Supporting private investment in partner countries
A key objective of MCC is to resolve constraints to private investment in our partner countries in order to reduce poverty through economic growth. In recent years, MCC has increasingly supported public-private partnerships (PPPs) and other broader forms of private sector participation (PSP) to attract business investments in and related to the projects that MCC funds and, more generally, in MCC partner countries.
Some of MCC’s accomplishments in obtaining PPP and PSP support, as well as future opportunities, include the following:
- Benin: U.S. companies have expressed strong interest in participating in potential PPPs that will be structured for six solar generation plants totaling 82 megawatts (MW).
- Cabo Verde: MCC’s second compact supported the Government of Cabo Verde’s exploration of a PPP to complete a land registry as part of a new land information management system.
- Côte d’Ivoire: This $525 million compact will support the development of a logistics center for cargo movements as a PPP. The center will work to reduce congestion in Abidjan, increase the efficiency of container traffic through the port, and provide necessary services to transporters. It is expected to have spillover benefits for U.S. truck and transportation services.
- Benin: MCC’s $375 million Power Compact seeks to unlock private investment by supporting policy reforms and investing in electricity generation, distribution, and off-grid electrification. U.S. companies have expressed interest in how grants from the $40 million Off-Grid Clean Energy Facility can facilitate market entry for their business models and technologies.
- Ghana: GE and Endeavor Energy are developing the Bridge Power project in Ghana, a component of the $4 billion in private sector commitments made at the signing of the $498 million Ghana Power Compact. In addition, MCC will support the improved utility performance of the Electricity Company of Ghana through a management contract concession that will leverage private sector expertise.
- Malawi: The Malawi Compact will improve the availability and reliability of electricity in the country by increasing the capacity and stability of the national electricity grid, bolstering the efficiency and sustainability of hydropower generation, and strengthening sector institutions, regulation, and governance to prepare for future expansion. These activities include Malawi’s first tender for 70 MW of solar power by independent power producers, which was awarded in May 2017. In addition, a total of 14 U.S.-headquartered firms and individuals have been awarded 18 different contracts totaling approximately $23.2 million in goods, works, and consulting services.
- Sri Lanka: A PPP unit was recently set up within the Ministry of Finance and has received initial support from the United States Agency for International Development (USAID), as well as the World Bank’s PPP team and the Public-Private Infrastructure Advisory Facility (PPIAF). In the early stages of compact development, MCC is actively engaging with the PPP unit, USAID, PPIAF, and other donors to determine what support MCC may be able to provide to assist the Government of Sri Lanka in developing and executing one or more successful PPPs in the coming years.
Central America’s Northern Triangle
- El Salvador: MCC currently is helping the Government of El Salvador to develop PPPs to attract up to $45 million in private investment to modernize the Cargo Terminal at its main international airport, and $25 million to provide street lighting and security cameras on highways around the capital, San Salvador.
- Guatemala: MCC is supporting the Government of Guatemala in drawing up to $900 million of private capital to build a light rail transit system in Guatemala City, and $75 million to rehabilitate the country’s main international airport in Guatemala City.
- Honduras: MCC is assisting the Government of Honduras in managing the implementation of several signed road concessions that require more than $300 million in private investment.
- El Salvador: The MCC-funded El Salvador Investment Challenge (ESIC) seeks to provide up to $75 million in public goods (e.g., roads, water supply and sanitation, and workforce development) to increase private investment in El Salvador. To date, private investors have proposed more than $250 million in privately-funded projects to ESIC for support.
Engaging U.S. Businesses
MCC actively promotes participation by U.S. firms in MCC-funded overseas procurements. MCC is engaging prospective U.S. bidders through enhanced collaboration with the Department of Commerce, the U.S. Trade and Development Agency (USTDA), World Bank, U.S. Chamber of Commerce, and others. MCC meets with U.S. firms that are either doing business in MCC partner countries or are interested in exploring these opportunities. MCC is actively working with the Department of Commerce’s Advocacy Center to reach its network of U.S. firms.
MCC is implementing a detailed market outreach plan to inform, attract, and further encourage U.S. firms to work with MCC. The market outreach plan includes the promotion of MCC and MCC partner-country procurements to targeted U.S. businesses, highlighting the advantages of working on MCC-funded projects while addressing any barriers to participation, showcasing post-compact investment opportunities for U.S. businesses, and building additional avenues for partnership with MCC through co-investment, joint research, knowledge sharing, and program co-design.