21044 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 

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Dated: April 8, 2011. 

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[FR Doc. 2011–9013 Filed 4–13–11; 8:45 am] 

BILLING CODE 1410–30–P 

MILLENNIUM CHALLENGE 

CORPORATION 

[MCC FR 11–04] 

Notice of Entering Into a Compact With 

the Republic of Malawi 

AGENCY: Millennium Challenge 

Corporation. 

ACTION: Notice. 

SUMMARY: In accordance with Section 

610(b)(2) of the Millennium Challenge 

Act of 2003 (Pub. L. 108–199, Division 

D), the Millennium Challenge 

Corporation (MCC) is publishing a 

summary and the complete text of the 

Millennium Challenge Compact 

between the United States of America, 

acting through the Millennium 

Challenge Corporation, and the 

Republic of Malawi. Representatives of 

the United States Government and the 

Republic of Malawi executed the 

Compact documents on April 7, 2011. 

Dated: April 8, 2011. 

Henry Pitney, 

Deputy General Counsel, Millennium 

Challenge Corporation. 

Summary of Millennium Challenge 

Compact With the Republic of Malawi 

The five-year Millennium Challenge 

Compact with the Republic of Malawi 

will provide up to $350.7 million to 

reduce poverty through economic 

growth (the ‘‘Compact’’). The Compact 

focuses on revitalization of the Malawi 

power sector, and is intended to: 

(i) Increase investment and employment 

income by raising the profitability and 

productivity of enterprises; (ii) expand 

access to electricity for the Malawian 

people and businesses; and (iii) improve 

delivery of social services. 

1. Project Overview and Activity 

Descriptions 

To advance the Compact goal of 

reducing poverty through economic 

growth, the Compact will fund a Power 

Sector Revitalization Project (the 

‘‘Project’’) that aims to improve the 

availability, reliability, and quality of 

the power supply by: (i) Increasing the 

throughput capacity and stability of the 

national electricity grid; (ii) increase 

efficiency of hydropower generation; 

and (iii) create an enabling environment 

for future expansion by strengthening 

sector institutions and enhancing 

regulation and governance of the sector. 

The Project consists of two activities (i) 

the Infrastructure Development Activity 

and (ii) the Power Sector Reform 

Activity (the ‘‘Activities’’). 

A. Infrastructure Development Activity 

($283 Million) 

The Infrastructure Development 

Activity focuses on the rehabilitation, 

upgrade and modernization of those 

generation, transmission and 

distribution assets of the Electricity 

Supply Corporation of Malawi 

(‘‘ESCOM’’) in most urgent need of 

repair, in order to improve the 

capability of the transmission system 

and increase the efficiency and 

sustainability of hydropower generation. 

Because maintaining the current 

generation assets and expanding 

generation capacity are necessary to 

ensure realization of the full benefits of 

the Infrastructure Development Activity, 

the Government of Malawi (‘‘GOM’’) is 

committing to maintain current 

generation assets, and to invest in new 

generation by completing the 

construction of the 64 MW Kapichira II 

hydropower plant during the term of the 

Compact. By the end of the Compact 

term, MCC expects that the 

Infrastructure Development Activity 

will result in increases in generation 

capacity (from 286 MW to 356 MW), 

network throughput (from 260 MW to 

410 MW) and distribution capability 

(from 868 megavolt amperes (MVA) to 

1,118 MVA), as well as a reduction of 

technical losses of the power system 

(from 20–25% to 18%). 

The Infrastructure Development 

Activity consists of the following four 

sub-activities: 

(a) Nkula A Rehabilitation SubActivity. This sub-activity will provide 

funding to rehabilitate and modernize 

Malawi’s oldest major hydropower plant 

Nkula A—at the Nkula Falls 

Hydroelectric plant. The objective of 

this proposed investment is to improve 

the availability of power in Malawi by 

reducing outages caused by the 

condition of assets, and maximizing the 

power output of generators. The 

rehabilitation is necessary to assist 

ESCOM avoid the good probability that 

at least a portion, if not all, of the plant 

could fail by the end of the Compact 

without MCC’s investment. Such a loss 

in generation output would have a 

significant adverse affect on the Malawi 

economy, and severely compromise the 

potential utilization and returns on 

MCC’s investment in the transmission 

and distribution upgrade and 

rehabilitation. 

(b) Transmission Network Upgrade 

Sub-Activity. This sub-activity will 

upgrade the backbone of the 

transmission network in order to: 

(i) Improve the quality and reliability of 

supply in the northern, central and 

southern regions of the country; (ii) 

increase the capacity to move power 

from the south, where 98 percent of 

Malawi’s power is generated, to the 

central and northern regions; (iii) reduce 

technical losses on transmission lines; 

and (iv) provide a secure transmission 

link between the southern and central 

regions. 

(c) Transmission and Distribution 

Upgrade, Expansion, and Rehabilitation 

Sub-Activity. This sub-activity includes 

investments in the southern, central, 

and northern power systems of the 

Malawi power network in order to: (i) 

Upgrade existing network connections 

(33-kilovolt (kV), 11kV); (ii) extend 

existing substations; (iii) upgrade 

transformers in existing substations; (iv) 

develop new substations; (v) install and/ 

or repair improved protection systems; 

(vi) provide new network extensions 

and connections; and (vii) install a new 

system control and data acquisition 

system. 

(d) Environment and Natural 

Resource Management (ENRM) SubActivity. The objective of the ENRM 

sub-activity is to help the GOM and 

other relevant stakeholders address the 

growing problems of aquatic weed 

infestation and excessive sedimentation 

in the Shire River, which cause costly 

disruptions to downstream power plant 

operations. The ENRM sub-activity 

intends to address these issues by: 

(i) Mitigating the impact of the weeds 

and sedimentation by providing 

dredgers and weed-harvesting 

equipment for use at existing 

hydropower plants and the Liwonde 

Barrage, and expanding use of upstream 

biological control measures; and (ii) 

developing and implementing an 

Environmental and Natural Resource 

Management Action Plan (ENRMAP) 

that sets the course for an improved 

understanding and action on 

environmental, social (including 

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Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 21045 

1 ‘‘Extremely poor’’ is defined as living on the 

equivalent amount in 2010 of less than US$1.25 per 

day 2005 PPP adjusted dollars, and ‘‘poor’’ is 

defined as living on less than US$2.00 per day 2005 

PPP adjusted dollars. 

gender), and economic factors that cause 

or contribute to weed infestation and 

sedimentation in the Shire River. 

B. Power Sector Reform Activity ($25.7 

million) 

The Power Sector Reform Activity 

complements the Infrastructure 

Development Activity by providing 

support for the GOM’s policy reform 

agenda, and aims to build capacity in 

pivotal sector institutions: ESCOM, the 

Malawi Energy Regulatory Authority 

(MERA), and the Ministry of Natural 

Resources Energy and Environment 

(MNREE). Currently, ESCOM suffers 

from significant financial, governance 

and operational challenges. In addition, 

inadequate GOM policies and sector 

governance continue to hinder 

development of the power sector. To 

address these challenges, MCC and the 

GOM have developed two sub-activities 

under the Power Sector Reform Activity: 

the ESCOM Turnaround sub-activity 

and the Regulatory Strengthening subactivity. 

(a) ESCOM Turnaround Sub-Activity. 

The objectives of this sub-activity are to 

restore ESCOM’s financial health and 

rebuild ESCOM into a strong, wellmanaged company. MCC funding will 

support three main areas of the 

turnaround: finances, corporate 

governance and operations. 

(i) Finances: MCC funding will 

support the provision of technical 

assistance and equipment to ESCOM, 

including: (1) Development of a detailed 

financial plan for 2011–2016; (2) 

deployment of a ‘‘financial turnaround 

team’’; (3) development of a loss 

reduction study; (4) assistance in rapid 

billings and collections improvements; 

(5) strengthening of internal controls; 

(6) rebuilding of the customer database; 

(7) pursuit of debt collection; (8) 

development of a new automated 

financial management system; and (9) 

assistance with tariff applications. 

(ii) Operations: MCC funding will 

support change management efforts, 

designing human resources strategies, 

strengthen ESCOM’s procurement 

division, and other operational 

assistance. 

(iii) Corporate Governance: MCC 

funding will seek to improve corporate 

governance and support ESCOM’s 

turnaround, including: (1) Recruitment 

services; (2) twinning/mentoring 

arrangements or management contract 

support; (3) a performance management 

system; and (4) board strategic planning. 

MCC funding will provide technical 

assistance on corporate performance 

standards, including a study on best 

practices and benchmarks for corporate 

governance of electric utilities with 

regional, continental and international 

benchmarks and recommendations for 

ESCOM by the end of the second year 

of the Compact term. 

(b) Regulatory Strengthening SubActivity. The objective of this subactivity is to provide support for the 

GOM’s policy reform agenda by 

building capacity in pivotal sector 

institutions such as MERA and MNREE, 

and to develop a regulatory 

environment, consistent with best 

practices in independent power utility 

regulation, which will promote 

potential private sector investment in 

generation and grid capacity at an 

affordable cost. 

(i) Tariff Reform: MCC funding will 

support a cost of service study to 

determine appropriate tariff levels and 

schedules to achieve full cost recovery, 

more efficient utilization of electricity, 

and achievement of social objectives. 

Based on the results of this study, the 

GOM commits to a phased 

implementation of full-cost recovery 

tariffs and schedules to be completed by 

the end of year three of the Compact. 

(ii) MERA Capacity Building: MCC 

funding will support capacity building 

at MERA to improve its regulatory 

oversight activities and operations 

including training and mentoring and 

development of peer relationships with 

other regulatory bodies. 

Enabling Environment for Public and 

Private Sector Investment: MCC funding 

will support the GOM’s efforts to 

implement a suitable market model 

which will include efforts to: (a) Study 

and design a single buyer model to be 

implemented during the Compact; and 

(b) develop the building blocks of a 

bilateral power trade market. 

2. Administration 

The Compact also includes program 

administration costs estimated at $33 

million over a five-year timeframe, 

including the costs of administration, 

management, auditing, and fiscal and 

procurement services. In addition, the 

cost of monitoring and evaluation of the 

Compact and integration of MCC’s 

gender policy is budgeted at 

approximately $9 million. 

3. Economic and Beneficiary Analysis 

By reducing power outages and 

technical losses, enhancing the 

sustainability and efficiency of 

hydropower generation, and increasing 

the potential kilowatt hours (‘‘kWh’’) of 

throughput to electricity consumers, the 

Program will reduce energy costs to 

enterprises and households, improve 

productivity in agriculture, 

manufacturing, and service sectors, and 

support the preservation and creation of 

employment opportunities in the 

economy. MCC and the GOM expect the 

Program to result in the following 

benefits and distribution thereof: 

• An estimated 5 million individuals 

will benefit by year 20 after the Compact 

term through reduced domestic and 

enterprise energy costs, increased 

employment income, and profits; 

• An estimated US$2.4 billion of 

income benefits to Malawi at the present 

discounted rate of 10 percent; 

• An estimated 40 percent of 

beneficiaries are currently extremely 

poor, and 60 percent are poor 1; and 

• Extremely poor individuals will 

gain approximately US$221 of benefits 

in PPP terms, and poor individuals will 

gain an average of US$291 (estimates 

based on recent employment and 

electricity connection patterns, and 

incorporate effects of a modest rise in 

tariffs, to partly finance expanded 

access). 

Millennium Challenge Compact 

Between the United States of America 

Acting Through the Millennium 

Challenge Corporation and the 

Republic of Malawi 

Millennium Challenge Compact 

Table of Contents 

Article 1. Goal and Objectives 

Section 1.1 Compact Goal 

Section 1.2 Program Objective 

Section 1.3 Project Objectives 

Article 2. Funding and Resources 

Section 2.1 Program Funding 

Section 2.2 Compact Implementation 

Funding 

Section 2.3 MCC Funding 

Section 2.4 Disbursement 

Section 2.5 Interest 

Section 2.6 Government Resources; 

Budget 

Section 2.7 Limitations of the Use of MCC 

Funding 

Section 2.8 Taxes 

Article 3. Implementation 

Section 3.1 Program Implementation 

Agreement 

Section 3.2 Government Responsibilities 

Section 3.3 Policy Performance 

Section 3.4 Accuracy of Information 

Section 3.5 Implementation Letters 

Section 3.6 Procurement 

Section 3.7 Records; Accounting; Covered 

Providers; Access 

Section 3.8 Audits; Reviews 

Article 4. Communications 

Section 4.1 Communications 

Section 4.2 Representatives 

Section 4.3 Signatures 

Article 5. Termination; Suspension; 

Expiration 

Section 5.1 Termination; Suspension 

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Section 5.2 Consequences of 

Termination, Suspension or Expiration 

Section 5.3 Refunds; Violation 

Section 5.4 Survival 

Article 6. Compact Annexes; Amendments; 

Governing Law 

Section 6.1 Annexes 

Section 6.2 Amendments 

Section 6.3 Inconsistencies 

Section 6.4 Governing Law 

Section 6.5 Additional Instruments 

Section 6.6 References to MCC Web Site 

Section 6.7 References to Laws, 

Regulations, Policies, and Guidelines 

Section 6.8 MCC Status 

Article 7. Entry Into Force 

Section 7.1 International Agreements 

Section 7.2 Conditions Precedent to Entry 

Into Force 

Section 7.3 Date of Entry Into Force 

Section 7.4 Compact Term 

Section 7.5 Provisional Application 

Annex I: Program Description 

Annex II: Multi-Year Financial Plan 

Summary 

Annex III: Description of the Monitoring and 

Evaluation Plan 

Annex IV: Conditions to Disbursement of 

Compact Implementation Funding 

Annex V: Definitions 

Millennium Challenge Compact 

Preamble 

This Millennium Challenge Compact 

(this ‘‘Compact’’) is between the United 

States of America, acting through the 

Millennium Challenge Corporation, a 

United States Government corporation 

(‘‘MCC’’), and the Republic of Malawi 

(‘‘Malawi’’), acting through its 

government (the ‘‘Government’’) 

(individually a ‘‘Party’’ and collectively, 

the ‘‘Parties’’). Capitalized terms used in 

this Compact will have the meanings 

provided in Annex V. 

Recognizing that the Parties are 

committed to the shared goals of 

promoting economic growth and the 

elimination of extreme poverty in 

Malawi and that MCC assistance under 

this Compact supports Malawi’s 

demonstrated commitment to 

strengthening good governance, 

economic freedom and investments in 

people; 

Recalling that the Government 

consulted with the private sector and 

civil society of Malawi to determine the 

priorities for the use of Millennium 

Challenge Corporation assistance and 

developed and submitted to MCC a 

proposal for such assistance to achieve 

lasting economic growth and poverty 

reduction; 

Understanding that MCC wishes to 

help Malawi implement the program 

described herein (as such description 

may be amended from time to time in 

accordance with the terms hereof, the 

‘‘Program’’) to counter a key binding 

constraint to sustained growth and 

diversification in the Malawi economy; 

and 

Acknowledging that to implement the 

Program, MCC wishes to make available 

to the Government an amount not to 

exceed Three Hundred and Fifty Million 

Seven Hundred Thousand United States 

Dollars (US$350,700,000), subject to the 

terms and conditions of this Compact; 

The Parties hereby agree as follows: 

Article 1. Goal and Objectives 

Section 1.1 Compact Goal 

The goal of this Compact is to reduce 

poverty through economic growth in 

Malawi (the ‘‘Compact Goal’’). 

Section 1.2 Program Objective 

The collective objective of the 

Program (the ‘‘Program Objective’’) is to 

(i) increase investment and employment 

income by raising the profitability and 

productivity of enterprises, (ii) expand 

access to electricity for the Malawian 

people and businesses, and (iii) improve 

delivery of social services. 

Section 1.3 Project Objective 

To achieve the Program Objective, the 

Government will implement the Power 

Sector Revitalization Project described 

in Annex I (the ‘‘Project’’) with the 

assistance of MCC. The objective of the 

Project is to improve the availability, 

reliability, and quality of the power 

supply by increasing the throughput 

capacity and stability of the national 

electricity grid, increase efficiency of 

hydropower generation, and create an 

enabling environment for future 

expansion by strengthening sector 

institutions and enhancing regulation 

and governance of the sector (the 

‘‘Project Objective’’). 

Article 2. Funding and Resources 

Section 2.1 Program Funding 

Upon entry into force of this Compact 

in accordance with Section 7.3, MCC 

will grant to the Government, under the 

terms of this Compact, an amount not to 

exceed Three Hundred and Forty One 

Million Five Hundred and Eighty 

Thousand United States Dollars 

(US$341,580,000) (‘‘Program Funding’’) 

for use by the Government to implement 

the Program. The allocation of Program 

Funding is generally described in 

Annex II. 

Section 2.2 Compact Implementation 

Funding 

(a) Upon signing of this Compact, 

MCC will grant to the Government, 

under the terms of this Compact and in 

addition to the Program Funding 

described in Section 2.1, an amount not 

to exceed Nine Million One Hundred 

and Twenty Thousand United States 

Dollars (US$9,120,000) (‘‘Compact 

Implementation Funding’’) under 

Section 609(g) of the Millennium 

Challenge Act of 2003, as amended (the 

‘‘MCA Act’’), for use by the Government 

to facilitate implementation of the 

Compact, including for the following 

purposes: 

(i) financial management and 

procurement activities; 

(ii) administrative activities 

(including start-up costs such as staff 

salaries) and administrative support 

expenses such as rent, computers and 

other information technology or capital 

equipment; 

(iii) monitoring and evaluation 

activities; 

(iv) feasibility and any remaining 

project preparatory studies; and 

(v) other activities to facilitate 

Compact implementation as approved 

by MCC. 

The allocation of Compact 

Implementation Funding is generally 

described in Annex II. 

(b) Each Disbursement (as defined 

below) of Compact Implementation 

Funding is subject to satisfaction of the 

conditions precedent to such 

Disbursement as set forth in Annex IV. 

(c) If MCC determines that the full 

amount of Compact Implementation 

Funding available under Section 2.2(a) 

exceeds the amount that reasonably can 

be utilized for the purposes set forth in 

Section 2.2(a), MCC, by written notice to 

the Government, may withdraw the 

excess amount, thereby reducing the 

amount of the Compact Implementation 

Funding available under Section 2.2(a) 

(such excess, the ‘‘Excess CIF Amount’’). 

In such event, the amount of Compact 

Implementation Funding granted to the 

Government under Section 2.2(a) will be 

reduced by the Excess CIF Amount, and 

MCC will have no further obligations 

with respect to such Excess CIF 

Amount. 

(d) Upon the written request of the 

Government, MCC may grant to the 

Government an amount equal to all or 

a portion of such Excess CIF Amount as 

an increase in the Program Funding. 

Such grant of additional Program 

Funding will be in writing and subject 

to the terms and conditions of this 

Compact applicable to Program 

Funding. 

Section 2.3 MCC Funding 

Program Funding and Compact 

Implementation Funding are 

collectively referred to in this Compact 

as ‘‘MCC Funding’’, and includes any 

refunds or reimbursements of Program 

Funding or Compact Implementation 

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Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 21047 

Funding paid by the Government in 

accordance with this Compact. 

Section 2.4 Disbursement 

In accordance with this Compact and 

the Program Implementation 

Agreement, MCC will disburse MCC 

Funding for expenditures incurred in 

furtherance of the Program (each 

instance, a ‘‘Disbursement’’). Subject to 

the satisfaction of all applicable 

conditions precedent, the proceeds of 

Disbursements will be made available to 

the Government, at MCC’s sole election, 

by (a) deposit to one or more bank 

accounts established by the Government 

and acceptable to MCC (each, a 

‘‘Permitted Account’’) or (b) direct 

payment to the relevant provider of 

goods, works or services for the 

implementation of the Program. MCC 

Funding may be expended only for 

Program expenditures. 

Section 2.5 Interest 

Unless MCC agrees otherwise in 

writing, the Government will pay or 

transfer to MCC, in accordance with the 

Program Implementation Agreement, 

any interest or other earnings that 

accrue on MCC Funding prior to such 

funding being used for a Program 

purpose. 

Section 2.6 Government Resources; 

Budget 

(a) The Government will provide all 

funds and other resources, and will take 

all actions, that are necessary to carry 

out the Government’s responsibilities 

under this Compact. 

(b) The Government will use its best 

efforts to ensure that all MCC Funding 

it receives or is projected to receive in 

each of its fiscal years is fully accounted 

for in its annual budget on a multi-year 

basis. 

(c) The Government will not reduce 

the normal and expected resources that 

it would otherwise receive or budget 

from sources other than MCC for the 

activities contemplated under this 

Compact and the Program. 

(d) Unless the Government discloses 

otherwise to MCC in writing, MCC 

Funding will be in addition to the 

resources that the Government would 

otherwise receive or budget for the 

activities contemplated under this 

Compact and the Program. 

Section 2.7 Limitations on the Use of 

MCC Funding 

The Government will ensure that 

MCC Funding is not used for any 

purpose that would violate United 

States law or policy, as specified in this 

Compact or as further notified to the 

Government in writing or by posting 

from time to time on the MCC Web site 

at http://www.mcc.gov (the ‘‘MCC Web 

site’’), including but not limited to the 

following purposes: 

(a) For assistance to, or training of, the 

military, police, militia, national guard 

or other quasi-military organization or 

unit; 

(b) For any activity that is likely to 

cause a substantial loss of United States 

jobs or a substantial displacement of 

United States production; 

(c) To undertake, fund or otherwise 

support any activity that is likely to 

cause a significant environmental, 

health, or safety hazard, as further 

described in MCC’s environmental and 

social assessment guidelines and any 

guidance documents issued in 

connection with the guidelines posted 

from time to time on the MCC Web site 

or otherwise made available to the 

Government (collectively, the ‘‘MCC 

Environmental Guidelines’’); or 

(d) To pay for the performance of 

abortions as a method of family 

planning or to motivate or coerce any 

person to practice abortions, to pay for 

the performance of involuntary 

sterilizations as a method of family 

planning or to coerce or provide any 

financial incentive to any person to 

undergo sterilizations or to pay for any 

biomedical research which relates, in 

whole or in part, to methods of, or the 

performance of, abortions or involuntary 

sterilization as a means of family 

planning. 

Section 2.8 Taxes 

(a) Unless the Parties specifically 

agree otherwise in writing, the 

Government will ensure that all MCC 

Funding is free from the payment or 

imposition of any existing or future 

taxes, duties, levies, contributions or 

other similar charges (but not fees or 

charges for services that are generally 

applicable in Malawi, reasonable in 

amount and imposed on a nondiscriminatory basis) (‘‘Taxes’’) of or in 

Malawi (including any such Taxes 

imposed by a national, regional, local or 

other governmental or taxing authority 

of or in Malawi). Specifically, and 

without limiting the generality of the 

foregoing, MCC Funding will be free 

from the payment of (i) any tariffs, 

customs duties, import taxes, export 

taxes, and other similar charges on any 

goods, works or services introduced into 

Malawi in connection with the Program, 

(ii) sales tax, value added tax, excise tax, 

property transfer tax or stamp duty tax, 

and other similar charges on any 

transactions involving goods, works or 

services in connection with the 

Program, (iii) taxes and other similar 

charges on ownership, possession or use 

of any property in connection with the 

Program, and (iv) taxes and other 

similar charges on income, profits or 

gross receipts attributable to work 

performed in connection with the 

Program and related social security 

taxes and other similar charges on all 

natural or legal persons performing 

work in connection with the Program 

except (1) natural persons who are 

citizens or residents of Malawi and (2) 

legal persons formed under the laws of 

Malawi (but excluding MCA–Malawi 

and any other entity formed for the 

purpose of implementing the 

Government’s obligations hereunder). 

(b) The mechanisms that the 

Government will use to implement the 

tax exemption required by Section 2.8(a) 

will be set forth in the Program 

Implementation Agreement (the ‘‘Tax 

Schedules’’). Such mechanisms may 

include exemptions from the payment 

of Taxes that have been granted in 

accordance with applicable law, refund 

or reimbursement of Taxes by the 

Government to MCC, MCA–Malawi or 

to the taxpayer, or payment by the 

Government to MCA–Malawi or MCC, 

for the benefit of the Program, of an 

agreed amount representing any 

collectible Taxes on the items described 

in Section 2.8(a). 

(c) If a Tax has been paid contrary to 

the requirements of Section 2.8(a) or the 

Tax Schedules, the Government will 

refund promptly to MCA–Malawi (or to 

another party as designated by MCC) the 

amount of such Tax in Malawi Kwacha 

and MCA–Malawi will refund that 

amount in U.S. Dollars to MCC, unless 

otherwise provided by MCC, within 

sixty (60) days (or such other period as 

may be agreed in writing by the Parties) 

after the Government is notified in 

writing (whether by MCC or MCA– 

Malawi) that such Tax has been paid. If 

the amount of such Tax is converted to 

U.S. Dollars from Malawi Kwacha, the 

rate of exchange applicable to such 

conversion shall be the U.S. Dollar– 

Malawi Kwacha rate of exchange as 

published by the Reserve Bank of 

Malawi on the date of transfer. 

(d) In the event the Government fails 

to make a payment, including any 

refund, reimbursement, or other 

payment that falls hereunder in full 

when due (including VAT or other 

refund or reimbursement), interest shall 

be paid on such past due amount at a 

rate of the then current U.S. Treasury 

Prompt Pay Interest Rate, calculated on 

a daily basis and a 360-day year from 

the due date of such payment until such 

amount is paid. 

(e) No MCC Funding, proceeds thereof 

or Program Assets may be applied by 

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21048 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 

the Government in satisfaction of its 

obligations under Section 2.8(c). 

Article 3. Implementation 

Section 3.1 Program Implementation 

Agreement 

The Parties will enter into an 

agreement providing further detail on 

the implementation arrangements, fiscal 

accountability and disbursement and 

use of MCC Funding, among other 

matters (the ‘‘Program Implementation 

Agreement’’ or ‘‘PIA’’); and the 

Government will implement the 

Program in accordance with this 

Compact, the PIA, any other 

Supplemental Agreement and any 

Implementation Letter. 

Section 3.2 Government 

Responsibilities 

(a) The Government has principal 

responsibility for overseeing and 

managing the implementation of the 

Program. 

(b) The Government will create and 

designate MCA–Malawi, a public trust 

to be created under the laws of Malawi, 

as the accountable entity to implement 

the Program and to exercise and perform 

the Government’s right and obligation to 

oversee, manage and implement the 

Program, including without limitation, 

managing the implementation of the 

Project and its Activities, allocating 

resources and managing procurements. 

MCA–Malawi will have the authority to 

bind the Government with regard to all 

Program activities. The designation 

contemplated by this Section 3.2(b) will 

not relieve the Government of any 

obligations or responsibilities hereunder 

or under any related agreement, for 

which the Government remains fully 

responsible. MCC hereby acknowledges 

and consents to the designation in this 

Section 3.2(b). 

(c) The Government will ensure that 

any Program Assets or services funded 

in whole or in part (directly or 

indirectly) by MCC Funding are used 

solely in furtherance of this Compact 

and the Program unless MCC agrees 

otherwise in writing. 

(d) The Government will take all 

necessary or appropriate steps to 

achieve the Program Objective and the 

Project Objective during the Compact 

Term (including, without limiting 

Section 2.6(a), funding all costs that 

exceed MCC Funding and are required 

to carry out the terms hereof and 

achieve such objectives, unless MCC 

agrees otherwise in writing). 

(e) The Government will fully comply 

with the Program Guidelines, as 

applicable, in its implementation of the 

Program. 

Section 3.3 Policy Performance 

In addition to undertaking the specific 

policy, legal and regulatory reform 

commitments identified in Annex I, the 

Government will seek to maintain and 

to improve its level of performance 

under the policy criteria identified in 

Section 607 of the MCA Act, and the 

selection criteria and methodology used 

by MCC. 

Section 3.4 Accuracy of Information 

The Government assures MCC that, as 

of the date this Compact is signed by the 

Government, the information provided 

to MCC by or on behalf of the 

Government in the course of reaching 

agreement with MCC on this Compact is 

true, correct and complete in all 

material respects. 

Section 3.5 Implementation Letters 

From time to time, MCC may provide 

guidance to the Government in writing 

on any matters relating to this Compact, 

MCC Funding or implementation of the 

Program (each, an ‘‘Implementation 

Letter’’). The Government will apply 

such guidance in implementing the 

Program. The Parties may also issue 

jointly agreed-upon Implementation 

Letters to confirm and record their 

mutual understanding on aspects 

related to the implementation of this 

Compact, the PIA or other related 

agreements. 

Section 3.6 Procurement 

The Government will ensure that the 

procurement of all goods, works and 

services by the Government or any 

Provider to implement the Program will 

be consistent with the ‘‘MCC Program 

Procurement Guidelines’’ posted from 

time to time on the MCC Web site (the 

‘‘MCC Program Procurement 

Guidelines’’). The MCC Program 

Procurement Guidelines include the 

following requirements, among others: 

(a) Open, fair, and competitive 

procedures must be used in a 

transparent manner to solicit, award and 

administer contracts and to procure 

goods, works and services; 

(b) Solicitations for goods, works, and 

services must be based upon a clear and 

accurate description of the goods, works 

and services to be acquired; 

(c) Contracts must be awarded only to 

qualified contractors that have the 

capability and willingness to perform 

the contracts in accordance with their 

terms on a cost effective and timely 

basis; and 

(d) No more than a commercially 

reasonable price, as determined, for 

example, by a comparison of price 

quotations and market prices, will be 

paid to procure goods, works and 

services. 

Section 3.7 Records; Accounting; 

Covered Providers; Access 

(a) Government Books and Records. 

The Government will maintain, and will 

use its best efforts to ensure that all 

Covered Providers maintain, accounting 

books, records, documents and other 

evidence relating to the Program 

adequate to show, to MCC’s satisfaction, 

the use of all MCC Funding and the 

implementation and results of the 

Program (‘‘Compact Records’’). In 

addition, the Government will furnish 

or cause to be furnished to MCC, upon 

its request, originals or copies of such 

Compact Records. 

(b) Accounting. The Government will 

maintain and will use its best efforts to 

ensure that all Covered Providers 

maintain Compact Records in 

accordance with generally accepted 

accounting principles prevailing in the 

United States, or at the Government’s 

option and with MCC’s prior written 

approval, other accounting principles, 

such as those (i) prescribed by the 

International Accounting Standards 

Board, or (ii) then prevailing in Malawi. 

Compact Records must be maintained 

for at least five (5) years after the end 

of the Compact Term or for such longer 

period, if any, required to resolve any 

litigation, claims or audit findings or 

any applicable legal requirements. 

(c) Providers and Covered Providers. 

Unless the Parties agree otherwise in 

writing, a ‘‘Provider’’ is (i) any entity of 

the Government that receives or uses 

MCC Funding or any other Program 

Asset in carrying out activities in 

furtherance of this Compact or (ii) any 

third party that receives at least 

U.S.$50,000 in the aggregate of MCC 

Funding (other than as salary or 

compensation as an employee of an 

entity of the Government) during the 

Compact Term. A ‘‘Covered Provider’’ is 

(i) a non-United States Provider that 

receives (other than pursuant to a direct 

contract or agreement with MCC) 

U.S.$300,000 or more of MCC Funding 

in any Government fiscal year or any 

other non-United States person or entity 

that receives, directly or indirectly, 

U.S.$300,000 or more of MCC Funding 

from any Provider in such fiscal year, or 

(ii) any United States Provider that 

receives (other than pursuant to a direct 

contract or agreement with MCC) 

U.S.$500,000 or more of MCC Funding 

in any Government fiscal year or any 

other United States person or entity that 

receives, directly or indirectly, 

U.S.$500,000 or more of MCC Funding 

from any Provider in such fiscal year. 

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(d) Access. Upon MCC’s request, the 

Government, at all reasonable times, 

will permit, or cause to be permitted, 

authorized representatives of MCC, an 

authorized Inspector General of MCC 

(‘‘Inspector General’’), the United States 

Government Accountability Office, any 

auditor responsible for an audit 

contemplated herein or otherwise 

conducted in furtherance of this 

Compact, and any agents or 

representatives engaged by MCC or the 

Government to conduct any assessment, 

review or evaluation of the Program, the 

opportunity to audit, review, evaluate or 

inspect facilities, assets and activities 

funded in whole or in part by MCC 

Funding. 

Section 3.8 Audits; Reviews 

(a) Government Audits. Except as the 

Parties may agree otherwise in writing, 

the Government will, on at least a semiannual basis, conduct, or cause to be 

conducted, financial audits of all 

disbursements of MCC Funding 

covering the period from signing of this 

Compact until the earlier of the 

following December 31 or June 30 and 

covering each six-month period 

thereafter ending December 31 and June 

30, through the end of the Compact 

Term. In addition, upon MCC’s request, 

the Government will ensure that such 

audits are conducted by an independent 

auditor approved by MCC and named 

on the list of local auditors approved by 

the Inspector General or a United 

States–based certified public accounting 

firm selected in accordance with the 

‘‘Guidelines for Financial Audits 

Contracted by MCA’’ (the ‘‘Audit 

Guidelines’’) issued and revised from 

time to time by the Inspector General, 

which are posted on the MCC Web site. 

Audits will be performed in accordance 

with the Audit Guidelines and be 

subject to quality assurance oversight by 

the Inspector General. Each audit must 

be completed and the audit report 

delivered to MCC no later than 90 days 

after the first period to be audited and 

no later than 90 days after each June 30 

and December 31 thereafter, or such 

other period as the Parties may 

otherwise agree in writing. 

(b) Audits of Other Entities. The 

Government will ensure that MCC 

financed agreements between the 

Government or any Provider, on the one 

hand, and (i) a United States nonprofit 

organization, on the other hand, state 

that the United States nonprofit 

organization is subject to the applicable 

audit requirements contained in OMB 

Circular A–133, ‘‘Audits of States, Local 

Governments, and Non-Profit 

Organizations,’’ issued by the United 

States Office of Management and 

Budget; (ii) a United States for-profit 

Covered Provider, on the other hand, 

state that the United States for-profit 

organization is subject to audit by the 

applicable United States Government 

agency, unless the Government and 

MCC agree otherwise in writing; and 

(iii) a non-U.S. Covered Provider, on the 

other hand, state that the non-U.S. 

Covered Provider is subject to audit in 

accordance with the Audit Guidelines. 

(c) Corrective Actions. The 

Government will use its best efforts to 

ensure that each Covered Provider (i) 

takes, where necessary, appropriate and 

timely corrective actions in response to 

audits, (ii) considers whether the results 

of the Covered Provider’s audit 

necessitates adjustment of the 

Government’s records, and (iii) permits 

independent auditors to have access to 

its records and financial statements as 

necessary. 

(d) Audit by MCC. MCC will have the 

right to arrange for audits of the 

Government’s use of MCC Funding. 

(e) Cost of Audits, Reviews or 

Evaluations. MCC Funding may be used 

to fund the costs of any audits, reviews 

or evaluations required under this 

Compact. 

Article 4. Communications 

Section 4.1 Communications 

Any document or communication 

required or submitted by either Party to 

the other under this Compact must be in 

writing and in English. For this purpose, 

the address of each Party is set forth 

below. 

To MCC 

Millennium Challenge Corporation, 

Attention: Vice President, Compact 

Operations, (with a copy to the Vice 

President and General Counsel), 875 

Fifteenth Street, NW., Washington, DC 

20005, United States of America, 

Facsimile: (202) 521–3700, Telephone: 

(202) 521–3600, E-mail: 

VPOperations@mcc.gov (Vice President, 

Compact Operations), 

VPGeneralCounsel@mcc.gov (Vice 

President and General Counsel) 

To the Government 

Ministry of Finance, Attention: 

Minister of Finance, (with copies to the 

(a) Secretary to the Treasury and (b) 

Chief Secretary to the Government), 

Capital Hill, Lilongwe, Malawi, Tel: 

+265–1788030, Fax: +265–1788384, Email: secmof@finance.gov.mw. 

To MCA–Malaw: 

Upon establishment of MCA–Malawi, 

MCA–Malawi will notify the Parties of 

its contact details. 

Section 4.2 Representatives 

For all purposes of this Compact, the 

Government will be represented by the 

individual holding the position of, or 

acting as, Minister of Finance of the 

Republic of Malawi, and MCC will be 

represented by the individual holding 

the position of, or acting as, Vice 

President, Compact Operations (each of 

the foregoing, a ‘‘Principal 

Representative’’). Each Party, by written 

notice to the other Party, may designate 

one or more additional representatives 

(each, an ‘‘Additional Representative’’). 

A Party may change its Principal 

Representative to a new representative 

that holds a position of equal or higher 

authority upon written notice to the 

other Party. 

Section 4.3 Signatures 

Signatures to this Compact and to any 

amendment to this Compact will be 

original signatures appearing on the 

same page or in an exchange of letters 

or diplomatic notes. With respect to all 

documents arising out of this Compact 

(other than the Program Implementation 

Agreement) and amendments thereto, 

signatures may, as appropriate, be 

delivered by facsimile or electronic mail 

and in counterparts and will be binding 

on the Party delivering such signature to 

the same extent as an original signature 

would be. 

Article 5. Termination; Suspension; 

Expiration 

Section 5.1 Termination; Suspension 

(a) Either Party may terminate this 

Compact in its entirety by giving the 

other Party thirty (30) days’ prior 

written notice. 

(b) MCC may, immediately, upon 

written notice to the Government, 

suspend or terminate this Compact or 

MCC Funding, in whole or in part, and 

any obligation related thereto, if MCC 

determines that any circumstance 

identified by MCC, as a basis for 

suspension or termination (whether in 

writing to the Government or by posting 

on the MCC Web site) has occurred, 

which circumstances include but are 

not limited to the following: 

(i) The Government fails to comply 

with its obligations under this Compact 

or any other agreement or arrangement 

entered into by the Government in 

connection with this Compact or the 

Program; 

(ii) An event or series of events has 

occurred that makes it probable that the 

Program Objective or the Project 

Objective will not be achieved during 

the Compact Term or that the 

Government will not be able to perform 

its obligations under this Compact; 

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(iii) A use of MCC Funding or 

continued implementation of this 

Compact or the Program violates 

applicable law or United States 

Government policy, whether now or 

hereafter in effect; 

(iv) The Government or any other 

person or entity receiving MCC Funding 

or using Program Assets is engaged in 

activities that are contrary to the 

national security interests of the United 

States; 

(v) An act has been committed or an 

omission or an event has occurred that 

would render Malawi ineligible to 

receive United States economic 

assistance under Part I of the Foreign 

Assistance Act of 1961, as amended (22 

U.S.C. 2151 et seq.), by reason of the 

application of any provision of such act 

or any other provision of law; 

(vi) The Government has engaged in 

a pattern of actions inconsistent with 

the criteria used to determine the 

eligibility of Malawi for assistance 

under the MCA Act; and 

(vii) The Government or another 

person or entity receiving MCC Funding 

or using Program Assets is found to 

have been convicted of a narcotics 

offense or to have been engaged in drug 

trafficking. 

Section 5.2 Consequences of 

Termination, Suspension or Expiration 

(a) Upon the suspension or 

termination, in whole or in part, of this 

Compact or any MCC Funding, or upon 

the expiration of this Compact, the 

provisions of Section 4.2 of the Program 

Implementation Agreement will govern 

the post-suspension, post-termination or 

post-expiration treatment of MCC 

Funding, any related Disbursements and 

Program Assets. Any portion of this 

Compact, MCC Funding, the Program 

Implementation Agreement or any other 

Supplemental Agreement that is not 

suspended or terminated will remain in 

full force and effect. 

(b) MCC may reinstate any suspended 

or terminated MCC Funding under this 

Compact if MCC determines that the 

Government or other relevant person or 

entity has committed to correct each 

condition for which MCC Funding was 

suspended or terminated. 

Section 5.3 Refunds; Violation 

(a) If any MCC Funding, any interest 

or earnings thereon, or any Program 

Asset is used for any purpose in 

violation of the terms of this Compact, 

then MCC may require the Government 

to repay to MCC in United States Dollars 

the value of the misused MCC Funding, 

interest, earnings, or asset, plus interest 

within thirty (30) days after the 

Government’s receipt of MCC’s request 

for repayment. Interest will accrue from 

the date of the violation and will be 

calculated at the 10-year U.S. Treasury 

Note rate prevailing as of the close of 

business in Washington, DC as of the 

date of MCC’s request for payment. The 

Government will not use MCC Funding, 

proceeds thereof or Program Assets to 

make such payment. 

(b) Notwithstanding any other 

provision in this Compact or any other 

existing agreement to the contrary, 

MCC’s right under Section 5.3(a) for a 

refund will continue during the 

Compact Term and for a period of (i) 

five (5) years thereafter or (ii) one (1) 

year after MCC receives actual 

knowledge of such violation, whichever 

is later. 

Section 5.4 Survival 

This Section 5.4 and the 

Government’s responsibilities under 

Sections 2.7, 3.7, 3.8, 5.2, 5.3, and 6.4 

will survive the expiration, suspension 

or termination of this Compact. 

Article 6. Compact Annexes; 

Amendments; Governing Law 

Section 6.1 Annexes 

Each annex to this Compact 

constitutes an integral part hereof, and 

references to ‘‘Annex’’ mean an annex to 

this Compact unless otherwise expressly 

stated. 

Section 6.2 Amendments 

(a) The Parties may amend this 

Compact only by a written agreement 

signed by the Principal Representatives 

(or such other government official 

designated by the relevant Principal 

Representative). 

(b) Notwithstanding Section 6.2(a), 

the Parties may agree in writing, signed 

by the Principal Representatives (or 

such other government official 

designated by the relevant Principal 

Representative) or any Additional 

Representative, to modify any Annex to 

(i) Suspend, terminate or modify any 

Project or Activity, or to create a new 

project, (ii) change the allocations of 

funds as set forth in Annex II as of the 

date hereof (including to allocate funds 

to a new project), (iii) modify the 

Implementation Framework described 

in Annex I, or (iv) add, delete or waive 

any condition precedent described in 

Annex IV; provided that, in each case, 

any such modification (1) is consistent 

in all material respects with the Program 

Objective and Project Objective, (2) does 

not cause the amount of Program 

Funding to exceed the aggregate amount 

specified in Section 2.1 (as may be 

modified by operation of Section 2.2(d)), 

(3) does not cause the amount of 

Compact Implementation Funding to 

exceed the aggregate amount specified 

in Section 2.2(a), and (4) does not 

extend the Compact Term. 

Section 6.3 Inconsistencies 

In the event of any conflict or 

inconsistency between: 

(a) any Annex and any of Articles 1 

through 7, such Articles 1 through 7, as 

applicable, will prevail; or 

(b) this Compact and any other 

agreement between the Parties regarding 

the Program, this Compact will prevail. 

Section 6.4 Governing Law 

This Compact is an international 

agreement and will be governed by the 

principles of international law. 

Section 6.5 Additional Instruments 

Any reference to activities, obligations 

or rights undertaken or existing under or 

in furtherance of this Compact or 

similar language will include activities, 

obligations and rights undertaken by, or 

existing under or in furtherance of any 

agreement, document or instrument 

related to this Compact and the 

Program. 

Section 6.6 References to MCC Web 

Site 

Any reference in this Compact, the 

PIA or any other agreement entered into 

in connection with this Compact, to a 

document or information available on, 

or notified by posting on the MCC Web 

site will be deemed a reference to such 

document or information as updated or 

substituted on the MCC Web site from 

time to time. 

Section 6.7 References to Laws, 

Regulations, Policies and Guidelines 

Each reference in this Compact, the 

PIA or any other agreement entered into 

in connection with this Compact, to a 

law, regulation, policy, guideline or 

similar document will be construed as 

a reference to such law, regulation, 

policy, guideline or similar document as 

it may, from time to time, be amended, 

revised, replaced, or extended and will 

include any law, regulation, policy, 

guideline or similar document issued 

under or otherwise applicable or related 

to such law, regulation, policy, 

guideline or similar document. 

Section 6.8 MCC Status 

MCC is a United States government 

corporation acting on behalf of the 

United States Government in the 

implementation of this Compact. MCC 

and the United States Government 

assume no liability for any claims or 

loss arising out of activities or omissions 

under this Compact. The Government 

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waives any and all claims against MCC 

or the United States Government or any 

current or former officer or employee of 

MCC or the United States Government 

for all loss, damage, injury, or death 

arising out of activities or omissions 

under this Compact, and agrees that it 

will not bring any claim or legal 

proceeding of any kind against any of 

the above entities or persons for any 

such loss, damage, injury, or death. The 

Government agrees that MCC and the 

United States Government or any 

current or former officer or employee of 

MCC or the United States Government 

will be immune from the jurisdiction of 

all courts and tribunals of Malawi for 

any claim or loss arising out of activities 

or omissions under this Compact. 

Article 7. Entry Into Force 

Section 7.1 International Agreement 

Before this Compact enters into force, 

the Government will proceed in a timely 

manner to complete all of its domestic 

requirements for each of the Compact 

and the Program Implementation 

Agreement to enter into force as an 

international agreement. 

Section 7.2 Conditions Precedent to 

Entry Into Force 

Before this Compact enters into force: 

(a) The Program Implementation 

Agreement must have been signed by 

the parties thereto; 

(b) The Government must have 

delivered to MCC: 

(i) A letter signed and dated by the 

Principal Representative of the 

Government, or such other duly 

authorized representative of the 

Government acceptable to MCC, 

confirming that the Government has 

completed its domestic requirements for 

this Compact to enter into force and that 

the other conditions precedent to entry 

into force in this Section 7.2 have been 

met. 

(ii) A signed legal opinion from the 

Attorney General of Malawi (or such 

other legal representative of the 

Government acceptable to MCC), in 

form and substance satisfactory to MCC; 

and 

(iii) Complete, certified copies of all 

decrees, legislation, regulations or other 

governmental documents relating to the 

Government’s domestic requirements 

for this Compact to enter into force and 

the satisfaction of Section 7.1, if any, 

which MCC may post on its Web site or 

otherwise make publicly available; 

(c) MCC shall not have determined 

that after signature of this Compact, the 

Government has engaged in a pattern of 

actions inconsistent with the eligibility 

criteria for MCC Funding; 

(d) The Government has delivered to 

MCC evidence, satisfactory to MCC, that 

it has fully funded a turnaround facility 

for Electricity Supply Corporation of 

Malawi (‘‘ESCOM’’) to meet ESCOM’s 

working capital and investment capital 

needs for the Government’s Fiscal Year 

2012, as further described in Annex I to 

this Compact (the ‘‘Turnaround 

Facility’’); 

(e) The Government will ensure that 

ESCOM has employed a professionally 

qualified Chief Executive Officer for 

ESCOM; and 

(f) The Government will have 

delivered a schedule for the 

construction of the Kapichira II 

hydropower plant that is acceptable to 

MCC. 

Section 7.3 Date of Entry Into Force 

This Compact will enter into force on 

the date of the letter from MCC to the 

Government in an exchange of letters 

confirming that MCC has completed its 

domestic requirements for entry into 

force of this Compact and that the 

conditions precedent to entry into force 

in Section 7.2 have been met. 

Section 7.4 Compact Term 

This Compact will remain in force for 

five (5) years after its entry into force, 

unless terminated earlier under Section 

5.1 (the ‘‘Compact Term’’). 

Section 7.5 Provisional Application 

Upon signature of this Compact, and 

until this Compact has entered into 

force in accordance with Section 7.3, 

the Parties will provisionally apply the 

terms of this Compact; provided that, no 

MCC Funding, other than Compact 

Implementation Funding, will be made 

available or disbursed before this 

Compact enters into force. 

In Witness Whereof, the undersigned, 

duly authorized by their respective 

governments, have signed this Compact. 

Done at Lilongwe, Malawi, this 7th 

day of April, 2011, in the English 

language only. 

The United States of America, acting 

through the Millennium Challenge 

Corporation, Name: Patrick Fine, Title: 

Vice President, Department of Compact 

Operations. 

The Republic of Malawi, acting 

through the Ministry of Finance, Name: 

Kenny Edward Kandodo, Title: Minister 

of Finance. 

Annex I Program Description 

This Annex I describes the Program 

that MCC Funding will support in 

Malawi during the Compact Term. 

A. Program Overview 

1. Background and Consultative Process 

(a) Background 

Malawi is a landlocked country in 

southeast Africa that gained 

independence in 1964 and has a 

population of approximately 13.8 

million people. Although Malawi has 

seen economic growth average seven 

percent over the last six years, an 

estimated 51 percent of the population 

lives on less than US$1.25 a day, and 

gross national income per capita stands 

at approximately US$880 (purchasing 

power parity (‘‘PPP’’) adjusted). The 

economy remains heavily dependent on 

rain-fed agriculture and primary 

commodity exports, and sustained 

economic growth and development 

require increasing productivity of 

industry, agriculture, and services, as 

well as diversification of the economy. 

Malawi’s economy faces numerous 

challenges, including a power sector 

that is one of the most severely 

constrained in sub-Saharan Africa. The 

economic costs of an unreliable and 

inadequate power supply, as well as the 

costs of inappropriate pricing and high 

technical and non-technical losses, are 

estimated at seven to nine percent of 

GDP. In order to improve the prospects 

for sustained growth, poverty reduction, 

and improved delivery of health and 

education services, the power sector 

must be stabilized and expanded. 

Building on its current efforts to reform 

the power sector, the Government seeks 

to invest in infrastructure, turn around 

its electricity utility—Electricity Supply 

Corporation of Malawi (‘‘ESCOM’’)—and 

develop an enabling legal and regulatory 

environment for investment in the 

sector. The Program is designed to 

support these efforts and assist Malawi 

with the sector’s transformation. 

(b) Consultative Process 

Malawi was deemed eligible for 

Compact assistance in 2007. To 

coordinate the Compact development 

process, the Government formed a core 

team (the ‘‘MCA–Malawi Core Team’’) in 

March 2008 to work with MCC to 

develop the Program. In May 2008, the 

MCA–Malawi Core Team initiated an 

analysis of constraints to economic 

growth in Malawi, in collaboration with 

the World Bank, the U.K. Department 

for International Development and the 

African Development Bank. Pursuant to 

this analysis and an extensive 

consultative process with key 

stakeholders, the power sector was 

identified as a key constraint to 

economic growth in Malawi. 

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2 ‘‘Extremely poor’’ is defined as living on the 

equivalent amount in 2010 of less than US$1.25 per 

day 2005 PPP adjusted dollars, and ‘‘poor’’ is 

defined as living on less than US$2.00 per day 2005 

PPP adjusted dollars. 

2. Goal and Objectives 

The Compact Goal is to reduce 

poverty through economic growth. The 

Program Objective is to increase 

investment and employment income by 

raising the profitability and productivity 

of enterprises, expand access to 

electricity for the Malawian people and 

businesses, and improve delivery of 

social services. The Project Objective is 

to improve the availability, reliability, 

and quality of the power supply by 

increasing the throughput capacity and 

stability of the national electricity grid, 

increase efficiency of hydropower 

generation, and create an enabling 

environment for future expansion by 

strengthening sector institutions and 

enhancing regulation and governance of 

the sector. 

3. Beneficiaries 

By reducing power outages and 

technical losses, enhancing the 

sustainability and efficiency of 

hydropower generation, and increasing 

the potential kilowatt hours (‘‘kWh’’) of 

throughput to electricity consumers, the 

Program will reduce energy costs to 

enterprises and households, improve 

productivity in agriculture, 

manufacturing, and service sectors, and 

support the preservation and creation of 

employment opportunities in the 

economy. The Parties expect the 

Program to result in the following 

benefits and distribution thereof: 

• An estimated 5 million individuals 

will benefit by year 20 after the Compact 

Term through reduced domestic and 

enterprise energy costs, increased 

employment income, and profits; 

• An estimated US$2.4 billion of 

income benefits to Malawi at the present 

discounted rate of 10 percent; 

• An estimated 40 percent of 

beneficiaries are currently extremely 

poor, and 60 percent are poor 2; and 

• Extremely poor individuals will 

gain approximately US$221 of benefits 

in PPP terms, and poor individuals will 

gain an average of US$291 (estimates 

based on recent employment and 

electricity connection patterns, and 

incorporate effects of a modest rise in 

tariffs, to partly finance expanded 

access). 

These estimated income benefits do 

not include the full value of 

improvements to the delivery of health 

and education services of improved 

power supply, but these are likely to be 

important both economically and 

socially. All projected results depend 

upon complementary investments in 

generation capacity, as well as the 

successful implementation of the 

infrastructure investments, the 

sustained turnaround of ESCOM, and 

the realization of power sector reforms. 

B. Power Sector Revitalization Project 

To advance the Program Objective, 

the Parties have designed a project to 

achieve a better-performing power 

sector with improved availability, 

reliability and quality of the power 

supply, increased efficiency of 

hydropower generation, and 

strengthened sector capacity and 

governance (the ‘‘Power Sector 

Revitalization Project’’). Set forth below 

is a description of the Power Sector 

Revitalization Project that the 

Government will implement, or cause to 

be implemented, with support from 

MCC Funding. 

The Power Sector Revitalization 

Project consists of the following 

activities (each an ‘‘Activity’’): 

• Investing in infrastructure 

development, including investment by 

the Government in new generation, and 

MCC Funding for generation and 

increased transmission and distribution 

capacity (‘‘Infrastructure Development 

Activity’’); and 

• Rebuilding ESCOM into a 

financially strong, well-managed utility 

and developing a regulatory 

environment that supports public and 

private investment in new generation 

capacity and expanded access (‘‘Power 

Sector Reform Activity’’). 

1. Infrastructure Development Activity 

The Infrastructure Development 

Activity will rehabilitate, upgrade and 

modernize ESCOM’s generation, 

transmission and distribution assets in 

most urgent need of repair, in order to 

preserve existing generation, improve 

the capability of the transmission 

system, and increase the efficiency and 

sustainability of hydropower generation. 

To facilitate the development and 

implementation of the Program, MCC is 

providing support for the Government’s 

ability to identify and prioritize 

investments in the sector by developing 

an integrated resource plan. MCC 

Funding will support significant 

investments in the power system 

infrastructure to preserve generation 

and stabilize and modernize the 

transmission and distribution network. 

The Infrastructure Development 

Activity is only viable, technically and 

economically, if the Government and 

ESCOM maintain current generation 

assets and expand the generation 

capacity of the power system. Under the 

Infrastructure Development Activity, the 

Government will invest in new 

generation by completing the 

construction of the Kapichira II 

hydropower plant. Additionally, the 

Government will continue to seek to 

attract sustainable investment from the 

private sector and other donors to add 

significant amounts of new generation 

to the system. 

The Parties expect that by the end of 

the Compact Term, the Infrastructure 

Development Activity, together with the 

Government’s commitment to complete 

construction of Kapichira II, will result 

in increases in generation capacity (from 

286 MW to approximately 356 MW), 

network throughput capacity (from 260 

MW to approximately 410 MW) and 

distribution capacity (from 868 MVA to 

approximately 1,078 MVA), and a 

reduction of total system losses from 

20–25 percent to 18 percent. 

(a) Integrated Resource Plan 

To facilitate the development and 

implementation of the Program, MCC is 

supporting the development of the 

Malawi 2020 Integrated Resource Plan 

(‘‘IRP’’) to enhance the Government’s 

efforts to add generation. The objective 

of the IRP is to identify a prioritized list 

of generation resources that can help the 

Government and ESCOM meet the 

increasing demands for power in a 

manner that balances the objective of 

least or low cost power to users and 

diversification of energy sources, and to 

increase the impact of the Project. The 

expected outcome of the IRP is an 

executed plan to target and secure 

increased investments in the power 

system. 

(b) Nkula A Refurbishment Sub-Activity 

MCC Funding will support the 

refurbishment of the Nkula A 

hydropower plant, with the objective to 

improve the availability of power in 

Malawi by reducing outages caused by 

the condition of the assets, and 

maximizing power output from Nkula 

A. The refurbishment will improve the 

reliability of the plant, extend its useful 

life, and thereby avoid a partial or total 

failure of the plant. 

(c) Transmission Network Upgrade SubActivity 

This sub-activity is designed to 

upgrade the backbone of the 

transmission network to: (1) improve 

the quality and reliability of supply in 

the northern, central, and southern 

regions of the country; (2) increase the 

capacity to move power from the south 

where 98 percent of Malawi’s power is 

generated to the central and northern 

regions; (3) reduce technical losses on 

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transmission lines; and (4) provide a 

secure transmission link between the 

southern and central regions. 

MCC Funding will support the 

following investments: 

(i) 220kV high voltage power line (the 

transmission ‘‘backbone’’ of the Malawi 

power system as currently configured) 

from the Nkula B hydropower plant to 

Lilongwe, which covers the southern 

and central regions of Malawi; the 

section of the backbone from Bawi or 

Golomoti, as the case may be, to 

Lilongwe—subject to completion and 

results of a full feasibility study and 

environmental and social impact 

assessments; and 

(ii) 132kV line parallel to existing 

66kV and 33kV lines from Chintheche 

to Luwinga and from Luwinga to 

Bwengu in the northern region. 

(d) Transmission and Distribution 

Upgrade, Expansion, and Rehabilitation 

Sub-Activity. 

This sub-activity includes 

investments in the southern, central, 

and northern power systems of the 

Malawi power network. MCC Funding 

will support the following measures: 

(i) Upgrading (up-rating) of existing 

network connections (33kV, 11kV); 

(ii) Extension of existing substations 

(including 66kV); 

(iii) Up-rating of transformers in 

existing substations; 

(iv) Development of new substations; 

(v) Installation of improved protection 

systems; 

(vi) Provision of new network 

extensions and connections; and 

(vii) Installation of new controls and 

communication systems (SCADA). 

(e) Environment and Natural Resource 

Management (‘‘ENRM’’) Sub-Activity 

The objective of the ENRM subactivity is to help the Government and 

other relevant stakeholders address the 

growing problems of aquatic weed 

infestation and excessive sedimentation 

in the Shire River which cause costly 

disruptions to downstream power plant 

operations. MCC Funding will support 

the following measures: 

(i) Mitigation of the impact of the 

weeds and sedimentation through 

mechanical and biological measures (in 

accordance with international best 

practices), including the purchase and 

use of dredgers and weed-harvesting 

equipment at existing hydropower 

plants and the Liwonde Barrage, and 

expanded use of upstream biological 

control measures; and 

(ii) Development and implementation 

of an Environmental and Natural 

Resource Management Action Plan 

(‘‘ENRMAP’’), acceptable to MCC, that 

enables an improved understanding of 

the environmental, social (including 

gender), and economic factors that cause 

or contribute to weed infestation and 

sedimentation in the Shire River, and 

establishes a set of prioritized 

interventions based on economic, 

institutional, policy, legal, 

environmental and social criteria to 

increase capacity to address these 

factors, in collaboration with other 

donors and stakeholders. 

The Parties expect that the ENRM 

sub-activity will decrease outages and 

increase electricity output at the Nkula, 

Tedzani, and Kapichira hydropower 

plants that are currently affected by 

invasive weeds and excessive 

sedimentation. The ENRM sub-activity 

is also expected to improve land use 

and watershed management practices in 

the Shire River basin to help resolve 

underlying environmental and social 

issues that affect hydropower, 

communities, and other users 

dependent on ecosystem services. 

(f) Public Sector Power Sector 

Preservation and New Generation 

Investments 

An essential part of the Infrastructure 

Development Activity is the addition of 

new generation for the utilization of the 

new and upgraded transmission and 

distribution assets. The economic 

viability of MCC-funded investments is 

contingent on maintaining at least the 

current generation capacity of the power 

system (286 MW) during the Compact 

Term and then expanding it by at least 

64 MW no later than the end of the 

Compact Term. In addition to this new 

generation, the Government expects to 

add significant generation to the system 

in the coming years, and MCC Funding 

will support planning and technical 

assistance through the IRP. 

To achieve the preservation and new 

generation required under the Compact, 

the Government commits to meet 

milestones. Under the preservation 

milestones, the Government commits to 

taking all steps necessary to maintain 

current generation capacity in 

accordance with a plan developed by 

ESCOM in line with industry best 

practices, as acceptable to MCC. If the 

system’s generation capacity falls below 

286 MW, unless caused by the 

temporary shutdown of plants for 

maintenance or rehabilitation or force 

majeure, the Government will use 

commercially reasonable efforts to 

obtain interim replacement output. 

Under the new generation milestones, 

the Government commits to providing a 

construction schedule for the 64 MW 

Kapichira II hydropower plant 

(‘‘Kapichira II’’) prior to entry into force 

and completing construction by the end 

of the Compact Term. The Government 

will provide quarterly updates to MCC 

on the satisfaction of milestones of the 

Kapichira II construction schedule. 

2. Power Sector Reform Activity 

The Power Sector Reform Activity 

complements the Infrastructure 

Development Activity by providing 

support for the Government’s policy 

reform agenda and building capacity in 

pivotal sector institutions: ESCOM, the 

Malawi Energy Regulatory Authority or 

its successor (‘‘MERA’’), and the Ministry 

of Natural Resources Energy and 

Environment (‘‘MNREE’’). The Power 

Sector Reform Activity consists of two 

sub-activities: the ESCOM Turnaround 

sub-activity and the Regulatory 

Strengthening sub-activity. 

(a) ESCOM Turnaround Sub-Activity 

The objectives of this sub-activity are 

to restore ESCOM’s financial health and 

rebuild ESCOM into a financially 

strong, well-managed company. MCC 

Funding will support three main areas 

of the turnaround: finances, corporate 

governance and operations. 

(i) Finances 

MCC Funding will support the 

provision of technical assistance and 

equipment to ESCOM, including: (1) 

Development of a detailed financial 

plan for 2011–2016; (2) deployment of 

a financial turnaround team; (3) 

development of a non-technical loss 

reduction study; (4) assistance in rapid 

billings and collections improvements; 

(5) strengthening of internal controls; (6) 

rebuilding of the customer database; (7) 

pursuit of debt collection; (8) 

development of a new automated 

financial management system; (9) 

assistance with tariff applications to the 

regulator; and (10) assistance with fixed 

asset mapping. 

The Government agrees that a detailed 

financial plan for ESCOM is at the core 

of understanding and resolving the 

current financial challenges of the 

company. With MCC assistance, the 

Government will develop a detailed 

financial plan (the ‘‘Financial Plan’’) 

designed to restore ESCOM to financial 

and operational sustainability. The 

Financial Plan will project the working 

and investment capital needs of ESCOM 

for the 2011–2016 fiscal years, as agreed 

to with MCC. The Financial Plan will be 

based upon key financial inputs, such as 

projected accounts receivables and 

payables, future maintenance and 

capital investment needs, tariff increase 

projections, planned operational 

efficiencies, annual results of operations 

pursuant to audited financial 

statements, and other inputs relevant to 

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21054 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 

obtain sound projections of the budget 

support that the Government will 

provide, if required, through the 

Turnaround Facility. The Financial Plan 

will be updated on a quarterly basis 

with current ESCOM financial 

information, and will be approved by 

ESCOM’s Board of Directors and the 

Government, as shareholder. 

The Government will create and fund 

the ESCOM Turnaround Facility to 

support ESCOM’s working capital and 

investment needs, as identified in the 

Financial Plan, during the Compact 

Term. The Government and MCC will 

identify specific milestones in the 

Malawi budget process and review 

progress leading up to the appropriation 

of funds for the Turnaround Facility. 

The Government will transfer to the 

Turnaround Facility, by the start of each 

ESCOM fiscal year (July–June) the 

required funding for that fiscal year to 

cover the maximum projected shortfall 

for ESCOM in working and investment 

capital under the Financial Plan. The 

Government will apportion this funding 

through the Government budget prior to 

the start of each fiscal year, beginning 

FY2011–2012. The ESCOM Board will 

control the use of funds disbursed from 

the Turnaround Facility. The funding 

and expenditure, if needed, of the 

Turnaround Facility in accordance with 

the Financial Plan will be a condition to 

Disbursement of continued MCC 

Funding. 

The Government has converted a 

substantial portion of the debt owed to 

it by ESCOM into equity. Any remaining 

debt owed to the Government by 

ESCOM will be cleared from ESCOM’s 

balance sheet no later than entry into 

force of the Compact. In addition, the 

Government will ensure that ESCOM 

restructures its third-party debt 

obligations in a manner that affords 

ESCOM a reasonable debt-service 

burden, consistent with the Financial 

Plan. 

(ii) Corporate Governance 

To improve corporate governance and 

support the turnaround, MCC Funding 

will support: (1) Recruitment services 

for key personnel; (2) twinning/ 

mentoring arrangements or management 

contract support; (3) a performance 

management system; and (4) strategic 

planning by the board of directors of 

ESCOM (‘‘ESCOM Board’’). MCC funding 

will provide technical assistance on 

corporate performance standards, 

including a study on best practices and 

benchmarks for corporate governance of 

electric utilities with regional, 

continental and international 

benchmarks and recommendations for 

ESCOM no later than the end of the 

second year of the Compact Term (the 

‘‘Corporate Governance Benchmarking 

Study’’). 

The Government will ensure that 

ESCOM employs a Chief Executive 

Officer (CEO) prior to entry into force of 

this Compact. The individual selected 

for CEO will have at least ten years of 

public utility management experience, 

preferably at the CEO level, and a 

professional qualification in 

engineering, business, or finance. 

The Government recognizes that good 

corporate governance of ESCOM is 

essential for long-term performance of 

the company and commits to improve 

ESCOM’s corporate governance 

framework and practices. The 

Government will ensure that the 

ESCOM Board adheres to clear 

benchmarks for good corporate 

governance, including: (A) compliance 

with the requirements under Malawi’s 

Companies Act, Public Financial 

Management Act, Public Audit Act, and 

the Energy Laws; (B) adherence to 

Malawi Code II, including duties of care 

and loyalty to the corporation and 

restrictions on conflicts of interest and 

related party transactions; (C) following 

the Sector Guidelines for Parastatal 

Organizations (the most recent of the 

draft or final form); and (D) staggering 

of ESCOM Board terms. 

The Government warrants that 

ESCOM has restructured its existing 

ESCOM Board committees to have the 

following three committees: (i) Finance 

and Audit Committee; (ii) Technical 

Committee; and (iii) Appointments and 

Remuneration Committee. The 

Government will ensure that future 

nominations and appointments to the 

ESCOM Board will be done in 

accordance with a framework 

established pursuant to Malawi’s 

Parastatals Reform Programme. 

The Government will ensure that 

ESCOM submits and publishes its 

annual audited financial statements and 

annual reports to the relevant 

authorities, and will publish reports 

similar to those applicable to listed 

companies under Malawi’s Companies 

Act, all of which will be posted on 

ESCOM’s Web site. Quarterly reports 

will be made available to key 

stakeholders, including MCA-Malawi 

and MCC. 

MCC Funding will support an annual 

performance audit of ESCOM 

operations. Prior to each audit, MCC 

and the Government will agree to the 

terms of reference based on standards 

for companies in Malawi, including 

Malawi Code II and the Companies Act. 

The Government will ensure that 

ESCOM takes appropriate corrective 

action to address any material 

weaknesses or recommendations 

identified through the audit. 

To improve ESCOM’s coordination 

with the Government, the Government 

will designate and coordinate all 

interaction with ESCOM through its 

Department of Statutory Corporations or 

a replacement or successor Government 

ministry or agency (‘‘DSC’’). The 

Government will ensure that all 

Government interaction with and 

shareholder oversight of ESCOM will be 

coordinated through DSC. 

(iii) Operations 

MCC Funding will support change 

management efforts, including 

developing organizational design, 

conducting performance management 

reviews, and designing human resources 

strategies. MCC Funding will support 

the procurement division by 

strengthening the internal control 

environment and developing policies 

and procedures to implement best 

practices in procurement. MCC Funding 

will support other operational 

assistance, including live wire repairs, 

asset management, occupational health 

and safety, safety and diagnostic 

equipment, and critical spare parts. 

MCC Funding will also support the 

development of ESCOM’s annual 

maintenance plan. The Government will 

ensure that ESCOM budgets and 

expends the amount set forth in the 

maintenance plan (based on a 

percentage of undepreciated asset value) 

for preventive maintenance of 

generation, transmission and 

distribution assets. 

The GOM affirms that ESCOM will 

adhere to the Public Procurement Act of 

Malawi and the policies and procedures 

of the Government’s Office of the 

Director of Public Procurement 

(‘‘ODPP’’). ESCOM will also take the 

following steps: (1) Strengthen the 

Internal Procurement Committee as an 

effective manager and overseer of 

procurement; (2) develop procurement 

benchmarks and milestones; (3) 

restructure its procurement and stores 

management staff to streamline 

operations; (4) minimize redundancies 

and fill skill gaps; (5) conduct public 

outreach through an information 

campaign; (6) design and agree on a new 

procurement organization structure 

merging procurement and supply; (7) 

secure guidance from ODPP; (8) develop 

a formal process to draft annual 

procurement plans; and (9) review and 

restructure the stores function and 

conduct regular stock checks. 

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(b) Regulatory Strengthening SubActivity 

The Regulatory Strengthening subactivity complements the Infrastructure 

Development Activity and the ESCOM 

Turnaround sub-activity by providing 

support for the Government’s policy 

reform agenda and building capacity in 

pivotal sector institutions, MERA and 

MNREE. The objectives of the 

Regulatory Strengthening Sub-Activity 

are to develop a regulatory environment, 

consistent with best practices in 

independent power utility regulation, 

that support investment in generation 

and grid capacity at an affordable cost, 

with the potential participation of the 

private sector. 

(i) Tariff Reform 

The Government understands that 

appropriate tariff levels are critical to 

ESCOM’s financial recovery and the 

growth of the power sector. MCC 

Funding will support a cost of service 

study to determine appropriate tariff 

levels and schedules to achieve full cost 

recovery, more efficient utilization of 

electricity, and achievement of social 

objectives. Based on the results of this 

study, the Government agrees to a 

phased implementation of full-cost 

recovery tariffs and schedules according 

to a timeline to be determined by entry 

into force of the Compact. Without 

reducing current tariff levels, the phased 

implementation will ensure an 

incremental increase in the scope of 

tariff levels and schedules, that will 

begin with a tariff that permits recovery 

of operating costs, thereafter recovery of 

operating costs plus capital replacement 

charges, and by the end of the Compact 

Term recovery of capital replacement 

costs, capital replacement charges and 

capital expansion charges. This full-cost 

recovery tariff should include recovery 

of operating expenses, financing costs 

actually incurred by ESCOM, capital 

replacement charges and capital 

expansion charges so that tariffs reflect 

ESCOM’s long-run marginal costs. The 

Government will also seek to ensure 

adequate protection of poor and 

vulnerable groups through a lifeline 

tariff or other mechanism in a manner 

which is consistent with average total 

cost recovery and efficient utilization of 

electricity. 

The Government will adopt the 

policy, legal and regulatory changes 

necessary to implement tariff reform, 

including: (1) rationalizing the five 

percent inflation fluctuation trigger and 

the four-year interval for review of base 

tariffs and tariff adjustment formula, so 

that tariffs may be adjusted on a basis 

that supports the viability of licensees; 

and (2) improving the components and 

definitions for the tariff adjustment 

components (collectively, the ‘‘Tariff 

Indexation Framework’’). 

(ii) MERA Capacity Building 

MCC Funding will support capacity 

building at MERA to improve its 

regulatory oversight activities and 

operations. This work will include the 

development and implementation of 

training and mentoring of MERA staff, 

and complementary activities designed 

to develop MERA. MCC Funding will 

also assist MERA to develop peer 

relationships with other regulatory 

bodies or related organizations. 

MCC Funding will be used to 

complete a study to support the 

Government’s commitment to further 

develop independent and capable 

governance of MERA. This study will be 

completed by the end of the second year 

of the Compact Term. The study will 

focus on best practices and benchmarks 

for corporate governance for electricity 

regulators, including regional, 

continental and international 

benchmarks and recommendations for 

the future governance of MERA (the 

‘‘Sector Benchmarking Study’’). 

The Government will ensure that 

MERA develops new technical codes for 

transmission, distribution and metering 

to account for captive, cogeneration and 

other forms of generation. MERA will 

also develop new ‘‘use of system’’ 

charging mechanisms, implement the 

design for a bilateral market, and 

develop codes to implement existing 

legal provisions on third-party access to 

the transmission network. MCC Funding 

will support these activities through 

technical assistance. 

The Government will consider 

changing the composition of the board 

of directors of MERA (‘‘MERA Board’’), 

to make the MERA Board and its 

governance procedures consistent with 

best practices for independent 

regulatory authorities in the region and 

internationally. Specifically, the 

Government will review the continued 

membership of ex officio directors and 

the appropriateness of crossrepresentation on power sector boards 

and potential conflicts of interest that 

may arise between the regulator and 

regulated entities through board 

membership, such as the presence of the 

Principal Secretary for Energy Affairs 

and the Director of Energy Affairs on the 

MERA Board. To the extent that 

Government ex officio members 

continue on the ESCOM and MERA 

Boards, the Government affirms its 

commitment to ensuring that the 

ESCOM and MERA Boards meet 

standards applicable to Malawi 

parastatals with respect to conflicts of 

interest and independent decisionmaking, that the ex officio directors on 

the MERA Board will continue to be 

non-voting members, and that 

regulatory rulings are transparent. 

The Government will ensure that the 

scope of MERA’s power sector 

responsibilities is limited to regulation 

and policy implementation, and not for 

policy development or the solicitation 

of new generation. 

In recognition of another key 

indicator of their progress developing a 

model regulatory institution, the 

Government and MERA confirm that 

levies and other charges applicable 

under the Energy Laws are, and have 

been, sufficient to cover MERA’s 

operating expenses. The Government 

will ensure that MERA will publish an 

annual report including audited 

financial statements, as required under 

the Energy Regulation Act. MCC 

Funding will be used to support MERA 

in its development, including 

development of an annual report. 

(iii) Enabling Environment for Public 

and Private Sector Investment 

MCC Funding will support the 

Government’s efforts to implement a 

suitable market model based on the 

studies performed in connection with 

the development of this Compact. MCC 

Funding will support MNREE’s efforts 

to study and design (1) a single buyer 

model for the power sector (‘‘SBM 

Plan’’); and (2) the building blocks of a 

bilateral power trade market. MCC 

Funding will also assist with 

stakeholder education and outreach to 

support consumer organizations, 

industrial and commercial users, and 

other key players in advocating for 

improved service. In addition, MCC will 

seek to work with Parliament to 

strengthen its role in oversight of the 

power sector. 

Based on the SBM Plan, the 

Government will create a single buyer, 

either ring-fenced within ESCOM, or a 

separate legal entity so that the single 

buyer’s financial and system operation 

activities are autonomous from other 

ESCOM business units or government 

entities. Also, the Government will 

provide support to improve the credit 

worthiness of this single buyer. The 

Government will not unbundle ESCOM, 

except as otherwise provided herein, 

and shall not make effective the 

provisions in Section 4 and Parts IV and 

V of the Electricity Act that limit 

licensees to one license. 

The Government will also clarify the 

Rural Electrification Act (the ‘‘REA’’) so 

that entities that pursue rural 

electrification activities without 

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21056 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 

receiving funding from the Rural 

Electrification Fund are not subject to 

the REA’s internal rate of return and 

megawatt size restrictions. The 

Government will also revise its National 

Energy Policy to allow charging of 

differential tariffs for off-grid 

electrification. 

(c) Power Sector Reform Agenda SemiAnnual Review 

The Government and MCC will jointly 

supervise, through specific milestones, 

progress on the implementation of the 

Government’s power sector reform 

agenda in the following areas: ESCOM 

finances; ESCOM operations; ESCOM 

corporate governance; tariff reform; 

MERA governance; and regulatory 

enabling environment for public and 

private sector participation (collectively, 

the ‘‘Power Sector Reform Agenda’’). The 

Government and MCC have specified 

the milestones below, for which new 

capitalized terms are further defined in 

Annex III. Prior to entry into force of the 

Compact, the Parties will identify semiannual benchmarks for each milestone. 

The parties will conduct a semi-annual 

review of progress on the Power Sector 

Reform Agenda. Corrective action, 

acceptable to MCC, as needed to ensure 

satisfactory progress, will be a condition 

of continued MCC Funding. 

(i) ESCOM Finances 

The financial health of ESCOM will 

be tracked by setting and maintaining 

the following financial ratios and 

covenants: 

(1) Cost Recovery Ratio; 

(2) Current Ratio supported by cash 

flow statements; 

(3) Bad Debt Ratio; 

(4) Average Cost of Electricity Billed; 

and 

(5) ESCOM Billing and Collection 

Efficiency. 

(ii) ESCOM Operations 

Improvements in the operations of 

ESCOM will be measured by the 

following areas: 

(1) Quantity of Electricity Metered; 

(2) Quantity of Electricity Billed; 

(3) Reduction in Losses; 

(4) Voltage Quality; 

(5) Maintenance Expenditures; 

(6) Reduced Outages; and 

(7) Annual Procurement Audit. 

(iii) ESCOM Corporate Governance 

ESCOM corporate governance will be 

measured by ESCOM’s performance on: 

(1) Corporate Governance 

Benchmarking Study; 

(2) Annual performance audit reports; 

and 

(3) Public annual report and audited 

financial statements. 

(iv) Tariff Reform 

Progress on tariff reform will be 

phased and measured by: 

(1) Cost of service study; 

(2) Tariff levels and schedules; 

(3) Tariff Indexation Framework; and 

(4) Tariff design efficiency, including, 

a lifeline tariff. 

(v) MERA Governance 

Improvements in MERA’s governance 

and capacity will be tracked by: 

(1) Sector Benchmarking Study; 

(2) Peer review; and 

(3) Public annual report and audited 

financial statements. 

(vi) Improved Market Structure for 

Private Investment 

Key milestones in the establishment 

of an enabling environment will be: 

(1) Single-buyer model formed; and 

(2) Legal framework for strengthened 

electricity market. 

3. Environmental and Social Safeguards 

The Project will be implemented in 

compliance with the MCC 

Environmental Guidelines and the MCC 

Gender Policy, and any resettlement 

will be carried out in accordance with 

the World Bank’s Operational Policy on 

Involuntary Resettlement in effect as of 

July 2007 (‘‘OP 4.12’’) in a manner 

acceptable to MCC. The Government 

also will ensure that the Project 

complies with all national 

environmental laws and regulations, 

licenses and permits, and applicable 

international conventions and treaties, 

except to the extent such compliance 

would be inconsistent with this 

Compact. Specifically, the Government 

will: (a) Cooperate with or complete, as 

the case may be, any ongoing 

environmental assessments, or if 

necessary undertake and complete any 

additional environmental assessments, 

social assessments, environmental 

management plans, environmental and 

social audits, resettlement policy 

frameworks, and resettlement action 

plans required under the laws of 

Malawi, the MCC Environmental 

Guidelines, this Compact, the Program 

Implementation Agreement, or any 

Supplemental Agreement, or as 

otherwise required by MCC, each in 

form and substance satisfactory to MCC; 

(b) ensure that Project-specific 

environmental and social management 

plans are developed and all relevant 

measures contained in such plans are 

integrated into project design, the 

applicable procurement documents and 

associated finalized contracts, in each 

case, in form and substance satisfactory 

to MCC; and (c) implement to MCC’s 

satisfaction appropriate environmental 

and social mitigation measures 

identified in such assessments or plans. 

Unless MCC agrees otherwise in writing, 

the Government will fund all necessary 

costs of environmental and social 

mitigation measures (including, without 

limitation, costs of resettlement) not 

specifically provided for or that exceed 

the MCC Funding specifically allocated 

for such costs in the Detailed Financial 

Plan for the Project. 

To maximize the positive social 

impacts of the Project, address crosscutting social and gender issues such as 

human trafficking, child and forced 

labor, and HIV/AIDS, and ensure 

compliance with the MCC Gender 

Policy, and to the extent that such does 

not conflict with MCC’s Gender Policy, 

the Malawi National Gender Policy as 

ultimately adopted by the Government, 

the Government will: (i) Develop a 

comprehensive social and gender 

integration plan which, at a minimum, 

performs a gender, institutional and 

policy review relevant to the Compact 

Project, identifies approaches for 

regular, meaningful and inclusive 

consultations with women and other 

vulnerable/underrepresented groups, 

consolidates the findings and 

recommendations of Project-specific 

social and gender analyses and conducts 

additional gender analysis as needed, 

and sets forth strategies for 

incorporating findings of the social and 

gender analyses into final Project 

designs and additional targeted 

activities as appropriate (‘‘Social and 

Gender Integration Plan’’); (ii) ensure, 

through monitoring and coordination 

during implementation, that final 

Activity designs, construction tender 

documents and implementation plans 

are consistent with and incorporate the 

outcomes of the social and gender 

analyses and Social and Gender 

Integration Plan; and (iii) on an annual 

basis, review and update the Social and 

Gender Integration Plan as needed to 

reflect lessons learned and projectspecific analysis. 

During the development of the 

Compact, MCC and the Government 

assessed and identified the potential 

environmental and social impacts and 

risks of the Activities. Under the 

definitions articulated in MCC’s 

Environmental Guidelines, (1) the 

Infrastructure Development Activity is 

classified as a Category A project; (2) the 

Power Sector Reform Activity is a 

Category C project; and (3) the ENRM 

sub-activity is categorized as a Category 

B project. In addition to environmental 

risks, MCC has also identified certain 

social and gender-related and 

resettlement risks from the Activities. 

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Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 21057 

Several measures have been taken to 

mitigate the risks associated with these 

Activities. Environmental and Social 

Impact Assessments (‘‘ESIAs’’) have been 

developed for the Infrastructure 

Development Activity, and additional 

environmental and social (including 

gender) analysis and mitigation 

planning will be carried out for certain 

activities of the Infrastructure 

Development Activity and the ENRM 

sub-activity. MCC will require 

appropriate storage and disposal, 

possibly outside of Malawi, of oilcontaminated soils, PCB-contaminated 

oils, soils and equipment, and other 

hazardous waste associated with 

implementation of the Infrastructure 

Development Activity. MCC Funding 

will be used to design and implement a 

hazardous waste management plan 

under the Infrastructure Development 

Activity. MCC will also require, and 

MCC Funding will support, measures to 

ensure appropriate disposal of weeds 

and sediment extracted from dredging 

and weed harvesting operations at the 

hydropower plants. The Government 

has identified potential sites for the 

disposal of weeds and sediment 

associated with implementation of the 

ENRM sub-activity and will require 

appropriate development and 

management of such sites. 

To address resettlement risks, a 

Resettlement Policy Framework has 

been prepared to specify how 

resettlement planning and 

implementation will proceed in 

connection with the Compact Activities. 

This resettlement framework will 

attempt to minimize loss of land and 

immovable assets, and avoid physical 

displacement of residential and other 

structures. In the event an Activity 

triggers involuntary resettlement, MCC 

Funding will support the development 

of a resettlement action plan by MCAMalawi in consultation with relevant 

Government entities, and such 

resettlement action plan will be 

submitted for approval to MCC. 

The Compact will fund additional 

analysis of social and gender-related 

implications of the Activities. This 

analysis will build upon preliminary 

work conducted during Compact design 

to ensure that the Activities are 

implemented so as to address and 

integrate the needs of vulnerable groups, 

in adherence with MCC’s Gender Policy. 

4. Donor Coordination 

MCC and the MCA-Malawi Core Team 

have sought development partners with 

complementary expertise on energy 

issues and whose further involvement 

could help ensure sustainability of the 

Compact. During Compact development, 

MCC’s review of feasible investments 

identified approximately $200 million 

more in beneficial projects than 

currently feasible under the Compact. 

Given MCC’s inability to finance these 

otherwise important investments, MCC 

has discussed with the World Bank and 

the African Development Bank—the 

other key donors supporting the power 

sector in Malawi—the possibility of 

partnering to support a comprehensive 

power sector reform program. This 

reform program could also include 

sector institutional strengthening 

activities such as capacity building and 

technical assistance for the MNREE’s 

Department of Energy. 

MCC has also been in discussions 

with the International Finance 

Corporation (IFC) regarding creating an 

appropriate enabling environment for 

private sector and IFC investment. IFC 

recently funded a study that identified 

barriers to private sector investment in 

energy efficiency and renewable energy 

opportunities and scoped potential IFC 

investments. IFC’s report identifies a 

critical need for technical assistance for 

the Government to establish an enabling 

environment in order to facilitate these 

energy efficiency and renewable energy 

opportunities. As of November 2010, 

MCC is considering incorporating the 

IFC’s recommendations in the policy, 

regulatory and legal framework 

strengthening activity currently 

supported under the Compact. 

5. USAID 

While USAID does not currently play 

an active role in implementing this 

Compact, MCC is seeking USAID 

involvement to provide technical 

assistance for the power sector. MCC is 

investigating whether USAID’s Africa 

Infrastructure Program (AIP) could 

potentially provide technical assistance 

to the Government of Malawi to assist 

them with structuring agreements with 

independent power producers and 

capacity building for MERA. In 

addition, MCC will coordinate its 

outreach initiatives with the Malawi 

parliament, media and civil society 

under the Regulatory Strengthening subactivity with USAID’s complementary 

governance and accountability 

initiatives under its Malawi Legislative 

Strengthening program. 

6. Sustainability 

The Compact includes several 

measures to ensure sustainability of 

MCC’s investment. As designed, both 

the Power Sector Reform Activity and 

the ENRM sub-activity are targeted to 

ensure sustainability of the 

Infrastructure Development Activity. In 

addition, the Infrastructure 

Development Activity includes certain 

sustainability safeguards such as 

requiring a certain percentage of asset 

value to be set aside for preventative 

maintenance. 

Substantial progress on the Power 

Sector Reform Activity is essential to 

the magnitude and sustainability of the 

Compact investments in physical 

infrastructure, and to the sustained 

economic growth of Malawi. The Power 

Sector Reform Activity also addresses 

key structural issues in the power sector 

including tariff reform, creating an 

environment capable of attracting 

private sector investment, and ensuring 

the creation of a strong and independent 

energy sector regulator. These reform 

activities are structured both as 

covenants in the Compact and 

conditions to entry into force of the 

Compact, or will become conditions to 

disbursement in the Program 

Implementation Agreement. Due to the 

weed and sedimentation problems 

plaguing Malawi’s almost entirely 

hydropower-based generation facilities, 

the ENRM sub-activity will also provide 

necessary steps to ensure sustainability 

of the Compact. 

In addition to the sustainability 

benefits inherent in the project design of 

the Power Sector Reform Activity and 

the ENRMAP, the sustainability of the 

Infrastructure Development Activity 

will also heavily depend on a robust 

maintenance regime for generation, 

transmission and distribution assets. As 

part of the Infrastructure Development 

Activity, MCC will require a certain 

percentage of its asset value be set aside 

for preventative maintenance of its MCC 

funded as well as other assets. 

C. Implementation Framework 

1. Overview 

The implementation framework and 

the plan for ensuring adequate 

governance, oversight, management, 

monitoring and evaluation, and fiscal 

accountability for the use of MCC 

Funding are summarized below. MCC 

and the Government will enter into the 

Program Implementation Agreement, 

and any other agreements in furtherance 

of this Compact, all of which, together 

with this Compact, set out certain rights, 

responsibilities, duties and other terms 

relating to the implementation of the 

Program. 

2. MCC 

MCC will take all appropriate actions 

to carry out its responsibilities in 

connection with this Compact and the 

Program Implementation Agreement, 

including the exercise of its approval 

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21058 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 

rights in connection with the 

implementation of the Program. 

3. MCA-Malawi 

In accordance with Section 3.2(b) of 

this Compact, MCA-Malawi will act on 

the Government’s behalf to implement 

the Program and to exercise and perform 

the Government’s rights and 

responsibilities with respect to the 

oversight, management, monitoring and 

evaluation, and implementation of the 

Program, including, without limitation, 

managing the implementation of 

Projects and their Activities, allocating 

resources, and managing procurements. 

The Government will ensure that MCAMalawi takes all appropriate actions to 

implement the Program, including the 

exercise and performance of the rights 

and responsibilities designated to it by 

the Government pursuant to this 

Compact and the Program 

Implementation Agreement. Without 

limiting the foregoing, the Government 

will also ensure that MCA-Malawi has 

full decision-making autonomy, 

including, inter alia, the ability, without 

consultation with, or the consent or 

approval of, any other party, to: (1) 

Enter into contracts in its own name; (2) 

sue and be sued; (3) establish Permitted 

Accounts in a financial institution in 

the name of MCA-Malawi and hold 

MCC Funding in such accounts; (4) 

expend MCC Funding; (5) engage a 

fiscal agent who will act on behalf of 

MCA-Malawi on terms acceptable to 

MCC; (6) engage one or more 

procurement agents who will act on 

behalf of MCA-Malawi, on terms 

acceptable to MCC, to manage the 

acquisition of the goods, works, and 

services required by MCA-Malawi to 

implement this Compact; and (7) 

competitively engage one or more 

auditors to conduct audits of its 

accounts. The Government will take the 

necessary actions to establish and 

maintain MCA-Malawi, in accordance 

with the terms hereof including the 

applicable conditions precedent to the 

Disbursement of Compact 

Implementation Funding set forth in 

Annex IV to this Compact. MCA-Malawi 

will be administered and managed by a 

Board of Trustees and a Management 

Unit. In addition, MCA-Malawi will 

have a Stakeholders’ Committee to 

continue the consultative process 

during implementation of the Program. 

MCA-Malawi will be incorporated 

through a trust deed under Malawi’s 

Trustees Incorporation Act, which trust 

deed will be included in the Program 

Implementation Agreement (hereinafter 

referred to as the ‘‘MCA-Malawi Trust 

Deed’’), which will, collectively, set 

forth the responsibilities of the Board of 

Trustees, the Stakeholders’ Committee 

and the Management Unit. The MCAMalawi Trust Deed will be developed 

and adopted in accordance with MCC’s 

Guidelines for Accountable Entities and 

Implementation Structures, published 

on the MCC Web site (the ‘‘Governance 

Guidelines’’), and will be in form and 

substance satisfactory to MCC. MCAMalawi on behalf of the Government 

will administer the MCC Funding. 

(a) Board of Trustees 

(i) Composition. MCA-Malawi will be 

governed by a board of trustees (the 

‘‘Board of Trustees’’), which will consist 

of voting members representing the 

Government, private sector, and civil 

society groups, as well as a non-voting 

representative of MCC as an observer. 

The appointment of the trustees will be 

articulated in the MCA-Malawi Trust 

Deed and will adhere to MCC’s 

Governance Guidelines. Subject to 

further discussion, members 

representing the Government will 

include the Secretary of the Treasury, 

the Principal Secretary for Natural 

Resources Energy and Environment, and 

the Principal Secretary for Development 

Planning and Cooperation. Nongovernment members will be nominated 

by key private sector and civil society 

groups rather than by the Government, 

and may include but shall not be 

limited to the Council for NonGovernmental Organizations in Malawi 

(CONGOMA), the Economics 

Associations of Malawi (ECAMA), and 

the Malawi Confederated Chambers of 

Commerce and Industry (MCCCI). There 

will be a minimum of seven trustees, 

and a maximum of nine trustees. The 

composition of the Board of Trustees 

will comply with the Governance 

Guidelines, to MCC’s satisfaction. 

(ii) Roles and Responsibilities. The 

Board of Trustees will be responsible for 

overseeing the implementation of the 

Program and will have final decisionmaking authority and responsibility 

over the implementation of the Program. 

The Board of Trustees will meet 

regularly; the frequency of meetings will 

be set forth in the MCA-Malawi Trust 

Deed and will be in accordance with the 

Governance Guidelines. The specific 

roles of the voting members and nonvoting observers will be set forth in the 

MCA-Malawi Trust Deed. The 

chairperson of the Board of Trustees 

will be selected by a majority vote of the 

Trustees. On at least an annual basis or 

as otherwise required by the 

Government, the Board of Trustees will 

report to the Government on the status 

and progress of the Compact regarding 

implementation, financial matters, 

procurements, and other matters 

identified by the Government. 

(b) Stakeholders’ Committee 

(i) Composition. A Stakeholders’ 

Committee will be selected according to 

a process in accordance with the MCC’s 

Governance Guidelines and the MCAMalawi Trust Deed, as approved by 

MCC. Without limiting the foregoing, as 

required in MCC’s Governance 

Guidelines, the Stakeholders’ 

Committee will be composed of inter 

alia, representatives from nongovernmental organizations, civil 

society, private sector, and local and 

regional government Program 

beneficiaries. 

(ii) Roles and Responsibilities. 

Consistent with the Governance 

Guidelines, the Stakeholders’ 

Committee will be responsible for 

continuing the consultative process 

throughout implementation of the 

Program. While the Stakeholders’ 

Committee will not have any decisionmaking authority, it will be responsible 

for, inter alia, reviewing, at the request 

of the Board of Trustees or the 

Management Unit, certain reports, 

agreements, and documents related to 

the implementation of the Program in 

order to provide advice and input to 

MCA-Malawi regarding the 

implementation of the Program. 

(c) Management Unit 

(i) Composition. The management 

unit, which will be led by a 

competitively selected Chief Executive 

Officer, will be composed of 

competitively selected staff with 

expertise in the key components of the 

Program, including, without limitation, 

a Deputy Chief Executive Officer, Legal 

Advisor, Human Resources Officer, 

Power Director, Communications and 

Outreach Director, Finance and 

Administration Director, ESA Director, 

Deputy Director for Social and Gender 

Issues, Procurement Director, Policy 

Specialist, M&E and Economics 

Director, and MIS Specialist (the 

‘‘Management Unit’’). The Management 

Unit will also include such other 

personnel as provided for in the MCAMalawi Trust Deed. The directors will 

be supported by appropriate additional 

staff to enable the Management Unit to 

execute its roles and responsibilities. 

(ii) Roles and Responsibilities. The 

Management Unit will be based in 

Lilongwe, Malawi, and will be 

responsible for day-to-day 

implementation of the Compact, with 

oversight from the Board of Trustees. 

The Management Unit will serve as the 

principal link between MCC and the 

Government, and will be accountable 

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Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 21059 

for the successful implementation of the 

Program, the Project, and each Activity. 

As a recipient of MCC Funding, MCAMalawi will be subject to MCC audit 

requirements. 

4. Implementation Arrangements 

Subject to the terms and conditions of 

this Compact and any related 

agreements entered into in connection 

with this Compact, MCC and the 

Government have identified certain 

institutions, including ESCOM, MERA 

and MNREE, that may receive technical 

assistance or other support under this 

Compact, and that, together with MCAMalawi, will have key roles in the 

implementation of the Project and the 

Activities (each, a ‘‘Project Partner’’). 

The Government will ensure that the 

roles and responsibilities of each Project 

Partner will be clearly articulated in an 

agreement between MCA-Malawi and 

the Project Partner, which agreement 

must be in form and substance 

satisfactory to MCC (each a ‘‘Project 

Cooperation Agreement’’). 

The Government will ensure that 

ESCOM, as a Project Partner, will do the 

following in support of the Project: (a) 

Provide access to its facilities and 

cooperate with MCA-Malawi, and its 

consultants (including the PMC as 

defined below); (b) dedicate key staff to 

the Project, including engineers, 

environmental, social and gender 

specialists, and monitoring and 

evaluation personnel; (c) bear any 

transportation costs and per diems and 

incidental expenses for any of its 

personnel who travel in connection 

with the Project; and (d) provide 

administrative and technical support 

and use of appropriate office space and 

facilities. 

MCA-Malawi will contract a project 

management consultant (‘‘PMC’’) to 

manage and supervise the 

implementation of the infrastructure 

portions of the Infrastructure 

Development Activity and will assist 

MCA-Malawi with technical evaluations 

and contract negotiations. The Project 

Cooperation Agreement between MCAMalawi and ESCOM will set forth the 

roles and responsibilities of each entity 

and any coordinating mechanisms to 

ensure that the PMC is able to 

successfully carry out its mandate. The 

PMC will also provide technical 

assistance to ESCOM with respect to 

project management. 

5. Fiscal Agent 

Unless MCC otherwise agrees in 

writing, the Government, directly or 

through MCA-Malawi, will engage one 

or more fiscal agents (each a ‘‘Fiscal 

Agent’’), who will be responsible for 

assisting the Government with fiscal 

management and ensuring appropriate 

fiscal accountability of MCC Funding. 

Duties of the Fiscal Agent will be set 

forth in the Program Implementation 

Agreement and in such agreement as the 

Government, directly or indirectly 

through MCA-Malawi, enters into with 

each Fiscal Agent, which agreement 

shall be in form and substance 

satisfactory to MCC. 

6. Procurement Agent 

Unless MCC otherwise agrees in 

writing, the Government, directly or 

through MCA-Malawi, will engage one 

or more procurement agents (each as 

‘‘Procurement Agent’’) to conduct and 

certify specified procurement activities 

in furtherance of the Compact. The roles 

and responsibilities of the Procurement 

Agent will be clearly articulated in the 

Program Implementation Agreement 

and in such agreement as the 

Government, directly or indirectly 

through MCA-Malawi, enters into with 

each Procurement Agent, which 

agreement shall be in form and 

substance satisfactory to MCC. Each 

Procurement Agent will adhere to the 

standards set forth in the MCC Program 

Procurement Guidelines and ensure that 

procurements are consistent with the 

procurement plan adopted by MCAMalawi pursuant to the Program 

Implementation Agreement, unless MCC 

otherwise agrees in writing. 

Annex II Multi-Year Financial Plan 

Summary 

This Annex II summarizes the MultiYear Financial Plan for the Program. 

1. General 

A multi-year financial plan summary 

(‘‘Multi-Year Financial Plan Summary’’) 

is attached hereto as Exhibit A. By such 

time as specified in the PIA, the 

Government will adopt, subject to MCC 

approval, a multi-year financial plan 

that includes, in addition to the multiyear summary of estimated MCC 

Funding and the Government’s 

contribution of funds and resources, the 

annual and quarterly funding 

requirements for the Program (including 

administrative costs) and for the Project, 

projected both on a commitment and 

cash requirement basis. 

EXHIBIT A—MULTI-YEAR FINANCIAL PLAN SUMMARY

Component CIF Year 1 Year 2 Year 3 Year 4 Year 5 Total 

1. POWER SECTOR REVITALIZATION PROJECT 

(a) Infrastructure Development Activity 2,978,000 12,134,000 80,191,000 80,715,000 64,344,000 42,638,000 283,000,000 

(i) Nkula A Refurbishment Sub-Activity .................... .................... 4,436,000 7,762,000 7,762,000 2,218,000 22,178,000 

(ii) Transmission Network Upgrade 

Sub-Activity ....................................... 1,712,000 6,843,000 48,862,000 45,151,000 35,280,000 25,531,000 163,379,000 

(iii) T&D Upgrade, Expansion, and Rehabilitation Sub-Activity .................... 740,000 2,590,000 19,090,000 19,675,000 15,377,000 11,086,000 68,558,000 

(iv) Environment and Natural Resource Management Sub-Activity .... 526,000 1,588,000 6,133,000 7,910,000 5,925,000 3,803,000 25,885,000 

(v) Resettlement: Action Plan Development and Implementation ................. .................... 1,113,000 1,670,000 217,000 .................... .................... 3,000,000 

(b) Power Sector Reform Activity ........ 3,352,000 4,470,000 4,469,000 4,470,000 4,469,000 4,470,000 25,700,000 

SUBTOTAL ................................... 6,330,000 16,604,000 84,660,000 85,185,000 68,813,000 47,108,000 308,700,000 

2. CROSS–CUTTING SUPPORT 

(a) Gender Integration ......................... 260,000 348,000 348,000 348,000 348,000 348,000 2,000,000 

(b) Monitoring and Evaluation .............. 387,000 2,259,000 1,073,000 1,073,000 858,000 1,350,000 7,000,000 

SUBTOTAL ................................... 647,000 2,607,000 1,421,000 1,421,000 1,206,000 1,698,000 9,000,000 

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3Poverty rates cited above are based on MCAMalawi Core Team projections using poverty line of 

US$1.00 a day. Annex I defines poverty line as 

US$1.25 a day. 

EXHIBIT A—MULTI-YEAR FINANCIAL PLAN SUMMARY—Continued 

Component CIF Year 1 Year 2 Year 3 Year 4 Year 5 Total 

3. PROGRAM ADMINISTRATION 

(a) MCA–Malawi Administration .......... 2,143,000 3,607,000 3,602,000 3,899,000 3,940,000 4,076,000 21,267,000 

(b) Financial Management and Procurement Controls ............................ .................... 2,060,000 2,122,000 2,185,000 2,251,000 2,319,000 10,937,000 

(c) Financial Audits .............................. .................... 150,000 155,000 159,000 164,000 168,000 796,000 

SUBTOTAL ................................... 2,143,000 5,817,000 5,879,000 6,243,000 6,355,000 6,563,000 33,000,000 

TOTAL COMPACT BUDGET 9,120,000 25,028,000 91,960,000 92,849,000 76,374,000 55,369,000 350,700,000 

Annex III Description of Monitoring 

and Evaluation Plan 

This Annex III (this ‘‘M&E Annex’’) 

generally describes the components of 

the Monitoring and Evaluation Plan 

(‘‘M&E Plan’’) for the Program. The 

actual content and form of the M&E Plan 

will be agreed to by MCC and the 

Government in accordance with MCC’s 

Policy for Monitoring and Evaluation of 

Compacts and Threshold Programs as 

posted from time to time on the MCC 

Web site (the ‘‘MCC Policy for 

Monitoring and Evaluation of Compacts 

and Threshold Programs’’). The M&E 

Plan may be modified as outlined in 

MCC’s Policy for Monitoring and 

Evaluation of Compacts and Threshold 

Programs with MCC approval without 

requiring an amendment to this Annex 

III. 

1. Overview 

MCC and the Government will 

formulate and agree to, and the 

Government will implement or cause to 

be implemented, an M&E Plan that 

specifies: (a) How progress toward the 

Compact Goal, Program Objective and 

Project Objective will be monitored 

(‘‘Monitoring Component’’); (b) a process 

and timeline for the monitoring of 

planned, ongoing, or completed 

Activities to determine their efficiency 

and effectiveness; and (c) a methodology 

for assessment and rigorous evaluation 

of the outcomes and impact of the 

Program (‘‘Evaluation Component’’). 

Information regarding the Program’s 

performance, including the M&E Plan, 

and any amendments or modifications 

thereto, as well as progress and other 

reports, will be made publicly available 

on the Web site of MCC, MCA-Malawi 

and elsewhere. 

2. Program Logic 

The M&E Plan will be built on a logic 

model which illustrates how the 

Program, Project and Activities 

contribute to the Compact Goal, the 

Program Objective and the Project 

Objective. 

The goal of the Compact is to reduce 

poverty through economic growth. The 

Program Objective is to: (a) Increase 

investment and employment income by 

raising the profitability and productivity 

of enterprises; (b) expand access to 

electricity for the Malawian people and 

businesses; and (c) improve delivery of 

social services. The outcomes of the 

Project Activities, otherwise referred to 

in the Compact as the Project Objective, 

are to improve the availability, 

reliability, and quality of the power 

supply by increasing the throughput 

capacity and stability of the national 

electricity grid, increase efficiency of 

hydropower generation, and create an 

enabling environment for future 

expansion by strengthening sector 

institutions and enhancing regulation 

and governance of the sector. These 

results are expected to contribute to 

Malawi’s own poverty-reduction and 

economic growth goals as defined in the 

Malawi Growth and Development 

Strategy (‘‘MGDS’’). 

3. Monitoring Component 

To monitor progress toward the 

achievement of the impact and 

outcomes of the Compact, the 

Monitoring Component of the M&E Plan 

will identify: (1) The Indicators (as 

defined below), (2) the definitions of the 

Indicators, (3) the sources and methods 

for data collection, (4) the frequency for 

data collection, (5) the party or parties 

responsible for collecting and analyzing 

relevant data, and (6) the timeline for 

reporting on each Indicator to MCC. 

Further, the Monitoring Component 

will track changes in the selected 

Indicators for measuring progress 

towards the achievement of the Program 

Objective and Project Objective during 

the Compact Term. MCC also intends to 

continue monitoring and evaluating the 

long-term impacts of the Compact even 

after Compact expiration. The M&E Plan 

will establish baselines which measure 

the situation prior to a development 

intervention, against which progress can 

be assessed or comparisons made (each 

a, ‘‘Baseline’’). The Government will 

collect Baselines on the selected 

Indicators or verify already collected 

Baselines where applicable and as set 

forth in the M&E Plan. 

(a) Indicators 

The M&E Plan will measure the 

results of the Program using 

quantitative, objective and reliable data 

(‘‘Indicators’’). Each Indicator will have 

benchmarks that specify the expected 

value and the expected time by which 

that result will be achieved (‘‘Target’’). 

All Indicators will be disaggregated by 

gender, income level and age, and 

beneficiary types to the extent 

practicable. Subject to prior written 

approval from MCC, the Government or 

MCA-Malawi may add Indicators or 

refine the definitions and Targets of 

existing Indicators. 

(i) Compact Indicators 

(1) Goal. The M&E Plan will contain 

the following Indicators related to the 

Compact Goal. The Target of these 

Indicators is to contribute to the 

national goals specified in the MGDS. 

Although the Program contributes to 

these goals, satisfaction of these goals is 

not intended to be solely attributable to 

the Project: 

(A) Absolute poverty rate 3

nationwide: 35–40 percent living on less 

than US$1.00 a day in 2010 to 33.3 

percent by 2016; and 

(B) Absolute rural poverty rate 

nationwide: 40 percent living on less 

than US$1.00 a day in 2010 to 36 

percent by 2016. 

(2) Other Indicators. The M&E Plan 

will contain the Indicators listed in the 

following tables. 

MCA-Malawi will update Baselines 

for key Indicators after new data 

becomes available, including the 

Malawi Integrated Household Survey III, 

after a new billing system is installed at 

ESCOM, and after a Cost of Service 

study and Integrated Resource Plan are 

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4 Indicator is sourced from World Bank Enterprise 

Survey, 2009. Baseline data reflects manufacturing 

sector data only. MCA-Malawi will explore 

developing a tool to capture information for 

smaller, informal firms. 

5 Indicator sourced from Malawi Chamber of 

Commerce (MCCCI) survey, 2009. 

6 Indicator sourced from World Bank Enterprise 

Survey, 2009. 

7 ‘‘LV’’ is defined as low voltage; ‘‘MV’’ is defined 

as medium voltage. 

8 Data and targets will be sourced from Malawi’s 

Electricity Investment Plan and Integrated Resource 

Plan. 

completed. Indicators on outages and 

load shedding will be refined prior to 

entry into force of the Compact and 

during the first year of the Compact. 

Financial Targets and performance will 

be reviewed and updated regularly, as 

defined in Annex I of the Compact. 

Table 1: Compact-Wide Results 

The following are Indicators and 

Targets for the monitoring of the 

Program Objective as further described 

in paragraph 2 of Part A of Annex I. The 

Project is expected to contribute to the 

achievement of these Indicators and 

Targets, but is not solely responsible for 

the results. 

TABLE 1—COMPACT-WIDE RESULTS

Result Indicator Definition Unit Baseline Year 5 Target 

Objective Level Indicators 

Increased Profitability 

and Productivity of 

Doing Business in 

Malawi.

Business sales losses 

due to power interruptions and quality, 

disaggregated by 

firm size 4.

Average value of sales 

losses due to electricity outages.

% ...................... 16.97 ......................... TBD 

Electricity as a major 

obstacle to doing 

business 5.

Average ranking by 

firms of electricity as 

a major obstacle to 

doing business. 10 is 

most severe, 1 is not 

a constraint.

Rank ................. 9.8 ............................. 5 

Back-up diesel generation for firms 6.Average annual kWh of 

diesel generation 

consumed by registered firms as a 

percentage of total 

electricity consumed.

% ...................... 6.55 ........................... TBD 

Energy sales to industrial customers.(Annual electricity sales 

(MWh) for industrial 

customers (Power LV 

& MV))/Total Electricity Sales (MWh) 7.

% ...................... Est. 46 ....................... 55–65 

Improved Electricity Access for Households 

and Key Social Services.

Percentage of population electrified 

disaggregated by national, urban and 

rural.

Percentage of households in Malawi using 

electricity for lighting 

to total population of 

Malawi.

% ...................... 9 ................................ 9.5–11 

Percentage of households in rural areas 

using electricity for 

lighting to total population.

% ...................... 3.0 ............................. 3.2 

Percentage of rural 

households using 

electricity for lighting 

to total rural population.

% ...................... 11.5 ........................... TBD 

Percentage of urban 

households using 

electricity for lighting 

to total urban population.

% ...................... 43.6 ........................... TBD 

Electric Power Consumption per Capita.(Total kWh billed in all 

regions)/Total population.

kWh per capita 103 ............................ 111–115 

Social service electricity connections, 

disaggregated by 

schools and health 

centers.

Percentage of total 

schools and total 

health centers connected.

% ...................... TBD ........................... TBD 

Expansion of Sector to 

Better Meet Demand 

for Power.

Investment in energy 

sector, disaggregated 

by private and public 

sectors, and generation and other assets 8.

Total US$ million committed by financial 

close, disaggregated 

by private and public 

sectors, and generation and other.

US$ million ....... 0 ................................ TBD 

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21062 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 

9Target will be calculated using total installed 

capacity minus 10 percent reserve margin for largest 

plant. 

10Baseline data are sourced from MCA Compact 

Development Indicator Traking Template Pilot 

Exercise FY2010. 

11Baseline data are sourced from MCA Compact 

Development Indicator Traking Template Pilot 

Exercise FY2010, and reflect the average for the 

fiscal year. 12Baseline data are derived from MCA Compact 

Development Indicator Traking Template Pilot 

Exercise FY2010, and reflect the average for the 

fiscal year. 

13Baseline data are derived from MCA Compact 

Development Indicator Traking Template Pilot 

Exercise FY2010, and reflect the average for the 

fiscal year. 

14Load shedding Indicators and their definitions 

will be refined prior to entry into force of the 

Compact and in the full M&E Plan. 

TABLE 1—COMPACT-WIDE RESULTS—Continued 

Result Indicator Definition Unit Baseline Year 5 Target 

MW of investment, 

disaggregated by private and public sectors, and generation 

and other.

MW ................... 0 ................................ TBD 

System Maximum Demand Met.Total demand met by 

the system.

MW ................... 260 (2009) ................. 320 9

Table 2: Infrastructure Development 

Activity. 

The following are Indicators and 

Targets for the monitoring of the 

Infrastructure Development Activity as 

further described in paragraph 1 of Part 

B of Annex I. 

TABLE 2—INFRASTRUCTURE DEVELOPMENT ACTIVITY

Result Indicator Definition Unit Baseline Year 5 Target 

Outcome Level Indicators 

Increased Availability of 

Electricity.

Quantity of Electricity 

Billed.

Total MWh billed in all 

regions.

MWh ...................... 1,421,958 10 ........... 1,800,000 

Reduction in Losses ..... Total System Losses 

(Technical and NonTechnical).

[(Total kWh generated 

¥Total kWh billed)/ 

Total kWh generated 

during same billing 

period].

% ............................ 20.13 11 .................. 17.5 

Transmission System 

Technical Losses.

[(Total kWh received by 

transmission from 

generation ¥ Total 

kWh sent from transmission to distribution)/Total kWh received by transmission from generation].

% ............................ 8.54 12 .................... 6.5 

Distribution System 

Technical & NonTechnical Losses.

[(Total kWh received 

from transmission to 

Distribution ¥ Total 

kWh billed)/Total kWh 

received from transmission to distribution].

% ............................ 11.58 13 .................. 8 

Reduced Outages ......... System Average Interruption Frequency 

Index (‘‘SAIFI’’).

[No. of customer interruptions > 3 mins/ 

Total customers].

Customer Interruptions/customer.NA .......................... TBD 

System Average Interruption Duration 

Index (‘‘SAIDI’’).

[(No. of customer interruptions > 3 mins * 

Duration of outage)/ 

Total customers].

Duration of Customer Interruptions/customer.NA .......................... TBD 

Total System Load 

Shed 14.

Average MW load shed 

per occurrence in a 

year.

MW ........................ 2.5 .......................... TBD 

Cumulative duration of 

load shed in a year.

Hours ..................... 27,500 .................... 5,800 

Maximum MW load 

shed during peak 

hours.

MW ........................ Est. 30–40 ............. TBD 

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TABLE 2—INFRASTRUCTURE DEVELOPMENT ACTIVITY—Continued 

Result Indicator Definition Unit Baseline Year 5 Target 

Improved quality of 

power at primary substations 15.

Voltage Quality, 

disaggregated by 

transmission and distribution.

Percentage of time 

within (±10% transmission and ±6% distribution) voltage 

range South.

% ............................ 83 ........................... 90 

Percentage of time 

within (±10% transmission and ±6% distribution) voltage 

range Centre.

% ............................ 83 ........................... 90 

Percentage of time 

within (±10% transmission and ±6% distribution) voltage 

range North.

% ............................ 83 ........................... 90 

Increased Connections 16.Number of residential 

customers connected 

to electricity, 

disaggregated by region.

Southern electricity supply total domestic 

connected.

Customer ............... 67,316 .................... 3,139 additional 

Central electricity supply total domestic 

connected.

Customer ............... 59,375 .................... 1,540 additional 

Northern electricity supply total domestic 

connected.

Customer ............... 22,612 .................... 1,255 additional 

Number of commercial 

customers connected 

to electricity, 

disaggregated by region.

Southern electricity supply general customers connected.Customer ............... 11,751 .................... 343 additional 

Central electricity supply general customers connected.Customer ............... 9,189 ...................... 301 additional 

Northern electricity supply general customers connected.Customer ............... 4,158 ...................... 258 additional 

Number of industrial 

customers connected 

to electricity, 

disaggregated by region.

Southern electricity supply [Power LV + 

Power MV connected].

Customer ............... 4,204 ...................... 8 additional 

Central electricity supply [Power LV + 

Power MV connected].

Customer ............... 2,510 ...................... 9 additional 

Northern electricity Supply [Power LV + 

Power MV connected].

Customer ............... 812 ......................... 10 additional 

Nkula A Sub-Activity 

Output Level Indicators 

Nkula A refurbished and 

operational.

Total MWh at Nkula A 

hydroelectric plant.

Total energy produced 

(MWh) annually at 

Nkula A.

MWh ...................... 168,900 .................. 207,441 

Transmission Network Upgrade Sub-Activity 

Output Level Indicators 

Transmission Lines Upgraded, Rehabilitated 

and Extended.

New 132-kV lines ......... Kms of new 132-kV 

lines built by Activity.

Kms ........................ 0 ............................. 153 

New 66-kV lines built ... Kms of new 66-kV lines 

built by Activity.

Kms ........................ 0 ............................. 79 

New 220-kV lines built Kms of new 220-kV 

lines built by Activity.

Kms ........................ 0 ............................. 190–205 

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15Substations will be identified in the full M&E 

plan. 

16 Data for Baseline are sourced from June 2010, 

ESCOM sales statistics and does not include export 

customers. The Indicator is useful for monitoring 

trends and performance as a function of overall 

sector growth, and will be used for impact 

evaluations. Targets are based on the Project’s 

technical benefits projections from ICF-CORE 

Feasibility Study and which were used in ERR 

analysis. 

TABLE 2—INFRASTRUCTURE DEVELOPMENT ACTIVITY—Continued 

Result Indicator Definition Unit Baseline Year 5 Target 

T&D Upgrade, Expansion and Rehabilitation Sub-Activity 

Output Level Indicators 

Total New Transmission 

Transformer Capacity.

Transmission substation 

capacity.

Sum of transmission 

transformer capacity.

MVA ....................... 991.5 ...................... 790 additional 

through Activity 

Increased Network ........ SCADA Coverage 

Transmission.

Percentage of master 

station availability.

% ............................ TBD ........................ 98–100 

Control and Improved 

Data Acquisition.

SCADA Coverage Distribution.Percentage of communication links available in installed sites.% ............................ TBD ........................ 90–95 

Distribution Network Upgraded, Extended 

and/or Operational.

Kms of New Distribution 

lines upgraded or 

built.

Kms of new 33-kV lines 

upgraded or built by 

Activity.

Kms ........................ 0 ............................. 113.3 

Kms of New Distribution 

Cables.

Kms of new 11-kV cables built by Activity.Kms ........................ 0 ............................. 5.44 

Distribution substation 

capacity.

Sum of distribution 

transformer capacity.

MVA ....................... 868 ......................... 210 additional 

through Activity 

Table 3: Environment and Natural 

Resource Management (ENRM) SubActivity 

Due to the distinct nature of the data 

collection and outcomes of the ENRM 

sub-activity, it has been broken out into 

a separate table below. The following 

table describes the key Indicators and 

Targets for the monitoring the ENRM 

sub-activity and its relevant 

components, as further described in 

paragraph 1(e) of Part B of Annex I. 

TABLE 3—ENVIRONMENT AND NATURAL RESOURCE MANAGEMENT (ENRM) SUB-ACTIVITY

Result Indicator Definition Unit Baseline Year 5 target 

Outcome Level Indicators 

Improved availability of 

hydroelectric power 

plants (HEP) in generation.

Energy not served due 

to weeds and sedimentation, 

disaggregated by 

HEP.

Sum MWh by HEP unavailable due to 

weed and sedimentation faults.

MWh ................. TBD ........................... 57,218 less than 

Baseline 

Percent utilization or 

operating ratio of 

HEP, disaggregated 

by HEP17.

Actual energy generated by HEP MWh/ 

Theoretical maximum 

energy of installed 

capacity MWh.

% ...................... 73 (Nkula A) ..............

69 (Nkula B) ..............

82 (Tedzani I&II) .......

70 (Tedzani III) ..........

77 (Kapichira I) ..........

85 (Nkula A) 

75 (Nkula B) 

90 (Tedzani I&II) 

75 (Tedzani III) 

85 (Kapichira I) 

Reduced weed infestation and siltation in 

upper Shire River 

basin.

Distribution of invasive 

aquatic species.

Area (Km 2) of weeds 

in upper Shire River 

basin as observed in 

geographic information system maps 

and field observations.

Km 2 .................. TBD ........................... TBD 

Water turbidity ............. Total suspended solids 

using standard methodology.

TSS .................. TBD ........................... TBD 

ENRMAP component (Indicators and Targets to be defined prior to entry into force of the Compact and MCC approval of activities to 

be funded under the ENRMAP component) 

Output Level Indicators 

Harmonized, gender responsive and effective institutional and 

policy environment for 

sustainable environmental management 

and protection.

Harmonized and gender responsive legal 

and policy framework 

enacted.

Legal framework adhering to the findings 

and recommendations of the ENRMAP 

developed 18.

Legal framework 

adopted.

.................................... Legal framework 

adopted. 

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18Legal framework may include environmental 

management bill (including establishment of the 

National Environmental Management Authority), 

water resource management bill, and development 

of a new soil conservation bill. 

19 Indicator is useful for monitoring trends and 

performance as a function of overall ecosystem 

conditions. 20Total harvested material will depend on the 

performance of harvesting measures and biological 

controls. 21Total harvested material will depend on the 

performance of harvesting measures and biological 

controls. 

22 Indicator will be refined after completion of 

key feasibility studies and design work for the 

ENRMAP. 

23 Indicator is useful for monitoring trends and 

performance as a function of overall ecosystem 

conditions. 

TABLE 3—ENVIRONMENT AND NATURAL RESOURCE MANAGEMENT (ENRM) SUB-ACTIVITY—Continued 

Result Indicator Definition Unit Baseline Year 5 target 

Operational payment 

for ecosystem services mechanism established.

Legal framework enabling ecosystem finance developed as 

per the findings of 

the ENRMAP established.

Legal framework 

adopted.

.................................... Legal framework 

adopted. 

Weed and Silt Management Component 

Output Level Indicators 

Improved Control of 

Aquatic Weeds.

ESCOM expenses on 

aquatic weed management 19.

Total MK expended by 

ESCOM per year on 

aquatic weed control, 

including staff, equipment and fuel.

Million MK ......... TBD ........................... TBD 

Yearly amount of weed 

harvested at Liwonde 

barrage.

Average weight in metric tons (‘‘MT’’) of 

weed harvested at 

Liwonde barrage per 

year.

Million MT ......... 13.4 ........................... 20.04 20

Average daily peak 

weight of weed harvested at Liwonde 

barrage.

Average peak weight in 

metric tons of weed 

harvested at Liwonde 

barrage.

MT .................... 120 ............................ 216 21

Biocontrol inoculations, 

disaggregated by key 

location.

Number of biocontrol 

inoculations conducted, 

disaggregated by key 

location.

Number ............. TBD ........................... TBD 

Efficiency of biological 

control on water hyacinth.

Feeding scars on sampled water hyacinth 

based on standardized methodology 22.

TBD .................. TBD ........................... TBD 

Improved Control of Silt ESCOM expenses on 

silt management 23.

Total MK expended by 

ESCOM per year on 

silt removal, including 

staff, equipment and 

fuel.

Million MK ......... TBD ........................... TBD 

Percentage of head 

pond available.

Head pond volume for 

Nkula/Original head 

pond volume for 

Nkula.

% ...................... 30 .............................. 75 

Head pond volume for 

Tedzani/Original 

head pond volume 

for Tedzani.

% ...................... 50 .............................. 75 

Head pond volume for 

Kapichira/Original 

head pond volume 

for Kapichira.

% ...................... 50 .............................. 75 

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24Financial targets will be set after financial 

modeling is completed, and will be updated 

annually. Data will be sourced from audited 

financial statements. Baseline for Cost Recovery 

Ratio is sourced from World Bank Benchmarking 

Study. Indicators are useful for monitoring trends 

and performance as a function of overall financial 

and investment conditions. 

25Total revenue based on energy, demand and 

fixed charges revenue. Operating expenses include 

cost of generation, transmission and distribution 

operations, corporate expenses, and financing costs 

to be incurred. 

26Capital replacement costs include depreciation. 

27Capital expansion costs include cost of longterm system expansion projects. 

28Targets to reflect results of financial analysis 

and/or MERA regulations. 

29 Indicator to be refined after assessment tool has 

been defined prior to EIF. 

Table 4: Power Sector Reform Activity 

The following are Indicators and 

Targets for the monitoring of the Power 

Sector Reform Activity as further 

described in paragraph 2 of Part B of 

Annex I. Key Targets and Baselines for 

these Indicators will be defined prior to 

entry into force of the Compact. Targets 

on financial Indicators will be reviewed 

semi-annually as defined in paragraph 

2(c) of Part B of Annex I, and updated 

on a yearly basis. 

TABLE 4—POWER SECTOR REFORM ACTIVITY

Result Indicator Definition Unit Baseline Year 5 target 

Outcome Level Indicators 

Improved Financial Sustainability/Solvency of 

ESCOM 24.

Cost Recovery Ratio ... Total Actual revenue/ 

Projected operating 

expenses 25.

% ...................... TBD ........................... Greater than 100% 

Total Actual Revenue/ 

Projected operating 

expenses plus capital 

replacement costs 26.

% ...................... TBD ........................... Greater than 100% 

Total Actual Revenue/ 

Projected operating 

expenses plus capital 

replacement plus 

capital expansion 

costs 27.

% ...................... TBD ........................... 100% 

Debt Equity Ratio ........ Total Debt/Total Equity Ratio ................. TBD ........................... TBD28

Acid or Quick Test ....... Current Assets/Current 

Liabilities, excluding 

receivables and 

stocks.

Ratio ................. TBD ........................... TBD 

Current Ratio ............... Current Assets/Current 

Liabilities.

Ratio ................. TBD ........................... TBD 

Improved Internal and 

External Governance 

of ESCOM and the 

Power Sector.

Quality of ESCOM Corporate Governance.Progress against milestones set as a result 

of independent expert assessment 

based on international and regional 

best practices and 

Malawi law as articulated in Corporate 

Governance 

Benchmarking Study..

TBD .................. TBD ........................... TBD 

Regulatory Independence and Effectiveness 29.Progress against milestones set as a result 

of independent expert assessment and/ 

or benchmarking 

study on issues such 

as quality of regulatory decisions 

based upon sound 

analysis, conformity 

with Laws of Malawi, 

independence, and 

transparency based 

on international/regional best practices 

and governing principles in conformance with Annex I.

TBD .................. TBD ........................... TBD 

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TABLE 4—POWER SECTOR REFORM ACTIVITY—Continued 

Result Indicator Definition Unit Baseline Year 5 target 

ESCOM Turnaround Sub-Activity 

Output Level Indicators 

Improved Financial 

Management.

ESCOM Billing and 

Collection Efficiency 30.

[Total revenue from 

post-paid bills collected in current 

month/total post-paid 

billed in previous 

month] × 100 for 

SES.

% ...................... TBD ........................... 85–90 

[Total revenue from 

post-paid bills collected in current 

month/total post-paid 

billed in previous 

month] × 100 for 

CES.

% ...................... TBD ........................... 85–90 

[Total revenue from 

post-paid bills collected in current 

month/total post-paid 

billed in previous 

month] × 100 for 

NES.

% ...................... TBD ........................... 85–90 

Electricity Metered ....... Indicator to be defined 

prior to entry into 

force and in the full 

M&E plan, in accordance to Annex I..

TBD .................. TBD ........................... TBD 

Average Collection Period in days.365/(Total post-paid 

sales/((Beginning accounts receivables + 

ending accounts receivable)/2)).

Days ................. 180 ............................ 50 

Bad Debt ...................... (Percentage of accounts over 180 

days)/(total accounts 

receivable).

Days ................. TBD ........................... TBD 

Average Creditor Days 365/(Total credit purchases/((Beginning 

accounts payables + 

ending accounts 

payables)/2)).

Days ................. 150 ............................ 60 

Financial Plans updated.ESCOM Financial Plan 

with agreed upon financial ratios and 

covenants as defined 

in Annex I under 

Compact updated.

Update to Plans .................................... Update to plans 

Publication of Audited 

Financial Statements.

ESCOM audited financial statements made 

public as defined in 

Annex I under Compact.

Publication of 

statements.

0 ................................ Annual publication 

Working Capital Gap 

Financed 31.

Yearly Government financial contribution 

required.

MWK Millions .... TBD ........................... 0 

Yearly Government financial contribution 

as fraction of amount 

indicated by MCCapproved Financial 

Plan.

Percentage ....... NA ............................. 100% if positive 

amount required 

Improved Quality of 

Customer Service.

Average time to respond to forced outages.Average time to restore 

power for high voltage forced outages.

Days ................. 3.36 ........................... 2.7 

Average time to restore 

power for MV/LV 

forced outages.

Days ................. 5.60 ........................... 3.5 

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30Baselines will be set after a new billing system 

is installed. 

31Financial targets will be set after financial 

modeling is completed, and will be updated 

annually. Data will be sourced from audited 

financial statements and other sources of financial 

information. 

32Maintenance plan is based on a percentage of 

un-depreciated asset value for preventive 

maintenance of generation, transmission and 

distribution assets. 

TABLE 4—POWER SECTOR REFORM ACTIVITY—Continued 

Result Indicator Definition Unit Baseline Year 5 target 

Customer satisfaction 

and perceptions of 

ESCOM service, 

disaggregated by 

gender.

Percent improvement in 

key indicators of customers’ satisfaction, 

disaggregated by 

gender.

% ...................... TBD ........................... TBD 

Improved ESCOM 

Operational Management and Efficiency.

Average Cost of Electricity Billed (kWh).[Total expenses for Gx, 

Tx and Dx (MK)/total 

electricity generated(kWh)*US$].

US$/kWh .......... TBD ........................... TBD 

Maintenance Expenditures.Actual maintenance expenditures/Planned 

maintenance budget 

as defined in Annex 

I 32.

% ...................... TBD ........................... 100 

Adherence to ESCOM 

maintenance plans 

as defined in Annex I.

Plans ................ NA ............................. Yearly update to 

plans 

Improved management 

of procurements by 

ESCOM.

Procurement Audits ..... Number of procurement 

audits completed by 

Auditor General’s Office receiving satisfactory assessments.

Audit ................. .................................... TBD 

Procurement threshold Procurement threshold 

increased by ODPP 

as a result of improved ESCOM compliance to procurement procedures.

Million MK ......... .................................... Increase over Baseline 

Regulatory Strengthening Sub-Activity (Indicators and Targets to be defined prior to entry into force and MCC approval of activities to 

be funded under the sub-activity. Additional Indicators will be defined as per the benchmarking study, peer review and/or independent expert assessment) 

Output Level Indicators 

Strengthened Regulatory Environment.Tariff application processing time.Average time to respond to tariff rate 

cases.

Days ................. TBD ........................... TBD 

Tariff Indexation 

Framework.

Refinement of legal 

basis for tariff indexation framework 

adopted and implemented, as defined 

in Annex I.

Framework ........ 0 ................................ Framework approved 

and implemented 

Audited financial statements and annual report published by 

MERA.

Audited financial statements and annual report published.Annual Report .. 0 ................................ Yearly publication of 

report 

MERA Resolutions ...... Percentage of ESCOM 

performance reports 

reviewed on time.

% ...................... .................................... TBD 

Improved Market Structure for Private Investment.Power Market Structure Creation of credit worthy single buyer.Single buyer 

created.

.................................... Credit worthy buyer 

created 

Revised Energy Laws 

in conformity with 

agreement in Compact approved and 

enacted.

Laws passed .... .................................... Amended laws 

passed 

(b) Data Collection and Reporting. The 

M&E Plan will establish guidelines for 

data collection and reporting, and 

identify the responsible parties. A 

performance monitoring task force will 

be created at ESCOM, with participation 

by MERA and MCA-Malawi. 

Compliance with data collection and 

reporting timelines will be conditions 

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Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 21069 

for Disbursements for the relevant 

Activities as set forth in the Program 

Implementation Agreement. The M&E 

Plan will specify the data collection 

methodologies, procedures, and analysis 

required for reporting on results at all 

levels. The M&E Plan will describe any 

interim MCC approvals for data 

collection, analysis, and reporting plans. 

(c) Data Quality Reviews. As 

determined in the M&E Plan or as 

otherwise requested by MCC, the quality 

of the data gathered through the M&E 

Plan will be reviewed to ensure that 

data reported are as valid, reliable, and 

timely as resources will allow. The 

objective of any data quality review will 

be to verify the quality and the 

consistency of performance data across 

different implementation units and 

reporting institutions. Such data quality 

reviews also will serve to identify where 

those levels of quality are not possible, 

given the realities of data collection. 

(d) Semi-annual Reviews. Semiannual reviews of the Power Sector 

Reform Activity will be conducted as 

outlined in paragraph 2(c) of Part B of 

Annex I. 

(e) Management Information System. 

The M&E Plan will describe the 

information system that will be used to 

collect data, store, process and deliver 

information to relevant stakeholders in 

such a way that the Program 

information collected and verified 

pursuant to the M&E Plan is at all times 

accessible and useful to those who wish 

to use it. The system development will 

take into consideration the requirement 

and data needs of the components of the 

Program, and will be aligned with 

existing MCC systems, other service 

providers, and ministries. 

(f) Role of MCA-Malawi. The 

monitoring and evaluation of this 

Compact spans one discrete Project and 

two Activities, and will involve a 

variety of governmental, 

nongovernmental, and private sector 

institutions. In accordance with the 

designation contemplated by Section 

3.2(b) of this Compact, MCA-Malawi is 

responsible for implementation of the 

M&E Plan. MCA-Malawi will oversee all 

Compact-related monitoring and 

evaluation activities conducted for each 

of the Activities, ensuring that data from 

all implementing entities are consistent, 

accurately reported and aggregated into 

regular performance reports as 

described in the M&E Plan. 

4. Evaluation Component 

The Evaluation Component of the 

M&E Plan will contain three types of 

evaluations: (1) Impact evaluations; (2) 

project performance evaluations; and (3) 

special studies. MCC also intends to 

continue monitoring and evaluating the 

long-term impacts of the Compact even 

after Compact expiration. The 

Evaluation Component of the M&E Plan 

will describe the purpose of the 

evaluation, methodology, timeline, 

required MCC approvals, and the 

process for collection and analysis of 

data for each evaluation. The results of 

all evaluations will be made publicly 

available in accordance with MCC’s 

Policy for Monitoring and Evaluation of 

Compacts and Threshold Programs. 

(a) Impact Evaluation. The M&E Plan 

will include a description of the 

methods to be used for impact 

evaluations and plans for integrating the 

evaluation method into Project design. 

Based on in-country consultation with 

stakeholders, the strategies outlined 

below were jointly determined as 

having the strongest potential for 

rigorous impact evaluation. The M&E 

Plan will further outline in detail these 

methodologies. Final impact evaluation 

strategies are to be included in the M&E 

Plan. The following is a summary of the 

potential impact evaluation 

methodologies. 

(i) Infrastructure Development 

Activity. The evaluation will attempt to 

assess the effectiveness of individual 

transmission lines and distribution 

investments in reducing outages and 

improving power quality, particularly in 

northern Malawi using a combination of 

approaches, to include potentially an 

interrupted time series approach, 

exogenous spatial variation due to the 

project, combined if sufficiently 

informative with phased 

implementation of distribution projects. 

The incremental impacts of improved 

reliability, quality and access to power 

will be estimated by comparing key 

intermediate outcomes, including 

changes in business investments and 

productivity, between businesses with 

access to infrastructure improvements, 

those without access to improvements, 

and for those in areas or zones that 

experience greater or lesser 

improvements in electricity due to 

differential levels of infrastructure 

upgrading. Gender disaggregated 

information for female-headed 

businesses will be pursued to the extent 

possible. 

(ii) Power Sector Reform Activity. The 

most rigorous evaluation possible will 

be conducted, possibly employing an 

interrupted time series approach. The 

evaluation will estimate the causal 

relationship between changes in sector 

governance with: (1) Changes in ESCOM 

financial and operational performance; 

and (2) increases in private investment, 

generation capacity and electricity 

coverage for different groups such as 

female-headed households and regions 

of the country. The evaluation will also 

assess: (A) the extent to which 

improvements in MERA independence 

and regulatory capacity result in 

improved quality of service and supply 

by ESCOM; and (B) the extent to which 

this Activity improves the efficiency 

(employees per customer, response time 

to outages, etc.) and reduces losses at 

ESCOM. Differentiated impacts on 

customer service and access to men, 

women, and vulnerable groups will be 

explored. 

(iii) Environment and Natural 

Resource Management (ENRM) SubActivity. The evaluation will attempt to 

isolate the causal factors linking weed 

and siltation in the Shire river basin to 

outages downstream at generation sites, 

particularly the extent to which 

palliative weed and silt management 

measures reduce the frequency and 

duration of outages and improve plant 

availability at hydropower plants 

downstream of Liwonde barrage. 

Potentially using a difference-indifferences and/or matching design, the 

evaluation will also attempt to look at 

how increases in tariff and/or 

electrification affect consumer energy 

choices, such as the use of charcoal and 

fuel wood, and the impact of the latter 

has on the environment. To the extent 

appropriate, differentiated impacts on 

different income groups, males vs. 

females, formal and informal firms, and 

factors such as access or non-access to 

capital will be explored. In order to 

implement the most rigorous 

evaluations possible, the Government 

and ESCOM will cooperate in 

assembling the required time series and 

other data required to implement the 

chosen methodology. 

(b) Project Performance Evaluation. 

The M&E Plan will make provision for 

evaluations of all relevant Project 

activities. The M&E Plan will also make 

provision for final Project level 

evaluations (‘‘Final Evaluations’’). With 

the prior written approval of MCC, the 

Government or MCA-Malawi will 

engage independent evaluators to 

conduct the Final Evaluations at the end 

of the Project. The Final Evaluations 

will review progress during Compact 

implementation and provide a 

qualitative context for interpreting 

monitoring data and impact evaluation 

findings. They must at a minimum: (i) 

Evaluate the efficiency and effectiveness 

of the Activities; (ii) determine if and 

analyze the reasons why the Compact 

Goal, Program Objective and Project 

Objective, outcome(s) and output(s) 

were or were not achieved; (iii) identify 

positive and negative unintended 

results of the Program; (iv) provide 

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21070 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 

lessons learned that may be applied to 

similar projects; and (v) assess the 

likelihood that results will be sustained 

over time. 

(c) Special Studies. The M&E Plan 

will include a description of the 

methods to be used for special studies, 

as necessary, funded through this 

Compact or by MCC. Plans for 

conducting the special studies will be 

determined jointly between the 

Government or MCA-Malawi and MCC 

before the approval of the M&E Plan. 

MCC, the Government and MCA-Malawi 

have agreed to conduct the following 

study as part of the Power Sector 

Reform Activity: 

(i) Prior to entry into force of the 

Compact, the Government and MCC will 

agree on a method by which to 

independently evaluate and assess 

Malawi’s regulatory environment and 

the governance of ESCOM and the 

power sector in Malawi as a whole. 

MCA-Malawi and the Government will 

then conduct both the Corporate 

Governance Benchmarking Study and 

the Sector Benchmarking Study by Year 

2 of the Compact. 

The M&E Plan will identify and make 

provision for any other special studies, 

ad hoc evaluations, and research that 

may be needed as part of the monitoring 

and evaluating of this Compact. Either 

MCC, MCA-Malawi or the Government 

may request special studies or ad hoc 

evaluations of Activities, or the Project 

as a whole prior to the expiration of the 

Compact Term. When the Government 

engages an evaluator, the engagement 

will be subject to the prior written 

approval of MCC. Contract terms must 

ensure non-biased results and the 

publication of results. 

(d) Request for Ad Hoc Evaluation or 

Special Study. If MCA-Malawi or the 

Government require an ad hoc 

independent evaluation or special study 

at the request of the Government for any 

reason, including for the purpose of 

contesting an MCC determination with 

respect to a Project or Activity or to seek 

funding from other donors, no MCC 

Funding resources may be applied to 

such evaluation or special study 

without MCC’s prior written approval. 

5. Other Components of the M&E Plan 

In addition to the monitoring and 

evaluation components, the M&E Plan 

will include the following components 

for the Program, Project and Activities, 

including, where appropriate, roles and 

responsibilities of the relevant parties 

and providers: 

(a) Costs. A detailed cost estimate for 

all components of the M&E Plan; and 

(b) Assumptions and Risks. Any 

assumption or risk external to the 

Program that underlies the 

accomplishment of the Program 

Objective, Project Objective and Activity 

outcomes and outputs. 

6. Approval and Implementation of the 

M&E Plan 

The approval and implementation of 

the M&E Plan, as amended from time to 

time, will be in accordance with the 

Program Implementation Agreement, 

any other relevant Supplemental 

Agreement and the MCC Policy for 

Monitoring and Evaluation of Compacts 

and Threshold Programs. 

Annex IV Conditions Precedent to 

Disbursement of Compact 

Implementation Funding 

This Annex IV sets forth the 

conditions precedent applicable to 

Disbursements of Compact 

Implementation Funding (each a ‘‘CIF 

Disbursement’’). Capitalized terms used 

in this Annex IV and not defined in this 

Compact will have the respective 

meanings assigned thereto in the 

Program Implementation Agreement. 

Upon execution of the Program 

Implementation Agreement, each CIF 

Disbursement will be subject to the 

terms of the Program Implementation 

Agreement. 

1. Conditions Precedent to Initial CIF 

Disbursement 

Each of the following must have 

occurred or been satisfied prior to the 

Initial CIF Disbursement: 

(a) The Government (or MCA-Malawi) 

has delivered to MCC: 

(i) An interim fiscal accountability 

plan acceptable to MCC; and 

(ii) A CIF procurement plan 

acceptable to MCC. 

2. Conditions Precedent to Each CIF 

Disbursement 

Each of the following must have 

occurred or been satisfied prior to each 

CIF Disbursement: 

(a) The Government (or MCA-Malawi) 

has delivered to MCC the following 

documents, in form and substance 

satisfactory to MCC: 

(i) A completed Disbursement 

Request, together with the applicable 

Periodic Reports, for the applicable 

Disbursement Period, all in accordance 

with the Reporting Guidelines; 

(ii) A certificate of the Government (or 

MCA-Malawi), dated as of the date of 

the CIF Disbursement Request, in such 

form as provided by MCC; and 

(iii) If this Compact has entered into 

force in accordance with Article 7, (1) 

a Fiscal Agent Disbursement Certificate 

and (2) a Procurement Agent 

Disbursement Certificate. 

(b) If any proceeds of the CIF 

Disbursement are to be deposited in a 

bank account, MCC has received 

satisfactory evidence that (i) the Bank 

Agreement has been executed and (ii) 

the Permitted Accounts have been 

established; 

(c) Appointment of an entity or 

individual to provide fiscal agent 

services, as approved by MCC, until 

such time as the Government provides 

to MCC a true and complete copy of a 

Fiscal Agent Agreement, duly executed 

and in full force and effect, and the 

fiscal agent engaged thereby is 

mobilized; 

(d) Appointment of an entity or 

individual to provide procurement 

agent services, as approved by MCC, 

until such time as the Government 

provides to MCC a true and complete 

copy of the Procurement Agent 

Agreement, duly executed and in full 

force and effect, and the procurement 

agent engaged thereby is mobilized; and 

(e) MCC is satisfied, in its sole 

discretion, that: 

(i) The activities being funded with 

such CIF Disbursement are necessary, 

advisable or otherwise consistent with 

the goal of facilitating the 

implementation of the Compact and will 

not violate any applicable law or 

regulation; 

(ii) No material default or breach of 

any covenant, obligation or 

responsibility by the Government, MCAMalawi or any Government entity has 

occurred and is continuing under this 

Compact or any Supplemental 

Agreement; 

(iii) There has been no violation of, 

and the use of requested funds for the 

purposes requested will not violate, the 

limitations on use or treatment of MCC 

Funding set forth in Section 2.7 of this 

Compact or in any applicable law or 

regulation; 

(iv) Any Taxes paid with MCC 

Funding through the date ninety (90) 

days prior to the start of the applicable 

Disbursement Period have been 

reimbursed by the Government in full in 

accordance with Section 2.8(c) of this 

Compact; and 

(v) The Government has satisfied all 

of its payment obligations, including 

any insurance, indemnification, tax 

payments or other obligations, and 

contributed all resources required from 

it, under this Compact and any 

Supplemental Agreement. 

3. For Any CIF Disbursement Occurring 

After This Compact Has Entered Into 

Force in Accordance With Article 7 

MCC is satisfied, in its sole discretion, 

that: 

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Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 21071 

(a) MCC has received copies of any 

reports due from any technical 

consultants (including environmental 

auditors engaged by MCA-Malawi) for 

any Activity since the previous 

Disbursement Request, and all such 

reports are in form and substance 

satisfactory to MCC; 

(b) The Implementation Plan 

Documents and Fiscal Accountability 

Plan are current and updated and are in 

form and substance satisfactory to MCC, 

and there has been progress satisfactory 

to MCC on the components of the 

Implementation Plan for the Projects or 

any relevant Activities related to such 

CIF Disbursement; 

(c) There has been progress 

satisfactory to MCC on the M&E Plan 

and Social and Gender Integration Plan 

for the Program or Project or relevant 

Activity and substantial compliance 

with the requirements of the M&E Plan 

and Social and Gender Integration Plan 

(including the targets set forth therein 

and any applicable reporting 

requirements set forth therein for the 

relevant Disbursement Period); 

(d) There has been no material 

negative finding in any financial audit 

report delivered in accordance with this 

Compact and the Audit Plan, for the 

prior two quarters (or such other period 

as the Audit Plan may require); 

(e) MCC does not have grounds for 

concluding that any matter certified to 

it in the related MCA Disbursement 

Certificate, the Fiscal Agent 

Disbursement Certificate or the 

Procurement Agent Disbursement 

Certificate is not as certified; 

(f) If any of the officers or key staff of 

MCA-Malawi have been removed or 

resigned and the position remains 

vacant, MCA-Malawi is actively engaged 

in recruiting a replacement; and 

(g) MCC has not determined, in its 

sole discretion, that an act, omission, 

condition, or event has occurred that 

would be the basis for MCC to suspend 

or terminate, in whole or in part, the 

Compact or MCC Funding in accordance 

with Section 5.1 of this Compact. 

Annex V Definitions 

Activity has the meaning provided in 

Part B of Annex I. 

Additional Representative has the 

meaning provided in Section 4.2. 

Audit Guidelines has the meaning 

provided in Section 3.8(a). 

Baseline has the meaning provided in 

paragraph 3 of Annex III. 

Board of Trustees has the meaning 

provided in paragraph 3(a)(i) of Part C 

of Annex I. 

CIF Disbursement has the meaning 

provided in Annex IV. 

Compact has the meaning provided in 

the Preamble. 

Compact Goal has the meaning 

provided in Section 1.1. 

Compact Implementation Funding 

has the meaning provided in Section 

2.2(a). 

Compact Records has the meaning 

provided in Section 3.7(a). 

Compact Term has the meaning 

provided in Section 7.4. 

Corporate Governance Benchmarking 

Study has the meaning provided in 

paragraph 2(a)(ii) of Part B of Annex I. 

Covered Provider has the meaning 

provided in Section 3.7(c). 

Disbursement has the meaning 

provided in Section 2.4. 

DSC has the meaning provided in 

paragraph 2(a)(ii) of Part B of Annex I. 

ESCOM has the meaning provided in 

Section 7.2(d). 

ESCOM Board has the meaning 

provided in paragraph 2(a)(ii) of Part B 

of Annex I. 

ENRM has the meaning provided in 

paragraph 1(e) of Part B of Annex I. 

ERNMAP has the meaning provided 

in paragraph 1(e)(ii) of Part B of Annex 

I. 

ESIAs has the meaning provided in 

paragraph 3 of Part B of Annex I. 

Evaluation Component has the 

meaning provided in paragraph 1 of 

Annex III. 

Excess CIF Amount has the meaning 

provided in Section 2.2(c). 

Final Evaluations has the meaning 

provided in paragraph 4(b) of Annex III. 

Financial Plan has the meaning 

provided in paragraph 2(a)(i) of Part B 

of Annex I. 

Fiscal Agent has the meaning 

provided in paragraph 5 of Part C of 

Annex I. 

Governance Guidelines means MCC’s 

Guidelines for Accountable Entities and 

Implementation Structures, as such may 

be posted on MCC’s Web site from time 

to time. 

Government has the meaning 

provided in the Preamble. 

Implementation Letter has the 

meaning provided in Section 3.5. 

Indicators has the meaning provided 

in paragraph 3(a) of Annex III. 

Infrastructure Development Activity 

has the meaning provided in Part B of 

Annex I. 

Inspector General has the meaning 

provided in Section 3.7(d). 

Intellectual Property means all 

registered and unregistered trademarks, 

service marks, logos, names, trade 

names and all other trademark rights; all 

registered and unregistered copyrights; 

all patents, inventions, shop rights, 

know how, trade secrets, designs, 

drawings, art work, plans, prints, 

manuals, computer files, computer 

software, hard copy files, catalogues, 

specifications, and other proprietary 

technology and similar information; and 

all registrations for, and applications for 

registration of, any of the foregoing, that 

are financed, in whole or in part, using 

MCC Funding. 

IRP has the meaning provided in 

paragraph 1(a) of Part B of Annex I. 

Kapichira II has the meaning provided 

in paragraph 1(f) of Part B of Annex I. 

kWh has the meaning provided in 

paragraph 3 of Part A of Annex I. 

M&E Annex has the meaning 

provided in Annex III. 

M&E Plan has the meaning provided 

in Annex III. 

Malawi has the meaning provided in 

the Preamble. 

Management Unit has the meaning 

provided in paragraph 3 (c)(i) of Part C 

of Annex I. 

MCA Act has the meaning provided in 

Section 2.2(a). 

MCA-Malawi Core Team has the 

meaning provided in paragraph 1(b) of 

Part A of Annex I. 

MCA-Malawi Trust Deed has the 

meaning provided in paragraph 3 of Part 

C of Annex I. 

MCC has the meaning provided in the 

Preamble. 

MCC Environmental Guidelines has 

the meaning provided in Section 2.7(c). 

MCC Funding has the meaning 

provided in Section 2.3. 

MCC Gender Policy means the MCC 

‘‘Gender Policy’’(including any guidance 

documents issued in connection with 

the guidelines) posted from time to time 

on the MCC Web site or otherwise made 

available to the Government. 

MCC Policy for Monitoring and 

Evaluation of Compacts and Threshold 

Programs has the meaning provided in 

Annex III. 

MCC Program Procurement 

Guidelines has the meaning provided in 

Section 3.6. 

MCC Web site has the meaning 

provided in Section 2.7. 

MGDs has the meaning provided in 

paragraph 2 of Annex III. 

MERA has the meaning provided in 

paragraph 2 of Part B of Annex I. 

MERA Board has the meaning 

provided in paragraph 2(b)(ii) of Part B 

of Annex I. 

MNREE has the meaning provided in 

paragraph 2 of Part B of Annex I. 

Monitoring Component has the 

meaning provided in paragraph 1 of 

Annex III. 

Multi-Year Financial Plan Summary 

has the meaning provided in paragraph 

1 of Annex II. 

ODPP has the meaning provided in 

paragraph 2(a)(iii) of Part B of Annex I. 

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21072 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Notices 

OP 4.12 has the meaning provided in 

paragraph 3 of Part B of Annex I. 

Party and Parties have the meaning 

provided in the Preamble. 

Permitted Account has the meaning 

provided in Section 2.4. 

PMC has the meaning provided in 

paragraph 4 of Part C of Annex I. 

Power Sector Reform Activity has the 

meaning provided in Part B of Annex I. 

Power Sector Reform Agenda has the 

meaning provided in paragraph 2(c) of 

Part B of Annex I. 

Power Sector Revitalization Project 

has the meaning provided in Part B of 

Annex I. 

PPP has the meaning provided in 

paragraph 1(a) of Part A of Annex I. 

Principal Representative has the 

meaning provided in Section 4.2. 

Procurement Agent has the meaning 

provided in paragraph 6 of Part C of 

Annex I. 

Program has the meaning provided in 

the Recitals. 

Program Assets means any assets, 

goods or property (real, tangible or 

intangible) purchased or financed in 

whole or in part (directly or indirectly) 

by MCC Funding. 

Program Funding has the meaning 

provided in Section 2.1. 

Program Guidelines means 

collectively the Audit Guidelines, the 

MCC Environmental Guidelines, the 

MCC Gender Policy, the Governance 

Guidelines, the MCC Program 

Procurement Guidelines, the Reporting 

Guidelines, the MCC Policy for 

Monitoring and Evaluation of Compacts 

and Threshold Programs, the MCC Cost 

Principles for Government Affiliates 

Involved in Compact Implementation 

(including any successor to any of the 

foregoing) and any other guidelines, 

policies or guidance papers relating to 

the administration of MCC-funded 

compact programs and as from time to 

time published on the MCC Web site. 

Program Implementation Agreement 

and PIA have the meaning provided in 

Section 3.1. 

Program Objective has the meaning 

provided in Section 1.2. 

Project has the meaning provided in 

Section 1.3. 

Project Cooperation Agreement has 

the meaning provided in paragraph 4 of 

Part C of Annex I. 

Project Objective has the meaning 

provided in Section 1.3. 

Project Partner has the meaning 

provided in paragraph 4 of Part C of 

Annex I. 

Provider has the meaning provided in 

Section 3.7(c). 

REA has the meaning provided in 

paragraph 2(b)(iii) of Part B of Annex I. 

Reporting Guidelines means the MCC 

‘‘Guidance on Quarterly MCA 

Disbursement Request and Reporting 

Package’’ posted by MCC on the MCC 

Web site or otherwise publicly made 

available. 

SBM Plan has the meaning provided 

in paragraph 2(b)(iii) of Part B of Annex 

I. 

Sector Benchmarking Study has the 

meaning provided in paragraph 2(b)(ii) 

of Part B of Annex I. 

Social and Gender Integration Plan 

has the meaning provided in paragraph 

3 of Part B of Annex I. 

Supplemental Agreement means any 

agreement between (a) the Government 

(or any Government affiliate) and MCC 

(including, but not limited to, the PIA), 

or (b) MCC and/or the Government (or 

any Government affiliate), on the one 

hand, and any third party, on the other 

hand, including any of the Providers, in 

each case, setting forth the details of any 

funding, implementing or other 

arrangements in furtherance of this 

Compact. 

Target has the meaning provided in 

paragraph 3(a) of Annex III. 

Tariff Indexation Framework has the 

meaning provided in paragraph 2(b)(i) 

of Part B of Annex I. 

Tax Schedules has the meaning 

provided in Section 2.8(b). 

Taxes has the meaning provided in 

Section 2.8(a). 

Turnaround Facility has the meaning 

provided in Section 7.2(d). 

United States Dollars or US$ means 

the lawful currency of the United States 

of America. 

USAID is the United States Agency for 

International Development. 

[FR Doc. 2011–8983 Filed 4–13–11; 8:45 am] 

BILLING CODE 9211–03–P 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

[Notice: (11–038)] 

NASA Advisory Council; Education 

and Public Outreach Committee; 

Meeting 

AGENCY: National Aeronautics and 

Space Administration. 

ACTION: Notice of meeting. 

SUMMARY: In accordance with the 

Federal Advisory Committee Act, Public 

Law 92–463, as amended, the National 

Aeronautics and Space Administration 

announces a meeting of the Education 

and Public Outreach Committee of the 

NASA Advisory Council (NAC). 

DATES: Friday, April 29, 2011, 8:30 a.m. 

to 5:30 p.m., Local Time. 

ADDRESSES: From 8:30 to 9:45 a.m., the 

meeting will occur at the Edward Jones 

Dome located at 701 Convention Plaza 

in St. Louis, MO. From 10 a.m.–12 

noon, the meeting will be conducted at 

the Renaissance St. Louis Grand & 

Suites, 800 Washington Avenue, in St. 

Louis, MO, in the Benton Room. From 

2–5:30 p.m., the meeting will take place 

at the Edward Jones Dome, 701 

Convention Plaza, in St. Louis, MO. 

FOR FURTHER INFORMATION CONTACT: This 

meeting will also take place 

telephonically and via WebEx. Any 

interested person should contact Ms. 

Erika G. Vick, Executive Secretary for 

the Education and Public Outreach 

Committee, National Aeronautics and 

Space Administration, Washington, DC, 

at Erika.vick-1@nasa.gov, no later than 4 

p.m., local time, April 27, 2011, to get 

further information about participating 

via teleconference and/or WebEx. 

SUPPLEMENTARY INFORMATION: The 

agenda for the meeting includes the 

following topics: 

FIRST Robotics Championship Opening 

Ceremony, 

FIRST Robotics from the NASA HQ 

Perspective, 

FIRST Robotics from the NASA Center 

Perspective, 

Leadership Forum, 

Tour the FIRST Robotics Teams. 

The meeting will be open to the 

public up to the seating capacity of the 

room. It is imperative that the meeting 

be held on this date to accommodate the 

scheduling priorities of the key 

participants. 

Dated: April 8, 2011. 

P. Diane Rausch, 

Advisory Committee Management Officer, 

National Aeronautics and Space 

Administration. 

[FR Doc. 2011–9036 Filed 4–13–11; 8:45 am] 

BILLING CODE 7510–13–P 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

[Notice: (11–039)] 

NASA Advisory Council; Meeting 

AGENCY: National Aeronautics and 

Space Administration. 

ACTION: Notice of meeting. 

SUMMARY: In accordance with the 

Federal Advisory Committee Act, Public 

Law 92–463, as amended, the National 

Aeronautics and Space Administration 

announces a meeting of the NASA 

Advisory Council. 

DATES: Thursday, May 5, 2011, 8 a.m.– 

5 p.m., Local Time 

Friday, May 6, 2011, 8 a.m.–12 p.m., 

Local Time. 

mstockstill on DSKH9S0YB1PROD with NOTICES