In July 2005, the Millennium Challenge Corporation signed a five-year, $175 million compact with the Government of Nicaragua to support those living in the León and Chinandega region by significantly increasing incomes of rural farmers and entrepreneurs. The investments in three strategic projects will reduce transportation costs, improve access to markets, strengthen property rights, increase investments, and raise incomes for farms and rural businesses. The compact in Nicaragua entered into force (EIF) in May 2006, formally initiating the five-year timeline for project implementation. The compact closed out in May 2011.
On July 3, 2009, MCC terminated funding under the compact in response to a pattern of actions by the Government of Nicaragua inconsistent with MCC’s eligibility criteria. Funding was terminated for all activities in the Property Regularization Project and for activities in the Transportation Project, including upgrading a major stretch of the Pacific Corridor highway, which were not already under contract. Due to that partial termination, MCC has reduced the amount of funding available to Nicaragua from $175,000,000 to $113,500,000.