Lesotho Compact

  • Grant Total: $362,551,000
  • Grant Committed: $358,045,894
  • Grant Expended: $358,045,894
  • Signed: July 23, 2007
  • Entry Into Force: September 17, 2008
  • Completed: September 17, 2013

In July 2007, the Millennium Challenge Corporation signed a five-year, $362.6 million compact with the Kingdom of Lesotho aimed at reducing poverty and increasing economic growth. The compact projects focus on improving the provision of water supplies for industrial and domestic use, improving health outcomes, and removing barriers to foreign and local private sector investment. The compact in Lesotho entered into force (EIF) in September 2008, formally initiating the five-year timeline for project implementation.

For the most up-to-date information on implementation progress, please read the Quarterly Status Report.

Health Sector Project

This project will mitigate the negative economic impacts of poor maternal health, HIV/AIDS, tuberculosis, and other diseases by substantially strengthening the Lesotho’s health care infrastructure and human resources for health capacity. Specifically, this project will:

  • Renovate up to 138 health centers in order to establish a national stock of health centers that achieve a common standard;
  • Strengthen and mainstream HIV/AIDS and TB services in and improved management of up to 14 hospital out-patient departments;
  • Construct and equip a new central laboratory and training for laboratory staff;
  • Construct a dedicated, central facility for collecting and processing blood and the provision of mobile blood collection and storage equipment;
  • Increase number of dormitories and staff residences at Lesotho’s National Health Training College;
  • Strengthen health systems through increased capacity for pre-service and in-service nurse training, improved district-level public health human resources management, support development of information tools for health systems management and strengthen health research capacity, and
  • Improve occupational health and safety and medical waste management practices.
Private Sector Development

This project is designed to increase private sector economic activity in Lesotho by improving access to credit, reducing transaction costs and increasing the participation of women in the formal economy. Specifically, this project will:

  • Improve functioning of the civil legal system through development of a functioning commercial court, court-annexed mediation, small claims procedures and introduction of improved case management;
  • Support production and issuance costs of national identification cards, create appropriate cross-border payment’s legislation; and regulations and the data privacy laws needed to establish and operate a cross-border credit bureau and protect personal information on national identification cards;
  • Implement a new automated payments and settlement system in Lesotho; including using smart-cards to improve financial services delivery to rural areas.
  • Implement a systematic land regularization program for urban and peri-urban areas and establish a new land administration authority, and
  • Implement a training and public awareness program dedicated to implementing gender equality in economic rights and building of local capacity to continue advocacy.
Water Sector Project

This project is aimed at improving the water supply for industrial and domestic needs by providing essential infrastructure to deliver water to garment and textile operations and future industrial projects. Domestic users in selected urban and rural areas will benefit from water system upgrades and expansion providing a reliable supply of water and better sanitation. The Project will also enhance rural livelihoods through improved watershed management. Specifically, this project will:

  • Construct a bulk water conveyance system;
  • Extend and rehabilitate the urban and peri-urban water network;
  • Improve sanitation services for an estimated 25,000 households through construction of ventilated improved pit latrines and water systems; and
  • Restore degraded wetlands at three areas in the highland pastures and preparation of a strategic environmental assessment to support development of a national watershed management and wetlands conservation plan.