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BTC/SCP and WREP Community Development Initiative

Report for October- December, 2013

GEORGIA

BP’s business activities in Georgia

BP has been in Georgia since 1996. Our main business is all about the safe transportation and

delivery of energy through our pipeline operations, where we are the lead investor and operator

in three major oil and gas projects:

Baku-Tbilisi-Ceyhan (BTC) pipeline

The Baku-Tbilisi-Ceyhan (BTC) pipeline began operating in June 2006. With a total

construction cost of circa $4 billion, the BTC pipeline is the first direct transportation link

between the Caspian and the Mediterranean seas. At full capacity, it can deliver one million

barrels of oil per day to market, generating important revenues for the Georgian government for

decades to come.

South Caucasus gas pipeline (SCP)

The South Caucasus gas pipeline (SCP) started delivering gas from the Shah Deniz field in the

Caspian to markets in Azerbaijan and Georgia from December 2006, and in Turkey from July

2007, representing an important new source of gas supply for the region.

Western Route Export Pipeline (WREP)

The Western Route Export Pipeline (WREP), also known as the Baku-Supsa pipeline, was our

first investment in Georgia. This 830 km pipeline transports oil from the Chirag field in the

Caspian Sea, via the Sangachal terminal in Azerbaijan, to the Supsa terminal in western

Georgia, with just under half of the pipeline located in Georgia. WREP, which became fully

operational in 1999, is capable of transporting up to 100,000 barrels of oil a day.

BP Georgia Community Development Initiative (CDI) overview

Community development along BTC/SCP pipelines

CDI in Georgia was initiated in early 2003 in 77 communities along the SCP and BTC

Pipeline route. Initially the program started with the title of Community Investment Program 1

(CIP 1). Later, in 2010 the title of the program changed into the Community Development

Initiative (CDI).

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CDI 1

The goal of CDI 1 during the construction phase was to enhance positive relations between BP

and communities along the pipeline route through sustainable socio-economic development.

The overall program budget during pipeline construction phase was $8 million over a three-

year period (2003-2006). Similar program were created for Azerbaijan and Turkey.

After the completion of construction of BTC/SCP pipelines and moving into the operations

phase (2006), BP as operator of BTC and SCP, continued financing of the phase II of the

CDI for additional 3 years (2006-2009) with the aim to strengthen/solidify positive

relationships with communities along the route of the BTC/SCP pipelines .

CDI 2

The overall goal for Phase II of the CDI (CDI 2) was to enhance positive relations between

BP and communities along the BTC/SCP pipelines route by investing in communities that

demonstrate a commitment to become models for sustainable community development. The

aim is to support communities to become increasingly able to implement and sustain self–help

projects with minimal external support, and to thereby improve the livelihoods and

opportunities for the pipeline affected communities through a partnership relationship with BP.

In the beginning of 2008 implementation of the marketing component of the CDI 2 -“Farmers

to Markets” project (FtM) has started in addition to on-going activities. The initiative to start

the project was prompted by the need to address and fill in a significant gap by assisting small

farmers in getting their goods to market. For this reason the project was named as Farmers to

Markets.

Implementation of project activities was scheduled for three year period (2008-2011) with the

total budget 520,000US$. Due to the saving in the project budget at the beginning of 2011,

No- cost extension of the project was approved. FtM project was prolonged by four months

until the end of July, 2011 to fulfill the planned activities with the funds remaining in the

project budget.

Recognizing commitment of BP and its co-venturers to support enhancement of the quality of

life of the communities in the countries of the three pipeline projects (BTC/SCP/WREP), and

based on the company stakeholder development strategy the decision was made to continue

supporting Community Development Initiative along the BTC/SCP and WREP pipelines in

Georgia beyond Y2009.

CDI 3

Third phase of the Community Development Initiative on BTC/SCP pipeline (CDI 3) started in

May 2010 with CARE international as the lead partner. Smooth transition between the CDI 2

and CDI 3 was achieved through extending some of the activities of CDI 2 until

commencement of the new phase.

The proposal submitted by CARE international for the CDI3 was reviewed both internally by

BTC/SCP team and externally by an Advisory Board made up of representatives of key donor

organizations active in the country - United Nations Development Program (UNDP), US

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Agency for International Development (USAID), the European Union (EU) and Swiss

Cooperation Office for the South Caucasus (SDC)

In May, 2010 formal agreement was signed with CARE international in the Caucasus to lead

the program implementation together with two local organizations: Center for training and

Consultancy (CTC) and Constanta Bank (micro loans). Program duration was planned till the

end of January 2012 with the total budget of US$ 1.865,081 million.

Due to the saving in the program budget, the program was prolonged within the no-cost

extension procedure by two months until the end of March’2012 to fulfill the planned activities

with the funds remaining in the project budget.

The goal of the third phase of the Community Program was to enhance and strengthen positive

and harmonious relationships with communities along the pipelines route through sustainable

social and economic development. Two main areas - agriculture and civil society capacity

building - have been identified as the most suitable areas for further intervention taking into

consideration country specifics and the results already achieved through the 1st and 2nd phases

of the Community Development Initiative.

During the first months of the project, CARE investigated alternative options for a local NGO

to pick up responsibility for significant components of the project during the second year of the

project implementation, in particular, rural infrastructure rehabilitation support, the agricultural

advisory services and small business development. CARE international announced tender for

selecting local NGOs to implement the field activities under the CARE supervision.

Regional Development Association was selected in the West section communities, Center for

Training and Consultancy was selected to implement activities in the East section communities.

After the 8 months of the start-up of CDI phase three, CARE started handover process to the

mentioned organizations, although CARE retained the oversight and guidance throughout the 2

year lifespan of the program.

To maintain the existing level of relationship and impact on the communities affected by the

business, as well as to ensure the business continuity and managing the reputation in the

country, the 4th phase of CDI implementation was initiated.

The Final External Evaluation of CDI 3, done by BP at the end of CDI 3, considered

nationalization strategy process as correct step for further operation, considered local NGOs

CTC and RDA capable to manage implementation of the next phase of the project and

recommended to request the proposals from them via tender for CDI4 implementation.

Community Development Initiative – phase 4 (CDI 4)

In March, 2012, BP Georgia announced Request for Proposals from CTC and RDA for the

three - year CDI implementation (CDI 4).

The proposals submitted for the CDI4 were reviewed both internally by BTC/SCP team and

externally by an Advisory Board made up of representatives of key donor organizations active

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in the country - the European Union (EU) and Swiss Cooperation Office for the South

Caucasus (SDC)

Both proposals were considered relevant to handle the implementation of CDI 4, CTC in the

Eastern part and RDA in the Western part communities. Program duration is May, 2012 –

May 2015 with total budget of the program 3,318, 975 US$

The main goal of the 4th

phase of the project is to deepen the positive relations between BP

communities along the BTC/SCP pipelines route, by investing in communities to provide

positive contribution for sustainable improvement in communities and maintain and enhance

sustainability of social-economic development. Main areas of the program include agricultural

support, business development as well as community development through capacity building

and sustainable activities, such as rehabilitation of rural infrastructure as well as Social

enterprise establishment by Community Based Organizations.

The specific objectives of the CDI 4 are to promote sustainable forms of social cooperation

and initiatives for community sustainable development and to enable economic opportunities

for the pipeline communities to develop regional agro-business and provide public goods and

services through established small and medium scale businesses.

In December, 2013 it was decided to extend the CDI agricultural component scale and start

piloting agricultural cooperative establishment.

Community Development Initiative for the South Caucasus Pipeline Expansion (CDI

SCPX)

The South Caucasus Pipeline expansion (SCPX) is being proposed by BP, on behalf of a

consortium of partners, as BP is the operator of the South Caucuses Pipeline (SCP). Project is

developed to expand the capacity of the existing SCP system to allow additional gas throughout

from the Shah Deniz Full Field Development in the Caspian Sea.

BP, on behalf of a consortium of partners, engaged with communities along SCPX construction

areas and started implementation of Community Development Initiative (CDI SCPX) in the

new communities, affected by SCPX project.

CDI SCPX program resembles the model of earlier phases of CDI with main strategy of the

program to provide the area with a powerful social and economic platform and give

opportunity for gradual development into strong independent communities as well as

promoting BP Georgia public image in the affected areas.

CDI SCPX started in May, 2013 and is due to end in May, 2015. East Section of project

interaction includes Gardabani, Tetritskaro, Tsalka districts, covering twelve (12) new villages.

West section includes Akhaltikhe, Adigeni districts covering five (5) villages, and Rustavi

town 18, 19 Districts are CDI SCPX target area as well. Implementing partner of CDI SCPX

is Center for Training and Consultancy in the East section, Regional Development

Association in the West section and Georgian Organization of the Scouts Movement in Rustavi

micro Districts. Total budget of CDI SCPX for new communities is 687,000 US$

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Community Development Initiative Management and Coordination

The CDI programs are managed by the Social Responsibility team in BP Georgia Tbilisi

office. Community Development Initiative Adviser is dedicated full time to monitoring and

evaluating the work of the NGOs through regular participation in field activities and review

of monthly, quarterly, annual and final reports, tracing the expenditure of the projects

contracts’ budget and other social sub-contracts through the recording of corresponding

invoices, ensuring, that implementing partners’ practices and procedures are aligned with

those of BP, that, those partners adhere to the principles of company Code of Conduct,

including a contractual requirement to act consistently with the code when working on

company behalf.

The CDI Adviser reports to Social Responsibility Manager

The NGOs that implement programs send monthly reports to BP, which provide a brief

summary of activities for the month and outlines any issues or actions. Quarterly reports that

are provided each calendar quarter, go into more depth focusing on outcomes, on summary of

activities, progress to date, challenges and the ways they are addressed. Quarterly financial

reports contain financial expenditure against the approved budget. An annual report focuses

on results, monitoring and evaluation, programmatic changes, etc. Final report describes

achievement and their resulting impacts, program overview and impact assessment, strength

and weaknesses, lessons learned.

Community Development Initiative for BTC/SCP – 4th

phase

Objectives and key components

Social / Institutional Objective and its components complementing the overall

goal

­ Sustainable forms of social cooperation and initiatives for sustainable community

development are promoted

­ 31 community infrastructure projects are implemented

­ 11 Community Based Organizations (CBO’s) establish Social enterprises to generate

income to deliver services to their communities

­ More than 25,000 residents benefit from improved infrastructure and social

enterprises

Economic Objective and its components complementing the overall goal

­ Enabled economic opportunities for development of agro businesses in the

communities and public goods and services are provided through established of small

and medium scale businesses

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­ 105 small and medium scale business are established with participation of at least

40% of women

­ 70% of funded start-up businesses achieve the profitability in 12 month from the

start

­ 3 Financial and legal Service Groups are established in Adigeni , Akhaltsikhe and

Borjomi districts

­ 36 services are rendered by each Financial and Legal Service Group to project

beneficiaries

­ 100 on farm demonstration are established

­ At least 150 farmers /producers ( 30% of women) linked to the urban channels to sell

their products

­ 1800 farming households achieved higher production margins as a result of use of

modern technologies

­ Project target community members and 6 target municipalities rise awareness about law on cooperation and its advantages for farmers unions

­ 6 Agricultural Cooperatives established ­ Agricultural Cooperative component delivers benefit to 155 pipeline households ­ 470 Subsidized agro loans are provided to the pipeline farmers

­ 20% increase is achieved in target household income

Project Specific examples of summarized outcomes include:

External evaluation of the project

At the end of 2013 company invited three international independent evaluators via tender,

to conduct CDI 4 midterm evaluation with the aim to assess the effectiveness of the whole

CDI 4 , provide critical review of the project achievements and make recommendations for

activities , approach and strategies for the remaining period.

Main findings of the evaluation are following:

There have been multiple increases in productivity and rates of return for the

initiatives in the communities, while significant forms of social networking have been

created. The nationalization policy for the programme partners has been a success.

There is a strong potential in scaling up some of the investments.

The modalities for the management of the programme are optimal, creating a good

balance between on-the-ground expertise, and coordination with the authorities and

international organizations. There is a strong grasp and commonality of strategy and

of relevant techniques amongst all partners.

Continuity and focus within the programme has created a high degree of value for

money. There are easy gains available to BP in show-casing the programme, in terms

of the constraints it has overcome, but especially in the profound shifts achieved in

public perception over the years, and the rural development models it has launched.

Main challenges during the reporting quarter

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Georgian Government has recently eased access to agri-loans by subsidizing annual rates

lower than proposed by CDI4 Subsidized Small Loans (SML) component. The rate of address

to SML loans issued by Bank of Georgia dropped accordingly. CDI management has

analysed the situation to stop Subsidized Small Loans component from January, 2014.

Due to very cold winter (-15c -20c) farmers started to face storage problems by mid quarter.

Although locals have been consulted in theory, it still turned out difficult to apply knowledge

at unexpected drop of temperature. Project agricultural specialists visited every site upon

request and rendered extension services about storage technologies and especially on how to

regulate temperature and ventilation in warehouses.

Strengthen institutional capacity in the community, CBO activities

Community infrastructure projects

5 more rehabilitation projects were implemented during the reporting period. All these

projects benefited about 800 Households. As for the reporting quarter, there are total of 30

economic infrastructure rehabilitation projects implemented, which provide benefits to 5,800

Households.

Irrigation projects increased the size of the irrigable lands. More than 600 ha became

irrigable due to the CDI 4 interaction. Community contribution in rehabilitation project is

equal to 40% on average.

Community Based Organizations ( CBO) managed to negotiate with local government to

contribute in the projects, and although the government share is not high - only 10%

average, this achievement indicates the CBO and local governments readiness to improve

co-operation for improvement of living conditions in village.

Social Enterprise (SE)

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11 social enterprises, established within the project, are operational. In total 418 different

type of services are provided by SEs to the communities, particularly, assistance for land cultivation, or providing support during the harvest.

Some of SEs already started generate the profit and implement the social projects in the

communities with the profit gained.

CBO accountability toward the community and transparent operation supported them to gain

the trust among community members, and motivate them to contribute the labour force in

social project implementation.

Agricultural support, new business start-up activities and subsidized agricultural loans

will support the communities to improve their livelihoods

Agriculture

Three new agriculture demo groups were arranged in the East section, in the villages. The

project staff together, with the farmers, developed demonstration models and budgets.

The main activities this quarter were related to post harvest handling of crops, including

storage technologies, as well as autumn land works.

Due to very cold winter (-15c -20c) farmers started to face storage problems by mid quarter.

Although locals have been consulted in theory, it still turned out difficult to apply knowledge

at unexpected drop of temperature. Project agricultural specialists visited every site upon

request and rendered extension services about storage technologies and especially on how to

regulate temperature and ventilation in warehouses. RDA Agricultural Mobilizers conducted

14 sessions of consultations on the below topic for 80 farmers of 14 target villages.

Wheat demonstrations have been the main source of technology transfer this year (125

farmers transferred wheat technology in total) and some other 200 follower farmers, who

fully transferred various technologies.

Besides this, more than 2,000 farmers adopted at least one aspect of the technologies. The

highest interest was shown to methods of soil cultivation, using fertilizers, pesticides with

crop processors, using veterinary preparation’s with livestock breeders

Total of 45 group trainings were conducted with participation of 47 demo and 147 other

farmers. Other 484 individual consultations were given to farmers on various issues.

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Combined Feed Demonstration

Project finalized activities in this component. The last distribution took place in Tori village

and results came positive already by the end of the quarter. Local farmers reported increased

milking capacity in cattle as well as 10-15% weight gain in pigs, which is very good

outcome.

In total, 10 Tori farmers received 4t of combined feed with subsidized price of 0.45 per kg.

Farmers Association "Samtskhe"

This quarter, association Samtskhe harvested and sold 20 t. of table and seed potato crops for

average price of 0.85 GEL, earning 17,200 GEL which let Samtskhe accumulate total of

60,700 GEL for this season.

Because of limited storage capacity of the Association, most crops were sold seasonally, at

harvest, for 0.65 GEL per kg, which made average farm gate price at 0.71 GEL for all 85 ton

sales.

Cooperative farming

The Agricultural Cooperative Development component launched from December 1, 2013.

Introductory meetings with interested farming groups from the target villages as well as

with municipality representatives were held.

Business start-up

During the reporting quarter, the project has signed agreements with 18 selected businesses

All the businesses are functional and the grantees are correctly filling in the accounts book,

although seasonal businesses (agri) suspended operations by end of October

According to the records total of 8,538 beneficiaries were served and average profit sums up

2,246 GEL up to date.

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As calculated average monthly household income of established businesses increased by 320

GEL.

5 entrepreneurship trainings were conducted for 44 business representatives as well as for

Tori cooperative farming group. The training module was more emphasised on daily record

keeping and importance of so-called “T-Account” in operations (proper recording of costs

and income). The expected outcome for the rest of the entrepreneurs is solely the habit of

daily tracking of costs and income.

Subsidized Micro-Loans (SML)

14 new agricultural loans were disbursed during the reporting quarter in the project target

communities.

In total 190 agricultural subsidized loans have been disbursed within he timeframe of the

project.

There are no delays in payments whatsoever.

Service Group

Three Financial-Legal Service Groups (FLSG), established and operating in CDI4,

continuing service provision to CBO, to small business as well as to the clients beyond

CDI.

Total revenues generated through the component in this quarter, is GEL 3,245 with GEL

2,142 profit.

The number of external customers this quarter is twice as much as CDI beneficiaries (14 CDI

and 30 external customers), which means that FLSGs have diversified their client base and

don’t rely solely on customers provided through CDI.

Next Quarter

CDI 4 East

The following activities are planned for the next quarter:

Due to the savings in the project , revised budget and notes shall be provided to BP;

Launch the third round of infrastructure rehabilitation competition

Conduct satisfaction survey within the communities benefiting from infrastructure

rehabilitation projects

Launch the third round competition for small start-up business

Working with farmers groups in establishing agricultural cooperatives

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CDI 4 West

Due to the savings in the project, revised budget and notes shall be provided to BP;

Work completion certificates shall be prepared for all infrastructure rehabilitation

projects

CBO capacity building, trainings shall be conducted;

Third round infrastructure rehabilitation component shall be announced;

Agricultural Cooperative component shall be announced;

Community Development Initiative for SCPX (CDI SCPX)

CDI SCPX project envisages assistance to 18 communities located along the SCPX

construction sites.

The overall goal of the project is to create harmonious and secure environment for sustained

socio-economic development of target communities affected by SCPX activities and promoting

BP Georgia's public image in the affected areas.

In order to fulfil overall goal project focuses on two specific objectives reflecting social and

economic agenda of the community development.

Support gradual development of civil society institutions in target communities via

building the capacity of communities to implement and sustain self-help projects with

minimal external support

Strengthen livelihood security for the affected communities via enabling the

economic opportunities for rural development.

Objectives and key components:

Social / Institutional Objective and its components complementing the overall

goal

­ 31 community infrastructure projects are implemented

­ 17 Community Based Organizations (CBO’s) established to implement

infrastructure rehabilitation

­ More than 3,000 households benefit from the project interaction

­ 40 youth participate in youth group and implement 4 environmental projects and 30

small scale environmental activities

­ 40 youth take part in summer camp organized by the project

Economic Objective and its components complementing the overall goal

­ 16 demonstration farms arranged and 40 combined fodder demonstration for 80 heads

of cattle established

­ 2 service groups and 1 milk collecting center arranged

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­ 34 small businesses established

­ 76 potential entrepreneurs improved skills

Project Specific examples of summarized outcomes include:

17 CBOs were registered in all SCPX villages immediately upon launch of CDI SCPX

All of them together with community members prioritize social infrastructure rehabilitation

projects.

In total 7 rehabilitation projects are implemented delivering benefit to total of 1, 537

households. Other rehabilitation projects are on-going.

As of the end of the reporting period t agricultural component counts 10 demonstration groups,

uniting 46 farmers and 6 individual demonstration models on 10 ha territory.

Trainings and consultations for the selected farmers are on-going.

The project announced grants competition to support the process of creation of service groups

in the target communities

1 milk collecting co-operative, “Khareba", established in the village Ude. Cooperative

received the grant amount for purchase of necessary equipment.

In the West section, the project started distribution of subsidized combined feed in the

reporting quarter to potential milk suppliers in the cooperative farming component.

As of the end of the reporting period, 14 farmers received subsidized combined feed in amount

of 2,140 kg.

Within the small business startup component, announcement was launched and 29 applications

were received. In total 27 applicants were selected by the selection committee for the Business

proposal writing and business administration training. During the second stage of the

completion, submitted business proposals were reviewed, totally 17 business projects were

selected (1 group and 9 individual applicants) for funding. There are total of 18 grantees, which

will run all these 17 businesses. All grantees attended business management/entrepreneurship

trainings.

Separate trainings on business proposal writing was conducted for the applicants in Rustavi

18,19 districts. 9 business proposals have been submitted and 3 proposals (having 5

beneficiaries) have been finally selected to be awarded the business grant and 2 businesses are

already funded.

Case study

One of the objectives of the Community Development Initiative Implemented within South

Caucasus Pipeline Expansion (SCPX) Project is to Enable the opportunity-driven process for

the population of Rustavi micro-districts #18 and #19 (only four blocks #: 4, 7, 9 and 23) to

develop small scale businesses through equipping them with necessary skills, knowledge and

tools.

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One of the training participants from 19 micro district, Archil Abesadze says:

“Business grant competition announced in the framework of the CDI SCPX is a great

opportunity for me to start something I would not be able to start without other’s help.

Business proposal writing training was inspirational for me – I’ve learnt that becoming

entrepreneur is something wider than just starting a business. Besides, I’ve understood that

business can’t be successful without clear plan and calculations and that any business idea

can be good if it’s well implemented.”

Youth component, being implemented within the project, works with the students from

schools # 10 and # 28 in 19th micro district. Six students of the schools were selected and

trained in leadership and environment programme.

Three youth groups have been already created in the target schools uniting 32 students in total.

10 students of target schools have attended the Project Cycle Management training.

Micro-grant competition has been announced and 2 project proposals from the both target

schools have been submitted and already reviewed by the project staff in the reporting period

20 youth from target schools took part in a summer camp organized by the Scouts of Georgia in

August, 2013. The camp was held in Vartsikhe, Bagdati district and involved over 460

participants from 12 different countries.

Camp activities included theoretical and practical activities on different topics: leadership,

group building and activity management, traditional sport and cultural workshops, archeology,

healthy lifestyle and civil education, environment protection, etc.

Case study

The students from Rustavi school #28 and #10 took part in an online conference "What have

I done for a peaceful coexistence with the nature?” Online conference has been organized by

Scouts of Georgia in Tbilisi and involved about 20 youth from Georgia, Russia, Ukraine,

Moldova, Armenia and Azerbaijan. Youth have discussed the environmental activities they

are conducting in their communities and shared future plans. As a result, participants have

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exchanged environmental learning experience with their fellows from the neighbor countries,

practiced their language skills and developed networks.

“Environment protection is an important issue not only on local or national level, but also

internationally; I’ve realized this when talking with the youth from the neighbor countries. It

was also great to stay after the online conference and to discuss our activities and projects

with our friends from other regions of Georgia, they are also doing great job to promote clear

and safe environment. We have learnt about successful cases of the micro-grant projects in

Tserovani IDP Settlement and villages Norio and Martkopi, within the Community

development Initiative, what a great job” – Sandro Gogichaishvili from Rustavi school #28 is

reporting.

Next Quarter

CDI SCPX West

Ude Cooperative farming project (milk collection center) shall enter operation phase

CBO capacity trainings will be conducted;

Second round of rehabilitation solicitation will be announced;

All business startup projects shall enter operations phase;

Quarterly progress survey shall be conducted;

CDI SCPX East

Launch economic infrastructure rehabilitation grants competition in SCPX target

communities

Finalize infrastructure rehabilitation project implementation in SCPX temporary

affected villages

Establishing Service Groups in SCPX target communities

Launch grant competition for small start-up business establishment in SCPX target

communities

Continue monitoring and consultation visits to Demo farmers and micro entrepreneurs

in SCPX target communities

CDI SCPX Rustavi

Monitoring business implementation activities, consultancy;

Announcing 2nd call for small business project ideas;

Implementation of environment programme activities;

Award and implementation of the micro-grant projects.

Community Development Initiative in the villages along WREP

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In 2009 the decision was made to bring WREP Georgia community Development initiative

under the same management framework as for the BTC/SCP, which resulted in engaging local

NGO in project implementation through the Request for Proposal (RFP) process, with focus on

youth capacity building component defined as a target area for investment.

“The Youth Capacity Building Project” was launched in May, 2010. Georgian Organization of

the Scout Movement (GOSM) was selected as the project implementing partner through the

tender process. Georgia organization of the Scouts Movement, co-operating with local NGO,

Center for Training and Consultancy, as with sub-partners within the project framework.

The project was due to May, 2012. Total budget was 482, 013 US$ out of which the amount

requested from BP for the implementation of the proposed project was 299,923 US$. 173, 490

US$ was contributed by GOSM and its partner NGO - Center for Training and Consultancy

(CTC) as well as by the project with the Swiss Guide and Scout Movement.

During the implementation of the project additional 55,500 US$ was allocated for the

additional activities, which included establishment of the second summer camp, and civic

education training course for the teachers in target schools. All mentioned activities were

included into the project scope based of the need assessment of the target schools and youth

group members. To fulfill the new activities, project was extended till the end of June 2012.

The project ended within the reporting period.

To continue the project interaction in the communities along WREP, company announced A

new RFP in the 3Q 2012 to identify the IP for the new CDI along the WREP.

Georgian organization of the Scout Movement was selected to implement the project – Small

Business development Project (SBDP) along the entire length of WREP. The project started in

October, 2012 and is due in end in December, 2015. Total budget of the projects is 1,302,190

US$ out of which the amount requested from BP is 1,228,385US$. Leveraged amount from

Scouts Movement is 73,805US$.

The project is intended to implement small business start-up activities in the communities

along WREP pipeline located within 2 km corridor (1km from each side) also, in communities

located within 4 km corridor (2km from each side) along the Access Roads to the BP above

ground facilities as well as affected due to some increased company operational activities.

In addition to the target villages, the project will be also implemented in 4 IDP camps, located

along WREP pipeline within 2 km corridor (1km from each side). The main initiatives

conducted at IDP camps should be focused only on empowering the youth at IDP camps.

Description of the Key objectives and main themes of Small Business Development Project

are represented in below paragraphs/chapters.

“Small Business development Project (SBDP)” - Objectives and key

components:

Enable the opportunity-driven process for the pipeline communities to develop

small scale agro and off farm-businesses through equipping them with necessary

skills, knowledge and tools.

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Support the environmental educational achievements of the secondary school

students only in 4 target IDP settlements by enabling life – long learning and

influence on behavior of youth towards natural environment.

Increase GOSM capacity to diversify the portfolio of quality service provision.

Some of the key achievements of the program will be:

Creating opportunities for 275 start-up businesses to emerge and at least

75% of them become financially sustainable, reinvesting the profits for

expansion and further development;

At least 275 new jobs created;

50% of the disbursed grants managed by women;

IDP settlements further prioritized and supported by working closely

with schools and introducing a World Environmental Programme.

Project Specific examples of summarized outcomes include:

Main challenges

Due to the winter weather condition, not usual for the region, it was impossible to reach some

of the villages in Imereti and Shida Kartli in December.

Four greenhouses were damaged and 18 businesses have been suspended till spring due to

severe weather conditions. Most of them are greenhouse businesses.

The following section provides detailed overview of the project activities and describes

major accomplishments, impact and outcomes:

288 business proposals were selected for further funding. The 154 ones out of selected

beneficiaries are women (53%), 254 grants have already been disbursed.

The 46 new services are created in the villages that are deprived of basic social and economic

services. Shops, beauty salons, sewing workshops, bakeries, cafes, mills and veterinary services

will serve the village population on the spot at reasonable prices. Some of the services are even

attracting neighbor villages being the only option in the community.

The 582 visits have been conducted during the reporting period to monitor and consult the

business implementation activities; to observe how the business start-up activities are

implemented and to introduce the account books to the beneficiaries.

Project supports job creation, which is resulted in the following outcome: 252 beneficiaries and

225 members of their families have been already employed in the businesses. Moreover, 67

individuals (not family members) from the community have been employed by these

businesses.

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The 38 ongoing visits have been conducted by the IDP youth mobilizer to the IDP Settlements

to coordinate youth group activities, gather the Project Management training participants and

make a micro-grant competition announcement

The 25 small scale environmental activities have been implemented by the IDP youth groups.

Some of them are presented indoors and some in outdoors, allowing the youth to explore and

discover the natural world. At least 70 IDP Youth change attitude towards the environmental

issues and increase knowledge about environment protection.

Second round micro-grant competition has been announced in the youth groups. Each group

should write a small project on the environment protection, or other issue relevant for the

settlement.

Accomplished projects in IDPs were as follows:

8 IDP youth have been trained in leadership and environment protection;

4 Youth groups have been created in IDP settlements. 70 youth have joined the

youth groups;

4 project cycle management trainings have been implemented in target IDP

settlements for 30 participants;

4 micro-grant projects have been submitted, awarded and implemented;

37 small scale environmental activities have been implemented by the youth

groups;

25 youth from the IDP settlements took part in a summer camp organized by the

project;

8 members of the IDP youth group took part in a leadership and activity

management training.

18

Case study

Vakhtang Chikhladze (village Vartsikhe, Bagdati district) has learned about small business

grant project competition, announced one year ago in the framework of the SBDP, from his

neighbor. He has immediately contacted the project mobilizer to get consulted about

competition rules and criteria. Today Mr. Chikhladze is owner of 300 square meters solid,

steel construction greenhouse, equipped by the irrigation system. The entrepreneur has

already managed to pick vegetables twice and received up to 1000 GEL income; he hopes to

do it 10 times till the end of the season.

“I’m so motivated; I fell in love with this occupation and decided to build a second

greenhouse, reinvesting the profit. I’m looking forward to get more benefit and extend my

business to greater scales. I have also employed my neighbors to help me during the crop.” –

Mr. Chikhladze has reported.

Next Quarter

Implementation of the Environmental Programme Activities;

Selection of Micro-Grant Environmental Projects;

Award of Micro-grant Environmental Projects;

Annual report.

19

List of acronyms

BTC/SCP Baku Tbilisi Ceyhan/South Caucasus Pipeline

WREP

Western Rout Export Pipeline

CDI

Community Development Initiative

CIP

Community Investment Program

FtM

YCBP

SBDP

Farmers to Market

Youth capacity Building Project

Small Business development project

NGO

Non-Governmental Organization

RDA

Regional Development Association

CTC

Center for Training and Consultancy

RFP

Request for Proposal

CBO

Community Based Organization

FLSG

Financial and Legal Service Group

IDP Internally Displaced Person

END