USAID IRAQ FROM THE AMERICAN PEOPLE

ACTIVITY DAT A

Activity Number: Country/Region Activity Name: Program Area: FundingBegin: IEE expiration date: LOPAmount: IEEPreparedby: Date: IEEAmendment:

INITIAL ENVIRONMENTAL EXAMINATION AND

CATEGORICAL EXCLUSION Amendment #6

NIA USAID/lraq Umbrella PAD

February 16, 2016 December 31, 2020 $954 million

File No.

Jodi Rosenstein, Acting Deputy Director for Stabilization June 29, 2019 Yes

If Yes File name oforiginal IEE: ME 16-13 (Iraq Umbrella PAD); ME 16-56 (Amendment I), ME 17-64 (Amendment 2), ME 18-57 (Amendment 3), ME 18-73 (Amendment 4) and ME 18-80 (Amendment 5).

ENVIRONMENTALACTIONRECOMMENDED; {PlaceX where applicable)

CategoricalExclusion PositiveDetennination_

PURPOSE;

The purpose of this IEE is to:

NegativeDetennination_X_ WithConditions X

a) Expand the scope of stabilization activities and make threshold determinations for a new activity, the Iraq Crisis Recovery and Resilience Program (ICRRP), to be implemented by UNDP through PIO grant #AID-267-1O-15-00001 under PAD Objective#2: Stabilization Support in Areas Liberated from Da'esh;

b) Increase the UNDP PIO grant award ceiling to $500 million.

All other elements of the IEE remain the same.

BACKGROUND AND DESCRIPTION OF ACTIVITIES;

In July 2015, the Mission awarded UNDP a PIO grant with an initial ceiling of $8,300,000 to implement stabilization activities through the Funding Facility for Stabilization (FFS), with an estimated completion date of January 5, 2017. The purpose of this grant is to support the U.S. government policy goal of strengthening Government of Iraq (GOI) capacity to respond to the immediate stabilization needs of devastated cities and towns, thereby encouraging Iraqis to stay in or return to liberated areas.

The current PAD and PAD Amendments authorizes a $400 million ceiling for the UNDP PIO, although the actual award has a current total cost estimate of$300 million with obligations totaling $271 million. In April 2019, Secretary of State Michael Pompeo authorized an additional $100 million to be provided to FFS to support immediate stabilization needs in Anbar provinces. In anticipation of future similar funding for Salah al Din, Kirkuk, and other newly liberated provinces, USAIDnraq is increasing the UNDP PIO award grant to $500 million.

Additional funding will be used to contin~ nding of the following activities under the existing UNDP grant USAID:

Funding Facility for Stabilization FFS - USAID/lraq is financing the rehabilitation of basic service infrastructure damaged by ISIS during its occupation in these provinces as well as other liberated areas. USAID is funding the rehabilitation of infrastructure built and maintained by the GOI before the occupation, and no USAID funds will be used to finance the construction of new infrastructure. These efforts include, but are not limited to, the rehabilitation of basic service infrastructure in five public sectors - water (e.g. water treatment and sewage plants), education (e.g., schools and universities), electricity (e.g., infrastructure for power generation, transmission and distribution), health (e.g., clinics and hospitals) and municipalities (e.g., municipal facilities, waste management)-as well as private housing, in provinces severely affected by ISIS. While the aggregate of activities in any sector may reach $80 million, most activities will not exceed $1 million. The appropriate certifications for capital assistance in compliance with FAA Section 611 ( e) and Section 1273 are on file.

Funding Facility for Economic Reform-Federal (FFER - Federal) is designed to support the GOI to oversee critical economic reforms, including those supported by the IMF, the World Bank, and other bilateral donors. The GOJ has established an Economic Reform Unit (ERU) to coordinate the implementation of these reforms within the various ministries and agencies. USAID approves the use of its funds and the selection of the international experts recruited to assist the GOI and other Iraqi entities, including state-owned enterprises, with implementation of the reforms. UNDP also may support pilot projects intended to test processes and systems that will increase the efficiency of revenue collection or expenditure management. Processes and systems may include software development, IT hardware and advisory services. Assuming that the GOl's political will remains constant, USAIDnraq anticipates that up to $50 million will be programmed through the FFER-Federal over the life of the PAD.

FFER-KRG - is designed to support the KRG to implement economic reforms, including those proposed by the IMF, World Bank, and other bilateral' donors. There are multiple lines of effort within the KRG to lead reforms, including through the Ministry of Planning and the Deputy Prime Minister's Office. The FFER-KRG will help the KRG and international donors

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prioritize KRG refonn efforts and make them more coherent. USA ID approves the use of its funds and the selection of the international experts recruited to assist the KRG and other KRG- entities, including state-owned enterprises, with implementation of the refonns. UNDP also may support pilot projects intended to test processes and systems that willincrease the efficiency of revenue collection or expenditure management. Such pilot processes and systems may include software development, IT hardware, and other small equipment such as electricity metering equipment as well as advisory services. Assuming that the KRG's political will remains constant, USAID/Iraq anticipates that up to $50 million will be programmed through the FFER-KRG over the life of the PAD.

Iraq Crisis Response and Resilience Programme (ICRRP) - In March 2019, Secretary of State Michael Pompeo directed funds to assist the GO! prevent and respond to a potential water crisis in Basra Province and other areas this summer, of which $5 million will be implemented by USAID/Iraq through ICRRP. The lack of potable water in Basra In the summer of 2018 led to wide-spread protests, and riots that spread to Baghdad and other areas of Iraq. In addition to the humanitarian need, providing access to potable water would prevent the instability of Basra and of Iraq.

USAID/lraq and the U.S. Embassy Iraq identified UNDP's ICRRP as the most cost­efficient and effective mechanism to implement Secretary Pompeo's request. Operational since 2014, ICRRP is a multilateral donor platform that works ln all 12 of Iraq's governorates to 1) improve crisis response coordination, processes and management; 2) improve local access to basic services and institutional delivery and accountability for those services; 3) improve livelihood opportunities particularly for communities with !DPs and refugees; 4) protect vulnerable communities, specifically women and youth, who are at risk of sexual and gender-based violence; and 5) strengthen social cohesion and reconciliation through dialogue, peace education and capacity building of local communities.

ICRRP is experienced in rehabilitating water treatment plants, pipe networks, and other projects to Improve access to potable water. In April 2019, the U.S. government decided to provide ICRRP with $5 million through USAID's current contract with UNDP to rehabilitate critical aspects of Basra's water infrastructure. Other current donors to ICRRP include Japan, Germany (KfW), France, Austria, DFID. It has also received funds from Deutsche Gesellschaftffir Internationale Zusammenarbeit (GIZ), Kuwait and the Kingdom of Saudi Arabia in the past for a total contribution of approximately $140 million.U.S. funds will be used to support the rehabilitation of water treatment plants and other public infrastructure ln Basra province and other areas of Iraq.

SUMMARY OF FINDINGS

The Mission will execute the PAD's Objective#2 Stabilization Suppo.,-4 Areas Liberated from Da'esh ... Activity through expanding the existing Public

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International Organization (PIO) Grant to the UNDP to include immediate stabilization activities through new activity ICRRP under #AID-267-l0-15-00001.

Although design, management and implementation of activities under the PIO grant are the responsibility ofUNDP, UNDP must obtain USAID's prior approval for projects and activities that will be funded with USAID funds. Upon review ofUNDP's proposed activities anticipated to be funded by USAID under FFS, FFER-KRG and ICRRP, it was determined that the projects encompass activities that could have an adverse impact on the environment, such as:

• Under the FFS, rehabilitation activities such as repairs of key infrastructure including health clinics, water infrastructure and treatment facilities, power grids and generators, schools, other government buildings, access roads and shelter.

• Under FFER- KRG procurement and installation of billing and metering hardware for the Advanced Metering Infrastructure (AMI) at pilot locations aimed to improve KRG's electricity revenue by reducing non­technical losses;

• Under ICRRP, the rehabilitation of water treatment plants and other public infrastructure.

Therefore, for activities funded by USAID falling under the above listed categories, the threshold determination is a Negative Determination, with conditions.

ADS 308.3.10 states: "In awarding cost-type grants to PIOs with their own environmental policies, for activities that are not exempted or categorically excluded from environment analysis under 22 CFR 216.2, USAID should strive to rely upon the PIO's application of its own environment policies to the activity proposed." UNDP has submitted its own environmental policy guidelines with assurance that these will be applied. UNDP's environmental guidelines were reviewed by REA and MEO and have been determined to be sufficient. Also, as per ADS 308.3.10 (c) provision "Any environmental conditions proposed to ensure adequate environmental review of the activity proposed should have due regard to both the independence and sovereignty of the PIO and the purpose and intent of the environmental impact assessment requirements of USAID." ln addition REA reviewed UNDP's Water Quality Testing approach and found it in line with USAID requirements. USAID also previously modified the award to includ conditions which require that UNDP submit their social and environmental screening documents (including environmental assessments, as needed) for USAID's record keeping purposes, subject to the limitations set forth in this IEE and specified in the PIO grant to UNDP.

The "Social and Environmental Standards" (SES) document is UNDP's Social and environmental policy. The SES, which were approved in June 2014 and became effective on January I, 2015, are an integral component of UNDP's quality assurance and risk management approach to programming. SES is outlining: •..

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1. UNDP's commitment to promote sustainable development 2. The policy require that all UNDP programmes and projects enhance positive

social and environmental opportunities and benefits and that environmental risks and impacts are avoided, minimized, and mitigated.

3. The policy includes most important and most critical environmental and social elements including Biodiversity, health and safety, cultural heritage, resettlement, indigenous people, pollution prevention, infrastructure safety, waste, pesticides, and climate change mitigation and adaption.

According to the policy, UNDP screens programs early in their development stage. The policy mentions that UNDP utilizes its social and environmental screening procedure to identify potential risks and to categorize projects according to the degree of potential risks (three categories: Low risk, Moderate risk, High risk). The policy also talks about UNDP's policy on monitoring, reporting and compliance.

For climate change impacts, and according to the policy, UNDP has a requirement to ensure that proposed activities are screened and assessed for climate change related risks and impacts of and to projects. The policy talks about both mitigation and adaptation.

Possible future activities w,der FFER-Fed will be within technical assistance area.

Table 1: Recommended threshold determinations and conditions for each activity.

Activities Categorical Negative Positive Deferral Exclusion Determination Determination

with Conditions

Funding Facility NIA X NIA NIA for Stabilization (FFS)

Iraq Crisis NIA X NIA NIA Recovery and Resilience Program UCRRS) Funding Facility X NIA NIA NIA for Economic Reform-Federal (FFER - Federal) Funding Facility NIA X NIA NIA for Economic Reform-KRG (FFER- KRG)

Recommended Action:

t, Funding Facility for Economic Reform - Federal (FFER - Federal) -

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Categorical Exclusion

Because the FFER-Federal is consistent with similar types of environmentally neutral actions and interventions listed in 22 CFR 216.2(c)(2), and meets the criteria.for Categorical Exclusion it is categorically excluded from any further environmental review requirements under 22 CFR 216.2(c)(3).

Categorical Exclusions are further recommended, pursuant to 22 CFR 216.2 (c)(2)(i), (iii), (v), and (xiv) under the following classes of actions:

(a) Technical assistance, education and training [2)6.2(c)(2)(i)];

(b) Analysis, studies, meetings and workshops [216.2(c)(2)(iii)];

(c) Document and information transfer [216.2(c)(2)(v)]; and,

(d) 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 environment (such as construction of facilities, etc.) [216.2( c)(2)(xiv)].

2. The Funding Facility for Stabilization (FFS), Funding Facility for Economic Reform - KRG (FFER - KRG) and Iraq Crisis Recovery and Resilience Program (ICRRS) - Negative determinations with conditions

Conditions:

l. The PIO will use its environmental policies and procedures in implementing USAID funded activities as pennitted by 22 CFR 216 procedures and ADS308.

2. UNDP will be responsible for the oversight of the implementation and environmental compliance of projects and activities implement edunder PIO grant agreement.

3. UNDP will provide to USAID "the UNDP Environmental and Social Screening Template (including Standard 2: Climate Change Mitigation and Adaptation) for FFS, FFER - KRG and ICRRS" and any update, as is required per UNDP compliance procedures. If a project or bundled projects, as per screening criteria listed in the document, does not require full "Social and Environmental screening" UNDP will provide the compliance statement. The statement must be signed by the responsible person who made the determination. If the project requires further environmental screening and/or assessment the relevant signed documents will be provided to USAID along with the project or activity proposal.

4. UNDP will provide USAID with fonnal quarterly progress and monitoring reports documenting environmental compliance includes climate risk management, for the USAID funded projects. In the event that environmental complianceis found to be lacking or insufficient to satisfy USAID's environmental compliance policy codified in 22 CFR 216, the UNDP grant agreement may be suspended as provided in the tenns and conditions of the PIO grant to UNDP.

5. USAID has put in place enhanced monitoring of this award by engaging its third-party monitoring and evaluation contract for Iraq. Through this contract, USAID will use field-based Iraqi Field Monitors to provide supplemental monitoring and verification of the performance ofUNDP activities.

6. A copyofthis IEE will be provided to the UNDP and explained by the Agreement Officer's Representative and the Mission Environmental Officer.

Limitation or the IEE;

This assistance does not cover activities involving:

!)Assistance, procurement or use of genetically modified organisms (GMOs).The use of GM Os will require preparation of a biosafety assessment (review) in accordance with ADS201.3.9.3(a) in an amendment to the IEE approved by the Bureau Environmental Officer (BEO).

2) Procurement (including payment in-kind, donations, guarantees of credit) or use (including handling, transport, fuel for transport, storage, mixing, loading, application, cleanup of spray equipment, and disposal) of pesticides or activities involving procurement, transport, use, storage, or disposal of toxic materials and/or pesticides (cover all insecticides, fungicides, rodenticides, etc. covered under the Federal Insecticide, Fungicide, and RodenticideAct).

3) Procurement or use of Asbestos Containing Materials (ACM) (i.e.,piping, roofing, handling and disposal of waste material etc.), PolycWorinated Biphenyl's (PCB) or other toxic/hazardous materials prohibited by the US EPA as provided at: http://www.epa.gov/asbestos and/or under international environmental agreements and conventions, e.g., Stockholm Convention on Persistent Organic Pollutants as provided at: http://cbm.pops.int, procurement and use of pesticides, and procurement and use of lead and mercury.

CLIMATE RISK MANAGEMENT

As per ADS 201 and ADS 201mal, USAID should factor climate resilience into international development programs and investments. All new projects and activities after October I, 2016, shall be screened for climate risks over the life of expected benefits, and (if appropriate) demonstrate how those risks will be reduced in order to ensure sustainability of the activity's objectives. According to the ADS guidance on climate risk, all construction activities are rated HIGH.

As permitted by 22 CFR 216 procedures and ADS308 the PIO will use its environmental policies and procedures, includes climate risk management, in implementing USAID funded activities. Therefore USAID will rely on UNDP implementing its own climate change screening requirements and process in implementation of The Funding Facility for Stabilization (FFS), Funding Facility for Economic Reform - KRG (FFER - KRG) and Iraq Crisis Recovery and Resilience Program (ICRRS). As per requirements stated under the Conditions section above, UNDP will include climate risk management in the quarterly progress and monitoring reports and will share the screening results with the AOR and MEO.

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COMPLIANCE

Pursuant to USAID's environmental procedures, including ADS 204.3.4, the Contracting/ Agreement Officer's Representative (C/AOR) or Activity Manager and the activity implementing partner are required to actively monitor their activities to ensure that they remain within the bounds of the above stated environmental threshold decisions. This requires undertaking periodical field checks in the activity implementation areas to verify whether any activities are being implemented that could result in unforeseen adverse environmental impacts that could be occurring, and to ensure that the activities remain within the bounds of the IEE.

Given the security restrictions for USAID employees in Iraq for monitoring activities, the C/AOR or Activity Manager will rely on an independent third-party monitoring contractor to ensure environmentalcompliance.

REVISIONS

As with all USAID-funded projects, and pursuant to 22 CFR 216.3(a)(9), if new information becomes available which indicates that any of the proposed actions to be funded by this activity might be "major" and their effects "significant," the threshold decision for the actions listed above will be reviewed and revised by the originator(s) of the program and projects andsubmitted through the MEO to the Bureau Environmental Officers, ME, for approval and, if warranted, an environmental assessment will be prepared by the Mission as appropriate. It is theresponsibilityoftheActivityManagers,AORs,andCORstokeeptheMissionEnvironmenta 1 Officer and the BEO informed of any new information or changes in the relevant activity that mightrequirerevisionoftheIEE.

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APPROVAL OF RECOMMENDED ENVIRONMENT AL ACTION SUPPLEMENTAL to Amendment #6 ofUMBRELA IEE

,,.

Approva k----"

Clearances:

Mansuri Mission Director

GEO: Jodi Rosenstein

MEO: Vladan Raznatovic

PRO: Joe Foltz

A-DMD: Maura O' Brien

REA: Anan Masri

RLO: Michael Behan (info)

Date ~ /r;j ;)-1) / 'f

cleared by email Date: June 19, 2019

cleared by e-mail Date: June 19, 2019

cleared by e-mail Date: June 19, 2019

J!A_~ Date: 1-\~ \ f\ cleared by e-mail Date: June 19, 2019

cleared by e-mail Date: June 28, 2019

John Wilson (/ /_ /r._;;l!o ""7 CONCURRENCE# :

ME Bureau Envir nental Officer Date 7 /r I z.,,1,

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