Date of Submission to Coordination Unit:

A. GENERAL INFORMATION

1. Activity Name

STRENGTHENING THE EMPLOYABILITY OF YOUTH DURING TUNISIA’S TRANSITIONG TO A GREEN ECONOMY

2. Requestor Information Name: Mr. Noureddine Kaabi Title: secretary of state

Organization and Address: Ministry of Investment and International Cooperation, 98 avenue Mohamed V (Place Pasteur) - Tunis Belvédère, Tunisia

Telephone: 71 796 213 Email : S-ETAT@mdci.gov.tn

3. Recipient Entity Name: Mr. Imed TURKI

Name: Mrs. Mariem LISSARI

Title: Chief of Staff

Title: Senior Advisor

Organization and Address: Ministry of Vocational Training and Employment, 10, Rue Ouled Haffouz, 1002 Tunis, Tunisia

Telephone: :+216 71791572 Email: imed.turki@mfpe.gov.tn / mariem.lissari@mfpe.gov.tn

4. ISA(s) SC Representative(s)Name: Amadou Thierno DIALLO Title: Director, Office of the Vice President Operations

Organization and Address: Islamic Development Bank, PO Box 5925, Jeddah 21432, Kingdom of Saudi Arabia

Telephone: Email: adiallo@isdb.org

Name: Fabrizio PAGANI Title: Head of Sherpa Office

Organization and Address: OECD, 2, rue André Pascal - 75775 Paris Cedex 16, France

Telephone: +33 1 45 24 18 55 Email: fabrizio.pagani@oecd.org

19/04/2013

5. Type of Execution (check the applicable box)√ Type Endorsements Justification

Country-Execution Attach written endorsement from designated ISA

Joint Country/ISA-Execution Attach written endorsement from designated ISA

This project (the “Project”) will be carried out jointly by the Government of Tunisia (GoT) and the Islamic Development Bank (IDB) and the Organisation for Economic Co-operation and Development (OECD) as implementing partners. The Project will be co-funded by the MENA Transition Fund (MENA TF) and the Tunisian Bank of Solidarity (BTS).

The portion financed by the BTS will be executed by the GoT and will consist in extending financial schemes to support youth entrepreneurs to setup “Cleantech companies” and start-ups. The portion financed by the MENA TF will be jointly executed by the GoT and the OECD.

The OECD is a leading authority on youth labour markets and skills. Building on extensive policy analysis, including the OECD’s recent reports on Jobs for Youth and Learning for Jobs, as well as the ongoing work on the broader OECD Skills Strategy, the portion executed by the OECD will serve to provide GoT with a set of policy options to: (i) address skills mismatches; (ii) encourage transition from precarious and low quality jobs to stable and more productive ones; (iii) reinforce youth employability in formal activities; (iv) support the transition towards a “green economy” model, leading to the emergence of new employment opportunities, respectful of the need to safeguard the environment.

The portion executed by the GoT under the MENA TF will consist in the launch of an innovative pilot project aiming at increasing employability of young graduate job seekers targeting the green economy sector. The GoT will lead the execution of this Project portion, in particular through international and local expertise, increased staff capacities and continuous backstopping and monitoring feedback.

The IDB will be the only ISA responsible for the oversight and management of the funds used for the country-executed portion.

The IDB is a Triple A south-south Development Institution, which has accumulated rich and strong experience in designing and implementing development projects in Tunisia and elsewhere. The

IDB portfolio in Tunisia is over US$ 1.2 billion in various sectors including education, skill development and micro-finance. Mutual trust has been established between the country and the IDB and a strong relationship has been built over 40 years of partnership. IDB is currently implementing two major programs aiming at contributing to address unemployment form both supply and demand sides, namely Vocational Education and Training Project and Youth Employment Support program. The choice of IDB as an ISA for the proposed project will ensure synergy and complementarity with these two programs.

ISA-Execution for Country Attach written endorsement from designated ISA

(Provide justification for ISA-Execution)

ISA-Execution for Parliaments

Attach written endorsements from designated Ministry and ISA

6. Geographic Focus

X Individual country: Republic of Tunisia

7. Amount Requested (USD) Amount Requested for direct Project Activities:(of which Amount Requested for direct ISA-Executed Project Activities):

US$ 4.337.000 including: OECD-executed activities: US$ 487.000 GoT executed activities: US$ 3.850.000

Amount Requested for ISA Indirect Costs:1 IDB US$ 100.000 OECD US$ 38.000

Total Amount Requested from the MENA TF: US$ 4.475.000

Co-Financing through Tunisian Bank of Solidarity (BTS) US$ 1.750.000

Total Project amount US$ 6.225.000

8. Expected Project Start, Closing and Final Disbursement DatesStart Date: 01 September 2013 Closing

Date:31 December 2016 End Disbursement

Date:30 June 2016

9. Pillar(s) to which Activity RespondsPillar Primary

(One only)Secondary(All that apply)

Pillar Primary(One only)

Secondary(All that apply)

Investing in Sustainable Growth. This could include such topics as innovation and technology policy, enhancing the business environment (including for small and medium-sized enterprises as well as for local and foreign investment promotion), competition policy, private sector development strategies, access to finance, addressing urban congestion and energy intensity.

√ Enhancing Economic Governance. This could include areas such as transparency, anti-corruption and accountability policies, asset recovery, public financial management and oversight, public sector audit and evaluation, integrity, procurement reform, regulatory quality and administrative simplification, investor and consumer protection, access to economic data and information, management of environmental and social impacts, capacity building for local government and decentralization, support for the Open Government Partnership, creation of new and innovative government agencies related to new transitional reforms, reform of public service delivery in the social and infrastructure sectors, and sound banking systems.

√

Inclusive Development and Job Creation. This could include support of policies for integrating lagging regions, skills and labour market policies, increasing youth employability, enhancing female labour force participation, integrating people with disabilities, vocational training, pension reform, improving job conditions and regulations, financial inclusion, promoting equitable fiscal policies and social safety net reform.

√ Competitiveness and Integration. This could include such topics as logistics, behind-the-border regulatory convergence, trade strategy and negotiations, planning and facilitation of cross-border infrastructure, and promoting and facilitating infrastructure projects, particularly in the areas of urban infrastructure, transport, trade facilitation and private sector development.

1 ISA indirect costs are for grant preparation, administration, management (implementation support/supervision) including staff time, travel, consultant costs, etc.

B. STRATEGIC CONTEXT

10. Country and Sector Issues

The problem of poor labour market outcomes for the young is not new to Tunisia and has been a key factor leading up to the Arab Spring, which originated in the country. The unemployment rate in Tunisia remained above 14% between 1999 and 2012, peaking at 44% among those aged between 15 and 29 years and young graduates. This situation raises questions about the employability of job seekers and the quality and orientation of education. Employment in the informal sector is high with the informal economy representing 30% of Tunisia’s GDP. 46% of young people prefer to work for the public administration, which already employs large numbers of people. To this day, youth employment remains one of the key policy challenges in the country’s transition. It is important to note that the country is experiencing the highest rates of unemployment ever and more so for the educated youth. This situation has been further complicated by the return of an estimated 100.000 Tunisian workers from neighbouring Libya. In 2010, there were 500.000 unemployed young people: 157.000 post graduates (31%), 139.000 graduates (27%) and 204.000 high school leavers (42%). At the macro level, the Tunisian economy is not generating enough jobs to absorb the high number of university graduates (an average of 70.000 expected to graduate every year until 2016) who enter the labour market annually. With nearly 400.000 students, higher education in Tunisia faces huge challenges in terms of quality, relevance and adaptability to the needs of an economy and society in transformation. At present, Tunisia lacks modern, well-designed vocational education/apprenticeship/internship programmes, which are essential to facilitate school-to-work transitions, provide more attractive alternatives to university education and a steady supply of middle-level and technical skills. Attention should therefore be paid to the short-, medium-, and long-term policies to create productive and sustainable jobs through a comprehensive approach which tackles supply issues (education, vocational training, etc.), demand issues (the macro policy mix, the composition of the business sector, and so on), and institutional issues (policy development and coordination, implementation, monitoring and evaluation, and social dialogue). Strong and sustained economic growth is obviously a first requirement to foster the transition to a “new” Tunisia. It serves to create jobs, while at the same time generating the self-worth and motivations that individuals need to trust both institutions and government. One key policy challenge to set Tunisia on a path of sustainable growth will be strengthening the human capital basis and the skills of its population, starting from the young generations. While this is a challenge for all countries, it is even more compelling for Tunisia, a country which, in the comparison with other MENA neighbours, appears relatively weakly endowed with natural resources. However, making the best utilisation of Tunisian human resources and enhancing the employability of youth should not be seen as a priority in itself. It is an essential pre-requirement for Tunisia to jumpstart into new, more productive and diversified economic opportunities, such as the activities linked to the expansion of the green economy. Against this background, the focus of this joint proposal to the MENA Transition Fund is on two complementary aspects of Tunisia’s broader efforts to shift to a greener economy. One relates to the general labour market and education policies that need to be in place in order to allow Tunisia to become increasingly adaptable to the needs of flourishing new productive sectors. This will include a focussed attention to the institutions that will encourage the transition of the Tunisian youth labour force to the greener sectors. The other is a pilot project that will concretely support the access of youth to green jobs, including by means of new initiatives geared to the development of green SMEs (e.g. Cleantech companies) – This is part of the Tunisian Green Jobs Platform.

11. Alignment with Transition Fund Objective

The objective of the Transition Fund is “to support the reforms currently under way in transition countries and improve the lives of their citizens, including by supporting policies for improving skills and labour market policies, increasing youth employability and improving job conditions and regulations”.

The proposed Project is in line with the overall objective of the Transition Fund, in particular, it aims at:

Identifying key measures to deliver high-quality vocational education and training (VET) that is well connected and responsive to the needs of the labour market. Such programmes can also provide alternative pathways to boost completion of upper-secondary education. VET programmes that combine classroom and workplace

learning, which can take different forms, including apprenticeships and work placements, can both improve the quality and relevance of learning, by providing trainees with contacts with the firm sector essential to support finding a job after graduation, and direct feedbacks on the labour market demand for specific VET skills. An expansion of well-designed VET programmes would provide an appropriate response to the labour-market needs of Tunisia, whose system of secondary education remains excessively focussed on general pathways. They also respond the need for better preparing young Tunisian and their families to the world of work and business sector development through education.

Addressing the main factors hindering basic skills, notably among the most socially disadvantaged Tunisian youth, many of whom live in backward regions. The experience of a number of emerging economies suggests that access to basic health, nutrition and education services - sometimes encouraged by the payment of a small financial benefit, delivered conditionally upon children enrolling in school and meeting certain health visit requirements, as is the case with conditional cash transfer programmes - can go a long way towards improving educational attainment and skill acquisition. Addressing these policy challenges would be particularly important in the economic context of Tunisia, characterised by wide spatial differences in economic outcomes. It would complement well the role of the policies more directly aimed to foster vocational education and training.

Encouraging formal and more productive jobs: it is generally agreed in Tunisia that all the problems do not lie on the supply side; there are major challenges relating to the demand for skills, especially as Tunisia seeks to develop private sector activities that are better adapted to global value chains. The key hurdles that prevent the development of a conducive investment climate for growth and job creation are multiple and complex. As in other MENA countries, enterprise surveys highlight such factors as corruption, economic and regulatory policy uncertainty, licensing and permits and access to and cost of finance. All these factors act as brakes to the launch of new entrepreneurial activities and their subsequent expansion. The focus of the proposed Project would be on the policies for encouraging formal and more productive jobs. Attention would be devoted to the identification of the incentives required for employing workers formally and how they could be improved, for example by favouring the implementation of a social protection scheme better suited to increase the benefits of affiliation to workers.

Supporting the transition towards new sectors and new jobs, particularly Green Jobs. A comprehensive approach to labour market and skill development policies is essential to create the condition for a fast, efficient and fair transition to new and more productive sectors. This is particularly true in countries where the youth make for a very large proportion of the overall population, such as the case in Tunisia. A comprehensive approach provides scope for re-assessing labour market and training policies in such a way to help the country become more adaptable and capable of facilitating a successful transition towards a low-carbon and resource-efficient economy. Such an assessment is complementary to, and can be reinforced by, increased attention on policies to spearhead green growth, with fostering green growth being already an important part of the Tunisian policy agenda. Indeed, on this basis, Tunisia is already looking to develop a Platform of Green Jobs (PGJ). More generally, the country’s strong interest in achieving a shift towards a green growth model and taking the most out of it is also shown by Tunisia’s adherence to OECD’s Declaration on Green Growth in 2012.

Supporting the recourse to, and learning from, cost-effective experimentations. The Green Jobs Platform (GJP) will be initiated through a pilot aiming at supporting young graduate job seekers by providing employability services, such as capacity building and training with a focus on backstopping and monitoring, including using tailored tools as mentorship, vocational learning and a well-designed “mutual obligations” approach. Taken together, the outcomes of the pilot will show the payoffs of promoting green jobs as a vehicle for sustainable growth. The pilot will be based on a participatory approach, involving Youth Jobless Associations, Private Sector and Authorities through actions that will enable each enrolled young unemployed graduates to access specific know-how, thus combining the theoretical knowledge acquired through formal education with practical hands-on experience in the field of “green jobs”. Beneficiaries will benefit from a personalised support. In addition, individual training will be provided before, during and after their acquiring a job in the green economy sector. Each beneficiary will be engaged through signing a tripartite agreement (the beneficiary, the integration advisor and the supervisor appointed by the receiving partner) outlining ‘Agreed Objectives’ and the actions needed to achieve them. The Platform will also be an opportunity for the Ministry of Vocational Training and Employment to improve the interactions between the governorate level (Employment Promotion Offices) and the central services. This will

result in a better integrated approach to serve job seekers. From a long-term perspective, however, achieving a broader diffusion of a greener economy and greater potential for green jobs, will require the backing of adequate policies to reconcile the accompanying structural adjustment in production with adequate protection for those who are more at risk of falling behind. In this context, the design of a conducive labour market and social policy setting plays an essential complementary role.

12. Alignment with Country’s National Strategy

Employment is a top priority in Tunisia. The January 14 revolution was a stark example of the limits of economic growth without social justice. The country’s strong growth performance and stable macroeconomic environment masque a reality of deeply-rooted structural imbalances such as widespread inequality, high unemployment, and limited opportunities to obtain decent work. A large consensus has emerged around the necessity for Tunisia to transit to a new model of more inclusive growth that also acts as a catalyst for generating new jobs in high productive business activities.

The proposed Project financed by the Transition Fund is in line with the objectives of the newly adopted Social Pact. The agreement, covering areas such as labour legislation and industrial relations, employment policies, vocational training and education, social protection, as well as balanced regional development, underlines the importance of social dialogue as a genuine pillar of a democratic transition towards greater social justice. Under the employment and vocational training policies chapter, the social pact stresses the importance of reforming the education and the vocational training systems in addition to designing effective policies to reduce informality.

This Project contributes to advance Tunisia’s National Employment Strategy : The Tunisian Ministry of Vocational Training and Employment launched in June 2012, a National Dialogue on Employment. This inclusive initiative reached out to all stakeholders - government, social partners, unemployed representatives, youth associations, political parties and international partners. It has allowed to issue the Terms of Reference of the National Strategy on Employment, which stresses the importance of better quality job creation, especially for young people, improved governance and transparency, and greater social dialogue in order to achieve a more socially and economically sustainable growth. The National Dialogue has also issued recommendations on promoting a culture of self-reliance and entrepreneurship among graduates by integrating them into educational curricula.

This Project responds to the recommendation of the National Dialogue on Employment on exploring emerging sectors such as green jobs, which represent an untapped source of jobs for youth, by anticipating needs for qualifications and encouraging entrepreneurship.

The proposed Project is In line with the National Vocational Training Strategy, which aims at supporting the employment policies and increasing the work return. The main orientations of the strategy are; (i) stimulating the partnership between the system and the economic sectors; (ii) strengthening the quality of training at all levels; (iii) developing training in the new sectors (aeronautic, renewable energy, business process outsourcing) by creating, modernizing and/or updating the vocational training centres; (iv) increasing the capacities of the training centers; (v) promoting the apprenticeship and (vi) improving the management of the system.

The proposed Project gives prominence to the mutually reinforcing gains between, on the one hand, labour market and social policy reforms and on the other hand the opening to new green economy sectors in Tunisia. As discussed above the Tunisian government is assigning increasingly prominence to the policies needed to achieve a shift towards a green growth model. A comprehensive package of policies to strengthen the employability of Tunisian youth (encompassing elements of labour market and skill policies, as well as policies to reinforce the degree of social protection) will be essential to enhance their capacity to meet the occupational needs of newer and more productive business activities, including those related to the expansion of the green economy. At the same time, the experience acquired through the implementation of the Platform of Green Jobs will provide valuable insights, from a privileged observatory, as to how best to continue to improve youth labour market policy with a view to foster the attractiveness of the Tunisian economy to new increasingly diversified and more

productive activities.

C. PROJECT DESCRIPTION

13. Project Objective

The main objective of this Project is to support the Tunisian government in its endeavour to strengthen the employability of Tunisian young generations by means of two concrete deliverables:

a) The definition of a comprehensive action plan for youth. In line with the goals of the National Employment Strategy, the action plan will set out practical policy guidelines conducive to the creation of an enabling environment where Tunisian youth can realise their work aspiration through the right skills mix needed to integrate themselves into the formal labour market, while at the same time accessing more stable, more productive and better quality jobs.

b) The Project will also lay essential ground for supporting the transition of the Tunisian economy towards a wide range of “new emerging sectors”, particularly in the domain of the green economy. In this context and as a test case, a key feature of the Project will be the development of new “green jobs” opportunities.

The Project will draw from a wide set of countries’ experiences and good practices that are known to have worked well in the developed and emerging countries, based on recent works of IDB, OECD, and UNOPS.

14. Project Components

This Project builds on the presumption that an extensive approach is needed in order to achieve an enabling youth employment framework, while at the same time supporting the transition towards new and greener sectors. Consistent with this, one salient innovative aspect of this joint Project lies in its two-pronged approach, involving the following mutually reinforcing components:First: The OECD will carry out a comprehensive review of youth employment issues in Tunisia. This review will assess reform requirements to develop education, training and labour market arrangements to improve labour market outcomes for youth. The review will include a focus on green jobs. Second: A pilot project on new greener employment opportunities – a Green Jobs Platform – targeting about 1,000 unemployed youth will be implemented in one selected Governorate. This pilot is intended to become a case model, which could be scaled up at the national level, based on the results obtained during the pilot phase.The two parts are designed in such a way to generate a dynamic learning process, through which the Tunisian Ministry of Vocational Training and Employment, along with a wide range of stakeholders, will increase their awareness about the policy requirements that need to be in place to facilitate the transition of the Tunisian economy towards “new jobs”. Further to pointing to the most urgent policy requirements to enhance the employability of youth, the first component will feed directly the second component by providing additional guidance and insights that could strengthen the pilot project’s potential for success. In turn, the lessons from the experience of the pilot project will spill over to the broader framework, which will also be very important to adjust the shape of youth policies. The Project components are outlined below in more details.

COMPONENT 1: POLICY OPTIONS FOR INVESTING IN YOUTH.The OECD is a leading authority on youth labour markets and skills. Building on extensive policy analysis, including the OECD’s recent reports on Jobs for Youth and Learning for Jobs, as well as the ongoing work on the broader OECD Skills Strategy, the output of this component foresees the preparation of a comprehensive report, by the OECD aimed at providing GoT with a set of policy options to: (i) address skills mismatches; (ii) encourage transition from precarious and low quality jobs to stable and more productive ones; (iii) reinforce youth employability in formal activities; (iv) support the transition towards a “green economy” model, leading to the emergence of new employment opportunities, respectful of

the need to safeguard the environment. Pending consultations with the MVTE and other relevant Tunisian authorities and stakeholders about the precise scope and coverage, the OECD report will tackle the following policy areas:

1. Overview of youth labour market challenges

An assessment of the situation of youth in the labour market, with a particular attention on, unskilled youth and poorer youth, including from disadvantaged regions as well as on young women;

A look at the adequacy of the education and training system in equipping young people with relevant skills (skills shortages and mismatches, including the regional dimension of skills mismatches;

A look at the factors hindering school-to-work transitions, including a strong dependence on public sector jobs; A discussion of the size and characteristics of informal employment in Tunisia.

2. The role of education and training policies with a particular focus on Vocational Education and Training (VET). Policy options for:

Developing and implementing an expanded set of high quality and relevant VET programmes; Strengthening the role of apprenticeship programmes for low-skilled youth, drawing from the practical country

experiences with implementing successful school-to-work pathways; Skills upgrading, with particular attention to raising the productivity of informal workers as a means to enhance

their opportunities for moving to formal jobs.

3. The role of labour market institutions that affect the demand for labour. Policy options for:

Reducing the segmentation of the labour market between regular workers -- typically prime-age workers with permanent contracts, often employed by the public sector -- and non-regular workers -- typically vulnerable youth working in more precarious and low quality jobs.

Using the minimum wage as a vehicle to enhance youth employability (for example, lessons from country experiences with sub-minimum wages); options for reviewing the burden of social security contributions on non-wage labour costs;

Addressing discriminatory practices resulting in “unreasonable” differences in wages and/or benefits between workers performing similar jobs.

4. The role of active labour market policies and the social welfare system in reinforcing employability in the formal sector. Policy options for:

Improving the social welfare system through cost-effective instruments that encourage the transition of youth workers from the informal to the formal sector and their access to more stable jobs;

Strengthening the role of the Public Employment Services and improving their coordination with job creation schemes and training;

Creating tax and benefits policies that reinforce youth work incentives, including through the introduction of a system of earned income tax credits, the design of wage subsidies schemes and cash transfer schemes; supporting young job seekers without creating benefits dependency.

5. A focus on green jobs

A look at the expected characteristics of Tunisia’s economic transition. As Tunisia shifts to a greener economic model, certain business activities will start declining; other will supply the same outputs using greener production processes; at the same time, other and completely new activities will be created;

The supportive role in facilitating this transition of policy reforms in the labour market, education and training areas;

Examples of what other countries are doing to face similar challenges and adjustment needs.The OECD report will be supported by an extensive use of international indicators, as a mean to put the case of Tunisia in international context.The most salient feature of the process through which the OECD report will be produced lies in the very inclusive character of the approach followed. The key building blocks of this inclusive approach are as follows:

1) Initial information questionnaire. Following our common understanding of the key issues to be addressed in the project, a questionnaire on key barriers faced by Tunisian youth in the labour market and relevant existing labour and skills policies to address these barriers will be prepared by the OECD. The questionnaire will also include reference to green jobs challenges. The MVTE will be in charge of providing answers to the questionnaire, possibly consulting with other experts and officials from other relevant Tunisian authorities.

2) Kick-off seminar. A first expert seminar would be held in Tunisia to “kick-off” the project, jointly organised by the OECD, the IDB and the MVTE. The OECD would provide an overview of the key findings and policy lessons that have come out of its extensive youth reviews in other countries. It would also be the opportunity to further refine the scope of the final report.

3) Study trip. The first seminar would be immediately followed by a one-week study trip by the OECD project team which would meet with the key Tunisian experts from the relevant ministries, institutes and other stakeholders.

4) Drafting of final report. Following the study trip, and based on the written answers from the questionnaire, the OECD will prepare the draft report on the labour market situation of youth in Tunisia.

5) Final reporting-back seminar. A second expert seminar on the OECD’s draft report would be held in Tunisia, organised jointly by the MVTE, the IDB and the OECD. The purpose of this seminar would be to discuss the draft report’s main findings and policy conclusions with the key Tunisian experts from the relevant ministries and other stakeholders. The OECD will also seek comments from the Steering Committee before the final publication of the report and will reflect any possible comments from the Committee.

6) Publication of final report. The draft report would then be revised and published by the OECD in light of the discussions at the “reporting-back” seminar and subject to any final comments by the Tunisian authorities and the Steering Committee. The report would be printed in the two OECD’s official languages.

7) Launch of final report. The final report will be launched in Tunis at an event organised with the MVTE.

COMPONENT 2: DEVELOPING AND IMPLEMENTING THE GREEN JOBS PLATFORM . This component builds on the results of a detailed analysis of the country’s economic and environmental policy as well as on extensive interviews with various stakeholders, including young unemployed graduates associations, NGOs, public and private sector organisations. This component will be executed by the Ministry of Vocational Training and Employment (MTVE) with the support of UNOPS (United Nations Office for Project Services), as implementing partner. The project will be implemented in a pilot governorate selected by the MTVE on the basis of established criteria, including the green economy potential, as well as, the willing participation and commitment of Youth Associations, private sector and local authorities. The component aims at improving the employability of 850 young graduates in different sectors of the green economy and is built around four main subcomponents. The component foresees interventions that require an established management team to guide it. Provision of monitoring and backstopping will ensure outputs that will meet the quality expected. This pilot scheme will reach out to each district in the selected governorate where the MTVE has employment offices (these can range between 5 and 7 depending on the governorate). National and international consultants will be recruited to provide the needed technical assistance and address the different requirements in terms of training, On-the-Job Training (OJT), coaching and development of the required tools. A National Coordinator and Senior Technical Advisor will also be recruited to ensure the proper overall set up, preparation and implementation of the action plan on a yearly basis, prepare the required reporting, carry out the secretariat function for the National Steering Committee and coordinate the different set of activities planned under the component. Moreover, monitoring will be provided to ensure compliance with the objectives and the expected results as well as to address bottlenecks and enable the effective implementation of the activities.

Subcomponent 2.1: Youth Professional Development in the field of Green Jobs Market: Enrolled young unemployed graduates will receive up to four weeks of training combining theoretical knowledge and practical hand on experience/operational know-how in the field of “green jobs”. They will be provided with the necessary support,

monitoring, supervision and backstopping by local and international experts in professional integration and individual trainings before, during and after their conversion to the green economy sector. These initiatives, developed following the preparation of personal projects, match the professional ambitions of the beneficiaries to find suitable, rewarding and stable jobs, which are fully in line with the country’s green growth agenda. The subcomponent comprises:

Integrated Training : planned on the basis of individual training programmes, as well as in the context of interactive group workshops with eco-experience experts and mentors, this training aims at developing the know-how, interpersonal skills, job search techniques and key knowledge concerning the green economy. Specific training courses will include: (i) technical skills such as business plan development , marketing, financial planning, management and project development, preparation of budgets; (ii) Interpersonal skills such as addressing audiences, negotiation skills, stress management, teamwork, project approach, group facilitation, active listening techniques; (iii) job search techniques such as CV preparation, job interviews, social networking, negotiation of wages; (iv) and specific courses on green economy and sustainable development to provide beneficiaries with an overview on the political, socioeconomic development in a transition to a green economy and the opportunities arising for employment and entrepreneurship in Tunisia.

The Eco Experience : aims at developing practical skills in a green business with a growth potential. It provides an appropriate way to deal with the lack of practical experience for new graduates. The Eco-experience also seeks to strengthen employment-generating projects in the area of green economy. The Eco-experience will take several forms: (i) Induction training to green jobs, which are conventional trainings tailored to the needs of the beneficiary with the aim of gaining a practical green job experience; (ii) Subsidized Eco-jobs, which represent an adaptation of the PC502 guideline to the eco-experience, including through revising the legal framework and securing additional public funding; (iii) Eco-solidarity jobs, which is an adaptation of the solidarity jobs guidance (Contrat Emploi de solidarité3) to the regional and local promotion of green jobs; (iv) International internships and training courses in Europe in the area of the green economy and sustainable development for 6 to 12 months. The platform proposes to negotiate an exchange programme with the United States and employers in Asia and Africa.

Coaching and mentoring : Each beneficiary is advised, supported, and oriented by several actors: employability advisors, supervisors, mentors, trainers, integration advisors and employment advisors.

Participation in conferences and debates : At least two conferences will be held to share testimonies related to green jobs and green economy. Lecturers are practitioners as well as potential employers. These conferences will enable beneficiaries to expand their professional network and to get critical information for their projects as well as for paid jobs seeking.

Subcomponent 2.2. Green Business Creation: This component aims at providing On-the-Job Training (OJT) to the enrolled group of unemployed youth graduates to create their “Cleantech companies”. Local and international experts will coach the selected entrepreneurs throughout the process of business creation and start up. The ultimate objective of this subcomponent is to contribute to the establishment of an integrated Cleantech value chain (ex. in the solid waste recycling sector). A series of instruments will be made available to facilitate the launch of the selected “Cleantech projects” such as financial and technical assistance, guarantee funds and incubation to facilitate proper development, and other active measures related to the establishment of green enterprises. This subcomponent comprises:

Technical Assistance : A series of instruments involving international and national expertise will be initiated to address the following issues:

o Enterprise start up assistance: An advisor is assigned to every entrepreneur. S/He advises, supports, guides the beneficiaries throughout the start-up process. The selected entrepreneurs will benefit from the advisor’s knowledge of the green economy business development, available

2 50% contribution of the State to salaries for the new recruitment of graduates of higher education.3 A monthly allowance ranging between TND 150 and 200 to graduates of higher education.

business market opportunities, legal requirements, business planning and other aspects needed for the selection of the appropriate business;

o Technical advice: Once the start-up is initiated, technical advisors in SME development will assist with backstopping and monitor the growth potential of the selected SME, with support from local and international specialists in different technical areas, such as communication, finance, commercial law and others related areas.

o Business Intelligence: will help identify and disseminate information on business opportunities to beneficiaries and advisors through various means: web, information sessions, etc.

o Marketing advice: Marketing assistance will be provided to assist entrepreneurs in the creation of instruments to facilitate their sales efforts. The marketing advisor handles the creation of the identity required in the market: graphic, logo, the sale concept, brochures, and web page, the use of social networks and others. The marketing advisor will also be responsible for the promotion of the platform at the governorate level.

Incubation : Series of instruments will be made available to beneficiaries, such as: (i) shared collective enterprise: a legal entity designated in carrying “Green jobs start-up” during the start-up phase. This instrument enables entrepreneurs to delay the creation of the legal personality until the viability of the company is proved; (ii) shared premises: a workplace will be put at the disposal of GJP candidates under request. All beneficiaries receive common services (secretary, telephone, web site, communication materials and others). Common Services will support the green enterprises to emphasize their presence and visibility in order to improve their credibility in the market.

Subcomponent 2.3: Financial support: The Project will provide financial support to youth entrepreneurs in the form of micro finance schemes to set-up their own “Cleantech Companies”. It is expected that 50 start-up will be created, each eligible to a financing amount of about US$ 35.000. This subcomponent will be led and financed by the Tunisian Bank for Solidarity (BTS) in cooperation with the GJP Steering Committee. The Project will put in place a post financing monitoring and follow-up mechanism to ensure the success of the start-ups. Business Angels will also be mobilized to engage in early-stage risk financing and business coaching.Subcomponent 2.4: Capacity development of local partners: This subcomponent aims at building the capacities of the MTVE and BTS staff in the pilot governorate as well as the central level through training sessions and personalized curricula. Under this subcomponent, the Project will benefit from international experienced and qualified experts to ensure effective transfer of knowledge and knowhow for employability, employment and integration advisors. The subcomponent will include:

Training of Employability Advisors : to acquire a global knowledge of the various tools to foster the integration of the beneficiaries. They have to develop good knowledge of green jobs market, social security laws as well as of measures to promote employability. Employability Advisors are responsible for reaching concrete results for the improvement of beneficiaries’ employability. They enable the job seeker to acquire the necessary qualifications to be in line with the labour market needs and with the individual professional projects. They are the main interlocutor of the beneficiary along the process of the individual professional project implementation. They are in charge of improving the beneficiaries’ employability within the green jobs platform, including through assigning active measures and providing practical experience (Eco-trainings, Solidarity Eco-jobs, paid-green jobs).

Training of Employment Advisors : who are responsible for facilitating beneficiaries’ access to a paid job. They establish and manage a network of potential employers within the pilot governorate. They initiate and establish a monitoring mechanism for the green jobs market with its perspectives and opportunities. Their role is to bridge the gap between beneficiaries and potential employers. Employment advisors will work closely with employability advisors

Training of Integration Advisors : who are entrusted to assist beneficiaries in identifying and developing their projects. This training requires the involvement of experts from partner countries who successfully

developed a mechanism of personalized professional integration. Cooperation mechanism with the Employment and Investment Agencies in Canada, France and Switzerland will be used for this purpose. Agreements will be established between these agencies and the appropriate Tunisian institutions to train Tunisian Advisors. In addition, international experts will be recruited to train the future local advisors at the pilot governorate level.

Capacity Building for MTVE and BTS staff : Appropriate and relevant training will include MTVE staff at the central and pilot governorate levels. BTS staff will also benefit from a capacity building programme in green economy business planning, evaluation and monitoring of projects with the aim of supporting the establishment of an integrated Cleantech value chain in the country.

15. Key Indicators Linked to Objectives Current characteristics of Tunisian youth labour market assessed and related main policy challenges identified; Policy options for reinforcing youth labour markets and the employability of youth identified, including key

elements for a youth action plan; Policy options for transition to green jobs proposed; Pilot Green Job Platform is implemented in one governorate ; 70% of beneficiaries employed; 50 small and medium "Cleantech Companies” created; 300 direct and indirect jobs created through incubators over the Project’s duration of 3 years; 50 MVTE staff members and qualified unemployed youth are trained.

D. IMPLEMENTATION

16. Partnership Arrangements (if applicable)

A. The Government of Tunisia:The Tunisian Government will be in charge of the overall coordination of the Project. The Ministry of Vocational Training and Employment through its institutions, including the Agence Nationale pour l’Emploi et le Travail Indépendant (ANETI) as well as the regional employment offices will form a national project implementation team. The Green jobs platform project will be managed by a steering committee consisting of representatives of the Ministry of Vocational Training and Employment, Tunisian Bank of Solidarity, the union of associations of unemployed graduates, the Cleantech enterprises involved at the National level .e.g. chambers of commerce and the Junior Chamber International. It is expected that other members join the national steering committee, if needed, such as the Ministry of Tourism, Ministry of Higher Education, Ministry of Industry, Ministry of Agriculture and other public institutions involved in the Green Economy agenda. Representatives of the civil society and private sector will also be invited to join the Committee on a ad-hoc basis. The Steering Committee for the Green Job Platform may decide to set up direct support units using these different members.B. The Tunisian Bank for Solidarity (BTS).The Tunisian Bank for Solidarity (BTS) is a universal bank specialised in financing micro and medium enterprises (SMEs) and providing micro credit. The BTS is a strong and financially viable institution with an annual lending volume of about TND 100 million (US$ 70 million) extended to more than 10.000 SMEs. The BTS has a nationwide network constituted of 25 branches. It can finance micro-projects with investment volumes up to TND 150.000 (about US$ 100.000) in all sectors and at all levels and particularly for university graduates. The BTS has built strategic partnerships with national and regional institutions involved in investment and self-employment promotion, including the Ministry of Vocational Training and Employment, micro credit NGOs and Business Centres in order to support micro-entrepreneurs to successfully launch their own projects

and guarantee the highest possible loan recovery rate. C. United Nations Office for Project Services:UNOPS (United Nations Office for Project Services) will also partner with the Ministry of Vocational Training and Employment (MVTE) in Tunisia for the implementation of the Green Jobs Platform. UNOPS is a UN organisation with a large and recognized experience in project management and implementation in different sectors related to economic recovery and in support to countries in transition. UNOPS has an important network of experts and organizations operating in the field of employment and green jobs, in addition UNOPS promotes the use of competent national expertise. The MVTE and UNOPS have signed an MOU related to the support for the Green Jobs Platform. D. Private Sector:The Project will build on the on-going consultation process in the framework of the National Employment Strategy as well as the E4E action plan to engage with the Private Sector. The Project will facilitate dialogue between private and public sector from the outset as this is an essential ingredient of a successful reform of the vocational training system. Workshops will be organized with private sector players and between public and private sector players for that purpose.E. Parliament and Civil society: Members of the National Constituent Assembly and representatives of civil society (labour union, think tanks, unemployed associations, etc.) will be invited to contribute to the Project as stakeholders in the ongoing dialogue on the implementation of the new social pact.F. The International network of Green Jobs Platform: This Network gathers a large number of actors from the public sector, civil society and “Cleantech” enterprises in Europe. This international development network offers the advantage of bringing to operational activities a large number of actors, others than partners who have initiated these projects. The Tunisian Green Jobs Platform will take benefit from the ongoing dialogue with representatives of this network of partners as well as from the exchange of experience with other Green Jobs Platforms worldwide.G. Other donors:Coordination between members of the donor community involved in education and vocational training reform programs as well as local employment initiatives will be key to ensure complementarity between the different projects currently developed or planed by the donors. Being the main interlocutor of bilateral and multilateral donors in this field, the MVTE will ensure that coordination is handled effectively.

17. Coordination with Country-led Mechanism/Donor Implemented Activities

The proposed Project is complementary to broader IDB engagement and financing package in Tunisia. It is also in line with the strategies defined in the Action Plan for Tunisia endorsed by the stakeholders in May 2012 under the joint IDB and IFC Education for Employment (E4E) initiative”. Furthermore, the proposed Project will complement the recently IDB approved Youth Employment Support Programs:

E4E Action plan. In 2012 IDB and IFC have launched an E4E action plan for Tunisia, which is built with an integrated focus on skill development for the labour market, rather than looking for new opportunities for job creation (given that the E4E is generally oriented towards the labour supply spectrum). This plan emphasizes the need to develop work-readiness and re-skilling programs in close collaboration with private sector employers. One key finding of the action plan that was validated by the country’s institutions was that the E4E system in the country is categorized by an existing chasm between prevailing demand and supply. This was diagnosed as primarily related to the following: (i) low quality of basic education; (ii) students not pursuing diplomas with highest employment opportunities; (iii) gaps in the quality/adequacy of public post-secondary education and vocational training offering; (iv) quasi-inexistence of alternatives from private universities and vocational training centres; and (v) lack of work-readiness and re-skilling programmes. The present Project is designed to address the last issue as it will develop work-readiness and re-skilling programs in close collaboration with private sector employers.

Vocational Education and Training for Employment Project. IDB has approved a US$ 27 million project aiming at improving the quality and adequacy of public vocational training, offer programmes and diplomas, which are highly

demanded by the market. The project objective is to develop the (VET) System to equip its graduates with the relevant skills to improve their employability. The project comprises: (i) establishment of new Vocational Training Centres (VTCs) offering training in priority sectors identified given their growth potential in the next 5 years and current skill limitations; (ii) Training and curricula development; and (iii) Enhancing Partnership with Private Sector.

Youth Employment Support Program (YES). IDB has also extended a financing to GoT for an amount of US$ 50 million to create new job opportunities for unemployed youth at higher risk of exclusion. The YES Programme is an effective mechanism for youth economic empowerment, fostering Tunisia’s capacity to deliver micro and small enterprise financing schemes to youth on a sustained basis. YES is implemented by Tunisian Bank of Solidarity (BTS).

The spillover effects from the Project will benefit other initiatives with complementary goals. Some initiatives have been identified during the preparation of the Project and could collaborate in the implementation of some project activities. This includes UNIDO’s initiative to undertake an operating study on opportunities to create green jobs for young promoters in four governorates, as well as ongoing programmes implemented by the International Labour Organisation (ILO) to strengthen capacities of the Ministry of Vocational Training and Employment. The Project will consider the results of studies on the topic of green jobs, such as the study on the development potential of green jobs in Tunisia, conducted by the Ministry of Environment and funded by the UNDP, and the impact assessment on economic and social development of renewable energy in Tunisia, conducted by National Agency for Energy Efficiency. In addition, the Project is aiming at working with NGOs (national and international) as well as development associations in Tunisia promoting and operating in the field of green jobs and employment.

18. Institutional and Implementation Arrangements

The proposed Project will use two sources of financing: Micro finance credit provided by Tunisian Bank for Solidarity and the MENA Transition Fund (MENA TF).The BTS resources will be Government executed and will be used to provide financial support and extend microfinance schemes to support youth entrepreneurs to setup Cleantech start-ups.The MENA TF resources will be both Government and OECD executed. For the Government executed activities financed under the MENA TF, the resources will be used to directly support GoT’s capacity in taking the lead for the implementation of component 2. The OECD executed activities financed under the MENA TF will cover component 1.The Government executed activities will be led by the Ministry of Vocational Training and Employment, which will be responsible for the execution of the Platform for Green Jobs with the support of IDB and UNOPS. An MOU to that effect has been signed with UNOPS. MVTE will be calling on UNOPS’ support in order to provide inputs and technical assistance and access to information on similar initiatives implemented elsewhere. IDB will ensure that procurement of all services under component 2 of the Project will follow its Procurement Guidelines. The IDB Standard Request for Proposals shall be used where applicable. For each contract to be financed from the Grant, the different procurement methods or consultant selection methods, estimated costs, prior review requirements, and time frame will be agreed between the MVTE and the IDB in a detailed Procurement Plan which should be developed prior to the project commencement. The Procurement Plan will be updated periodically to reflect the actual project implementation. All disbursements will be made in accordance with the Disbursement procedures of IDB and will be used to finance project activities through the disbursement procedures in use: i.e. Disbursement Request for direct payment, or using a Special Account opened in a local Bank. An independent auditor will be recruited to audit the financial statements of the project.

19. Monitoring and Evaluation of Results

The reporting system on the outputs of the programme takes the form of the submission of a progress report every 6 months. Such reporting will be presented the Steering Committee, which has an important role in guiding, monitoring and

supporting for the achievement objectives and obtaining intended results. Evaluation for the GJP component will be provided at specific times of the Project life by external consultants in order to identify issues and improvements. Lessons learned and recommendations for improvements will be documented in a final report which will be executed by an independent consultant. The OECD will produce a mid-year progress report, which will outline the key accomplishments achieved during the first part of the realisation of the report which it is mandated to produce. The OECD will present the draft report to the Steering Committee before its final publication to reflect its possible comments.IDB will: (i) ensure proper coordination and exchange of information with relevant donor coordination mechanisms, including the IFI Coordination Platform; (ii) provide implementation support to MVTE throughout the life of the project; (iii) ensure that the TF funds are administered in accordance with the applicable policies and procedures of IDB; (iv) provide financial and progress reporting through the Trustee and Coordination Unit of the Fund; and (v) provide inputs to the annual reports of the DPTF through the Coordination Unit.

E. PROJECT BUDGETING AND FINANCING

20. Project Financing (including ISA Direct Costs4)Cost by Component Transition

Fund(USD)

Country Co-Financing

(USD)

Co-Financing provided by

Tunisian Bank of Solidarity (USD)

Total(USD)

Component 1: the “Invest in Youth: Tunisia” Report - (OECD executed)

487.000 487.000

Component 2: Developing and implementing the Green Jobs Platform – (GoT executed)

(a) Sub-component 2.1: Youth Professional Development in the field Green Jobs Market

(b) Sub-component 2.2: Green Business Creation

(c) Sub-component 2.3: Financial Support

(d) Sub-component 2.4: Capacity Development

1.410.000

1.800.000

640.000

200.000

100.000

1.750.000

1.410.000

2.000.000

1.750.000

740.000

Total Project Cost 4.337.000 300.000* 1.750.000 6.387.000

* The Country Co-Financing part consists of in-kind contribution, including incubation facilities for “Cleantech” companies within sub-component 2.2 on Green Business Creation as well as meeting rooms, conference facilities, printing, office material and administrative assistance within sub-component 2.4 on Capacity Development.

21. Budget Breakdown of Indirect Costs Requested (USD)

Description Amount (USD)

Islamic Development Bank

4 ISA direct costs are those costs related to the ISA’s direct provision of technical assistance within the project.

For grant preparation, administration and implementation support:

Staff timeUS$ 100.000

Organisation for Economic Co-operation and Development*

For grant preparation and administration:

Staff time US$ 38.000

Total Indirect Costs US$ 138.000

* Indirect cost for OECD is a charge applicable to all voluntary contributions accepted by the Organisation since 1 March 2005 further to a Council Resolution. A new cost recovery policy was adopted by Council in November 2009. The current rate applicable is 7.3% as of 1 January 2012

F. Results Framework and Monitoring

Project Development Objective (PDO):

PDO Level Results Indicators*Unit of

MeasureBaseline

Cumulative Target Values**Frequency

Data Source/Methodology

Responsibility for Data Collection

Description (indicator definition etc.)YR 1 YR 2 YR3 YR 4

Indicator One: OECD report assessing the broader policy framework for investing in youth, in particular to promote the employability of youth, through better labour market, education and training policies.

Legal and institutional reforms are adopted

0 0 1

Yearly MVTE / Reports

OECD in cooperation with MVTE and IDB

Delivery of the OECD report.

Indicator Two: Enrolled beneficiaries are employed or have launched their own projects

Percentage 70% 5% 25% 25% 15% Yearly MVTE GJP Steering Committee + IDB + UNOPS

Number of enrolled beneficiaries employed.

Indicator Three: Creating small and medium sized "Cleantech Companies”.

Number 50 0 20 20 10 Yearly MVTE GJP Steering Committee + IDB + UNOPS

Number of small and medium "Cleantech Companies” created.

Indicator Four: Direct and indirect jobs generated by the “Cleantech Companies”

Number 300 0 100 150 50 Yearly MVTE GJP Steering Committee + IDB + UNOPS

Number of jobs created by incubators.

INTERMEDIATE RESULTS

Intermediate Result (Component One): Comprehensive VT and Employment policy framework analysis

Intermediate Result indicator One: Co-ordination platform for monitoring VT and employment related policies

Inter-ministerial taskforce set up to co-ordinate inputs to policy review process

0 0 1 0 0 6 months Regular communication with task-force partnering in policy review process

Inter-ministerial taskforce led by MVTE + OECD + IDB

Preparation of OECD questionnaire. The MFPE will be in charge of providing answers to the questionnaire, possibly consulting with other experts and officials from the relevant Tunisian authorities. Collection of responses from MFPE. Kick-off seminar back-to-back with OECD mission..

Intermediate Result indicator Two: Invest in Youth: Tunisia” Report completed

Analytical report

0 1 0 0 0 6 months Reports OECD, MFPE and IDB teams attending two workshops (together with other experts)

OECD Report completed, published and disseminated. Publication of OECD report on policy Options for Investing in

Youth will complete the mission of the OECD.

Intermediate Result (Component Two): Setting-up the Green Jobs Platform

Intermediate Result indicator One: Organization structure, pilot identified, staffing and skill requirements, including gender focus approach,

Organization structure, pilot identified, staff skills, procedures defined, gender focus

0 1 1 1 1 6 monthsWorkplan and Implementation set up; reports

GJP Steering Committee + IDB + UNOPS

GJP organization structure is defined; pilot identified, staff skill requirements are established including gender focus.

Intermediate Result indicator Two: youth professional preparation for the green markets’ jobs and its potential in Tunisia: approach, arrangements and material prepared

Approach including a combined set up of an integrated (academic and practical) training & eco-experience, coaching and mentoring arrangement in place.

0 1 1 1

10 months

Arrangements and integrated training pack, eco experience , coaching and mentoring programme prepared

GJP Steering Committee + IDB + UNOPS& feedback from enrolled beneficiaries

Arrangements and integrated training pack are prepared, including eco- experience, coaching and mentoring programmes;

Intermediate Result indicator Three: Integrated Training sessions are organized as well as eco-experiences and coaching and mentoring programmes

# enrolled beneficiaries # external participants/experts sharing country experiences

0 0 30 30 30 10 months Reports

Experts &training staff & feedback from training participants

Number of beneficiaries trained, coached and mentored; contacts established with practitioners and other experts and network including at the international level

Intermediate Result indicator Four: Cleantech companies are created and established including its related technical and financial instruments

# of companies

0 0 20 20 5 10 months

MVTE statistics on creation of start-ups accompanied by the GJP.

GJP Steering Committee + IDB + UNOPS

Technical and financial instruments established to facilitate Projects launched and established in the framework of the Green Jobs Platform

Intermediate Result indicator Five: Direct and Indirect Jobs are generated

# of jobs 0 0 50 150 100 10 months MVTE statistics, Mission report of monitoring and evaluation and periodic reports to the

GJP Steering Committee + IDB + UNOPS

Number of direct and indirect jobs generated by the Cleantech companies + incubators

Steering Committee.

Intermediate Result indicator Six: Capacity Development provided for selected MVTE staff and qualified youth in the pilot governorate

#of staff in training, internships and exchange programme

0 10 20 20 0 6 months Reports GJP Steering Committee

Number of staff and youth benefiting from training programs, including internships and exchange programmes with partner countries.