Vanuatu Closed Compact


In March 2006, MCC and the GoV signed a five-year, $65.69 million compact aimed to reduce transportation costs, and thereby reduce poverty and increase incomes in rural areas by stimulating economic activity in the tourism and agricultural sectors.

Country Context

At the time of compact signing in 2006, approximately half of the population lived in poverty and agriculture and tourism were central to Vanuatu’s growth.

Transport Infrastructure Project

The Transport Infrastructure Project aimed to increase adequate and reliable transport infrastructure services as well as overcome the impact of poor transport infrastructure on formal economic activity and investment in the agriculture and tourism sectors.

Compact Changes

Due to escalating global construction costs, currency fluctuations, and delays in mobilizing implementing entities and contractors, the Infrastructure Activity was restructured in early 2008.

Coordination and Partnerships

Following the results of the bidding process in February 2008, which indicated a shortfall of compact funds, the GoV solicited additional funding from the New Zealand AID.

Conditions Precedent

Read the conditions that Vanuatu needed to meet under the terms of the compact prior to disbursing project funds.

Lessons Learned

At the time of the Vanuatu compact, many of the practices and policies that currently govern MCC’s compact development and implementation had not been developed. MCC currently applies a more rigorous approach and continues to refine its approaches.

  • Signed: March 2, 2006
  • Entry into Force: April 28, 2006
  • Compact End Date: April 28, 2011