LAC-IEE-17-30

ENVIRONMENTAL THRESHOLD DECISION For Amendment 4 to

LAC-IEE-15-06 El Salvador EG Office (Bilateral Program) Activity Location:

El Salvador

Project Title and Number:

Increasing Business Productivity Project, No. 519-0470

Development Objective Grant Agreement Title and Number:

Development Objective (DO) Economic Growth Opportunities in Tradables Expanded, No. 519-002 IR 2.2 Productivity of Targeted Businesses Increased

New Life-of-Project Funding:

$143,500,000

Life of Project:

FY 2015 - FY 2021

Reference Threshold Decision: LAC-IEE-15-06, IEE is for the new strategy Project Appraisal Document “Increasing Business Productivity Project”, No. 519-0470), LAC-IEE-15-38 Amendment 1, LAC-IEE-16-13 Amendment 2, LAC-IEE-16-40 Amendment 3.

IEE Prepared by:

Annie de Valencia, Regional Trilateral Cooperation Support Activity COR, Regional Program Office

Date Prepared:

February 21, 2017

REO/MEO Recommended Threshold Decision:

Categorical Exclusion for the new Activity: Trilateral Cooperative Support Activity

BEO Threshold Decision: Concur

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1. SUMMARY OF PURPOSE, SCOPE, BACKGROUND, ACTIVITIES AND LOCATIONS

1.1 Purpose and Scope of IEE The purpose of this IEE amendment is to revise USAID/El Salvador Economic Growth Office’s (Bilateral Program) Increasing Business Productivity Project, LAC-IEE-15-06, as follows:

a) Modify section 1.3 Description of Components and Tasks to add the Description of the USAID Regional Trilateral Cooperation Support Activity, and include illustrative interventions for this Activity as included in the Amendment No. 1 of the PAD for Project No. 519-0470. The Trilateral Cooperation Support Activity will support the three sub-IRs, sub-IR 2.2.1, sub-IR 2.2.2, and sub-IR 2.2.3 of the Increasing Business Productivity Project.

b) Update section 1.4 to include information for the Trilateral Cooperation Support Activity c) Update Section 2 (Potential Environmental Impacts) to include language for the Trilateral

Cooperation Support Activity regarding no environmental impacts anticipated. d) Include a Categorical Exclusion for the new Activity in Section 3.1 as a Recommended

Threshold Decision. e) Include a new Condition regarding small scale construction to follow USAID Sector

Environmental Guidelines. f) Update Section 3.3 to include new Environmental Compliance Language for Contracts g) Include language for section 3.4 regarding Amendments.

All other sections, and information in the sections, of the previous IEEs for El Salvador bilateral DO2 IR 2.2 IEE, remain the same. The complete amended IEE is attached. It replaces the original IEE. Revisions are highlighted in yellow. All conditions and requirements of the attached IEE and this Environmental Threshold Decision document will be fully implemented. 1.2 Background USAID CAM Regional Trilateral Cooperation Support Activity was covered in LAC-IEE-15-23 (DO2 Regional Climate Smart Economic Growth) and LAC-IEE-16-20 (DO1 Regional Economic Integration Increased). The Trilateral Cooperation Support Activity was envisioned to be used by both the Regional Program and Bilateral Program. The USAID El Salvador bilateral program thus is amending their IEEs for EG and DG to include this Activity and will place funds in the Trilateral Activity for their “buy-in” and implementation. The purpose of the Trilateral Cooperation Support Activity is to facilitate the establishment of trilateral cooperation among (1) the United States Government represented by USAID, (2) receiving countries (i.e., Guatemala, Honduras, El Salvador, Nicaragua, and Mexico), and (3) selected “offering countries” primarily from Latin America such as Brazil, Argentina, Colombia, Chile, Peru, Uruguay, Paraguay and Mexico (Mexico is potentially an offering and receiving country).

- 3 - The activity will also promote the replication of successful models from the U.S. and other South-South cooperation countries through technical assistance and trilateral cooperation, to promote the exchange of best practices in addressing the tradables constraint by improving the business enabling environment, strengthening tax collection and transparency. In addition, planned trilateral interventions using funds from the Improving the Business Enabling Environment Project will support the areas, including but not limited to, fiscal policy, public financial management, formulation of a programmatic budget at targeted ministries, local and municipal development, technology transfer, and finance windows of opportunity to improve logistics, facilities, and streamline control procedures at priority border crossings as well as to provide technical assistance to appropriate national government entities to establish a more effective, fair and transparent revenue administration at the national level. Interventions assisted through this activity will support the U.S. Strategy for Engagement in Central America (the “CEN Strategy”), the Country Development Cooperation Strategy, and the Plan of the Alliance for Prosperity proposed by the Northern Triangle governments including El Salvador. 1.3 Description of Components and Tasks: In support of Components 1, 2, and 3, the following activity is being added to the original IEE. All other activities and illustrative actions in the past IEEs remain the same. Trilateral Cooperation Support Activity

In addition, the Project will include the following activity to formalize and facilitate future trilateral cooperation interventions in El Salvador to enhance trilateral cooperation throughout Latin America. This activity will support interventions for Component 1, Component 2, and Component 3 described above. The Regional Trilateral Cooperation Support Activity is implemented through a contract which has a three-year base period and an option for a fourth year. This activity contract was awarded on August 1, 2016, and it is implemented by a U.S. contractor, International Business & Technical Consultants, Inc. (IBTCI), in partnership with El Salvador’s leading socioeconomic think-tank, Salvadoran Foundation for Social and Economic Development (FUSADES, Spanish acronym). Illustrative trilateral cooperation interventions The Trilateral Cooperation Activity will plan and implement study tours familiarizing professionals from receiving countries with approaches to similar issues in other Latin American (LA) countries and visits to receiving countries by subject matter experts from other LA countries. Typically, the visits by LA countries subject matter experts will be associated with study tours, but the activity can consider visits by LA countries subject matter experts independent of a study tour if they can be linked to a mission priority.

- 4 - Building on prior experience and lessons learned, EG team recommends implementing the following interventions, including but not limited to, through the Trilateral Cooperation Activity:

• Study tours for GOES officers and/or private sector organizations representatives to learn from “offering” countries’ experiences in developing the eco-system to foster entrepreneurship (start-ups).

• Study tours for GOES officers and/or private sector representatives to learn from provider’s countries successful experiences the key aspects, at the policy, financial and agronomic levels to spur the growth of the cacao sector.

• Bring delegation of experts from the “offering” countries to provide technical assistance and training for El Salvador’s Cacao Alliance.

• Study tour for GOES officers and/or private sector representatives to visit a Center of Innovation and Business in Colombia, and learn about how innovation can change a city or country through the Colombian successful model to promote the development of innovative technology-based businesses.

• Bring delegations of experts to provide technical assistance and training, and other support to selected municipalities to increase sustainable capacity of local governments as well as local organizations, facilitate economic activity, and streamline start-up processes for a robust local economic growth led by the private sector.

• Study tours for GOES officers and/or private sector representatives to learn about successfully programs to improve quality of technical/vocational instruction/instructors; and also bring delegation of experts to transfer they knowledge on these topics.

• Exchange of technology and technical assistance to support exports based on past successful cooperation efforts with governments from the different providing countries.

Anticipated results:

• At least five study tours implemented to learn from the South-South Cooperation provider countries about their experiences in: a) developing the eco-system to foster entrepreneurship (start-ups), b) spurring the growth of the cacao sector, and c) promoting the development of innovative technology-based businesses.

• At least five delegations of experts provided technical assistance to promote the exchange of best practices to expand economic growth opportunities in the tradable sector.

• At least 25 GOES officials from selected Ministries and institutions of the GOES trained in different key areas, including but not limited to, Higher Education and Workforce Competencies, Business Development Services for Small and Medium Enterprises (SMEs), and Sustainable Production of Key Agro-tradables.

1.4 Locations Affected and Existing Conditions: The information is section 1.4 of the IEE remains the same with exception of the following addition for the Trilateral Cooperation Activity:

- 5 - In addition, the Trilateral Cooperation Support Activity will carry out interventions in support of Component 1, 2, and 3. Therefore, these trilateral interventions will be implemented in the same places where interventions of Components 1, 2, and 3 will be carried out. 2. POTENTIAL ENVIRONMENTAL IMPACTS As the illustrative actions for the Trilateral Agreement activity are focused on study tours, exchange of technologies and information, training, and technical assistance, no anticipated potential environmental impacts are anticipated. All of the potential environmental impacts for activities listed as NDWC in the LAC-IEE-15-06 and associated 3 amendments remain the same. 3. ENVIRONMENTAL THRESHOLD DETERMINATION (ETD) AND CONDITIONS 3.1. Trilateral Cooperation Support Activity Categorical exclusion is issued for the Trilateral Cooperation Support Activity as appears in the following table: Categorical Exclusion

• 22 CFR 216.2(c)(i) Technical Assistance and Training: For all activities, including the new El Salvador Competitive Activity, and the new Regional Trilateral Cooperation Support Activity, except for the El Salvador Cacao Alliance agricultural production activity.

• 22 CFR 216.2(c)(iii) Analyses, studies, academic or research workshops or meetings: For Higher Education, SME, El Salvador Competitive, Cacao Activities, and the new Regional Trilateral Cooperation Support Activity.

• 22 CFR 216.2(c)(v) Document and information transfer: For Workforce Development, SME, El Salvador Competitive, Energy Activities, and the new Regional Trilateral Cooperation Support Activity.

• 22 CFR 216.2(c)(xiv) Development Planning for the planning, policy development, access to financing, organization, and establishing associations: For all Activities listed in this IEE including the new El Salvador Competitive Activity, the new Regional Trilateral Cooperation Support Activity, and non-agriculture related trainings of the El Salvador Cacao Alliance.

• 22 CFR 216.2(c)(xv) Design Criteria or standards development: For Workforce Development, SME, El Salvador Competitive Activities, and the new Regional Trilateral Cooperation Support Activity.

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3.2 Conditions, Mitigation, Monitoring and Evaluation All conditions, mitigation, monitoring and evaluation direction remain the same and the following condition is being added: l). Each grant or sub-grant for small scale construction/rehabilitation activity shall follow the Municipal Building guidelines already approved by USAID within the USAID Sectoral Environmental Guidelines (http://www.usaidgems.org/besPractices.htm) Infrastructure Sector. 3.3 Environmental Compliance Language for Contracts and Agreements Each technical office, along with the MEO and REA, will ensure that environmental compliance language from this IEE is included in all procurement and obligating documents, such as activity-related Development Objective Agreements, and under Global Acquisition and Assistance Systems (GLAAS). The following language regarding environmental compliance will be included in any kind of procurement instrument within this Activity: Categorical Exclusion and Negative Determination Only. “The Foreign Assistance Act of 1961, as amended, Section 117 requires that the impact of USAID’s activities on the environment be considered and that USAID include environmental sustainability as a central consideration in designing and carrying out its development programs. This mandate is codified in Federal Regulations (22 CFR 216) and in USAID’s Automated Directives System (ADS) Parts 201.5.10g and 204 (http://www.usaid.gov/who-we-are/agency-policy/series-200), which, in part, require that the potential environmental impacts of USAID-financed activities are identified prior to a final decision to proceed and that appropriate environmental safeguards are adopted for all activities. [Offeror/ applicant/contractor/recipient] environmental compliance obligations under these regulations and procedures are specified in the following paragraphs of this [RFP/RFA/contract/task order/grant/cooperative agreement]. In addition, the contractor/recipient must comply with host country environmental regulations unless otherwise directed in writing by USAID. No action funded under this [contract/task order/grant/CA] will be implemented unless an environmental threshold determination, as defined by 22 CFR 216, has been reached for that activity, as documented in a Request for Categorical Exclusion (RCE), Initial Environmental Examination (IEE) duly signed by the Bureau Environmental Officer (BEO). As part of its initial Work Plan, and all Annual Work Plans thereafter, the contractor/recipient, in collaboration with the USAID COR/AOR and REA or BEO, as appropriate, shall review all ongoing and planned activities under this [contract/task order/grant/CA] to determine if they are within the scope of the approved Regulation 216 environmental documentation. At least one Negative Determination with Conditions, with sub-awards. An Initial Environmental Examination (IEE) [(insert IEE # or hyperlink, if available)] has been approved for [the Activity] funding this [RFA/RFP/contract/task order/grant/cooperative agreement (CA)]. The IEE covers activities expected to be implemented under this [contract/task order/grant/CA]. USAID has determined that a Negative Determination with Conditions applies to one or more of

- 7 - the proposed actions. This indicates that if these actions are implemented subject to the specified conditions, they are expected to have no significant adverse effect on the environment. The [offeror/applicant/contractor/recipient] shall be responsible for implementing all IEE conditions pertaining to actions to be funded under this [solicitation/award]. As part of its initial Work Plan, and all Annual Work Plans thereafter, the contractor/recipient, in collaboration with the USAID COR/AOR, and REA or BEO, as appropriate, shall review all ongoing and planned actions under this [contract/task order/grant/CA] to determine if they are within the scope of the approved IEE. If the contractor/recipient plans any new actions outside the scope of the approved IEE, the contractor/recipient shall inform USAID in writing of these changes. No such new actions shall be undertaken prior to receiving written USAID approval. When the approved IEE contains one or more Negative Determinations with Conditions, the [contractor/recipient] shall:

● Prepare an environmental mitigation and monitoring plan (EMMP) for each proposed action under the Negative Determination with Conditions in the IEE, describing how the contractor/recipient will, in specific terms; implement all IEE conditions that apply within the scope of the award. The EMMP format is attached. The EMMP shall include monitoring the implementation of the conditions and their effectiveness.

● Integrate a completed EMMP into the initial work plan. ● Prepare an Environmental Compliance Report (ECR) at the end of the year or as per

reporting requirements of the contract. The ECR shall be based on the monitoring of mitigation measures using Table 3 of the EMMP.

● A revised EMMP must be completed and approved in subsequent Annual Work Plans, making any necessary adjustments to implementation in order to minimize adverse impacts to the environment.

A provision for sub-awards is included under this award. Therefore, the [contractor/recipient] will prepare an EMMP for each proposed sub-award, except those that qualify for a categorical exclusion. In the case of a categorical exclusion, [contractor/recipient] shall complete and submit for USAID approval table 1 of the EMMP (Environmental Review Form- ERF). In order to ensure the funded proposals will result in no adverse environmental impacts. Implementation of sub-awards shall not begin prior to USAID written approval of the corresponding EMMP. The contractor/recipient is responsible for ensuring that mitigation measures specified in the EMMP are implemented.” Contract Officers will use documents listed in ADS 204.5 “Environmental Compliance: Language for Use in Solicitations and Awards; An Additional Help for ADS Chapter 204” dated May 19, 2008. ).

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3.4 Amendments

• Amendments to Initial Environmental Examinations (IEEs) shall be submitted for LAC Bureau Environmental Officer (BEO) approval for any activities not specifically covered in the IEE, which include:

o Funding level increase beyond ETD amount, o Time period extension beyond ETD dates (even for no cost extension), or o A change in the scope of work, such as the use of pesticides or activities

subject to Foreign Assistance Act sections 118 and 119 (e.g. procurement of logging equipment), among others.

• Amendments to IEEs may require the need to conduct an Environmental Assessment (EA) and approval of this document by the LAC BEO could require an annual evaluation for environmental compliance.

Signed:

Dirn~~ Bureau Environment Officer Bureau for Latin America and the Caribbean

Copy to:

Attachments:

Larry Sacks, Acting Mission Director Kim Delaney, DDIR Amy Partida, A/RPO Joe Torres, REA Mary Rodriguez, MEO Greg Howell, EG Annie de Valencia, RPO

Initial Environmental Examination LAC-IEE-15-06

- 9 - File Locations: LAC Bureau- P:\LAC.RSD.PUB\ENV\Reg 216\IEE\IEE17 Environmental compliance database-this document will be posted to the environmental compliance database at http://gemini.info.usaid.gove/egat/envcomp/index

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INITIAL ENVIRONMENTAL EXAMINATION Amendment 4 to

LAC-IEE-15-06 El Salvador EG Office Activity Location:

El Salvador

Project Title and Number:

Increasing Business Productivity Project, No. 519-0470

Development Objective Grant Agreement Title and Number:

Development Objective (DO) Economic Growth Opportunities in Tradables Expanded, No. 519-002 IR 2.2 Productivity of Targeted Businesses Increased

New Life-of-Project Funding:

$143,500,000

Life of Project:

FY 2015 - FY 2021

Reference Threshold Decision: LAC-IEE-15-06 , IEE is for the new strategy Project Appraisal Document “Increasing Business Productivity Project”, No. 519-0470), LAC-IEE-15-38 Amendment 1, LAC-IEE-16-13 Amendment 2, LAC-IEE-16-40 Amendment 3.

IEE Prepared by:

Annie de Valencia, Regional Program Office

Date Prepared:

February 21, 2017

REO/MEO Recommended Threshold Decision:

Categorical Exclusion

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1. BACKGROUND AND PURPOSE AND SCOPE 1.1 Purpose and Scope of IEE The purpose of this IEE amendment is to amend LAC-IEE-15-06 to:

a) Modify section 1.3 Description of Components and Tasks to add the Description of the USAID Regional Trilateral Cooperation Support Activity, and include illustrative interventions for this Activity as included in the Amendment No. 1 of the PAD for Project No. 519-0470. The Trilateral Cooperation Support Activity will support the three sub-IRs, sub-IR 2.2.1, sub-IR 2.2.2, and sub-IR 2.2.3 of the Increasing Business Productivity Project.

b) Update section 1.4 to include information for the Trilateral Cooperation Support Activity c) Update Section 2 (Potential Environmental Impacts) to include language for the Trilateral

Cooperation Support Activity regarding no environmental impacts anticipated. d) Include a Categorical Exclusion for the new Activity in Section 3.1 as a Recommended

Threshold Decision. e) Include a new Condition regarding small scale construction to follow USAID Sector

Environmental Guidelines. f) Update Section 3.3 to include new Environmental Compliance Language for Contracts g) Include language for section 3.4 regarding Amendments.

All other sections, and information in the sections, of the previous IEEs for El Salvador bilateral DO2 IR 2.2 IEE remain the same. The purpose of the Amendment 3 was to approve El Salvador Cacao Alliance PERSUAP. The purpose of this Amendment 2 of the original LAC-IEE-15-06 (DO2 IR2.2) is to include a new Activity, El Salvador Competitive Activity, under Component 2: Business Development Services for SMEs Strengthened (Sub-IR 2.2.2.) Although the El Salvador Competitive Activity includes objectives and actions that are cross cutting between DO2 IR2.1 and 2.2, this Activity will be included only in this IEE for DO2 IR2.2 for ease of tracking and efficiency. The goal of this Activity is to increase El Salvador’s competitiveness by strengthening capacity of micro, small and medium enterprises (MSMEs) to compete in domestic and export markets, and improve the national and subnational business environment to encourage private sector investment, innovation, and business expansion to foster economic growth and job creation. Additional information regarding this new Activity is described in Section 1.3 Description of Components and Tasks under Component 2 “Business Development Services for SMEs Strengthened,” and contributes to the achievement of the Sub-IR 2.2.2. No additional changes are needed for this IEE Amendment 2. The Life of the Project and Life of Project Funding increases from $96,619,000 stated in LAC-IEE-15-06 and LAC-IEE-15-38, to a new total of $143,500,000. The purpose of Amendment 1 of LAC-IEE-15-06 (DO2 IR2.2) was to update the information on the Workforce Development Activity that was included in LAC-IEE-15-06. The name of the

- 13 - activity has been changed to Employment Training1. This Activity will add a sub-grant component, as well as potentially adding small scale construction/refurbishing actions under the sub-grant component and main activity. The Employment Training activity is a joint venture between the USAID/El Salvador mission Economic Growth (EG), Democracy, and Governance (DG) offices. The DG office’s existing PAD IEE for the Crime and Violence in Targeted Municipalities Reduced Project (LAC-IEE-15-30) includes a sub-grant component and small scale construction/renovations for the Employment Training activity’s within Output 3.2-Access to Education and Job Opportunities. The IEE amendment 1 was necessary as EG funds will also be used for the Employment Training Activity and the EG LAC-IEE-15-06 did not include the actions of small-scale construction nor a sub-grant component for this Activity. In accordance with the new Project Design Guidance, a project will generally focus on the IR level or the DO level if it is associated with relatively small levels of resources. In this case, the Project Appraisal Documents (PADs) for USAID/El Salvador CDCS are defined at the IR level. Therefore, the scope of the activities under the separate IRs, warrant the development of separate PADs. According to the Guidance, each PAD is required to have an IEE. The purpose of this revised IEE is to analyze the potential environmental impacts for the El Salvador Competitive activity under DO2, IR2.2 “Productivity of Targeted Businesses Increased.” The revised Total Estimated Cost of DO2, IR2.2, Project 519-0479 is increased from $96,619,000 to $143,500,000. The official end date of the CDCS is 2017, however some of the activities under this PAD will likely continue through 2021, as awards will most likely be for five years and some are still in the design phase. Current activities under implementation were authorized under previous IEEs (LAC-IEE-14-39 and LAC-IEE-14-55.) This IEE absorbs the following ongoing activities presently covered under LAC-IEE-14-55, as they are continuing into the DO2 IR2.2 PAD, which includes the following activities: Higher Education, SME Development, three Development Credit Authorities (DCAs) and the National Cacao Alliance. The remaining ongoing activities covered under LAC-IEE-14-55 are not part of the PAD and thus will continue until completion under the LAC-IEE-14-55. This IEE absorbs the Workforce Development activity presently covered under LAC-IEE-14-39, as it is continuing into the DO2 IR2.2 PAD. This IEE also includes the new El Salvador Competitive Activity that is yet to be awarded as of December 16, 2015. 1 Formerly known as Workforce Investment activity

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1.2 Background The goal of the DO2, IR2.2 PAD, Increasing Business Productivity Project, is to expand economic growth opportunities in the tradable sector and its purpose is to increase the productivity of targeted businesses. The proposed project design is aligned with the goals of the Partnership for Growth (PFG) Joint Country Action Plan (JCAP) to help address the low productivity in tradables constraints and the USAID Country Development Cooperation Strategy (CDCS) 2013-2017. Specifically, this Project has a direct link with the PFG Tradables Goal No. 3 – Improve the quality of the education system in order to create a more highly qualified and technologically skilled labor force. The project also has a direct link with Goal No. 6 – Surmount low productivity of tradables by transforming factors of production of the tradables sector through the implementation of strategies to improve innovation and quality, and a focus on the international market. The Project purpose will be accomplished through the achievement of three sub-purposes, which are directly linked to Intermediate Result (IR) 2.2 “Productivity of Targeted Businesses Increased,” of the Development Objective (DO2) Economic Growth Opportunities in Tradables Expanded. Sub-purpose 1, “Higher Education and Workforce Competencies Strengthened,” contributes to the achievement of the Sub-Intermediate Result (Sub-IR) 2.2.1; Sub-purpose 2, “Business Development Services for SMEs Strengthened,” contributes to the achievement of the Sub-IR 2.2.2; and Sub-purpose 3, “Sustainable Production of Key Agro-tradables Expanded,” contributes to Sub-IR 2.2.3. USAID CAM Regional Trilateral Cooperation Support Activity was covered in LAC-IEE- 15-23 (DO2 Regional Climate Smart Economic Growth) and LAC-IEE-16-20 (DO1 Regional Economic Integration Increased). The Trilateral Cooperation Support Activity was envisioned to be used by both the Regional program and Bilateral Program. The USAID El Salvador bilateral program thus is amending their IEEs for EG and DG to include this Activity and will place funds in the Trilateral Activity for their “buy-in” and implementation. The purpose of the Trilateral Cooperation Support Activity is to facilitate the establishment of trilateral cooperation among (1) the United States Government represented by USAID, (2) receiving countries (i.e., Guatemala, Honduras, El Salvador, Nicaragua, and Mexico), and (3) selected “offering countries” primarily from Latin America such as Brazil, Argentina, Colombia, Chile, Peru, Uruguay, Paraguay and Mexico (Mexico is potentially an offering and receiving country). 1.3 Description of Components and Tasks: Component 1: Higher Education and Workforce Competencies in Tradables Expanded

(Sub-IR 2.2.1): The following activities support the achievement of this Component: Higher Education

- 15 - USAID is implementing an activity supporting the Higher Education sector to build the institutional capacity of higher education institutions (HEIs) and strengthen university human resources to provide educational programs and research that contribute to the country’s economic growth. The activity will strengthen the institutional capacity and effectiveness of HEIs and official entities, such as the Higher Education Council, the Accreditation Commission and the Ministry of Education’s Higher Education Directorate to address policy reforms to bring relevance to the higher education system. This activity is being implemented by Research Triangle Institute (RTI) and is expected to end in 2019. Illustrative Interventions:

1. Promote partnerships with the private sector and higher education institutions to create a responsive educational system that meets private sector demands.

2. Create productive sector clusters with anchor universities and private sector partners, to promote applied research and industry relevant curricula, with industry input.

3. Create career centers at participating HEIs that promote private sector involvement, offer internships, and communicate relevant supply and demand information regarding jobs.

4. Strengthen qualifications of faculty, researchers and administrators at higher education institutions to build capacity for sustainable response to productive sector needs.

5. Provide grants to local organizations to increase their capacity. Anticipated Results: If the technical assistance and education provided are applied and the equipment granted through the Higher Education activity is effectively used, then the capacity of faculty will be improved, curricula and research will be better aligned with labor demand, key educational institutions and systemic reforms will be enabled. In addition, collaboration among local and international higher education institutions, public and private sectors, and donors will be improved, the relevance and quality of the higher education system’s response to priority sectors needs will be increased, productivity will be improved and long-term economic growth will be enhanced. Workforce Development New Activity name: Employment Training USAID/El Salvador will also implement an activity supporting Workforce Development for Tradables, working with employers and institutions dedicated to workforce training and professional education to develop industry standards in the skills and competencies needed by private industry targeting tradables. The activity will also improve the quality of training offered by technical and vocational training centers. USAID/El Salvador will build on successful activities that have or are leveraging private sector resources for vocational training, job placement and small business development. This activity will undergo the procurement process once the PAD “Increasing Business Productivity” is approved and it is expected to have a five-year implementing period. UPDATE: In line with the approved PAD, the Employment Training Activity will include a sub-grant component that will provide funding for actions described

- 16 - above, as well as potential small scale renovation and construction of schools and/or training centers. Illustrative Interventions:

6. Provide training to current and future employees to enhance their skills for a more productive workforce of the tradables sector.

7. Establish competency-based standards and/or industry certifications, recommend legal and regulatory reforms and improve training curricula for occupations of the tradables sector.

8. Promote partnerships with the private sector and training institutions to create a responsive educational system that meets private sector demands.

9. Create a framework of cooperation among different actors relevant to the market labor, such as the Ministry of Labor, the Ministry of Education, INSAFORP, non-governmental organizations, the private sector, and training institutions. The activity will catalyze relationships among different actors, which share common interests related to workforce development.

10. Implement a small grants component for local organization involvement in the Higher Education activity and the Employment Training Activity.

11. Small scale renovations and/or construction of schools, training centers, and other buildings. Anticipated Results: If the technical assistance and training provided is applied and the equipment granted through the Workforce Development for Tradables activity is effectively used, then the labor force will have skills better aligned with private sector demands contributing to increase productivity of targeted business in priority sectors. Component 2: Business Development Services for SMEs Strengthened (Sub-IR 2.2.2) Small and Medium Enterprise (SME) Development- includes Micro, Small, and Medium Enterprise (MSME) USAID/El Salvador will assist the GOES and the private sector to improve the effectiveness of their business and export development services and help SMEs become more productive and competitive. USAID/El Salvador will partner with the Ministry of Economy and its Productive Development Fund (FONDEPRO) and the National Commission for Micro and Small Enterprise (CONAMYPE), as well as the El Salvador Export Promotion and Investment Attraction Agency (PROESA) and private sector organizations. USAID/El Salvador will also strengthen the local network of Small Businesses Development Centers (SBDCs), which is a public, private and academia effort to provide effective services to micro and small enterprises. The current SME Development activity implemented by Chemonics International will continue under the new strategy and will end in October 2016. .

- 17 - USAID/El Salvador is also implementing three Loan Portfolio Guarantees (DCAs) with two commercial banks, Davivienda (two separate DCAs ending 2015 and 2021) and Banco de America Central (one DCA ending 2021), to expand the availability of credit to micro, small and medium firms, reduce collateral requirements and incentivize additional productive loans that otherwise would not be made. USAID/El Salvador will create new DCAs that will also help SMEs and financial institution take advantage of a DCA Loan Portfolio Guarantee. If additional funds are received, other DCAs to guarantee loans to higher education students will be considered. USAID/El Salvador will try to help local financial institutions overcome the market imperfection that is excluding financially viable sectors. Illustrative Interventions:

12. Support the establishment and strengthening of the network of Small Business Development Centers or CDMYPEs by its Spanish acronym, by 1) Providing training and development of the CDMYPE network human resource; 2) Promoting a culture of permanent improvement across the CDMYPE network through the implementation of a continuous improvement program and accreditation system for CDMYPEs; 3) Support the creation of the Association of CDMYPEs, as an entity that empowers the institutions that operate the centers; and 4) Assist CONAMYPE in carrying out its SME development policies.

13. Support FONDEPRO with technical assistance to strengthen its capacity to grant co-financing to SMEs in a more effective and efficient way by 1) Assisting in the preparation to earn an ISO 9000 certificate of quality; 2) Redesigning the process for SMEs to request co-financing funds and redefining eligibility criteria for business initiatives; and 3) Developing training activities for FONDEPRO and the Ministry of Economy’s human resources to strengthen the skills of the technical staff.

14. Strengthen PROESA’s capacity to provide export services to SMEs by supporting: 1) Implementation of the annual “Exportar Paso a Paso” initiative; 2) PROESA’s efforts to promote the use of the SBDC Global Platform in El Salvador among exporters; and 3) Participation of SMEs in international trade fairs and commercial missions to target markets.

15. Strengthen private sector organizations to improve business development services to MSMSE/SMEs.

16. Continue implementing DCAs with local financial institutions to expand credit access to micro, small and medium enterprises and access of students to higher education.

Anticipated Results: If the technical assistance and training provided is applied, and the equipment granted through the SME Development activity is used, the local capacity of the SBDCs network will be expanded. In addition, productive partnerships with private sector organizations will be established to facilitate transactions and ensure technology transfer and innovation. Furthermore, as a result of the technical assistance received through the SBDCs and the access to credits through USAID/El Salvador’s DCA loan guarantees, SME productivity will be increased,

- 18 - innovative product strategies to create value-added products for export will be developed and SMEs will expand their businesses in global markets, creating more employment in El Salvador. El Salvador Competitive This Activity builds upon lessons learned from prior development investments and complements current USAID/El Salvador activities (e.g. SME Development Activity-Chemonics) to enable Salvadoran businesses to become more competitive in global markets while ensuring participation of men and women, including those with disabilities and those from the lesbian, gay, bisexual, transgender, and intersex (LGBTI) community. The Activity’s beneficiaries will be selected MSMEs and municipal governments. The Activity will advance two inter-related objectives: 1) Equipping for Growth-will increase the capacity of the private sector to compete in the export value- and supply-chains. Equipping for Growth will improve business development service providers to support MSMEs expansion through innovation and implementation of new technologies, and their value added in export-oriented supply-chains. The Activity will support three components in this objective: 1: Increase Business Development Services and MSMEs Business Capacity 2: Improved MSMES Use of Innovation and Technology 3: Expanded Market Access for MSMEs 2) Governing for Growth- will strengthen the national and subnational business enabling environment to make El Salvador more competitive. Governing for Growth will improve the capacity of financial institutions to efficiently serve the large market segment of MSMEs, and improve the business enabling environments at the national and subnational levels. The Activity will support three components in this objective: 1: Expanded Access to Finance for MSMEs 2: Improved Municipal Services to Firms in the Export Value Chain 3: Streamlined Policy, Regulatory and Procedural Processes Illustrative Interventions: 17. Develop partnerships with, and provide technical assistance and training to, selected

GOES and private sector business development service providers who assist MSMEs increase their business capacity and manage more efficiently their businesses, improve the quality of products and services, develop new value-added products, and comply with standards and other technical requirements to access value and supply chains of export markets.

18. Help the CDMYPE network to improve the quality of assistance and expand the number

of MSMEs served by CDMYPEs. Increase the institutional capacity of the recently formed private association of CDMYPEs denominated ACDMYPE

- 19 - 19. Develop innovative and/or technology initiatives in MSMEs operating in targeted sectors,

leading to new products and services, improved business processes, and/or innovative business models.

20. Support high technology start-ups in El Salvador through encouraging competition by

organizing events where entrepreneurs compete for seed capital. A grants fund of $1 million may be proposed to promote competition among start-ups and create a seed capital fund to sustainably finance start-ups. The Contractor would be responsible for proposing the amount of each grant, and criteria for USAID approval to select the start-ups.

21. Provide technical assistance, training and hardware/software equipment to organizations

to improve the services provided to MSMEs to access export markets, improve market research/prospection, participate in trade fairs, conduct commercial missions, and other export services needed.

22. Partner with large enterprises exporting to establish global value chains with Salvadoran

MSMEs suppliers. Develop creative, innovative, and sustainable interventions and tools to work with these companies improving MSMEs suppliers’ capacity to develop products in quantities, and with the quality and delivery reliability required.

23. Assist approved financial institutions to create and/or improve MSME units, strengthen

risk management systems; improve customer service to support new financial products, etc. Financial institutions could also be assisted to apply for DCA guarantees.

24. Identify international private equity funds to invest in equity capital in El Salvador and

link the private equity fund with MSMEs who have high growth potential. 25. Assist the selected municipalities to create or strengthen one-stop-windows and reduce

the time for entrepreneurs to register businesses, obtain licenses, and register new investments. Assist municipalities to set up or strengthen EMPRE units to effectively guide entrepreneurs to GOES and private sector business development service providers.

26. Develop and implement municipal competitive plans promoting economic growth and

improved governance. Plans will promote the use of public-private dialogue to develop and implement business and social activities, generate jobs, and prevent violence and delinquency. The Offeror will develop criteria, in coordination with municipal authorities, to ensure their commitment and promote competition among municipalities. A Grants Fund will be established to provide up to $10 million to private sector organizations allied with municipalities to help municipal competitive committees implement their plans and develop productive activities or violence prevention initiatives.

- 20 - 27. Assess existing reports and analysis, including the FUSADES diagnostic,2 to

recommend and assist improvements in the regulatory and institutional frameworks that facilitate business activities in the country to reduce gaps and eliminate obstacles to private sector operations and business expansion.

Anticipated Results: If the technical assistance and training provided is applied, and the equipment granted by El Salvador Competitive activity is used, the local capacity of the SBDCs network and other public and private sector partner organizations will be expanded. Partnerships with these organizations will facilitate transactions and ensure technology transfer and innovation. Furthermore, as a result of the technical assistance provided through these organizations to MSMEs, their productivity will be increased, innovative product strategies to create value-added products for export will be developed, and MSMEs will expand their businesses in global markets, creating more employment in El Salvador. In addition, the national and subnational government will improve the regulatory framework and streamline doing business procedures. Public and private sectors will work together to achieve mutual economic growth objectives and make El Salvador more competitive. Renewable and Energy Efficiency: USAID/El Salvador will implement the Renewable and Energy Efficiency activity to assist the GOES improve capacity building at regulatory and planning agencies to develop and incorporate strategies that accelerate business investment in clean energy and energy efficiency. Improvements to regulatory frameworks, long-term energy planning and assistance in the implementation of incentives programs for private sector investment in clean energy and energy efficiency technologies will be pursued. Furthermore, the project will provide technical assistance to businesses in areas related to cleaner production and energy efficiency to increase productivity and competitiveness. This activity will also support the establishment of technical programs to train high school, college, and technical/vocational students. Training programs will include research and development in clean energy, energy efficiency, and advanced vehicle technology application. Implementing clean energy and more efficient energy technology opens up the opportunity for other innovative energy solutions such as electric vehicle grid integration, energy storage, and distributed power generation. Illustrative Interventions: • Provide technical assistance and support to national institutions, programs and private sector

organizations to develop, design and implement clean energy and energy efficiency programs.

• Promote knowledge sharing through exchanges, forums, seminars or roundtables on regulatory approaches to accelerate investment in clean energy and energy efficiency,

2 FUSADES, Diagnóstico y Propuestas para el Fortalecimiento del Marco Legal e Institucional del Clima de Negocios en El Salvador, http://fusades.org/node/6886

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including strategies such as decoupling, which have been successfully implemented in the United States. Share case studies from other countries that support various programs’ results in terms of energy savings and economic returns.

• Create informational and educational products related to crosscutting topics like policies, regulations, equipment specifications and energy efficiency cost calculators.

• Support the adoption, implementation and/or enforcement of energy efficient vehicles and other alternative fuel transportation.

• Promote the introduction of fiscal incentives for residential and commercial energy efficiency through temporary or permanent tax credits, rebates, and/or value-added tax exemptions for more energy efficient lighting, appliances, smart meters, electric car charging stations and alternative fuel vehicles.

• Promote partnerships with the private sector and training institutions to create a responsive training system that meets private sector demands related to clean energy and energy efficiency.

• Provide technical assistance and support to implement cleaner production strategies at businesses to improve productivity and competitiveness.

• Support businesses with knowledge, tools, financing, and training to unlock sustainable energy’s cost saving potential and clean energy investments.

Anticipated Results: If the technical assistance and training provided is applied, and the equipment granted through the Renewable and Energy Efficiency activity is used, investments in clean energy and energy efficiency will be expanded and green jobs will be created. In addition, partnerships with private sector organizations will be established to facilitate job placement and ensure technology transfer and innovation. Component 3: Sustainable Production of Key Agro-Tradables Expanded (Sub-IR 2.2.3) El Salvador Cacao Alliance USAID/El Salvador is implementing the El Salvador Cacao Alliance activity to establish a national cacao value-chain in El Salvador and increase cacao exports. USAID/El Salvador will support the planting, processing and marketing of cacao by working with small farmers associations and international buyers. USAID/El Salvador will introduce sustainable agriculture practices to develop a resilient agricultural system that can withstand the effects of climate change. This will be achieved by developing a policy framework and national alliance for sustainable and competitive cacao production, establishing cacao agroforestry systems, facilitating access to financing and post-harvest infrastructure, and increasing the adoption of environmentally sustainable management practices. This activity is implemented by Catholic Relief Services and is expected to end in September of 2019.

- 22 - The activity anticipates to: 1) Promote a policy framework that provides incentives, and specialized research and extension services for the development of a national cacao sector; 2) Support 6,000 small producers owning from 1.4 to 5 hectares located in different regions throughout the country to establish and maintain productive and profitable organic cacao agroforestry systems for a total estimated 6,000 hectares (Ha.) In addition, low-cost, small scale (less than 100 Ha.) and sustainable irrigation systems will be partially subsidized by the project for approximately 3,000 farmers; 3) Restore biodiversity and increased resilience to climate change through producers’ improved farm management and use of natural resources, and 4) Strengthen producer organizational processes and linkages for engagement in the cacao value chain. If additional funding from other sources is available, the number of farmers could be increased up to 10,000 with the same number of hectares. In addition, small-scale construction/rehabilitation of processing facilities and for cacao production activities may be implemented. The producer organizations will be trained in cacao post-harvest handling techniques, will obtain third-party certifications, and will comply with export-oriented traceability and food safety standards. Agricultural Best Management Practices (i.e. USAID guidelines, FAO Extension Guidelines, and other guidelines listed in Section 3.2 of this IEE Amendment) will be implemented. Illustrative Interventions:

28. Establish policies and incentives to support the development of cacao sector in El Salvador.

29. Create an institutional framework, including the creation of the National Cacao Institute, for the provision of services to cacao producers, processors, exporters and buyers.

30. Facilitate mechanisms for producers to access financing for the establishment of cacao agroforestry systems and the financing of small scale irrigation systems (approximately 1-2 Ha average size for low water use irrigation systems).

31. Operate a small grants component

32. Provide technical assistance and training to small and medium-sized producers to establish and maintain productive and profitable cacao agroforestry systems and alternative crop production that will include the use of pesticides.

33. Create and supporting business management structures for post-harvest processing centers.

34. Strengthen producer organizational processes and linkages for engagement in the cacao value chain.

35. Create linkages among producer organizations and international buyers. Potential small scale construction of processing facilities.

Anticipated Results: If the technical assistance and training provided is applied and the equipment granted through the El Salvador Cacao Alliance is used, small farmers will have the opportunity to increase their incomes and become more resilient to climate change. The current coffee leaf rust crisis will be partly mitigated, particularly among smallholder coffee farms at lower elevations where coffee is

- 23 - becoming increasingly less viable. As a result, El Salvador will diversify its agricultural export base and include cacao exports. In support of Components 1, 2, and 3, the following activity is being added to the original IEE:

Trilateral Cooperation Support Activity In addition, the Project will include the following activity to formalize and facilitate future trilateral cooperation interventions in El Salvador to enhance trilateral cooperation throughout Latin America. This activity will support interventions for Component 1, 2 and 3 described above. The Trilateral Cooperation Support Activity (the “Activity”) is implemented through a contract which has a three-year based period and an option for a fourth year. This Activity contract was awarded on August 1, 2016, and was covered under LAC-IEE- 15-23 (DO2 Regional Climate Smart Economic Growth) and LAC-IEE-16-20 (DO1 Regional Economic Integration Increased). It is implemented by a U.S. contractor, International Business & Technical Consultants, Inc. (IBTCI), in partnership with El Salvador’s leading socioeconomic thing-tank, Salvadoran Foundation for Social and Economic Development (FUSADES, Spanish acronym). Purpose of the Activity The purpose of this Activity is to facilitate the establishment and assist in coordinating implementation of trilateral cooperation among (1) the United States Government represented by USAID, (2) receiving countries (i.e., Guatemala, Honduras, El Salvador, Nicaragua, and Mexico), and (3) selected “offering countries” primarily from Latin America such as Brazil, Argentina, Chile, Colombia, Peru, Uruguay, Paraguay and Mexico (Mexico is potentially an offering and receiving country). The Activity will also promote the replication of successful models from the U.S. and other South-South cooperation provider countries through technical assistance and trilateral cooperation, to promote the exchange of best practices to expand economic growth opportunities in the tradables sector through increasing the productivity of targeted businesses. In addition, planned trilateral interventions using funds from the Increasing Business Productivity Project will support the areas, including but not limited to, of Higher Education and Workforce Competencies, Business Development Services for Small and Medium Enterprises (SMEs), and Sustainable Production of Key Agro-tradables. Interventions assisted through this Activity will support the U.S. Strategy for Engagement in Central America (the “CEN Strategy”), the Country Development Cooperation Strategy, the Government of El Salvador’s (GOES) Five Year Development Strategy and the Alliance for Prosperity Road Map proposed by the Northern Triangle governments including El Salvador. Illustrative trilateral cooperation interventions for the Increasing Business Productivity Project in support of Components 1, 2, and 3

- 24 - The Trilateral Cooperation Activity will plan and implement study tours familiarizing professionals from receiving countries with approaches to similar issues in other Latin American (LA) countries and visits to receiving countries by subject matter experts from other LA countries. Typically, the visits by LA countries subject matter experts will be associated with study tours, but the Activity can consider visits by LA countries subject matter experts independent of a study tour if they can be linked to a mission priority.

Building on prior experience and lessons learned, EG team recommends implementing the following interventions, including but not limited to, through the Trilateral Cooperation Activity:

• Study tours for GOES officers and/or private sector organizations representatives to learn from “offering” countries’ experiences in developing the eco-system to foster entrepreneurship (start-ups).

• Study tours for GOES officers and/or private sector representatives to learn from provider’s countries successful experiences the key aspects, at the policy, financial and agronomic levels to spur the growth of the cacao sector.

• Bring delegation of experts from the “offering” countries to provide technical assistance and training for El Salvador’s Cacao Alliance.

• Study tour for GOES officers and/or private sector representatives to visit a Center of Innovation and Business in Colombia, and learn about how innovation can change a city or country through the Colombian successful model to promote the development of innovative technology-based businesses.

• Bring delegations of experts to provide technical assistance and training, and other support to selected municipalities to increase sustainable capacity of local governments as well as local organizations, facilitate economic activity, and streamline start-up processes for a robust local economic growth led by the private sector.

• Study tours for GOES officers and/or private sector representatives to learn about successfully programs to improve quality of technical/vocational instruction/instructors; and also bring delegation of experts to transfer they knowledge on these topics.

• Exchange of technology and technical assistance to support exports based on past successful cooperation efforts with governments from the different providing countries.

Anticipated results:

• At least five study tours implemented to learn from the South-South Cooperation provider countries about their experiences in: a) developing the eco-system to foster entrepreneurship (start-ups), b) spurring the growth of the cacao sector, and c) promoting the development of innovative technology-based businesses.

• At least five delegations of experts provided technical assistance to promote the exchange of best practices to expand economic growth opportunities in the tradable sector.

• At least 25 GOES officials from selected Ministries and institutions of the GOES trained in different key areas, including but not limited to, Higher Education and Workforce Competencies, Business Development Services for Small and Medium Enterprises (SMEs), and Sustainable Production of Key Agro-tradables.

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1.4 Locations Affected and Existing Conditions: Some activities of the three components under the Increasing Business Productivity project will have interventions nationwide. Others will focus on the 50 municipalities selected for Plan El Salvador Seguro. The El Salvador Cacao Alliance will concentrate in La Paz, San Vicente, Usulután and San Miguel. If additional funds area available from other sources, this activity could be expanded to other regions presenting soil and climate conditions suitable for cacao production. In addition, the Trilateral Cooperation Support Activity will carry out interventions in support of Component 1, 2, and 3. Therefore, these trilateral interventions will be implemented in the same places where interventions of Components 1, 2, and 3 will be carried out. The Increasing Business Productivity project design is aligned with the goals of the Partnership for Growth (PFG) Joint Country Action Plan (JCAP) to help address the low productivity in tradables constraints and the USAID Country Development Cooperation Strategy (CDCS) 2013-2017. Specifically, this Project has a direct link with the PFG Tradables Goal No. 3 – Improve the quality of the education system in order to create a more highly qualified and technologically skilled labor force. It is also linked to Goal No. 6 – Surmount low productivity of tradables, by transforming factors of production of the tradables sector through the implementation of strategies to improve innovation and quality, and a focus on the international market. The project is also linked with the Alliance for Prosperity of the Northern Triangle Countries of Guatemala, Honduras and El Salvador, and the USG Central America Strategy (CEN) Planned interventions under the first component are needed to help build the institutional capacity of Higher Education Institutions (HEIs), and strengthen university human resources to provide educational programs and research that contribute to the country’s economic growth. Workforce skills will be better aligned with labor and private sector demands, relevance and quality of the higher education system’s response to priority sectors needs will increase, and higher productivity will contribute to long-term economic growth. Related to Component 2, El Salvador has a shortage of business management capacity at the individual level and in institutions. The country lacks a critical mass of potential producers and employees with skills to produce competitive exports. Gaps in market linkages also exist. For example, small producers are not well prepared to supply local or international large buyers and retailers. Low product quality, inadequate packaging, non-compliance with food security standards, unreliable product delivery, limited understanding of export markets, and other factors need to be overcome to improve supply chains. Micro and small enterprises provide very little added value in their supply chains, unless they are linked to larger buyers. Large enterprises account for the vast majority of exports, which is not unusual in any economy, but large enterprises are not necessarily taking advantage of domestic linkages with micro and small enterprises. Stronger linkages between and among supply chains from micro to small, and from small to medium and large exporters are needed. Violence and criminality in El Salvador directly affect the investment climate and business growth. Businesses of all sizes unanimously agree that gang violence and extortion are major impediments to investment and business expansion.

- 26 - Municipalities play an important but partial role in the investment climate and business environment of El Salvador. For a number of functions, such as registration and local permits, implementation of national or municipal laws and regulations are conducted through municipal governments. Municipal governments and the private sector have often been at enmity, with little trust or cooperation. The situation has begun to improve – sometimes dramatically – through the creation of Municipal Competitiveness Committees (CCMs), which have facilitated public-private dialogue to address weaknesses in services to the private sector and communities highlighted by the Municipal Competitiveness Index. Planned interventions under the second component are relevant to support MSME development by assisting the Government of El Salvador (GOES), municipal governments, and the private sector to improve the effectiveness of their business and export development services and help MSMEs become more productive and competitive. The Project also anticipates expanding the availability of credit to micro, small, and medium firms, reducing collateral requirements and incentivizing additional productive loans via Loan Portfolio Guarantees with commercial banks under the Development Credit Authority. Guarantees for student loans to attend higher education institutions will also be considered. Planned interventions under the third component will provide assistance to expand agro-tradables and provide new economic opportunities for SMEs in rural areas through sustainable agricultural activities that will also have the secondary benefit of mitigating the impacts of climate change. 1.5 National Environmental Policies, Procedures or Regulations. Salvadoran national environmental legislation does not apply to Higher Education, Workforce Development, SME Development, DCAs and the El Salvador Cacao Alliance. In the case of protecting biologically important areas in El Salvador, the development of activities within protected areas will follow the Environmental Law and its regulations such as: Ley de Medio Ambiente (Decreto Legislativo, Diario Oficial No. 339, Tomo No. 3553, 4 de mayo de 1998) and its Regulations (Decreto Legislativo No. 17, 21 de marzo de 2000, Diario Oficial No. 73, Tomo No. 347, 12 de abril de 2000, y sus reformas Decreto Legislativo No. 581, 18 de octubre de 2001 y Diario Oficial No. 206, Tomo No. 353, 31 de octubre de 2001). The Ministry of Environment and Natural Resources is in charge of protected areas management and is responsible of the Protected Areas Law enforcement. Additionally, the Ministry of Environment and Natural Resources is responsible for the enforcement of the Wildlife Conservation Law (Decreto Legislativo No. 844, Diario Oficial No. 96, Tomo No. 323, 25 de mayo de 1994, y su reforma Decreto Legislativo No. 441, Diario Oficial No. 133, Tomo No. 532, del 16 de julio de 2001.) 2. POTENTIAL ENVIRONMENTAL IMPACTS As the illustrative actions for the Trilateral Agreement activity are focused on study tours, exchange of technologies and information, training, and technical assistance, no anticipated potential environmental impacts are anticipated.

- 27 - All of the potential environmental impacts for activities listed as NDWC in the LAC-IEE-15-06 remain the same: The Mission conducts environmental monitoring and evaluation as established by the IEE. For negative determinations with conditions, all implementing partners are required to submit the Environmental Mitigation and Monitoring Plan Report (EMMP) for review and approval by the Mission Environmental Officer (MEO). Additionally, Agreement Officer Representatives (AORs) and Contract Officer Representatives (CORs) in conjunction with the MEO and/or Regional Environmental Advisors (REAs) conduct field visits to review application of prescribed mitigation measures. Based on these monitoring and evaluation process, all activities that will be extended through this IEE amendment are in compliance with Regulation 216 and all prescribed mitigation measures have been applied and are deemed to be effective. For the El Salvador Cacao Alliance, the following activities are expected to have an effect on the environment: 1) Use of agrochemicals. The project will promote the use of organic fertilizers and pesticides. If non-organic fertilizers and pesticides are required, staff will conduct a Pesticide Evaluation Report and Safe User Action Plan (PERSUAP) prior to the training and use of pesticides; 2) Introduction of small-scale (less than 100 Ha each) irrigation for a total of approximately 1,500 Ha. The activity will likely promote three irrigation system types at the farm level: drip irrigation, small-dispersion irrigation, and medium-dispersion irrigation, based upon gravity- and pump-based systems. It is not expected that the total irrigated from adjacent farms will exceed 100 Ha. The participating farms are scattered throughout various regions and watersheds within regions and many of the irrigation systems are already in place but in need of rehabilitation. Given this scenario, depletion of aquifers would not be an issue. Nevertheless, the El Salvador Cacao Alliance will conduct water balancing studies to address aquifer withdrawal; 3) Change of land use from lower-elevation coffee cultivation areas, basic grain production and cattle grazing areas to cacao agroforestry systems; and 4) Construction and operation of one cacao processing center which will produce liquid and solid waste. The size of the processing plants is unknown at this moment, as it will depend on the volumes processed in the future based on the number of farmers who will deliver product. However, the Environmental Mitigation Plan and Report will include this item as well if the footprint of the processing center is less than 10,000 sq. ft., as it is anticipated. An environmental assessment will be required if the footprint of the processing center is found to be greater than 10,000 sq. ft. DCA activities have the potential to have environmental impact depending on the type of activities financed. The AOR/COR shall provide training to lenders on USAID Environmental Guidelines. For the Employment Training Activity (Component 1), a sub grant program will be implemented. As the specific actions for each sub-grant are not yet known until the grant proposals are received, an Environmental Mitigation and Monitoring Plan (EMMP that replaces the EMMP) shall be prepared for the sub-grants. Also, small scale construction/renovation of schools, training centers, and other buildings within this Activity has the potential to create waste, erosion/sedimentation, and safety hazards. An Umbrella/Programmatic EMMP shall be prepared to identify the potential impacts of this action and minimize impacts through the

- 28 - implementation of mitigation measures. The USAID Guidelines for Small Scale Construction shall be used to assist in identifying necessary mitigation measures. For the new El Salvador Competitive Activity in Component 2, grant programs may be implemented. As the specific actions for each grant are not yet known until the grant proposals are received, an Environmental Mitigation and Monitoring Plan (EMMP) Table 1 shall be used to screen the grants for potential environmental impacts. Since potential business products and/or processing methods have the potential to promote actions that may cause harm to the environment if Best Management Practices are not incorporated into the business process, USAID Environment Guidelines (especially the chapter on small business development) shall be used to incorporate best management practices into the training of public and private organizations that will partner with the implementer to provide technical assistance and training for MSMEs, to ensure a more sustainable business and minimal impacts to the environment. 3. RECOMMENDED THRESHOLD DECISION AND MITIGATION ACTIONS 3.1 Recommended Threshold Decisions and Conditions Categorical Exclusion: For Component 1: Higher Education and Workforce Competencies in Tradables Expanded, categorical exclusion is recommended for all activities other than the small grants component and small scale construction/renovation actions. For Component 2: Business Development Services for MSME/SMEs Strengthened, categorical exclusion for all activities other than the 1. DCAs related to support to enterprises, 2. For training activities for the Ministry of Economy’s FONDEPRO and other public and private sector organizations partnering with the implementer to assist MSMEs, and 3. Special grant programs to fund seed capital for business start-ups, and private sector organizations allied to municipalities and municipal competitive committees (MCC) to implement MCC plans. For Component 3: Sustainable Production of Key Agro-Tradables Expanded, categorical exclusion is recommended for all activities other than those listed in the negative determination with conditions section below. For Regional Trilateral Cooperation Support Activity: categorical exclusion is recommended.

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Categorical Exclusion • 216.2ci – Technical Assistance and Training: For all activities, including the new El Salvador Competitive Activity, and the new Regional Trilateral Cooperation Support Activity, except for the El Salvador Cacao Alliance agricultural production activity.

• 216.2c iii-Analyses, studies, academic or research workshops or meetings:

For Higher Education, SME, El Salvador Competitive, Cacao Activities, and the new Regional Trilateral Cooperation Support Activity.

• 216.2cv-Document and information transfer: For Workforce Development, SME, El Salvador Competitive, Energy Activities, and the new Regional Trilateral Cooperation Support Activity. • 216.2c xiv- Development Planning for the planning, policy

development, access to financing, organization, and establishing associations :

For all Activities listed in this IEE including the new El Salvador Competitive Activity, the new Regional Trilateral Cooperation Support Activity, and non-agriculture related trainings of the El Salvador Cacao Alliance. • 216.2cxv-Design Criteria or standards development: For Workforce Development, SME, El Salvador Competitive Activities, and the new Regional Trilateral Cooperation Support Activity.

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Negative Determination with Conditions

. For enterprise type DCA loans.

. For the sub-grant component under the Higher Education and Employment Training activity.

. For the small scale renovation and/or construction of schools, training centers, and other buildings under the Employment Training activity.

. For training activities for the Ministry of Economy’s FONDEPRO, and other public and private partner organizations to include the chapter of Small Business Development under the USAID Environment Guidelines to incorporate best management practices into the business processes of MSMEs under Component 2.

. For the grant component for high technology new start-up businesses and other business special grant support under Component 2

. For the sub-grant component under the El Salvador Cacao Alliance.

. For the El Salvador Cacao Alliance pesticide use training and PERSUAP use.

. For the El Salvador Cacao Alliance agriculture diversification and other agricultural actions (cacao nurseries, planting, agroforestry, small scale irrigation, and processing) and small scale construction related to cacao production and processing.

3.2 Conditions, Mitigation, Monitoring and Evaluation To minimize and/or eliminate an environmental impact from activities containing Negative Determinations with Conditions the Contractor/Recipient shall: a) Prepare an EMMP describing how they will, in specific terms, implement all environmental mitigation measures described in the plan and monitor their effectiveness. Guidance on preparation of the EMMP will be provided to the Contractor/Recipient as part of the Request for Proposals. b) Integrate a completed EMMP into the initial work plan. c) Integrate an EMMP into subsequent Annual Work Plans, making any necessary adjustments to activity implementation in order to minimize adverse impacts to the environment. d) All sub grants and/or start up grants (Component 2) shall prepare an EMMP before implementation could occur. For Component 2, El Salvador Competitive Activity start-up grants for the creation of new businesses, the Implementing Partner shall set criteria as to the type of small businesses that would receive these grants, and Table 1 Screening Form of the EMMP shall be used to determine potential impacts of the proposed start-up businesses. e) All EMMPs and Environmental Reports (using Table 3 of the EMMP) shall be reviewed and approved by the AOR/COR, MEO, and REA before implementation of the Negative Determination with Conditions action occur.

- 31 - f) An Environmental Mitigation/Monitoring Report shall be prepared and approved at least on an annual basis or as per the contract. g) Follow the Minister of Environment and Natural Resources guidelines for specific activities such as those established through the Ley de Medio Ambiente (Decreto Legislativo, Diario Oficial No. 339, Tomo No. 3553, 4 de mayo de 1998) and its Regulations (Decreto Legislativo No. 17, 21 de marzo de 2000, Diario Oficial No. 73, Tomo No. 347, 12 de abril de 2000, y sus reformas Decreto Legislativo No. 581, 18 de octubre de 2001 y Diario Oficial No. 206, Tomo No. 353, 31 de octubre de 2001). h) For the El Salvador Cacao Alliance, the specific actions for mitigating any potential adverse effects on the environment by the proposed cacao production and post-harvest practices are hereby listed:

1) Activities must respect all protection categories established within the National System of Protected Areas. 2) The activity will not promote any land use changes in areas of the country considered forest remnants. 3) Before any activities involving the use of water, the project will conduct a water balance study in the region to identify the supply and demand of water, ensuring that no contamination will occur or that aquifers are depleted. Any plans for irrigation must take into account social issues and possible conflicts over water at the local level. 4) The activity will promote cacao production systems which effectively “harvest water” to assist in the recharging of aquifers such as infiltration ponds and pits. 5) Environmental Mitigation Plans (EMP/EMMP) will be conducted by the activity for any water harvesting or irrigation interventions. Key components of the EMP will be to quantify how much water is available in a territory, identify current uses of available water, and determine the impact of increased water usage associated with the establishment of water harvesting and supplemental irrigation systems. El Salvador Cacao Alliance will work with community leaders and producers to determine potential mitigation strategies for any negative impact project interventions may have. 6) The activity will promote the use of conservation practices and techniques, where necessary, to prevent erosion and increase water filtration. For example: micro-terraces around trees, mulching, composting in root zones, and infiltration ponds/ditches/pits. The methodological approaches to be implemented by the project will be the following: a) Soil and Water Assessment Tool (SWAT), which uses basic parameters such as climate, slopes, and crops, to calculate water balances and model various management practices to help determine best uses of land in a given environment; b) El Salvador Cacao Alliance will leverage Digital Soil Maps currently in production by CRS’ ProSoil project in collaboration with MARN; and c) El Salvador Cacao Alliance will adopt soil-

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smart practices and technology from CIAT’s Tropical Soils and Biological Fertility Research Institute. All of these tools will help replenish organic materials in soils, which contributes to improved water retention during dry months and improved filtration during heavy rainfall. 7) For infrastructure (construction and equipping of one processing center), alternative solid and liquid waste systems and management of the systems will be reviewed and selected to avoid contamination of water and soils 8) The project will promote primarily agro-ecological techniques for cacao production, keeping the use of agro-chemicals to a minimum and ensuring that these are of low toxicity. A Pesticide Evaluation Report and Safe Use Plan (PERSUAP) shall be prepared for the training and use of pesticides for the cacao and alternative crops. The PERSUAP shall be reviewed by the AOR/COR, MEO, and REA, and approved by the LAC RSD BEO before any crop training on pesticides and/or crop production can be implemented. 9) Applicable best management practices for agriculture/soil conservation and infrastructure actions for the El Salvador Cacao Alliance training and production activities, as well as in the EMMP process, will be used and can be found in the USAID Sector Environmental Guidelines available at the following web site: http://www.usaidgems.org/sectorGuidelines.htm.

i) In addition, the MARN recommends that the El Salvador Cacao Alliance incorporate a landscapes approach consistent with that of the Salvadoran National Program for the Restoration of Ecosystems and Landscapes (PREP), which works through farm-level interventions to improve impacts in environmental degradation and management at the watershed, municipal or regional levels. j) For the DCAs, AORs shall provide training to the lender organizations regarding USAID Environmental Guidelines for specific activities that are financed (i.e. agriculture section of the Environmental Guidelines). As well, no activities listed in Reg 216 as Positive Determination shall be financed. k) For the SME Development training activities for the Ministry of Economy’s FONDEPRO, and El Salvador Competitive Activity training actions with public and private partner organizations need to include the chapter of Small Business Development under the USAID Environment Guidelines to incorporate best management practices into the business processes of MSMEs under Component 2. l). Each grant or sub-grant for small scale construction/rehabilitation activity shall follow the Municipal Building guidelines already approved by USAID within the USAID Sectoral Environmental Guidelines (http://www.usaidgems.org/besPractices.htm) Infrastructure Sector. 3.3 Environmental Compliance Language for Contracts and Agreements Each technical office, along with the MEO will ensure that environmental compliance language from this IEE is included in all procurement and obligating documents, such as activity-related Development

- 33 - Objective Agreements, and under Global Acquisition and Assistance Systems (GLAAS). The following language regarding environmental compliance will be included in any kind of procurement instrument within this Activity: Categorical Exclusion and Negative Determination Only. “The Foreign Assistance Act of 1961, as amended, Section 117 requires that the impact of USAID’s activities on the environment be considered and that USAID include environmental sustainability as a central consideration in designing and carrying out its development programs. This mandate is codified in Federal Regulations (22 CFR 216) and in USAID’s Automated Directives System (ADS) Parts 201.5.10g and 204 (http://www.usaid.gov/who-we-are/agency-policy/series-200), which, in part, require that the potential environmental impacts of USAID-financed activities are identified prior to a final decision to proceed and that appropriate environmental safeguards are adopted for all activities. [Offeror/ applicant/contractor/recipient] environmental compliance obligations under these regulations and procedures are specified in the following paragraphs of this [RFP/RFA/contract/task order/grant/cooperative agreement]. In addition, the contractor/recipient must comply with host country environmental regulations unless otherwise directed in writing by USAID. No action funded under this [contract/task order/grant/CA] will be implemented unless an environmental threshold determination, as defined by 22 CFR 216, has been reached for that activity, as documented in a Request for Categorical Exclusion (RCE), Initial Environmental Examination (IEE) duly signed by the Bureau Environmental Officer (BEO). As part of its initial Work Plan, and all Annual Work Plans thereafter, the contractor/recipient, in collaboration with the USAID COR/AOR and REA or BEO, as appropriate, shall review all ongoing and planned activities under this [contract/task order/grant/CA] to determine if they are within the scope of the approved Regulation 216 environmental documentation. At least one Negative Determination with Conditions, with sub-awards. An Initial Environmental Examination (IEE) [(insert IEE # or hyperlink, if available)] has been approved for [the Activity] funding this [RFA/RFP/contract/task order/grant/cooperative agreement (CA)]. The IEE covers activities expected to be implemented under this [contract/task order/grant/CA]. USAID has determined that a Negative Determination with Conditions applies to one or more of the proposed actions. This indicates that if these actions are implemented subject to the specified conditions, they are expected to have no significant adverse effect on the environment. The [offeror/applicant/contractor/recipient] shall be responsible for implementing all IEE conditions pertaining to actions to be funded under this [solicitation/award]. As part of its initial Work Plan, and all Annual Work Plans thereafter, the contractor/recipient, in collaboration with the USAID COR/AOR, and REA or BEO, as appropriate, shall review all ongoing and planned actions under this [contract/task order/grant/CA] to determine if they are within the scope of the approved IEE. If the contractor/recipient plans any new actions outside the scope of the approved IEE, the contractor/recipient shall inform USAID in writing of these changes. No such new actions shall be undertaken prior to receiving written USAID approval. When the approved IEE contains one or more Negative Determinations with Conditions, the [contractor/recipient] shall:

● Prepare an environmental mitigation and monitoring plan (EMMP) for each proposed action under the Negative Determination with Conditions in the IEE, describing how the contractor/recipient will, in specific terms; implement all IEE conditions that apply within the

- 34 -

scope of the award. The EMMP format is attached. The EMMP shall include monitoring the implementation of the conditions and their effectiveness.

● Integrate a completed EMMP into the initial work plan. ● Prepare an Environmental Compliance Report (ECR) at the end of the year or as per reporting

requirements of the contract. The ECR shall be based on the monitoring of mitigation measures using Table 3 of the EMMP.

● A revised EMMP must be completed and approved in subsequent Annual Work Plans, making any necessary adjustments to implementation in order to minimize adverse impacts to the environment.

A provision for sub-awards is included under this award. Therefore, the [contractor/recipient] will prepare an EMMP for each proposed sub-award, except those that qualify for a categorical exclusion. In the case of a categorical exclusion, [contractor/recipient] shall complete and submit for USAID approval table 1 of the EMMP (Environmental Review Form- ERF). In order to ensure the funded proposals will result in no adverse environmental impacts. Implementation of sub-awards shall not begin prior to USAID written approval of the corresponding EMMP. The contractor/recipient is responsible for ensuring that mitigation measures specified in the EMMP are implemented.” Contract Officers will use documents listed in ADS 204.5 “Environmental Compliance: Language for Use in Solicitations and Awards; An Additional Help for ADS Chapter 204” dated May 19, 2008. ). Environmental Language for Awards for Activities with Positive Determination and Environmental Assessment (EA) required. An Initial Environmental Examination (IEE) has been approved for the [Activity funding] this [RFA/RFP/contract/agreement] and for activities to be undertaken herein [insert IEE # or hyperlink, if available]. The IEE contains a Positive Determination for the following proposed activities: [(specify)]. This indicates that these activities have the potential for significant environmental effects. Accordingly, the [contractor/recipient] is required to comply with the terms of an approved Environmental Assessment (EA)[insert IEE # or hyperlink, if available] that addresses the environmental concerns raised by these activities. No activity identified under this Positive Determination can proceed until Scoping as described in §216.3(a)(4) and an EA as described in §216.6 are completed and approved by USAID. As part of its initial Work Plan, and all Annual Work Plans thereafter, the contractor/recipient, in collaboration with the USAID COR/AOR and MEO, REA or BEO, as appropriate, shall review all ongoing and planned activities under this [contract/task order/grant/CA] to determine if they are within the scope of the approved Regulation 216 environmental documentation. If the contractor/recipient plans any new activities outside the scope of the approved Regulation 216 environmental documentation, if the life of activity funding ceiling will be eclipsed, or if a time extension is required, it shall prepare an amendment to the documentation for USAID review and approval. No such new activities shall be undertaken prior to receiving written USAID approval of environmental documentation amendments. Any ongoing activities found to be outside the scope of the approved Regulation 216 environmental documentation shall be halted until an amendment to the documentation is submitted and written approval is received from USAID. When the approved Regulation 216 documentation is an IEE that contains one or more

- 35 - Positive Determinations, an EA has been be prepared [attach EA or include a hyperlink]. The EA includes a Mitigation and Monitoring (M & M) Plan (Table 3 of the EMMP for LAC) that shall be used to document the progress and impacts of the selected alternative actions. Language for environment compliance for RFA/RFPs: USAID anticipates that environmental compliance and achieving optimal development outcomes for the proposed activities will require environmental management expertise. Respondents to the [RFA/RFP] should therefore include as part of their [application/proposal] their approach to achieving environmental compliance and management, to include:

● The respondent’s approach to implementing the mitigation measures prescribed in the EA ● The respondent’s approach to providing necessary environmental management expertise, including examples of past experience of environmental management of similar activities. ● The respondent’s illustrative budget for implementing environmental compliance activities. For the purposes of this solicitation, [offerors/applicants] should reflect illustrative costs for environmental compliance implementation and monitoring in their cost proposal.

3.4 Amendments

• Amendments to Initial Environmental Examinations (IEEs) shall be submitted for LAC Bureau

Environmental Officer (BEO) approval for any activities not specifically covered in the IEE, which include:

o Funding level increase beyond ETD amount, o Time period extension beyond ETD dates (even for no cost extension), or o A change in the scope of work, such as the use of pesticides or activities

subject to Foreign Assistance Act sections 118 and 119 (e.g. procurement of logging equipment), among others.

• Amendments to IEEs may require the need to conduct an Environmental Assessment (EA) and

approval of this document by the LAC BEO could require an annual evaluation for environmental compliance.

- 36 -

Guidelines for Implementing Partners USAID/Latin American and Caribbean Bureau (LAC) ENVIRONMENTAL MITIGATION and

MONITORING PLAN (EMMP) 3 November 19, 2015

A. Background All activities funded by USAID must conform to its environmental procedures outlined in 22 CFR 216, which require Initial Environmental Evaluations (IEE) to ensure that “environmental factors and values are integrated into the USAID decision-making process” and that “the environmental consequences of USAID-financed activities are identified and considered by USAID and the host country prior to a final decision to proceed and that appropriated environmental safeguards are adopted”. All USAID activities and programs funded through USAID’s Latin America and the Caribbean (LAC) Missions are issued an Environmental Threshold Decision (ETD) by the Bureau Environmental Officer (BEO) pursuant to the IEE as per 22 CFR 216.3(a)2. One category of Threshold Decision is the Negative Determination (22 CFR 216.3(a)3), which is given to projects that are not ”found to have a significant effect on the environment” when certain conditions are in place. In LAC, the development of an Environmental Mitigation and Monitoring Plan (EMMP) is often one of the conditions set forth in the Negative Determination. The EMMP ensures compliance with 22 CFR 216 by identifying and mitigating environmental effects of USAID activities and by meeting any other conditions specified in the applicable ETD. It is also used for any sub-award activities where the specific actions of sub-award are not yet identified at the time of award. In addition, Table 3 of the EMMP form can be used as a Mitigation and Monitoring Plan for Environmental Assessments (EA). Activities carried out by implementing partners (IPs) of USAID/LAC Missions include a range of discrete activities under various awards that will likely have a risk for significant environment effects. Examples include activities such as infrastructure refurbishment or medical waste management. This EMMP procedure will provide for both the screening for environmental risk, the preparation of a mitigation plan and reporting on monitoring of these mitigation measures. Gender and persons with disabilities are also considered as social impact factors in the development of a mitigation plan as these have a direct bearing on the type and kind of mitigation measure to be prescribed. Global Climate Change (GCC) and its impact on the project, as well as the project’s to exacerbate GCC is also a consideration within the EMMP process. Finally, the EMMP is an effective tool for applying USAID’s Sector Environmental

3 This replaces all previous Environmental Mitigation Plan and Report (EMPR) forms

Appendix A

- 37 - Guidelines to an activity or program which has been developed as per 22 CFR 216.3(a)3(iii). (http://www.usaidgems.org/sectorguidelines.htm). The EMMP initially categorizes activities into three risk categories: No Risk, Medium Risk, and High Risk. Those with No Risk can continue without further review upon completion of the Table 1 screening form and review and approval of the risk analysis by the Agreement/Contract Officer’s Representative (AOR/COR) and the Mission Environment Officer (MEO). The EMMP typically deals with those activities at Medium Risk (see Figure 2). Those with High Risk must be reconsidered for the need of an EA. Risk is further defined in section C1 below. All awardees that receive a Negative Determination with Conditions ETD will be required to fill out an Environmental Mitigation and Monitoring Plan (as attached) per activity type that includes:

1. Narrative (Justification/Background, Baseline Information/Existing Conditions, Description of Activities, and Social Considerations sections must be completed at a minimum).

2. The Environmental Screening Form (Table 1),

3. The Environmental Mitigation Plan (Table 2), and

4. The Environmental Monitoring Table (Table 3). AOR/CORs, Activity Managers, and Implementing Partners can work with the USAID MEO to ensure that environmental effects are sufficiently identified and mitigation actions are agreed upon, including clear guidance on the procedures for GCC and social considerations, where fitting. B. Timing of EMMP All solicitations for activities that fall within the NWDC will included this document as part of the solicitation package as per the ADS 204 annex regarding solicitation language. As per direction outlined here and in the Environmental Considerations section of all solicitation, potential applicants must present a draft EMMP with their submission. This is important as the funding for mitigation implementation identified in Table 3 must be incorporated in the applicant’s proposal budget. The draft EMMP can also serve as a criteria for selection by the Technical Evaluation Committee reviewing proposals. Once the IP is chosen, a revised initial EMMP is submitted by the applicant or contractor to the AOR/COR at the time the initial work plan is submitted. The MEO, and the Regional Environmental Advisor (REA) must approve this EMMP before work can commence. For sub-awards, the awardee is required to fill out the EMMP and submit it for approval to the Chief of Party (COP). The COP then submits the EMMP for review and final approval to the AOR/COR and MEO. Implementation of activities shall not occur until final approvals of the EMMPs are received. A format for this initial EMMP can be seen in attachment 1; it includes:

1. An initial screening process using the “Environmental Screening Form” (Appendix 1, Table 1) to assure the activity is at the Medium Risk Level.

- 38 -

2. The identification of potential impacts and related mitigation measures using the “Environmental Mitigation Plan” (Appendix 1, Table 2) for each sub-activity.

3. The Environmental Monitoring Table (Appendix 1, Table 3) includes the

necessary mitigation measures to be monitored, the monitoring indicators, who will conduct the monitoring, and when will the monitoring occur. Table 3 also includes a monitoring chart that documents who conducted the monitoring and the effectiveness of the mitigation measures.

At the end of each year of implementation, the EMMP is resubmitted with the same information as provided initially, along with a report reflecting the status of implementation and effectiveness monitoring of the identified mitigation measures using the “Environmental Monitoring Table” (Appendix 1, Table 3). This serves as the Annual Environmental Compliance Report (ECR) required by most implementing mechanisms. Results from the ECR are subsequently incorporated into a revised EMMP that shall be submitted to the AOR/COR for approval by the MEO/REA that reflects any new activities in the activity’s second year work plan along with any changes to mitigation measures based on the prior year’s monitoring. This process of submitting the EMMP monitoring report at the end of the year, together with a revised EMMP that reflects the following year’s work plan, is repeated each year until the close of the activity (See Figure 1). C. Initial

Environmental Mitigation and Monitoring Plan

- 39 -

1. Classification of Level of Risk

Different activities under an award can have varying levels of risk for environmental effects and therefore require different courses of action (Figure 2). No-risk activities, classified under “a” below, do not require the development of an Environmental Mitigation Plan (Table 2) or an Environmental Monitoring Table (Table 3) and could be covered under a Categorical Exclusion (22 CFR 216.2(c)). The AOR/COR should consult with the MEO to determine if the action in question has already received an Categorical Exclusion or if one must be requested from the BEO. Activities identified as Medium-risk (“b”) require the IP to screen those potential environmental effects and develop a plan to mitigate them. High-risk activities (“c”) include activities that have irrevocable change and/or cannot be mitigated by the implementation of industry standards, best management practices, or design specific implementation standards and, therefore, are considered to have significant environmental effects that will require an EA (22 CFR216.2(d)).

Figure 2 below depicts a schematic of required action based on the level of risk of a particular activity under an award. Note: all sub-award activities are required to have an EMMP completed. If all questions on Table 1 are checked No, then the sub-award activity falls under the low risk category and implementation could start directly without further analysis, pending approval of the work plan by the AOR/COR and MEO.

a). Discrete activities that do not require mitigation plans (No-Risk): An illustrative list of no-risk discrete activities where no mitigation reporting is required includes:

● Education or training, unless it implements or leads to implementation of actions that impacts the environment (such as construction of schools or use of pesticides)

- 40 -

● Community awareness initiatives ● Controlled research/demonstration activities in a small

area ● Technical studies or assistance (unless actions include

agriculture and pesticides) ● Information transfers

If there is a risk that the actual implementation of subjects learned during training could adversely affect the environment (e.g., training on agricultural techniques), the training is expected to include as part of its curriculum, an analysis of environmental effects a plan for mitigation. Mitigation measures such as Good Agricultural Practices/Best Management Practices would need to be identified for use in training as a mitigation measure and listed in Table 2 of the EMMP.

Many discrete activities under an agreement will fall between the two extremes of low and high risk and may cause some significant environmental effects that can be avoided or mitigated with proper planning. For these activities, the IP will be responsible for completing the EMMP on an annual basis.

c) Discrete activities that cannot be supported (High-Risk):

Under USAID’s Environmental Procedures, if there is a proposed action that may have significant environmental effects, an approved EA is required prior to its implementation (22 CFR 216.2(d)1). In the case of pesticide use, a Pesticide Evaluation Report and Safer Use Action Plan (PERSUAP) will be prepared by the partner and approved by the LAC BEO (22 CFR 216.3 (b)). Such activities include, but are not limited to:

● Agricultural, livestock introduction or other activities that

involve forest conversion ● Resettlement of human populations ● Construction of water management systems such as dams

or impoundments ● Drainage of wetlands ● Introduction of exotic plants or animals in protected areas ● Permanent modification of the habitat supporting an

endangered species ● Industrial level plant production or processing (this does

not include community or regional plant nurseries aimed at restoring areas after fires, for example)

● Installation of aquaculture systems in sensitive water bodies including rivers, lakes, and marine waters (not land-based fish ponds)

● Procurement of timber harvesting equipment, including chainsaws

● Use of restricted use pesticides (insecticides, herbicides, fungicides, etc.)

● Large-scale reconstruction in un-degraded lands, such as within protected areas

● Large-scale new construction (over 1,000 meters2) ● Timber harvesting, or cutting of trees over 20 cm diameter

breast height related to forest management or for commercial products. ● Construction of penetration roads and/or reroutes

- 41 -

d) Cumulative effects Even though individual activities may be considered medium risk, when those activities are analyzed in terms of other USAID actions and/or other non-USAID actions that are likely to occur, cumulative effects must be considered and may require the development of an EA.

e) Extraordinary circumstances Certain extraordinary circumstances must be considered and may require an EA. These include

- impacts to sensitive terrestrial or aquatic areas (see question 14) - impacts to unique cultural or historical features (see question 28)

2. Environmental Screening Form

The Environmental Screening Form (Appendix 1, Table 1) contains information relevant to the potential environmental effects over the life of activity with regard to natural resources, the environment, and human health. If items in Column “A” of the Environmental Screening Form are checked “YES”, then items for monitoring and mitigation are to be specified in the “Environmental Mitigation Plan” (Appendix 1, Table 2). The Environmental Mitigation Plan simply outlines the plan of action for mitigation of potential environmental effects. If all Column A is checked “NO”, then Tables 2 and 3 are not required to be completed and the activity can begin upon approval from the COR/AOR and MEO. When all of Table 1 questions are checked “NO”, the MEO must ensure that the activities listed in the “Description of Activities” narrative section truly will not cause impacts to the environment. The MEO must also ensure that all of the actions for the activity are listed in the Narrative and that each action is covered in Table 1.

For reference on mitigation information on a wide variety of discrete activities, refer to the USAID/GEMS Sector Environmental Guidelines. http://www.usaidgems.org/sectorGuidelines.htm. Illustrative sector-specific guidelines also include: WHO guidelines for handling and disposal of medical waste, “Low-Volume Roads Engineering: Best Management Practices Field Guide (Keller and Sherar, 2003)” and the World Wildlife Fund Agriculture and the Environment, A WWF Handbook on Agricultural Impacts and Better Practices (Clay, 2004).

D. Annual Environmental Compliance Report As per terms and conditions of all awards with USAID, each implementing partner is expected to submit an Annual Report, which normally requires an ECR. If an EMMP has been developed, it should be used to fulfill this requirement. The ECR should contain information relevant to the potential environmental effects over the life of a discrete activity under an award and includes: a) a copy of the initial EMMP completed during the initial activity planning (reference Section B above); b) the prescribed mitigation measures using the “Environmental Mitigation Plan (Appendix 1, Table 2)”; and c) synthesized data on these mitigation measures collected throughout the year and tracked in the “Environmental Monitoring Table (Appendix 1, Table 3)”. As it is often difficult to quantitatively measure progress of complex mitigation measures, it is

- 42 - necessary to include inserted digital photos (with relevant maps) to describe progress of mitigation activities. E. Sections of the EMMP

1. EMMP Coversheet 2. EMMP Narrative (to be filled out with activity specific information). NOTE: details for

each of the actions to be implemented must be listed in the “Description of Activities” section of the Narrative.

3. Appendices: 1. Environmental Screening Form (Table 1) 2. Environmental Mitigation Plan (Table 2) 3. Environmental Monitoring Table (Table 3) 4. Photos, Maps, Level of Effort

Reference: February 8, 2007; L. Poitevien (USAID/Haiti), M. Donald (USAID/Dominican Republic), E. Clesceri (USAID/Washington). Guidelines for Implementing Partners on the USAID Haiti Environmental Mitigation Report.

Guidelines for Implementing Partners

USAID/LAC ENVIRONMENTAL MITIGATION and MONITORING PLAN (EMMP) Appendix 1:

A. Coversheet for ENVIRONMENTAL MITIGATION and MONITOR PLAN (EMMP) USAID MISSION DO # and Title: __________________________________________ Title of IP Activity: ______________________________________________________ IP Name: _____________________________________________________________ Award Number: ________________________________________________________ Funding Period: FY______ - FY______ Associated IEE/ETD: _______________________________ Life of Activity Funding (US$): ___________________________ Report Prepared by: Name:__________________________ Date: ____________ Date of Previous EMMP: ____________________________ (if any) Status of Fulfilling Mitigation Measures and Monitoring: Yes No ___ ___ Initial EMMP. ___ ___ Annual EMMP. USAID Mission Clearance of EMMP for XXX Activity:

Contract/Agreement Officer’s Representative: __________ Date: ______________ Mission Environmental Officer: ______________________ Date: ______________

Regional Environmental Advisor: ____________________ Date: ______________

B. Environmental Mitigation and Monitoring Plan Narrative 1. Background, Rationale and Outputs/Results Expected:

Provide a brief summary of the activities under consideration and expected results. 2. Environmental Baseline:

Describe the existing condition of the area of the activity. This should include a description of/baseline information on the natural and physical resources that could potentially be effected by the activity. Provide information on the existing infrastructure, roads,

- 44 -

agricultural systems, etc. if relevant to the activity. Succinctly describe location, site details; surroundings (include a map, even a sketch map). Include information on any “unique or extra-ordinary” resources that are within the activity area such as wetlands, critical habitat, etc. Include information on the existing climate trends and conditions such as how might environmental conditions change due to climate change for the life of the activity and expected lifespan of the interventions? Describe how the activity will involve men and women whose actions during the life of the activity may have a direct effect the environment. Methodologies for data collection and analysis for gender-sensitive implementation and monitoring of activities are encouraged.

3. Activity Description/Specific Actions to be implemented: Provide both quantitative and qualitative information about actions to be undertaken during the activity (e.g. specific actions of construction-size, location, and type of materials to be used, etc.), types of agriculture production (full till mechanized, organic etc.), how the intervention will operate, and any connected activities that are required to implement the primary activity (e.g., road to a facility, need to quarry or excavate borrow material, need to lay utility pipes to connect with energy, water source or disposal point or any other activity needed to accomplish the primary one but in a different location). If various alternatives have been considered and rejected because the proposed activity is considered more environmentally sound, explain these.

Example:

New construction of a 900 square meter youth center located in XXX town and is 70 meters from the River XXX. Construction will be of block and cement with rebar reinforcing. Construction will include a new two-stall toilet and sinks using town water source from pipes. A 20 square meter biodigester will be used to capture waste and methane gas piped to the youth center kitchen for use as cook fuel. Biodigester will be underground and built of concrete by molds. Electrical wiring for the youth center will be installed with the power source by solar panels on the zinc roof and batteries/electrical circuits located attached to the center in a closed and locked storage room.

Activities with sub-awards require a specific EMMP for each award. 4. Evaluation of the Potential for Environmental Effects (Tables 1 and 2):

As a component of conducting environmental screening and developing the Environmental Mitigation Plan (Appendix 1, Table 2), briefly summarize environmental effects that could occur before, during, and after implementation, as well as any problems that might arise with restoring or reusing the site, if the facility or activity were completed or ceased to exist. Explain direct, indirect, and cumulative effects on various components of the environment (e.g., air, water, geology, soils, vegetation, wildlife, aquatic resources, historic, archaeological or other cultural resources, people and their communities, land use, traffic, waste disposal, water supply, energy, climate change adaptation, climate change mitigation, etc.). Indicate positive impacts and how the natural resources base will be sustainably improved. For example, any activity that increases human presence in an area, even temporarily, will increase noise, waste, and the potential for hunting, timber harvesting, etc.

- 45 - 5. Environmental Mitigation Actions (Tables 2 & 3):

For the Initial EMMP, summarize the mitigation measures in the “Environmental Mitigation Plan” (Table 2) and briefly describe how these measures will be monitored in the “Environmental Monitoring Table” (Table 3). Ensure that Table 3 includes the cost of implementing and monitoring each of the mitigation measures listed. For the Annual EMMP, describe the effectiveness of mitigation measures based on monitoring. For example:

a) What mitigation measures have been put in place? How is the success of mitigation

measures being determined (i.e., indicators)? Explain if and why the mitigation measures are not working or not effective? What adjustments need to be made?

b) What is being monitored, how frequently and where, and what action is being taken (as

needed) based on the results of the monitoring? 6. Social Considerations

Gender equality is a USG-wide priority and USAID has, and will continue to a take a lead role in that effort. Integrating gender considerations into all stages of planning, programming, and implementation of development assistance is not only a legal mandate; it is an essential part of effective and sustainable development. The Automated Directive System (ADS) 201 sets out specific requirements to help ensure that appropriate consideration is given to gender as a factor in development planning at the Development Objective and the Intermediate Results level of Development Objectives all the way down to the activity level. This programming policy includes clear guidance on the procedures for gender integration where determined to be appropriate. Additionally, the USAID Disability Policy Paper (http://pdf.usaid.gov/pdf_docs/PDABQ631.pdf) sets out specific requirements to help ensure that appropriate consideration is given to persons with disabilities as a factor in development planning at the Development Objective and the Intermediate Results level of Development Objectives all the way down to the activity level. Therefore, gender and persons with disabilities considerations are included in the EMMP checklist to ensure activity implementation adheres to agency priorities and mandate. Additional information can be found at the following website: http://www.usaid.gov/sites/default/files/Guide_How_Integrate_Disability_Gender_Assessments_2010.pdf. Ultimately, consideration of social issues helps avoid significant environmental effects (see 216.3 (a)(3)(iii)). Environmental mitigation measures should be specifically designed to take in account social issues such as gender and persons with disability, thus ensuring greater success of the mitigation measure and greater long-term sustainability of the activity. The impacts and roles of women and children should be also taken into consideration when completing Table 2 regarding environmental (social) impacts and designing mitigation measures.

- 46 - 7. Climate Change Integration

Climate change impacts all areas of development and is often considered both a threat and a driver to many activities that USAID supports. Good climate change integration is part of good activity design. In addition, Executive Order 13677: “Climate-Resilient International Development” encourages integration of the Agency's GCC Initiative (GCC) of mitigation and adaptation principles throughout its portfolios. Therefore, GCC impacts (to the activity and from the activity implementation) shall also be considered. Actions that would minimize GCC impacts shall be included in the list of mitigation activities to be implemented.

- 47 - Appendix 1. Environmental Screening Form (Table 1)

Name of Activity:________________________________________________ Implementing Partner: ___________________________________________ Award Number: ________________________________________________ Date:_________________________________________________________ Relevant IEE/ETD #_____________________________________________

Column A

Column B Column C

Yes

No

If answered yes to Column. A. Is it a high

risk or medium risk

High Risk

Medium-Risk

INFRASTRUCTURE (Buildings, roads, WASH, etc.) 1 Will the activity involve construction and/or reconstruction/rehabilitation

of any type of building? For new construction, if less than 1,000 m2 = medium risk, if greater than 1,000 m2 = high risk.1

2 Will the activity involve building penetrating roads, road rehabilitation and maintenance or other road related infrastructure (drainage, bridges, etc..)? If penetrating road construction/rerouting = high risk2, if repair/rehabilitation (improving drainage, resurfacing of existing roads) = medium risk.

3 Will the activity involve construction or rehabilitation of water and sanitation infrastructure (irrigation systems, potable water, water harvesting, septic systems etc.). Potable water systems require testing for bacteria, arsenic and other heavy metals.

4 Will the activity involve construction or rehabilitation of any other infrastructure such as landfills, incinerators, energy infrastructure, etc.

5 Will the infrastructure activity cost more than US $500,0003? If YES, approval of a USAID Engineer is required as mitigation measures in Table 2. Additionally, compliance with FAA 611 is required (please consult with the mission legal advisor).

6 Does the activity require adherence to national building code or other national regulatory standard? Mitigation measures in Table 2.

7 Does the activity require local planning permissions (i.e zoning, building permits, etc.)

BIOPHYSICAL 8 Will the activity involve the purchase, use, plans to use, or training in the

use of pesticides4 (including bio pesticides like neem)?

9 Will the activity involve changes in water quality (pollution, sedimentation, stagnation,, salinization, temperature change, etc.)

10 Will the activity affect surface or groundwater quantity 11 Will the activity involve training and/or implementation of agricultural

practices/production including animal husbandry?

12 Will the activity involve aquaculture systems? 13 Will the activity involve the use or disposal of hazardous materials (used

engine oil, paint, varnish, lead-based products, fluorescent light bulbs/mercury, batteries, asbestos or other hazardous or special management waste)? Consider effects to both the biophysical environment and human health.

14 Will the activity involve implementation of timber management5,,extraction of forest products, clearing of forest cover, and/or conversion of forest land by cutting of trees >20cm diameter at base height (DBH)?

15 Is the activity in or near (within 50m6) any sensitive terrestrial or aquatic areas including protected areas, wetlands, critical wildlife habitat (including nesting areas), and threatened or endangered species?

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16 Will the activities proposed generate airborne particulates (dust), liquids, or solids (i.e. discharge pollutants) or potentially violate local air standards?

17 Will the activity create objectionable odors? 18 Will the activity occur on steep slopes (greater than 15%)? 19 Will the activity contribute to erosion? 20 Will the activity change existing land use in the vicinity? 21 Is the proposed activity incompatible with land type (i.e., annual crops

on steep slopes, infrastructure on poorly drained soils)?

22 Will the activity affect unique geologic or physical features? 23 Will the activity have potential effects to inhabitants, natural landscapes,

or flora/fauna downstream from the activity site?

24 Will the activity have a direct or indirect effect, or include actions with mangroves, coral reefs and other marine/coastal ecosystems?

GLOBAL CLIMATE CHANGE 25 Are activity activities or outcomes vulnerable to changes in the weather

or climate such as changes in precipitation patterns, increased temperatures or sea level rise?

26 Does the activity’s activities exacerbate climate change vulnerabilities (i.e., drought, flooding, decrease water supply)?

27 Will the activity create greenhouse gas emissions from decomposing waste, burning of organic matter, or use of fossil fuels etc. (consider duration and scale)

SOCIO ECONOMIC 28 Will the activity contribute to displacement of people, housing or

businesses?

29 Will the activity affect indigenous peoples and/or unique cultural or historical features?

30 Will the activity expose people or property to flooding? ENVIRONMENT & HEALTH 31 Will the activity create conditions encouraging an increase in illness,

diseases, or disease vectors (waterborne, STDs or other)?

32 Will the activity generate hazards or barriers for pedestrians, motorists or persons with disabilities?

33 Will the activity involve the use, storage, handling or disposal of syringes, gauzes, gloves and other biohazard medical waste?

34 Will the activity expose workers to occupational hazards? 35 Will the activity increase existing noise levels? GENDER7 36 Does the activity activity inhibit the equal involvement of men and

women?

37 Do the activity results disproportionately benefit/impact men and women?

OTHER 38 Does the activity/activity involve a sub-award component?8 39 Is an operations and maintenance plan required? (for all type of

infrastructure, equipment, road rehabilitation, or water and sanitation action = Yes)

RECOMMENDED ACTION (Check Appropriate Action): (Check)

(a) The activity has no potential for significant effects on the environment. No further environmental review is required (Categorical Exclusion). No further action required.

(b) The activity includes mitigation measures and design criteria that if, applied will avoid a significant effect on the environment (Negative Determination with Conditions). EMMP Required.

(c) The activity has potentially substantial or significant adverse environmental effects, therefore, an EA

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1 Construction activities need to be reviewed for scale, planned use, building code needs and maintenance. New construction having a footprint larger than 1000 meters2 or 10,000 feet2 is considered large scale and high risk. Some small construction activities, such as building an entrance sign to a park, may require simple mitigation measures whereas larger buildings will require more extensive review and monitoring. 2 New construction of roads are considered high risk and will require a full environmental assessment of the planned construction, i.e. a Positive Determination. Any reroutes of a road or trail longer than 100 meters is considered a high risk. Reroutes within a protected area, nearby a water source/wetlands, and/or archaeological site are considered a high risk. 3 Pursuant to FAA, section 611, Completion of Plans and Cost Estimates. 4 The purchase of packaged store pesticides are included. The planned procurement and/or use or training on the use of pesticides will trigger the need to develop an amended Initial Environmental Examination that meets USAID pesticide procedures (Pesticide Evaluation Report and Safer Use Action Plan or “PERSUAP”) for the activity. 5 Any activities that involve the commercial harvesting of trees or converting forests is considered high risk and will require a full environmental assessment of the activity (i.e. Positive Determination). The reference to cutting trees of greater than 20cm dbh is for actions related to forest management and commercial forest products and not for individual trees being cut for construction or non-commercial purpose. 6 Less than 50meters is based on best practices from US Federal and State regulations. 7A positive response to gender questions require follow up only when there are other positive responses on questions, and an EMMP is developed. 8 If the Activity includes a sub-award component, each sub-awardee shall be required to prepare an EMMP prior to implementation of the sub-award.

is required before activity implementation (Positive Determination). NOTE: if any question is marked as High Risk, an EA is required and Tables 2 and 3 of the EMMP do not need to be completed.

(d) The activity has significant adverse environmental effects that cannot be mitigated. Proposed mitigation is insufficient to eliminate these effects and alternatives are not feasible. The activity is not recommended for implementation. *For sub awards, do not fund.

Appendix 2. Environmental Mitigation Plan (Table 2) Enter the Question/Row # of the potential negative effects with check marks in Column A (Table 1) and complete table below for mitigation measures to reduce or eliminate the issue. In the Sub-Activity or Component Column, list the main actions to be implemented. Under each action, list the tasks (Steps) that are needed to implement this action.

Name of Activity:___________________________________________ Implementing Partner: ______________________________________ Award Number: ___________________________________________ Date:____________________________________________________ Relevant IEE/ETD #________________________________________

# of the question from Table 1

Action or component with the different tasks required to implement the action.

Description of Environmental Effect

Environmental Mitigation Measures*

1 Component - Construction and maintenance of latrine

Step 1- design

Step 2- location

Step 3- purchase of materials

Step 4- build latrine

Step 5- site clean-up/disposal of construction waste

Step 6- use of latrine/operations and maintenance

9 Component – Purchase and construction of a water storage system

Step 1

Step 2

Step 3

etc.

* Please be as specific as possible. Sample mitigation measures are located in the USAID Sector Environmental Guidelines or other pertinent guidelines, see http://www.usaidgems.org/sectorGuidelines.htm. Details on exact monitoring plan are illustrated in Table 3, Environmental Monitoring and Evaluation Tracking Table.

Appendix 3. Environmental Monitoring Table (Table 3)

Description of Mitigation Measure (same as in Table 2)

Responsible Party for implementing and monitoring mitigation measures

Monitoring Methods Estimated Cost of

implement-ing

mitigation measures

and monitoring

Results

Recommended Adjustments

Indicators of

implemen- tation and effective- ness of

indicators

Methods Frequency Dates Monitored

Problems Encountered

Mitigation Effectiveness

1

1

2

3

4

5

1

2

Award Number:

Activity Name:

Implementing Partner:

Location Name:

Nearby Communities:

Senior Activity Manager:

Monitoring Period:

Date:

3

4

9

1

2