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  • Congressional Budget Justification (CBJ):  Congressional Budget Justification, FY 2025
  • March 2024

Compact Development & Oversight

Compact Development Funding and Due Diligence
(in millions of $) FY 2023 Enacted FY 2024 Annualized CR FY 2025 Request
Total Appropriation/Request 930.0 930.0 937.0
Compact Development/Oversight
113.5 94.5 105.5
Compact Development Funding
28.0 15.0 24.0
Due Diligence
85.5 79.5 81.5

Compact development and oversight comprise both compact development funding (CDF) as authorized under Section 609(g) of the Millennium Challenge Act of 2003, as amended, and due diligence funding. These funds support pre-compact planning and assessment, oversight activities during implementation, and post-compact evaluations—activities that are critical to the success of MCC programs and ensure that the agency, partner countries, and the development community can take advantage of the learning opportunities inherent in MCC programs.

For FY 2025, the request includes $105.5 million for compact development and oversight, further broken down with $24 million planned toward compact development funding and $81.5 million for due diligence to support monitoring, programmatic oversight, and data collection and evaluation.

Compact Development Funding

CDF allows MCC to grant funding for eligible countries for the purposes of facilitating the development of a compact, as noted in section 609(g) of MCC’s authorizing statute. Laying the groundwork for compact programs helps MCC improve the quality of compacts and the ability of partner countries to implement the programs successfully. Such groundwork includes project design studies, feasibility studies, environmental and social impact assessments, engineering and geotechnical designs, economic baseline surveys, technical assessments of financial management and procurement capabilities, and other specialized analyses that help partner countries fully prepare projects that can be implemented within the fixed five-year timeframe, within budget, and achieve substantial results for compact programs.

The CDF requested for FY 2025 will support the programs to be selected in December 2024 as they launch their development processes.

Due Diligence

MCC utilizes due diligence funds at every stage of the compact and threshold program lifecycle. Due diligence funds allow MCC to obtain information that is necessary to evaluate proposed projects during compact and threshold development, to effectively oversee and monitor projects during implementation, and to evaluate the results after close-out. These funds are utilized in procuring the technical expertise required throughout the compact and threshold lifecycles and allow MCC to right-size contractor support requirements based on the relative size and diversity of its portfolio.

Due diligence funds are utilized after program closure in order to conduct independent impact and performance evaluations that use rigorous statistical methods to measure results related to MCC activities. In addition to offering valuable lessons on how MCC can improve, independent evaluations provide critical information about program successes and ensure that our development projects have the intended impact on the people they are meant to serve. Each of these independent evaluation packages is fully available to the public on the MCC Evidence Platform, an interactive web-platform designed to encourage the use of MCC’s data and analysis.

Due diligence funds also support data and technical expertise needed for calculating economic rates of return for compact projects. Through pre-compact economic modeling of expected economic rates of return, MCC chooses which projects are most likely to generate benefits (specifically, increased income for program beneficiaries) and serves to refine program design to optimize results. Economic modeling done after compact closeout helps to assess the cost effectiveness of the agency’s programs.