Press Release

For Immediate Release

July 13, 2007

Contact: 202-521-3880

Email: info@mcc.gov

Mozambique and MCC Sign $507 Million Poverty Reduction Grant To Improve Water, Sanitation, Roads, and Agriculture

Washington, D.C. In a signing ceremony today at the State Departments Benjamin Franklin room, Chief Executive Officer of the Millennium Challenge Corporation, Ambassador John Danilovich, and Mozambican Minister of Development and Planning Aiuba Cuereneia signed a $506.9 million Compact designed to reduce poverty in Mozambique by promoting sustainable economic growth. Deputy Secretary of State John D. Negroponte officiated and witnessed the signing joined by Mozambican President Armando Guebuza.

The Compact between MCC and Mozambique seeks to reduce poverty levels throughincreased incomes by improving water, sanitation, roads, land tenure and agriculture. The program is expected to benefit approximately five million Mozambicans.

MCC congratulates the Mozambicans for developing a terrific program that will reduce poverty and stimulate economic growth, said MCC CEO Ambassador John Danilovich. This Compact seeks to improve the lives of all Mozambicans by providing access to clean water, better roads and increased agricultural productivity. Furthermore, the agreement is a testament to Mozambiques strong commitment to good governance and to building the necessary institutional framework for aid to be used effectively.

The largest of the four components in the Compact, the $203.6 million Water Supply and Sanitation Project, will increase access to safe and reliable water supply and sanitation services, thereby increasing productivity and reducing water-borne diseases—one of the leading causes of death in children under five.

The $176.3 million Transportation Project will improve access to markets and services; reduce transport costs for the private sector to facilitate investment; and increase public transport access for individuals to take advantage of job and other economic opportunities.

The $39.1 million Land Tenure Services Project will establish more efficient and secure access rights to land by improving the policy framework, upgrading land information systems and services, and helping beneficiaries meet immediate needs for registered land rights.

The $17.4 million Farmer Income Support Project will help coconut farmers improve productivity and encourage diversification into other cash-crop production.

Ambassador Danilovich added, President Guebuzas leadership was instrumental in producing a program that will help the poor in Mozambique build a better life for themselves and their children. Mozambique is a valued partner in the fight against poverty and we look forward to continuing our dynamic partnership as Mozambicans begin to implement this ambitious plan.

Since its inception in 2004, MCC has signed Compacts totaling $3.5 billion with 12 partner countries: Madagascar, Cape Verde, Honduras, Nicaragua, Georgia, Armenia, Vanuatu, Benin, Ghana, Mali, El Salvador and Mozambique.MCC also expects to sign a $363 million Compact with Lesotho in late July.

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Millennium Challenge Corporation (MCC), a United States government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.