Press Release

Cape Verde Named Eligible for Second MCC Compact

Board Calls on Partners to Bolster Efforts to Fight Corruption; Innovative energy and environment projects approved for Mongolias compact

For Immediate Release

December 9, 2009

Washington, D.C.— The U.S. Governments Millennium Challenge Corporation (MCC) Board of Directors held its quarterly meeting today, the first since the confirmation of MCCs new Chief Executive Officer, Daniel W. Yohannes, who was sworn-in by U.S. Secretary of State Hillary Rodham Clinton at the Department of State yesterday.The Board reviewed the progress of its partnerships with countries to reduce poverty, and agreed to select Cape Verde as eligible to develop a proposal for a second compact grant.

I was proud to participate in my first MCC Board meeting today with Secretary Clinton and the other distinguished directors.We took the opportunity to review the status of MCCs compacts, review the policy performance of our partner countries, and reaffirm the U.S. Governments commitment to finding lasting and innovative solutions to global poverty, said MCC CEO Daniel W. Yohannes.

Cape Verde is the first MCC partner country to be selected as eligible for a second compact, Mr. Yohannes said.Cape Verde illustrates many of the characteristics of a strong partner and has consistently displayed good economic and political governance. We look forward to building on the successes of Cape Verdes current efforts to combat poverty.

This is the first year that the MCC Board considered countries for possible eligibility for second compacts. Eligibility for a second compact is not automatic.For those countries selected, a second compact will allow for deeper investment in poverty reduction and economic growth, which is consistent with MCCs mission.Countries must meet a higher hurdle to achieve second compact eligibility because MCC takes into account not only a countrys policy performance as measured by MCCs indicators, but also effectiveness of implementation on its first compact as well as results achieved to date.

The Board agreed that Jordan, Malawi, the Philippines, Indonesia, and Zambia are eligible to continue the process of developing compacts in fiscal year 2010.The Board was briefed on MCCs $262 million compact with Moldova, currently scheduled for signing in early 2010. Since its inception in 2004, MCC has approved compacts totaling over $7 billion with 19 partner countries.

MCC embraces President Obamas commitment to fighting global poverty.We continue to work with Members of Congress to seek sufficient resources for MCC to fulfill our long-term economic development partnerships with some of the poorest countries in the world, said Mr. Yohannes.

The Board voted to restructure Mongolias $284.9 million MCC compact.The Board approved approximately $47.2 million for energy and environment projects focused on supporting economic growth by promoting the introduction of alternative energy and energy efficient products, thereby helping Mongolians reduce the impact of low quality and inefficient fuels on both personal health and productivity and government expenditure.The compact restructuring also includes $79.7 million for construction of approximately 174 kilometers of a major highway and a 252 meters bridge over the Tuul River to accommodate heavy traffic into Mongolias capital city, Ulaanbaatar.

The Board made special note of the positive performance of Albania and Georgia as MCC partners.MCC signed a second threshold program with Albania last Octoberworth over $15.7 millionto support anti-corruption activities.Albania has made significant progress as an economic reformer and now passes MCCs indicator criteria as a lower middle income country.Likewise, Georgia has been a consistent economic reformer and has made great strides to reduce poverty through its $393.5 million compact.Georgia has 18 months remaining in the term of its compact and may be considered by the Board for a second compact at a later date.

In FY 2010, the Philippines and Indonesia graduated from the low income country category (LIC) to the lower middle income country category (LMIC).Graduation to a higher income category, as well as other factors including higher medians and changes to the indicator system, can impact a countrys indicator performance, while not necessarily reflecting a change in policy performance. In making its decision to reselect the Philippines and Indonesia, the Board took into consideration each countrys current indicator performance as an LMIC, as well as the information that the Philippines and Indonesia would have met the criteria as a low income country.The Board stressed that clear commitment to and progress on the fight against corruption are critical for any country that hopes to enter into a compact with MCC.

The Board voted to suspend MCCs $23 million threshold program with Niger.The Board reviewed the recent actions by the Government of Niger, which constitute a significant policy reversal from the time the country was selected for an MCC grant, and took the action in accordance with MCCs Policy on Suspension and Termination.MCC will proceed with an orderly wind-down of the threshold program, which has focused on control of corruption, streamlining the process to start a business and land access procedures, and girls education.

MCC makes this suspension decision with deep disappointment, said Mr. Yohannes.The girls schools project had tremendous potential to promote girls education and create opportunities in Niger.MCC would have liked to continue the program had circumstances in Niger permitted us to move ahead.

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Millennium Challenge Corporation (MCC), a United States government agency that works with developing countries, 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 help eliminate extreme poverty. For more information about MCC, visit

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