The activity’s objective, target population, type of intervention, definitions, selection methodology, and expected results should be defined prior to investment. While these were stated in some form in the Compact for the Investment Support Activity, the definitions were not clear up-front or shared by all of the stakeholders. As a result, the interpretation of this language was debated throughout implementation, affecting the size range of the investments, the interest rate and the collateral requirements. In future circumstances, MCC should be very clear when drafting investment related language in Compacts in order to set out the purpose, activities and expected results of the intervention, which should be accompanied by a detailed term sheet to guide implementation preparation and investment.
Lesson Learned