Coordination and Partnerships

Through a blended co-financing arrangement, MCC’s investments in transportation leveraged an additional $130 million from the CABEI to improve highway CA-5. Beyond the completion of the original works, the co-financing arrangement allowed for an expansion and improvement over the original scope of work, including a major traffic interchange and an additional lane on one of the segments.
In December 2010, the ownership of the Farmer Access to Credit Trust Fund was transferred to the Honduran Ministry of Finance. BAC Honduras (now known as Grupo BAC Credomatic), one of the largest banks in Central America, continued to administer the Trust Fund to provide lines of credit to institutions on-lending to producers of high value agriculture and agribusinesses. A new public-private committee was instituted to oversee the Trust Fund post-compact.
On January 28, 2010, the Secured Transaction Law was published, which authorized the creation of the movable property registry. The registry, housed at the Chamber of Commerce & Industry of Tegucigalpa (CCIT) was designed to allow registry users; including retailers, banks, and microfinance and other financial institutions to securitize credit with both tangible and intangible movable property. The enabling legislation, championed by the MCA-H in close coordination with the CCIT, expands the pool of collateral available to borrowers and makes it easier for bankers to collect on loans. Lenders can file pledges through the CCIT-managed system, and therefore, increase borrowers’ access to credit.

Key Policy Conditions Precedent

Key Compact Component(s)	Major CP or Policy Reform Required	Rating: Met on Time/Deferred/Waived
All Project Activities	MCA-H performs, satisfactory to MCC, an environmental audit of all Project Activities.	Met	MCC approved a request from MCA-H to substitute an environmental audit with the hiring of independent Environment, Social and Safety Inspectors to generate reports to allow Inspectors to provide on-time input to MCA on the quality/environmental and safety standards. This allowed for course corrections as opposed to presenting audit findings after the fact.
Rural Development Project – Credit Project Activity	The GoH enacts the Law on Access to Credit and implementing regulations acceptable to MCC.	Met	On August 19, 2009, the National Congress of Honduras approved the Law on Security Interests in Personal Property, published in the Official Gazette, La Gaceta, on January 28, 2010 (Decree No. 182-2009)
Transportation Project	The GoH implements the Road Maintenance Plan.	Met	The GoH road maintenance budget was less than $40 million per year in the time leading up to the compact in 2005. As part of the compact, the GoH increased its own road maintenance funding to $64 million by 2010.
Transportation Project	The GoH enacts legislation acceptable to MCC on national road safety and enforcement.	Met	The Road Safety National Legislation (Ley de Tránsito Decreto 205-2005) was approved by congress August 16, 2005 and published in the GoH Official Paper (La Gaceta) on January 3, 2006.
Transportation Project – Vehicle Weight Control	The GoH enacts implementing regulations acceptable to MCC that enables a vehicle weight control system on the national highway network to be properly built and operated.	Met	Prior to being able to issue the request for proposal for the system, the GoH needed to enact the implementing regulation. The Fondo Vial Law, the enacting legislation, was approved by Congress on July 31, 2009 and was published in La Gaceta on September 29, 2009. This would have allowed only one year to implement this activity. Ultimately, funds allocated towards the Vehicle Weight Control Activity were eliminated from the compact as a result of political events that transpired in Honduras that were inconsistent with MCC principles.