. The conventions served as a stage for talented youth to showcase their furniture and interior product designs and apparel designs to companies and visitors. In Q21, EMPOWER-beneficiaries from the wood- processing sector created a significant number of jobs for youth. Te Naseri created 18 new jobs for youth bringing the total number of youth employment to 136, Dekoriti hired two, Ukaj employed nine youth and Idrizi hired two. From the apparel sector, Unikat employed three youth, Lia Stublla hired two, and Cro-fashion hired two youth. Beneficiaries from the ICT sector also created a significant number of new jobs and offered internships to youth. STIKK provided Students received their awards as a part of the Best Student Design Contest during the third edition of the internships to 27 youth, IQ-to-Link hired 11 youth Wood Industry Convention. and trained 38, Baruti provided internships to 15

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2.4.3 Minorities and North Kosovo In Y5, EMPOWER continued to seek opportunities to assist minority populations in Kosovo. These include northern Kosovo (NK) in general, Serb and non-Serb minority communities in southern Kosovo.

Table 17: North Kosovo Activities & Impact, in $000s #Activities #Firms EMP $ Co-Fin $ New New Sales $ Trainees Period Jobs Cuml 23 84 728 491 1,324 14,109 101 Y5 3 0 83 4 9 6,325 50 Q21 1 0 25 - 2 5 1,541

EMPOWER’s 23 interventions of $728K in business competitiveness and workforce development in NK created a total of $14M in sales, of which $5.6M in new sales and 81 new jobs in Y5 alone. The Project supported the creation of a total of 491 jobs to date. Under Productivity and Quality, EMPOWER awarded one grant in Y5 to a NK company. During FY19, EMPOWER initiated support to a north Kosovo company, As Promet, focusing on non-wood forest products, to obtain an ISO certification. EMPOWER’s investment amounts to $2,000, complemented by company- and EBRD-investment of $4,700. The company has created 5 news jobs, all of which are women, thus transitioning to a “small business.” The grant was provided to As Promet to attain an ISO certification. EMPOWER, in collaboration with EBRD, initiated during Y5 an assessment phase to determine the readiness of NK companies to be considered for support on certification. It initiated the process by securing the involvement of EBRD, which reviewed applications from several NK companies. EBRD determined that, with the exception of As Promet, other companies were not ready to be supported at this point. According to grant awarded to As Promet, the company will renew its ISO 22000 and seek to obtain an organic certificate. The cost of the certificates is being cost-shared among EBRD, As Promet and EMPOWER. To provide new opportunities to north Kosovo companies, which are ready for export, EMPOWER organized a visit of Organica association and National Raspberry Association “Mjedra e Kosoves” representatives to three north Kosovo companies. They visited Nature&Group S&V, a company which cultivated 4 ha of 16,500 blueberry plants; Agro Art, a raspberry producer and processor; and Agro Centar, an apple and apple juice producer. The aim of these visits was to establish contacts between representatives of these associations and north Kosovo companies primarily to be better informed, help them to introduce required quality standards and expand market opportunities in domestic and foreign markets. Under Production Expansion, EMPOWER did not award new grants in Y5 to NK companies. In terms of performance of companies previously supported with grants, Milos I Marta, Europa and Godzi noted substantial sales growth results by a threefold average increase. Agro Art is one of the rare raspberry processors which has their own raspberry production in Kosovo with installed 200 tons of new cooling, processing and storage capacities. In Y5, the company created 10 new full time and 3 new FTE jobs. Today, Agro Art has 12 full-time workers and employs more than

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70 seasonal workers during the spring and summer season, providing an opportunity to small producers to sell their products to the company. Currently, Agro Art exports raspberries to Serbia, but the main target in 2020 will be the introduction of organic standards which will provide new market opportunities for export in EU countries. During Y5, DPZ Embelsia, one of the rare producers of handmade baklavas, the finished installation of professional oven and started production in the new production facility. The new installed equipment increased the quantity and quality of its products. During Y5, the company created 6 full-time jobs and 2 FTE workers, of whom 7 are women. Under Connection to Markets, to improve knowledge about market demand for medicinal and aromatic plants (MAPs) and essential oils and find potential customers, EMPOWER supported a visit of Peppermint International LLC to the world’s leading trade fair for organic food, Biofach 2019 Fair in Nuremberg, Germany. The company’s representative had a chance to meet a number of potential customers and an opportunity to make the first agreement with a company from Switzerland. In addition, the company also received EU certification required for EU countries, especially Germany, which is, besides Switzerland, the second targeted market at the moment. The company reported being in the process of securing an Organic Standard Certificate for 2019 from Albinspekt. The company signed 42 agreements with MAP cultivators. To increase access to finance and provide new opportunities to NK agriculture producers and processors, EMPOWER provided support to NK farmers to apply for funds from Kosovo’s Ministry of Agriculture, Forestry and Rural Development (MAFRD). The call for proposals was published in 2018. The STTA, which was engaged by EMPOWER, organized a general information session and several specific tailored presentations and interactive meetings to brief NK farmers and agricultural producers about specific MAFRD funding scheme requirements. A total of 50 farmers attended these meetings and received necessary information. In total, 39 applicants that were supported by the EMPOWER- engaged STTA succeeded in submitting their applications. From the 39 submitted applications, 26 or 67% were considered for support at the preliminary stage, amounting to $1.1M. During the implementation process which was finished in July 2019, out of 26 approved activities, 24 were implemented, since two farmers terminated their contracts with MAFRD. The total value of 24 implemented activities amounted to $1M, of which $825K will be funds provided by MAFRD. Among the selected farmers that implemented their activities are two EMPOWER beneficiaries (Agro Centar and Agro Art) and four farmers who were part of the activities implemented by Kosovo Cluster Business Support (KCBS).

2.4.4 Microenterprises EMPOWER supports SMEs of any size, including microenterprises, if their investment-to-job ratios are satisfactory. EMPOWER’s efficient procedures for grant selection and implementation make it possible to accommodate smaller companies. These include microenterprises that employ fewer than 10 employees. USG continued to provide assistance to microenterprises with growth potential in a variety of sectors, including agriculture, information technology (IT), wood processing, food processing, clean energy, and tourism to improve their competitiveness. A total of 57 grants totaling $174,000 were distributed to microenterprises in FY19. Funding was used to either start up a new business, business expansion or quality certification, to enable greater access to markets, increased sales and new jobs created. As a result, microenterprises in different sectors created 66 new jobs in FY19 and increased sales of $223,428. During FY19, USAID through Empower private Sector activity implemented a youth entrepreneurship development program targeting 200 Kosovo youth from four municipalities. The program resulted in 55 youth starting their own microenterprises after receiving small-scale self- employment grant. In addition, Empower supported a north Kosovo sweets producer, Embelsia DPZ,

Annual Report Y5 including Quarter 21 — October 2019 Page 38 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx with an expansion grant of $22,400, complemented by $48,000 in co-investment by the beneficiary. During FY19, the aforementioned company created 5 news jobs. As a result, Embelsia’s total jobs amount to 14, thus having transitioned into a small business. Furthermore, during FY19, Empower initiated support to a north Kosovo company, As Promet, focusing on non-wood forest products, to obtain an ISO certification. EMPOWER’s investment amounts to $2,000, complemented by company- and EBRD-investment of $4,700. The company has created 5 news jobs, all of which are women, thus transitioning to a “small business.”

In Y5, through the EMPOWER Self-Employment Training program, 200 participants were trained in business-skills, and those with the best business idea proposals received grants to start their own businesses. Through Q21, 49 new start- up microenterprises in various fields were established through the program.

Throughout the five years of the Project, more than a dozen EMPOWER microenterprise-level beneficiaries have grown out of the category to 49 participants of the of the EMPOWER Self-employment become small businesses. Experience has shown program received small grants to establish their start-up that the upgrade and purchase of new equipment microenterprises. These young women received equipment for their new beauty salon. significantly helps businesses to grow, increase production, increase their size and create new jobs. In Y5, grant support from EMPOWER for new equipment, enabled woman-owned sweets producer from north Kosovo Embelsia DPZ to increase the quality and quantity of its handmade baklavas, and at the same time increase its competitiveness in the Kosovo market. In Y5, Embelsia DPZ also signed a contract worth more than $78,000 to supply baklavas to Interex hypermarket during the Ramazan period of May 2019. This resulted in the microenterprise creating eight new jobs, bringing the total employee number to 14, and thus transitioning into a small business.

In Q21, EMPOWER supported the microenterprise As Promet to obtain the organic certification for processed agriculture and NWFPs (non-wood forest products) and ISO:22000 certifications. These certifications will expand As Promet’s market opportunities and competitiveness, ensuring that their products meet the Food Safety standards for the EU market. Established in 2002, the company specializes in the production and processing of raspberry and other berry products. The company has expanded their exports to France, Belgium, Austria, Switzerland, the Netherlands, Germany, Italy and neighboring countries, which increased the production and new jobs up to 20%. By the end of Q21, As Promet created five new jobs, all of which are for women, bringing the total number of employees to 13 and transitioning into a small business.

2.4.5 Donor and GoK Collaboration Investment leverage: The indicator is defined as the total cash cost of an EMPOWER-supported activity divided by the EMPOWER cash investment, excluding EMPOWER staff and operational costs, aggregated across all funded activities. The cumulative Y5 planned target was 3.0x, while the actual target stood at 5.13x through Y5. The 5.13x is a result of $4.7M disbursed by EMPOWER to date, plus the $17.39M provided as co-finance by private companies and $2.14M provided by collaborating institutions.

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In Y5 alone, EMPOWER disbursed $937K and total co-finance was $2.7M where $2.38M was provided by by private companies and $400K by collaborating institutions leading to 3.97x investment leverage. EMPOWER consistently seeks collaboration with all relevant donor projects and GoK agencies that are engaged in private sector development in Kosovo, especially in competitiveness and workforce skills, but also in economic development policy and enhancing the business environment. The figure below provides a snapshot of beneficiary and donor / GoK co-financing to date, which has enabled the Project to leverage its available grant funds by 5.13x through Y5, significantly exceeding the 3.0x PMI target. Figure 4: Co-Finance for Activities initiated through Year 5/Q21

Actual Activity Co-Finance through Q21 $30,000 $25,000 $20,000 $15,000

Thousands $10,000 $5,000 $-

Appare Energy ICT Metal Other Touris Wood Totals l m Totals $1,834, $3,653, $1,847, $1,121, $5,490, $629,56 $9,702, $24,278 Donor/GoK $ $26,320 $76,972 $555,00 $1,995 $498,75 $255,46 $731,14 $2,145, FIRM-FIN $1,238, $2,949, $922,76 $946,33 $3,712, $96,881 $7,530, $17,397 EMPOWER $569,21 $626,61 $369,51 $173,39 $1,279, $277,22 $1,440, $4,736,

Totals EMPOWER FIRM-FIN Donor/GoK $

Figure 5.A: Co-Finance for Activities initiated in Year 5

Actual Activity Co-Finance by Donor, GoK & Firm Finance in Y5 $3,000 $2,500 $2,000 $1,500 Thousands $1,000 $500 $-

Energy ICT Metal Other Touris Wood Totals Apparel m Totals $71,634 $307,03 $187,43 $20,160 $427,44 $8,829 $1,764, $2,787, Donor/Gok $ $- $16,800 $113,91 $- $104,41 $- $165,53 $400,66 FIRM-FIN $ $71,634 $290,23 $73,517 $20,160 $323,02 $8,829 $1,599, $2,386,

Totals FIRM-FIN $ Donor/Gok $

2.4.6 Environmental Compliance The Initial Environmental Examination Document DCN: 2015-KOS-036 applicable to EMPOWER Private Sector sets out the environmental reviewing, monitoring and reporting tasks for each activity subject

Annual Report Y5 including Quarter 21 — October 2019 Page 40 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx to an environmental compliance procedure. Section 4.8.2 of the IEE provides that Implementing Partners (IPs) shall report on environmental compliance requirements as part of their routine project reporting to USAID. EMPOWER conducts environmental compliance reviews, as required, for all grant-funded interventions. In project year 5, EMPOWER’s outside Environmental Specialist was engaged in 6 different funded activities which were categorized as “negative determination with conditions”, for which Environmental Review Checklists (ERCs) and Environmental Mitigation and Monitoring Plans (EMMPs) were prepared. All these were submitted to USAID and after comments, resubmitted and approved by USAID’s Bureau Environmental Office (BEO). During project year 5, 7 activities (2 of them in Q21) were classified as “categorical exclusion”, having no environmental impact, requiring neither EMMP nor ERC. Environmental Monitoring: EMPOWER undertook monitoring visits to inspect the implementation of environmental measures, as indicated at the ERC-EMMP for each company/organization. Monitoring is based on environmental impacts, mitigation measures and monitoring indicators, as set out at the EMMPs for each activity. The monitoring visits included: o Visual observation and photographs related to: physical impacts, air emissions, water use, waste management, use of personal protective equipment (PPE), fire safety measures, ventilation, wastewater collection and discharge, hazardous materials storage. o Interviews with the owners or managers of companies, related to the progress made on completing: environmental permits, plans for implementing the mitigation measures. EMPOWER prepares and files an Environmental Monitoring Report for each monitoring visit. A summary of the monitoring visits and their finding is contained in Annex 5, Table 3.

2.5 General and Administrative 2.5.1 Strategic Activities Fund Management Through the end of Q21 EMPOWER has launched three Annual Program Statements, receiving 1,485 applications in total for SAF funding. In response to the first call for applications - Annual Program Statement #1, EMPOWER has received 791 applications in total for SAF funding. All 791 concept notes have been reviewed, where 728 were not accepted and 63 were approved. The call for applications was launched in January 2015 and closed in May 31, 2015. EMPOWER received an additional of 281 applications in total in response to its second request for applications – Annual Program Statement #2, where Sida partnered with USAID to provide $2.0MM additional funding. The call for applications was launched in June 8, 2016 and closed in December 31, 2016, where all 281 concept notes have been reviewed, of which 258 not accepted, and 23 were approved. The third request for application for SAF funding - Annual Program Statement #3, was launched on June 01, 2017 and closed on December 31, 2017. In response to the third request for applications EMPOWER has received 413 applications seeking $15 million in finance. By the end of Q21, 26 concept notes have been approved, 387 of them have been rejected. In March 2018 EMPOWER has launched three RFAs. In response to those RFAs three grants have been approved and signed, where total SAF funding was $ 364K. In addition to three Annual Program Statements through Q21 an additional of 21 activities including unsolicited applications (8) have been approved where total SAF funding is $ 290K. The following table provides SAF status as of the end of Quarter 21:

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Table 18: SAF Grants Approved by Type – through Q21 Status Number SAF Co-Finance # Jobs Leverage EMP / JOB Final COR Approved 176 $4,540,902 $16,131,016 3,453 4.6 $1,315

TEC Approved 1 $5,264 $16,800 - 4.2 #DIV/0! Grand Total 177 $4,546,166 $16,147,816 3,453 4.6 $1,317 Production Expansion 78 $2,618,252 $12,991,596 1,830 6.0 $1,431 Connection to Markets 43 $731,731 $1,317,203 552 2.8 $1,326 Workforce 27 $960,051 $1,546,595 1,009 2.6 $951 Development Productivity and Quality 18 $111,530 $249,415 62 3.2 $1,799 Business Environment 11 $124,603 $43,008 - 1.3 #DIV/0! Grand Total 177 $4,546,166 $16,147,816 3,453 4.6 $1,317 Of which: North Kosovo 20 $725,872 $1,319,967 467 2.8 $1,554 Microenterprise 54 $1,247,961 $2,708,378 774 3.2 $1,612 176 grants for a total of $4.5 MM in SAF funds were approved and signed by the end of Q21. Of the total 176 SAF grants approved and signed through Q21, 159 grants or 90% of them have been completed and 17 or 10% of them are in process, where all 83 equipment financed by EMPOWER have been installed. At $1,317/job overall through Q21, EMPOWER continued to be close to the nonbinding guideline of $1,000 in SAF investment per new employment.7

2.5.2 Public Events and Communications In Q21 and Y5, the Project used a variety of communication channels to promote Project activities, including the Project’s webpage, Facebook, newsletters, factsheets, TV interviews, events featured on TV and online news portals, featured articles in magazines, videos, and success stories. Newsletters - The most significant events and achievements of the Project throughout Y5 were featured in two-page EMPOWER newsletters, which were issued every quarter. The newsletters covered news on grant agreement signings, a front-page success story and various other activities undertaken by the Project. The newsletter was printed and distributed through a variety of channels. It was posted on the EMPOWER website and Facebook in three languages and sent to over 900 EMPOWER stakeholders and contacts by email. Printed copies were exhibited in the Project office and distributed at meetings and events. Factsheet – Visually appealing infographics Factsheets highlighting EMPOWER’s achievements through each quarter were developed throughout Y5. Printed copies of the Factsheets are exhibited in the EMPOWER office and were distributed at meetings and the various events that occurred during the year.

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

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Business Catalogue – In Y5, the Project developed the second edition of the business catalogue “Our Products – Kosovo Ready to Export” in Albanian and English with the purpose of profiling and promoting export-ready Kosovo businesses. The 250-page catalogue features the profiles with photos of 116 Kosovo businesses was printed and published in both languages online on www.yumpu.com and shared through Facebook, email, and the EMPOWER website. By the end of Y5, the online catalogue in Albanian received over In Y5, the 2019 edition of the business catalogue 3600 views and the English version over 780 “Our Products - Kosovo Ready to Export” was views. The printed catalogue was launched at the developed and published by EMPOWER in Albanian and English. Economic Conference of Albanian Diaspora from Europe- B2B, where copies were distributed to participants. Printed copies were also distributed to various contacts such as the Association of Wood Processors of Kosovo, Kosovo Apparel Marketing Association, Kosovo Chamber of Commerce, Kosovo Manufacturing Club, Albanian Global Diaspora Business Network, Ministry of Diaspora and Strategic Investments, foreign embassies in Kosovo, and at EMPOWER’s events and meetings. Over 500 printed copies were distributed. Events – Over 65 events were organized by EMPOWER throughout Y5 to highlight the achievements and milestones of beneficiaries and to promote the objectives of the Project. These include various grant signings with Jasin Metal, Wear and Go, Elektrostublla, Bonevet Kacanik, As-Promet, Mobilieria Prishtina and USAID visits at EMPOWER beneficiaries. Several EMPOWER-organized and supported events received extensive media attention. The project organized several official visits in Y5 for the US

Ambassador, USAID Mission Director and USAID EMPOWER- beneficiary companies holding B2B meetings with Diaspora investors during the Economic Conference of team to visit EMPOWER beneficiaries. These Albanian Diaspora from Europe – B2B. include the second edition of the Apparel Industry Convention, the third edition of Kosovo Wood Industry Convention, the Economic Conference of Albanian Diaspora from Europe – B2B, KosICT, Girls in ICT day, the certification ceremonies of the On-the-Job Training program, Self-employment Training program and the Tailored Training program, ribbon-cutting ceremony at Agro-Art, and various visits to EMPOWER-beneficiaries. The majority of events were officiated by high-ranking US Government (USG) and GoK officials, including the Kosovo Prime Minister Ramush Haradinaj, U.S. Ambassador in Kosovo, Mr. Philip S. Kosnett, Deputy Chief of Mission, Ms. Colleen Hyland, USAID Mission Director, Ms. Lisa Magno, Economic Growth Office Director, Mr. Brian Martalus, the USAID/Kosovo Acting Deputy Mission Director Christina Davies, the Ambassador of Sweden in Prishtina Karin Hernmarck Ahliny, the Ambassador of the Kingdom of the Netherlands in Prishtina Gerrie Willems, the Ambassador of Finland in Kosovo Pia Stjernvall, Kosovo Minister of Economic Development Valdrin Lluka, Country Director at GIZ for Kosovo and Macedonia David Oberhuber, Head of Development Cooperation in the Embassy of Sweden in Prishtina Nasrin Pourghazian, Kosovo Government ministers, and others.

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A notable event organized by EMPOWER in Y5 was the Economic Conference of Albanian Diaspora from Europe - B2B held in Prishtina during May 24-25, 2019. The Conference served as a place to gather and connect businesses for 47 companies from Kosovo with 144 businesses from Diaspora, with the aim of creating new business deals to increase exports of Kosovo products and services. The Conference was opened by the USAID Kosovo Economic Growth Office Director, Mr. Brian Martalus and the Chair of the Albanian Global Diaspora Business Network branch in Austria, Mr. Yll Blakaj. After the opening, over 250 B2B In Q21, USAID Economic Growth Office Director, Brian Martalus took part in the ribbon-cutting ceremony at Agro- meetings were held, which were pre-arranged Art’s new facility in Leposavic. through the online platform https://konferenca.rrjeti.biz/, developed specifically for the purpose of the Conference. Through the platform, and aided by the business catalogue, 236 meetings were pre-scheduled for the B2B activity. The Conference was extensively covered by local media and Diaspora media, where over ten media were present at the opening ceremony and Gala dinner. Several TV and online media conducted interviews with participants and took video footage during the B2B meetings. The event was featured more than 13 times on major TV channels in Kosovo and more than 23 online news portals covered event. The event was extensively promoted through the Project’s Facebook and website, a story on the Conference was published by online portals prior the event (as sent by the Project), and electronic banners were placed on The USAID Kosovo Economic Growth Office Director, three of the most viewed online portals in Kosovo Mr. Brian Martalus talked about the business catalogue and Diaspora. The opening ceremony and B2B prepared by EMPOWER. meetings were live streamed on the online news portal Kosova Press and EMPOWER’s Facebook page, reaching over 6,100 views. Interviews were arranged prior to the Conference on RTK1’s morning program and Radio Kosova morning program. A one-hour program on the Conference and Diaspora linkages was organized and screened the day before the conference on RTK1’s “55 Minuta” prime- time program. The two discussion panel sessions held on the second day of the Conference were also live streamed on the Project’s Facebook page reaching more than 3,000 views and were transmitted live on major TV channels such as Klan Kosova and RTV21. The organized visits to Kosovo companies Ciao Berto, Tiki Mosaic and Binni, organized as part of the Conference were shared on Facebook. A video was also developed as a closing remark for the success of the Economic Conference of Albanian Diaspora from Europe - B2B consisting footage of the conference, panel sessions, B2B meetings and site visits.

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During Y5, another two notable events that were organized by the Project were the second edition of the Kosovo Apparel Industry Convention and the third edition of the Kosovo Wood Industry Convention. The Kosovo Apparel Industry Convention was held on November 14, 2018, serving as a networking platform for Kosovo 22 local apparel manufacturers, government agencies, donors, and other industry stakeholder. A highlight of the Convention was a 50-minute runway show featuring Kosovo-made apparel from 16 manufacturers followed by a Student Design The runway fashion show of the Kosovo Apparel Industry Contest. Over 100 people attended the show, and Convention held on November 14, 2018. over 1100 watched the live stream on Facebook. The Convention achieved extensive media coverage on Kosovo TV, radio, and online media. Leading up to the event, interviews were organized for the KAMA and EMPOWER Private Sector team and apparel company representatives on popular shows in Radio Kosova, RTK1, KTV, RTV21, Klan Kosova and T7. Over ten media were present at the opening ceremony of the Convention and over 17 online portals wrote about the event. A printed catalogue showcasing profiles and photos of the exhibiting apparel companies was prepared and 200 printed copies distributed at the Convention. A catalogue showcasing the designs of the finalists of the Best Student Design Contest of the Apparel Industry Convention was also developed and distributed at the event. The third edition of the Kosovo Wood Industry Convention was held on December 5, 2018, in Prishtina. The Convention consisted of an exhibition of Kosovo-made wood products by 21 Kosovo wood processing companies, and forum discussion sessions which covered a variety of topics. Co-organized by the Project and the Association of Wood Processors of Kosovo (AWPK), the event achieved substantial media coverage on Kosovo TV and online media. Leading up to the event, interviews were organized for the USAID Mission Director Lisa Magno made remarks during AWPK Director and board members, and the open ceremony of the Kosovo Wood Industry representatives of wood processing companies Convention held on December 5, 2018, in Prishtina on popular shows on Radio Kosova, RTV21, KTV, and Klan Kosova. A live feed prior to the opening of the Convention was also arranged on RTK1. The interviews were also shown and shared on YouTube and Facebook. Stories about the Convention were communicated on popular TV channels, and 18 online portals wrote about the event. A printed catalogue showcasing the designs of the finalists of the Student Design Contest was also prepared and distributed at the Convention. The Convention also included a display of the top 40 innovative and practical furniture designs created by university students from around Kosovo as part of the Student Design Contest.

In Q21, the Project organized the Doku-Diaspora activity to promote tourism and economic development of Kosovo. A developed touristic package aimed to attract Albanian Diaspora through a specific touristic program. Paired with this year’s edition of Dokufest events, the packages designed specifically for Diaspora contained three different tourist packages. By registering online, Diaspora tourists decided between the three packages which included visits to some of the most attractive historical spots around the Prizren, wine-tasting in Rahovec, Nashec Tour combined with traditional culinary experiences and film screening during Dokufest 2019. The package information was shared

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through various social media channels and printed leaflets distributed at the arrival hall of Prishtina International Airport. The package was also advertised in the Albinfo.ch magazine, which is targeted at the Diaspora.

Facebook and Website - Facebook continued to be a powerful communications tool for EMPOWER throughout Q21 and Y5. Facebook was widely utilized to create awareness and build publicity for the EMPOWER-organized events including the Economic Conference of Doku-Diaspora information booth, which was available for Albanian Diaspora from Europe - B2B, second tourists during Dokufest 2019. edition of the Apparel Industry Convention, the third edition of the Wood Industry Convention and other events. A social marketing strategy was devised to promote the events through Facebook starting a few weeks prior and up to their completion. The Facebook pages of KAMA, AWPK, and ADBN were continuously updated with information including participating companies’ profiles, forum presentation topics and presenters, and other interesting information. These posts were also shared on the EMPOWER Facebook page. During Y5, EMPOWER Facebook page was constantly updated with posts from events, success stories, grantee profiles and successes. Posts were featured extensively on the USAID/Kosovo and US Embassy Facebook page being attributed to the EMPOWER program. These postings were shared on the EMPOWER Facebook page. Overall, in Y5, 34 posts were made on the USAID/Kosovo and US Embassy Facebook relating to EMPOWER activities, and 273 posts were made by EMPOWER in Y5 whereas in Q21 there were 24 post made on EMPOWER’s Facebook page. By the end of Y5, the EMPOWER Facebook page had a following of 6,602 people. The EMPOWER website was continuously enriched with blogs on the latest news, videos, reports, newsletters, and other relevant Project information throughout Q21 and Y5. In addition, the website was a primary channel for soliciting responses to requests for proposals and project job vacancy announcements. TV, YouTube, and online portals - In Y5, seven videos were produced to highlight the work of the Project. Two documentary videos were produced to highlight the Project’s support to beneficiaries in north Kosovo’s food and wood processing industries. The videos are approximately 25 minutes long and feature interviews with EMPOWER beneficiaries, the USAID Mission Director Lisa Magno and USAID Economic Growth Office Director Brian Martalus. The videos were made with subtitles in English, Albanian and Serbian and were broadcast several times in Q21 during primetime on the most- popular TV channels watched by the Kosovo Serbian population including on TV Most, TV Puls and TV Herc. A video was also made to highlight the successes of the third edition of the Green Festival, which was uploaded on the USAID/Kosovo YouTube channel and shared on social media. For the Economic Conference of Albanian Diaspora from Europe - B2B, two videos were developed – one covered the overall event, while the other included the participants’ impressions of the B2B meetings. The two videos are expected to be published during the next quarter on the USAID/Kosovo YouTube channel and EMPOWER Facebook page. Activities underway – Preparations are underway for a variety of activities for the upcoming quarter, including the third edition of the Apparel Industry Convention, the fourth edition of the Wood Industry Convention, the fourth edition of the Green Festival, a Diaspora and Foreign Direct Investment Convention and B2B event, and an event to highlight the Project’s achievement’s.

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RESULTS VS. PERFORMANCE MANAGEMENT INDICATORS EMPOWER Private Sector made significant advances toward its quantitative and qualitative objectives. The original targets failed to take into account the fact that impact would be limited during the first year, due to the requirements for initial assessments before activities supporting economic growth could begin. Companies receiving grants also required time to order and install equipment before sales and job growth impact could be achieved. In addition, the original targets were developed with the expectation that USAID would engage a local partner to work alongside EMPOWER, with substantial additional grant funds and personnel, through a separate procurement, as the original RFP for EMPOWER stated. However, background information and EMPOWER’s Performance Based Management System (PBMS) reveal a significant impact on indirect beneficiaries: businesses that are not direct participants but, through their linkages with PBs, benefit from increased business growth and WfD. Existing targeted and tracked indicators, including interviews with direct beneficiaries, confirm the positive effects on indirect beneficiaries. As the existing project data underestimates the impact on indirect beneficiaries, EMPOWER has started to use economic impact multipliers. Economic multipliers estimate how a change in one sector will impact output and employment elsewhere in the region or the economy as a whole. Multipliers measure the impact on output and employment for businesses that represent backward of forward linkages from the perspective of the direct beneficiary. These effects occur when increased sales experienced by the beneficiary lead to a boost in sales for the primary supplier or induce additional business activity for forward-linked businesses. These are indirect or secondary effects. When national and regional multipliers do not Table 19: Estimates of Kosovo Multipliers exist, it is appropriate to adapt previously Employment Sales constructed input-output tables and to use multipliers developed in other contexts. Apparel 1.37 1.47 EMPOWER has conducted thorough research to find comparable multipliers specific to the sectors Energy 7.25 1.52 in which its activity is concentrated. When ICT 1.57 1.56 drawing on multipliers from other countries, EMPOWER prioritized selecting economies among Metal 1.85 1.75 Kosovo’s regional neighbors that most closely Other 2.73 1.63 resemble today’s Kosovar economy. In the process, EMPOWER avoided sourcing multipliers Tourism 2.26 1.71 from highly industrialized and OECD economies Wood 2.09 1.74 because their crowding out and import- dependence factors are expected to be significantly different from those of Kosovo. EMPOWER averaged the sourced multipliers to produce a single multiplier estimate for each of the sectors in which EMPOWER identifies direct beneficiaries. EMPOWER can, however, confirm the presence of these significant indirect effects through data tracked by the project and anecdotal evidence from EMPOWER beneficiaries. To take these factors into account, the project revised timelines and PMI targets in PBMS Revision #6, and USAID approved this revision on December 21, 2016. Following approval from USAID on the introduction of multipliers, EMPOWER has incorporated the indicators on sales, sales increases, and employment for beneficiaries (PBs and SBs), and has removed the indicators for overall economic impact on the tourism sector as the multipliers substitute such indicators.

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2.5.3 Results vs. PMIs Detail Table 20 lists all of EMPOWER’s PMIs from its PBMS. The following are highlights: Number of beneficiary entities: The PMI cumulative target for the number of entities through the end of the project is 400. The PMI cumulative target for the number of entities through Q21/Y5 is 682. The PBMS defines these companies as “bodies that have participated in or obtained support from any Project Activity.” In terms of companies that received material assistance directly from EMPOWER, the number of these PBs was 531 through Q21/Y5. Counting companies, NGOs, and individuals that domestically produce and supply direct production inputs to companies that received production expansion grants from EMPOWER—SBs, whose sales must grow if those receiving grants grow—adds an estimated 151 unique companies, bringing the total number of enterprise beneficiaries (PBs and SBs) to 682. Attributed aggregate total sales of PB companies: EMPOWER introduced this new indicator in Q10 to better reflect its impact on PBs. The attributed sales of PBs, beginning in the quarter in which they become EMPOWER beneficiaries, aggregated over all such beneficiaries is $404 million through Q21/Y5. The PBMS target for five years is $150 million. Attributed aggregate sales increase of PB companies: $204 million cumulative through Q21/Y5, versus a cumulative target of $100 million through Year 5. The indicator is defined as “attributed annual increased sales of PBs over their Baseline sales, aggregated over all such beneficiaries. For the purpose of this and other EMPOWER PIRS, a Baseline year is Y for any Activity that was initiated from 1-Sep-Yn through 31-Aug-Yn+1.” This indicator was revised in Q10 to better reflect EMPOWER’s timelines and the realistic economic potential of beneficiaries identified so far. Aggregate exports increase of PB companies: $87.33 million cumulative to date, versus the PBMS target of $50 million through Year 5. This indicator is a subset of aggregate sales increase and was also revised in Q10. Business size expansion (PBs): The PBMS defines this indicator as “PBs transitioning to a larger size category: micro-to-small (<10 to 10 or more employees), small-to-medium (10–49 to 50 or more), and medium-to-large (50–249 to 250 or more) from the time that the Beneficiary applied for EMPOWER support.” On that basis, the cumulative target through Year 5 is 25. To date, 44 companies have expanded, where 24 companies transitioned from micro to small, 16 companies transitioned from small to medium, and 4 companies transitioned from medium to large. New geographic markets entered by PBs: This indicator counts domestic regions or countries to which PBs sell as a result of EMPOWER assistance. The cumulative target through Year 5 is 50. Already, PBs have achieved 279 new market entries, of which 4 in Q21 and 45 in Y5. New geographic markets for a number of companies included regional neighbors (Albania, Montenegro, Macedonia, and Serbia), Western Europe, countries with large Kosovar diaspora populations (Switzerland, Germany, Sweden, France, and Italy), Africa (Senegal), and the United States. New products sold by PBs: This indicator counts product types that PBs sell as a result of EMPOWER assistance. The cumulative target through Year 5 is 50. PBs have achieved 328 new product entries through Q21/Y5, of which 81 occurred in Y5. Number of PBs adopting new technologies: The revised PBMS targets new technologies and defines it as “PBs that have adopted new hardware or software technologies. New hardware includes technologies of the type or purpose that the company did not previously possess, and new production lines.” The cumulative target for Year 5 is 80. To date, 95 beneficiaries have adopted new technologies as a result of EMPOWER support. New jobs at PBs: This is EMPOWER’s most important indicator. Jobs are considered attributable when they are generated by EMPOWER support for production facilities and consequent sales expansion, for trade show attendance producing sales contracts, or for skills training/internships

Annual Report Y5 including Quarter 21 — October 2019 Page 48 EMPOWER Private Sector - Annual Report Y5 and Q21-FINAL.docx leading to employment. Jobs are (i) full-time; (ii) part-time where two part-time jobs equal one full- time job; (iii) seasonal full-time equivalent calculated as 1,800 hours/year; and (iv) inferred employment calculated based on PB sales increase at market development activities that have not been reported otherwise. Primary beneficiaries created 1,258 new attributable jobs in Y5, bringing the cumulative total since the beginning of the project to 4,778. The Year 5 cumulative target is 5,000. Investment leverage: The indicator is defined as the total cash cost of an EMPOWER-supported activity divided by the EMPOWER cash investment, excluding EMPOWER staff and operational costs, aggregated across all funded activities. The cumulative Year 3 target was 3.0x, and the project actually achieved 5.13x through Q21/Y5. The 5.13x is a result of $4.73 million disbursed by EMPOWER to date, plus $17.39 million provided by private companies and $2.14 million provided by collaborating institutions. EMPOWER also tracks but does not target certain other indicators, as follows: Number of primary beneficiaries: A subset of PMI #1, this indicator reports only on PBs that have “participated in or obtained direct support from any Project Activity.” To date, 531 of the beneficiary companies were PBs. The indicator counts beneficiaries as unique companies, controlling for duplicates from EMPOWER activities in a former period or in more than one activity. Number of primary microenterprise beneficiaries: To date, 229 PBs, for which EMPOWER has detailed information, were microenterprises defined as “PBs that had <10 employees at the time they applied for EMPOWER support, which means the submission date of the (first, if more than one) Concept Note.” Number of start-up PBs: 68 of our PBs were start-ups, no more than one year before the date that they applied for EMPOWER support through Q21/Y5. Number of domestic supplier beneficiaries: The revised PBMS includes as a separate tracked, but not targeted, PMI the number of domestic supplier beneficiaries defined as “a domestic company, non- governmental organization, and individual that supplies production inputs to Primary Beneficiaries (PBs), confirmed through interviews with PBs.” Currently, the number of estimated SBs is higher, yet 151 SBs have been confirmed through interviews. CI Finance: Total collaborating institution (donors and local government) cost-share of EMPOWER- supported activity investment through Q21/Y5 is $2.14 million. Aggregate Private Institutional Finance: Based on interviews with PBs and accepted as part of companies’ cost-share through EMPOWER’s Grants Department, the cumulative “increase in aggregate total new loans or investments from financial institutions of PBs from the time they became EMPOWER beneficiaries” through Q21/Y5 was $5.55 million. Value of Foreign Direct Investment: To date, one EMPOWER PB received $280K as Foreign Direct Investment (FDI). Value of Private Investment: Private co-finance in EMPOWER-supported activities by PBs and other non-institutional investors is $11.56 million. This cost-share is cumulative through Q21. Total Impact – Sales at Beneficiaries (PBs and SBs): Sales of beneficiaries are defined as “Attributed sales of beneficiaries, aggregated over all such beneficiaries, calculated based on sector multipliers and sales of PBs. Multipliers are averages of sector relevant multipliers developed in Kosovo’s regional neighbors that most closely resemble today’s Kosovar economy.” This indicator was introduced in revision #7 to better reflect the overall economic impact of EMPOWER’s activities. (For sector multipliers, see Table 19.) Based on to-date sales of PBs, the total sales impact is $670 million through Q21/Y5.

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Total Impact – Sales Increase at Beneficiaries (PBs and SBs): Sales increase of beneficiaries are defined as “Attributed sales increase of beneficiaries, aggregated over all such beneficiaries, calculated based on sector multipliers and sales increase of PBs. Multipliers are averages of sector relevant multipliers developed in Kosovo’s regional neighbors that most closely resemble today’s Kosovar economy.” This indicator was introduced in revision #7 to better reflect the overall economic impact of EMPOWER’s activities. (For sector multipliers, see Table 19.) Based on to-date increase of sales of PBs, the total sales increase impact is $338 million. Total Impact – New Jobs at Beneficiaries (PBs and SBs): Similar to total impact of sales and sales increase, new jobs at beneficiaries are calculated based on multipliers and jobs at PBs. Based on 4,778 new jobs at PBs and sector multipliers outlined above, the total job impact at PBs and SBs is 11,441 through Q21/Y5. Number of new product quality certifications obtained by PBs: To date, 16 PBs obtained 51 formal certifications for product quality/safety. Skills certifications: 1,123 individuals received skill certifications after attending EMPOWER-supported activities through Q21/Y5. Person-hours of workforce skills training: Individuals attended 491K hours of workforce skills training. Jobs – Women (PBs): The revised PBMS tracks the aggregate number of new jobs for women created by PBs and attributable to project activities. To date, women filled 1,790 of the new jobs, 491 of which were created in Y5. Jobs – Youth (PBs): Cumulative Q21 actual jobs for youth are 1,432, of which 304 were created in Y5. Jobs – Minorities (PBs): Cumulative Q21 actual jobs for ethnic minorities are 488, of which 109 were created in Y5. Minorities are ethnicities (other than Albanian in south Kosovo), including Serbs from NK. Jobs – North Kosovo (PBs): EMPOWER’s interventions in business competitiveness and training in this priority region created 488 new jobs—81 in Y5 in NK. Women in Management (PBs): EMPOWER encourages its PBs to promote social inclusion in job creation, including creating jobs for women in management. To date, beneficiaries have created 111 new management jobs for women, of which 51 were created in Y5. Trainees (PBs): To date, 4,119 individuals participated in project supported WfD activities. 1,778 women 1,810 youth (aged 18–24) 166 ethnic minorities 126 in NK In Y5, 1,798 individuals participated in these activities. 641 women 630 youth (aged 18–24) 56 ethnic minorities 51 in North Kosovo In Q21, 200 participated in these activities. 62 women 117 youth (aged 18–24) 1 ethnic minorities - in North Kosovo Interns/Apprentices (PBs): 2,668 individuals participated in internships/apprenticeships in project supported WfD activities. 1,155 women 1,402 youth (aged 18–24) 58 ethnic minorities 21 in North Kosovo In Y5, 868 individuals participated in these activities: 343 women 415 youth (aged 18–24) 5 ethnic minorities - in North Kosovo In Q21, 227 participated in these activities. 71 women 144 youth (aged 18–24) 1 ethnic minorities - in North Kosovo

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PMI Summary Table 19: PMI Summary through Q21 Actuals—Targeted Indicators

Target (Cumulative) Data Overall Reporting Source Performance Indicator Unit 2015 2016 2017 2018 2019 Progress Total Frequency Increase Target Actual Target Actual Target Actual Target Actual Target Actual

Quarterly, Number of beneficiary companies # 171% 150 91 260 340 300 433 350 571 400 682 400 Activities Annual

Attributed aggregate sales of $000 269% 64,981 134,393 97,471 254,176 150,000 404,087 150,000 Surveys beneficiaries

Attributed aggregate sales increase $000 197% 6,608 1,065 61,824 15,580 28,000 56,029 56,000 106,003 100,000 204, 100,000 of beneficiaries 289 Attributed aggregate exports Activities, $000 181% 3,102 738 16,755 8,208 10,304 25,345 30,837 49,933 50,000 94,4 50,000 increase of beneficiaries 75 Surveys

Business size expansion # 176% 5 4 10 16 15 23 20 28 25 44 25 Quarterly, Surveys Annual Number of new geographic # 558% 10 26 20 111 30 169 40 242 50 279 50 Surveys markets entered by beneficiaries

Number of new products sold by # 656% 10 16 20 48 30 156 40 257 50 328 50 Surveys beneficiaries

Number of beneficiary companies Activities, that have invested new # 119% 26 20 38 40 48 60 55 80 95 80 Surveys technologies

Quarterly, Activities, Total new jobs # 96% 250 465 2,800 1,272 2,250 2,473 3,250 3,608 5,000 4,778 5,000 Annual Surveys

Quarterly, Investment leverage ratio N/A 3.0x 5.46x 3.0x 5.8x 3.05x 5.02x 3.0x 5.4x 3.0x 5.13 3.0x Activities Annual

1 AIR = Activity Intermediate Result (see PBMS causal model) 2 Jobs in subcategories are not additive - they overlap 3 Primary Beneficiaries only 4 Total activity funding from all sources divided by EMPOWER SAF investment (cash) 1AIR = Activity Intermediate Result (see PBMS causal model) 2Total activity funding from all sources divided by EMPOWER investment. Note: Monetary values originally in € and converted to $ at 1.12.

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Table 20: PMI Summary through Q21 Actuals Additional Tracked/Non-Targeted Indicators Cumulative Reporting Data Source Performance Indicator Unit 2015 2016 2017 2018 2019 Frequency Number of Primary Beneficiaries # 91 183 256 426 531 Activities Number of Microenterprise beneficiaries # 64 111 125 176 229 Number of Start-ups # 11 19 19 68 Number of Domestic Supplier # 157 177 145 151 Beneficiaries CI Finance $000 1131 1135 1678 2146 Aggregate Private Institutional Finance $000 3735 3297 5388 5552

Value of Foreign Direct Investment $000 280 280 280 280 Quarterly, Annual Value of Private Investment $000 3759 7804 9558 11565 Indirect impact – Sales at SBs # 414,735 670,823 Indirect impact – Sales increase at SBs $000 173,288 338,543 Indirect impact – New jobs at SBs # 8,702 11,441 Number of new product quality # 1 7 21 32 51 certifications obtained by beneficiaries Number of workers with certified job # 35 380 674 757 1123 skills / qualifications Person-hours of workforce and 000 115 225 329 343 491 Activities management skills training Jobs - Women # 255 630 943 1306 1790 Jobs - Youth # 289 672 1030 1186 1432 Jobs - Minorities # 27 144 212 361 488 Jobs - North Kosovo # 21 116 202 390 488 Quarterly, Women in Management # 28 47 51 111 Annual Trainees # 503 878 1474 2291 4119 Trainees – Women # 328 512 812 1137 1778 Trainees – Youth (18-24) # 354 561 900 1191 1810 Trainees – Minorities # 6 65 93 110 166 Trainees – North Kosovo # 1 54 75 75 126 Interns / Apprentices # 383 559 1004 1800 2668

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Cumulative Reporting Data Source Performance Indicator Unit 2015 2016 2017 2018 2019 Frequency Interns - Women # 243 329 500 812 1155 Interns - Youth (18-24) # 280 421 706 998 1402 Interns - Minorities # 5 10 38 53 58

Interns - North Kosovo # 1 22 21 21 ** Jobs in subcategories are not additive

- they overlap

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

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Table 21. EMPOWER-Supported Trade Fairs Results

EMPOWER-Supported Trade Fair Results # Trade Fair Sector Location # PB Sales $000 Assistance $000 Date firms LoP Actual EMP Co- Fin 1 IF Wedding; Izmir; Feb 3 2 4 TEXPO Apparel Istanbul 15

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

4 Destinations Paris Mar 4 26 8 10 Nature 2015 Tourism 15 5 Energetika Energy Zagreb Apr 1 421 1,400 4 7 15 6 Textile, Facon Tirana Jun 8 538 113 13 46 and Fashion Apparel 15 7 MOW Wood Hanover Sep 2 1,680 1,296 21 36 Germany 2015 15

8 Adventure Chile Oct 2 2 5 2 Travel World Tourism 15 Summit 9 A+A 2015 Dusseldorf Oct 3 187 250 2 6 Apparel 15 10 Investment & ICT Chicago Nov 2 3 - Trade 15 Conference 11 World Travel London Nov 5 109 18 20 Market Tourism 15 12 SwissBau 2016 Wood Basel Jan 3 2,352 1,551 28 52 16

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

17 Destinations Paris Mar 5 73 3 12 Nature 2016 Tourism 16 18 Skopje Wood Skopje Mar 3 519 391 10 25 Furniture Fair 16 2016 19 Skopje Fashion Skopje Apr 2 1 8 Weekend Apparel 16

20 Wire & Tube Metal Dusseldorf Apr 5 8 1 7 Fairs 16 21 Milan Wood Milan Apr 4 2 4 Furniture Fairs 16

22 Xylexpo Wood Milan May 0 0.4 - Furniture Fair 16

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

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

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28 Adventure Sep 4 168 11 11 Travel World Tourism Anchorage, 16 Summit, Alaska Alaska 29 The Digital ICT London Sep 1 202 9 3 2 Show, London 16 30 Emilia Other Emilia Sep 1 95 34 1 1 Romagna, Romagna 16 Motorfest 31 Kosovo Wood Wood Pristina Oct 17 20 4 Industry 16 Convention 2016 32 STIKK B2Bs, ICT Cologne; Nov 7 4 17 Germany Frankfurt; 16 Darmstadt

33 Performance Munich Nov 4 4 6 Days Apparel 16 34 BAU Energy Munich Jan 6 112 1 7 17 35 IMM Cologne Wood Cologne Jan 4 4,200 1,096 55 99 Furniture Fair 17 2017 36 Gulfood Fair Other Dubai Mar 2 1 4 17 37 JEC World Other Paris Mar 1 336 482 5 7 2017 17 38 ITB 2017 Berlin Mar 8 560 300 7 29 Tourism 17 39 Destinations Paris Mar 4 143 12 4 7 Nature 2017 Tourism 17 40 Furniture Wood Tirana Mar 2 336 - 2 9 Tirana 2017 17 41 Skopje Wood Skopje Mar 2 336 105 7 8 Furniture Fair 17 2017

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44 Green Festival Energy Pristina Sep 22 824 69 18 2 17 45 A+A 2017 Dusseldorf Oct 3 125 1,441 17 25 Apparel 17 46 STIKK B2Bs, ICT Munich; Oct 11 224 5 33 Germany Nuremberg 17 47 ECRM Other Miami, Nov 1 336 184,177 12 11 Florida 17

48 Kosovo Pristina Nov 22 62 112 Apparel Apparel 17 Industry Convention 2017 49 Tirana Energy Tirana Nov 4 168 10 3 3 International 17 Fair 50 Diaspora Pristina Nov 133 336 527 29 24 Economic General 17 Forum 51 Belgrade Wood Belgrade Nov 11 34 Furniture Fair 17

52 Kosovo Wood Wood Pristina Dec 21 2 1 Industry 17 Convention 2017 53 IMM Cologne Wood Cologne Jan 3 1,120 1,784 34 144 Furniture Fair 18 2018 54 SwissBau 2018 Wood Basel Jan 7 3,640 5,322 31 67 18

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55 ITB 2018 Berlin Mar 5 - 29 717 Tourism 18 56 Destinations Paris Mar 1 - 23 188 Nature 2018 Tourism 18 57 Light + Energy Frankfurt Mar 1 112 125 - - Building 18 58 Ibatech Fair Other Istanbul Apr 1 22 81 18 59 Adriatic Fair Energy Budva Apr 1 56 59 1 1 18 60 EuroCucina Wood Milan Apr 11 17 11 18 61 Energy Frankfurt Sep 1 112 29 34 8 Automechanika 18 Fair 62 Green Festival Energy Pristina Sep 30 70 40 42 3 18 63 Western ICT Talinn, Oct 2 2 1 Balkans Estonia 18 Business Forum 64 Kosovo Pristina Nov 22 18 - Apparel Apparel 18 Industry Convention 2018 65 STIKK Match- ICT Nov 10 4 36 Making B2B Nuremberg 18

66 Kosovo Wood Wood Pristina Dec 22 23 8 Industry 18 Convention 2018 67 IMM Cologne Wood Cologne Jan 4 1,792 193 11 215 Furniture Fair 19 2019 68 ISM Fair Other Cologne Jan 3 1 2 19

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69 BIOFACH Fair Other Feb 1 2 3 2019 Nuremberg 19 70 BIOFACH Fair Other Feb 1 391 1 2018 Nuremberg 18 71 Intersolar Fair Energy Munich May 6 384 1 6 19 72 Vienna Fair Vienna Apr 8 - 9 General 19 73 Mission to Wood Brussels May 5 - 3 5 Belgium 19

74 NY Conference ICT New York May 8 29 10 94 19 75 Economic Other Prishtina May 49 336 96 37 42 Conference of 19 Albanian Diaspora 76 Visiting Turkey May 5 112 - 9 - Factories and Apparel 19 B2B 77 Doku Fest Other Prizren Aug 0 - - - - Diaspora 19

78 M.O.W. Wood Germany 4 1,120 - 11 32 79 Wood Industry Wood Prishtina Oct 100 - - - - Convention 4th 19 Edition 80 Green Festival Energy Prishtina Oct 30 - - 1 - 4th Edition 19 773 $ $205,305 $ $ TOTAL 25,053 1,326 2,561

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