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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 124889
PROJECT PAPER
FOR
SMALL RETF GRANT
(US $1.5 MILLION EQUIVALENT)
TO THE
RECIPIENT
FOR A
MOBILE INNOVATION PROJECT UNDER EPIC (P132570)
June 26, 2014
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective May 14, 2014)
Currency Unit = Jamaican Dollar
JMD1 = US$ 0.0090
US$1 = JMD 110.725
FISCAL YEAR
July 1 – June 30
ABBREVIATIONS AND ACRONYMS
CARICOM Caribbean Community
CMIP The Caribbean Mobile Innovation Project
CTU Caribbean Telecommunications Union
EPIC Entrepreneurship Program for Innovation in the Caribbean
FM Financial Management Department
ICT Information and Communication Technology
MBSS Mona Business Support Services
mHubs Mobile Innovation Hubs
mLabs Mobile Application Laboratories
MSBM Mona School of Business and Management
NGOs Non-governmental organizations
UWI The University of the West Indies
Regional Vice President: Hasan A. Tuluy
Country Director: Sophie Sirtaine
Sector Director: Gerardo M. Corrochano
Sector Manager: Valerie D'Costa
Task Team Leader: Toni Kristian Eliasz
CARICOM
MOBILE INNOVATION PROJECT UNDER EPIC (P132570)
TABLE OF CONTENTS
Page
I. STRATEGIC CONTEXT .................................................................................................7
A. Country Context ............................................................................................................ 7
B. Sectoral and Institutional Context ................................................................................. 7
C. Higher Level Objectives to which the Project Contributes .......................................... 9
II. PROJECT DEVELOPMENT OBJECTIVES ..............................................................10
A. PDO............................................................................................................................. 10
B. Project Beneficiaries ................................................................................................... 10
C. PDO Level Results Indicators ..................................................................................... 10
III. PROJECT DESCRIPTION ............................................................................................11
A. Project Components .................................................................................................... 11
B. Project Financing ........................................................................................................ 13
IV. IMPLEMENTATION .....................................................................................................13
A. Institutional and Implementation Arrangements ........................................................ 13
B. Results Monitoring and Evaluation ............................................................................ 14
C. Sustainability............................................................................................................... 15
V. KEY RISKS AND MITIGATION MEASURES ..........................................................16
A. Risk Ratings Summary Table ..................................................................................... 16
B. Overall Risk Rating Explanation ................................................................................ 17
VI. APPRAISAL SUMMARY ..............................................................................................17
Annex 2: Detailed Project Description (optional) .....................................................................20
DATA SHEET
CARICOM1
Mobile Innovation Project under EPIC
Small RETF Grant Project Paper .
Latin American and the Caribbean
FIEID (infoDev)
.
Basic Information
Date: 26-June-2014 Sectors: General information and communications sector (75%), Information Technology (25%)
Country Director: Sophie Sirtaine Themes: Micro, Small and Medium Enterprise Support (60%), Other private sector development (30%),
Technology diffusion (10%)
Sector Manager/Director: Valerie D’Costa / Gerardo
Corrochano
EA Category: C – Not Required
Project ID: P132570
Instrument: Grant Team Leader(s): Toni Kristian Eliasz
.
Recipient: The UWI Consortium
Executing Agency: UWI Consulting
Contact: Professor Claremont Kirton Title: Deputy Executive Director
Telephone No.: (246) 233 7924 Email: [email protected] .
Project Implementation Period: Start Date: 01-June-2014 End Date: 30-Nov-2017
Expected Effectiveness Date: 15-July-2014
Expected Closing Date: 30-Mar-2018 .
Project Financing Data(US$M)
[ ] Loan [X] Grant [ ] Other
[ ] Credit [ ] Guarantee
For Loans/Credits/Others
Total Project Cost : 1.50 Total Bank Financing : 1.50
Total Cofinancing : 0.0 Financing Gap : 0.0 .
Financing Source Amount(US$M)
BORROWER/RECIPIENT 0.00
The Support for Entrepreneurship Program for Innovation in
the Caribbean Multi-Donor Trust Fund
1.50
1 Eligible Caribbean countries include: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana,
Jamaica, Montserrat, Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago
Total 1.50 .
Expected Disbursements (in USD Million)
Fiscal Year 2015 2016 2017 2018
Annual 0.50 0.45 0.35 0.20
Cumulative 0.50 0.95 1.30 1.50 .
Project Development Objective(s)
The Caribbean Mobile Innovation Project (CMIP) aims (1) to strengthen the Caribbean mobile innovation ecosystem and (2) to enable sustainable and competitive mobile enterprises to grow. .
Components
Component Name Cost (USD Millions)
Caribbean Mobile Innovation Project 1.50
.
Compliance
Policy
Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [X] .
Does the project require any exceptions from Bank policies? Yes [ ] No [X]
Have these been approved by Bank management? Yes [ ] No [X]
Is approval for any policy exception sought from the Board? Yes [ ] No [X]
Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ] .
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment OP/BP 4.01 X
Natural Habitats OP/BP 4.04 X
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
Projects on International Waters OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X .
Legal Covenants
Name Recurrent Due Date Frequency
Description of Covenant
.
Team Composition
Bank Staff
Name Title Specialization Unit UPI
Toni Kristian Eliasz Projects Officer Team Lead FIEID 376943
Ayanna Samuels Consultant Mobile Innovation FIEID 470234
Danqing Zhu Program Analyst EPIC Program Analyst FIEID 375551
Rocio M. Malpica Senior Counsel Legal LEGLE 251193
Kerry Natelege Crawford Financial Management Analyst Financial Management LCSFM 422585
Prosper Nindorera Senior Procurement Specialist Procurement LCSPT 75867
Eunan Ugonna Onyenuma Finance Analyst CTR Finance Officer CTRLN 352897
Barbry R. Keller Senior Operations Officer Regional/Network Trust Fund
Coordinator
LCSDE 97394
Glenn S. Morgan Regional Safeguards Adviser Regional Safeguards Adviser OPSOR 13880
Galina Y. Sotirova Country Operations Adviser Operational Services Director LCC3C 77854
Diletta Doretti Operations Officer Operations Officer FIEID 235670
Non Bank Staff
Name Title Office Phone City
.
Locations
Country First Administrative
Division
Location Planned Actual Comments
.
7
I. STRATEGIC CONTEXT
A. Country Context
1. infoDev’s Caribbean Mobile Innovation Project is designed to serve 14 of the 15
CARICOM countries. These countries include 11 island states (Antigua and Barbuda, Bahamas,
Barbados, Dominica, Grenada, Jamaica, Montserrat, Saint Kitts & Nevis, Saint Lucia, Saint
Vincent & the Grenadines, and Trinidad & Tobago) and 3 continental countries (Belize, Guyana,
and Suriname). Haiti is the only CARICOM country that does not fall within this program. The
14 CARICOM countries have a total population of 7 million with Jamaica having the largest
population (2.77 million) and Montserrat having the smallest population (5,189). Jamaica also
has the largest labor force of 1.2 million people.2 The CARICOM countries have a combined
GDP of US$61.85 billion per year. Trinidad and Tobago contribute the most to the combined
GDP (US$22.5 billion) and Montserrat contributes the least ($55.4 million). Unemployment
rates in these CARICOM countries range from 21% in Guyana to 4.6% in Trinidad and Tobago3.
2. CARICOM governments are currently facing serious fiscal difficulties. Unemployment is
increasing while private sector investments and external capital flows are decreasing. Further, the
region is experiencing an increase in the frequency of natural disasters. Crime and violence
remain a serious problem.4
B. Sectoral and Institutional Context
Opportunities for the Mobile Sector
3. The mobile phone industry offers exciting potential for entrepreneurial and economic
development. Mobile phones are the largest communication and transaction platform in history.
Relying on six billion cell subscriptions, about three quarters of the world’s population now have
direct access to a mobile phone.5 This technology offers potential for economic growth and high-
quality jobs in the mobile industry, while mobile software and applications, or “apps,” also
catalyze other sectors like health or government. While access has become less of an issue, the
current challenge is to support mobile innovation ecosystems that enable application developers
and entrepreneurs to drive sustainable inclusion and growth within their economies. In view of
low technological entry barriers and fixed costs, the mobile industry offers vast revenue and
growth potential. In turn, a favorable ecosystem that integrates policy-makers, mobile network
operators, investors, and donors, among other players must exist in order for entrepreneurs to
thrive. Oftentimes however, professional networks, favorable policy environments, information
access, business skills, mentors, spaces for exchange, and access to investors are lacking.
Identifying and tackling barriers to mobile innovation ecosystems can unleash the potential of
mobile innovation, sparking economic transformation and sustainable growth.
2 World Bank World Development Indicators 3 Wolfram Alpha knowledgebase, 2013 4 ibid 5 World Bank (2012). Information and Communication for Development 2012 – Maximizing Mobile. T.Kelly (ed.). The World
Bank, Washington, DC, USA. www.worldbank.org/ict/ic4d2012
8
The Caribbean Mobile Innovation Market
4. While the Caribbean is diverse culturally and economically, the islands that make up the
region share many similarities in the mobile market. This includes a high adoption rate of mobile
phones, the same two mobile network operators (Digicel and LIME), expanding 3G networks
and the future introduction of 4G, high network coverage, and the increasing use of smartphones.
With the competition between network providers, the ICT (Information and Communication
Technology) and telecommunications sectors are major growth sectors in the region. With the
ability to access fast mobile connectivity, businesses and consumers demand that services that
can be accessed through their mobile phone are locally relevant, which often requires that they
are developed locally.
5. While the research shows that the region is ripe for a strong and functioning mobile
innovation ecosystem, there are specific challenges unique to the region which disrupts the
development of the Caribbean ecosystem. These challenges include islands which are both
geographically and economically fragmented, little collaboration among developers on different
islands, the current inability to effectively monetize mobile apps in the region, a lack of typical
seed financing vehicles for technology-enabled startups, and national governments having
various ICT and innovation policies with various levels of implementation and enforcement.
Status of Mobile Innovation Support
6. There is both demand and supply for technology incubators and acceleration initiatives in
the Caribbean. On the demand side, there is a promising pool of entrepreneurs and developers in
the region that have evolved out of “grassroots-driven” technology and entrepreneurial
communities. While these communities have been hosting activities supporting the development
of startups (i.e. Caribbean BETA, Startup Weekend ), there is a desire to provide premium
services through a regional approach. The community members are willing to pay for these
formalized services through equity or other success sharing mechanisms, and multiple
stakeholders (governments, universities, and the private sector) have expressed interest in
supporting these communities. But these services need to create a culture shift as the region is
risk-averse. Growth-oriented entrepreneurs are not commonplace in the Caribbean, and the
openness to innovation is not embraced throughout the region. Training, mentoring, and
coaching (both from internal and external parties) will be necessary to create this culture shift
along with providing inexperienced entrepreneurs with knowledge about the business and
technical sides of startups.
7. From the supply side, the Caribbean region has a relatively new history of business
incubators. There are a number of physical incubators that were created in the last decade, with
varying levels of success6. But, for the most part, there have not been many positive results.
Recurring lessons from former and current incubators include non-sustainable grants and a lack
of detailed partnership strategies for donor-funded incubators, and a limited number of graduates,
a lack of a clear strategy, and under-funded services for government-funded incubators.
6 Economisti Associati (2013)
9
8. Bridging the gap between existing technology communities and formal incubators is an
opportunity to strengthen the foundation for mobile innovation support in the Caribbean.
C. Higher Level Objectives to which the Project Contributes
9. The CMIP will contribute to the creation of entrepreneurship as the motor for future
economic and sustainable development of the Caribbean through a range of higher level
objectives including:
(a) increasing and maintaining industry competitiveness to the level necessary to
engage in the global digital economy
(b) supporting the creation of the necessary critical mass for significant improvement
in access to finance by recognizing new ventures from the Caribbean as good
investment opportunities
(c) the development of a pool of highly-skilled individuals within the Caribbean’s
workforce
(d) encouraging viability of pro-poor innovations and the positive development
effects through the usage of mobile apps
10. Alignment between the CMIP’s Objectives and CARICOM’s Strategies: The CMIP
will contribute to the CARICOM Secretariat’s goal of leveraging ICT as the new frontier for
regional integration and an effective tool to advance regional socio-economic development. The
project aligns with the proposed priority areas set by 2014-2018 Strategic Plan for the Caribbean
Community7, including youth and ICT. CMIP will collaborate with partners on six islands as
hubs to foster the strengthening of local technical community and building regional innovation
and entrepreneurship ecosystems. The regional pool of high-growth potential mobile startups
will help to facilitate knowledge economy CARICOM member states.
11. Alignment between the CMIP’s Objectives and the World Bank Strategies for
Jamaica and the OECS: The CMIP supports the World Bank’s regional priorities and themes
(including private sector-led growth, competitiveness and youth empowerment) and
complements ongoing programs within the Caribbean focused on innovation and/or
entrepreneurship. These include the Caribbean Communications Infrastructure Program
(CARCIP) through the World Bank's ICT Sector Unit (TWICT), the Caribbean Growth Forum
(CGF), and the LAC Sustainable Development Network’s work in Jamaica. For CARCIP,
infoDev and TWICT have regularly briefed each other on the current and future activities of each
program along with planning to support each other. This includes a partnership to provide
training to Caribbean policy makers on ICT innovation in Finland, along with follow up training
in the Caribbean, as well as strengthening the ICT incubator and entrepreneurial activities
already planned under CARCIP. For the CGF, the CMIP shares similar goals for innovation and
entrepreneurship in the region. Through its activities, the CMIP will identify and support the top
7CARICOM secretariat: http://www.caricom.org/overview-reform.jsp
10
ICT entrepreneurial talent in the region while also building the skills and capabilities of future
ICT entrepreneurs in order to cultivate a pool of talent. infoDev will continue to participate in
CGFs8, providing insights on entrepreneurship and innovation based on its global experience in
business incubation and acceleration. Finally, in partnership with SDN and FPD, infoDev will
continue to support the Government of Jamaica’s goals to strengthen its digital industry.
12. Specifically, the CMIP will explore synergies with the JM Youth Employment in Digital
and Animation Industries Project and the Jamaica Foundations for Competitiveness and Growth
project. Building on the successful collaboration on Digital Jam 3.0 to prime the pipe of talents
in ICT industry, the CMIP will provide follow-on support to DJ3.0 winning teams to accelerate
their business by providing virtual incubation services. Similarly, the local activities to be
implemented by the mLabs and the annual startup challenge are ideal channels to strengthen the
flow of Caribbean entries to the Startup Jamaica initiative. The CMIP and the JM Youth
Employment in Digital and Animation Industries Project will also continue to share knowledge
and expertise in providing mentoring, training and support to potential Jamaica mobile app
entrepreneurs.
II. PROJECT DEVELOPMENT OBJECTIVES
A. PDO
13. The Caribbean Mobile Innovation Project (CMIP) aims (1) to strengthen the Caribbean
mobile innovation ecosystem and (2) to enable sustainable and competitive mobile enterprises to
grow.
B. Project Beneficiaries
14. The target beneficiaries of the project are mobile app innovators, aspiring and existing
entrepreneurs, with a particular focus on youth, who are ready and early adopters of technology.
The CMIP will also support startup ecosystem enablers throughout the region. Finally, the CMIP
will also engage other entities in creating a favorable innovation ecosystem for local mobile
innovation. These include governments, academia, civil society, international donors, and
investors.
C. PDO Level Results Indicators
15. Project level results indicators that will be measured are:
(a) IT/ITES Revenue (Revenue generated by the startups)
(b) Investment raised
(c) IT/ITES employment (Direct jobs created by the startups, including breakdown for
women)
8 http://www.infodev.org/articles/caribbean-growth-forum-cgf
11
(d) Sustainable startups created (surviving at least one year)
III. PROJECT DESCRIPTION
A. Project Components
16. The CMIP’s concept was devised through a market assessment process, ensuring that the
model is based on local market conditions. By collecting feedback from over 300 stakeholders, the
resulted model is demand-driven and tailored to the needs of the Caribbean innovation ecosystem.
Concept components have been co-designed with local partners and end beneficiaries, ensuring a
strong sense of local ownership and the longer-term sustainability of the effort.
17. The CMIP is a multi-faceted project to strengthen the Caribbean mobile innovation
ecosystem and enable sustainable and competitive mobile enterprises to grow. infoDev will partner
directly with the UWI Consortium (grant recipient) to design and implement a number of regional
and local activities that will target early stage app entrepreneurs and guide them to market
readiness. The grant recipient will coordinate the entire CMIP but will also select partners on six
islands, which will act as hubs for the local technology communities (mHubs). While many of the
activities will be delivered by the mHubs on the selected individual islands, CMIP has a regional
scope and it will include 14 CARICOM countries into the project’s activities by means of virtual
incubation techniques. The project will create a regional pool of high-growth potential mobile
startups with the capacity to release their apps to the market and raise additional capital to scale
their business.
18. CMIP Activities: Regional activities, managed by the UWI Consortium and implemented
in collaboration with mHubs, will constitute the main thrust of the project. Addressing the gaps
and challenges of the nascent Caribbean mobile innovation ecosystem, they will focus on the
early stages of startup development and on regional integration. Aided by local outreach through
six mHubs, the activities will invite the participation of developers from all over the region and
provide the best with exposure and access to regional and international networks of mentors and
investors. Regional activities consist of three phases along the pathway from “mind-to-market.”
Using the business plan as a guide for the creation and management of the CMIP, the following
services will be financed under the grant:
(a) Phase I: From Ideation to Pitch
(i) Training courses that cover two areas of mobile development: business
training focused on establishing and building a startup (i.e. monetization
strategies, business modeling, and customer relations) and technical
training focused on developing mobile apps (i.e. USSD, J2me, and
HTML5)
(ii) Organize and run prototyping events and competitions (i.e. hackathons)
12
(iii)Startup Challenge, a 4 month competition for developers and
entrepreneurs to submit their mobile app business idea and prototype in
order to win prizes, including further direct support
(iv) Organize the annual pitching event in which the 25 finalists from the
Startup Challenge pitch their business to a panel of judges
(b) Phase II: From Pitch to Market
(i) Provide and manage seed financing in each of the five winning teams to
enable the teams to continue with the development of the apps prototype
(ii) Match the five winning teams from the Startup Challenge with mentors
(regional, international, and Diaspora)
(iii)Provide the five winning teams access to facilities (desk space and wi-fi)
(when possible)
(iv) Arrange networking events (both face-to-face and virtual) between the 5
winning teams as well as other members of the Caribbean and
International mobile innovation ecosystems
(v) Develop and implement an Investment Readiness Bootcamp for the five
winning teams
(vi) Plan and organize the Demo Trip in which the five winning teams will
travel to an international event in order to showcase their product and
pitch their companies
(c) Phase III: From Market to Maturity
(i) Supervise the progress of the five winning teams, including assisting
them apply to the A2F Financing Facility and matching the teams with
other potential investors
(ii) Maintain and develop the network of alumni to enable additional
opportunities for networking and peer-to-peer learning
(iii)Review the activities delivered over the year in order to identify any
updates and adaptations to the process
(d) Virtual Community
(i) Establish and maintain a virtual community in order to engage and
connect all stakeholders in the Caribbean mobile innovation ecosystem
13
B. Project Financing
Instrument
19. The instrument will be a Recipient Executed Trust Fund Grant of US$1.5 million provided
under the Standard Conditions for Grants Made by the World Bank Out of Various Funds
(February 15, 2012 or latest edition).
20. The source of funds is the infoDev (World Bank) administered the Support for
Entrepreneurship Program for Innovation in the Caribbean Multi-Donor Trust Fund (TF071619).
Project Cost and Financing
21. The grant covers 100% of the estimated required seed capital in launching the CMIP, and
87% of the overall projected Project expenses during the grant period. Financing gap will be
covered through attracting co-investments and revenue generation activities as explained in
section IV. C. Sustainability
Project Components Project cost IBRD Financing % Financing
1. Innovation and Enterprise support services
Total Baseline Costs
Physical contingencies
Price contingencies
USD 1,715,000 USD 1,500,000 87%
Total Project Costs
Interest During Implementation Front-End Fees
Total Financing Required
USD 1,715,000 USD 1,500,000 87%
USD 1,500,000
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
22. The CMIP will be virtually run by the UWI Consortium with each consortium member
being located in Jamaica, within the grounds of the University of West Indies, Mona Campus.
The lead member will be UWI Consulting and will be joined by other two members, the Mona
School of Business and Management (MSBM) and the other in the Mona Business Support
Services (MBSS).
23. UWI Consulting, as the lead partner of the consortium, is a wholly owned subsidiary of the
University of the West Indies (UWI) and is a limited liability corporation with offices in St.
Lucia, Barbados, Jamaica, and Trinidad and Tobago. It supports creative and innovative projects
and programs in the Caribbean that build the institutional capacity of governments and the
private sector to develop human capital as the lynchpin for enhancing regional and global
competiveness. It accesses the knowledge and expertise of professors within the UWI network,
which has the largest and most significant concentration of advanced knowledge and technical
expertise in the Caribbean region.
14
24. MSBM and MBSS, both UWI departments, form the other two partners within the
consortium. Along with utilizing the expertise of UWI professors, the consortium will be able to
access to UWI’s large and regional infrastructure, including campuses on Barbados, Jamaica,
and Trinidad and Tobago along with its Open Campus, which delivers online education, in
designated centers in 18 territories. This includes two incubator facilities, one in the Mona
School of Business and Management (MSBM) and the other in the Mona Business Support
Services (MBSS). Both target students and MSMEs, and provide physical spaces and consulting
services to support and enhance the effectiveness of existing businesses and startup. MBSS’s
physical facilities, IT infrastructure, and service portfolio will be used for the CMIP. This
includes a mixed office space (open plan cubicles, formal meeting rooms with audio-visual
amenities and whiteboards and informal meeting areas suited to workgroup collaboration) and
broadband and wireless internet at all workstations and meeting rooms.
25. infoDev will supervise the project, while implementing other activities relevant for the
project through the Entrepreneurship Program for Innovation in the Caribbean (EPIC) along with
assisting in fundraising and partnership development. infoDev will also help to design and
implement the monitoring and evaluation approach to follow the impact of the CMIP on the
graduates and the ecosystem.
B. Results Monitoring and Evaluation
26. Like any project that influences complex economic and social environments, it is impossible
to measure the Project’s positive and negative impact in its entirety. Following good practice in
international development, the CMIP will instead draw on a simple logical impact model to
maintain clarity of vision and identify indicators that matter. The CMIP’s mission is itself a
subcomponent of the EPIC program’s overall goal to contribute to a more prosperous, integrated,
and competitive Caribbean economy. Thus, the lion share of the CMIP impact model are derived
from the EPIC program’s impact model and performance measurement framework.
27. Results indicators (included in Annex 1) set an incentive for the UWI Consortium to deliver
high-quality services and to allocate its resources in a way that the desired impact is achieved
beyond the key indicators.
28. To derive a much richer and more informative set of data points, the CMIP may collect data
on several additional indicators, depending on available resources and the necessary effort for
tracking. This data can complement and feed into qualitative summary studies that may be
conducted by EPIC or other relevant initiatives. A potential approach to assess the CMIP’s effects
on the Caribbean mobile innovation ecosystem as well as a list of example indicators will be
established once the project has started.
29. Ultimately, the UWI Consortium is responsible for data collection and evaluation, which
may be complemented by additional evaluation efforts by infoDev. The UWI Consortium is also
required to assist infoDev and its contracted agencies and individuals for additional data collection
from stakeholders and to give infoDev access to contact details of network members.
15
30. UWI Consortium is required to submit detailed progress reports for CMIP (both for
performance measurement and grant documentation), and have staff available for clarification and
follow-up inquiries. infoDev will coordinate with the UWI Consortium to ensure that meaningful
data is captured in a timely fashion and that the administrative burden for the UWI Consortium is
kept to a reasonable level.
31. The data is fed into a monitoring system that will also serve as a performance measurement
system for CMIP to support long term learning and improvement. As such, the system should
facilitate reporting and evaluation during the CMIP lifetime and beyond. In the system, the UWI
Consortium, in particular, is asked to track information on (different types of) clients and
beneficiaries, including entrepreneurs and startups as well as partners. To fill the data base, the
UWI Consortium will be responsible for collecting data from stakeholders, or to set the system up
in a way that allows stakeholders to feed some of the data into it directly. Data will be updated on
a semi-annual basis, more frequent updates will ensure that data collection runs smoothly and can
be turned into insightful evaluations, and include recommendations for adjustments.
C. Sustainability
32. The initial $1.5 million USD grant (EPIC Seed Financing) will be used to establish the
CMIP which will last four years. In the first two years, the funding will cover 100% of the CMIP
budget. In the subsequent years, the funding will decrease to 80% in Year 3 and to 72% in Year
4. The funding has been structured in this manner in order to have the UWI Consortium focus on
sustainability. It will be the role of the UWI Consortium to generate revenues on a yearly basis in
order to cover the funding gaps in years 3-4. Revenues will need to be generated from a number
of activities (training, hackathons, etc.), sponsorships, and returns on investments made into
startups. The UWI Consortium will also be funding the local activities run through the mHubs.
33. The revenue streams will include the following:
(a) Private Sector Partnerships and Sponsorship: The most important revenue source
is through both regional and local private sector sponsorships. Since the CMIP will
not have a physical space that is often utilized to brand partner companies, the
branding opportunities are related to events and a virtual presence. CMIP activities
offer several types of sponsorships from small contributions that local technology
companies can afford to pay for the mHub to major regional sponsorships to be
branded throughout all the activities.
(b) Equity/Royalty: The five Startup Challenge winners will receive $5,000 in seed
financing from UWI Consortium for a fixed stake in their company (or alternatively
through a royalty or other success sharing arrangement). The shares will be owned by
the UWI Consortium and they are assumed to be held for five years. Liquidation of
the shares (through VC/Angel funding) will be reinvested back into the CMIP.
(c) Training, Event and Pre-Incubation Service Fees: Based on the best practices
from infoDev’s mLabs and the advice from focus group discussions with Caribbean
stakeholders, beneficiaries are willing and able to pay for the access to high-quality
16
activities, such as the Business and Technical Training or participation in pitching
and networking events.
(d) Government Investment: With the regional nature of the CMIP, it will be difficult
for the UWI Consortium to receive funding from local governments because of the
project’s regional scope. In turn, local mHubs should reach out to their national
governments and apply for funding as well as find ways to collaborate with relevant
government bodies such as export agencies, including in-kind support like venue use
during events. The initial goal is to secure one government investment which could
then spark investment across the other islands.
(e) Other Possible Revenue Streams: While the above sources of revenue will help to
supplement the initial funding and eventually secure long term sustainability, it will
be critical for the UWI Consortium to continue raising new funding and create more
revenue streams. Other funding sources include other multinational development
agencies, foundations, non-governmental organizations (NGOs), and regional bodies
(i.e. CTU and CARICOM). These could include agreements that invest or collaborate
with the CMIP. Another option will be for the UWI Consortium and its members to
provide consulting services. The associates of the UWI Consortium will be able to
form a consulting component to provide market research, implementation services,
and application development. Finally, the UWI Consortium and the local mHubs will
be able to host other events in order to generate awareness in the community and
receive revenue from entry fees.
V. KEY RISKS AND MITIGATION MEASURES
A. Risk Ratings Summary Table
Stakeholder Risk Moderate
Implementing Agency Risk
- Capacity High
- Governance Low
Project Risk
- Design High
- Social and Environmental Low
- Program and Donor Low
- Delivery Monitoring and Sustainability Substantial
Overall Implementation Risk Moderate
17
B. Overall Risk Rating Explanation
34. The overall risk rating is considered moderate. While this model is new and innovative to
the region, it is based on extensive research and consultations. Lessons from similar projects in
other regions have taught that the implementing agency, the UWI Consortium, and their project
personnel will have a critical role in executing the project successfully and achieving the
intended results, as well as the potential long term impact that a strengthened mobile innovation
ecosystem can provide. infoDev has allocated resources to both closely supervise the project
team of the UWI Consortium as well as build the capacity of the team and similar incubation
efforts as a part of the EPIC program.
VI. APPRAISAL SUMMARY
Economic Benefits
35. Generally, it should be acknowledged that the CMIP is designed to function as a catalyst
for innovation and entrepreneurship far beyond the project’s activities and time horizon. The
CMIP’s total impact will go beyond the measured impact. Outcomes will often be multi-faceted,
indirect, and impossible to pinpoint. Therefore, the following results estimate and any future
impact assessment can only be seen as snapshots of few key, high-level parameters.
36. For the economic analysis, a model was created to indicate results in terms of revenues
generated, investments raised, and jobs created by the startup teams founded as a consequence of
the project activities. Over the first four years 125 startups are expected to be founded and
assisted (335 startup teams over ten years), of which 24 are expected to become sustainable (75),
and they will generate USD 2.50 million in revenue from their products and services (USD 14.20
million), and raise USD 3.67 million in early stage investments (USD 25.70 million), generating
416 direct and indirect jobs (6,063). The cumulative revenues are expected to exceed the initial
donor contribution for the project within project implementation and the economic benefits will
increase assuming the CMIP will reach its sustainability targets.
37. There are other expected benefits, such as effects on the entrepreneurial ecosystem,
increase in technical and entrepreneurial skills, or other potential spillovers in the ICT industry
development and effects through the usage of apps, but these effects are difficult to estimate and
are not included in the model. For instance, app usage by businesses can lead to increased
operational efficiencies and rising profits, and m-government or m-health apps can lead to better
public service delivery.
Financial Management
38. The Financial Management assessment found that the UWI Consortium has acceptable
financial management capacity, including the budgeting, accounting, reporting, auditing and
adequate internal control arrangements to implement. The Accounting Department has four
financial management staff of which two staff are qualified accountants (ACCA). However,
since the new project will increase the workload of the existing staff significantly, it was agreed
that a new Project Accountant would be required to manage the additional work load. The cost
of the Accountant would be financed by the project. The UWI Consortium has adequate
18
accounting systems, control environment, guidelines and procedures for proper management and
use of the project funds. The UWI Consortium would be able to submit timely interim and
audited financial statements to the Bank.
Procurement
39. The Procurement assessment found that the UWI Consortium’s experience is limited to
relatively small projects with very simple procurement procedures. The UWI Consortium
appears to be well organized with the main issue being their very limited exposure to the
procedures and selection methods that are used for consulting firms and the fact key staffs to be
involved in the management of the grant have not been recruited yet. As UWI Consortium and
probably the project team to be recruited have limited experience in the some of the processes to
be used under the grant, the Bank prior review thresholds will be low. It is recommended that
World Bank prior reviews at least the 3 first contracts for each selection and procurement
methods to be used regardless of the contract amount. Once the procurement plan will be known
and discussed, the contracts that requiring special attention regardless of established Bank Prior
review thresholds will be singled out.
Safeguards
40. Because of the virtual nature of the project, the CMIP did not trigger any of the safeguards
issues. This project is rated Category C.
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Annex 1: Results Framework and Monitoring
CARICOM: Mobile Innovation Project Under EPIC
Project Development Objectives (PDO): The project aims (1) to strengthen the Caribbean mobile innovation ecosystem and (2) to enable sustainable and competitive mobile
enterprises to grow.
PDO Level Results Indicators*
Co
re
Unit of
Measure Baseline
Cumulative Target Values** Frequency
Data Source/
Methodology
Responsibility
for Data
Collection YR 1 YR 2 YR3 YR 4 YR5
IT/ITES Revenue USD ($) 0 117,375 461,037 1,187,906 2,509,099 N/A Annual Form/Progres
s Reports
The UWI
Consortium
Investment raised USD ($) 0 322,500 655,750 1,072,825 1,626,917 N/A Annual Form/Progres
s Reports
The UWI
Consortium
IT/ITES employment
(of which women %)
# of jobs
(direct/ind
irect), %
gender
0 48 (14/34)
20%
128 (37/91)
20%
245
(70/175)
20%
416
(119/297)
20%
N/A Annual Form/Progres
s Reports
The UWI
Consortium
Sustainable startups created
(surviving at least one year)
# of
startups 0 5 10 16 24 N/A Annual
Form/Progres
s Reports
The UWI
Consortium
INTERMEDIATE RESULTS
Intermediate Result:
Startup teams receiving services
(of which women %)
# of
startups,
% gender
0 25
20%
50
20%
75
20%
100
20% N/A Annual
Progress
Reports
The UWI
Consortium
Level of satisfaction by startups
of CMIP services
% rate
good or
very good
0 75% 75% 75% 75% N/A Annual
Surveys,
Progress
Reports
The UWI
Consortium
Applications received through
mobile competitions
# of
applicatio
ns
0 100 200 300 400 N/A Annual
Applications,
Progress
Reports
The UWI
Consortium
CMIP reaching financial
sustainability targets
Generated
revenue /
expenses
0 21% 34% 37% 49% N/A Annual
End of year
financial
Records
The UWI
Consortium
mHubs established by CMIP # of
mHubs 0 6 6 6 6 N/A Annual
Progress
Reports
The UWI
Consortium
*Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators)
**Target values should be entered for the years data will be available, not necessarily annually
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Annex 2: Detailed Project Description (optional)
CARICOM: MOBILE INNOVATION PROJECT UNDER EPIC
41. The detailed project description is available in the CMIP Business Plan. As this document
includes over hundred pages plus Annexes it should be accessed separately. Available at:
http://www.infodev.org/cmipBP.
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Annex 3-Operational Risk Assessment Framework (ORAF)
CARICOM: Mobile Innovation Project under EPIC (P132570)
Stage: PCN
1. Project Stakeholder Risks
1.1 Stakeholder Risk
Description:
1. Lack of Government buy-in: Local governments show no
interest in supporting (financially or politically) the regional
approach of the CMIP
2. Alumni not interested in participating: The graduates from
incubation are not interested in providing mentorship to future
classes and less interested in building a developer community in the
region
Rating Moderate
Risk Management:
1. infoDev and the UWI Consortium will work directly with the
World Bank offices in the Caribbean to build relationships with
elected officials on each island. The mandate will be to raise
awareness for the benefits of the regional approach among all
stakeholders, including government officials.
2. After graduation, a condition to join the virtual Alumni Network
and stay connected with the infoDev’s global network of
entrepreneurs will be to provide support in future local and regional
events.
Resp: Stage: Recurrent
:
Due Date: Frequenc
y:
Status:
2. Implementing Agency Risks (including fiduciary)
2.1 Capacity
Description:
Partners have limited capacity and resources: Implementors (both
the UWI Consortium and potential mHubs) in the region lack the
capacity and resources to provide the services deemed necessary to
incubate and build local communities.
Rating High
Risk Management:
infoDev will provide the necessary support to the UWI Consortium
and local mHubs and other partners through concrete guidance
(e.g., toolkits), contacts and linkages, as well as other materials. The
UWI Consortium will provide the necessary support to the mHubs
and will also re-assign duties for sub-contractors based on their
performance.
Resp: Stage: Recurrent
:
Due Date: Frequenc
y:
Status:
2.2 Governance
Description:
As the consortium consist of three entities, it is important that
their roles and responsibilities, including a clear governance
structure for the project, are defined in detail in order to achieve
efficiency.
Rating Low
Risk Management:
The members of the UWI Consortium are required to prepare a
legal agreement prior to the signing of the grant agreement which
will include both the roles and responsibilities as well as a specific
governance structure. infoDev will be providing advice during the
development of the structure based on past experiences with
consortiums.
Resp: Stage: Recurrent
:
Due Date: Frequenc
y:
Status:
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3. Project Risks
3.1. Design
Description:
New and unproven project design: While the model is using a
number of best practices, the design of the CMIP, especially
connecting local actors under a regional hub, has not been
attempted before.
Rating High
Risk Management:
infoDev will monitor and observe the implementation of the CMIP,
including having a local consultant in the region, in order to see
where, if any, improvements can be made to the project’s design.
The UWI Consortium will have the ability to provide feedback to
infoDev about the project during the annual review period. The
UWI Consortium will also be supported by an advisory committee
which will include experts from the Caribbean region.
Resp: Stage: Recurrent
:
Due Date: Frequenc
y:
Status:
3.2 Social and Environmental
Description:
Based on the virtual nature of the project and targeted beneficiaries,
this is no expected risks related to environmental or social issues.
Currently, there are no plans to construct or refurbish space for the
entrepreneurs to use.
Rating Low
Risk Management:
If the current plan changes in the future, it will be necessary for
infoDev to have a safeguards assessment completed before any
funds are promised to the expansion of the project.
Resp: Stage: Recurrent
:
Due Date: Frequenc
y:
Status:
3.3 Program and Donor
Description:
Although the business model doesn’t depend on additional donor
financing, other donors have been identified as potential supporters.
Main risk is overlap and/or weak coordination among entities
supporting similar activities.
Rating Low
Risk Management:
Close coordination and frequent outreach efforts to inform main
donors active in the region will minimize potential overlap and help
to build mutually beneficial partnerships.
Resp: Stage: Recurrent
:
Due Date: Frequenc
y:
Status:
3.4 Delivery Monitoring and Sustainability
Description:
1. Failure to become sustainable in 4 years: After 4 years, the CMIP
is not sustainable enough to continue providing its current portfolio
of services
2. Funding requirements larger than expected: The allocated budget
for the project runs out early as costs are higher than originally
estimated
Rating Substantial
Risk Management:
1. Through a collaborative review by the UWI Consortium and
infoDev, activities and services provided will be scaled down in
order for the CMIP to continue. The review will be based on the
needs of the community and their cost.
2. Where possible, additional sources of funding will be raised from
donors, World Bank and private sector links. Based on the initial
support that EPIC delivers, the UWI Consortium and mHubs are
required to quickly build their portfolio and engage in partnerships
and additional fund-raising from investors.
23
3. Revenue estimate is too optimistic: The generated revenue is not
enough to bridge the budget gap
4. Lack of private sector interest: The private sector, specifically
the technology sector, is not interested in providing both
sponsorship funding and coaching to the regional community
3. infoDev and the UWIConsortium will analyze the financial
statements in order develop fundraising quotas for the CMIP. There
will also be an annual revision of the business plan.
4. infoDev and UWI Consortium will use its contacts in the private
sector in order to meet in-person to develop partnerships.
Resp: Stage: Recurrent
:
Due Date: Frequenc
y:
Status:
4. Overall Risk
Implementation Risk Rating: Moderate
Comments: The CMIP is built on the best practices that have been discovered in other infoDev projects supporting mobile innovation
ecosystems. Also it was designed around the needs of the Caribbean mobile innovation ecosystem. While this model is new and
innovative to the region, it is based on extensive research and consultations. The greatest risk will be the assumptions created in
developing the sustainability model of the project. If the demand and the subsequent revenues from the activities do not reach certain
levels, the project will struggle to implement all planned activities. By having the UWI Consortium understand the necessity of
generating income from the start, the goal is to have a reserve of money built up in order to protect from outside or unknown forces
when the grant funding decreases in subsequent years.