23
Document of The World Bank FOR OFFICIAL USE ONLY Report No: 124889 PROJECT PAPER FOR SMALL RETF GRANT (US $1.5 MILLION EQUIVALENT) TO THE RECIPIENT FOR A MOBILE INNOVATION PROJECT UNDER EPIC (P132570) June 26, 2014 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

  • Upload
    others

  • View
    2

  • Download
    0

Embed Size (px)

Citation preview

Page 1: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 124889

PROJECT PAPER

FOR

SMALL RETF GRANT

(US $1.5 MILLION EQUIVALENT)

TO THE

RECIPIENT

FOR A

MOBILE INNOVATION PROJECT UNDER EPIC (P132570)

June 26, 2014

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without World

Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Page 2: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

CURRENCY EQUIVALENTS

(Exchange Rate Effective May 14, 2014)

Currency Unit = Jamaican Dollar

JMD1 = US$ 0.0090

US$1 = JMD 110.725

FISCAL YEAR

July 1 – June 30

ABBREVIATIONS AND ACRONYMS

CARICOM Caribbean Community

CMIP The Caribbean Mobile Innovation Project

CTU Caribbean Telecommunications Union

EPIC Entrepreneurship Program for Innovation in the Caribbean

FM Financial Management Department

ICT Information and Communication Technology

MBSS Mona Business Support Services

mHubs Mobile Innovation Hubs

mLabs Mobile Application Laboratories

MSBM Mona School of Business and Management

NGOs Non-governmental organizations

UWI The University of the West Indies

Regional Vice President: Hasan A. Tuluy

Country Director: Sophie Sirtaine

Sector Director: Gerardo M. Corrochano

Sector Manager: Valerie D'Costa

Task Team Leader: Toni Kristian Eliasz

Page 3: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

CARICOM

MOBILE INNOVATION PROJECT UNDER EPIC (P132570)

TABLE OF CONTENTS

Page

I. STRATEGIC CONTEXT .................................................................................................7

A. Country Context ............................................................................................................ 7

B. Sectoral and Institutional Context ................................................................................. 7

C. Higher Level Objectives to which the Project Contributes .......................................... 9

II. PROJECT DEVELOPMENT OBJECTIVES ..............................................................10

A. PDO............................................................................................................................. 10

B. Project Beneficiaries ................................................................................................... 10

C. PDO Level Results Indicators ..................................................................................... 10

III. PROJECT DESCRIPTION ............................................................................................11

A. Project Components .................................................................................................... 11

B. Project Financing ........................................................................................................ 13

IV. IMPLEMENTATION .....................................................................................................13

A. Institutional and Implementation Arrangements ........................................................ 13

B. Results Monitoring and Evaluation ............................................................................ 14

C. Sustainability............................................................................................................... 15

V. KEY RISKS AND MITIGATION MEASURES ..........................................................16

A. Risk Ratings Summary Table ..................................................................................... 16

B. Overall Risk Rating Explanation ................................................................................ 17

VI. APPRAISAL SUMMARY ..............................................................................................17

Annex 2: Detailed Project Description (optional) .....................................................................20

Page 4: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

DATA SHEET

CARICOM1

Mobile Innovation Project under EPIC

Small RETF Grant Project Paper .

Latin American and the Caribbean

FIEID (infoDev)

.

Basic Information

Date: 26-June-2014 Sectors: General information and communications sector (75%), Information Technology (25%)

Country Director: Sophie Sirtaine Themes: Micro, Small and Medium Enterprise Support (60%), Other private sector development (30%),

Technology diffusion (10%)

Sector Manager/Director: Valerie D’Costa / Gerardo

Corrochano

EA Category: C – Not Required

Project ID: P132570

Instrument: Grant Team Leader(s): Toni Kristian Eliasz

.

Recipient: The UWI Consortium

Executing Agency: UWI Consulting

Contact: Professor Claremont Kirton Title: Deputy Executive Director

Telephone No.: (246) 233 7924 Email: [email protected] .

Project Implementation Period: Start Date: 01-June-2014 End Date: 30-Nov-2017

Expected Effectiveness Date: 15-July-2014

Expected Closing Date: 30-Mar-2018 .

Project Financing Data(US$M)

[ ] Loan [X] Grant [ ] Other

[ ] Credit [ ] Guarantee

For Loans/Credits/Others

Total Project Cost : 1.50 Total Bank Financing : 1.50

Total Cofinancing : 0.0 Financing Gap : 0.0 .

Financing Source Amount(US$M)

BORROWER/RECIPIENT 0.00

The Support for Entrepreneurship Program for Innovation in

the Caribbean Multi-Donor Trust Fund

1.50

1 Eligible Caribbean countries include: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana,

Jamaica, Montserrat, Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago

Page 5: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

Total 1.50 .

Expected Disbursements (in USD Million)

Fiscal Year 2015 2016 2017 2018

Annual 0.50 0.45 0.35 0.20

Cumulative 0.50 0.95 1.30 1.50 .

Project Development Objective(s)

The Caribbean Mobile Innovation Project (CMIP) aims (1) to strengthen the Caribbean mobile innovation ecosystem and (2) to enable sustainable and competitive mobile enterprises to grow. .

Components

Component Name Cost (USD Millions)

Caribbean Mobile Innovation Project 1.50

.

Compliance

Policy

Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [X] .

Does the project require any exceptions from Bank policies? Yes [ ] No [X]

Have these been approved by Bank management? Yes [ ] No [X]

Is approval for any policy exception sought from the Board? Yes [ ] No [X]

Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ] .

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 X

Natural Habitats OP/BP 4.04 X

Forests OP/BP 4.36 X

Pest Management OP 4.09 X

Physical Cultural Resources OP/BP 4.11 X

Indigenous Peoples OP/BP 4.10 X

Involuntary Resettlement OP/BP 4.12 X

Safety of Dams OP/BP 4.37 X

Projects on International Waters OP/BP 7.50 X

Projects in Disputed Areas OP/BP 7.60 X .

Legal Covenants

Name Recurrent Due Date Frequency

Description of Covenant

.

Page 6: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

Team Composition

Bank Staff

Name Title Specialization Unit UPI

Toni Kristian Eliasz Projects Officer Team Lead FIEID 376943

Ayanna Samuels Consultant Mobile Innovation FIEID 470234

Danqing Zhu Program Analyst EPIC Program Analyst FIEID 375551

Rocio M. Malpica Senior Counsel Legal LEGLE 251193

Kerry Natelege Crawford Financial Management Analyst Financial Management LCSFM 422585

Prosper Nindorera Senior Procurement Specialist Procurement LCSPT 75867

Eunan Ugonna Onyenuma Finance Analyst CTR Finance Officer CTRLN 352897

Barbry R. Keller Senior Operations Officer Regional/Network Trust Fund

Coordinator

LCSDE 97394

Glenn S. Morgan Regional Safeguards Adviser Regional Safeguards Adviser OPSOR 13880

Galina Y. Sotirova Country Operations Adviser Operational Services Director LCC3C 77854

Diletta Doretti Operations Officer Operations Officer FIEID 235670

Non Bank Staff

Name Title Office Phone City

.

Locations

Country First Administrative

Division

Location Planned Actual Comments

.

Page 7: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

7

I. STRATEGIC CONTEXT

A. Country Context

1. infoDev’s Caribbean Mobile Innovation Project is designed to serve 14 of the 15

CARICOM countries. These countries include 11 island states (Antigua and Barbuda, Bahamas,

Barbados, Dominica, Grenada, Jamaica, Montserrat, Saint Kitts & Nevis, Saint Lucia, Saint

Vincent & the Grenadines, and Trinidad & Tobago) and 3 continental countries (Belize, Guyana,

and Suriname). Haiti is the only CARICOM country that does not fall within this program. The

14 CARICOM countries have a total population of 7 million with Jamaica having the largest

population (2.77 million) and Montserrat having the smallest population (5,189). Jamaica also

has the largest labor force of 1.2 million people.2 The CARICOM countries have a combined

GDP of US$61.85 billion per year. Trinidad and Tobago contribute the most to the combined

GDP (US$22.5 billion) and Montserrat contributes the least ($55.4 million). Unemployment

rates in these CARICOM countries range from 21% in Guyana to 4.6% in Trinidad and Tobago3.

2. CARICOM governments are currently facing serious fiscal difficulties. Unemployment is

increasing while private sector investments and external capital flows are decreasing. Further, the

region is experiencing an increase in the frequency of natural disasters. Crime and violence

remain a serious problem.4

B. Sectoral and Institutional Context

Opportunities for the Mobile Sector

3. The mobile phone industry offers exciting potential for entrepreneurial and economic

development. Mobile phones are the largest communication and transaction platform in history.

Relying on six billion cell subscriptions, about three quarters of the world’s population now have

direct access to a mobile phone.5 This technology offers potential for economic growth and high-

quality jobs in the mobile industry, while mobile software and applications, or “apps,” also

catalyze other sectors like health or government. While access has become less of an issue, the

current challenge is to support mobile innovation ecosystems that enable application developers

and entrepreneurs to drive sustainable inclusion and growth within their economies. In view of

low technological entry barriers and fixed costs, the mobile industry offers vast revenue and

growth potential. In turn, a favorable ecosystem that integrates policy-makers, mobile network

operators, investors, and donors, among other players must exist in order for entrepreneurs to

thrive. Oftentimes however, professional networks, favorable policy environments, information

access, business skills, mentors, spaces for exchange, and access to investors are lacking.

Identifying and tackling barriers to mobile innovation ecosystems can unleash the potential of

mobile innovation, sparking economic transformation and sustainable growth.

2 World Bank World Development Indicators 3 Wolfram Alpha knowledgebase, 2013 4 ibid 5 World Bank (2012). Information and Communication for Development 2012 – Maximizing Mobile. T.Kelly (ed.). The World

Bank, Washington, DC, USA. www.worldbank.org/ict/ic4d2012

Page 8: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

8

The Caribbean Mobile Innovation Market

4. While the Caribbean is diverse culturally and economically, the islands that make up the

region share many similarities in the mobile market. This includes a high adoption rate of mobile

phones, the same two mobile network operators (Digicel and LIME), expanding 3G networks

and the future introduction of 4G, high network coverage, and the increasing use of smartphones.

With the competition between network providers, the ICT (Information and Communication

Technology) and telecommunications sectors are major growth sectors in the region. With the

ability to access fast mobile connectivity, businesses and consumers demand that services that

can be accessed through their mobile phone are locally relevant, which often requires that they

are developed locally.

5. While the research shows that the region is ripe for a strong and functioning mobile

innovation ecosystem, there are specific challenges unique to the region which disrupts the

development of the Caribbean ecosystem. These challenges include islands which are both

geographically and economically fragmented, little collaboration among developers on different

islands, the current inability to effectively monetize mobile apps in the region, a lack of typical

seed financing vehicles for technology-enabled startups, and national governments having

various ICT and innovation policies with various levels of implementation and enforcement.

Status of Mobile Innovation Support

6. There is both demand and supply for technology incubators and acceleration initiatives in

the Caribbean. On the demand side, there is a promising pool of entrepreneurs and developers in

the region that have evolved out of “grassroots-driven” technology and entrepreneurial

communities. While these communities have been hosting activities supporting the development

of startups (i.e. Caribbean BETA, Startup Weekend ), there is a desire to provide premium

services through a regional approach. The community members are willing to pay for these

formalized services through equity or other success sharing mechanisms, and multiple

stakeholders (governments, universities, and the private sector) have expressed interest in

supporting these communities. But these services need to create a culture shift as the region is

risk-averse. Growth-oriented entrepreneurs are not commonplace in the Caribbean, and the

openness to innovation is not embraced throughout the region. Training, mentoring, and

coaching (both from internal and external parties) will be necessary to create this culture shift

along with providing inexperienced entrepreneurs with knowledge about the business and

technical sides of startups.

7. From the supply side, the Caribbean region has a relatively new history of business

incubators. There are a number of physical incubators that were created in the last decade, with

varying levels of success6. But, for the most part, there have not been many positive results.

Recurring lessons from former and current incubators include non-sustainable grants and a lack

of detailed partnership strategies for donor-funded incubators, and a limited number of graduates,

a lack of a clear strategy, and under-funded services for government-funded incubators.

6 Economisti Associati (2013)

Page 9: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

9

8. Bridging the gap between existing technology communities and formal incubators is an

opportunity to strengthen the foundation for mobile innovation support in the Caribbean.

C. Higher Level Objectives to which the Project Contributes

9. The CMIP will contribute to the creation of entrepreneurship as the motor for future

economic and sustainable development of the Caribbean through a range of higher level

objectives including:

(a) increasing and maintaining industry competitiveness to the level necessary to

engage in the global digital economy

(b) supporting the creation of the necessary critical mass for significant improvement

in access to finance by recognizing new ventures from the Caribbean as good

investment opportunities

(c) the development of a pool of highly-skilled individuals within the Caribbean’s

workforce

(d) encouraging viability of pro-poor innovations and the positive development

effects through the usage of mobile apps

10. Alignment between the CMIP’s Objectives and CARICOM’s Strategies: The CMIP

will contribute to the CARICOM Secretariat’s goal of leveraging ICT as the new frontier for

regional integration and an effective tool to advance regional socio-economic development. The

project aligns with the proposed priority areas set by 2014-2018 Strategic Plan for the Caribbean

Community7, including youth and ICT. CMIP will collaborate with partners on six islands as

hubs to foster the strengthening of local technical community and building regional innovation

and entrepreneurship ecosystems. The regional pool of high-growth potential mobile startups

will help to facilitate knowledge economy CARICOM member states.

11. Alignment between the CMIP’s Objectives and the World Bank Strategies for

Jamaica and the OECS: The CMIP supports the World Bank’s regional priorities and themes

(including private sector-led growth, competitiveness and youth empowerment) and

complements ongoing programs within the Caribbean focused on innovation and/or

entrepreneurship. These include the Caribbean Communications Infrastructure Program

(CARCIP) through the World Bank's ICT Sector Unit (TWICT), the Caribbean Growth Forum

(CGF), and the LAC Sustainable Development Network’s work in Jamaica. For CARCIP,

infoDev and TWICT have regularly briefed each other on the current and future activities of each

program along with planning to support each other. This includes a partnership to provide

training to Caribbean policy makers on ICT innovation in Finland, along with follow up training

in the Caribbean, as well as strengthening the ICT incubator and entrepreneurial activities

already planned under CARCIP. For the CGF, the CMIP shares similar goals for innovation and

entrepreneurship in the region. Through its activities, the CMIP will identify and support the top

7CARICOM secretariat: http://www.caricom.org/overview-reform.jsp

Page 10: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

10

ICT entrepreneurial talent in the region while also building the skills and capabilities of future

ICT entrepreneurs in order to cultivate a pool of talent. infoDev will continue to participate in

CGFs8, providing insights on entrepreneurship and innovation based on its global experience in

business incubation and acceleration. Finally, in partnership with SDN and FPD, infoDev will

continue to support the Government of Jamaica’s goals to strengthen its digital industry.

12. Specifically, the CMIP will explore synergies with the JM Youth Employment in Digital

and Animation Industries Project and the Jamaica Foundations for Competitiveness and Growth

project. Building on the successful collaboration on Digital Jam 3.0 to prime the pipe of talents

in ICT industry, the CMIP will provide follow-on support to DJ3.0 winning teams to accelerate

their business by providing virtual incubation services. Similarly, the local activities to be

implemented by the mLabs and the annual startup challenge are ideal channels to strengthen the

flow of Caribbean entries to the Startup Jamaica initiative. The CMIP and the JM Youth

Employment in Digital and Animation Industries Project will also continue to share knowledge

and expertise in providing mentoring, training and support to potential Jamaica mobile app

entrepreneurs.

II. PROJECT DEVELOPMENT OBJECTIVES

A. PDO

13. The Caribbean Mobile Innovation Project (CMIP) aims (1) to strengthen the Caribbean

mobile innovation ecosystem and (2) to enable sustainable and competitive mobile enterprises to

grow.

B. Project Beneficiaries

14. The target beneficiaries of the project are mobile app innovators, aspiring and existing

entrepreneurs, with a particular focus on youth, who are ready and early adopters of technology.

The CMIP will also support startup ecosystem enablers throughout the region. Finally, the CMIP

will also engage other entities in creating a favorable innovation ecosystem for local mobile

innovation. These include governments, academia, civil society, international donors, and

investors.

C. PDO Level Results Indicators

15. Project level results indicators that will be measured are:

(a) IT/ITES Revenue (Revenue generated by the startups)

(b) Investment raised

(c) IT/ITES employment (Direct jobs created by the startups, including breakdown for

women)

8 http://www.infodev.org/articles/caribbean-growth-forum-cgf

Page 11: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

11

(d) Sustainable startups created (surviving at least one year)

III. PROJECT DESCRIPTION

A. Project Components

16. The CMIP’s concept was devised through a market assessment process, ensuring that the

model is based on local market conditions. By collecting feedback from over 300 stakeholders, the

resulted model is demand-driven and tailored to the needs of the Caribbean innovation ecosystem.

Concept components have been co-designed with local partners and end beneficiaries, ensuring a

strong sense of local ownership and the longer-term sustainability of the effort.

17. The CMIP is a multi-faceted project to strengthen the Caribbean mobile innovation

ecosystem and enable sustainable and competitive mobile enterprises to grow. infoDev will partner

directly with the UWI Consortium (grant recipient) to design and implement a number of regional

and local activities that will target early stage app entrepreneurs and guide them to market

readiness. The grant recipient will coordinate the entire CMIP but will also select partners on six

islands, which will act as hubs for the local technology communities (mHubs). While many of the

activities will be delivered by the mHubs on the selected individual islands, CMIP has a regional

scope and it will include 14 CARICOM countries into the project’s activities by means of virtual

incubation techniques. The project will create a regional pool of high-growth potential mobile

startups with the capacity to release their apps to the market and raise additional capital to scale

their business.

18. CMIP Activities: Regional activities, managed by the UWI Consortium and implemented

in collaboration with mHubs, will constitute the main thrust of the project. Addressing the gaps

and challenges of the nascent Caribbean mobile innovation ecosystem, they will focus on the

early stages of startup development and on regional integration. Aided by local outreach through

six mHubs, the activities will invite the participation of developers from all over the region and

provide the best with exposure and access to regional and international networks of mentors and

investors. Regional activities consist of three phases along the pathway from “mind-to-market.”

Using the business plan as a guide for the creation and management of the CMIP, the following

services will be financed under the grant:

(a) Phase I: From Ideation to Pitch

(i) Training courses that cover two areas of mobile development: business

training focused on establishing and building a startup (i.e. monetization

strategies, business modeling, and customer relations) and technical

training focused on developing mobile apps (i.e. USSD, J2me, and

HTML5)

(ii) Organize and run prototyping events and competitions (i.e. hackathons)

Page 12: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

12

(iii)Startup Challenge, a 4 month competition for developers and

entrepreneurs to submit their mobile app business idea and prototype in

order to win prizes, including further direct support

(iv) Organize the annual pitching event in which the 25 finalists from the

Startup Challenge pitch their business to a panel of judges

(b) Phase II: From Pitch to Market

(i) Provide and manage seed financing in each of the five winning teams to

enable the teams to continue with the development of the apps prototype

(ii) Match the five winning teams from the Startup Challenge with mentors

(regional, international, and Diaspora)

(iii)Provide the five winning teams access to facilities (desk space and wi-fi)

(when possible)

(iv) Arrange networking events (both face-to-face and virtual) between the 5

winning teams as well as other members of the Caribbean and

International mobile innovation ecosystems

(v) Develop and implement an Investment Readiness Bootcamp for the five

winning teams

(vi) Plan and organize the Demo Trip in which the five winning teams will

travel to an international event in order to showcase their product and

pitch their companies

(c) Phase III: From Market to Maturity

(i) Supervise the progress of the five winning teams, including assisting

them apply to the A2F Financing Facility and matching the teams with

other potential investors

(ii) Maintain and develop the network of alumni to enable additional

opportunities for networking and peer-to-peer learning

(iii)Review the activities delivered over the year in order to identify any

updates and adaptations to the process

(d) Virtual Community

(i) Establish and maintain a virtual community in order to engage and

connect all stakeholders in the Caribbean mobile innovation ecosystem

Page 13: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

13

B. Project Financing

Instrument

19. The instrument will be a Recipient Executed Trust Fund Grant of US$1.5 million provided

under the Standard Conditions for Grants Made by the World Bank Out of Various Funds

(February 15, 2012 or latest edition).

20. The source of funds is the infoDev (World Bank) administered the Support for

Entrepreneurship Program for Innovation in the Caribbean Multi-Donor Trust Fund (TF071619).

Project Cost and Financing

21. The grant covers 100% of the estimated required seed capital in launching the CMIP, and

87% of the overall projected Project expenses during the grant period. Financing gap will be

covered through attracting co-investments and revenue generation activities as explained in

section IV. C. Sustainability

Project Components Project cost IBRD Financing % Financing

1. Innovation and Enterprise support services

Total Baseline Costs

Physical contingencies

Price contingencies

USD 1,715,000 USD 1,500,000 87%

Total Project Costs

Interest During Implementation Front-End Fees

Total Financing Required

USD 1,715,000 USD 1,500,000 87%

USD 1,500,000

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

22. The CMIP will be virtually run by the UWI Consortium with each consortium member

being located in Jamaica, within the grounds of the University of West Indies, Mona Campus.

The lead member will be UWI Consulting and will be joined by other two members, the Mona

School of Business and Management (MSBM) and the other in the Mona Business Support

Services (MBSS).

23. UWI Consulting, as the lead partner of the consortium, is a wholly owned subsidiary of the

University of the West Indies (UWI) and is a limited liability corporation with offices in St.

Lucia, Barbados, Jamaica, and Trinidad and Tobago. It supports creative and innovative projects

and programs in the Caribbean that build the institutional capacity of governments and the

private sector to develop human capital as the lynchpin for enhancing regional and global

competiveness. It accesses the knowledge and expertise of professors within the UWI network,

which has the largest and most significant concentration of advanced knowledge and technical

expertise in the Caribbean region.

Page 14: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

14

24. MSBM and MBSS, both UWI departments, form the other two partners within the

consortium. Along with utilizing the expertise of UWI professors, the consortium will be able to

access to UWI’s large and regional infrastructure, including campuses on Barbados, Jamaica,

and Trinidad and Tobago along with its Open Campus, which delivers online education, in

designated centers in 18 territories. This includes two incubator facilities, one in the Mona

School of Business and Management (MSBM) and the other in the Mona Business Support

Services (MBSS). Both target students and MSMEs, and provide physical spaces and consulting

services to support and enhance the effectiveness of existing businesses and startup. MBSS’s

physical facilities, IT infrastructure, and service portfolio will be used for the CMIP. This

includes a mixed office space (open plan cubicles, formal meeting rooms with audio-visual

amenities and whiteboards and informal meeting areas suited to workgroup collaboration) and

broadband and wireless internet at all workstations and meeting rooms.

25. infoDev will supervise the project, while implementing other activities relevant for the

project through the Entrepreneurship Program for Innovation in the Caribbean (EPIC) along with

assisting in fundraising and partnership development. infoDev will also help to design and

implement the monitoring and evaluation approach to follow the impact of the CMIP on the

graduates and the ecosystem.

B. Results Monitoring and Evaluation

26. Like any project that influences complex economic and social environments, it is impossible

to measure the Project’s positive and negative impact in its entirety. Following good practice in

international development, the CMIP will instead draw on a simple logical impact model to

maintain clarity of vision and identify indicators that matter. The CMIP’s mission is itself a

subcomponent of the EPIC program’s overall goal to contribute to a more prosperous, integrated,

and competitive Caribbean economy. Thus, the lion share of the CMIP impact model are derived

from the EPIC program’s impact model and performance measurement framework.

27. Results indicators (included in Annex 1) set an incentive for the UWI Consortium to deliver

high-quality services and to allocate its resources in a way that the desired impact is achieved

beyond the key indicators.

28. To derive a much richer and more informative set of data points, the CMIP may collect data

on several additional indicators, depending on available resources and the necessary effort for

tracking. This data can complement and feed into qualitative summary studies that may be

conducted by EPIC or other relevant initiatives. A potential approach to assess the CMIP’s effects

on the Caribbean mobile innovation ecosystem as well as a list of example indicators will be

established once the project has started.

29. Ultimately, the UWI Consortium is responsible for data collection and evaluation, which

may be complemented by additional evaluation efforts by infoDev. The UWI Consortium is also

required to assist infoDev and its contracted agencies and individuals for additional data collection

from stakeholders and to give infoDev access to contact details of network members.

Page 15: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

15

30. UWI Consortium is required to submit detailed progress reports for CMIP (both for

performance measurement and grant documentation), and have staff available for clarification and

follow-up inquiries. infoDev will coordinate with the UWI Consortium to ensure that meaningful

data is captured in a timely fashion and that the administrative burden for the UWI Consortium is

kept to a reasonable level.

31. The data is fed into a monitoring system that will also serve as a performance measurement

system for CMIP to support long term learning and improvement. As such, the system should

facilitate reporting and evaluation during the CMIP lifetime and beyond. In the system, the UWI

Consortium, in particular, is asked to track information on (different types of) clients and

beneficiaries, including entrepreneurs and startups as well as partners. To fill the data base, the

UWI Consortium will be responsible for collecting data from stakeholders, or to set the system up

in a way that allows stakeholders to feed some of the data into it directly. Data will be updated on

a semi-annual basis, more frequent updates will ensure that data collection runs smoothly and can

be turned into insightful evaluations, and include recommendations for adjustments.

C. Sustainability

32. The initial $1.5 million USD grant (EPIC Seed Financing) will be used to establish the

CMIP which will last four years. In the first two years, the funding will cover 100% of the CMIP

budget. In the subsequent years, the funding will decrease to 80% in Year 3 and to 72% in Year

4. The funding has been structured in this manner in order to have the UWI Consortium focus on

sustainability. It will be the role of the UWI Consortium to generate revenues on a yearly basis in

order to cover the funding gaps in years 3-4. Revenues will need to be generated from a number

of activities (training, hackathons, etc.), sponsorships, and returns on investments made into

startups. The UWI Consortium will also be funding the local activities run through the mHubs.

33. The revenue streams will include the following:

(a) Private Sector Partnerships and Sponsorship: The most important revenue source

is through both regional and local private sector sponsorships. Since the CMIP will

not have a physical space that is often utilized to brand partner companies, the

branding opportunities are related to events and a virtual presence. CMIP activities

offer several types of sponsorships from small contributions that local technology

companies can afford to pay for the mHub to major regional sponsorships to be

branded throughout all the activities.

(b) Equity/Royalty: The five Startup Challenge winners will receive $5,000 in seed

financing from UWI Consortium for a fixed stake in their company (or alternatively

through a royalty or other success sharing arrangement). The shares will be owned by

the UWI Consortium and they are assumed to be held for five years. Liquidation of

the shares (through VC/Angel funding) will be reinvested back into the CMIP.

(c) Training, Event and Pre-Incubation Service Fees: Based on the best practices

from infoDev’s mLabs and the advice from focus group discussions with Caribbean

stakeholders, beneficiaries are willing and able to pay for the access to high-quality

Page 16: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

16

activities, such as the Business and Technical Training or participation in pitching

and networking events.

(d) Government Investment: With the regional nature of the CMIP, it will be difficult

for the UWI Consortium to receive funding from local governments because of the

project’s regional scope. In turn, local mHubs should reach out to their national

governments and apply for funding as well as find ways to collaborate with relevant

government bodies such as export agencies, including in-kind support like venue use

during events. The initial goal is to secure one government investment which could

then spark investment across the other islands.

(e) Other Possible Revenue Streams: While the above sources of revenue will help to

supplement the initial funding and eventually secure long term sustainability, it will

be critical for the UWI Consortium to continue raising new funding and create more

revenue streams. Other funding sources include other multinational development

agencies, foundations, non-governmental organizations (NGOs), and regional bodies

(i.e. CTU and CARICOM). These could include agreements that invest or collaborate

with the CMIP. Another option will be for the UWI Consortium and its members to

provide consulting services. The associates of the UWI Consortium will be able to

form a consulting component to provide market research, implementation services,

and application development. Finally, the UWI Consortium and the local mHubs will

be able to host other events in order to generate awareness in the community and

receive revenue from entry fees.

V. KEY RISKS AND MITIGATION MEASURES

A. Risk Ratings Summary Table

Stakeholder Risk Moderate

Implementing Agency Risk

- Capacity High

- Governance Low

Project Risk

- Design High

- Social and Environmental Low

- Program and Donor Low

- Delivery Monitoring and Sustainability Substantial

Overall Implementation Risk Moderate

Page 17: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

17

B. Overall Risk Rating Explanation

34. The overall risk rating is considered moderate. While this model is new and innovative to

the region, it is based on extensive research and consultations. Lessons from similar projects in

other regions have taught that the implementing agency, the UWI Consortium, and their project

personnel will have a critical role in executing the project successfully and achieving the

intended results, as well as the potential long term impact that a strengthened mobile innovation

ecosystem can provide. infoDev has allocated resources to both closely supervise the project

team of the UWI Consortium as well as build the capacity of the team and similar incubation

efforts as a part of the EPIC program.

VI. APPRAISAL SUMMARY

Economic Benefits

35. Generally, it should be acknowledged that the CMIP is designed to function as a catalyst

for innovation and entrepreneurship far beyond the project’s activities and time horizon. The

CMIP’s total impact will go beyond the measured impact. Outcomes will often be multi-faceted,

indirect, and impossible to pinpoint. Therefore, the following results estimate and any future

impact assessment can only be seen as snapshots of few key, high-level parameters.

36. For the economic analysis, a model was created to indicate results in terms of revenues

generated, investments raised, and jobs created by the startup teams founded as a consequence of

the project activities. Over the first four years 125 startups are expected to be founded and

assisted (335 startup teams over ten years), of which 24 are expected to become sustainable (75),

and they will generate USD 2.50 million in revenue from their products and services (USD 14.20

million), and raise USD 3.67 million in early stage investments (USD 25.70 million), generating

416 direct and indirect jobs (6,063). The cumulative revenues are expected to exceed the initial

donor contribution for the project within project implementation and the economic benefits will

increase assuming the CMIP will reach its sustainability targets.

37. There are other expected benefits, such as effects on the entrepreneurial ecosystem,

increase in technical and entrepreneurial skills, or other potential spillovers in the ICT industry

development and effects through the usage of apps, but these effects are difficult to estimate and

are not included in the model. For instance, app usage by businesses can lead to increased

operational efficiencies and rising profits, and m-government or m-health apps can lead to better

public service delivery.

Financial Management

38. The Financial Management assessment found that the UWI Consortium has acceptable

financial management capacity, including the budgeting, accounting, reporting, auditing and

adequate internal control arrangements to implement. The Accounting Department has four

financial management staff of which two staff are qualified accountants (ACCA). However,

since the new project will increase the workload of the existing staff significantly, it was agreed

that a new Project Accountant would be required to manage the additional work load. The cost

of the Accountant would be financed by the project. The UWI Consortium has adequate

Page 18: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

18

accounting systems, control environment, guidelines and procedures for proper management and

use of the project funds. The UWI Consortium would be able to submit timely interim and

audited financial statements to the Bank.

Procurement

39. The Procurement assessment found that the UWI Consortium’s experience is limited to

relatively small projects with very simple procurement procedures. The UWI Consortium

appears to be well organized with the main issue being their very limited exposure to the

procedures and selection methods that are used for consulting firms and the fact key staffs to be

involved in the management of the grant have not been recruited yet. As UWI Consortium and

probably the project team to be recruited have limited experience in the some of the processes to

be used under the grant, the Bank prior review thresholds will be low. It is recommended that

World Bank prior reviews at least the 3 first contracts for each selection and procurement

methods to be used regardless of the contract amount. Once the procurement plan will be known

and discussed, the contracts that requiring special attention regardless of established Bank Prior

review thresholds will be singled out.

Safeguards

40. Because of the virtual nature of the project, the CMIP did not trigger any of the safeguards

issues. This project is rated Category C.

Page 19: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

19

Annex 1: Results Framework and Monitoring

CARICOM: Mobile Innovation Project Under EPIC

Project Development Objectives (PDO): The project aims (1) to strengthen the Caribbean mobile innovation ecosystem and (2) to enable sustainable and competitive mobile

enterprises to grow.

PDO Level Results Indicators*

Co

re

Unit of

Measure Baseline

Cumulative Target Values** Frequency

Data Source/

Methodology

Responsibility

for Data

Collection YR 1 YR 2 YR3 YR 4 YR5

IT/ITES Revenue USD ($) 0 117,375 461,037 1,187,906 2,509,099 N/A Annual Form/Progres

s Reports

The UWI

Consortium

Investment raised USD ($) 0 322,500 655,750 1,072,825 1,626,917 N/A Annual Form/Progres

s Reports

The UWI

Consortium

IT/ITES employment

(of which women %)

# of jobs

(direct/ind

irect), %

gender

0 48 (14/34)

20%

128 (37/91)

20%

245

(70/175)

20%

416

(119/297)

20%

N/A Annual Form/Progres

s Reports

The UWI

Consortium

Sustainable startups created

(surviving at least one year)

# of

startups 0 5 10 16 24 N/A Annual

Form/Progres

s Reports

The UWI

Consortium

INTERMEDIATE RESULTS

Intermediate Result:

Startup teams receiving services

(of which women %)

# of

startups,

% gender

0 25

20%

50

20%

75

20%

100

20% N/A Annual

Progress

Reports

The UWI

Consortium

Level of satisfaction by startups

of CMIP services

% rate

good or

very good

0 75% 75% 75% 75% N/A Annual

Surveys,

Progress

Reports

The UWI

Consortium

Applications received through

mobile competitions

# of

applicatio

ns

0 100 200 300 400 N/A Annual

Applications,

Progress

Reports

The UWI

Consortium

CMIP reaching financial

sustainability targets

Generated

revenue /

expenses

0 21% 34% 37% 49% N/A Annual

End of year

financial

Records

The UWI

Consortium

mHubs established by CMIP # of

mHubs 0 6 6 6 6 N/A Annual

Progress

Reports

The UWI

Consortium

*Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators)

**Target values should be entered for the years data will be available, not necessarily annually

Page 20: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

20

Annex 2: Detailed Project Description (optional)

CARICOM: MOBILE INNOVATION PROJECT UNDER EPIC

41. The detailed project description is available in the CMIP Business Plan. As this document

includes over hundred pages plus Annexes it should be accessed separately. Available at:

http://www.infodev.org/cmipBP.

Page 21: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

21

Annex 3-Operational Risk Assessment Framework (ORAF)

CARICOM: Mobile Innovation Project under EPIC (P132570)

Stage: PCN

1. Project Stakeholder Risks

1.1 Stakeholder Risk

Description:

1. Lack of Government buy-in: Local governments show no

interest in supporting (financially or politically) the regional

approach of the CMIP

2. Alumni not interested in participating: The graduates from

incubation are not interested in providing mentorship to future

classes and less interested in building a developer community in the

region

Rating Moderate

Risk Management:

1. infoDev and the UWI Consortium will work directly with the

World Bank offices in the Caribbean to build relationships with

elected officials on each island. The mandate will be to raise

awareness for the benefits of the regional approach among all

stakeholders, including government officials.

2. After graduation, a condition to join the virtual Alumni Network

and stay connected with the infoDev’s global network of

entrepreneurs will be to provide support in future local and regional

events.

Resp: Stage: Recurrent

:

Due Date: Frequenc

y:

Status:

2. Implementing Agency Risks (including fiduciary)

2.1 Capacity

Description:

Partners have limited capacity and resources: Implementors (both

the UWI Consortium and potential mHubs) in the region lack the

capacity and resources to provide the services deemed necessary to

incubate and build local communities.

Rating High

Risk Management:

infoDev will provide the necessary support to the UWI Consortium

and local mHubs and other partners through concrete guidance

(e.g., toolkits), contacts and linkages, as well as other materials. The

UWI Consortium will provide the necessary support to the mHubs

and will also re-assign duties for sub-contractors based on their

performance.

Resp: Stage: Recurrent

:

Due Date: Frequenc

y:

Status:

2.2 Governance

Description:

As the consortium consist of three entities, it is important that

their roles and responsibilities, including a clear governance

structure for the project, are defined in detail in order to achieve

efficiency.

Rating Low

Risk Management:

The members of the UWI Consortium are required to prepare a

legal agreement prior to the signing of the grant agreement which

will include both the roles and responsibilities as well as a specific

governance structure. infoDev will be providing advice during the

development of the structure based on past experiences with

consortiums.

Resp: Stage: Recurrent

:

Due Date: Frequenc

y:

Status:

Page 22: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

22

3. Project Risks

3.1. Design

Description:

New and unproven project design: While the model is using a

number of best practices, the design of the CMIP, especially

connecting local actors under a regional hub, has not been

attempted before.

Rating High

Risk Management:

infoDev will monitor and observe the implementation of the CMIP,

including having a local consultant in the region, in order to see

where, if any, improvements can be made to the project’s design.

The UWI Consortium will have the ability to provide feedback to

infoDev about the project during the annual review period. The

UWI Consortium will also be supported by an advisory committee

which will include experts from the Caribbean region.

Resp: Stage: Recurrent

:

Due Date: Frequenc

y:

Status:

3.2 Social and Environmental

Description:

Based on the virtual nature of the project and targeted beneficiaries,

this is no expected risks related to environmental or social issues.

Currently, there are no plans to construct or refurbish space for the

entrepreneurs to use.

Rating Low

Risk Management:

If the current plan changes in the future, it will be necessary for

infoDev to have a safeguards assessment completed before any

funds are promised to the expansion of the project.

Resp: Stage: Recurrent

:

Due Date: Frequenc

y:

Status:

3.3 Program and Donor

Description:

Although the business model doesn’t depend on additional donor

financing, other donors have been identified as potential supporters.

Main risk is overlap and/or weak coordination among entities

supporting similar activities.

Rating Low

Risk Management:

Close coordination and frequent outreach efforts to inform main

donors active in the region will minimize potential overlap and help

to build mutually beneficial partnerships.

Resp: Stage: Recurrent

:

Due Date: Frequenc

y:

Status:

3.4 Delivery Monitoring and Sustainability

Description:

1. Failure to become sustainable in 4 years: After 4 years, the CMIP

is not sustainable enough to continue providing its current portfolio

of services

2. Funding requirements larger than expected: The allocated budget

for the project runs out early as costs are higher than originally

estimated

Rating Substantial

Risk Management:

1. Through a collaborative review by the UWI Consortium and

infoDev, activities and services provided will be scaled down in

order for the CMIP to continue. The review will be based on the

needs of the community and their cost.

2. Where possible, additional sources of funding will be raised from

donors, World Bank and private sector links. Based on the initial

support that EPIC delivers, the UWI Consortium and mHubs are

required to quickly build their portfolio and engage in partnerships

and additional fund-raising from investors.

Page 23: World Bank Documentdocuments.worldbank.org/curated/en/... · islands, the current inability to effectively monetize mobile apps in the region, a lack of typical seed financing vehicles

23

3. Revenue estimate is too optimistic: The generated revenue is not

enough to bridge the budget gap

4. Lack of private sector interest: The private sector, specifically

the technology sector, is not interested in providing both

sponsorship funding and coaching to the regional community

3. infoDev and the UWIConsortium will analyze the financial

statements in order develop fundraising quotas for the CMIP. There

will also be an annual revision of the business plan.

4. infoDev and UWI Consortium will use its contacts in the private

sector in order to meet in-person to develop partnerships.

Resp: Stage: Recurrent

:

Due Date: Frequenc

y:

Status:

4. Overall Risk

Implementation Risk Rating: Moderate

Comments: The CMIP is built on the best practices that have been discovered in other infoDev projects supporting mobile innovation

ecosystems. Also it was designed around the needs of the Caribbean mobile innovation ecosystem. While this model is new and

innovative to the region, it is based on extensive research and consultations. The greatest risk will be the assumptions created in

developing the sustainability model of the project. If the demand and the subsequent revenues from the activities do not reach certain

levels, the project will struggle to implement all planned activities. By having the UWI Consortium understand the necessity of

generating income from the start, the goal is to have a reserve of money built up in order to protect from outside or unknown forces

when the grant funding decreases in subsequent years.