UNIDO Project Concept

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Project concept: Supporting Moldova’s industrial SMEs through the Subcontracting and Partnership Exchange (SPX) Centre United Nations Industrial Development Organization 1 | Page UNIDO Project Concept Version 2.0, as at 6 th May 2020 Project title: Supporting Moldova’s industrial SMEs through the Subcontracting and Partnership Exchange (SPX) Centre Thematic area code HC2: Advancing Economic Competitiveness HC21: Investment, Technology & SME Development Starting date: As soon as possible Duration: 42 months Project site: Chisinau, Moldova Counterpart: SME Development Agency (ODIMM), Moldovan Investment Agency, Ministry of Economy and Infrastructure Executing agency/ cooperating agency: UNIDO Project Inputs: 1,500,000 EUR - Support costs (13%): 195,000 EUR - Counterpart inputs: tbd - Grand Total: 1.695,000 EUR Project purpose The purpose of the project is to stimulate and facilitate a modernization and growth process for Moldovan SMEs to ensure that they are competitive both in the domestic market as well as in international markets. To achieve this, the project will address four specific areas: 1) Matchmaking: The project will profile SMEs to understand the existing capacities and conduct matchmaking with major buyers in order to facilitate domestic and international business contracts; 2) SME upgrading: The project will benchmark SMEs to identify strengths and weaknesses, and subsequently prepare an action plan for their upgrading. In order to harness the availability and specialization of locally-available business development providers in Moldova, benchmarked SMEs will be linked to enterprise development support programmes and national SME financing schemes;

Transcript of UNIDO Project Concept

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Project concept: Supporting Moldova’s industrial SMEs through the Subcontracting and Partnership Exchange (SPX) Centre

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UNIDO Project Concept

Version 2.0, as at 6th May 2020

Project title:

Supporting Moldova’s industrial SMEs through the Subcontracting and Partnership Exchange (SPX) Centre

Thematic area code HC2: Advancing Economic Competitiveness HC21: Investment, Technology & SME Development

Starting date: As soon as possible Duration: 42 months Project site: Chisinau, Moldova

Counterpart: SME Development Agency (ODIMM), Moldovan Investment Agency, Ministry of Economy and Infrastructure

Executing agency/ cooperating agency: UNIDO

Project Inputs: 1,500,000 EUR - Support costs (13%): 195,000 EUR - Counterpart inputs: tbd - Grand Total: 1.695,000 EUR

Project purpose The purpose of the project is to stimulate and facilitate a modernization and growth process for Moldovan SMEs to ensure that they are competitive both in the domestic market as well as in international markets. To achieve this, the project will address four specific areas:

1) Matchmaking: The project will profile SMEs to understand the existing capacities and conduct matchmaking with major buyers in order to facilitate domestic and international business contracts;

2) SME upgrading: The project will benchmark SMEs to identify strengths and weaknesses, and subsequently prepare an action plan for their upgrading. In order to harness the availability and specialization of locally-available business development providers in Moldova, benchmarked SMEs will be linked to enterprise development support programmes and national SME financing schemes;

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3) Export and investment promotion: The project will organize international industrial

investment promotion forums in Moldova and participate in international trade fairs in order to provide exposure to SMEs to international investors and traders. Prior to these events, the project will embark on a process of investment opportunity profiling in priority sectors. Follow-up support will be provided after these events in a bid to maximize the conversion rate of business leads to become actual investments.

4) Institutional support: To ensure sustainability beyond the lifetime of the project, the project will establish a Subcontracting and Partnership Exchange (SPX) within an existing institution through which the above services will be carried out. The project will build the capacity of the SPX host institution so that it can effectively maintain and expand a database of SMEs that have been profiled using UNIDO’s SPX profiling tool and it will provide continuous matchmaking between SMEs and major buyers. Furthermore the project will build the capacity of the SPX so that it can conduct and explain the results of the benchmarking exercise, prepare investment profiles and support SMEs in negotiations with local finance institutions in order to access funds for upgrading. Finally the project will support the SPX in organization/participation in international trade and investment forums. Thus, the SPX will be in a position to stimulate both domestic investment and foreign direct investment (FDI) in the Moldovan industrial sectors.

Baseline scenario National context regarding investments and exports The recently adopted National Strategy for Investment Attraction and Export Promotion 2016-2020 underlines the importance of job creation and export enhancement for sustainable economic development of the country. It emphasises the capacity of new technologies to enhance the competitiveness of local products. The Strategy is focused on seven priority sectors based on their potential to attract investment, create jobs and contribute to the rise of exports for the next 4-5 years. These sectors are: (1) agriculture and food industry; (2) automotive industry; (3) business services especially business process outsourcing (BPO); (4) clothing and footwear industry; (5) electronics industry; (6) information and communication technologies; and (7) production of machinery and parts. The FDI stock in Moldova was US$ 4 billion in 2018 and, excluding any potential divestments, the stock has been growing by around 5% annually. Table 1: FDI inflows to Moldova from 2013 -2018 (Source: UNCTAD)

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2013 2014 2015 2016 2017 2018 FDI inflow (US$ million) 233 338 228 91 163 228 FDI outflow (US$ million) 22 37 19 9 14 31 Number of Greenfield investments 5 7 5

UNCTAD’s 2013 Investment Policy Review 2013 provides the composition of the cumulative FDI inflows 1992–2012: Services and construction (mainly banking, trade, real estate and business services): 65%; manufacturing: 24.9%; electricity, gas and water supply: 8.6 % and agriculture, hunting and forestry: 1.5 %. Manufacturing FDI comprises various industries, such as production of glass, plastic, construction materials, automotive components, garments and footwear. It also comprises food, tobacco and beverages, including wine production. According to the Moldova Investment Agency (MIA), the automotive industry is currently one of the most dynamic sectors in Moldova. In addition, the ICT sector is a rather new and fast growing sector for Moldova, with many foreign companies entering the market. In 2005, the main exported product categories were beverages, including alcoholic drinks and vinegar. While food & beverages still commanded the highest share of exports in 2016 (22 %), followed by apparel (16 %), electrical equipment and appliances now is the third highest industry in export, commanding a share of 15.2% according to UNIDO’s Industrial Analytics Platform (IAP).1 This was mainly due to exports of electrical cables for the automotive sector produced by several companies with the help of foreign investments. That being said, also according to IAP, in 2016, Moldova compared to Eastern Europe still lagged behind in manufacturing value added as a percentage of GDP (11.8% vs 15.5%), manufactured goods in total merchandise exports (72.1% vs 82.7%) and most prominently high-tech goods in total manufacturing exports (26.9% vs 52.9%). In 2019, Moldova was ranked 48 among 190 economies in the ease of doing business score (source: World Bank). To overcome remaining barriers facing the private sector, the Government has prioritized the promotion of industrial parks to support local economic development. The adoption of the new Law on Industrial Parks (No. 182 of July 15, 2010) created new conditions for attracting investments in the development of the industrial sector of the economy. Currently, approximately 60 industrial companies operate in 10 industrial parks in the country, employing over 2,500 people. However, to reach the full potential of industrial parks for the economic development of Moldova, and as a factor in creating an enabling shared prosperity through job creation, further investments are needed. According to the National Strategy for Investment Attraction and Export Promotion 2016-2020, it was expected that, by the end of 2020, the annual inflow of foreign direct investments (FDI)

1 See: https://iap.unido.org/country/MDA

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would rise to US$ 380 million, create a minimum of 10,000 new jobs, increase the volume of exports of goods up to 3 billion USD, with services up to 1.275 billion USD, reduce trade deficit in GDP up to 4% and decrease the unemployment rate to 1.4%. However, early 2020 the COVID-19 pandemic hit the world at large and Europe particularly hard. The magnitude of the ensuing crisis is unprecedented in modern history, and it is expected that the lock down ordered by most governments, including in Moldova, to contain the virus and delay its rapid spread will have both negative economic as well as social impact globally. The enforced social distancing (closing of non-essential activities including factories, shops and similar) combined with restricted international and local travel, has led to a sharp drop in demand and disrupted supply chains all over the world, and resulted in a spike of unemployment.. The American Chamber of Commerce (AmCham) in Moldova conducted a survey March 30 – April 6 where 315 Moldovan companies from more than 20 industries responded on the impact that the COVID-19 had had2. The findings are quite dire:

• 89% of respondents are totally or significantly impacted by the decreased demand of products and / or services provided, and 2/3 of them are affected by the decreased productivity of employees.

• 92% of respondents estimate that demand for products / services will continue to decline, with the availability of working capital being one of the most significant anticipated challenges.

• In order to address the economic impact of the COVID-19 pandemic, about 2/3 of respondents stated that they would reduce staff related costs, administrative and rental costs, as well as postpone strategic investments, estimating a decrease in revenues this year in comparison to 2019 by over 35%.

• 31% of respondents plan to enter the online market, and 8% of respondents consider creating export opportunities.

Without doubt the recovery phase from the COVID-19 shock will take its time, and it is expected that also FDI will drop radically in 2020 as a direct effect of lower profits and a highly uncertain future. Institutional context The Moldovan Investment Agency (MIA) is the prime source of information and assistance for potential investors. MIA was created through the merger of the Moldovan Investments Attraction and Exports Promotion Organization and the Tourism Agency in 2018. It has the task to contribute to the economic growth through increasing the level of FDI, the exports’ volume and to further develop the tourism sector. Thus, the duties of the Agency deal with the promotion of Moldova’s image for the attraction of foreign investments, backing the investment activity and protecting investments, promotion of exports, tourism and strengthening economic 2 https://www.amcham.md/st_files/2020/04/30/EN_AmCham%20survey%20report.pdf

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diplomacy.. Its team consists of permanent investment attraction staff, sectorial consultants, as well as regional officers. Another important organization for investment promotion particularly for the domestic SMEs is the Organization for Small and Medium Enterprises Sector Development (ODIMM). It is a non-profit and non-commercial public institution that reports directly to Moldova’s Ministry of Economy and Infrastructure. ODIMM was established in 2007 to promote entrepreneurship, support access to finance and provide services for SMEs. Functions include the following: development and implementation of programs and projects for the development of the SME sector; administration of the State Credit Guarantee Fund (FGC); providing consulting and training services for managers and employees of SMEs; creation and development of a business incubator network in Moldova; supporting the formation of clusters and innovative networks; supporting the development of associations and business support institutes, and; cooperation with similar national and international organizations. Also relevant in this context is the Moldovan Chamber of Commerce and Industry (CCI). The CCI is a non-governmental, autonomous and independent organization, which represents the interests of the business community in Moldova and focuses on assisting local and foreign enterprises in a variety of ways including business development, as well as other areas vital to the success of a company. With its head office located in Chisinau, the CCI has 9 regional branches and one representation office in the Transnistria region. The CCI is an active member in a number of leading international organizations, among which are: the International Chamber of Commerce, the EUROCHAMBRES Federation and the Central European Chamber of Commerce Initiative. As part of its policy to foster economic development, increase competitiveness of SMEs and promote international trade links, the CCI offers the following services to Moldovan and foreign enterprises: The Chamber is actively involved in state programs for supporting the interests of its members, as well as all SMEs in the country, assisting local entrepreneurs in promoting their products and services on foreign markets and identifying funds for production purposes, research and technological development. For this purpose, it cooperates closely with foreign chambers of commerce and industry, state authorities, international donor organizations, business associations in Moldova and abroad. Rationale for and origin of the request The project will support the efforts of the Government of Moldova in mobilizing private investment, both domestic as well as FDI, in prioritized industrial sectors with a view to create additional jobs in manufacturing, something that has become even more so important in the wake of the COVID-19 crisis, where the SPX would be a vehicle to maximize FDI contribution in times where FDI will become scarce.

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Perhaps equally important, the SPX will promote and strengthen domestic supply linkages, which to some extent will mitigate the negative impacts of shocks such as the COVID-19 crisis. As shown by the recent COVID-19 impact survey by AmCham Moldova, 64 percent of the companies estimated that the lack of raw materials will increase and that further logistic disruptions will take place for several months even though commercial traffic is allowed to enter/leave the country. In addition to supply issues, or perhaps a direct consequence of it, 68 percent of the responding companies are postponing strategic investments. A well-functioning SPX will be in an excellent position to alleviate supply chain issues through its matchmaking function. It will be in an excellent position to support the modernization and growth of Moldovan SMEs, who have been hit hard by the COVID-19 crisis, and through these efforts the SPX will also support further investments, both from domestic and international companies. UNIDO and the government of Moldova have signed in December 2018 a Country Programme (CP) covering the period 2019-2023. The CP Component I agreed aims to enhance industrial competitiveness, market access, innovation and investment promotion. Through projects and actions that should be formulated within this component it is expected that priority industry subsectors be well integrated into global value chains and producing competitive products. This should be reflected in an increased manufacturing value added, increased share of medium and high-tech activities in total manufacturing value added, and an increased FDI stock per capita. This project proposal aims to contribute to the expected results in the CP component I, as discussed during several exchanges with representatives from the Ministry of Economy and Infrastructure (MEI) and other stakeholders during a UNIDO mission to Moldova for launching the CP in May 2019. The proposal request has been later confirmed through a video-conference and written communications exchanged among UNIDO and MEI representatives held along November and December 2019 and it has been identified as a priority for the country. The Project The project will have 4 distinct components:

i. Increased institutional support for SME development through the establishment of a Subcontracting and Partnership Exchange (SPX), which will provide the services of components ii-iv to Moldovan SMEs on a continuous basis;

ii. Profiling and matchmaking between Moldovan SMEs and major buyers; iii. SME benchmarking and upgrading; iv. Investment and export promotion for SMEs;

i) The Subcontracting and Partnership Exchange (SPX)

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The SPX will be established within an existing institution and capacitated to carry out the services explained in detailed in components ii-iv below. It is through the SPX that the project will be able to ensure sustainability and a clear exit strategy. The project will equip, train and coach the staff on SPX tools and methodologies so that they can confidently carry out the services of the SPX. At the end of the project is expected that the key SPX staff will be fully absorbed by the host institution and that they can continue to perform their responsibilities with the resources available to the host institution. An SPX Centre cannot function nor exist without the support and contribution of a designated manager and a team of specialists/experts who have as their main aim the successful implement of the SPX Programme. In this sense, the basis of a successful SPX Programme in any country context firmly lies on the calibre, experience and capability strength of the SPX Personnel being engaged. Basically, an SPX Centre is normally run by minimum three (3) main personnel roles, each of which covering specific tasks but complementary tasks. These roles refer to the SPX Executive Manager, the SPX Profiling Specialist and the SPX Benchmarking Specialist, all of which are local experts. The most important figure is the one for the SPX Executive Manager who is responsible for the planning and management of the SPX activities in close interaction with UNIDO SPX project management at UNIDO Headquarters. At the outset, the SPX Executive Manager must manage the SPX functions and drive all aspects of programme implementation. He/she must ensure that identified SPX stakeholders work together and effectively synchronize their activities whilst taking a pro-active role in sensitizing local and international buyers with the intention to build sustainable strategic partnerships. He/she should ideally be staff of the institution that will host the SPX to ensure that its functions are duly embedded in the organizational and cultural context of the host institution. The SPX Officers are expected to perform practical operational tasks associated with the mainstream SPX activities including, profiling, benchmarking, buyer engagement, planning and execution of B2Bs as well as the identification and formulation of industrial investment technology project profiling (IITPP). To assist with this the project will provide full access to a virtually hosted tailor made database and a management information system. Depending on the national context and the skill profiles available of staff in existing institutions, the SPX can be hosted in a public institution/agency such as the SME Development Agency (ODIMM) or the Moldovan Investment Agency. The SPX could also be hosted by a private association such as the Chamber of Commerce and Industry (CCI). Both public and private owned hosts have proven valid according to experience gathered over the last 25 years. Regardless of the host, however, experience has also shown that it is of utmost importance for the success of the SPX that sufficient staff and resources are allocated to the SPX, so that the SPX is able conduct the tasks at hand, and also that the work of the SPX is supported by all relevant institutions, also those that are not selected as the host of the SPX. In the case of

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Moldova it is suggested to conduct an initial round of consultations with the key stakeholders to identify the potential hosts of the SPX, assess their respective strengths and weaknesses with regards to mandate (ownership is crucial), manpower and resources available, geographical outreach etc. at the onset of the project before a selection can be done. Once the selection is done, the project will train not only the foreseen key staff for leading the SPX activities, but also staff that may play a supporting role3. This training may also be extended to staff of other relevant institutions, where one could expect strategic collaborations in terms of geographic / client outreach as well as thematic collaborations, for example with certification or standardization bodies, providers of SME finance and other topics where the SPX host institution do not have the specific expertise. Links to laboratories, ideally those with international accreditation, or research institutes/innovation centres that can assist SMEs to prototype and test their products will also be sought. The main advantages to the different key stakeholders of a functioning SPX are the following: Small and medium-sized enterprises (SMEs) The SPX provides support to SMEs to make them visible within the SPX supplier pool (see Figure 1 below). By linking SMEs to other SME upgrading service providers in the country, their likelihood in meeting international standards as required by large domestic and/or international buyers increases significantly. Figure 1: SPX focus in a tiered supply chain

3 In a scenario where the most suitable host institution do not have sufficient manpower to dedicate to the SPX at an initial stage of the project, the project may take the approach of first strengthen the institution by supporting the recruitment of additional staff with the expectation that upon successful implementation of the project, the host institution incorporates such staff over time as their own employees.

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Less technologically advanced SMEs can also benefit from the SPX in that they could be linked at the lower tiers of the supply chain. The SPX gives SMEs an opportunity to benchmark their operations against the requirements of key local and regional buyers as well as related international standards for their product grouping, and facilitates an upgrading process for SMEs so that they may become competitive in the international market. The SPX also facilitates investment promotion and export promotion for SMEs through the preparation of investment profiles and participation in international investment forums and trade fairs. The SPX Programme enables large buyers to identify and support the development of local supplier capacity in compliance with buyer specific requirements. Buyers can gain visibility and recognition in Moldova by assuming the role of agents for industrial development. The profit for buyer organisations is that this assistance in developing local and regional suppliers will translate in economic and corporate gains as they reduce the needs for importing goods and/or services. The SPX helps buyers identify suppliers from a broader pool of prospective suppliers with the aim to work with these suppliers so that they can meet the minimum standards required by the buyers. As a result, the SPX is beneficial to the buyers which often lack the resources and time to gather and access information about the wider supplier market, especially for low priority purchases. This will be of particular interest for large companies established within the industrial zones, often characterized by weak backward linkages. SPX host institutions and/or agencies The SPX programme serves to contribute to the economic and technological advancement of SMEs, thereby creating a sustainable local supplier base. The SPX Benchmarking services allow public agencies to tailor and prioritize their services with regard to the actual upgrading requirements of the respective supplier companies, as compared to providing standard and off-the-shelve solutions having less impact. Furthermore it allows the agencies to expand their

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customer base and gain visibility as well as to gain access to state-of-the-art tools for enterprise assessments such as the benchmarking and profiling tools. The Government of Moldova Through a functioning SPX Centre, the Government will gain unique insights into subcontracting matters as well as SME development in Moldova. The Government can regularly tap the gained experience and collected data on SME development and subcontracting statistics of the SPX to adjust national and regional investment related policies and incentives in order to support the growth of the domestic industry as well as to improve the investment climate for large international companies that have already invested in Moldova or are considering to do so. ii) Profiling and matchmaking The SPX works to link buyers to both current and potential suppliers and sub-contractors. Hence, a functioning SPX will support the increased emphasis on local supply chains in the wake of the COVID-19 disruption of global value chains, and thus build country-level resilience to absorb future economic shocks that could cut lead to a halt of imports from abroad. The SPX Team develops profiles of the skills and capacities of local companies to be promoted among buyers, and provides customized support to buyers looking for competitive local suppliers. The services provided by the SPX and supported by an online SPX Management Information System (MIS) include:

• Physical enterprise visits using UNIDO’s SPX profiling tools; • Building a database of local enterprise capacity; • Developing strategic partnerships with buyers to determine their purchasing and

procurement requirements in order to guide local SMEs in their path to becoming competitive suppliers of those products;

• Collating requests for quotations (RFQs) from large buyers; • Routing quotations from buyers to potential suppliers; • Organizing matchmaking events (linked to investment promotion component);

This Management Information System (MIS) will be set up specifically for the SPX institution defining respective roles and responsibilities of the SPX team members granting them associated user/access rights as per defined functions. iii) SME benchmarking and upgrading SPX Benchmarking compares the operational performance (results) and practices (how things are done) of a company against those of other companies of a similar size and type. The subsequent diagnosis allows companies to objectively assess where they stand in relation to

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international practices within their sector (nationally, regionally and globally), and where they need to upgrade to meet buyer requirements. The UNIDO SPX programme works with leading international partners to ensure that companies have access to the best systems and the best and most upgraded plant-level data when they undertake this process. Based on the profiling and the benchmarking, the SPX assists SMEs to formulate investment proposals, mobilize financing and identify technology partners. Depending on the expertise available in the host institution of the SPX, the SPX may directly assist SMEs in areas where the SME needs support, and the SPX can link SMEs to locally-available specialized support organizations/programmes for enterprise development for those areas where the SPX cannot provide direct support. The SPX will track the effectiveness of training or upgrading intervention through recurrent benchmarks of those SMEs undergoing the upgrading process. Some SMEs will require long-term investments into upgrading their production systems in which case tailored investment promotion support can be offered within the next component. iv) Investment promotion for SMEs The SPX can make a valuable contribution in the post-COVID recovery period as it would be a vehicle to maximize FDI contribution in times where this will become scarce. For investment promotion the SPX can support SMEs in the preparation of investment opportunity profiles, for example through the established and well known Computer Model for Feasibility Analysis and Reporting (COMFAR)4. In addition, the SPX can support SMEs in accessing finance from national financial institutions and support programmes, based on the investment opportunity profiles and feasibility studies, in order to respond to the needs identified by the benchmarking diagnosis. The project will, during its duration of 3 ½ years, support the Government of Moldova in organizing at least one international industrial investment forum serving to promote Moldova as a prime destination for FDI in industry/industry related projects and to systematically mobilize additional investments in prioritized industrial sectors/areas. The industrial investment forum will serve to showcase the investment climate in Moldova and to demonstrate major ongoing and planned industry projects/industrial infrastructure projects. The forum will also provide platform for Moldovan SMEs, where they can promote their capacities, products & services in a bid to attract mixed foreign-domestic joint venture projects.

• Facilitating the setting up of a governance structure required for such a cross-cutting event as an international industrial investment forum while ensuring such a Forum leverages existing trade show/industrial exhibitions rather than competing against them;

• Support the Ministry of Economy and Infrastructure and relevant public/private institutions in the preparation of investment opportunity profiles (linked to the work of the SPX);

4 https://www.unido.org/comfar/

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• Support in the mobilization and preparation of Moldovan SMEs for successful participation in investment forums (also linked to the work by the SPX);

• Sensitizing potential international investors about investment opportunities that the SPX Moldova will have identified;

• Support in the mobilization of international participation in annual investment forums and global flagship Fair such as Germany’s Hannover Messe5 or France’s MIDEST.6

In addition to the organization of investment forums the project, together with the SPX, will support Moldovan SMEs to participate in international trade fairs7 to allow them to showcase their products/services on an international level and develop international business contacts in order to support SMEs to penetrate international markets and increase their exports. Figure 2 below summarized the intervention logic of the SPX Programme: Figure 2: Match-making logic of an SPX Programme

5 The Hannover Messe is one of the world's largest trade fairs. Typically, there are about 6,500 exhibitors and 250,000 visitors, and it covers all areas of industrial technology. 6 See https://www.midest.com/fr 7 The specific tradeshows to be targeted for participation in will be decided on based on the priority industrial sectors that the SPX will target initially.

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Project Logical Framework

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Main target groups of the project The three main target groups for this project is 1) the host institution for the SPX; 2) the SMEs that will be targeted by the SPX in terms of profiling, benchmarking and further supported to upgrade their products and processes; 3) the major buyers that will have access to profiled and validated industrial goods suppliers / industrial service providers. As mentioned above, it is also expected that the Government of Moldova will also benefit from the existence of an SPX Centre in addressing business environment issues, SME development needs, investment promotion/incentives and others. Counterparts The main government counterpart will be the Ministry of Economy and Infrastructure as well as other pertinent Ministries. As concerns the hosting of an SPX Centre, it can be hosted in a public institution/agency such as the ODIMM or the MIA, or in a private sector organization such as the CCI. Total budget and duration The expected duration of the project is 3 1/2/ years, and the project budget is EUR 1.5 million (excluding 13% project support costs). Below is an indicative overview of the budget per output.8

Outputs Budget (excl. 13% PSC)

Output 1 – Establishment of SPX 300,000 Output 2 – SME profiling and matchmaking 200,000 Output 3 – SME benchmarking and upgrading 500,000 Output 4 – Investment Promotion 500,000 Total 1,500,000

8 Budget can vary depending on the availability of complementary in kind inputs by the SPX host (in particular staff costs) as well as other factors.

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Institutional arrangements and coordination mechanism The project will by firmly tied to the Partnership Framework for Sustainable Development 2018–2022 (PFSD), in particular to Priority Area 2: Sustainable, Inclusive and Equitable Economic Growth, and will create synergies with all other UNIDO components of the future Country Programme for Moldova. PTC/TII/INV will take the lead in developing the project in close collaboration with the focal point Ministry, the Ministry of Economy and Infrastructure. Funding strategy It will become necessary to identify and mobilize funding for the implementation of the Project, including from the international financial institutions, international cooperation and the business sector, as well as identifying available national funding opportunities. Being a non-resident Agency in Moldova, UNIDO would rely on the political support of the Government of Moldova in approaching and negotiating funding with a range of donors. RBM code and thematic area code HC2 Advancing Economic Competitiveness HC21 Investment, Technology, and SME Development Contact person Mr. Stefan Kratzsch Industrial Development Officer Investment Promotion Division Department of Trade, Investment and Innovation (PTC/TII) United Nations Industrial Development Organization Tel: (+43-1) 26026-3543 E-Mail: [email protected]