Growth in a Time of Climate Extremes

Can the Philippines Get Its Act Together?

by Lawrence Ang

In my last blogpost, I outlined the current environment shaping the Philippines’ climate and energy future. Since then, SSG Advisors together with the Ateneo School of Government, concluded its joint undertaking to consult sectoral stakeholders, including regulators and major companies in the energy arena, and has now proposed policy guidelines for the Philippines to “Get Its Act Together” and align leadership along the domains of climate, energy, and an enabling environment. The complete policy briefs as well as executive summaries can be found here, much of which have been very well received by policy makers and the press alike.

I end this blog series with the most salient points of the policy studies—that of the intersection between climate change and the pursuit for an optimal energy mix in the Philippines. Excerpts of this article were published previously with my co-authors Atty. Tony La Vina and Atty. Teresa Ira Maris Guanzon here.

 

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The Philippines at the End of the Marrakesch Climate Conference

The Marrakech climate change conference, held early in November 2016, ended on a high note. The “Marrakech Action Proclamation for Our Climate and Sustainable Development” signals a shift towards a new era of implementation and action on climate and sustainable development.

According to the Proclamation: “The Marrakech Conference marks an important inflection point in our commitment to bring together the whole international community to tackle one of the greatest challenges of our time. As we now turn towards implementation and action, we reiterate our resolve to inspire solidarity, hope and opportunity for current and future generations.”

Governments hailed the Paris Agreement, noting its rapid entry into force and its ambitious goals. The Proclamation acknowledged the great momentum on climate change worldwide, a momentum that is unstoppable, driven by governments, science, business, global and local actors.

In a parallel meeting in Marrakech, the Climate Vulnerable Forum, which includes the Philippines, committed “strive to meet 100% domestic renewable energy production as rapidly as possible, while working to end energy poverty and protect water and food security, taking into consideration national circumstances.” They promised “to help each other with our respective transition plans to transform our energy, transport and other sectors, and together ensure support is made available in terms of capacity building, financing and technology.”

This CVF call is exactly right for the Philippines.

While President Duterte has already announced his decision to ratify the Paris Agreement, the Department of Energy (DOE) is not yet on board. This is because Energy Secretary Alfonsi Cusi is concerned that the department will not be able to fulfill its mandate to ensure energy security for the country if we implement the Paris Agreement.

In our view, this is a misappreciation of the Paris Agreement. In fact, if implemented properly, the Paris Agreement will lead us to a more energy secure future.

Moving forward, when we ratify the Paris Agreement, we should accompany it with a declaration that the Intended Nationally Determined Contribution we submitted in Paris is not yet final. The wording of that commitment actually implies that but we should be explicit that we will finalize our reduction number by 2018 after a bottom up process where government departments will submit their contributions to the mitigation commitment based on their respective numbers. That should give comfort to the DOE whose first order of priority should be to ensure sustainable and energy access for everyone in our country, for the private and business sector and for poor and local communities. To achieve that, the right way forward is implementing an optimal energy mix.

 

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Towards an Optimal Energy Mix

In the past months, much has been said and is being done about the country’s optimal energy mix.

The government has called for a review of the unofficial but widely known 30 coal-30 natural gas-30 renewable energy-10 oil energy mix policy to assess whether it meets quality, security, reliability, and affordability – the foremost considerations of this administration.

The current energy mix is composed of coal, renewable energy, natural gas, and oil. Coal appears to be highly favored because it is the cheapest (at least for now) despite opposition mostly from environmental groups. The supply of indigenous natural gas is under threat because of the depletion of the Malampaya reserves.

Renewable energy (RE) (at least solar and wind) costs are rapidly decreasing while the feed-in tariff allowance charged to consumers has surged by 200% (and still faces the possibility of increasing). These are some of the numerous issues facing the varying energy sources of the country amidst the national objective of achieving a rebalanced high-income economy by 2040.

“Optimizing our Energy Mix”, part two of the three-part policy brief series “Getting Our Act Together”. zeroes in on the importance of energy in economic growth, and how an energy mix policy can support that growth. The brief reviews the current energy mix of the country using the internationally accepted standards of the energy trilemma (security, equity, and environmental sustainability). Afterwards, it advocates initial steps for an easier transition towards an energy mix characterized by security, equity, and environmental sustainability.

The country’s energy mix is dominated by coal at 44.51%.

In the short term, coal addresses security (the resource and the power plants are accessible and available) and equity (it is cheap at Php 2.9 to Php 3.5 per kWh) but not sustainability (its external cost to the environment and health is Php 2.78 to 2.82 per kWh). In the long-term, coal fails to satisfy all three components of the energy trilemma. Majority of the coal is imported, and 70% is imported from just one country (due to the lower freight cost). It is more expensive when operated at less than 60% capacity factor (specifically its cost increases to Php 4 to Php 4.8 per kWh).

Still, the country expects a coal-dominated future (with 54% coal in the capacity mix and 66% coal in the energy mix by 2022). This compromises energy security, equity, and sustainability.

Following coal in the energy mix is total RE at 25.44% comprising both of conventional (hydropower and geothermal power) and emerging (solar, wind, run-of-river hydro, and biomass) RE. In the short term, RE addresses sustainability but not security (due to its intermittency and uncertainty) and equity (at least for emerging RE since the cost is pegged to the feed-in tariff rate).

In the long term, RE satisfies all three components of the energy trilemma. Advancements in RE (i.e. capture, collection, and storage technology) have emerged to cope with intermittency and uncertainty. Also, quick developments in technology are bringing the cost of emerging RE down (solar and wind are expected to decrease to about Php 4 per kWh and Php 3 per kWh respectively by 2020). This is followed by the question of whether or not FIT is still needed for solar and wind. It is important to note that conventional RE, which makes up 23.92% of the RE share in the energy mix, has not received any subsidy.

The third largest share in the energy mix is natural gas at 22.91.

In the short term, natural gas addresses the energy trilemma. It is sourced locally, is ideal as a mid-merit plant because of its flexibility, and can compete with coal when the latter is operated at less than 60% capacity factor. It also produces only one-third of the carbon emissions of coal. In the long term, natural gas fails to satisfy energy security (because the country will have to import natural gas once Malampaya is depleted), environmental sustainability (since it is after all a fossil fuel), and possibly equity (just like imported coal, imported natural gas exposes energy supply and price to volatile international market conditions).

The smallest percentage share of the energy mix is oil-based technology at 7.14%. In both the short and long term, oil based technologies fail to address the energy trilemma. Oil is imported. It is the most expensive among the fossil fuels, and its price is extremely volatile. Moreover, it is at par with coal when it comes to greenhouse gas emissions. Still, oil plants are vital because they serve missionary areas and satisfy the peaking requirements of the country’s portfolio (although simple cycle gas plants may equally be capable of doing so.)

 

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Addressing the Energy Trilemma

Considering the Philippines’ growth objectives, the government’s mandate to establish an energy mix that addresses the trilemma, and the current energy mix, it becomes clear that government’s priority should be to diversify.

Three immediate courses of action are required:

  1. Reduce over-dependence on coal to address security and efficiency issues (insofar as coal plants that do not operate as baseload and/or operate at less than 60% capacity factor);
  2. Increase, if not maintain, the share of natural gas (since it addresses the duck curve caused by intermittent RE); and
  3. Set the stage for a flexible environment to capitalize on swift market and technological changes in RE.

Optimizing the coal share in the energy mix and reducing the use of imported coal can be done through the following policies.

First, set a cap on coal plant endorsements using a portfolio based approach. This can be done by limiting the endorsements of new coal plants to the projected baseload demand of each region taking into account the changing needs of the economy.

Second, create a gold standard for coal plants. The gold standard for existing plants would be in the form of (1) performance guards because as coal plants age they become more inefficient and thus more expensive, and (2) implementation of Sec. 13 and 19 of the Clean Air Act. For new plants, the gold standard can be a policy that only ultra-supercritical plants can be built.

Third, compliance of new plants with BOI environmental criteria set in the Investment Priorities Plan and BOI Memorandum Circular 2015-01.

 

Allowing Natural Gas to Compete

Once coal’s share is reduced, natural gas will be allowed to compete and optimize the mid-merit or at the very least, maintain its share in the current energy mix given the expected depletion of the Malampaya reserves.

First, a comprehensive natural gas policy and legislative framework has to be legislated to attract private sector investment. There is a natural gas bill filed in the Senate. Hopefully it will be enacted into law, unlike natural gas bills in the past Congresses.

Second, support for the construction of natural gas infrastructure has to be given. A low hanging fruit would be streamlining and fast tracking the processing of applications for permit for the construction, expansion, operation, maintenance and modification of pipelines, transmission and distribution related facilities of natural gas.

Third, other indigenous natural gas resources have to be explored, developed and produced, and each Philippine Energy Contracting Round (PECR) has to be swiftly resolved. An existing roadblock to the past PECR (and any future PECR) is the tax issue of the Malampaya consortium with the Commission on Audit.

Reducing overdependence on one energy source increases the flexibility to take advantage of rapid RE developments. Increasing both conventional and emerging RE can be done through the full implementation of policies in the RE Act, which include net metering, FIT, renewable portfolio standards, and the green energy option.

Also, incentives and government assistance for development and construction of conventional RE can be provided. Nuclear power can be explored as a new resource in the energy mix since it is reliable and efficient, and can counter the intermittency of variable RE. However, there is a high set-up cost and long-term skill base required for nuclear plants, while special precautions must also be undertaken to avoid any radioactive leaks and/or accidents.

All of these set the stage towards achieving a quality, reliable, affordable, and more sustainable energy mix, which can be easily adjusted to meet innovations in technology, and even unexpected changes in economic growth and population.

It is the responsibility of the government to provide these aforementioned policy directions as it works with the market (contrary to the view of letting the market decide) in order to attain a high-income economy, and energy security, equity, and sustainability.

It’s time to ratify and implement the Paris Agreement. For energy, we begin with aiming for an optimal energy mix.


Lawrence1.jpegLawrence Ang is Director for Asia for SSG Advisors. He brings nearly ten years’ experience at the nexus of sustainable development and private sector engagement in the region.

Smallholder Crop Insurance in East Africa: A New Way Forward

Smallholder farmers in East Africa are increasingly vulnerable to risks associated with changing weather patterns. Climate insecurity puts their livelihoods in jeopardy and discourages investment in new technologies. As recent studies have explored, viable business models for crop insurance have the game-changing potential to reduce risks for the 2 billion people that depend on smalholder farms for income and subsistence.

Despite the promise, attempts at developing crop insurance have been rife with complications. Pilot programs have failed to scale for a number of reasons, including: insufficient climate data, low uptake due to lack of affordability as well as poor product design, unfavorable policy environments, high operational costs, and lack of scientific research to determine risk. The few that show scalability, such as the R4 Rural Resilience Initiative in Ethiopia (R4) and ACRE in East Africa, have done so by building inclusive participatory processes with strong institutional partners and by integrating insurance into other risk reduction offerings, but they continue to face a number of challenges, especially with regards to data availability, high operati
onal costs for installing and maintaining independent weather stations, and independent risk assessment.

As an implementing partner with Tetra Tech ARD for USAID/Kenya and East Africa’s PREPARED Project, SSG has developed a comprehensive public-private partnership between Jubilee InsuranceEast Africa, Kenya Meteorological Department (KMD), Rabobank, UNFAO and others to design and launch an Index-Based Weather Insurance product referred to as “Kinga Kilimo” (“Protect Farming” in Kiswahili). The product is designed to provide ICT based Agro-weather advisory to farmers via SMS prior to climatic events to provide forecasts for land preparation, timing for planting, crop variety and cultivars, crop management (fertilizer, pesticide application, cultivation, water supplementing), postharvest management, and soil conservation. It also offers parametric Weather Based Index Insurance for risk management of crop production losses associated with extreme weather events.

Both the partnership and the product are intended to address the challenges and to incorporate lessons learned from the previous attempts at crop insurance. As such, PREPARED has designed the partnership around several critical innovations to maximize success in designing a crop insurance product:

Incorporate Weather Data: To overcome the limiting factors of data quality, the partnership provided capacity building to the Kenya Metrological Department (KMD) in order to produce a blended weather dataset that incorporates over 35 years of data. This dataset uses Potential Evapotranspiration (PET) and GeoCLIM – a geospatial climate data-management and analysis software tool that integrates observed station data with satellite-derived estimates – so as to address both ex-ante and ex-post risk faced by the farmer at farm level.

Few, if any, crop insurance schemes have had such a comprehensive investment in improving data collection. Mr. Francis Ngari, the Micro-Insurance Manager at Jubilee Insurance, explains the value-added from this approach, noting, “We see this shared value approach to partnership as a big breakthrough in designing crop insurance. Previously we have had challenges accessing climate data and engaging with the Kenya Meteorological Department in designing crop insurance products, however, this partnership has made this possible. Getting credible and more robust blended data from KMD has made our premiums lower and improved the credibility of our products.”

Improve the Service Provision of Government Partners:  Guided by SSG Partnership Specialist Polycarp Ngoje, the  PREPARED project has helped transform the culture of the Kenya Meteorological Department through PREPARED’s Quality Service Improvement Program (QSIP) to be service-oriented and to focus more on potential collaboration and partnership to enhance usage of weather data.

Peter Ambenje, Director of KMD, reflects on the importance of this shift in orientation, stating that “The innovative approach to the partnership design of the Weather Index Insurance Kinga Kilimo product has opened our eyes on how we can engage with the private sector and generate products that add value as opposed to just sharing climate data. The Quality Service Improvement Program (QSIP) has changed the approach and mindset of our staff as far as service delivery is concerned. We look forward to adopting this model in engaging with other partners moving forward.”

Mr. Ngari attests that this partnership is “a breakthrough in agriculture insurance.” The United Nations Food and Agricultural Organization (UNFAO), which has contract farming for legumes and pulses in Eastern Kenya, has also found this partnership approach useful to them for downscaled weather forecast and climatological zoning based on historical data and water requirement satisfaction indexing for various crops. According to Philip Mwangi in the program office in Machaon County, “the partnership has been the missing puzzle [piece] in the contract farming. The scientific tools and downscaled agro weather advisory tool is a great avenue to disseminate crop management information to the farmers from land preparation to post harvest management.”

The new product is being test-marketed in several counties in Kenya this fall with the goal of rolling it out across much of the country for the spring growing season. It is expected to reach over 15,000 smallholder farmers in these pilots alone. Perhaps more importantly, though, the lessons learned from this partnership – including the need to bring the right partners together, the importance of using proper climate data as a base, and the need for government agencies to understand shared value and service provision – could transform crop insurance across all of Africa.

Growth in a time of (climate) extremes: Can the Philippines get its act together? (Part 1)

by Lawrence Ang


Yes. You’ve read a lot about it recently. You’ve probably even had a couple of intense, curious, or at the least “interesting” conversations about the Philippines with your family, friends, and colleagues. But, alas, the Philippines isn’t just about its President or its notorious traffic. Right? Right.

So let’s talk about it. Let’s talk about the Philippines.

Annual GDP growth?—excellent at 6-7%. Demographics?—over 52% of the population are of working age, and all fluent English speakers (now that’s a workforce!). A high income country by 2040?—looks like it’s destined to happen. The gears of growth running Asia’s favorite beach destination is so well-oiled that its credit ratings were upgraded to investment grade and above over the last 3 years alone. Not even the recent downturn in the US and Asia markets made this economy flinch. No wonder, it feels unstoppable.

But let’s talk about climate change for a second. Or to paraphrase, the way nature is pulling the rug on emerging economies. The Philippines is, if not the most, vulnerable nation in Asia when it comes to extreme weather events. An average of 20 typhoons ravage the country annually, with droughts interspersed in between. Typhoon Haiyan, recorded history’s strongest supertyphoon ever, claimed at least 10,000 lives in 2013 and resulted in over $225 million of damage across major cities, coastal areas, and agricultural towns—with several communities still recovering 3 years on. It comes as no surprise then that the Philippines has a reputation of being one of most vocal champions of the United Nations Framework Convention on Climate Change and the recently signed Paris Agreement—a product of decades’ worth of global negotiations that limits greenhouse gas emissions to “safe levels” and sets the framework for how the international community will assist developing countries, institutionally and financially, adapt to the new norm of a hotter, more unpredictable, and extreme world.

But here’s the rub. As the Philippines experiences phenomenal growth on one hand, and an uncertain climate future on the other, what does the future hold for Asia’s new tiger economy? Well, it seems, more uncertainty. The country is yet to ratify the Paris Agreement, as of this article’s writing, putting into jeopardy opportunities to receive much needed financial resources from the international community to help the country cope with the effects of climate change. Furthermore, current domestic capacities to implement climate adaptation measures have been left wanting, despite the nation holding the record for having passed some of the most progressive climate laws and policies in the region. A budget issue? Perhaps. A case of a new administration still gauging the benefits of “owning” the problem? Many believe so.

Add to that, there’s the other big elephant in the room—the country’s energy mix. In the nation’s quest to fulfill its ambition of becoming a high income economy by 2040 (with average per capita income expected to reach $14,000), powering the country’s industrialization has become an absolute priority. So much so that the cheapest options on the table, which today are perceived to be coal-fire powered plants, have been deemed as the most convenient and expedient to address the country’s energy woes, notwithstanding the country’s rich renewable energy resources, which admittedly are variable and “peaky”.

But should this be the case? Is a coal-dependent future the smartest way forward? What of natural gas, the world’s emerging “transition fuel”; or solar micro-grids, the energy of the future according to Silicon Valley? Is there a way for the Philippines to stay flexible, enough to take advantage of rapidly innovating energy technologies like cheaper solar and batteries? How much will it cost and who pays? How does all of this affect the country’s ability to compete with its neighbors?

The debate rages on.

In partnership with the Ateneo School of Government, SSG Advisors is developing a policy roadmap for the Philippine government and the nation’s power industry under the “Getting Our Act Together” Project—a multi-sectoral initiative focused on developing concrete policy recommendations towards accelerating an optimal energy mix, climate action, and private sector collaboration. Since the project’s launch in August 2016, several expert workshops and policy dialogues have been held with leaders from the public and private sectors, altogether crystallizing practical policy measures that can immediately be adopted to balance climate and energy in the midst of a rapidly developing Philippines.

The holy grail of an optimal energy mix capable of delivering secure, affordable and sustainable power to all now dominates talks within executive and legislative circles, as it is likely to affect the major decision making processes of jeepney drivers to blue chip investors alike and, at the same time, mirror the country’s seriousness in tackling carbon emissions in solidarity with the rest of the world, small as its footprint may be.

One thing’s for sure, though. As the next global climate conference is just around the corner (November 2016 to be exact), the Philippine government is expected to make major decisions around its ratification of the Paris Agreement and its long-term strategy to power the Philippines. So between now and then, the buzz is likely to enter a crescendo. So let’s keep talking. Until Part 2!

 


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Lawrence Ang is Director for Asia for SSG Advisors. He brings nearly ten years’ experience at the nexus of sustainable development and private sector engagement in the region. Aside from leading SSG’s partnership building and impact investment advisory work in Asia, Lawrence is currently leading SSG’s efforts, in partnership with the Ateneo School of Government, to develop policy pathways towards establishing a climate-smart development agenda, an optimal energy mix, and an enabling environment for private sector investment in the Philippines.

 

 

 

Coming Together for Education in Haiti

by Andrea Alcala


On September 5th, public schools in Haiti opened up their doors to the new school year, and with a new school year comes the renewed opportunity to tackle educational gaps and challenges.

Haiti’s education system deficiencies have been magnified by past international and national assessments results that showed how almost half of primary school students are not able read or write in French nor Creole by grade 2. In response to this alerting information, on November 5th of 2014, the Haitian government adopted the National Cause: Reading, Writing and Math (CNLEM). The National Cause is a nationwide platform to advance the aforementioned skills in basic education through focalized and standardized efforts. As a way to bring back national awareness to the National Cause, the Ministry of National Education and Vocational Training (MENFP) in collaboration with the United States Agency for International Development (USAID) launched a Back-to-School Conference on the importance of reading, writing, and math in Port-au-Prince and Cap Haitien, Haiti.

SSG Advisors led the technical implementation and logistical coordination of these events, bringing together close to 200 participants per location. The event mobilized MENFP local and regional staff, as well as representatives of national and international partnering organizations committed to improve basic education in Haiti.

WP_20160915_002Conferences were divided into two main sections: presentations and discussion. The first part of the conference was structured with two key sessions covering the National Cause and the importance of literacy, numeracy, and mother tongue instruction, with national presenters such as the MENFP Director General-Mr. Louis Mary Cador and Matenwa non-profit, community leader Abnel Sauveur, and international presenters such as Dr. Josefina Vijil, Dr. Rosangela Bando, and Christine Low. Followed by the presentations were the small group breakout sessions to discuss personal and organizational resolutions to drive the National Cause for improving reading, writing, and math. This last part was highly appreciated by participants, as it not only offered them a space to voice their thoughts and learn from others, but it offered them the opportunity for their inputs to directly feed this national movement.

SSG Advisors is happy to see how the multi-stakeholder, collaborative nature of these efforts within the education sector remained true throughout the execution of these events and beyond. We look forward to learning about the shared advancements to achieve higher quality education in Haiti under the National Cause umbrella in the upcoming years.

 

Seafood Watch Partnership Announcement

by Tim Moore and Claire Swingle


In the United States alone, 1/3 of seafood has been found to be mislabeled or fraudulently sold. This means that we don’t know what we’re actually eating, or what social or environmental practices were used to supply it. Though the Food and Agriculture Organization estimates that “IUU fishing takes up to 26 million tons of fish each year, or more than 15 percent of the world’s total annual capture fisheries output,” illegal, unreported, and unregulated (IUU) fishing often goes unnoticed as a problem.SFW

On Monday, USAID and the Monterey Bay Aquarium Seafood Watch program (“SFW”) announced their partnership to change this by combatting illegal fishing, improving seafood traceability, and enhancing the sustainability of fisheries in the Asia-Pacific region, the world’s largest seafood exporter.

This partnership is a direct result of SSG’s work under the Oceans and Fisheries Partnership Activity, funded by the United States Agency for International Development’s Regional Development Mission for Asia (“USAID Oceans”), to strengthen regional cooperation to combat illegal, unreported and unregulated fishing (IUU), promote sustainable fisheries, and conserve marine biodiversity in the Asia-Pacific region.

Under USAID Oceans, SSG has been working to develop public-private partnerships with ICT firms, leading retailers, Southeast Asian seafood processors and fisheries, and the financial sector to support the development of digital catch documentation and traceability (CDT) to reduce illegal fishing and improve fisheries management. Robust, digital catch documentation and traceability, central to USAID Oceans’ mission, will enable seafood to be traced from “boat to plate,” enhancing transparency and visibility in complex global seafood supply chains, all the way through to export to US, EU, and neighboring ASEAN markets.

SSG facilitated the Seafood Watch partnership through its proven STEP methodology to partnership development in order to leverage SFW’s influence on North American seafood markets — where it assesses over 80% of seafood by volume consumed in the US market, and informs seafood purchasing at more than 100,000 business locations. This partnership also leverages SFW’s strong connections to major seafood buyers, including the largest food service companies in North America – such as Compass Group, Blue Apron, and Sea to Table –and business partners like Mars Petcare, to strengthen responsible sourcing commitments and action plans to promote and co-invest in the expansion of digital traceability and transparency in key seafood suppliers in Southeast Asia.

The Seafood Watch Partnership can significantly mitigate IUU fishing and increase the sustainability of fisheries in the Asia-Pacific – a serious concern given that 90% of all fisheries worldwide are now fully exploited, over-exploited, or have collapsed – as well as promote an ethical seafood supply chain and improving marine biodiversity conservation.

Indeed, according to Senior Partnerships Advisor to USAID Oceans, Timothy Moore, “Together, the partnership with Seafood Watch will harness technical experts, major seafood business partners, and on-the-ground fishers to bring about dramatic and positive changes in Southeast Asia’s seafood supply chain and serve as a model of collaboration for other regions around the world.” The partnership with Seafood Watch is a testament to the innovative approaches SSG takes to engineer sustainable solutions to the most pressing global development challenges.


Get involved in the conversation: #SustainableFoodInstitute2016 #USAIDOceans @seafoodwatch #seafoodtraceability #baittoplate

Find out more about what SSG is doing: http://ssg-advisors.com/

A Multi-Pronged Approach to the Growing Pains of Value Chain Development in Timor-Leste

By Colin Foster and Jeff Halvorson

Like other mountainous and geographically-isolated countries, Timor-Leste suffers from a lack of financial and technological services essential to the creation of a healthy, competitive agricultural market. Therefore, finding solutions to sustainable agriculture production in Timor-Leste is all about identifying missing links/gaps in the marketplace and building trust through relationships that have commercial benefit for everyone along the horticultural value chain.

Timor-Leste has very few established services, groups, and associations that provide basic market information to farmers and SMEs. In response, SSG Advisors and Cardno Emerging Markets recently began laying the groundwork with leading telecommunications companies to build and launch an agricultural database that will be used by farmers along key horticultural value chains that supply both domestic and export markets. This partnership aims to increase the supply of much-needed products by giving rural farmers access to up-to-date market prices for their produce, weather updates, and guidance on relevant good agricultural practices (GAP). Meanwhile, SSG works with leading agricultural buyers to contribute to the content on this platform and brokers MOUs with these farmers, thereby solidifying the market pull that will incentivize these newly-informed farmers to produce what buyers want, when they want it.

The next step will be helping firms in Timor-Leste’s small private sector sustainably integrate these solutions into their core business operations. To address this objective, results from recent ICT and rural finance assessments will provide insights into the incentives banks, MFIs, and other lending institutions need to facilitate the adoption and implementation of these ICT products. In addition, SSG and Cardno address capacity and financing challenges facing farmers, input suppliers, and wholesalers so these groups benefit from ICT solutions and formal purchasing agreements with leading buyers.

It’s a long-term strategy that involves building the ICT platform infrastructure through multi-stakeholder partnerships between key buyers and sellers so that the former continue using/funding it when the project ends in 2021. We are still at the early stages of this effort but based on interest and commitments thus far, SSG has found a fertile ground for this new technology due to its potential to significantly improve the lives of thousands of Timorese smallholder farmers by connecting them to interested buyers through a transparent system.

Building Local Partnerships to Empower Youth in Kenya

I’m 35,000 feet above Greenland, and I’m thinking about Africa. Kenya, specifically. I spent six years growing up in Kenya in the 1970s and 80s, and so it is a place that remains clse to my heart, and it’s only been in the last ten years that I’ve realized how much those experiences havScreen Shot 2016-07-18 at 10.02.38 AMe shaped my world view and my career. I’m extremely lucky to be able to do the work I do for SSG Advisors, and to be able to give back – even in little ways– to a place that shaped so much of who I am.

Kenya is a country of contrasts: huge population growth and large swaths of empty space; arid land that is hard to farm, and lush, green valleys full of growth. Industries in decline – tourism, sugar farming – and new, growth sectors like minerals and technology. It has booming cities – Nairobi and Mombasa — with their frenetic construction, impenetrable traffic jams and vibrant populations; small towns on the verge of collapse, and sparsely populated rural areas. The country is governed by a Constitution that virtually every Kenyan believes in, but they struggle with daily small-scale corruption and ongoing political scandals. As always, Kenya represents the hope and de
speration of Africa.

I just completed, with three colleagues, a Rapid Partnership Appraisal (RPA) on the Kenya Youth Employment Skills (KYES) program, which aims to connect unemployed and underemployed youth with job opPicture2portunities in nine counties over the next five years. The program is funded by USAID, and is being implemented by the Research Triangle Institute International (RTI), our partner on the project. This kind of program can help reshape Kenya, a country with more than 60% of the population under the age of 25. Unemployment, while high among all under-educated youth, is even more prevalent among young women, who often become young mothers, or aren’t allowed to work due to religious or cultural reasons. A program like KYES can give hope to young people who lack confidence and skills, and don’t feel like they are part of the growing middle class. People who feel they are stuck doing low-level jobs with few skills or opportunities to move up the economic ladder.

Under this backdrop is where SSG Advisors does its best work. We believe strongly that partnerships between the private sector, non-governmental organizations, community groups and donors represent a critical part of the path forward in any program. The only way to make development really, truly sustainable is to work with the businesses and organizations that were built locally and will be in their communities long after the five-year span of any program. The great news is that many other organizations are also understanding this, including our partner NGOs, the donors and development banks, and of course the businesses with whom we are engaging. Our Sustainable, Transparent, Effective Partnership (STEP) process simply gives everyone a framework from which to work.

In the past 15 days, we met with more than 50 businesses and organizations in five counties across Kenya – from rural farming areas to the bustling cities. We learned about why growing indigenous chickens can yield faster profits than boiler chickens. We learned how ingredients like tea, sugar and bixa are grown and harvested (employing thousands of people) in the start of a long value chain that stretches around the world. We spoke with women’s groups who are selling handicrafts on the Internet in Europe and the US, and met home-grown technology companies that are designing products for Africans by Africans. We heard how a new government regulator is striving to provide better building standards to manage the construction boom. We met local political leaders who are trying to change their communities from the ground up. These people see hope in the future of Kenya, and are deeply invested in it. When we surveyed them about how long they planned to be working in the country, the answer was invariably “for a lifetime.”

The work we did in Kenya over the last few weeks is really just the start of a process that will last for the entirety of the five-year program, and well beyond. This is a marathon, not a sprint. We are actively working with the program team and the partners in every county to start the process of brokering the partnerships that will make KYES successful, and just as importantly, that will give youth the skills and the job opportunities they need to be successful.

At SSG, we don’t just talk about sustainability as a vague concept, or something to check a box in a work plan. It’s fundamental to the work we’ve done in more than 50 countries, and with countless businesses and organizations. It’s core to how we help organizations rethink new business models, allowing them to tap into new markets. By working together in deeply rooted local partnerships, we have some hope of changing the outcomes for millions of people around the world.

Research and Recommendations on Indicators for Agricultural Cooperatives

SSG is pleased to announce the publication of our research report to culminate the Cooperative Research Support Services activity, entitled “Indicators to Measure the Economic Sustainability and Patronage Value of Agricultural Cooperatives: Research and Recommendations” (please see the publication here).

USAID contracted SSG to propose and justify two indicators to measure the impact of assistance to agricultural cooperatives: one indicator for financial sustainability and one indicator for patronage value, or the benefit that individuals receive for being cooperative members. This task was particularly challenging due to the diversity of cooperative experiences across the globe, which makes it difficult to develop widely applicable definitions and metrics, and the limited administrative capacity of many of the agricultural cooperatives with which USAID works.

SSG employed a mixed method approach to identify, filter, test, and assess these indicators. This approach included extensive literature review, key informant interviews with agricultural cooperatives in Guatemala and Kenya as well as subject matter experts and USAID implementing partners in the U.S. and Europe, and survey of subject matter experts. In the absence of an industry standard for designing and testing indicators, SSG developed an indicator rating approach that helped filter through scores of indicators based on data gathered through stakeholder interviews.

Additionally, SSG assessed the indicators based on Participatory Monitoring & Evaluation (PM&E) principles, with a focus on the utility of the indicators to the agricultural cooperatives and the ability of target organizations themselves to collect, report on, and make use of the data. The PM&E lens is aimed at making the process of designing and utilizing indicators a form of building local capacity in the vein of USAID Forward, a strategy within which local organizations develop the ability to increasingly engage with the Agency as implementing partners. SSG’s approach has the potential to advance USAID Forward in that, based on our indicator recommendations, the cooperatives can feel invested in the design of the project and think critically about the effects of USAID assistance.

So, now what? There are several noteworthy next steps that arose from this research. First, during the final presentation to USAID, the report appeared to spark important conversation among the researchers and various USAID stakeholders around how to continue to strengthen the M&E and impact of assistance to agricultural cooperatives. Second, given the objectives of USAID Forward, it will be interesting to explore opportunities to incorporate PM&E principles into other types of activities where target organizations or individuals can assume ownership over the indicator development and reporting process. Third, there appears to be an ongoing opportunity to leverage information and communications technology to inform M&E around cooperative development and other USAID agriculture activities through self-reported data. This capability may be particularly important for indicators regarding small farmer perception of cooperative management, which may be costly or difficult to ascertain through face-to-face surveys due to sensitivities within cooperatives. We are looking forward to leveraging the methodologies and experiences from the Cooperative Research Support Services activity in the future, whether with cooperatives or other areas in which SSG has supported M&E for foreign assistance, such as the security sector.

Finding Justice through HICD in Liberia: Strengthening the Capacity of Liberia’s Legal Institutions

By Natalie Shemwell and Colin Foster
Temple of Justice - Liberia

As life climbs back to normality in Liberia after years of civil war and catastrophic disease, Liberia’s Judicial System is struggling to effectively maintain law and order for its citizens.

A five-year USAID rule of law activity, the Legal Professional Development and Anti-Corruption Program (LPAC) program implemented by Checchi and Company Consulting Inc., seeks to promote a more effective and accountable formal justice sector. The project focuses on improving the capacity of five Liberian legal institutions: Liberian Anti-Corruption Commission, the Louis Arthur Grimes School of Law, the Liberian National Bar Association, the James A. A. Pierre Judicial Institute, and the Liberia Legal Information Institute

SSG Advisors used USAID’s Human and Institutional Capacity Development (HICD) framework to define measurable performance gaps faced by each institution and to propose solutions to address them. Through an intensive three-week assessment, the SSG team worked collaboratively with each of the five institutions, staff, and stakeholders to identify the root causes behind the variety of performance challenges faced by each organization.

The HICD framework provides methodologies and tools designed to assist organizations as they strive for performance excellence. The assessment provides the first steps in the HICD process, serving to anchor the entire performance improvement system. The assessment is a systematic and thorough workplace diagnosis and documentation analysis that provides a basis for improving performance at the organizational, process, and workforce levels.

Strengthening institutional capacity remains one of the greatest challenges faced by USAID as it works to fulfill its development assistance mandate worldwide. USAID Forward mandates a growing role for direct Agency partnering with local institutions. Over the next five years, Checchi will use the comprehensive findings and suggested performance improvement solutions from SSG’s preliminary assessment to support each institution in implementing capacity-building efforts that will target sources of inefficiency.

Can Better Data Enhance the Climate Resilience of Small Holder Farmers?

WILD-photoFarming is – at the best of times – a risky undertaking.  For smallholder farmers in developing countries, such as Kenya, this is not the best of times. A report by Environment for Development finds that severe droughts in Kenya have interrupted rainfall partners with serious consequences such as harvest failure, deteriorating pastures, and livestock losses. [1] These losses have implications for agricultural incomes as well as local food security. It is therefore essential that smallholder farmers have access to risk management tools, such as climate data or weather insurance.

For years, insurance companies and donor organizations have been trying to develop weather-indexed insurance for smallholder farmers with limited success.  A key challenge in many countries has been the lack of accurate climate data – both current and historical.  Weather insurance requires accurate historical and current climate data so that insurance companies can develop models that allow them assess risk and set premiums.  Without accurate data, insurance premiums end up being very high – often beyond the means of a farmer to pay.  These high premiums have hindered the uptake of weather insurance products by smallholder farmers.

A new tool may help address this challenge by providing highly accurate historical and current climate data that can help lower weather insurance premiums significantly.  As a key outcome of the USAID/Kenya and East Africa PREPARED project, the GeoCLIM tool allows for much more accurate climate data by synching up inputs from both ground weather stations and satellites.  GeoCLIM was originally developed by PREPARED partners and stakeholders (including Tetra Tech, FEWS NET, USAID, ICPAC, UCSB and USGS) for use by policymakers across East Africa to address climate change and famine early warning. SSG Advisors and PREPARED partners also envisioned its significant potential for the insurance industry – providing much-needed data required to better forecast risks and, therefore, set premiums.

Under the auspices of PREPARED, SSG Advisors brought together national meteorological and hydrological organizations, climate scientists, technology firms, insurance companies and farmers groups to explore how GeoCLIM might underpin the development and scaling of weather-indexed insurance products targeted at smallholder farmers in Kenya and, eventually, across East Africa.  At a two-day workshop, participants used Osterwalder’s  Business Model Canvas to develop and clarify what a weather-index insurance business model might look like.[2]  Partners mapped out product offerings, channels, value proposition, relationships etc. – all the essential elements of how a weather-indexed insurance product can be offered and scaled for smallholder farmers.

With business models developed, the partners are now working to formalize a partnership that will result in the launch of a new weather-index insurance product for smallholder farmers by late 2016.  By harnessing the power of climate data, insurance companies, governments, donors and scientists are giving small holder farmers the tools they need to adapt to a rapidly changing climate.



[1] Kabubo-Mariara, Jane and Kabara, Millicent. (20145). Climate Change and Food Security in Kenya. Environment for Development Discussion Paper Series. 15-05.

[2] Osterwalder, A., Pigneur, Y., & Clark, T. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. Hoboken. NJ: Wiley. Sahlman, WA (1997). How to Write a Great Business Plan. Harvard Business Review75(4), 96-108.