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  • Closed Compact Report:  Closed Compact Report: Cabo Verde Compact
  • July 2017


In July 2005, the Millennium Challenge Corporation (MCC) and the Government of Cabo Verde signed a five-year, $110 million compact to help increase the country’s economic growth and reduce poverty through investments in infrastructure, watershed management and agricultural support, and private sector development. MCC’s compact with Cabo Verde was ambitious in size and scope, with activities in three sectors spanning four of the country’s nine inhabited islands. While this made implementation challenging, the flexibility built into the compact’s design allowed for adjustments as needed. The Cabo Verde Compact was MCC’s third-ever compact, and while there were successes, MCC learned important lessons from this and other early compacts.

At compact completion, four bridges and three roads were built to improve access to markets, employment, and social services, and the island’s critical Port of Praia was significantly expanded and modernized to increase productivity and operational efficiency. The compact also funded the construction of 28 spring- and rain-fed reservoirs and 48 dikes; trained 553 subsistence farmers producing high-value horticultural and fruit crops; and helped 225 farmers and small agribusinesses obtain credit. Finally, compact investments strengthened the capacity of microfinance institutions and laid the groundwork for the country’s first private credit bureau.

Given the complexity of the Cabo Verde Compact, MCC’s five-year time limit on disbursements, and budget constraints, significant changes for some activities were necessary. In many cases, the Government of Cabo Verde procured alternative project funding, but changes in compact scope and reallocations made evaluating performance measurements against original targets difficult. Recalculating Economic Rate of Return (ERRs) at closeout was complicated by the fact that original design assumptions no longer applied for some activities. Final evaluation reports on most compact investments are expected in the timeframe 2017-2019, along with independent updated ERR calculations for many activities.