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  • Closed Compact Report:  Closed Compact Report: Lesotho Compact
  • October 2015

Compact Changes

The Lesotho Compact included broad capital investments in infrastructure and major service delivery systems like those that manage water distribution. Because MCC compacts are a fixed amount implemented over five years, partner governments must focus on attaining compact results while balancing changes in costs and speed of implementation.

As projects encountered higher-than-anticipated construction costs—based on additional technical and regulatory information about the design of compact investments—the government committed additional funding to cover these cost overruns and avoid a reduction in scope of the compact’s Health Sector Project. The Rural Water Supply and Sanitation Activity infrastructure was scaled up to increase latrine coverage, while funding for the Civil Legal Reform Activity within the Private Sector Development Project was increased as well. Construction progress for the Health Sector Project was 88 percent complete by compact end, with contractors having completed 46 of 68 MCC-funded and 10 of 70 government-funded health centers. By July 2014, the remaining health centers had been completed by contractors using government funding.

Two changes in scope to compact activities also occurred during its implementation:

  • MCC cancelled the Automated Clearing House Sub-Activity within the Private Sector Development Project in December 2010, determining it would not accomplish the economic growth and poverty reduction outcomes envisioned during compact development. The remaining $600,000 in the sub-activity was transferred to the Debit Smart Card Sub-Activity in May 2012, which targeted expanding financial services to people living in remote areas of Lesotho.
  • In February 2012, the government officially requested removing National ID cards from the National ID and Credit Bureau Activity of the compact, to align the activity with its own national e-passport initiative. The component was subsequently removed, and its $8 million funding directed where there were shortfalls, including the Urban and Peri-Urban Water Network Activity.