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QUARTERLY REPORT OCTOBER 1 – DECEMBER 31, 2018

Moldova Competitiveness Project

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QUARTERLY REPORT

YEAR 4 QUARTER 1 (FY2019 Q1)

OCTOBER 1 – DECEMBER 31, 2019

JANUARY 14, 2019

Prime Contractor: Chemonics International Inc. www.chemonics.com/ Partners: J. E. Austin Associates, Inc. www.jeaustin.com Bhavana World Project www.bhavanaworldproject.com Contract No.: AID-117-C-15-00001 PHOTO CAPTION: Seamstresses working at Maicom apparel factory in Chisinau, MCP grantee COVER PAGE PHOTO CREDIT: Eduard Bigzu

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

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TABLE OF CONTENTS

ACRONYM LIST ................................................................................................................................................ 7

EXECUTIVE SUMMARY ..................................................................................................................................... 9

SECTION I ....................................................................................................................................................... 11

PROJECT TECHNICAL INTERVENTIONS DURING FY19 Q1 ............................................................ 11

WINEGROWING INDUSTRY ...................................................................................................................... 11

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ................... 11 Program 1. Upgrading quality and driving innovation in viticulture and winemaking ............................... 11 Activity 1. ASW (Association of Small Winemakers) Mentorship Program - support in emergence and development of small wine producers ........................................................................................................ 11 Activity 2. ‘PQUP’ Program (Product Quality Upgrading Program): expanding the Wine of Moldova portfolio ....................................................................................................................................................... 12 Program 2. BUILDING KNOWLEDGE FOR FUTURE GROWTH ...................................................................... 13 Objective 2. Expanded Market Linkages ..................................................................................................... 15 Program 1. Wine of Moldova international promotion and export growth ............................................... 15 Activity 1. Build Wine of Moldova Brand Equity and Increase Awareness .................................................. 15 Activity 2: Export Support Program (ESP): increased wine sales on target markets through firm-level marketing support ....................................................................................................................................... 17 Program 2. Enhance wine culture and grow a mature local market .......................................................... 19 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ............................................ 21 Program 1. Policy upgrading and legal regulatory reforms in the wine industry ....................................... 21 Activity 1. Support ONVV to continue policy, legal and regulatory reforms ............................................... 21 Activity 2. Finalize the Wine of Moldova 2030 strategy to guide long-term industry competitiveness, and promote in the Government ........................................................................................................................ 22 Activity 3: Develop and strengthen the PGI wine associations ................................................................... 22

TOURISM INDUSTRY .................................................................................................................................. 23

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ................... 23 Program 1. Start-up Tourism Moldova: product development, service quality upgrading and tourism offer diversification .............................................................................................................................................. 23 Activity 1. Wine-Up: Wine Tourism Accelerator Program ........................................................................... 23 Activity 2. Hospitality+ Moldova program: improving tourism hospitality infrastructure .......................... 23 Activity 3. Go-Regional Tourism Start-Up: unveiling the tourism potential of Orheiul Vechi reservation and Purcari region .............................................................................................................................................. 25 Objective 2: Expanded Market Linkages ..................................................................................................... 26 Program 2. Tree of Life Marketing Program: unveiling the hidden gems of Moldova to the world ........... 26 Activity 1. Placing Moldova on the map of world tourism: building brand equity and international awareness of Moldova as a tourism destination ........................................................................................ 26 Activity 2. Foster business linkages and expand target markets................................................................. 28 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ............................................ 30 Program 3: Re-Think Tourism Moldova. Building a sustainable public-private partnership ....................... 30 Activity 1. Re-think tourism industry: reformed policies and regulation to ensure sustainable development .................................................................................................................................................................... 30 Activity 2. Strengthen private sector voice to balance public-private dialogue .......................................... 30

LIGHT INDUSTRY ........................................................................................................................................ 31

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ................... 31

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Program 1. Strengthening ZIPhouse as the flagship institution in workforce development and fashion startup acceleration .................................................................................................................................... 31 Activity 1. Enhance ZIPhouse institutional capacity .................................................................................... 31 Activity 2. Boost fashion creativity, startups and community building ....................................................... 31 Activity 3. Develop industry skills through quality advanced technical education and training ................. 33 Program 2. SMART (Streamline Manufacturing, Accountability, Resource efficiency, and Transparency) Factory program ......................................................................................................................................... 34 Activity 1. Implement complex innovative methods to streamline manufacturing and productivity growth .................................................................................................................................................................... 34 Objective 2: Expanded Market Linkages ..................................................................................................... 37 Program 3. Expanding Market Opportunities ............................................................................................. 37 Activity 1. Reposition Moldova as a full-product manufacturing partner and support internationalization of Moldovan fashion brands on regional markets ...................................................................................... 37 Activity 2. Consolidate the Din INIMA Umbrella Brand and Expand Domestic Market ............................... 37 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ............................................ 39 Activity 1. Assist APIUS to Become a Strong Professional and Industry Association ................................... 39

INFORMATION TECHNOLOGY, ENGINEERING AND CREATIVE SERVICES ............................... 40

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ................... 40 Program 1: Promoting STEAM Education and STEAM fields Careers .......................................................... 40 Activity 1. Pilot the Future Classroom (FCL) Concept in Moldovan schools ................................................. 40 Activity 2. Expand Educational Robotics Program ...................................................................................... 41 Activity 3: Support private initiatives for improving STEAM education and promoting STEAM careers ..... 42 Program 2: Build the Ecosystem for Workforce and Entrepreneurship Development ................................ 44 Activity 1. Develop Regional Innovation Centers (Balti, Regional FabLabs) ................................................ 44 Activity 3. Fab Lab Chisinau – coaching the ATIC/TUM partnership ........................................................... 45 Activity 4. Support and develop the IT and engineering laboratory cluster within the TUM ...................... 45 Activity 5. Improve the entrepreneurial ecosystem for innovation and creative services ........................... 46 Objective 2: Expanded Market Linkages ..................................................................................................... 47 Activity 1. Assist foreign market entry for domestic tech & creative firms and attract tech-based investors to Moldova .................................................................................................................................................. 47 Activity 2. Support private-driven initiatives to develop IT Parks ................................................................ 48 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ............................................ 49 Activity 1. Implementation of the Law on IT Parks ...................................................................................... 49 Activity 2. Strengthen and update industry strategies ................................................................................ 49 Activity 3. Capacity Building for for ATIC and COR business associations ................................................... 49

DELIVERABLES .......................................................................................................................................... 50

SECTION II ...................................................................................................................................................... 51

PROJECT-LEVEL OUTCOMES AND RESULTS .................................................................................... 51

Sector Engagement, Enhancement, and Development (SEED) Fund ........................................................... 51 Local Capacity Building Program ................................................................................................................ 52 Access to finance through special channels/USAID Development Credit Authority (DCA) .......................... 53 Public-Private Partnerships ......................................................................................................................... 53 Communications ......................................................................................................................................... 63

SECTION III ..................................................................................................................................................... 65

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY19 Q2 (JANUARY-MARCH 2019) ..................... 65

SECTION IV ..................................................................................................................................................... 67

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PROJECT ADMINISTRATION ................................................................................................................... 67

Level of Effort Report .................................................................................................................................. 67 Administration and Finance ........................................................................................................................ 67

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ACRONYM LIST

ANAT National Association of Travel Agencies of Moldova ANIVEC National Association of Clothing Manufacturers ANTRIM National Association for Inbound Tourism APICAPS National Association of Footwear and Components Manufacturers APIUS Employers Association of Light Industry ASW Association of Small Wineries ATIC Moldovan Association of Private ICT Companies B&B Bed & Breakfast B2B Business to Business B2C Business to Company CEED Competitiveness Enhancement and Enterprise Development CIS Commonwealth of Independent States COP Chief of Party DCFTA Deep and Comprehensive Free Trade Agreement DCOP Deputy Chief of Party DO Development Objective EU European Union ERC/EMMP Environmental Review Checklist/Environmental Mitigation and

Monitoring Plans FI Founder Institute FCL Future Classroom Lab FY Fiscal Year ICT Information and Communications Technology ICTCE ICT Center of Excellence (Tekwill) IDC International Data Corporation JAA J.E. Austin Associates K Thousands LOP Life of Project M Millions MARDE Ministry Agriculture, Regional Development and Environment MCCI Moldovan Chamber of Commerce Industries M&E Monitoring and Evaluation MECR Ministry of Education, Culture and Research MICE Meetings, Incentives, Conferences, and Events Tourism MODARTS Modular Arrangements of Predetermined Time Standards MOU Memorandum of Understanding ONVV National Office of Vine and Wine PDO Protected Designation of Origin PGI Protected Geographical Indication PIRS Performance Indicator Reference Sheet PMP Performance Monitoring Plan PMU Project Management Unit PPP Public Private Partnership PR Public Relations SEED Sector, Engagement, Enhancement, and Development Fund SMART Streamline Manufacturing, Accountability, Resource Efficiency, and

Transparency SME Small and Medium Enterprise SMETA Sedex Members Ethical Trade Audit STTA Short-term Technical Assistance SWM Startup Weekend Moldova TOT Training of Trainers

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ToL Tree of Life TUM Technical University of Moldova USAID United States Agency for International Development USD United States Dollar USG United States Government WEC Wine Excellence Center in Stauceni WoM Wine of Moldova WTAP Wine Tourism Accelerator Program Y Year

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EXECUTIVE SUMMARY

WINEGROWING INDUSTRY During the reporting Quarter, MCP improved wine quality through technical trainings, equipment upgrades, and mentoring. With MCP assistance, 89 gold, silver and bronze medals were awarded to Wine of Moldova at international competitions. The project invested in viticulture research, and knowledge development for key decision makers. Increasing productivity, quality and skills: MCP deployed third assistance for intake of wine quality improvement programs, ASW Mentorship and PQUP. The project also invested in training and updating knowledge of 228 winegrowing industry professionals. MCP supported “Flave Dor” project wins USAID’s 2018 Digital Development Award. Improving market linkages: Wine of Moldova was promoted at leading wine trade expos in China and explores export diversification opportunities in Sweden and France. Over 1,300 market linkages were established, and Moldovan wine won 43 gold, 34 silver and 12 medals at international competitions. Strengthening business enabling environment: MCP organized a study trip to Rioja for key decision makers to learn best practices in light of sectorial strategy development.

TOURISM INDUSTRY

In Q1Y4, MCP continued to boost and diversify the tourism offerings in Moldova by fostering quality growth, innovation, diversification, and expansion of tourism services. Additionally, the project strengthened Moldova’s position as a new emerging travel destination on target markets, through participation at international travel trade fairs.

Increasing productivity, quality, and skills: The project focused on strengthening and promoting unique tourism experiences such as the National Wine Day celebration and new soft adventure routes at Orheiul Vechi Reserve to stimulate inbound tourism. MCP conducted the third tourism exit survey to obtain vital information for planning the next phase of Moldova’s tourism strategy, and confirm current strategic initiatives. Improving market linkages: Moldova was promoted at leading travel expos and B2B events in the target markets of Italy (TTG Rimini in October) and Poland (TT Warsaw in November) with wraparound PR activities in partnership with Wine of Moldova. Moreover, MCP and ANTRIM organized the first inbound tourism webinar which was attended by 40 Italian tour operators interested in Moldova as a new upcoming travel destination Strengthening business enabling environment: The project supported the Moldovan Ministry of Economy and Infrastructure to develop a Regulatory Impact Assessment (RIA) and other strategic documents to inform draft amendments to tourism legislation, based on a White Paper delivered by the public and private sectors in June, continuing the path towards tourism legislation reform.

LIGHT INDUSTRY In Q1Y4, MCP skills development programs strengthened the competitiveness of emerging fashion entrepreneurs and supported sales via popup shops, local fairs, and online sales through the newly launched e-commerce platform. Meanwhile, social audits in Light Industry

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companies secured sales and jobs, and Moldovan designers conquered the Romanian market and signed $65,600 in export contracts as a result MCP’s export promotion actions. Increasing productivity, quality, and skills: MCP fashion hub ZIPhouse partnered with UKaid on an EU for Business project to deliver workforce development training under the ZIPhouse Fashion Academy and Fashion Leadership Program. In total more than 120 participants representing over 20 local companies, young designers, and teaching staff from TUM and other educational institutions benefited from advanced seminars and workshops led by international trainers, with 80+ hours of training. As a result of its Sedex Members Ethical Trade Audit (SMETA) certification obtained with MCP support, Portavita has attracted a UK manufacturing client worth $1.7 million USD. This contract is equal to more than 50% of Portavita’s annual total sales and has safeguarded around 400 jobs at the company. The SMETA certificate means that the company delivers all Labor, Health & Safety, Environment and Business Ethics standards required by international customers. Improving market linkages: 17 companies attended five international B2C trade events in Romania, generating over $65,600 USD in sales. Romania is a target market for Moldovan producers which produce and sell under their own label, producing higher value added. 15 apparel brands from the USAID and Sweden-supported DININIMA umbrella brand have come together to launch the first multi-brand DININIMA e-commerce platform www.fromtheheart.shop. This is the first time that local brands unite efforts to strengthen their online presence.

INFORMATION TECHNOLOGY, ENGINEERING AND CREATIVE SERVICES MCP continued to strengthen Moldovan STEAM education through investments in skills development and education hubs. The project focused on industry ecosystem and market linkage development, helping Moldova promote its business opportunities in IT industry, including the benefits offered by the IT Parks, and supporting the creative industry to grow its talent pool. Increasing productivity, quality, and skills: Future Classroom Lab pilot institutions renovated their spaces and are ready to host new type of learning activities. Educational Robotics program attracted new schools and teachers. FIRST LEGO League junior and SumoBot Challenge provided great opportunities for children and youth to showcase their projects within the competition-based learning model. Coding education was promoted locally and even at the European Parliament, during EU Dojo, MegaDojo and Hour of Code events. Girls across Moldova were oriented towards tech careers at GirlsGoIT Annual Forum. MCP supported Moldova’s first B2B conference on visual effects and post-production for audio and film, and launched the third edition of the Founder Institute pre-acceleration program. Improving market linkages: MCP supported the promotion of Moldova as an IT destination on the regional market (in Romania) and at Moldova Business Week. New IT industry profile was developed by IDC to help Moldova promote its business opportunities. Strengthening business enabling environment: MCP worked with the Moldova IT Park Administration and Moldova Investment Agency to promote the Law on IT Parks to local and foreign companies. More than 320 companies are residents of the virtual IT part, out of which 87 are from 25 foreign countries. 71 new IT companies were registered in 2018 since the Law on IT Parks entered into force.

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SECTION I

PROJECT TECHNICAL INTERVENTIONS DURING FY19 Q1 Chemonics International Inc. (Chemonics) and its partners, J. E. Austin Associates, Inc. and Bhavana World Project, are pleased to submit to the United States Agency for International Development in Moldova (USAID/Moldova) and Swedish International Development Cooperation Agency (SIDA), this Quarterly Report covering the period from October 1 through December 31, 2018.

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

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

Activity 1. ASW (Association of Small Winemakers) Mentorship Program - support in emergence and development of small wine producers

The Small Winemakers Mentorship Program supports farmers pursuing value-add to their vine plantations. The project’s support is complex and comprises mentoring the viticulture and winemaking operations, assistance for sustainable winery management, marketing, and sales. The ASW Mentorship program has three key objectives: support the institutional development of the Association of Small Winemakers; grow their internal capacities; and foster trust on behalf of their members, thus creating a sustainable ecosystem for development of family owned wineries. MCP is supporting ASW to grow its management capacities and provide additional services to its members. During the reporting period, MCP assisted ASW to develop its annual activity plan, and facilitated the ASW annual board meeting where the activity plan was vetted. The plan includes procurement of equipment that will be jointly used by members of the association, a list of marketing activities, and a series of initiatives linked to lobbying and advocacy. For this latter section of activity, MCP has assigned Mr. Oleg Utica to be a short-term consultant to develop documents that will ensure the proper operation of ASW, and facilitate cooperation with other sector stakeholders. Expanding and scaling-up the ASW Mentorship Program. The ASW Mentorship Program is a peer to peer assistance activity where emerging small wine producers are mentored by experienced winemakers and have access to shared equipment, a unique marketing and promotion platform focused on quality, and the concept of so-called ‘author wines’. During the reporting period, MCP offered support to ‘established small winemakers’ Crama Miresti and Vinfoteca, assisting these wineries to draft and submit applications for SEED grants to develop and launch hospitality services. As a result, both wineries were

Caption: Logos of Crama Tudor (GT Tudor Aghenie) and Professeur Iurco (GT Nicolae Iurco) developed with MCP support under ASW Mentorship program Credit: MCP

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approved by the selection committee and will begin implementing their activities in the first part of 2019. Assisting this type of winery is essential to strengthen the entire ecosystem of small winemakers, and to provide opportunities to expand and enlarge Moldova’s wine tourism offer. 17 small winemakers received technical assistance during harvest and primary processing. MCP fully deployed the production component of the mentorship program during the 2018 harvesting season in all three in-takes. 17 small winemakers currently receive technical assistance from expert oenologists, of which nine are new start-ups (3rd intake) receiving full support, and eight are beneficiaries of the 1st and 2nd program intakes, who are receiving a gradual tapering off of assistance to ‘monitoring’ levels to ensure continuity of production of high quality wines. These start-ups were also awarded grant contracts under which critically necessary equipment was procured: stainless steel tanks, pumps, refrigerating units etc. MCP also deployed marketing support for 2nd intake graduates GT Nicolae Iurco and GT Tudor Aghenie. Both wineries were assisted to develop brand identities and labeling, enabling them to premiere at the 15th edition of Wine Vernissage (reported herein). During the reporting quarter, MCP began to identify prospect new wineries – potential beneficiaries of the next intake. As such, the project conducted negotiations and a technological inventory of Vinum and SOT, and a start-up winery from Comrat (Capital of UTA Gagauzia), Wintage SRL, was assisted to draft and submit its application for SEED grants under RFA-2018-002, which was positively reviewed and approved by the selection committee.

Activity 2. ‘PQUP’ Program (Product Quality Upgrading Program): expanding the Wine of Moldova portfolio

The goal of the PQUP activity is to support ‘transition wineries’ to graduate to the ‘quality over quantity’ paradigm. This enables beneficiaries to convert their business models from bulk wine to production of bottled wines with higher added value, thus expanding the quantity of industry wines that are compatible with Wine of Moldova and Protected Geographic Indication quality standards. MCP fully deploys winemaking technical assistance during the 2018 production season. The key goal of the PQUP is to support ‘transition wineries’ to graduate to the ‘quality over quantity’ paradigm. This enables beneficiaries to convert their business models from bulk wine production to making bottled wines with higher added value, thus expanding the quantity of industry wines that are compatible with Wine of Moldova and Protected Geographic Indication quality standards. To stimulate the move towards quality wine production, MCP has delegated four expert oenologists to deliver 285 of level-of-effort days of consultancy and expertise to 14 program beneficiaries. Eight of these entered the program in the first and second intake, and are receiving tapered support down to a ‘monitoring’ level during the current winemaking season, demonstrating MCP’s in-depth, long-term approach and lowering the risk of non-performance by the wineries. The other eight wineries were recruited under the 3rd intake of the PQUP program. The winemaking consultants are working with these wineries as chief oenologists to ensure the implementation of best practices, and are training both junior and senior production personnel. This third intake includes Moldova’s second largest wine exporter, Driada Grup (Kazayak Vin and Suvorov Vin), and Maurt, one of the best-selling wineries on the domestic market. By improving the quality of the wine produced at these wineries and moving away from bulk sales, MCP will generate a sector-wide impact and be able to demonstrate an ironclad ‘proof of concept’ to other, more reluctant soviet-style wineries. Eight MCP-supported winemakers expand into wine tourism to diversify income stream. With MCP support, eight program beneficiaries - Tomai Vinex, Vinia Traian, Novak Winery, Podgoria Vin, Migdal-P, Doina Vin and Agrici Winery - started developing or

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modernizing their tourism infrastructure under the MCP “Wine-up” program, contributing to significant enlargement of the Moldova’s wine tourism offer. Wine tourism, alongside gastronomy, was shown to be the key driver of tourists to Moldova in the MCP-funded 2018 tourism survey and is a proven way for wineries to diversify their income streams and expand their businesses in rural areas, while attracting tourist dollars to rural areas.

Program 2. BUILDING KNOWLEDGE FOR FUTURE GROWTH

Wine of Moldova Academy seminars and study visits update the skills and knowledge of 228 industry professionals, with MCP support. The Wine of Moldova Academy is a private sector service under the National Office of Vine and Wine (ONVV), and acts as a support program for the wine industry’s educational institutions, providing trainings to cover the industry’s most important knowledge gaps. The Moldovan wine sector suffers from a shortage of qualified workers, vital to increase its competitiveness and respond to new demands from highly competitive markets, both in the EU and globally. The Wine of Moldova (WoM) Academy aims to address wine industry’s continuing education needs, with a curriculum based on lessons learned from the MCP Skills Gap Analysis and the industry’s development goals. During the reporting period, MCP supported the Academy to organize:

• A seminar on “Best practices in ecologic and biodynamic viticulture”. Organic and biodynamic wines are an important trend in international wine markets. In response to this trend, ONVV organized a dedicated seminar with recognized French expert Cristophe Ehrhard who shared best international practices with 49 participants from 19 wineries.

• A seminar on “Best practices in wine bottling”. Bottling is a wine production procedure with some of the greatest risks to a quality product, that ultimately creates added value. To increase skills and knowledge and to share modern practices, ONVV organized a seminar for 83 industry professionals from 38 wineries on the subject, involving leading local experts.

• National Conference on combating phytoplasma diseases (reported in detail herein)

• Study Visit to Cote du Rhone wine region (reported in detail herein).

• Study visit to La Rioja wine region (reported in detail herein).

PROGRAM 3. INNOVATIONS AND PRECISION VITICULTURE TECHNOLOGIES

TO FACE CLIMATE CHANGE AND ENSURE HIGH QUALITY GRAPES

Activity 1. “Best Grapes” and “FlaveDor” - piloting innovations in vineyard management and grape quality improvement MCP is committed to pursue innovations and precision viticulture technologies to face global climate change and ensure high quality raw material for winemaking. In partnership with ONVV, MCP implements two pioneer projects ‘Best Grapes’ and ‘FlaveDor’ aiming to

Caption: ONVV leading winemaking expert Mrs. Elizaveta Breahna conducting the seminar “Best practices in wine bottling”, November 2018 Credit: Wine of Moldova

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increase their scale to national coverage piloting innovations in vineyard management and grape quality improvement in Moldova. These pilots are implemented by the PGI regional producer associations, helping to build specialized extensions services for grape and wine producers. “Best grapes” project expands the number and area of demonstration plots. During the reporting quarter, ONVV and PGI Association Valul lui Traian increased the number of Best Grapes demonstration plots from four to eight. Demonstration plots are used to experiment and test different viticultural applications in real-life Moldovan conditions, and the resulting best practices are disseminated through the wine sector by periodic newsletters. The grapes from each demonstration plot are processed into wine in microvariation conditions, ensuring the best transposition of viticultural techniques and practices into the characteristics of wine. One of the newly established demonstration plots will be situated in the vineyards of the Stauceni Wine Excellence Center (WEC), and the establishment of the demo plot was marked by a Cooperation Memorandum signed by ONVV and WEC management with the objective of creating a wider impact on wine education and specialized research. All demonstration plots are equipped with modern observation technologies: methodological stations, pest traps and sensors to monitor climate conditions and respective pest and disease factors. The system also traces relationships and dependencies between these factors and the spread of disease, issuing alarms for spay and vine treatment when circumstances indicate high risks for disease development. MCP has committed to equip two new demo plots with methodological stations through a grant extension to PGI Association Valul lui Traian, and ONVV will contribute with same amount. “Flave Dor” project wins USAID’s 2018 Digital Development Award. “Flave Dor”, also known as the ‘Drone Vine Disease Detection Pilot’ is an innovative project with the aim of combating endemic vine diseases posing significant risks to Moldova’s winegrowing industry: Flavescence Doree and Bois Noir. The approach uses Unmanned Aerial Vehicles (drones) equipped with multi-spectral cameras and sophisticated cloud-based imagery processing and analysis software to deliver accurate information about the location of disease down to the plant level. The project also uses PCR and DNA testing to investigate the forensics of disease origin and area of contamination. In December 2018, the “Flave Dor” project was awarded at USAID’s second annual Digital Development Awards, or “the Digis,” which recognize USAID projects and activities “that are helping build an inclusive digital economy while accelerating development impact with cutting-edge technologies and advanced data analysis.” To showcase the successes of the project, USAID delegated an American photographer and videographer Mr. Colby Gottert, to visit Moldova for five days in December. Mr. Gottert accompanied the MCP wine expert and strategic communication specialist across Moldova capture the details of the “Flave Dor” project, and focus on the impact of the technology on the wellbeing of the inhabitants of Moldova’s rural areas.

Caption: Signature of Cooperation Memorandum between ONVV and Stauceni Wine Excellence Center, November 2018 Credit: Wine of Moldova

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ONVV organizes national conference about prevention and combating phytoplasma diseases of vine, presenting results of Flave Dor project. During the conference in December, ONVV viticulture experts presented project results to the sector, including aerial surveillance by drones and by-hand inspection of another 800 hectares of vineyards, including graft plantations and rootstocks, that were visually evaluated. The results show that vineyards aged 1-4 years old, are infected by vine disease at a rate of 30-94.6%. About 320 vines were tested using the PCR method, including 30 samples evaluated by a French laboratory. The results of this laboratory testing show that the most common phytoplasma disease in Moldova is Bois Noir ("Black Wood"), however laboratory samples have not yet determined its country of origin. The general conclusion is that the phytoplasma diseases spread via infected planting material, but even more via crickets who act as disease vectors and spread phytoplasma diseases from infected plants to the healthy ones. The conference participants asked for the inclusion of Flavescence Doree, Bois Noir vectors and Drosophila suzuki (an insect that impacts the vine plant similar to Philloxera vitis) in the list of quarantined organisms. Currently, the legislation of the Republic of Moldova on the prevention and control of phytoplasma Flavescence doree ("Golden Yellowing”) and Bois noir ("Black Wood") is not harmonized with that of the European Union, which establishes clear mechanisms and strategies in this respect.

Objective 2. Expanded Market Linkages

Program 1. Wine of Moldova international promotion and export growth

Activity 1. Build Wine of Moldova Brand Equity and Increase Awareness

Largest wine cellar in the world featured in a Netflix TV series promoting Moldova as a wine tourism destination. Increasing wine exports to high-value international markets is a priority for MCP, that strategically invest in activities to raise awareness of Wine of Moldova in priority markets. To this end, MCP has developed a partnership with leading wine travel portal “The Winerist” and Wine of Moldova has been featured in several ‘A-list’ media outlets. In October, influential UK hospitality industry magazine The Buyer published an article on Moldovan Wine. The article references an episode of the popular Netflix TV series ‘Travels with My Father’, hosted by British actor and comedian Jack Whitehall, where Jack and his father visit Moldova and drive through the tunnels of the largest wine cellar in the world, Milestii Mici. The increasing frequency of international articles and TV shows about Moldovan wine demonstrates increasing international interest from international consumers, emphasizing continued potential for export growth.

Caption: American photographer Colby Gottert, shooting Arcadie Fosnea (ASW Chairman) at Crama Mircesti, December 2018 Credit: Olesea Galusca, MCP

Caption: Mr. Vladimir Corobca, ONVV’s leading viticulture expert, reporting on results of research phase of Flave Dor Project during the national conference on prevention of phytoplasma diseases, December 2018 Credit: Wine of Moldova

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Moldovan Wines win Gold and Silver medals at leading wine competitions Effervescent du Monde in France and International Wine Contest Bucharest. MCP supports Moldovan winemakers to enter their products into leading wine competitions to increase awareness about Moldovan wine, and demonstrate its leaps forward in quality on the international stage. "Effervescents du Monde" is one of the most important international contests for sparkling wines, held in Dijon, France, on November 14-16, 2018. The 2018 edition gathered an international jury, including a representative of the National Vine and Wine Office (ONVV), to judge 594 wines from 22 countries around the world. 22 Moldovan wines from nine companies entered the competition under the “Wine of Moldova” national brand, winning 12 medals, including two gold. In addition, at the beginning of November, 47 wines and Divines were awarded gold and silver medals at the International Wine Contest Bucharest 2018 (IWCB). Fautor winery won the most medals (nine) followed by Chateau Vartely (six), Valea din Vale (three) and Purcari (three). Moldovan wine stars at gastronomic gala in Gdansk, Poland, organized by famous culinary guide. In November, Wine of Moldova was the start of a gala event organized by international culinary guide "Gault & Millau" in Gdansk, Poland. On entry, the 750 guests were greeted with a sparkling wine, before sampling six further Moldovan wines throughout the evening, each paired with original dishes prepared by top chefs in the form of culinary shows. The meal was completed with a classic Moldovan Divin. Poland is a key target market for Moldovan wine and tourism, and this event further increases the visibility of both Moldovan wine and opportunities for oeno-gastronomic tourism on this export market.

Caption: Moldovan wine experts Mihai Druta and Daniela Dontu present Wine of Moldova at the "Gault & Millau" gala event in Gdansk, Poland Credit: Wine of Moldova Facebook

Caption: 750 Polish gastronomic fans sample Wine of Moldova at the "Gault & Millau" gala event in Gdansk, Poland Credit: Wine of Moldova Facebook

Salcuta Winery announcement of the gold and silver medal at the International Wine Contest Bucharest 2018. Credit: Salcuta Facebook page

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Wine of Moldova promotes RAVAC International Film Festival to show support for cinematography and the creative industries. The five-day RAVAC International Film Festival took place on October 4-7, 2018 in Chisinau as part of the National Wine Day satellite “Wine Culture week”, with support from the National Office of Vine and Wine. This first ever Moldovan International Film Festival celebrated Moldovan wine culture and traditions, and showcased 45 films about the art of wine, including two feature lengths and eight short films made in Moldova. The festival was organized by Moldovan creative company YOUBESC, in partnership with Wine of Moldova and with MCP support. A special “Wine of Moldova” prize was awarded to Swedish actress Eva Melander for her performance in the film ‘Border’, which was accepted on her behalf by Adam Amberg, Head of Sweden Cooperation in Moldova. Vasile Braga, executive director of the Moldovan Creative Industries association COR awarded the prize for the people’s vote to young Moldovan producer Ion Bors for his film “Plus Minus One”. MCP supports ‘More than Wine’ calligraphy exhibition showcasing the relationship between Wine and Moldova’s creative industry. MCP supports Moldova’s creative sector as a vital component of a thriving economy, leveraging exports through expertise in design, advertising, video production and much more. In celebration of the sector’s relationship with the wine industry, MCP supported the "More than WINE" exhibition, showing examples of wine calligraphy as part of a week-long “Wine Culture” event in honor of National Wine Day. The exhibition presented 30 works from students at the Grafema Calligraphy school in Chisinau, drawing parallels between the dual arts of winemaking and calligraphy, and was organized by the Moldovan Association of Creative Industries (COR) and the design studio 43Oz in partnership with the Association of Small Winemakers.

Activity 2: Export Support Program (ESP): increased wine sales on target markets through firm-level marketing support

MCP assists seven small winemakers to expand market linkages in Romania. Romania is considered a target export market for Wine of Moldova and is especially important for small winemakers who cannot rely on domestic sales alone. MCP supported seven members of the Association of Small Winemakers (ASW) to attend the Wine & Street Food Festival in Bucharest, Romania, on October 12-14, 2018, including MCP-supported startup winery Domeniile Pripa. Participants sold almost 300 bottles of their ‘author’ wines, a significant number for these boutique winemakers who produce an average of only 5,000 bottles a year. Small winemakers have achieved create results on the Romanian market in 2018: export growth for members of ASW is expected to reach 50% by year end, when the volume of Moldovan ‘author wine’ exported to Romania is forecasted to exceed 13 thousand

Adam Amberg, Head of Sweden Cooperation in Moldova, accepts the Wine of Moldova Excellence Award on behalf of Swedish actress Eva Melander at the RAVAC International Film Festival. Credit: RAVAC and Olesea Galusca, Facebook.com

Works of wine calligraphy at the “More than WINE” exhibition supported MCP as part of Wine Culture week. Credit: diez.md

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bottles. Since MCP began supporting ASW in 2015, the number of small winemakers exporting to Romania has grown from two to eight, obtaining a compound annual growth rate (CAGR) growth of 317% for ‘author wines’. MCP supports eight Small Winemakers to solidify export links at leading trade fair in Romania. MCP supported eight leading small winemakers to strengthen their exports to target market Romania by attending the 22nd Bucharest Wine Fair, “GoodWine”, on November 23-25, 2018. Attending wineries included GOGU Winery, DAC Winery, ATU Winery, Equinox Wines, Pripa Domains, Carpe Diem, Minis Terrios Wines and NOVAK Winery, each of which have caught the attention of the Moldovan domestic market with their premium author wines. Visitors to the Association of Small Winemakers umbrella stand were also able to find copies of the Fine Wine Guide 2018, profiling 50 of the best wines in Moldova. Romania is a key target market for Moldovan small winemakers, with exports of ‘author’ wines exceeding 13,000 bottles in 2017, a growth of 50% on the previous year. Over 400 new market linkages established during Wine of Moldova participation at trade fair in Guangzhou, China. Since 2013, exports to China alone quadrupled (+388 percent), propelling Moldova to one of the top 20 wine exporters to this market. Additionally, since 2016 China has become the number 1 export destination by value, demonstrating that Chinese consumers are prepared to pay higher prices for premium Moldovan wine. Considering the importance of this market to Moldova’s wine exports, ONVV assisted 32 Moldovan wine companies to present their wines under the Wine of Moldova national brand at InterWine, held on November 9-11, 2018 in Ghangzhou, China. Following continuous efforts to promote Wine of Moldova on the Chinese market, and the consequent participation of Wine of Moldova at the most important industry events and exhibitions, the wineries reported a higher level of interest from trading partners to import and distribute Moldovan wine as well as higher attendance at their trade fair stands. Wine of Moldova’s participation at Interwine was also announced by local press and generated several publications after the event. Moldovan small winemakers win gold medals at competitions associated with Interwine Trade Fair. Two Moldovan wines from small winemakers, Et Cetera Winery’s Merlot 2014 and Carpe Diem Winery’s Bad Boys, received golden medals at the wine contests organized around the trade fair. This further contributed to increased visibility and interest in Moldovan wine during the expo. The success of this participation, organized

Producers from the Association of Small Winemakers interacting with potential clients at the Bucharest Wine Fair ‘GoodWine’ Credit: Association of Small Winemakers facebook.com

Caption: Et Cetera Winery’s Merlot 2014, presented among other winners of Double Gold medals at Interwine exhibition and wine contest. Guangzhou, China, November 2018 Credit: Association of Small Winemakers facebook.com

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independently by ONVV, underlines the quality of Moldovan wine and demonstrates the increasing maturity of this flagship PPP, which is supported by MCP. Wine of Moldova explores export opportunities in Sweden and builds positive image in France. Wine of Moldova’s strategy for upcoming period is to continue to expand in key export markets while exploring opportunities for export diversification on niche markets and building a robust presence on markets that contribute to increasing international awareness and setting trends in global wine consumption. According to the WoM marketing framework, Scandinavian countries are "opportunity" markets for exports diversification. As such, ONVV organized exposure for five wineries, already present on the Swedish market, during Stockholm Food and Wine 2018. Meanwhile, 21 wineries gathered under the umbrella of the national wine brand, participated in the Salon Food & Spirits exhibition for the first time, organized by Sommeliers International in Bordeaux, France. This annual exhibition is of strategic importance to the international wine sector and gathers winemakers from all over the world. This year, 59 exhibitors presented their high-quality products, which were appreciated by more than 900 visitors, including merchants, restaurant owners, sommeliers, bartenders and importers. After the exhibition, Moldovan Wine was rated with the highest marks at the "Inside Spirits Competition" competition, organized by the magazine "Sommeliers International". Following the tastings and evaluations, 14 Moldovan producers were awarded with medals, and the national wine brand left with two gold, eight silver and five bronze medals. National Wine Day satellite event in target export market Romania attracts over 6,000 visitors. This year’s National Wine Day festival was mirrored in neighboring Romania, to celebrate the 100th anniversary of unification of Romanian with Moldova. Romanian wineries showcased their wines at NWD in Chisinau, and the National Office of Vine and Wine organized a satellite event in Bucharest, the capital of Romania, presenting 21 Moldovan wines to an expert audience. The event’s 6,000 visitors were treated to presentations from Moldovan artists, musicians, craftsmen and rural guesthouses, showcasing wine and gastronomic experiences and positioning Moldova as a tourism destination for the Romanian target market.

Program 2. Enhance wine culture and grow a mature local market

MCP reactivates the Association of Sommeliers in Moldova and appoints a new ASE ambassador for Moldova. MCP aims to contribute to the development of the sommelier profession in Moldova, and to consolidating the community of sommeliers as a critical step in developing local wine culture. For this purpose, MCP has a strategic partnership with the Association of European Sommeliers. Following several years of inactivity, and complaints from members, MCP facilitated a meeting of all ASE members in Moldova. During the meeting, Moldovan sommeliers vetted the Alex Staci as the new ambassador for ASE in Moldova. The candidate was accepted by the ASE executive board, who also developed a tentative list of activities for 2019.

Promotional materials for the Moldovan Wine Festival in Bucharest, Romania, promoting Moldova wine and wine tourism to a Romanian audience. Credit: Wine of Moldova, Facebook.com

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15th edition of Wine Vernissage break attendance and participation records. The Wine Vernissage is a bi-annual flagship event for Moldova’s wine industry, promoting conscious wine consumption and quality upgrades on the domestic market. With MCP support, the event has passed through the proof-of-concept, and each edition brings increased attendance, self-sufficiency, and growing number of wineries willing to participate. The 15th edition of the Wine Vernissage gathered a record-breaking number of attendees. Over 2,000 people interacted with over 70 wineries, the highest number of participants in the event’s history. 24 Of these participants were small winemakers, who were placed in their own, separate hall for the first time to accommodate the growing number of people interested in finding out more about ASW’s ‘author wines’. Wine of Moldova contributes to expansion of wine culture to regions and promotes inclusion of the Gagauzia autonomy. Regional festival and events are one of the most efficient tools to attract tourists to a region, as they allow foreign tourists to get a glimpse of the regional traditions and contribute to authentic experiences. Wine of Moldova has become an important voice in promoting wine culture and conscious consumption, acknowledged for its high standards while organizing different wine related events such as Wine Vernissage and National Wine Day. Combining these, ONVV supported winemakers from one of the largest regions with Protected Geographical Indication – Valul lui Traian – to present their wine at the "Gagauz sarap yortusu 2018" Wine Festival held in Comrat. The guests of the Festival had the opportunity to taste Wine of Moldova, admire local folk ensembles, and enjoy the traditional dishes of the Gagauz ethnic minority. MCP supports Moldova to celebrate 17th National Wine Day, attracting over 120,000 national and international visitors. The 17th annual National Wine Day took place on October 5-6, 2018, attracting 120,000 visitors from Moldova and abroad and filling all Chisinau’s hotels to capacity for the second year running. Visitors tasted 10,000 glasses of wine and bought 83,330 bottles, from the 1,000 wines and 60 wine producers on show and learned about Moldova’s four regions of Protected Geographical Indication (PGI), alongside

Swedish Ambassador Anna Lyberg at National Wine Day, awarding a prize for best winery in Codru PGI Association to Asconi winery Credit: Wine of Moldova, facebook.com

USAID Director Karen Hilliard at National Wine Day, awarding small winery Mihai Sava for outstanding efforts in wine tourism. Credit: Wine of Moldova, facebook.com

Caption: Winners of the visitors’ choice awards: Aroma, Fautor, Cricova representatives with Mr. Gheorghe Arpentin, ONVV director during the 17th edition of Wine Vernissage, December 2018 Credit: Wine of Moldova, facebook.com

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folk ensembles, handicraft stalls, and masterclasses on Moldovan wine. Outside Chisinau, wineries also opened their doors for tastings, and were connected by the newly launched ‘National Wine Road’ tourism signs, and parallel events celebrated Moldovan wine’s links to Calligraphy, Film, and Romania. MCP supports the National Office of Vine and wine to organize National Wine Day as part of its efforts to develop the domestic wine market and wine tourism industry. USAID Director, Karen Hilliard awarded small winery Mihai Sava with a prize recognizing their success in promoting wine tourism, and Swedish Ambassador Anna Lyberg awarded large winery Asconi in recognition of their efforts in sophisticated wine tourism. National Office of Vine and Wine and Ministry of Agriculture welcomed International Wine Day visitors to Chisinau Airport with miniature bottles of wine. The National Office of Vine and Wine partnered with the Ministry of Agriculture, Regional Development and Environment to provide a stand in Chisinau Airport Arrivals hall, welcoming international visitors to National Wine Day with a free miniature bottle of wine. The stand, developed with MCP and Avia Invest support, showed visitors a first taste of Moldovan hospitality. Moldova’s most powerful tourism marketing tool is word of mouth and investing in strong first impressions like this stand leads to more visitors recommending Moldova to their friends.

Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Program 1. Policy upgrading and legal regulatory reforms in the wine industry

Activity 1. Support ONVV to continue policy, legal and regulatory reforms

MCP supports ONVV and MARDE to continue needed industry reforms. The legal and regulatory reforms initiated in Moldova’s wine industry in 2013 need to continue. Reforming the sector is an ongoing process, aiming to fully reorganize the existing model of industry regulation, management, and control. In this context, MCP supports ONVV and MARDE to initiate changes in technical regulations, assessment of quality controls, and a traceability system subordinated to normative acts. During the reporting period, ONVV has been consulted in preparation to harmonize the following legal acts in line with EU standards, or to update current legislation to meet the requirements of the private sector:

• Draft of the concept and respective Government Decision on the restructuring of the system of research, innovation, education and rural extension in the entire agri-food sector (with the winegrowing sector being considered a part of it);

National Wine Day welcome stand at Chisinau International Airport arrivals hall, set up by ONVV and the Ministry of Agriculture with MCP support. Credit: ANTRIM, facebook.com

Tourists enjoying their free bottles of Moldovan wine at National Wine Day welcome stand in Chisinau International Airport Arrivals Hall. Credit: ANTRIM, facebook.com

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• Package amendments to law no. 57 "On Vine and Wine" and law 1100 "On production and circulation of ethylic alcohol and alcohol-based produce". The amendments include new requirements on labeling and packaging.

Activity 2. Finalize the Wine of Moldova 2030 strategy to guide long-term industry competitiveness, and promote in the Government

MCP supports 12 wine setor representatives to learn best practices from Spanish DOP success story in Rioja. MCP aims to support ONVV and the Wine Associations in continuing wine-sector reforms, focusing on supporting ONVV in implementation of improvements in product quality conformity and traceability, particularly pertaining to product certification, government controls, and upgrading wine quality standards via new PDOs. These are also intrinsic elements of the future Wine of Moldova 2030 Strategy, which is being developed in partnership with wine sector stakeholders. As such, MCP decided to support a study visit of 12 representatives of Moldova’s wine sector to La Rioja, a Spanish DOP region formed at the end of the 19th century, which produces over 40% of Spain’s total DOP wine production from over 54 thousand hectares. La Rioja has become one of Spain’s most famous wines, making it a quality and marketing success story with a well-known DOP common brand. The reasons for this success include a firm system of controls implemented within the region, strong institutional partnerships between producers and the associations with the Regulator Council, and a pragmatic and systemic approach in developing the DOP concept.

Activity 3: Develop and strengthen the PGI wine associations

Moldova Competitiveness Project (MCP) supports seven PGI wineries visit prominent PGI/PDO winemaking region in France. Valee du Rhone is one of the most important and famous wine regions in France, second only to Bordeaux by both surface and volume, and home to the famous Chateauneuf du Pape, Crozes-Hermitage and other famous heritage wines. MCP and ONVV organized a study visit to the region for representatives from seven Moldovan PGI wineries to learn best practices and strategies to promote wine products with the PGI / PDO quality mark. PGI helps guarantee quality, enables higher prices, and enhances tourism cache for regions.

Caption: Representatives from 7 Moldovan PGI wineries at the ACO Hermitage vineyard in Valee du Rhone, France Credit: Wine of Moldova Facebook

Caption: Wine of Moldova delegation during visit to Rioja Consejo Regulador. Spain, November 2018 Credit: Wine of Moldova

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TOURISM INDUSTRY Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) Program 1. Start-up Tourism Moldova: product development, service quality upgrading and tourism offer diversification

Activity 1. Wine-Up: Wine Tourism Accelerator Program

MCP supports installation of first road signs directing visitors to Moldova's most important tourism destinations Access to information is essential for tourists and enhances their ability to explore a country. To facilitate foreign visitors and domestic tourists to access key sites, encourage road trips and stimulate tourism, the USAID and Sweden-supported Competitiveness Project partnered with the Ministry of Economy and Infrastructure and the National Office of Vine and Wine (ONVV) (MIE), to install the first of 156 informative road signs across Moldova. This signs direct travelers to 21 wineries on the newly developed "Wine Route", and will also increase the flow of tourists to the most important sights in each corner of the country: monasteries, museums, historical moments, etc. MCP supports tourism training in product development and online marketing for 53 wineries and tour operators. On November 19-20, MCP supported a two-day professional training course for wineries and tour operators on the "Development and promotion of authentic tourist products" in Moldova. Participants learned how to use 21st century tools to present their products to high-spending wine and gastronomy tourists, enabling them to keep pace with current technological trends, appeal to a younger and more educated traveler, and differentiate from other market experiences. The training was held at the Tourism Information Center in Chisinau and delivered by Diana Isac, CEO and founder of Winerist, the largest digital portal for wine and gastronomy experiences in 145 destinations around the world.

Activity 2. Hospitality+ Moldova program: improving tourism hospitality infrastructure

65 Moldovan potential entrepreneurs learn about rural tourism opportunities. On December 6, 2018, MCP organized a seminar for 65 farmers and local community members in the central-south area of Anenii Noi to trigger interest in pursuing rural tourism

Diana Isac provides product development and digital marketing to tourism and winery professionals at the Chisinau Tourism Information Center training space Credit: ANTRIM

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businesses. At present, Moldova has 26 rural guesthouses, only half of which offer year-round services to western tourism standards. There are no guesthouses at all in the Anenii Noi area which surrounds Castel Mimi, which has the potential to be transformed into a wine tourism hub. The MCP presentation showcased its current prototypes of rural tourism businesses in 13 assisted rural B&Bs, which tripled their numbers of visitors during the assistance period, 2015-2018. These examples of success demonstrate the potential of entrepreneurship within the hospitality sector, which could become emerging sector of the rural economy. Participants learned about Moldova’s growing rural tourism industry, and MCP-supported grant opportunities to develop hospitality-based businesses, from guesthouses and food tours to excursions and local crafts. The Anenii Noi region is also famous for smoked meats, making it ripe for development of both hospitality and gastro-tourism businesses. MCP invests in rural tourism development to drive economic growth in rural regions and provide alternatives to migration. Tourism industry is starting to emerge in Moldova, recording 20% annual average growth and 145,000 foreign tourists in 2017, 54% increase vs 2015, underpinned by MCP assistance in destination international marketing and sustainable rural tourism development. MCP shines spotlight on Moldovan cuisine to strengthen rural tourism. Moldovan hospitality centers around food, and traditional cuisine is one of the greatest draws for international tourists, repeatedly mentioned in online reviews. MCP supports activities to revitalize Moldovan traditional recipes ready for 21st century tourists. On October 29, 2018, MCP supported the ‘People, Place, Food and Wine’ gastronomic event, bringing together modern interpretations of traditional foods and local specialties hand-made by cooks from MCP-supported rural guesthouses. This event is part of MCP’s wider efforts to expand opportunities for gastronomic tourism in Moldova, including the development of recipe cards, gastronomic tours, and supporting the inclusion of traditional recipes in restaurant menus to keep Moldova’s food heritage alive. As result, a new gastronomic book with revived receipts was published. Incentivized by MCP, tour operators get creative and bring innovation in developing leisure offers. 13 Moldovan tourism agencies and tour operators have been selected into the MCP’s Start-Up Tourism Moldova program, out of more than 30 applications, to develop new inbound tourism products, estimated to service more than 10,000 tourists per year. Currently, only 3% of 440 tourism agencies active in Moldova have developed local tourism products, i.e. selling Moldova as a tourism destination on international markets. The 2018 edition of the Startup Tourism Program encourages tour operators to develop experiential tourism products, such as biking and hiking trails around wineries, gastronomic and cultural tours, and handicraft tours, but also innovative digital campaigns for promoting authentic tourism experiences in Moldova.

Caption: Announcement for the Rural Development and Entrepreneurship seminar held at Castel Mimi with support from MCP. Credit: Castel Mimi Facebook

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Activity 3. Go-Regional Tourism Start-Up: unveiling the tourism potential of Orheiul Vechi reservation and Purcari region

MCP-supported hiking and birdwatching routes launched in Orheiul Vechi. On October 30, 2018, MCP supported the launch of hiking, biking and birdwatching tourist routes in the Orhei Vechi nature reserve, to capitalize on the rapidly growing global market for Soft Adventure tourism. Visitors to Orheiul Vechi can choose from six free self-guided tours, using free materials including an interactive map and birdwatching mobile app, a local bird guide, and information panels. The routes were developed by the Ecological Movement of Moldova as part of the project "Responsible Community - Conserved Terrestrial Landscape", supported by the UN GEF Small Grants Program in partnership with MCP. MCP supports the development of bird watching, hiking and cycling routes to diversify the tourist offer of the region, extend visitor stays, and develop new forms of nature and soft adventure tourism in the Republic of Moldova. Authentic rural guesthouses in Trebujeni are fully booked during tourism season. Four rural guesthouses in Trebujeni, refurbished with MCP support in 2017, reported that they operated at full capacity during the 2018 tourism season, with only one free day. Trebujeni village is located in one of Moldova’s premier rural tourism sites ‘Orhei Vechi’, which is a focus of MCP investment to create a ‘rural tourism hub”. In 2018, three more guesthouses in the village have begun infrastructure upgrades to meet the demands of western tourists. MCP co-invests in these construction projects, under the condition that the building work and renovations use traditional methods and techniques like thatch and wood, to preserve the region's authenticity. One example of MCP co-investment is the one million lei ($58,000US) reconstruction of a traditional village home into a new guesthouse,'Anisoara'. The owner, Ion Stamati, says that tourism is the only option for the economic growth of Trebujeni, with the potential to create jobs and attract investment. Ion's daughter, after whom the guesthouse is named, currently works in the Caribbean, but sends home remittances every month to support the project. Anisoara hopes that one day she will be able to return home and manage the guesthouse, providing another data point to demonstrate tourism's potential to mitigate against migration.

Opening of the hiking, biking and bird watching trails in Orhei Vechi. Credit: Ana Maria Moroz, MCP

Ion Stamati, from Trebujeni village, supervising the construction of his future guesthouse. Credit: Ana Maria Moroz, MCP

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Objective 2: Expanded Market Linkages

Program 2. Tree of Life Marketing Program: unveiling the hidden gems of Moldova to the world

Activity 1. Placing Moldova on the map of world tourism: building brand equity and international awareness of Moldova as a tourism destination

MCP-supported Tourism Info Center celebrates 1-year anniversary and 8,000 visitors from 92 countries. Tourism Information Centers (TIC) are the gold standard in informing visitors about a region’s tourism offering, ensuring that tourism dollars reach both large and small service providers. MCP provided strategic support to tourism industry association ANTRIM in partnership with Chisinau Town Hall, the EU delegation, and UNDP to open Moldova’s first TIC in the heart of Chisinau in November 2017. In its first year of activity, the TIC recorded more than 8,000 visitors in its first year of activity, demonstrating the industry’s huge potential for growth. 83% Of these visitors originated from 92 different foreign countries including target markets Romania, Italy and Poland. The TIC connects visitors to Moldova’s authentic food, wine, and soft adventure opportunities, increasing revenues and improving rural livelihoods, and also serves as an industry event platform, hosting 45 trainings, master-classes and capacity building events in 2018 alone.

Tree of Life tourism brand transformed into ‘Invest Moldova’ national brand to attract investment. The National Agency for Investment has built on the success of the internationally recognized Moldovan tourism brand, Tree of Life, originally created with support from USAID, by developing it into ‘Invest Moldova’, a national umbrella brand to promote Moldova and attract foreign capital and investment. This expansion of the Tree of Life concept to include other key Moldovan industries, including Light Industry and ICT, demonstrates the Moldovan Government’s recognition of the effectiveness of MCP’s branding and marketing strategy for tourism. At the launch of the initiative, Rodica Verbeniuc, Director of the National Agency for Investment, invited investors to #Grow in Moldova and emphasized that consolidating Moldova’s identity as an

USAID Mission Director Karen Hilliard expresses support for Moldova’s Tourism Information Center and the potential of Moldova’s tourism industry to develop further. Credit: MCP

Ambassador of Sweden Anna Lyberg expresses support for Moldova’s Tourism Information Center and the potential of Moldova’s tourism industry to develop further. Credit: MCP

New Invest Moldova national investment brand, expanded from the national tourism brand Tree of Life with the inclusion of motifs representing key Moldovan industries: Light Industry, ICT, Automotive technology and Infrastructure. Credit: invest.gov.ms

Eugen Boico, Director of the creative agency Boico, Rodica Verbeniuc, Director of the National Agency of Investment and Chiril Gaburici, Minister of Economy and Infrastructure at the launch of the InvestMoldova national brand Credit: invest.gov.md

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attractive investment destination will allow local companies to transition towards generating greater value-added, and provide opportunities to integrate into global value chains. MCP partners with the National Agency for Investment to promote industries such as tourism, wine and light industry.

Moldova features in Romanian National Geographic as a result of MCP support Romania is Moldova’s key target market for inbound tourists, and USAID and Sweden invest in strategic promotional activities to increase visitors from this market, including travel fairs and funding press trips for travel journalists. A press trip in fall 2018 is still yielding results, with a new photo feature in National Geographic Romania published in December, profiling the undiscovered delights of Moldova to Romanian tourists and focusing on the country’s wine, hospitality and value for money. Tourism has the potential to act as a driver of economic growth in rural areas, and approximately one in four foreign tourists in 2018 came from Romania, demonstrating the importance of the market to the industry’s success. MCP supports 20 travel journalists from target tourism markets to discover National Wine Day 2018. The Moldova Competitiveness Project continued its promotion of Moldova’s tourism offering by supporting a press trip of 20 journalists from Poland, Italy, the US and Sweden to visit the country and discover its wine tourism destinations during the National Wine Day season. The trip was led by the tourism association (Asociaţia Națională pentru Turism Receptor din Moldova) ANTRIM and resulted in over 10 articles being published in the online and print travel publications in target markets like Poland and Italy. Furthermore, as a result of the October press trip at the beginning of 2019 four additional articles are expected to be published in the international travel media, namely in National Geographic, Lonely Planet and Food and Wine Magazine. #BeOurGuest tourism campaign awarded second prize in “Destination Promotion Campaign” at ETRAVEL conference in Bucharest, Romania. On October 24, 2018, BeOurGuest was awarded at the ETRAVEL conference in Bucharest, Romania, coming second in the “Destination Promotion Campaign” category. The jury, made up of experts from the Romanian tourism and digital marketing industries, selected the BeOurGuest campaign from a pool of 13 nominations covering countries from Austria to Japan. BeOurGuest is part of a complex marketing program funded by MCP to promote small-scale rural tourism in Moldova. Based on a viral video, the campaign was launched in November 2017 and has achieved over 4,000,000 social media views in addition to being profiled in more than 100 publications, television shows and national and international radio programs. The recognition of the campaign at the ETRAVEL conference reflects the success of Moldova on the Romanian tourism market. In 2017, 20,000 tourists visited Moldova from Romania, 20% more than in 2016.

Ambassador of Moldova in Bucharest Mihai Gribincea, executive director of ANTRIM Natalia Turcanu and travel blogger Svetlana Matvievici receiving #Beourguest award in Bucharest, Romania Credit: ANTRIM

New photojournalism article profiling Moldova in National Geographic Romania, resulting from a press trip organized by USAID and Sweden

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MCP-supported Tourism Association helps Chisinau hotels become fully booked during National Wine Day. ANTRIM, the Moldovan inbound Tourism Association, reports that Chisinau Hotels were fully booked during the National Wine Day period for the second year running. The MCP-supported association was instrumental in ensuring that visitors to the festival had a great experience by negotiating with local authorities to delay roadworks close to major hotels, which were scheduled to clash with National Wine Day. This success demonstrates the maturity of the Tourism Association, proactively working with institutions for the benefit of both tourists and the country’s national image during the most important festival of the year. Activity 2. Foster business linkages and expand target markets

Moldova’s tourism opportunities promoted at international expo TTG Rimini in Italy, with MCP support. The project supported eight tour operators and two wineries to take part in Italy’s leading outbound travel fair, TTG Rimini, on October 10-12, 2018. Italy is a target market for the Moldovan tourism industry, and the delegates shared a country booth under the national tourism brand “Moldova: Discover the Routes of Life”. At the start of October, national tourism organization ANTRIM organized a webinar with support from MCP, targeting Italian travel agents to boost interest in the stand. This was followed by two dedicated presentations during the expo, promoting Moldovan travel opportunities to Italian tour operators and travel media. After only one year of continuous marketing activities targeting the Italian market, Moldova has begun to be perceived as a tourism destination with potential, included in tour operator packages, and Moldovan tour operators have established over 80 new business contacts on the Italian market as a result of participation at key international trade fairs like TTG Rimini.

Tour operators and wine companies man the Moldova country stand at leading tourism expo TTG Rimini in Italy, October 2018, Credit: Natalia Turcanu, Facebook.com

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40 Italian tour operators learn Moldova’s tourism offer via a webinar. On November 15, 2018, Moldova’s first inbound tourism webinar was attended by 40 Italian tour operators interested in Moldova as a new upcoming travel destination. The one-hour online event was delivered in partnership between MCP and tourism industry association ANTRIM and consisted of a presentation on Moldova’s touristic opportunities followed by a short Q&A session with three Moldovan tour-operators. Italy is a key target market for Moldova’s tourism industry, and the webinar built on the success of the Moldova country stand at Italy’s leading travel show, TTG Rimini, in October 2018. The webinar has further boosted new business contacts between Moldovan and Italian operators and has also increased the probability of Moldova featuring in more tour packages offered by Italian tour operators in the 2019 season.

Moldovan soft adventure hiking trails win award for best active tourism product at Poland’s leading travel fair, TT Warsaw. Inbound tourism association ANTRIM won best foreign entry in the Active Tourism competition at Poland’s leading travel fair, TT Warsaw, with the newly launched soft adventure hiking trails at Orheiul Vechi. This prize further increases Moldova’s visibility in Poland, a target tourism market, and provides external validation for the quality of Moldova’s soft adventure offering, developed with support from MCP. Moldova’s Ambassador to Poland, Iurie Bodrug also visited the Moldova country stand at TT Warsaw, demonstrating the Government of Moldova’s support for this growing industry. Soft adventure tourism is one of the largest growing segments of the international tourism industry, and MCP invests in the development of this sector to attract high-spending foreign tourists into rural areas where they can stimulate the local economy.

Moldova’s diploma for best active tourism product at TT Warsaw Credit: Silvia Tanas, facebook

Representatives of Moldovan tour operator, incoming tourism associations and wineries at the common stand branded with #Beourguest and #TreofLife country brand at the TT Warsaw, November 2018 Credit: Silvia Tanas, Facebook.com

Caption: Announcement for the tourism webinar on key Italian tourism industry portal travelidentity.it Credit: travelidentity.id

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Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Program 3: Re-Think Tourism Moldova. Building a sustainable public-private partnership

Activity 1. Re-think tourism industry: reformed policies and regulation to ensure sustainable development

MCP supports the Moldovan Ministry of Economy to develop Tourism Regulatory Impact Assessment. In October, the project supported the Moldovan Ministry of Economy and Infrastructure to develop a Regulatory Impact Assessment (RIA) and other strategic documents to inform draft amendments to tourism legislation, based on a White Paper delivered by the public and private sectors in June. The Ministry of Economy will promote the RIA and other documents to the Moldovan Parliament, to continue on the path towards tourism legislation reform. MCP supports industry-level reforms that can create a pro-entrepreneurship business climate, and enable SMEs to emerge and flourish, acting as an engine of economic growth. MCP supported the development and launch of the June Tourism White Paper as a stepping stone to extensive legislation reform in the sector. Activity 2. Strengthen private sector voice to balance public-private dialogue

MCP drives agenda for Tourism Panel at Moldova Business Week. Moldova Business Week (MBW) is the most important event in the Moldovan Business Calendar, bringing together Moldovan businesses and potential investors, promoting Moldova’s international image, intensifying and improving public-private dialogue, promoting export and attracting foreign investments. Thomas Albeteg, First Secretary of Sweden in Moldova, gave the opening remarks at the MBW Tourism Panel, reinforcing Sweden’s support for the sector as a driver of economic development in rural areas, and a provider of alternatives to migration. 2018 is the first year that Moldova’s Tourism Industry featured on the MBW agenda, in response to the Moldova Competitiveness Project’s support for the sector. The agenda of the Tourism Panel was driven by this support, and included presentations from MCP on how to incentivize the sustainable development of the industry. Diana Lazar, MCP Deputy Director, spoke about Strategic Initiatives to Incentivize the Development of Moldova’s Tourism Industry, Natalia Turcanu, from the MCP-supported industry association ANTRIM talked about Mechanisms to promote Moldova on a Global Scale, and other speakers have presentations on soft adventure tourism and sectoral regulatory reform, key priority areas for the project.

Photo caption: Diana Lazar (Deputy Chief of Party) presenting the strategic initiatives to incentivize a sustainable development of the tourism industry in Moldova Photo credit: Agency of Investment support

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

Launched in late 2015, ZIPhouse was created to address challenges in industry education, promote fashion startups, and encourage academia-industry collaboration. The center launched under USAID’s support (CEED II) and is managed by the Technical University of Moldova with the participation of APIUS, the fashion industry association. MCP continues to support ZIPhouse with a focus on capacity building and content development.

Program 1. Strengthening ZIPhouse as the flagship institution in workforce development and fashion startup acceleration

Activity 1. Enhance ZIPhouse institutional capacity

MCP underlines support for female entrepreneurship at 4th annual “Inspiring Women

in Fashion” event at ZIPhouse. MCP supported the fourth annual “Inspiring Women in Fashion” event at the ZIPhouse center of excellence, in conjunction with Women’s Entrepreneurship Day, to motivate and inspire young talented Moldovan women to create startups and pursue careers in Moldova’s growing fashion sector. Attendees listened to a panel discussion from four Moldovan fashion leaders, including two brands supported by

MCP, and had the opportunity to network with businesswomen and peers. The Moldovan apparel and footwear industry employs over 27,800 people, 90% of whom are women, in key roles from managers and entrepreneurs through to technical designers and seamstresses. Moldova is one of the few countries in the world where over 50% of economic migrants are women, with attendant socioeconomic consequences. MCP therefore works to stimulate women’ access to quality jobs in Moldova’s fashion industry to provide alternatives to migration.

Activity 2. Boost fashion creativity, startups and community building

The Winter edition of Young Designers Popup Shop “DRESS UNIQUE” brings to market 12 emerging designers. Based on the success of the first popup shop organized by ZIPhouse in September, with joint support from British Embassy and MCP, the second edition of a two-day popup shop gave 12 Moldovan young designers the opportunity to showcase the products in public, to test the product with potential customers and to make

Inspiring Women in Fashion” event at ZIPhouse, November 23, 2018 Credit: ZIPhouse

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their first sales. Four designers made their debut appearance at the event, with specially designed collections for the event. The popups unite a pool of aspiring female designers from Chisinau and the regions, hand-picked by the fashion platform ZIPhouse. For most of them, the format of joint popups organized by the fashion platform ZIPhouse is a unique opportunity to enter the market. Meanwhile, customers have the chance to connect with emerging and undiscovered local fashion talent. Strategically hosted by BERDs hotel, the fashion popup shop is also a shopping attraction for tourists, and the popup will be repeated on a regular basis.

ZIPhouse winter merchandising competition “ART OF DISPLAY: Christmas Edition” links creative and fashion sectors to spur sales. To stimulate Moldova’s nascent fashion merchandising and window display sector and spur fashion industry sales, MCP partnered with the UK Government and industry Center of Excellence ZIPhouse to organize a Fashion Window Competition, aimed at merchandising specialists, interior designers, and other interested parties. Six teams entered the 2018 “ART OF DISPLAY: Christmas Edition” contest, decorating the windows of six local fashion brands in just two weeks. The winning team of four stylists and designers was selected following a public vote and input from a professional jury and will receive an intensive training course in Window Display and Visual Merchandising in the UK. MCP invests in fashion-sector stimulating industries like merchandising and window dressing to increase the competitiveness of local brands on the

Caption: Young Designers exhibit their unique products at the Winter Edition of the Popup Shop “Dress Unique”. Organized by ZIPhouse with MCP and UKaid support

Caption: Winners of the “ART OF DISPLAY: Christmas Edition” fashion window competition 2018 Credit: Designcafeclub.md

Caption: Winning display of the “ART OF DISPLAY: Christmas Edition” fashion window competition 2018 Credit: Designcafeclub.md

“I am very grateful for the opportunity to participate in a popup shop for the first time, and to join the best emerging local designers. It allowed me to test my product on real clients and to get orders for personalized products. I also appreciate the advice received from ZIPhouse team on how to improve my products for the next popup shops for greater sales.”

Nicoleta Munteanu, Designer and founder at Love&Passion

Lingerie startup

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domestic market. In 2018, domestic sales of Moldovan own brand companies assisted and monitored by MCP reached $27.2 million, an increase of $6.3 million or 30.6% since 2017.

Activity 3. Develop industry skills through quality advanced technical education and training

The third Annual “Moldova in Fashion” conference increased the knowledge of over 130 participants on global trends and innovative technologies, fashion marketing and branding. On October 20, 2018, MCP supported ZIPhouse and the industry association APIUS to organize the third annual “Moldova in Fashion” conference. The event was open to all Moldovans interested in the growing Fashion industry, from Entrepreneurs and Young Designers to Fashion Bloggers, Teachers, Students, and emerging Fashionistas. The 150 conference attendees heard from Moldovan experts and also speakers from Dubai, Italy, Ukraine and Romania, who shared their experience of global trends and innovative technologies, fashion marketing and branding, and how to stimulate domestic and international sales. This edition of the conference focused on current hot topics including sustainable fashion, smart textiles and product customization, to increase the competitiveness of domestic brands abroad. MCP supports events like the Moldova in Fashion conference to develop a thriving fashion community and enhance the competitiveness of the Moldovan Fashion industry, which employs 27,800 people, 90% of whom are women. Technical University of Moldova instructors attend short courses at IED Instituto Europeo di Design in Italy. MCP supports the ZIPhouse Fashion Leadership Program, a quick-win remedy to bridge the current skills gap, improve innovative thinking and add value to the whole industry. With MCP support, ZIPhouse negotiated an opportunity for 30 key leaders from Moldova’s fashion industry to attend short courses at the Accademia di Belle Arti "Aldo Galli", part of IED Instituto Europeo di Design in Como, Italy in October 2018. The students attended two parallel courses in Fashion Design and Fashion Marketing. The group included 13 teachers from the Technical University of Moldova (TUM), Faculty of Textiles, Design and Printing, representing 65% of the TUM teaching staff on fashion related disciplines. Following the course, MCP will continue to work closely with TUM staff to ensure that the new knowledge and skills are applied to improve teaching curricula, ensure the applicability of knowledge, and ensure knowledge transfer to both students and the private sector. Forty fashion industry professionals attend trainings with international ‘trendsetting’ experts. The two-day intensive course on November 10-11, 2018 took place as part of the

Carolina Timco, ZIPhouse executive director at the opening of Moldova in Fashion conference. Credit: ZIPhouse

Participants in the ZIPhouse Fashion Leadership Program and 13 TUM instructors, at IED Instituto Europeo di Design in Como, Italy Credit: Carolina Timco, Facebook.com

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MCP-supported ZIPhouse Fashion Academy, and was led by Polina Stoianova, a trainer from leading fashion university Polimoda, Italy. Participants learned about the full cycle of trend analysis and its influence on all aspects of a fashion business including research and inspiration, collection development, color palettes and how to select raw materials in line with both current trends and brand identity. MCP invests in the ZIPhouse Fashion Academy to provide knowledge and skills upgrades for Moldova’s fashion industry, and this training fills a vital gap, as at present, there are no trendsetting experts within the Republic of Moldova. The industry need for this type of training was demonstrated by the event’s popularity: 70 members of Moldova’s fashion sector registered to attend, however only 40 were able to fit in the training space. MCP has previously sent fashion professionals to Polimoda to attend specialized short courses, but this workshop is the first Polimoda-affiliated event organized in Moldova. ZIPhouse followed this success with a three-day Fashion Design training with Polimoda expert Filipo Fanini. ZIPhouse Fashion Academy brings advanced knowledge on fashion sales techniques to Moldova, as a result of collaboration with the Eastern Partnership “Ready to Trade” Project. The Eastern Partnership “Ready to Trade” Project, under the initiative “EU for Business”, aims to provide support for Moldovan Light Industry in the next two years. The project has chosen ZIPhouse to deliver its educational component, based on its stellar track record in training and workforce development. During the quarter, three courses were organized at ZIPhouse, focusing on critical industry topics related to sales. The three two-day courses were led by international experts from top Russian fashion schools, on “Collection development and product range mix”, “Wholesale techniques” and “Retail and merchandising”. In total 120+ participants representing 20+ local companies, young designers and teaching staff from TUM and other educational institutions benefited from advanced seminars and workshops led by international trainers, with 80+ hours of training in total. Since its launch, ZIPhouse has trained 120+ unique private companies, about 27% of industry’s SMEs.

Program 2. SMART (Streamline Manufacturing, Accountability, Resource efficiency, and Transparency) Factory program

Activity 1. Implement complex innovative methods to streamline manufacturing and productivity growth

Maicom apparel factory, increases productivity and sees wages jump to $380/month due to implementation of a new incentive system, safeguarding the jobs of more than 160 women. With support from the Moldova Competitiveness Project’s SMART program (Streamline Manufacturing, Accountability, Resource Efficiency, and Transparency), Maicom apparel factory implemented the recommendations of international consultant Martin Buecher to increase productivity and changed their incentive system. During Q1Y4, the company continued to implement the recommendations provided by international consultant to optimize the work phase and continue to improve and optimize the incentive system. As a result, the company productivity has raised to 95% compared to 70% before implementing the recommendations provided by international consultant. This in turn ceased fluctuations in personnel, and increased wages up to an average of USD $380/month across the company, 1.2 times more than average salary in the Visit of Margot Ellis, USAID Assistant Administrator to MAICOM apparel factory

Credit: Maria Gheorghita, Light Industry Team Leader

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industry. Maicom provides jobs for more than 160 women with good working conditions and living wages, which contributes to a reduction in poverty and the drivers of migration. The continued nature of these results demonstrates the durability and sustainability of MCP assistance. Four new companies were selected for future assistance. During the quarter, MCP has selected new four light industry companies for assistance: Fabrica de confectii din Ribnita, Tellus, Loztextil and Bit Program. The companies were selected based on their commitment to improving factory efficiency and product quality. MCP will continue to deepen assistance by engaging productivity and efficiency local expert Demian Usanli. For that reason, a SOW was developed where the assistance will be provided to implement Lean Management tools, and MODAPTS (Modular Arrangement of Predetermined Time Standard). The assistance will start in Q2, Y4. Moldovan clothing manufacturer attracts major EU client as a direct result of MCP support for social audit. Working conditions and value chain transparency have become a hot topic for international clothing brands following pressure from consumers. To simultaneously improve local working conditions and enhance competitiveness when bidding for international manufacturing contracts, MCP supports Moldovan Light Industry companies to attain social compliance certification, a key way to demonstrate high standards to international clients. In Q1Y4, the Project supported Portavita, one of Moldova’s biggest manufacturers of womenswear, to acquire the SMETA (Sedex Members Ethical Trade Audit) recognition, which is one of the most widely used ethical audit formats in the world. The SMETA recognition means that the company promotes Labor Standards, Health&Safety, Environment and Business Ethics according to the international and local requirements. As a result, Portavita attracted a manufacturer from the UK as a new client and signed a contract worth USD $1.7 million. This contract is equal to more than 50% of Portavita’s annual total sales and has safeguarded around 350 jobs at the company. MCP-assists three apparel companies to implement an Integrated Quality Management System to increase their reputation as a reliable manufacturing partner. In the apparel industry, conforming to recognized standards of production is one of the most important steps to produce high-quality products while achieving production goals and maximizing profits. In Q1Y4, MCP started to assist three more apparel companies (Mobile, Bevera Nord and Style by Militta) to implement international social compliance and production standards, ensuring improved safety, working conditions, and efficiency. With the support of local consultant Ala Oberst, the companies began to implement Integrated Quality Management Systems according to the requirements of international standards ISO 9001: 2015 (quality management) and ISO 45001: 2018 (Occupational health and safety management systems), which will help them to provide a safe and healthy work environment for employees and ensure workplace conditions in accordance with human rights, ILO conventions and national labor law. The program started by defining the organizational structure, the new quality policy and quality objectives for each company. These changes will be translated into more secured orders from their foreign clients who require high social compliance standards. MCP consultancy strengthens Moldovan footwear and accessories brands. In Q1, Y4 MCP continued the “Flying Designers” program with a pool of seven firms (both ongoing and new candidates), focusing on three handbag producers and four footwear manufacturers. This complemented the focus on light industry earlier years, ensuring the quality production of a full range of fashion products. MCP invests in

“Upon reviewing the seven designs you passed, I understood the logic and approach of the work and how each concept can be further developed into future collections”.

Olga Potehin, designer of Potehin Company

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design support programs like Flying Designers due to their critical role in shifting Moldova’s fashion industry to value-added production schemes and own-label manufacturing. MCP’s ‘Flying Designer Luisa Fasio, an Italian leather accessories designer with over 15 years of experience provided design assistance to Moldovan manufacturers by strengthening design skills, advice on creating coherent seasonal collections, and project management of the design cycle.

Flying Designers” program targeted examples Potehin shoe brand: the consultant provided feedback on the brand’s current collections, and supported the development of a new line of luxury sports footwear, “POTEHIN SPORT” to win a new customer base The consultant recommended that Potehin begin structuring their collection into “stories” where they can use one element and diversify into different end uses. Maalex bag company: The international consultant supported this new beneficiary company to build on their area of expertise and create signature products that will not compete with one another in the local market. Key recommendations included the use of the broad resources at ZIPhouse to research international trends and color pallets, and a new line of products with a stitching and patchwork theme, capitalizing on the high quality of workmanship and stitching across all Maalex products.

Arulu bag company: The international consultant worked closely with the Arulu designer on a special project for using fish skin. The resulting innovative products already exist in prototype.

Figure: The international consultant Luisa Fazio worked very closely with Arulu designer on a special project for using fish skin for bags.

Figure: Women’s shoes recommended by international consultant Luisa Fazio for Potehin brand, which should bridge between the classic men’s styling but with a more modern and feminine edge.

Figure: The international Luisa Fazio proposed to Maalex bag producer a series of styles and details with a focus on stitching and quilt details talking into consideration that the stitching quality across all products is at a very good level.

Figure: The international Luisa Fazio suggested to Potehin shoes company to brand their sport shoes separately from the rest of the collection, as “POTEHIN SPORT”.

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Objective 2: Expanded Market Linkages

Program 3. Expanding Market Opportunities

Activity 1. Reposition Moldova as a full-product manufacturing partner and support internationalization of Moldovan fashion brands on regional markets

MCP-supported light industry companies to enter Romanian market with own brands which ensure the highest value added and signed contracts worth USD $85,500. Taking cultural affinities, customer preferences, and developed economic and political relationships into account, Romania is presents great potential for market expansion. One of MCP’s main objectives for Y4 is to facilitate increased penetration of regional markets (Romania) by Moldovan light industry companies. As a result, in Q1, MCP assisted three Moldovan bridalwear and eveningwear brands to attend the 11th edition of Romania’s leading wedding fair, Ghid Mariaj, organized on October 26-28, 2018 in Iasi and Mariaj Fest in Bucharest on November 10-12, 2018. The three participating brands signed orders worth over $31,000 USD demonstrating the popularity of Moldovan designs on the Romanian export market. MCP also supported 14 companies to participate at the B2C ‘Moldova Presents’ event in Iasi, organized by the Moldovan Chamber of Commerce. Moldovan companies registered a sales worth USD $28,500. MCP also supported three apparel companies to be present at the B2C event which take place in Palas Mall Iasi during December 5, 2018 -January 7, 2019. Those three companies registered $26,000 of sales. EHO brand presents bridal and evening-wear collection in Spain. EHO is a graduate of the MCP-supported ZIPhouse Fashion Acceleration Program and beneficiary of continuing professional development opportunities including short courses provided by ZIPhouse. The brand is now showing its maturity by branching out on its own and presented its bridal- and evening-wear collection for 2019 at Marbella Fashion Week in Spain, demonstrating its international recognition and continued orientation towards high-value export markets.

Activity 2. Consolidate the Din INIMA Umbrella Brand and Expand Domestic Market

DININIMA brands showcase at the largest fashion expo in Moldova that attracted 36 international buyers. MCP works to simultaneously develop domestic and export markets for Moldovan Fashion products. Moldova Fashion Expo is Moldova’s largest fashion exhibition. Previous events have attracted over 9,000 visitors, and more than 100 exhibitors from six countries. This year, with MCP support, the expo was powered by prestigious Moldovan designer Julia Allert, and featured over 40 trademarks and 30 fashion designers with standalone booths selling directly to customers. The expo also included a fashion catwalk for the first time, showcasing 12 Moldovan brands with support from Moldova Fashion Days. The event showcased Moldova’s design skills and the quality of local manufacturing to the domestic fashion market, but also developed in premier the B2B sales, attracting 36 international fashion buyers from region Ukraine, Romania, Kazakhstan, Russia, Azerbaijan, Lebanon, Italy and other countries resulting in valuable collaborations. A Young Designers zone was organized under ZIPhouse initiative, in support of its residents, allowing emerging designers to test the market and meet face-to-face with customers and buyers for retail stores. Sales on the spot registered at ZIPhouse Young

Evghenii Hudorojcov, designer and founder of EHO brand, presents his Metamorphose Couture SS 19' collection at Marbella Fashion Week 2018. Credit: Marbella Fashion Week, Facebook.com

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Designers zone valued $8,350US. Many of those 11 startups populating the Young Designers zone are also graduates of the ZIPhouse Fashion Acceleration Program, which MCP supports to ensure the sustainable growth of Moldova’s fashion industry.

MCP-supported fashion brands launch first DININIMA e-commerce platform. 15 apparel brands from the MCP-supported DININIMA umbrella brand have come together to launch the first multi-brand DININIMA e-commerce site, fromtheheart.shop. Moldova has a successful ICT industry and some of the world’s fastest internet, yet e-commerce legislation is weak, stifling the growth of online sales and negatively impacting the domestic market. This private initiative, which capitalizes on the strength of the DININIMA platform, has been developed despite this regulatory challenge, and represents a big step forward for the sector. The website invites customers to “Discover local fashion makers. They create here, at home, quality articles that are in line with international trends”, further stimulating the domestic market for Moldovan fashion brands. Ecaterina Pascenco, owner of Olsa Shoes, says that the platform has already spurred domestic sales, with new orders received from the site daily in its first week of operation. MCP assists Industry Association APIUS and umbrella brand DININIMA organize virtual fashion show to spur Seasonal sales on domestic market. The online event, known as ‘Sparkling Christmas Party’, features prominent Moldovan businesswomen, journalists and influencers wearing Christmas outfits from DININIMA womenswear and kids wear brands. The joint campaign will launch on social media during the Christmas shopping period. The

ZIPhouse young designers’ corner at MCP-supported Moldova Fashion Expo, October 4-7, 2018. Credit: International Fashion Expo, Facebook.com

Fashion lovers and international buyers check out Moldovan trademarks and fashion designers at MCP-supported Moldova Fashion Expo, 04-07 October 2018. Credit: International Fashion Expo, Facebook.com

Caption: Communications collateral for the DININIMA Sparkling Christmas Party seasonal promotion campaign. Credit: Castel Mimi Facebook

Screenshot from Moldova’s first e-commerce platform for USAID and Sweden-supported DININIMA brands. The banner informs visitors that this is the ‘First online shop for Moldovan producers’, delivered ‘with love, from home, from Moldova’.

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featured models will be tagged in the social media posts to show their support for local brands, leverage visibility and spur domestic sales. The launch of this seasonal campaign demonstrates the maturity of industry association APIUS and umbrella brand DININIMA in organizing sophisticated marketing activities, harnessing the power of local influencers and targeting key periods in the Moldovan retail calendar. Sales-driven promotion spurs domestic sales of DININIMA brands. MCP encourages local producers to shift from general market awareness to sales-driven promotion, placing higher emphasis on sales events. During the reporting quarter MCP supported the implementation of a strong PR, communications and advertising “Black Friday” campaign to communicate Black Friday sales at brand showrooms and in three Din Inima stores: at UNIC and ZORILE commercial centers, and the MODA Din Inima fashion boutique. APIUS successfully initiated dialogue with the commercial centers and negotiated promo budgets for Din Inima branded activities. This is a good step towards sustainability for future collaborative promo actions. Due to this initiative, the customer stream increased by 25-30% during the Black Friday period.

Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1. Assist APIUS to Become a Strong Professional and Industry Association

MCP supports inspirational study trip to Portugal for APIUS Industry Association board members and leading apparel manufacturers. Portugal has a $7 billion textile industry which has successfully recovered from the economic crisis, tripling its exports and becoming one of the leading textiles industries in the world. Moldova’s apparel industry mirrors Portugal's trajectory of moving away from cut and make towards higher value-added services like own brand manufacturing. To inspire and build the capacity of the Moldovan apparel industry, MCP organized a study visit to Portugal on December 3-9, 2018 for key stakeholders from the Moldovan apparel and shoes manufacturing sector, board members from the APIUS industry association, and representatives from the ZIPhouse center of excellence. The delegation visited Portuguese factories to discover manufacturing efficiency best practices and technologies, and the Professional Training Centre for the Textile, Clothing, Apparel and Wool Industry, MODATEX, a mirror of ZIPhouse, to learn about trends in industry training. A collaborative relationship was formed with the key associations of the fashion industry, the National Association of Footwear and Components Manufacturers APICAPS and the National Association of Clothing Manufacturers ANIVEC. Based on the similarities between the Portuguese and Moldovan apparel manufacturing sectors, the study group will apply the lessons learned from these institutions to strengthen the advocacy and training activities of APIUS and ZIPhouse in Moldova and develop relationships for future collaboration.

Photo Credit: Carolina Tulgara sau ZIPhouse Photo Caption: Moldovan delegation visiting an apparel factory during the study trip to Portugal in December 2018

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INFORMATION TECHNOLOGY, ENGINEERING AND CREATIVE SERVICES Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Program 1: Promoting STEAM Education and STEAM fields Careers

Activity 1. Pilot the Future Classroom (FCL) Concept in Moldovan schools

National Center for Digital Innovation in Education renovated with public funds within USAID and Sweden-supported Future Classroom Lab pilot project. Moldovan Ministry of Education, Culture and Research (MECR) is committed to modernizing the education system and considers teachers’ professional development an essential success factor in this process. Within the framework of the MCP FCL pilot project, and in partnership with Moldova’s largest telecoms company Orange Moldova, MECR allocated 3.2 million lei (US $185,000) to create a National Center for Digital Innovation in Education at the State Pedagogical University Ion Creanga. The University allocated its largest events hall for this purpose, which will be equipped by MCP and Orange Moldova. The Center will operate as a partnership between the Pedagogical University and Tiraspol State University, and will lead research, development and teacher training to strengthen the inclusion of digital innovation in Moldova’s education system, equipping youth with the digital skills they need to access 21st century jobs. The works started at the beginning of November and were practically finalized in December. Within FCL pilot, 11 participating schools across Moldova also finalized renovating their Future Classroom Labs, according to the design concepts provided by the project partners and are expecting the delivery of furniture and equipment to start using the new, open hi-tech learning spaces, where teachers and pupils experiment with innovative learning scenarios using transformative digital technologies. All the spaces will begin to host educational activities in the early 2019.

3D of the Future Classroom Lab training center for teachers. Credit: Dumitru Carbuni

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Activity 2. Expand Educational Robotics Program

The second First Lego League Junior competition to promote youth STEAM education gathered over 70 youth. On October 29, 2018 over 70 Moldova youth came together to compete in the second Moldovan First Lego League Junior competition. 13 Teams of seven to ten year old brought their technical and robotics skills together to solve real-life problems in Water Dynamics. First Lego League competitions are organized as part of the MCP Educational Robotics Program, built on ten years of evaluation data from the U.S. FIRST Foundation which indicate that children exposed to educational robotics are two times more likely to major in science, engineering or other related fields, empowering them to benefit from high quality jobs in Moldova’s ICT industry. Robotics competitions are key element of the program, providing competition-based learning and the opportunity for youth to apply their skills to real-world problems. MCP-supported youth robotics competition Sumobot Challenge attracts 160 young aspiring engineers. The second annual SumoBot Challenge Moldova took place on November 25, at ICT Center of Excellence Tekwill. The challenge attracted 80 teams of young programmers, consisting of two team members and one adult coach. The MCP incorporates the SumoBot Challenge into its wide-reaching STEM education program, designed to support the development of Moldova’s ICT workforce pipeline and ensure than Moldovan youth have the skills they need to access quality jobs in Moldova’s growing ICT industry. Sumobot Challenge is one of the world’s best competitive based learning models, motivating, encouraging and supporting robotics enthusiasts to further develop their engineering skills. Over 11,500 Moldovan youth have benefitted from Moldova Competitiveness Project STEM education programs since 2014.

Mircea Eliade High Scool team at FLL Junior. Credit: Marcela Papuc

Winners of the SumoBot Challenge 2018 Credit: Veronica Esanu, MCP

One of the matches played during SumoBot Challenge Credit: V.Esanu

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MCP triggers schools to invest own funds to buy robotics sets. To incentivize the organic growth of the schools’ network implementing educational robotics program, in the summer of 2018, Moldova Competitiveness Project and the Ministry of Education, Culture and Research launched a special promotion campaign: “buy THREE get ONE free”, to encourage elementary school principals to purchase robotics sets with public funds. USAID and Sweden provided robotics training for interested teachers and offered one additional free robotics set for every three bought by participating schools. During October-December 2018, 89 elementary school teachers, many of them from schools that were still hesitant to implement robotics classes, attended an introductory course by a LEGO Education Academy trainer. The training had a transformational effect on participating teachers, inspired them, increased their self-confidence and belief in the importance of robotics education. As an overall result of the incentive program and training, over 40 schools have invested their own resources in procurement of robotics sets, matched in kind by USAID and Sweden. In the 2018-2019 academic year, the MCP Educational Robotics program is expected to have helped over 15,000 youth, or five per cent of Moldovan general education students gain technical and soft skills needed to access 21st century jobs. The success of this training and incentive program demonstrates the sustainability and the scalability of the scheme.

Activity 3: Support private initiatives for improving STEAM education and promoting STEAM careers

120 Moldovan youth joined the global movement Hour of Code. On December 8, MCP supported over 120 children and teenagers to attend Moldova’s largest Hour of Code event, facilitated by 30 volunteer mentors, most of them being from the MCP-supported CoderDojo program. This is an annual, international one-hour event introducing youth to the joy of coding and the opportunities it can bring. Participants took part in various coding workshops, tested drones, and discovered robotics with LEGO WeDo, Ozobot and Arduino kits, web and game design, and science experiments with Makey Makey invention kits. Attendees also had the opportunity to hear from a reputed IT entrepreneur and CoderDojo mentor - Vitalie Esanu, who inspired them to be inquisitive about technologies and continue to learn IT for a successful future career. Vitalie spoke about how he began programming at the age of 12

Primary grade teacher building their first WeDo robot. Credit: Ionela Titirez, MCP

Moldovan primary grades teachers excited to start competing their first built and programmed robots Credit: Ionela Titirez, MCP

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and started earning income from coding by age 16, and how one of his iPhone apps, Camera Genius, became no.1 in App Store worldwide. The event was organized by the Moldova Competitiveness Project and Tekwill Academy Kids, as part of the STEM education and ICT workforce pipeline initiatives, which have benefitted 11,500 youth to date. According to an impact survey conducted by MCP in the 2017/2018 academic year, 73% of youth enrolled in STEM activities report increased interest in technology, STEM subjects and ICT-related careers. MCP supports Moldova’s largest youth programming event, MegaDojo Chisinau 2018. On October 7, 2018 over 170 youth, parents, teachers and mentors gathered at MegaDojo Chişinău 2018, to take part in Moldova’s largest informal IT education event to date. The MegaDojo was organized during European Coding Week, as part of the Chisinau CoderDojo, a free weekend programming school where expert volunteers support children between the ages of 9 and 17 to design simple games, mobile apps and websites using code. MCP invests in informal, extra-curricular STEAM learning activities like CoderDojo to equip Moldovan youth with the skills needed to enter the 21st century workforce.

Moldovan youth teach EU parliamentarians to code. “Hi, my name is Delia, I am 10 years old and I’ve come from Moldova to teach you how to code”. This was the message heard by European MPs on October 17, 2018 at the sixth annual EUDojo at the European Parliament in Brussels, held during Europe Code Week. MCP supported three Moldovan youths and their CodoDojo mentor to travel to Brussels, joining 38 other young coders from CoderDojos across Europe to teach MEPs to write their first lines of code, and stress the importance of digital education. MCP supports extra-curricular STEM education projects like CoderDojo as part of its complex ICT workforce development strategy. Since MCP began supporting CoderDojo’s free, volunteer-led, community-based programming clubs for youth in Chisinau in 2016, the movement expanded to eight locations with 20-25 volunteer mentors facilitating coding classes for up to 400 children.

Web and game design masterclass at Hour of Code 2018 event. Credit: Tekwill Academy Kids

Young STEM students learn coding and celebrate their achievements at MegaDojo Chisinau, October 2018. Credit: MCP

Moldovan youth teach EU parliamentarians to code. Credit: CoderDojo

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Girls across Moldova were oriented towards tech careers at GirlsGoIT Annual Forum. Moldova’s rapidly growing ICT industry pays some of the highest salaries in Moldova ($1,400/month for software developers), providing opportunities for young people to find quality jobs at home in Moldova. However, only 25% of the 20,000 people, employed in the industry are women. To increase young women’s access to these opportunities, USAID and Sweden support the educational initiative GirlsGoIT, which runs free summer camps and regional tech clubs for girls, where they can learn web development, 3D printing, robotics and other job-ready skills. The Moldova Competitiveness Project stressed its support for the GirlsGoIT program at the annual forum on 16 November, where program participants presented their achievements. To date, more than 500 Moldovan girls aged 14-20 have accessed software development, engineering, and electronics education, and more than 50 participants have decided to study STEM subjects at universities or vocational education institutions.

Program 2: Build the Ecosystem for Workforce and Entrepreneurship Development

Activity 1. Develop Regional Innovation Centers (Balti, Regional FabLabs)

US Ambassador visits the future Regional Innovation Center in Balti. On December 11, 2019, the newly appointed US Ambassador Derek J. Hogan, visited the future Balti Innovation Center at the University of Balti and demonstrated the support for the state-of-the-art Public-Private-Partnership dedicated to Science, Technology, Engineering, Arts and Math education located in the north of Moldova. The Ambassador met with representatives of local public authorities, administration of Balti State University and representatives of the local business community. Also, the Ambassador visited the Free Economic Zone from Balti and learned the advantages it offers to potential investors. Ambassador Hogan underlined the USG commitment to the development of Regional Innovation Centers, congratulated the partners of the public-private-partnership for uniting to develop this common goal, stressing the importance of building centers of excellence tailored to the expertise of a specific region. New milestones achieved in the development of the Regional Innovation Center in Balti. The Architectural and Technical Design of the Regional Innovation Center in Balti was developed and submitted for state verification. Based on the Architectural and Technical Design of the Center, in January 2019, the Regional Development Agency “North” will initiate the public procurement process, worth a total of USD 0.65 million (MDL 11 million). MCP also worked to increase the organizational capacity of the Association of Manufacturing Industry Employers (APIP) who will manage the Innovation Center. MCP held bi-weekly meetings with representatives from APIP to work on the Center’s activity plan, communicated with private companies from the Balti Free Economic Zone that will partner with the Center, and planned activities for the students of the Balti State University “Alecu Russo”.

Photo caption: Beneficiaries, partners and participants at the GirlsGoIt 2018 Annual Forum

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Activity 2. Creative Hub – the grand opening

Artcor Creative Hub construction and renovation works at its final stage. During Q1Y4, MCP concentrated on the construction and endowment of the ArtCor Creative Hub under development at the Academy of Music, Theater and Fine Arts. The majority of the construction work was finalized, including water, sewage, heating, internal and external electricity networks, and concrete works. Phase 1 of the project, known as “Left Wing” and located in the old Academy building, is now 95% complete, and expected to be finalized in January 2019. According to the grant agreement between MCP and the Association of Creative Companies (COR), the Association developed two education courses that will take place in the Creative Hub, e.g. Interior Design, Game Design and Story Telling courses. COR also hired a Manager of the Creative Hub, who set to work on developing the Hub’s internal procedures, accounting processes, service offers and their fees and activity plan of the Creative Hub. Once the Hub is launched, all the processes, resources and plans will be available to the creative community, enhancing transparency and contributing to knowledge sharing within the sector. MCP supported the Ministry of Education, Culture and Research in the process of procuring the Hub’s equipment endowment, including graphic design workstations, network equipment, laptops and presentation TVs. The equipment will be delivered in January 2019. The grand opening of the Creative hub will take place in Q2. Activity 3. Fab Lab Chisinau – coaching the ATIC/TUM partnership

Mini-Makers Fair and Robot Factory enhanced participants’ knowledge in 3D printing, Laser Cutting, Electronics, Robotics. On October 13, 2018 over 300 people attended the second edition of the Chisinau Mini-Makers Fair, to take part in free workshops on 3D printing, Laser Cutting, Electronics, Robotics and much more. The event was held at Tekwill and FabLab Chisinau, a maker-space connected with other makers hubs across Europe. Makers travelled from across Moldova and even Ukraine and Romania to discover more about opportunities in engineering, and regional factories from Drochia, Cahul and Ungheni demonstrated links with the private sector. MCP invests in Moldova’s emerging creative services and precision engineering industries, as they have some of the highest salaries in the country, providing opportunities for youth to stay and find quality work in Moldova. Activity 4. Support and develop the IT and engineering laboratory cluster within the TUM

MCP support Christmas Hackathon for 40 students at CIRCLE Laboratories. On December 18, CIRCLE Laboratories at the Technical University of Moldova (TUM) hosted a 24-hour Christmas Hackathon: Internet of Things Edition, in collaboration with BEST Chisinau, a student organization dedicated to pro-European student development. Teams of young programmers and engineers conceptualized, designed and built intelligent, Christmas-themed internet-connected devices guided by a team of mentors, and using CIRCLE Labs technology including Arduino Mega 2560, Raspberry Pi 3 B model, Rephone

Young people find out more about engineering and electronics at the Chisinau Mini-Makers fair

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kit, LED, Grove Speech Recognizer kit, wiring and other components. This equipment was initially provided by MCP in Y3 within the grant agreement for the development of the CIRCLE laboratory cluster, as well as additional equipment provided by MCP specifically for the Christmas Hackathon. More than 40 students applied their skills at the event, which was supported by MCP in cooperation with the private companies including Best4u, Development aid, Inther Software Development, AGEPI, Micro Lab, Orhei Vit and Next Level. Activity 5. Improve the entrepreneurial ecosystem for innovation and creative services

MCP supports eight startups to emerge from the YEP! Moldova completes a ‘Startup Semester’ During the reporting period, MCP supported the international Yep! Moldova platform to organize and deliver a ‘Startup Semester’ in four universities across Moldova: Balti University “Alecu Russo”, Academy of Arts, State University and Pedagogical University “Ion Creanga”. Yep! is a regional network of academic business incubators originating in Ukraine, providing business-related education for youth. MCP supports Yep!Moldova to further stimulate the Moldovan entrepreneurial ecosystem and provide opportunities for skilled youth. The Startup Semester began in September 2018 and ended with a DemoDay on December 6, 2018. Eight teams of entrepreneurs from Moldovan universities in Chisinau and Balti pitched their startup concepts at the Demo Day at Tekwill Excellence Center. The pitching event marked the climax of a 2.5-month incubation program where participants learned how to draw up a business plan, develop strategies, optimize time management and other key entrepreneurship skills. The two winning teams won a financial award to attend a Yep!Startup regional pitching event in neighboring Kyiv, Ukraine. Founder Institute (FI) pre-acceleration program was successfully launched by Dreamups with MCP support. After a series of seven events organized for the startup community to promote entrepreneurial education, Dreamups, the local partner of the US-head-quartered international pre-acceleration program Founder Institute, recruited 20 aspiring young start uppers (from 70 applicants) to go through the third edition of FI Chisinau. Within this program, participants are trained and mentored in how to properly tackle business challenges and take their business ideas to the next level. FI Chisinau is implemented with MCP support, under the grant agreement with Dreamups Innovation Campus and will last three months.

Caption: Young participants take part in the MCP-supported Christmas Hackathon at CIRCLE Labs. Credit: BEST Chisinau

Startup Semester participants and winners demonstrating their achievements during the Demo Day at Tekwill. Credit: YEP!Moldova

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MCP supports Moldova’s first B2B conference on visual effects and post-production for audio and film. On December 16, 150 audio and film specialists attended Moldova’s first conference on post-production techniques for audio and film, held at Tekwill Center of Excellence. Speakers travelled from as far afield as the UK, and presented on subjects including digital animation, broadcast design, commercials, sound design and social media. Organized by members of the Creative Industries Association with MCP support, the conference was long awaited and appreciated by the participants as the first event in Moldova bringing together specialists within the post-production niche. Conference participant Anna Rojelovscaia from Pixtoonstudio said "The conference was very expected by the community. It was a great opportunity to exchange with the pears and to see the great potential this sector has in Moldova. We discovered services of great quality that can be subcontracted locally". Advertising, TV, Film and other industries requiring skills in post-production are key members of Moldova’s Creative Services sector, which is growing at a rate of 11% a year. MCP supports the development of Moldova’s Creative Services industries as they offer quality opportunities for young people paying salaries 50% higher than average, mitigating against the drivers of migration.

Objective 2: Expanded Market Linkages

Activity 1. Assist foreign market entry for domestic tech & creative firms and attract tech-based investors to Moldova

MCP supports the promotion of Moldova as an IT destination on the regional market. On December 10 -11, MCP supported a delegation including Minister of Economy and Infrastructure, Chiril Gaburici, General Director of the Investment Agency, Rodica Verbeniuc and State Secretary of ICT, Vitalie Tarlev, to travel to neighboring Bucharest, Romania to promote incentives for IT investment in Moldova. The delegates met with Romanian ICT and Creative companies to identify new strategic opportunities for investment in Moldova and highlight the strategic benefits of the business enabling conditions in Moldova’s first virtual IT park. These incentives include a flat 7% tax on sales revenue, a reduced bureaucratic burden, and a dedicated IT Visa program for IT professionals. The virtual park, known as ‘Moldova IT Park’ is an initiative of the Moldovan Government, and has gained over 300 members since it opened in early 2018. The park is the result of extensive advocacy from USAID and Sweden to develop Moldova’s business enabling Law on IT in 2017. One third of the companies registered in the park are foreign owned, and 16 of these Romanian, second only to companies from the USA.

Startup Semester participants and winners demonstrating their achievements during the Demo Day at Tekwill. Credit: YEP!Moldova

Caption: A strategic meeting between Romanian ICT and Creative investors and the Moldovan delegation to promote opportunities in Moldova’s Virtual IT Park, supported by USAID and Sweden Credit: MCP

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New IT industry profile was developed by IDC to help Moldova promote its business opportunities. During October – December 2018, MCP worked closely with International Data Corporation (IDC) to develop a new, up to date report on the Moldovan IT Industry. The report will be used for external promotion of the IT industry and includes a qualitative and quantitative analysis of the Moldovan IT market and IT ecosystem alongside legislation, tax incentives, IT education system and workforce. The draft report was presented to Moldova’s main ICT stakeholders at Moldova Business Week event in November, 2018 organized by the new Investment Agency. The draft was then presented to Romania’s largest IT companies on December 10, 2018 during the MCP-organized event "Beyond Limits" Discover Moldova's IT Opportunities". The IDC report will be published in January 2019 and its distribution will be targeted to the largest IT companies from the region as well as global companies as potential investors in Moldovan IT sector. US Ambassador opened ICT panel at Moldova’s most important business event of the year. Moldova Business Week (MBW) is the most important event in the Moldovan Business Calendar, bringing together Moldovan businesses and potential investors, promoting Moldova’s international image, intensifying and improving public-private dialogue, promoting export and attracting foreign investments. US Ambassador Derek J. Hogan, alongside Moldovan Government representatives and the ICT Business Association opened the ICT panel, focusing on USG support for business-stimulating initiatives like Moldova's first virtual and physical IT Parks; workforce pipeline initiatives like Educational Robotics and university-based Innovation Centers; and reforms like visa-free travel for ICT professionals and a streamlined 7% flat rate corporate tax. Following these welcoming remarks, Razvan Sarlu, Senior Consultant at IDC made a presentation on the evolution of Moldova’s ICT sector, based on a study funded by MCP, and other speakers highlighted key MCP priority areas, including modern approaches in IT education (provided by MCP-supported industry association ATIC); IT Parks; and Women in ICT.

Activity 2. Support private-driven initiatives to develop IT Parks

MCP provides technical and strategic support to ensure success of Moldova’s first physical IT Park. In line with the Y4 workplan, MCP is supporting private initiatives for developing physical IT park infrastructure. During the reporting period MCP provided technical and strategic support to Moldovan internet provider Starnet, the developer of Moldova’s first physical IT park. Digital Park. The development of Digital Park requires USD $17 million (EUR 15 million) investment and will be delivered in two phases. First one is planned to be delivered in January-February 2019. During Q4, MCP facilitated and streamlined the signing of the USAID DCA Loan Guarantee Agreement between USAID and local commercial bank Moldova-Agroindbank SA that will provide financing to Starnet to develop the Digital Park. The loan guarantee agreement sets up disbursements of USD $8.9 million with a guarantee of 30% and is intended to strengthen the bank's ability to provide loans to Starnet to develop the Digital City IT Park. Both phase 1 and phase 2 of the IT park will be covered by financing under the guarantee agreement signed in Q1.

US Ambassador Derek J. Hogan opening the ICT panel on Moldova Business Week 2018 Credit: Ludmila Bilevschi, USAID

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Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1. Implementation of the Law on IT Parks

MCP continues to support the sustainable growth of Moldova’s first virtual IT Park in line with the Law on IT Parks. During the reporting period, MCP worked with the Moldova IT Park Administration and Moldova Investment Agency to promote the Law on IT Parks to local and foreign companies. MCP also supported the Administration of IT Park to develop instructions for residents of Moldova IT Park (Moldova’s first virtual IT Park) to complete their mandatory reports to the IT Park Administration. MCP conducted information sessions for the members of the Association of Creative Companies regarding the benefits of joining Moldova IT Park, following amendments to the Law on IT Parks in July 2018 to allow the companies from the creative services industry, e.g. graphic design, animation and visual effects, to benefit from the single 7% tax include in the provisions of the Law on IT Parks. At the end of the reporting period, more than 320 companies are resident of the virtual IT part, out of which more than 87 are from 25 foreign countries. 71 New IT companies were registered in 2018 since the law on IT Parks entered into force. Activity 2. Strengthen and update industry strategies

IT Industry & Digital Innovation Development Strategy 2019-2023 published and launched. The IT Industry & Digital Innovation Development Strategy (2019-2023), also known as IT Industry Competitiveness Strategy V2 was published on November 9, 2018. The strategy was developed with the support of MCP and focuses on four strategic pillars such as: Competitive Human Capital, Competitive IT Business Environment, ICT Based Innovations, IT Investment and Export Support Programs. The strategy was originally developed in 2017, but the government approval process took more time than was initially expected. The government approved the document in September 2018, and it became effective in November 2018 following publication. Activity 3. Capacity Building for for ATIC and COR business associations

MCP invests in capacity building to ensure sustainable success of Association of Creative Companies and the Creative Hub. During October – December 2018, MCP invested significant time and effort into capacity building the new Association of Creative Companies (COR), which has been functioning for less than 12 months. These capacity building activities focused on:

• Improving member services and attracting new members;

• Increasing the organization’s capacity to manage grants;

• Resource planning and developing the management for the Creative Hub ArtCor;

• International cooperation with peer associations and creative hubs.

MCP conducted weekly meetings with the directors of COR and ArtCor to work together on these activities, which are vital to attract new COR members and keep them satisfied, to implement the existing grant between MCP and COR, to apply for new grant programs provided by other donors, and to prepare for the launch and operation of the Creative Hub.

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

1. Annual Report, FY18 2. Monthly Report, October 2018 3. Monthly Report, November 2018

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SECTION II

PROJECT-LEVEL OUTCOMES AND RESULTS Sector Engagement, Enhancement, and Development (SEED) Fund

During Q1Y4, the SEED Fund focused on implementing the $5 million grants program, disbursing a total of $368,707 covering 23 existing grant beneficiaries across all industries. To date the SEED Fund has awarded 105 grants and disbursed a total of $3,477,730 or 70% of the total SEED Fund.

SEED Fund allocated with USAID approval: o Two new grants in the wine and wine tourism sectors for: (a) Vinia Traian - to develop its

wine-tourism component by equipping a wine tasting room within the winery shop. This will allow the Grantee to improve infrastructure for visitors, provide clients the opportunity to enjoy wine tastings directly at the winery shop, and increase the volume of the Grantee’s wine production; (b) Maestru-D.C. LLC to develop a wine tourism component through procuring goods to equip wine tasting rooms within the winery. This will improve infrastructure for visitors, provide clients with the opportunity to enjoy wine tastings directly at the winery, increase the volume of the Grantee’s wine production. The opportunity to visit the winery will greatly increase consumer confidence in the product, which will lead to an increase in the number of loyal consumers and the development of a sustainable business.

o Three funded modifications in the wine sector for: (a) GT Aghenie Tudor to reflect the actual price of the chilling equipment for the wine storage room procured by MCP, which was more expensive than initially budgeted; (b) G.T. TNG – Tronciu to develop a wine tourism component within the winery; and c) SC “Tartcomvin” SRL to allow the Grantee to improve infrastructure for visitors by procuring wine shelves and an air conditioning unit. The opportunity to visit the winery shop will greatly increase consumer confidence in the product, which will lead to an increase in the number of loyal consumers and the development of a sustainable business.

In December 2018, the SEED Fund also launched a new public Request for Applications (RFA) in the rural tourism sector with the goal to “develop rural tourism in winegrowing areas of the Republic of Moldova with diversification of tourism products, improvement of quality of services and facilities in order to position Moldova as an attractive tourist destination based

$3,477,730

$1,160,643

$361,627

SEED Fund Performance through December 2018

TotalDisbursed

Totalawarded,not yetdisbursed*RemainingBudget

*average ER of Project years 1-4 of 1 USD=18.23 MDL

21%

15%

28%

35%

1%

Grant Allocation by Industry through December 2018 (by value)

Wine

Tourism

ICT Cluster

Light Industry

Crosscutting

105 grants have been awarded through Dec. 2018

To date:

• 105 grants awarded

• 94% of total $5 million awarded

• 70% of total $5 million paid

• 74% of awarded grants paid

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on sustainability, authenticity and preservation of traditions”. The application deadline is February 28, 2019. Furthermore, a selection committee was held to review applications under two RFAs in the Wine and Tourism sectors during which a total of 11 applicants were recommended for award and five applicants were put on hold as the committee requested additional information about the sustainability and readiness of the applicants. A new selection committee will be held in Q2 to review these applicants.

Local Capacity Building Program

Industry-centered associations are the dominant focus for MCP and a mechanism for sustainability. To foster local sustainability and capacity, MCP channels the majority of its trade and workforce development assistance through industry associations which enables them to grow their capacity, relevance, and value to their members. Flagship activities include five grants to four business associations and one excellence center— ANTRIM, APIUS, ASW, ATIC, and ZIPhouse—aimed at building the capacity of these institutions to provide quality member services and become advocates for the industries they represent. In Q1 FY19, MCP continued accomplishing this via advocacy, mentorship, communication and governance technical assistance. Additionally, MCP supports business association member participation in various international trade shows, exhibitions, organization of key events, press tours, conferences, competitions, and others. Another capacity building tool implemented by MCP, is the utilization of reimbursement mechanisms via cost sharing. In such instances, the grantees use their financial resources for the implementation of a small portion of their activities and then present reimbursement requests documenting the procurement process. This enables the grantees to develop and follow sound business procedures, become more confident in their abilities to implement activities with limited MCP supervision, and build a stronger finance and administration team. These efforts incentivize the members of the business associations to pay their annual membership fees, gaining much needed support and contributing to the sustainability of the respective associations.

Environmental Protection

During the quarter, MCP worked on developing an Environmental Review Checklist/Environmental Mitigation and Monitoring Plans (EMMP) (ERC/EMMP) for four grant beneficiaries in the light industry – Silvia Bombonici SRL, Vistlinie SRL, ZIPhouse, and APIUS. The document was approved by the Mission Environmental Officer (MEO) and Environmental Bureau Officer (BEO) in December 2018. Also, MCP worked with the MEO on the modifications to the ERC/EMMP of two existing grant beneficiaries – G.T. TNG-Tronciu in the wine tourism and Rumix Stil SRL in the tourism sector. In Q2Y4, MCP anticipates awarding new grants in the tourism and wine tourism sectors and therefore, an increased number of ERC and/or EMMP will be developed. Anti-Corruption

During the quarter, MCP continued to support increased transparency of operations in the selected industries, by advocating for appropriate and transparent policies that reduce government rent seeking. MCP similarly advocated for a level playing field among firms, large and small, to better ensure that firm growth and profits are based on enterprise productivity and innovation, not connections. Furthermore, Chemonics and its employees maintain high standards of ethical conduct in the selection, award, implementation, and oversight of project activities. During the reporting quarter, MCP employees successfully completed the “2018 Code of Business Conduct”, which is an annual mandatory training provided to all employees by Chemonics International Inc.

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

Ongoing support provided to financial institutions with DCA agreements. MCP assists the implementation of the Development Credit Authority (DCA) loan guarantee program, which is a USAID special mechanism to increase access to finance. In Q1Y4, $21,000 USD were placed and disbursed for three new loans within the ongoing DCA for Energy Efficiency with Prime Capital. All three loans were taken for repairing residential buildings with an energy efficiency impact. To date, the financial institution has placed 61 loans under guarantee valued at $751,500, of which $737,366 (98%) have been disbursed. As such, as of December 2018, Prime Capital absorbed 21% of the $3,527,337 DCA pipeline during the 6-year implementation period, with 19 more years to go until 2028. The option of placing only the energy-saving component(s) of a larger loan under DCA was discussed with USAID DCA Washington office, since currently Prime Capital places under guarantee only loans that are taken in totality for energy efficiency goals. MCP facilitated and streamlined the signing of the USAID DCA Loan Guarantee Agreement between USAID and a local bank for financing StarNet to develop the physical IT park infrastructure. The DCA agreement was signed between USAID and the commercial bank Moldova-Agroindbank SA. The loan guarantee agreement sets up disbursements of $8.9 million with a guarantee of 30% and is intended to strengthen the bank's ability to provide loans to StarNet to develop the Digital City IT Park. The development of Digital Park requires a total investment of US $17 million (EUR 15 million).

Public-Private Partnerships

MCP is focused on public-private partnerships (PPPs) to encourage systemic and sustainable change. MCP facilitated 38 public-private partnerships that collectively leverage multi-million dollar resources for shared objectives in reform, trade promotion, workforce development, and economic growth. The total value of these transformative partnerships exceeds $34 million, of which $4.2 million were reported in Q1Y4. While project and other donors’ contribution represents 39% of the total value (MCP -16%, public partners-22%, other donors-1%), the private sector contribution represents 61%.

Table. PPPs progress in Q1Y4

Industry

PPP name

Progress in the quarter

Winegrowing Industry

"WoM Marketing Platform"

During the reporting quarter, the project organized the participation of Moldovan wineries at seven B2Bs and trade fairs on target export markets. Also, promotional campaigns were deployed at the Chinese, Polish and Romanian markets.

$751,500

$737,366

$2,775,837

Figure. DCA in Energy Efficiency Performance throught December 2018

Total Awarded

Total Disbursed

Remaining DCAamounts

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Industry

PPP name

Progress in the quarter

Winegrowing Industry

"WoM Academy"

Three trainings and workshops were organized during which over 200 industry employees were trained to improved viticulture and winemaking skills, to increase productivity and quality standards. Also, two study trips were organized.

Winegrowing Industry

"WoM Advocacy platform"

Two notices to drafts of legislative acts were developed and passed to MARDE.

Winegrowing Industry

"Best Grapes”

Three newsletters with precision viticulture data were issued in Q1 FY19.

Winegrowing Industry

"FlaveDor" During the quarter, the National conference on Phytoplasma diseases was organized.

Winegrowing Industry

ONVV ONVV organized six activities at local markets to promote wine culture; two study trips were organized.

Tourism Industry

Tree of Life festivals calendar

In the reporting quarter, the calendar continued to be promoted both nationally and internationally. Out of the 27 events included in the calendar, two took place in Q1Y4: National Wine Day and Wine Vernissage, plus five new events attracting in total over 123,000 visitors during the reporting quarter.

Tourism Industry

Wine Road Signages

During the reporting quarter, 156 informative road signs were installed across Moldova, which constitute the first phase of the project. These signs direct travelers to 38 wineries on the newly developed "Wine Route" and will also increase the flow of tourists to the most important sights in each corner of the country: monasteries, museums, historical moments, etc..

Tourism Industry

Tourism Information Center (TIC)

The Tourist Information Center engaged 15 new interns to support the Center’s activities and hosted five new events.

Light Industry

Din Inima promotional campaigns

The PPP supported joint marketing campaigns to raise awareness about the profile of the industry, and stimulated joint retail initiatives. MCP contributed 54% and APIUS contributed 46% of the total $12,193 budget for implementing quarterly initiatives under this PPP, such as “Black Friday”, the “DININIMA Sparkling Party” campaign, and various look books.

Light Industry

ZIPhouse Design and Technology Center

More than 10 events took place at the ZIPhouse PPP during the reporting period, including professional trainings, workshops, competitions, and popup shop events. The value of this PPP came to over $85,689 during the quarter. All parties (APIUS; TUM; MCP) continue to support and invest in ZIPhouse to ensure and maintain its institutional capacity and content development. Additionally, UKaid added its support to the initiative, and now contributes to the ZIPhouse PPP. MCP contributed 41.9% to the total budget for implementing quarterly activities, UKaid contributed 28.15%, and TUM contributed 29.5%, including the effort of finding private sponsors and partners.

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Industry

PPP name

Progress in the quarter

IT, CSI and PE

Balti Innovation Hub

Technical design documentation of the Balti Innovation Center was developed. Organizational capacity of the future managers of the center, the Association of Employers from the Manufacturing Industry, was strengthened.

IT, CSI and PE

Robotics PPP

89 Primary school teachers attended introductory training for using LEGO WeDo robotic sets. 40 schools procured robotic sets through their own budgets and were awarded additional free sets from MCP. Two competition-based learning events were organized together with ATIC: FIRST LEGO League and SumoBot Challenge Moldova, attended by 230 students from robotics programs.

IT, CSI and PE

Future Classroom Lab

During the reporting quarter, all partners advanced on completing their responsibilities. The State Pedagogical University allocated the space for the National Center for Digital Innovation in Education, MECR allocated the funds necessary to conduct the space renovation as did the financially autonomous participating schools, MCP initiated the procurement of the digital equipment for the Center and for the regional hub schools, and Orange Moldova ordered all the furniture to equip the renovated spaces, according to the design concept developed by the partners.

IT, CSI and PE

FabLab Chisinau

All equipment installed and configured, FabLab Manager hired by TUM. FabLab is now organizing activities in 3D printing, microelectronics, embedded programming, robotics, and wood working.

IT, CSI and PE

FabLab in Cahul

Each location had over 100 people using FabLab equipment to increase their digital fabrication skills and prototype business ideas. IT, CSI and

PE FabLab in Ungheni

IT, CSI and PE

FabLab in Drochia

IT, CSI and PE

CIRCLE Labs at TUM

More than 300 students from TUM used CIRCLE infrastructure for their university curricular activities. One hackathon on the Internet of Things was organized in partnership between TUM, MCP, and private companies.

IT, CSI and PE

Creative Hub Development

70% of the necessary construction works on the Hub were finalized. Public procurement of certain equipment was conducted by MECR as per the MoU.

IT Strategy 2019-2023

Strategy for development of the IT industry and ecosystem for digital innovation for 2018-2023 was approved by the Government and officially published.

Law on IT Parks

For complying with the Law on IT Parks, MCP developed a guide for IT park residents on mandatory reporting procedures.

Virtual IT Park

The number of residents in the Moldova IT Park reached more than 320 companies.

IT, CSI and PE

Starnet IT Park (Digital Park)

The contract for providing DCA bank guarantee agreement was signed between USAID and StarNet.

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Inclusive Development

MCP recognizes and affirms USAID and Sweden’s commitments to inclusive development and provides all project beneficiaries with equal opportunities to participate in its activities and to benefit from project-funded assistance.

Empowering Women and creating opportunities for Youth involvement. MCP designs its activities using a non-discriminatory approach, and with the goal to include groups that have been historically excluded or disadvantaged, especially women and youth. Project activities are designed to interest and attract women and youth and motivate them to develop themselves and their careers in-country.

Table. Women and Youth participation in MCP activities in Y4Q1, by industry

Description Light industry Wine Tourism IT, PE, CSI TOTAL

Total participants per industry

406 266 53 841 1,566

Women 336 89 43 342 810

Youth 287 121 38 659 1,105

All MCP programs focusing on the wine industry seek inclusive development of women and youth. In this respect, the project’s ASW Mentorship program is designed to stimulate young winemakers to launch small wineries and/or to support the development of emerging small wineries (Carpe Diem, Minis Terrios, Gogu Winery, Atu Winery, Crama Mircesti, Unicorn Estate, Teba Prim, Vinaria Lupascu, Pomusoara Dulcisoara). In addition, under the Wine of Moldova Academy initiative, in Q1Y4 MCP supported knowledge upgrade activities and trainings for 266 industry professionals, 45% of which were youth and 33% of which were women. All MCP programs focusing on the tourism industry seek to inclusively develop women and youth. The Chisinau Tourism Information Center (TIC), opened via a PPP and with MCP support through a grant to ANTRIM, actively engages young volunteers from tourism related specialties to provide them with valuable work experience. ANTRIM maintains the partnerships established with the State University of Moldova, the Tiraspol State University in Chisinau, and the Perspectiva University, to offer young professionals the opportunity to take an internship at the TIC and benefit from capacity building activities delivered by ANTRIM. During the reporting quarter, the Center hosted 15 new interns. In addition, MCP supported the “Tourism Product Development” training at which 38 people participated. From 53 people trained in the reporting period, 72% are youth and 81% are women.

Inclusive Development Q1Y4 Highlights 215 ➢ 52% of total 1,566 participants in capacity

building programs in Q1Y4 are women ➢ 71% of total 1,566 activity participants are youth ➢ 41% of the total 192 firms assisted in Q1Y4 are

women-owned

➢ 11 companies from Gagauzia and Transnistria involved in MCP supported activities

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In the light industry, the project provided technical assistance to and supported activities at the innovative hub ZIPhouse which is a platform for students, young designers, start-up companies and professionals from the light industry. MCP assisted ZIPhouse in the organization of several large initiatives targeting young people and women, such as the sales events “Young Designers Popup Shop” and “ZIPhouse trade zone at Moldoexpo Fashion fair”, and educational initiatives bringing advanced knowledge from abroad to young people in Moldova, such as the “Trendsetting seminar” and “Fashion Design” led by trainers from Polimoda University in Italy. These activities engaged young people, mostly women, bringing together skills within Moldova’s creative and fashion industries. All initiatives had both an educational and competition component, to enhance practical skills and abilities, and encourage creativity, innovation, and entrepreneurship. In addition, 30 key leaders from Moldova’s fashion industry attended short courses at the Accademia di Belle Arti "Aldo Galli", part of IED Instituto Europeo di Design in Como, Italy. As a result of work-skills development activities implemented with MCP support, the project contributed to knowledge upgrades and trainings for over 460 people, 83% of which are women and 71% are youth. In the IT cluster, seven activities targeting youth and women were carried out in Q1Y4, registering high youth participation. In the creative industry, the project organized one important event – “Fix it in post” conference. In the precision engineering field, the Christmas Hackathon on Internet of Things was organizsed during the rerporting period. Other events in the IT industry included Hour of Code, MegaDojo Chisinau 2018, Robotics ToT, First Lego League Junior, and SumoBot Challenge Moldova. In total, MCP-supported activities recorded 841 participants, 78% of which were youth and 41% were women. Support economic development of Transnistria and Gagauzia. In Y4Q1, MCP provided technical assistance to 11 Gagauzia and Transnistria-based SMEs from the wine sector and light industry, primarily focused on product quality, factory efficiency, and/or trade growth. This assistance is provided at the firm level and is delivered in the form of support from industry organizations, namely the National Office for Vine and Wine and industry associations - ANTRIM (tourism) and APIUS.

• In the wine industry, MCP provided technical assistance to eight wine companies from the Gagauzia region and two wine producers from Transnistria to participate in project activities. Seven companies from Gagauzia (Tartcomvin, Bostavan, DK intertrade, CGL Prim, Tomai Vinex, Vinuri de Comrat, and Kazayak Vin) and one from Transnistria (Kvint) participated in the “National Wine Day 2018” and the Wine of Moldova Festival in Romania organized with MCP support. Six companies from Gagauzia (Tartcomvin, Bostavan, CGL Prim, Tomai Vinex, Vinuri de Comrat, and Kazayak Vin) were supported to apply at international wine contests - International Wine Contests Bucharest and Challenge International du Vin. Also, Kvint and Buket Moldavii companies from Transnistria benefited from trainings organized under the Wine of Moldova Academy. In addition, Wintage - a small winery from Comrat - was awarded with SEED grant.

• In the tourism industry, MCP continued to support the integration of Transnistria and Gaguzia into key tourism routes, by including destinations like Kara Gani winery (CGL-Prim company), Gagauz Sofrasi guesthouse and Kvint winery in the itinerary for a press trip organized around National Wine Day in October. Because Transnistria has genuinely distinctive characteristics as a reminder of Soviet times, MCP supports the integration of Tiraspol city in tourism routes with the product name ‘Back to USSR’.

• In the light industry, MCP supported two Transnistria-based footwear manufacturers, Tellus and Tellus A, to participate in the specialized trade fair “Republic of Moldova

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presents” organized by the Moldovan Chamber of Commerce in Iasi, Romania. In total, eight apparel and footwear firms from Transnistria and Gagauzia - that are also large employers in this region, collectively employing over 3,000 people - are assisted by MCP to improve competitiveness. Technical assistance ranges from quality improvement, specifically improvement of factory productivity and product design, and trade growth, especially to diversify away from the Russian market, with steady progress made towards regional trade.

Monitoring & Evaluation

The MCP Year Three Report, a comprehensive monitoring tool presenting the project’s outputs, was finalized and submitted to USAID and the Swedish Embassy. During the quarter, the MCP technical team worked extensively to prepare and submit the Year Three Project Annual Report, which was prepared in two versions – a short version of 79 pages and a detailed version of 313 pages. Complex M&E activities were implemented to present Y3 results. During the quarter, significant efforts were made to collect comprehensive data from monitored companies, covering sales, exports, investments, finance accessed, and number of employees. All financial data was entered into the MCP M&E database, while in parallel a rigorous verification of the data’s accuracy was conducted. Information on activities implemented throughout Y3 (such as trainings, exhibitions, promotional campaigns, etc.) was gathered, reviewed and included in the M&E database. Special attention was paid to reporting progress within public-private partnerships, including objectives, duration, partners, and their total contribution. All MOUs with project beneficiaries were scanned and stored in electronic files, along with supporting documents for implemented activities. Finally, reports were generated and disaggregated for each indicator (mainly by targeted industry, company size, and gender). The analysis and evaluation of the results achieved demonstrates the high-level performance of MCP activities - the project met or exceeded Year Three targets for all indicators. MCP prepared PPR info on Y3 assisted enterprises, sales and innovations indicators. During the quarter, PPRs for a number of MCP indicators were prepared and submitted to USAID: indicator #2 “Increased value of sales facilitated on behalf of assisted enterprises”; indicator #4 “Number of enterprises receiving assistance to improve knowledge, processes, technologies and practices”; indicator #19 “Number of innovations supported through USG assistance”; and indicator #20 “Number of innovations supported through USG assistance with demonstrated uptake by the private or public sector”. The last two indicators are not included in the MCP PMP, however, per USAID’s request MCP has been providing reports on them starting with Y3. New achievements were registered by MCP in Y4Q1. MCP achieved the following results due to targeted project activities in all four supported industries:

Figure: Cover page of MCP Year Three Report

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➢ Increasing productivity and skills:

• MCP expanded its outreach to a further 24 SMEs, either directly or through its association counterparts. The project now assists an impressive 641 SMEs, 194 or 30%, of which are women-owned. This cumulative number exceeds the Life-of-Project target of 450 SMEs by 42%, and the Y4 cumulative target of 350 SMEs by 83%. This outreach was possible due to the project’s approach of working with industry associations, delivering sustainability and long-term impact, and enabling the project to reach a wider number of SMEs.

• The project progressed well in delivering capacity building programs. During the reporting quarter 1,566 people, of whom 71% are youth and 52% are women, participated in educational activities, trainings to enhance job skills, and community building events delivered by the project. Activities in IT (clustered with Precision Engineering and Creative Services Industries) delivered half of the reported participants (53%). These programs are instrumental in shifting mentalities and improving knowledge industry-wide. To date, 28,421 people have participated in MCP-supported capacity building programs, exceeding both the four-year cumulative target of 15,000 people by 89%, and the life-of-project target of 18,000 by 58%.

➢ Improving market linkages:

• To date, MCP assistance has helped 316 unique SMEs increase their sales and make 11,172 new market linkages. In Y4Q1 alone, MCP implemented 25 sales facilitation activities benefitting 122 companies with 395 participations, resulting in 1,544 market linkages. These results were achieved by supporting participation in international exhibitions and local promotional activities. Illustrative international trade shows attended by MCP-supported companies include Stockholm Food and Wine 2018, Interwine, Guangzhou 2018, Wine & Street Food Festival Bucharest, TT Warsaw, TTG Incontri Travel Expo, Wedding Fair Ghid Mariaj in Iasi, and Marriage Fest exhibition in Bucharest, Romania. Local promotional activities included National Wine Day 2018, Wine Vernissage, Young Designers Popup Shop. MCP also supported press tours for Italian and Polish, Scandinavian and American journalists and organized a webinar for Italian tour operators connecting them to Moldovan tour operators.

➢ Strengthening business enabling environment: With MCP support, several important

results were achieved towards strengthening the Moldovan business enabling environment, such as:

o Modification of the Land Code – allowing the construction of tourism facilities on agricultural land,

o A MoU was signed between ONVV and Stauceni Excellence Center (SEC) on establishing new experimental plot & enhancing the curricula and study practices for SEC students.

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Performance Monitoring: Target vs. Actual

Indicator YEARS 1-3 YEAR 4

Y1-Y3 Target Established

Y1-Y3 Result Achieved

Y1-Y3 Target versus Result

Cumulative Target

Established

Cumulative Result

Achieved

Cumulative Target versus Result

Q1Y4 Result

Project Purpose: Grow and Expand Targeted Competitive Industries

1 Value of domestic and export sales in targeted sectors*

$50,000,000 $1,107,920,440 $ 57,920,440 $ - Data

reported annually

N/A N/A

2

Increased value of sales facilitated on behalf of assisted enterprises

$ 80,000,000 $175,780,623 $ 95,780,623 $110,000,000 Data

reported annually

N/A N/A

3

Value of new private sector investment in assisted enterprises

$ 34,000,000 $135,133,045 $101,133,045 $46,000,000 Data

reported annually

N/A N/A

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

IR 2.2: Improved Private Sector Competitiveness in Selected Industries

Sub-IR 2.2.1: Increased Productivity

4

Number of enterprises receiving assistance to improve knowledge, processes, technologies and practices

350

617

267

400

641

241

24

5

Assisted enterprises applying improved knowledge, processes, and technologies

210

281

71

280

291

11

10

6

Assisted enterprises following recognized product or process standards

70

110

40

130

111

- 19

1

7

Individuals receiving job skills aligned with industry needs

11,000

26,870

15,870

15,000

28,436

13,436

1,566

61

8

Percentage change in specified productivity measure (sales per employees)

+6% +28% +22% +6% Data

reported annually

N/A N/A

Objective 2. Expanded Market Linkages

IR 2.2: Improved Private Sector Competitiveness in Selected Industries

Sub-IR 2.2.2: Expended Market Linkages

9

Number of enterprises with sales facilitated through USG assistance

210

300

90

290

316

26

16

IR 2.1: Improved Private Sector Competitiveness in Selected Industrie

Sub-IR 2.1.2: Expended Market Linkages

10

Number of assisted enterprises in targeted industries with increased financing

110

136

26

160

Data reported annually

N/A N/A

11

Financing accessed by assisted enterprises

$2,000,000 $87,092,600 $85,092,600 $5,000,000 Data

reported annually

N/A N/A

12

Number of assisted enterprises in targeted industries with increased investment

120

317

197

190

Data reported annually

N/A N/A

Objective 3. . Improved Sector –Enabling Environment and Increased Local Capacity

IR 2.1: Improved Economic Foundation for Growth

Sub-IR 2.1.1: Improved Business and Trade Enabling Environment

13

Number of regulations and administrative procedures eliminated, streamlined or simplified with USG support

18

36

18

24

38

14

2

14 Number of Public-Private

25

38

13

35

39

4

1

62

*Targets for Y4 will be established in Q2Y4.

Partnerships established

15

Value of Public-Private Partnerships established

$3,000,000 $30,737,650 $27,737,650 $4,000,000 $34,953,683 $30,953,683 $4,216,033

16 Improved capacity of local institutions**

+30% over baseline

+45% over baseline

+15% over baseline

+40% over baseline

Data reported annually

N/A N/A

17

Project-assisted public-private sector dialogue platforms conducted

12

39

27

16

43

27

4

18

Increased number of market linkages established with donor assistance*

150

9,628

9,478

150

11,172

11,022

1,694

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Communications

MCP continued to facilitate the participation of high-level donor representatives at MCP-supported events to raise Moldovan and international awareness about the project’s activities. In December 2018, the project also hosted a week-long press trip for international photographer, journalist and filmmaker Colby Gottert to report on the USAID pilot project using drones to detect vine disease, which is one the USAID Digi Awards 2018. All the events, as well as other monthly activities, were promoted on local media. MCP developed a calendar of events for the upcoming month and coordinated representative and media participation, in addition to extensive reporting duties to the project donors.

High-level donor representation at MCP-supported events

- National Wine Day – US DCM Martin McDowell and Ambassador of Sweden Anna Lyberg attended the event’s official opening ceremony and toured the wineries on show in the National Square, Chisinau.

- Ravac International Film Festival Awards – Head of Swedish Cooperation Adam Amberg received the Prize of Excellence on behalf of Swedish actress Eva Melander for her role in the film Border.

- Fashion Accelerations Program Final Pitching Day – Swedish Ambassador Anna Lyberg awarded first prize to the young designer who won the acceleration program, and visited the ZIPhouse excellence center in design.

- Launch of hiking, biking and birdwatching trails in Orhei Vechi – USAID Deputy Chief of Mission Victoria Gellis accompanied the State Secretary from the Ministry of Education, Culture and Research, Andrei Chistol, on a tour of rural guesthouses benefitting from MCP support.

- Moldova Business Week – US Ambassador Derek J. Hogan opened the ICT panel, and Swedish First Secretary Thomas Alveteg spoke as part of the tourism panel, which appeared at the event for the first time.

- GirlsGoIT Annual Forum – Swedish Ambassador Anna Lyberg spoke at the event to encourage young girls to pursue a career in IT and underline its strategic role in Moldova’s development;

- First-year anniversary of the Chisinau Tourist Information Center – USAID Mission Director Karen Hilliard and Swedish Ambassador Anna Lyberg featured in a social media campaign to mark the anniversary, with congratulatory messages reinforcing USAID and Sweden’s support for Moldova’s tourism sector. Ambassador Lyberg also visited the Tourism Information Center on the anniversary date.

- Maicom apparel factory press trip – USAID EG Director reinforced messages of USAID support for light industry, which employs over 27,800 women, to members of the Moldovan press. Regional Innovation Center in Balti – US Ambassador Derek J. Hogan visited the future Regional

Innovation Center and met with the leadership of the State University from Balti and Free Economic

Zone to demonstrate USG support for the PPP.

- Winter Wine Vernissage – US DCM Martin McDowell, USAID DCM Lynn Vega and Head of Sweden Cooperation Adam Amberg visited the event and took part in media interactions.

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Media visit following 2018 Digital Development Award for Drone Vine Disease Detection Pilot. In this quarter, USAID announced that MCP had won the USAID 2018 Digital Development Award for its innovative Drone Vine Disease Detection Pilot. Recognizing USAID projects that harness the power of digital tools and data-driven decision making, the “Digis” highlight the important role digital technologies play in accelerating the achievement of development goals. MCP is one of five winners of the “Digis”, selected from more than 140 applications from around the world. As part of this award, the 2018 Digi winners will be recognized at a special ICT4Drinks reception in Washington D.C. in early 2019, increasing the profile of the project and its achievements in the United States. The project communications team played a key role in this achievement, coordinating both the competition entry, and the resulting visit from international photographer, journalist and filmmaker Colby Gottert in December 2018. Mr. Gottert has been contracted by USAID to report on the global winners of the USAID Digi Awards 2018, and the stories and films resulting from the visit will be published by USAID over the coming year. MCP organized and accompanied Colby Gottert on a 5-day trip around Moldova’s wineries to report on the progress in Moldova’s wine industry resulting from USAID and Sweden investment, and to showcase how 21st century technology helps deploy international best practices in vineyard management to safeguard livelihoods linked to the wine industry. The delegation visited Mircesti Winery in Mircesti village, Salcuta winery in Salculta village, Cricova winery and cellars, National Office for Wine and Vine, the Laboratory of the Practical Scientific Institute of Horticulture and Food Technology responsible for analyzing data from the drones, and the 2018 Winter Wine Vernissage. Pictures and recorded interviews with beneficiaries in the wine industry show the end beneficiary of the project’s work: rural people at all stages of the winemaking process, from those tending vines in the field by hand, to those working on a bottling line in a modern factory.

Making-of. Photo shooting with Colby Gottert at Mircesti and Salculta wineries. Credit. Olesea Galusca, MCP

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SECTION III

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY19 Q2 (JANUARY-MARCH 2019) Wine Industry

• Prepare for participation and deep communication campaigns around Prowein and China Food and Drink Fair exhibitions (local STTA – TBD, associated budget TBD);

• Ongoing support for technological processes upgrade and wine quality enhancement under ASW Mentorship and PQUP programs (local STTA – Vera Danu, Nadejda Mardare, Constantin Caldare, Ilie Gogu, Vadim Burunsus);

• Deploy trainings and sommeliers certification in partnership with Association of European Sommelier (associated budget - 5,000 USD).

Tourism Industry

• Participation with a country stand at key international travel exhibitions (international STTA -Nadia Pasqual and Alex Crevar, associated costs – 30,000 USD);

• Assisting start-up program beneficiaries (local tour operators) in developing new tourism products and services (associated costs – 32,000 USD);

• Launch of the new Tree of Life Agenda of events for 2019 (associated costs – 2,000 USD);

• Presentation of the results of the tourism exit survey conducted in Fall 2018 (associated costs – 1,000 USD).

Light Industry

• Support ZIPhouse to launch the 2019 Acceleration Program (associated costs – 2,000 USD);

• Support Moldovan apparel companies to open a new DININIMA common store (associated costs – 6,500 USD);

• Support APIUS members to attend international exhibitions (associated budget – 10,000 USD);

• Advance the SMART Program in four companies (local STTA – Demian Usanli);

• Continue to implement Integrated Management Quality System in three companies (local STTA – Ala Oberst);

• Support social audit at Portavita women clothing manufacturer (associated costs – 3,500 USD);

• Support visits to Interfiliere and Premier Vision raw materials exhibitions for three companies (associated costs – 2,000 USD);

• Support APIUS to organize 2019 Moldova Fashion Days Spring edition (associated costs – 1,500 USD).

IT, PE and CSI cluster

• Open the National Center for Digital Innovation in Education and regional FCL hubs, after finalizing procurement of planned digital equipment (associated costs – 40,000 USD);

• Organize FCL teacher training on development of integrated lessons/projects and using digital equipment and web apps (associated costs – 1,200 USD);

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• Organize a conference on digital innovation in education (associated costs – 7,000 USD);

• Continue to work on incentive program for schools to procure robotics sets from own budgets, providing additional donations and trainings (associated costs – 7,000 USD);

• Organize FIRST LEGO League Moldova 2019 semi-finals and final (associated costs – 20,000 USD);

• Continue to support Dreamups in implementing the Founder Institute pre-acceleration program (associated costs – 4,000 USDs)

• Organize a series of workshops on Storytelling/TV Script writing, in partnership with Brio Studio;

• Organize Global Game Jam;

• Launch of Digital Park;

• Finalize endowment of Creative Hub ArtCor and prepare for launch.