Innovation in water

Posted on May 9, 2012 by Jonathan Brooks, Managing Director for Europe, Asia, Pacific, and Latin America

The Honduras Compact’s Agricultural Public Goods Grant Facility sought to increase the productivity and business skills of farmers who operate small- and medium-size farms, as well as their employees.

A community irrigation system created with the help of MCC’s compact with Honduras recently received international recognition—the latest example of how MCC’s investments provide a model for sustainable poverty growth in our partner countries.

The Cosechas de Agua rainwater harvesting project, developed through the compact’s Agricultural Public Goods Grant Facility and managed by CHF International, received the Latin American prize for innovative water management projects in the face of climate change at the World Water Forum in Marseille, France, on March 15.

Cosechas de Agua harvests rainwater for use in irrigation in the arid southern municipalities of Nacaome, Langue, Goascorán, and Aramecina. It captures rainwater and then uses a system of hydraulic works, dams and pipelines to store and distribute the water to fields. The project aims to introduce complementary irrigation systems for 188 agricultural producers over 98 hectares of land, intended to increase their income.

Access to irrigation and other support through the compact was intended to allow farmers to diversify their crops, increase their yields and expand their access to new customers nationally, regionally and internationally.

The $50,000 prize—sponsored by the Mexican national water authority Conagua, the FEMSA Foundation, the Inter-American Development Bank, and the Water Center for Latin America and the Caribbean—will be used to develop the project over the next three years. Cosechas de Agua officials will also be invited to present progress on the system's economic, social and environmental impacts at the next World Water Forum in March 2015.

The Agricultural Public Goods Grant Facility was part of the $68 million Rural Development Project, which sought to increase the productivity and business skills of farmers who operate small- and medium-size farms, as well as their employees. The project is expected to help more than 357,000 people over the next 20 years and raise their household incomes by $53 million.

Will Mozambique be Africa’s next big growth economy?

Posted on April 6, 2012 by Patrick Fine, Vice President for Compact Operations

Patrick Fine, MCC's vice president of compact operations, recently visited compact project sites in Mozambique and left optimistic about the country's economic future.

Nampula Province in central Mozambique is 2,200 kilometers north of the capital Maputo, about the distance from the East Coast to the Mississippi River. The countryside is marked by granite domes that tower hundreds of feet off the lush plains and by isolated mountains that rise up in surreal silhouettes worthy of artist Shane Devries. The land is not heavily populated, and villages are simple collections of traditional thatched-roof rondavels plastered with mud from ubiquitous conical ant hills. Rural electrification has not yet reached most of these villages, roads are simple dirt tracks, most people still fetch water from rivers, and boys stand by the roadside holding out bags of freshly shelled cashews for sale.

You can see signs of growing prosperity, including the results of MCC’s $506 million partnership with Mozambique: Our investment has helped build hundreds of village water points; pave major routes to facilitate agriculture, mining and commerce; and upgrade and expand straining municipal water and sanitation systems.

A year ago, these projects were seriously behind schedule and over budget, causing MCC and the Government of Mozambique to create an action plan to overhaul the approach for completing the work within the five-year deadline. I was impressed by the way Mozambique’s management authority, MCA-Mozambique, had consistently met its implementation milestones since the revised plan was adopted in March 2011.

Last week, with only 18 months remaining in the compact, I visited Nampula to get a firsthand view of what is being accomplished.

I was encouraged by the road and water system construction underway and came away with increased confidence that Mozambique will complete its work on time. In one rural community down a narrow 13 kilometer dirt track, I inaugurated a new borehole and water pump that serves 700 community members and will eliminate the need for women and children to spend up to two hours a day fetching water.

In the town of Nampula, I witnessed the distribution of property titles that give people secure property rights for the first time. The ceremony took place in an open neighborhood square where local officials called out names; the property owners came forward from the large crowd, signed a ledger and took their titles. At the end of the ceremony a number of people started to angrily call out, demanding their titles. The officials explained that the titles would be distributed each day that week. I found this spontaneous demonstration of the demand to have a title a reassuring indication of the value of MCC’s investment.

While my focus was on the MCC-financed projects, what really caught my attention was the extraordinary economic opportunity in Mozambique. Already, Mozambique exports electricity from the largest hydroelectric dam in Africa, and it still has unexploited capacity. A Portuguese contractor working on the MCC road project drove up in a Ford Ranger and had American-manufactured scientific equipment in its materials lab. Recently an American company, Anadarko Petroleum Corporation, announced it had discovered one of the world’s largest reserves of natural gas off the northern coast; the center of the country holds huge deposits of coal, and as more exploration takes place it is very likely that other minerals will be found in commercial quantities. Anadarko has plans to invest approximately $20 billion over the next five years! A Brazilian mining company is already shipping coal and has announced a $6 billion expansion.

I see all sorts of opportunities, from village hardware stores, hair salons and groceries to the suppliers and services that new investments in mining will require. Seen in this light, American investments in basic infrastructure are prescient. And a U.S. company is the supervising engineer on the drainage activity in Nampula city—where one of the main customers and beneficiaries of the new water system is Coca-Cola.

But far more important than market opportunities created by individual MCC-financed projects are the market opportunities that will open up for U.S. goods and services if Mozambique’s economy takes off. Road-building and mining equipment, chemicals and a spectrum of products and services will be needed to build this economy. Now is the time for U.S. companies to invest in establishing a presence in the country so that they can be competitive. 

The government is implementing business-friendly reforms—such as the MCC financed land reform program—and there is a still-untapped entrepreneurial spirit among the youth. Mozambique’s economy has already been growing at nearly 8 percent per year over the past several years and is on the verge of an economic era that could transform its villages and create prosperity and opportunities not only for one of the world’s poorest populations but for the companies and individuals intrepid enough to join an economy just taking off.

I left Mozambique with the impression that almost everything is in place for it to become the next big growth economy in Africa.

A resource for Armenia’s future

Posted on March 29, 2012 by Jonathan Brooks, Managing Director for Europe, Asia, Pacific, and Latin America

A display at the MCC Resource Center at the U.S. Embassy in Yerevan offers information about MCC's $33 million Water-to-Market Activity, which aimed to increase productivity of farmers, agribusinesses and water-supply institutions through training and the

Although MCC's compact with Armenia closed at the end of September, the U.S. Embassy in Yerevan is ensuring the lessons we learned during our five-year partnership can improve the country’s future development projects.

The embassy’s new MCC Resource Center makes information regarding MCC’s $177 million investment available as a reference for future U.S. Government development projects, Armenians from the diaspora interested in building upon compact projects and others. The center includes an array of documents like farmer-training maps, public outreach documents, quarterly bulletins, and training materials.

The MCC Resource Center also provides embassy staff and visitors with information on MCA-Armenia’s successor, the Foreign Financed Projects Management Center (FFPMC). An FFPMC team led the compact development process, and we are pleased that they are involved again by helping monitor MCC’s investments over the next few years.

A Tribute to Process: The Port of Cotonou

Posted on August 22, 2011 by Valeria R. McFarren , Implementation Communications Officer

The Port of Cotonou is often described as the lungs of Benin: It breathes in revenue that gives life to Benin’s economy. In fact, 50 percent of Benin’s state income and 85 percent of all customs income originates there.

The port is also a gateway to landlocked West African countries. Ninety percent of all imports arrive through the port, with approximately 54 percent of them destined for hinterland countries such as Burkina Faso, Mali, and Niger. However, high shipping costs, low efficiency, and poor logistical facilities have limited the Port of Cotonou from becoming an even more important trade route, affecting its competitiveness as a springboard to neighboring countries. In 2006, the Millennium Challenge Corporation (MCC) and the Government of Benin, in recognition that an efficient port is a driver of GDP growth, embarked on an investment program of $188 million in port improvements. This $188 million project is part of Benin’s $307 million MCC compact.

I was in Benin two weeks ago visiting the port, and was impressed by the size and magnitude of this MCC/MCA-Benin project. To design and implement major infrastructure improvements and tackle institutional reform in Benin’s only port – within MCC’s five-year timeline – is a significant undertaking.

As the project concludes, port improvements will surely be visible, but all the sweat, tears, and hard work behind it may be forgotten.  This is my tribute to process: a behind-the-scenes look at the Port of Cotonou. 

• According to independent reports from the International Finance Corporation, around 450 people were employed for port reconstruction over the last two years.• 360,000 tons of rocks were hauled in to extend the jetty, a structure used to prevent the build-up of sediment in the port, by 300 meters.  This barrier significantly reduces the amount of sand in the port entrance channel area, reducing maintenance costs for dredging of the port. Construction was completed in December 2010, six months ahead of schedule. 
• The railway from Cotonou to Parakou, which had been non-functional for six years, was put back to work bringing rocks for construction to the port. This required approximately 30 trips. 
• Most of the rocks were supplied by truck. Approximately 100 to 120 trucks per day were loaded with rocks, each weighing one to three tons, and made the 150-kilometer trip from the quarry to the port.
• Three teams of trained divers were brought in to install scour protection at the base of the new quay wall. This protects the sea floor from forming destabilizing holes and ensures that more boats can continue using the port.
• One and half months of construction took place underwater.
• Rigorous safety protocols and environmental safeguards were in place—several months of staff time were dedicated to providing educational briefings about construction safety hazards and HIV/AIDS awareness. 
• Approximately 150,000 tons of concrete were used to build the three-foot-thick quay walls, parking areas, and over five kilometers of roads, including a three-kilometer road around the port.
• In coordination with the MCC/MCA-Benin project, the Government of Benin successfully negotiated a concession agreement with the French company Bolloré, who will manage a new container terminal at the port’s new quay for 25 years after the compact ends. The agreement includes $200 million in concession fees during the first eight years of operation, and investment in operating equipment and civil works of $256 million over the life of the concession.
• Dredging the port is almost complete. This project will increase the depth of the port basin from 12 meters to 15 meters, allowing up to 250-meter-long container vessels access to the new quay berth. Bigger boats mean more containers per boat, increasing volume of imports and exports.

MCC always operates with the bottom line in mind: How does this port contribute to economic growth? The answer is that a more efficient, higher capacity, and safer port reduces ships’ waiting time at anchor, waiting time at berth, and customs clearance times, which reduces shipping costs. For imports, this reduces the cost of goods to Benin and its neighbors. For exports, the reduction in shipping costs and time makes Benin – and its neighbors using the port -- more competitive and spurs their growth.

According to Henning Stehli, the port advisor hired by MCA-Benin, approximately 50,000 people earn a living off the port, both directly and indirectly. A few examples include fishermen, truckers, longshoremen, those buying and selling goods, and those involved in insurance and security. For instance, the dockers tend to be responsible not only for their immediate families but also those who live with them: children, parents, siblings, and extended families. Each docker’s income maintains a household of an average of 10 people. Even being conservative with figures, Henning sees at least half a million Beninese depending on the port for survival on a daily basis.
Henning sums it up nicely: “The MCC gift came to the right place... It is having and will have a great impact. However, excellent management is needed – the Government of Benin must gift its people back by making sure they take care and make good use of this investment.”