~USAID AFGHANISTAN ~ FROM THE AMERICAN PEOPlE

US AGENCY FOR INTERNATIONAL DEVELOPMENT Office for Afghanistan and Pakistan Affairs

INITIAL ENVIRONMENTAL EXAMINATION Amendment 1

PROGRAM/ACTIVITY DATA

Country Code and SO: Strategic Objective Name: Country or Region:

306 S05 Afghanistan

Activity Name: Financial Access for Investing in the Development of Afghanistan (FA IDA) projcct

Funding Begin: Oct 2009 Funding End: Aug 2014 LOP Amount: $88 million lEE Prepared by: Eric Shutler, date: 612712013 lEE Amendment: #1, previous lEE (RCE): Asia 09-62 Afghanistan RCE ETD

ENVIRONMENTAL ACTION RECOMMENDED: (Place X where applicable)

Categorical Exclusion [Xl Deferral Positive Determlnation [ 1 Negative Determination Negative Determination With [X] Exemption Conditions

LO PURPOSE, BACKGROUND AND ACTIVITY DESCRIPTION

1.1 Purpnse and Scope of the lEE

1 1 J

The purpose of this amendment to the previously issued Request for a Categorical Exclusion for the Financial Access for Investing in the Development of Afghanistan (FAIDA) project is to, in accordance with 22 CFR 216, document the increase in Life of Project (LOP) funding from $75 million to $88 million and the expansion of the Scope of Working to include support for agricultural input suppliers in Kandahar. This change is due to an emerging requirement to assist input suppl iers with accurate knowledge regarding the judicious use of inputs, including pesticides, to better serve their farmer clients. The original LOP was $160 mill ion but the contract was modified immediately after signing to $75 million.

1.2 Background

The Financial Access for Investing in the Development of Afghanistan (FAIDA) project is a five-year (3 base years plus 2 option years), $88 million program called to build the foundation

for a sustainable and inclusive financial system on the national level, with job creation being a paramount outcome of the project wi th an emphasis on agricultural assistance in south and east Afghanistan.

J.3 Activity Description

FAIDA includes four major types of interventions. This amendment expands the Capacity Building component (#3) with training on General Agricultural Practices (GAP) and the safe use of pesticides, including Integrated Pest Management (IPM), for input suppliers.

I. Microfinance Investment Support Facility (MISFA): Work with MISFA to facilitate the ongoing growth of the sector through lines-of-credit, operating subsidies, andlor partial credit guarantees. MISFA funds other microfinance institutions that provide loans usually less than $500. This work wi II also include support for sector strategy development.

2. Innovation Challenge Fund. Design opportunistic, demand-driven public-private partnerships to encourage a range of institutions (such as banks, MFls, and NBFls) to reach underserved markets, develop new products, and explore new technologies with the goals of scale, impact and financial sustainability. There is no housing construction in this activity; the innovations fund is for technological innovation such as ATMs, mobile phones, and electronic banking.

3. Capacity Building. Develop the capacity of a broad range of financial institutions and meso-level financial service providers, through fee-based training and performance-based technical assistance. This amendment adds capacity building for input suppliers in the judicious use of pesticides so that they can better advice farmer client". These activities are expected to result in:

a. Technical training materials and presentations for input supply company owners and technical and sales staff regarding suitable input packages, including pesticides, GAP and IPM, for production of pomegranates, melons, almonds and at least three key vegetables crops.

b. Prepare FAIDA Agribusiness South local national staffto successfully implement these trainings including a review of previously offered input supply trainings.

4. Knowledge Management alld policy Advocacy. Build an infrastructure to facilitate information capture, sharing and dissemination, including policy advocacy with the government.

2.0 RECOMMENDED THRESHOLD DECISIONS

The table below lists F AIDA program activities covered in this mE, the environmental impacts and Reg. 216 determinations and conditions, if any.

Effect on Natural Determination and Reg. 216 actions Activities or Physical

Environment required

2

Categorical Exclusion, no actions

MISFA's Finance Facility No impact required per 22 CFR 216.2(c)(2) (iii), (v) and (xiv)

Categorical Exclusion. no actions

Innovation Challenge Fund No impact required per 22 CFR 216.2(c)(2)(i) and (iii)

Capacity Building (all training except Categorical Exclusion, no actions

pesticide training for input suppliers) No impact required per 22 CFR 216.2(c)(2)(i)

Negative Determination with Conditions:

No impact with Implementer will ensure that training is

Capacity Building (pesticide training) mitigating provided in accordance with a Pesticide Evaluation Report and Safer Use Action

measures Plan, as per as per 22 CFR216.3(b)(I)

Knowledge Management and policy Categorical Exclusion, no actions

No impact required per 22 CFR 2l6.2(c)(2)(i), (iii),

Advocacy (v) and (xiv)

3.0 ENVIRONMENTAL RECOMMENDATIONS

3.1 Categorical Exclusion

a) Recommended Action: Categorical Exclusion ($88 million or 99.9% of funding) The vast majority of FAIDA activities do not have an effect on the natural and physical environment fit within the categories listed in 22 CFR 216.2 (c)(2) and are categorically excluded from any further environmental review requirements. The originator of the proposed action has determined that the proposed activities are within the following classes of actions:

• Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.). [22 CFR 216.2(c)(2)(i)];

• Analyses, studies, academic or research workshops and meetings. [22 CFR 2162( c )(2)(iii)];

• Document and information transfers. [22 CPR 216.2(c)(2)(v)]; and • Studies, projects or programs intended to develop the capability of recipient countries to

engage in development planning, except to the extent designed to result in activities directly affecting the cnvironment (such as construction of facilities, etc.). [22 CFR 216.2(c)(2)(xiv)] .

b) Recommended Action: Negative Determination ($100,000 or 0.1 % of funding) The FA IDA Capacity Building activities relating to pesticide training only are considered to be under this determination. FAIDA will field an Expert Agricultural Input Supply Advisor who will work with the Agribusiness South Team Leader, Provincial Advisors and the Input Supply team members to accomplish the following key tasks:

3

a. Technical training materials and presentations for input supply company owners and technical and sales staff regarding suitable input packages for production of pomegranates, melons, almonds and at least three key vegetables crops

b. Prepare FAIDA Agribusiness South local national staff to successfully implement these trainings including a review of previously offered input supply trainings

The proposed action is that the lmplementers will consult with the MEO to ensure that the training activities will be informed by a Pesticide Evaluation Report and Safer Use Action Plan (PERSUAP) as per 22 CFR216.3(b)(1).

If the program description is changed to prov'ide for activities outside of those listed above that do not conform to the general exclusions then a new environmental assessment will be required.

4.0 REVISIONS

Pursuant to 22 CFR 216.3(a)(9), if new information becomes available which indicates that activities to be funded by the program might be "major" and the program's effect "significant," or if additional activities are proposed that might be considered "major" and their effects significant, this lEE will be reviewed and revised by the originator of the project and submitted to the Bureau Environmental Officer (BEO) for approval and, if appropriate, an environmental assessment will be prepared. It is the responsibility of the USAID CORIAOR to keep the Mission Environmental Officer, USAID/Afghanistan and the BED/OAPA informed of any new information or changes in scope and nature of the activity that might require revision of the fEE.

4

Clearance Page

IEE Amendment #1 for Financial Access for Investing in the Development of Afghanistan (FAlDA)

Clearances: Date:

L0,,;4,;!UI) Eric Shutler I I

CORIAOR

Mission Environmental Officer

Regional Legal Advisor

Regional Environmental Advisor Asia, Middle East & OAPA

Deputy Mission Director

Acting Mission Director

Bureau Environmental Officer

Harry Rottenberg

¥;ng:lIsu " 'Y_ ~,c,L..-

CD""«. .... ~J ~ eJKUl Andrei Barannik

~ f,'J~ . Bisson

1 ~. -1

Approval: Date

......Q-lj~

Gordon Wcynand 7/S/V

it f.(!<.:r.r:::t ! OAt'A -/.3 - JL<.t. - ArC -CoSO

DISTRIBUTION: MEO, CORIAOR, OAA, RLA

5

Nabi, Ghulam

From: Sent To: Subject:

Follow Up Flag: Flag Status:

Categories:

Andrei Barannik <abarannik@usaid.gov> Sunday, June 30, 2013 2:39 PM Bottenberg, Harry Re: FIAOA lEE Amendment

Follow up f lagged

Green Category

Harry - reviewed - f ew Qs t o address:

• facesheet should show correct LOP amount - either $88ml or $160ml , which is stated in the original r E and in this amendment in t he text

• s project is under implementation since 2009, some environmental lessons learned should be dist illed nd briefly present ed in this amendment

• re: Innovation Challenge Fund - will t here be any housing construct ion & what type of equipment may be procured & leased?1

• what is funded t hrough MISFA?! • Do you have an MD or Acting MD? • REA should read REA/ASia, Middle East & OAPA

With the above duly spelled out in the amendment, r concur.

BR, Andrei

On Sat, Jnn 29, 2013 at 5:42 AM, Bottenberg, Harry <HBottenberg@statc.gov>wrote: Here is F AIDA. We're doing the amendment so they can legitimately do pesticide training for retailers. Not sure if you remember this from the email traffic. They will follow the P-PERSUAP that Andrew Harvey has been working on; I've shared a draft with them. They're just doing GAP training now, once the P-PERSUAP is done they'll proceed with the pesticide training.

Harry

Harry Bottenberg, Ph.D.

1