Nicaragua Compact

In July 2005, the Millennium Challenge Corporation signed a five-year, $175 million compact with the Government of Nicaragua to support those living in the León and Chinandega region by significantly increasing incomes of rural farmers and entrepreneurs. The investments in three strategic projects will reduce transportation costs, improve access to markets, strengthen property rights, increase investments, and raise incomes for farms and rural businesses. The compact in Nicaragua entered into force (EIF) in May 2006, formally initiating the five-year timeline for project implementation. The compact closed out in May 2011.

On July 3, 2009, MCC terminated funding under the compact in response to a pattern of actions by the Government of Nicaragua inconsistent with MCC’s eligibility criteria. Funding was terminated for all activities in the Property Regularization Project and for activities in the Transportation Project, including upgrading a major stretch of the Pacific Corridor highway, which were not already under contract. Due to that partial termination, MCC has reduced the amount of funding available to Nicaragua from $175,000,000 to $113,500,000.


Compact Budget


  • Signed:
    July 15, 2005
  • Entry Into Force:
    May 27, 2006
  • Closed:
    May 26, 2011

Compact Projects

Property Regularization Project

  • $0Project Total Amount

This project was terminated effective July 3, 2009.  Prior to termination a pilot project was implemented that resulted in 2,865 property titles.

Projected Long-Term Results

  • Estimated Beneficiaries TBD
  • Estimated Net Benefits $30,000,000

Rural Business Development Project

  • $32,900,000Project Total Amount

This project aims to increase profits and wages in farms and non-farm businesses that help develop higher-profit agriculture and agribusiness enterprises in the departments of León and Chinandega.

  • Provide business development services, disseminates market information, and develops improved production techniques, and
  • Provide technical assistance to small and medium farms and agribusinesses transition to higher profit activities;

Projected Long-Term Results

  • Estimated Beneficiaries 21,985
  • Estimated Net Benefits $51,000,000

Transportation Project

  • $58,000,000Project Total Amount

This project aims to reduce transportation costs between Nicaraguan production centers and national, regional and global markets.

  • Upgrade 18 kilometers of highway between Villanueva and Guasaule to better link producers in northwestern Nicaragua to commercial centers in Honduras and El Salvador, and
  • Upgrade 50 kilometers of rural secondary routes to improve community access to markets and social services.

Projected Long-Term Results

  • Estimated Beneficiaries 97,110
  • Estimated Net Benefits $32,400,000