TREATIES AND OTHER INTERNATIONAL ACTS SERIES 17-912

________________________________________________________________________

FOREIGN ASSISTANCE

Millennium Challenge Compact 

Between the 

UNITED STATES OF AMERICA

and KOSOVO

Signed at Washington September 12, 2017

with

Annexes 
 NOTE BY THE DEPARTMENT OF STATE

 Pursuant to Public Law 89—497, approved July 8, 1966

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued

under the authority of the Secretary of State shall be competent

evidence . . . of the treaties, international agreements other than

treaties, and proclamations by the President of such treaties and

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime

jurisdiction, and in all the tribunals and public offices of the

United States, and of the several States, without any further proof

or authentication thereof.”
 KOSOVO

 Foreign Assistance

 Millennium Challenge Compact

 signed at Washington 

 September 12, 2017;

 Entered into force September 12, 2017.

 With annexes.
MILLENNIUM CHALLENGE ACCOUNT THRESHOLD PROGRAM 


GRANT AGREEMENT 


BETWEEN 


THE UNITED STATES OF AMERICA, 


ACTING THROUGH THE MILLENNIUM CHALLENGE CORPORATION 


AND 


THE REPUBLIC OF KOSOVO, 


ACTING THROUGH THE PRESIDENT OF THE REPUBLIC OF KOSOVO 

TABLE OF CONTENTS 


Page 

Article 1. Goal and Objectives ........-........................................................................................ 1 


Section 1.1 Program Goal .................................................................................................. 1 


Section 1.3 Project Objectives ........................................................................................... 1 


Article 2. Program Funding .................................................................................................... 2 


Section 2.1 Program Funding ............................................................................................ 2 


Section 2.2 Interest............................................................................................................. 2 


Section 2.3 Government Resources; Budget ..................................................................... 2 


Section 2.4 Use of the Grant .............................................................................................. 2 


Section 2.5 Taxes ............................................................................................................... 3 


Article 3. Government Representations and Obligations ........................................................ 4 


Section 3.1 Government Representations .......................................................................... 4 


Section 3.2 Government Responsibilities .......................................................................... 4 


Article 4. Implementation Framework .................................................................................... 6 


Section 4.1 Program Implementation Plan ........................................................................ 6 


Section 4.2 Monitoring and Evaluation ............................................................................. 7 


Section 4.3 Procurement and Grants .................................................................................. 8 


Section 4.4 Fiscal Accountability ...................................................................................... 8 


Section 4.5 Environmental, Gender and other Program Guidelines .................................. 9 


Section 4.6 Reports ............................................................................................................ 9 


Section 4.7 Records; Accounting; Providers; Access ........................................................ 9 


Section 4.8 Audits; Reviews ............................................................................................ 10 


Section 4.9 Required MCC Approvals ............................................................................ 11 


Section 4.10 Implementation Letters ................................................................................. 12 


Article 5. Disbursement of Grant Funding ............................................................................ 12 


Section 5 .1 Disbursement Process ................................................................................... 12 


Section 5.2 Conditions Precedent to the Initial Disbursement ........................................ 14 


Section 5.3 Conditions Precedent to Each Disbursement.. .............................................. 14 


Article 6. Completion Date; Termination and Suspension ................................................... 15 


Section 6.1 Completion Date ........................................................................................... 15 


Section 6.2 T · ermma f d S · E · ·
 ion an uspens10n; xp1ratlon ...................................................... 16 


Section 6.3 Refunds ......................................................................................................... 17 


Article 7. Governing Law; Amendments; General ............................................................... 18 


Section 7 .1 Governing Law ............................................................................................. 18 


Section 7.2 Consultations................................................................................................. 18 


Section 7.3 Representatives ............................................................................................. 18 


Section 7.4 Communications ........................................................................................... 18 


Section 7.5 MCC Status ................................................................................................... 19 

Section 7.6 No Assurance of Future Assistance .............................................................. 19 


Section 7.7 Amendment ................................................................................................... 19 


Section 7.8 Survival ......................................................................................................... 20 


Section 7.9 Definitions; Interpretation ............................................................................. 20 


Section 7 .10 References to MCC Website ......................................................................... 20 


Section 7 .11 Signatures...................................................................................................... 20 


Section 7 .12 Grant Reference ............................................................................................ 20 


Article 8. Entry Into Force .................................................................................................... 21 


Annex I: Program Description 

Schedule A to Annex I: Indicators 

Annex II: Conditions Precedent to Disbursements 

Annex III: Allocation of Grant Funding 

Annex IV: Definitions 

Toe- ii 
THRESHOLD PROGRAM GRANT AGREEMENT 


This THRESHOLD PROGRAM GRANT AGREEMENT (this "Agreement"), dated 

September 12, 2017, is made between the United States of America, acting through the 

Millennium Challenge Corporation ("MCC'), and the Republic of Kosovo ("Kosovo"), acting 

through the President of the Republic of Kosovo (the "Government," and, collectively with 

MCC, the "Parties" and each, individually, a "Party"). 

RECITALS 

WHEREAS, MCC has authorized a program to provide assistance under Section 616 of 

the Millennium Challenge Act of2003, as amended, to selected candidate countries that have 

demonstrated a commitment to strengthening good governance, economic freedom and 

investments in people in order to assist such countries to become eligible for a Millennium 

Challenge Compact (the "Threshold Program"); 

WHEREAS, MCC has selected Kosovo as eligible for the Threshold Program; and 

WHEREAS, the Parties wish to implement the program described herein to achieve the 

goals and objectives described herein (as such program description and objectives may be 

amended from time to time in accordance with the terms hereof, the "Program"); 

NOW, THEREFORE, the Parties agree as follows: 

ARTICLE 1. 

GOAL AND OBJECTIVES 

Section 1.1 Program Goal. The goal ofthis Agreement is to assist Kosovo to become eligible 

for a Millennium Challenge Compact by supporting the implementation of critical institutional 

and policy reforms that address binding constraints to economic growth in Kosovo (the 

"Program Goaf'). MCC's assistance will be provided in a manner that strengthens good 

governance, economic freedom, and investments in the people of Kosovo. 

Section 1.2 Project Objectives. The Program consists of the projects described in Annex I 

(each, a "Project" and collectively, the "Projects"). The objective of each of the Projects (each, a 

"Project Objective" and collectively, the "Project Objectives") is as follows: 

(a) The objective ofthe Reliable Energy Landscape Project is to reduce the current 

gap between energy demand and supply by lowering energy use through piloting household 

investments in energy efficiency, switching to cost-effective non-electricity sources ofheating, 

and reducing barriers to independent power producer ("/PP'') entrants to the market; and 

(b) The objective ofthe Transparent and Accountable Governance Project is to 

improve the public availability and analytical use ofjudicial, environmental, and labor force data 

by civil society, business, and the Government, thus promoting data driven decision-making. 
ARTICLE2. 


PROGRAM FUNDING 


Section 2.1 Program Funding. 

(a) MCC hereby grants to the Government, subject to the terms ofthis Agreement, an 

amount not to exceed forty-nine million United States dollars (US$49,000,000) (the "Grant") to 

support implementation ofthe Program, as such Program is described in greater detail in Annex 

I. 

(b) The Grant will be disbursed from time to time (each, a "Disbursement") in 

accordance with the terms ofthis Agreement, including any conditions to disbursement 

contained in this Agreement. 

(c) The Grant will be allocated as described in Annex III, or as otherwise agreed in 

accordance with this Agreement. 

Section 2.2 Interest. Unless MCC agrees otherwise, to the extent that any interest or other 

earnings may accrue on the Grant before such funding is used for a Program purpose, the 

Government will pay or transfer such amounts to MCC, in accordance with this Agreement. 

Section 2.3 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 and obligations under 

this Agreement. 

(b) The Government will use its best efforts to ensure that the amount ofthe Grant 

that it receives or is projected to receive in each of its fiscal years is fully accounted for in its 

annual budget. 

(c) Unless the Government discloses otherwise to MCC in writing, the Grant will be 

in addition to the resources that the Government would otherwise receive or budget for the 

activities implemented under the Program. 

Section 2.4 Use ofthe Grant. 

(a) The Government will ensure that the Grant and any assets or services funded by 

the Grant, in whole or in part, will be used solely in furtherance ofthis Agreement and the 

Program. 

(b) The Government also will ensure that no Grant funding will be used for any 

purpose that would violate United States law or policy, as specified in this Agreement or as 

further notified to the Government in writing by MCC, including but not limited to the following 

purposes: 

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(i) for assistance to, or training of, the military, police, militia, national guard 

or other quasi-military organization or unit; 

(ii) for any activity that is likely to cause a substantial loss of United States 

jobs or a substantial displacement of United States production; 

(iii) to undertake, fund or otherwise support any activity that is likely to cause 

a significant environmental, health or safety hazard, as further described in the "MCC 

Environmental Guidelines" posted at www.mcc.gov (the "MCC Website") or otherwise made 

available by MCC to the Government ("MCC Environmental Guidelines") (to the extent 

applicable to the Threshold Program and as may be further instructed by MCC from time to 

time); or 

(iv) 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 ofinvoluntary 

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 2.5 Taxes. 

(a) Unless the Parties agree otherwise, the Government will ensure that the Grant 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 

Kosovo, reasonable in amount and imposed on a non-discriminatory basis) ("Taxes") of or in 

Kosovo (including any such Taxes imposed by a national, regional, local or other governmental 

or taxing authority of or in Kosovo). Specifically, and without limiting the generality of the 

foregoing, the Grant 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 

Kosovo in connection with the Program; (ii) sales tax, value-added tax, excise tax, property 

transfer 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 in the case ofthis clause (iv): (A) 

natural persons who are citizens or permanent residents of Kosovo; and (B) legal persons formed 

under the laws of Kosovo (but excluding the Accountable Entity and any other entity formed for 

the purpose of implementing the Government's obligations hereunder). 

(b) MCC and the Government understand that this Agreement is an arrangement as 

contemplated by Article 1 ofthe Agreementfor Economic and Technical Cooperation between 

the Government ofthe United States ofAmerica and the Government ofthe Republic ofKosovo, 

signed at Pristina on March 29, 2012 ("Economic and Technical Cooperation Agreement") 

and, as such, the terms of the Economic and Technical Cooperation Agreement apply, including 

with respect to Taxes and other charges that may apply in Kosovo. 

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(c) The Government and MCC may enter into one or more agreements setting forth 

the mechanisms that the Government will use to implement the tax exemption required by this 

Section 2.5. Such mechanisms may include exemptions from the payment of Taxes that have 

been granted in accordance with applicable law, refund or reimbursement ofTaxes by the 

Government to MCC, the Accountable Entity or to the taxpayer, or payment by the Government 

to the Accountable Entity or MCC, for the benefit ofthe Program, of an agreed amount 

representing any collectible Taxes on the items described in this Section 2.5. The Parties 

understand that an agreement pursuant to this Section 2.5( c) may be entered into by the 

Government without the need for further action by the Government (including any parliamentary 

action), or satisfaction of any additional domestic requirements of Kosovo. 

(d) If a Tax has been paid contrary to the requirements ofthis Section 2.5, the 

Government will refund promptly to MCC (or to another party designated by MCC) the amount 

of such Tax in United States dollars or the currency ofKosovo within 30 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 the Accountable Entity) that such Tax has been paid. 

(e) The Grant, including any proceeds thereof or Program Assets, may not be applied 

by the Government in satisfaction of its obligations under this Section 2.5. 

ARTICLE3. 

GOVERNMENT REPRESENTATIONS AND OBLIGATIONS 

Section 3.1 Government Representations. The Government hereby represents to MCC that the 

information provided to MCC by or on behalf ofthe Government in the course ofreaching this 

Agreement is true, correct, and complete in all material respects. 

Section 3 .2 Government Responsibilities. 

(a) Principal Responsibility. The Government is responsible for overseeing and 

managing the implementation ofthe Program. 

(b) Accountable Entity. With the prior written consent of MCC, the Government 

hereby designates an entity to be established as a foundation in accordance with the Law on 

Freedom ofAssociation in Non-Governmental Organizations to be known as Millennium 

Foundation Kosovo 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 Projects, allocating resources and managing 

procurements. Such entity will: (i) be referred to herein as the "Accountable Entity"; (ii) have 

the authority to bind the Government with regard to the Program (including, without limitation, 

the legal authority to execute contracts, grants, cooperative agreements or other, similar 

arrangements); and (iii) act in accordance with MCC's "Guidelines for Accountable Entities and 

Implementation Structures" provided by MCC or posted on the MCC Website (the "MCC 

Governance Guidelines") (to the extent applicable to the Threshold Program and as may be 

further instructed by MCC from time to time). The designation ofthe Accountable Entity 

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 

4 

fully responsible. MCC hereby acknowledges and consents to the designation in this Section 

3.2(b). With the prior written consent of MCC, the Government may designate one or more 

additional entities to implement the Program and to exercise and perform the Government's right 

and obligation to oversee, manage, and implement the Program. The Parties note that the 

Government remains ultimately responsible for the performance ofthe Government's obligations 

under or in relation to this Agreement. · 

(c) Policy Performance. In addition to undertaking the specific policy, legal and 

regulatory reform commitments identified in Annex I, Annex II or elsewhere in this Agreement 

(if any), the Government will seek to maintain and to improve its level of performance under the 

policy criteria identified in Section 607 ofthe Millennium Challenge Act of 2003, as amended. 

(d) Program Assets. Unless MCC agrees otherwise, the Government will ensure that 

any Program Assets or services funded in whole or in part (directly or indirectly) by the Grant 

are used solely in furtherance ofthis Agreement and the Program. 

(e) Achievement of Project Objectives. The Government will take all necessary or 

appropriate steps to achieve the Project Objectives prior to the Completion Date (including, 

without limitation, funding all costs that exceed the Grant and are required to carry out the terms 

hereof and achieve such objectives, except as MCC otherwise agrees). 

(f) Intellectual Property. The Government grants to MCC a perpetual, irrevocable, 

royalty-free, worldwide, fully paid, assignable right and license to practice or have practiced on 

its behalf (including the right to produce, reproduce, publish, repurpose, use, store, modify or 

make available) any portion or portions ofIntellectual Property as MCC sees fit in any medium, 

now known or hereafter developed, for any purpose whatsoever. 

(g) Impoundment; Liens or Encumbrances. The Government will ensure that neither 

the Grant nor any asset acquired with Grant funding will be subject to any impoundment, 

rescission, sequestration, liquidation, lien, attachment, enforcement ofjudgment, pledge, or 

encumbrance of any kind (each a "Lien"), except with MCC's prior written approval. In the 

event any Lien is nonetheless imposed, the Government will promptly seek the release of such 

Lien and, if such Lien is imposed by a final non-appealable court order, will pay any amounts 

due in order to obtain such release; provided, however, that the Government will not apply any 

portion ofthe Grant funding or any other funds received from MCC (or assets acquired with 

funds provided by MCC) to satisfy any ofits obligations under this Section 3.2(g). 

(h) Insurance; Performance Guaranties. The Accountable Entity will ensure to 

MCC's satisfaction that any assets acquired with Grant funding are insured and will arrange such 

other appropriate insurance to cover against risks or liabilities associated with the Program and 

the transactions contemplated thereby, including by requiring Providers or Covered Providers to 

obtain adequate insurance and to post adequate performance bonds or other guaranties. The 

Government or the Accountable Entity will be named as the payee (or an additional insured, as 

the case may be) on any such insurance and the beneficiary of any such guaranty or bonds. The 

Government or the Accountable Entity will promptly notify MCC ofthe payment of any 

proceeds from claims paid under such insurance or guaranty, and will ensure that any such 

proceeds will be used to replace or repair any lost, stolen, or damaged assets acquired with Grant 

5 

funding; provided, however, that, at MCC's election, such proceeds will be deposited in an 

account as designated by or as otherwise directed by MCC. 

(i) Autonomy. The Government will ensure that (i) no decision of the Accountable 

Entity is modified, supplemented, unduly influenced, or rescinded by any governmental 

authority, except by a non-appealable judicial decision or as otherwise approved by MCC, and 

(ii) the authority ofthe Accountable Entity will not be expanded, restricted, or otherwise 

modified, except in accordance with this Agreement or as otherwise approved by MCC in 

writing. 

(j) Performance Liabilities. No Grant funding or any other funding received from 

MCC (or assets acquired with funds provided by MCC) may be used to pay any damages, 

including any indemnification-related payments, incurred or owed by the Government or the 

Accountable Entity under any agreement between the Government or the Accountable Entity, on 

the one hand, and any third party. 

(k) Publicity. The Government and the Accountable Entity will give appropriate 

publicity to this Agreement as a program to which the United States of America, through MCC, 

has contributed, including by posting this Agreement, in English, as MCC may request, on an 

agreed website, identifying the Grant activity sites and marking assets acquired with the Grant, 

all in accordance with MCC's "Standards for Global Marking" provided by MCC or posted on 

the MCC Website (the "MCC Marking Standards"); provided, however, that any press release 

or announcement regarding MCC or the fact that MCC is making the Grant or any other 

publicity materials referencing MCC will be subject to MCC's prior written approval. MCC may 

post this Agreement on the MCC Website. MCC may also freely use any information it receives 

in any report or document provided to it with respect to the Program, the Grant or this 

Agreement. 

(1) Further Assurances. The Government will promptly do and perform such other 

and further acts, and take all necessary and appropriate actions, including using its best efforts to 

obtain all necessary approvals and consents to otherwise effectively carry out the obligations of 

the Government set forth in this Agreement. 

ARTICLE4. 

IMPLEMENTATION FRAMEWORK 

Section 4.1 Program Implementation Plan. The framework for implementation for the 

Program will be further elaborated in a set of documents, in form and substance approved by 

MCC, consisting of: (i) the Detailed Financial Plan; (ii) one or more Procurement Plans; (iii) a 

Work Plan; and (iv) an Audit Plan (each, an "Implementation Plan Document" and, 

collectively, the "Implementation Plan"). The Accountable Entity will submit its proposed 

Implementation Plan for review and approval by MCC by the timeframes set forth in this 

Agreement and at least on an annual basis thereafter (or in such other interval as may be required 

by the Program Guidelines). MCC will review the proposed Implementation Plan and as 

necessary may request the Government to submit clarifications or adjustments. The Accountable 

Entity will submit an updated Implementation Plan or updated Implementation Plan Document 

6 

during any quarter in which significant changes or modifications are made to a Project or to the 

Program, or when the Accountable Entity determines that the expected results, targets and 

milestones for the specified year are not likely to be achieved; provided, however, that an 

updated Detailed Financial Plan will be submitted each quarter and an updated Procurement Plan 

will be submitted at least every six months. In such instances, the Accountable Entity will submit 

to MCC for approval a proposed revised Implementation Plan or updated Implementation Plan 

Document (as applicable) on the same date as the next Disbursement Request is due. The 

Accountable Entity will ensure that the implementation of the Program is conducted in 

accordance with the Implementation Plan. 

(a) Detailed Financial Plan. Unless MCC agrees otherwise, the Accountable Entity 

will develop, adopt and implement a detailed financial plan (as approved by MCC) in accordance 

with the MCC Reporting Guidelines (to the extent applicable to the Threshold Program and as 

may be further instructed by MCC from time to time) (as supplemented or otherwise modified 

from time to time, the "Detailed Financial Plan"). The Detailed Financial Plan will set forth the 

funding requirements for each Activity ofthe Program (including administrative costs) and for 

each Project, broken down to the sub-Activity level (or lower, where appropriate) and projected 

both on a commitment and cash requirement basis. Annex III, attached hereto, sets forth the 

allocation of Grant funding for the Program. Annex III may be modified from time to time by 

agreement ofthe Parties in accordance with the terms ofthis Agreement. 

(b) Procurement Plan. The Accountable Entity will develop a procurement plan 

covering each procurement relating to the Program (each, a "Procurement Plan"), and submit 

such Procurement Plan to MCC for approval before commencing the relevant procurement. Each 

Procurement Plan will identify, among other things, the method of procurement for the goods, 

works, or services to be procured. The Accountable Entity will ensure that all goods, works, or 

services will be procured using the procurement method as approved in each Procurement Plan, 

and will comply with the method of procurement outlined in such Procurement Plan. 

(c) Work Plan. The Accountable Entity will develop, adopt, and implement a work 

plan, in form and substance satisfactory to MCC, for the overall administration of the Program 

(the "Work Plan"). In addition, the Accountable Entity will develop, adopt, and implement such 

other work plans relating to the Projects and/or Activities as MCC may request from time to 

time. 

(d) Audit Plan. The Accountable Entity will develop, adopt, and implement a plan, in 

accordance with the MCC Audit Guidelines (to the extent applicable to the Threshold Program 

and as further instructed by MCC from time to time), for the audit of the expenditures of the 

entities that are subject to audit pursuant to the MCC Audit Guidelines (the "Audit Plan"). The 

Audit Plan will be in form and substance satisfactory to MCC and will be developed no later 

than 60 days before the end of the first period to be audited. Unless MCC agrees otherwise in 

writing, the Accountable Entity will engage one or more auditors as contemplated in the MCC 

Audit Guidelines (each, an "Auditor") to undertake the audits contemplated by the Audit Plan. 

Section 4.2 Monitoring and Evaluation. The Accountable Entity will develop, adopt, and 

implement a monitoring and evaluation plan (the "M&E Plan") that will serve as the primary 

governing document for monitoring and evaluation activities for the Program. The M&E Plan 

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will be developed and updated in accordance with the "MCC Policy for Monitoring and 

Evaluation of Compacts and Threshold Programs" provided by MCC or posted on the MCC 

Website (the "M&E Policy"). 

Section 4.3 Procurement and Grants. 

(a) The Accountable Entity will ensure that the procurement of all goods, works and 

services required to implement the Program will be consistent with the "MCC Program 

Procurement Guidelines" provided by MCC or posted on the MCC Website (the "MCC Program 

Procurement Guidelines") (to the extent applicable to the Threshold Program and as may be 

further instructed in writing by MCC from time to time). The MCC Program Procurement 

Guidelines include, among others, the following requirements: 

(i) 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; 

(ii) solicitations for goods, works and services must be based upon a clear and 

accurate description of the goods, works and services to be acquired; 

(iii) 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 costeffective and timely basis; and 

(iv) 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. 

(b) Unless MCC agrees otherwise, the Accountable Entity will ensure that any grant 

issued in furtherance of the Program (each, a "Program Grant") is awarded, implemented, and 

managed pursuant to open, fair and competitive procedures administered in a transparent manner 

acceptable to MCC. In furtherance ofthis requirement, and prior to the issuance of any Program 

Grant, the Accountable Entity and MCC will agree upon written procedures to govern the 

identification of potential recipients, including without limitation appropriate eligibility and 

selection criteria and award procedures. 

Section 4.4 Fiscal Accountability. Unless MCC agrees otherwise, the Accountable Entity will 

develop, adopt, and implement a manual (as approved by MCC) setting forth the principles, 

mechanisms and procedures (the "Fiscal Accountability Plan") that will be used to ensure 

appropriate fiscal accountability and compliance with the "Cost Principles for Accountable 

Entity Operations" provided by MCC or posted on the MCC Website (the "MCC Cost 

Principles") (to the extent applicable to the Threshold Program and as may be further instructed 

in writing by MCC from time to time) for the use ofthe Grant funding. The Fiscal 

Accountability Plan will include, among other things, requirements with respect to: 

(a) budgeting; (b) accounting; (c) cash management; (d) financial transactions (receipts and 

payments); (e) opening and managing Permitted Accounts; (t) personnel and payroll; (g) travel 

and vehicle use; (h) asset and inventory control; (i) audits; and G) reporting. The Fiscal 

Accountability Plan will be revised periodically, subject to review and approval by MCC. 

8 

Section 4.5 Environmental, Gender and other Program Guidelines. 

(a) Unless MCC agrees otherwise, the Accountable Entity will ensure that activities 

undertaken, funded, or otherwise supported in whole or in part (directly or indirectly) by Grant 

funding comply with the MCC Environmental Guidelines, including the environmental and 

social performance standards set forth in the Performance Standards on Environmental and 

Social Sustainability of the International Finance Corporation (as in effect from time to time, the 

"IFC Performance Standards") that have been incorporated by reference into the MCC 

Environmental Guidelines (in each case, to the extent applicable to the Threshold Program and 

as may be further instructed in writing by MCC from time to time). The Accountable Entity also 

will ensure that the Program complies with all national environmental laws and regulations, 

licenses and permits, except to the extent such compliance would be inconsistent with this 

Agreement. 

(b) Unless MCC agrees otherwise, the Accountable Entity will ensure that activities 

undertaken, funded or otherwise supported in whole or in part (directly or indirectly) by Grant 

funding comply with the MCC Gender Policy and the MCC Gender Integration Guidelines (in 

each case, to the extent applicable to the Threshold Program and as may be further instructed in 

writing by MCC from time to time). 

(c) Unless MCC agrees otherwise, the Government will ensure that activities 

undertaken, funded or otherwise supported in whole or in part (directly or indirectly) by Grant 

funding comply with the Program Guidelines (in each case, to the extent applicable to the 

Threshold Program and as may be further instructed by MCC from time to time). 

Section 4.6 Reports. 

(a) Periodic Reports. Unless MCC agrees otherwise, the Accountable Entity will 

provide to MCC the periodic reports required by the "MCC Guidance on Quarterly MCA 

Disbursement Request and Reporting Package" provided by MCC or posted on the MCC 

Website (the "MCC Reporting Guidelines") (as applicable to the Threshold Program and as may 

be further instructed in writing by MCC from time to time), in each case timely delivered and in 

form and substance satisfactory to MCC. 

(b) Additional Reports. In addition to the reports required by Section 4.6(a), the 

Accountable Entity will provide to MCC within 30 days of a written request by MCC, or as 

otherwise agreed by the Parties in writing, such other reports or documents as MCC may request 

from time to time as related to any component ofthe Implementation Plan, the Fiscal 

Accountability Plan or in connection with any Activity or Disbursement. 

Section 4.7 Records; Accounting; Providers; Access. 

(a) Records. The Government will maintain, and will use its best efforts to ensure 

that the Accountable Entity and any 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 Grant funding (collectively, the "Records"). The Government will furnish or cause 

to be furnished to MCC upon MCC's request originals or copies of all such Records. 

9 

(b) Accounting. The Government will maintain, and will use its best efforts to ensure 

that the Accountable Entity and any Covered Providers maintain, Records in accordance with 

generally accepted accounting principl~s 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 Kosovo. 

Records must be maintained for at least five years after the end ofthe term ofthis Agreement or 

for such longer period, if any, required to resolve any litigation, claims or audit findings, or any 

statutory requirements. 

(c) Access. Upon MCC's request, the Government, at all reasonable times, will 

permit, or cause to be permitted, authorized representatives of MCC, the 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 ofthis 

Agreement, and any agents or representatives engaged by MCC or the Government to conduct 

any assessment, review or evaluation ofthe Program, the opportunity to audit, review, evaluate 

or inspect facilities, assets and activities funded in whole or in part by Grant funding. 

Section 4.8 Audits; Reviews. 

(a) Government Audits. Unless MCC agrees otherwise, the Government will, on an 

annual basis (or on a more frequent basis if requested by MCC in writing), conduct, or cause to 

be conducted, financial audits of all disbursements of Grant funding covering the period from 

signing ofthis Agreement until the following March 31 and covering each 12-month period 

thereafter ending March 31, until the Completion Date. 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 the Millennium Challenge Corporation's Accountable Entities 

(the "MCC Audit Guidelines") issued and revised from time to time by the Inspector General, 

which are posted on the MCC Website. Audits will be performed in accordance with the MCC 

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 

applicable audit period, 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 the Uniform Administrative 

Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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-United States Covered Provider, on the other hand, state that 

the non-United States Covered Provider is subject to audit in accordance with the MCC Audit 

Guidelines. 

10 

(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 ofthe 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 ofthe 

Government's use of Grant funding. 

Section 4.9 Required MCC Approvals. Each ofthe following transactions, agreements and 

documents will require MCC's prior written approval: 

(a) Any Disbursement and each Disbursement Request; 

(b) Implementation Plan (including each element or component thereof), the Fiscal 

Accountability Plan and the M&E Plan, and any modification of any ofthe foregoing; 

(c) Agreements between the Government and the Accountable Entity, and 

agreements in which any ofthe following are appointed, hired or otherwise engaged (each ofthe 

foregoing, a "Material Agreement"): 

(i) Auditor; 

(ii) Bank; or 

(iii) a member ofthe Accountable Entity's board of directors (including any 

observer) or any Key Staff ofthe Accountable Entity (including agreements regarding 

compensation for any such person); 

(d) Any modification, termination or suspension of a Material Agreement, or any 

action that would have equivalent effect; 

(e) Any agreement or transaction ofthe Accountable Entity that is not arm's-length; 

(f) Any pledge of any Grant funding or any Program Assets, or any incurrence of 

material indebtedness, or any guarantee, directly or indirectly of any indebtedness; 

(g) Any decree, legislation, regulation, charter, contractual arrangement or other 

document establishing or governing (other than public laws of general application to all public 

institutions), or relating to the formation, organization or governance of, the Accountable Entity, 

and any amendment, supplement, modification, repeal or other alteration thereof or thereto (each, 

a "Governing Document'); 

(h) Any disposition, in whole or in part, liquidation, dissolution, winding up, 

reorganization or other change ofthe Accountable Entity, including any revocation or 

modification of or supplement to any Governing Document related thereto; 

(i) Any change in character or location of any Permitted Account; 

11 

(j) (i) Any change of any member ofthe Accountable Entity's board of directors, any 

observer, the chairperson ofthe board, the composition or size ofthe board or the filling of any 

vacant seat on the board, or the replacement of any observer; (ii) any change of any Key Staff of 

the Accountable Entity or in the composition or size ofits management unit, and the filling of 

any vacant position of any Key Staff ofthe Accountable Entity; 

(k) Any decision by the Accountable Entity to engage, accept or manage any funds in 

addition to the Grant (including from any donor agencies or organizations) prior to the 

Completion Date, or to engage in any activities or undertake any duties or responsibilities other 

than those contemplated under this Agreement or any related agreement or document; 

(1) Any agreement, transaction, decision or other action or document for which MCC 

approval is required under any ofthe Program Guidelines, including the MCC Program 

Procurement Guidelines; and 

(m) Any decision to amend, supplement, replace, terminate, or otherwise change any 

of the foregoing documents or arrangements. 

Section 4.10 Implementation Letters. From time to time, MCC may provide guidance or 

instructions to the Government in writing on any matters relating to this Agreement, the Grant or 

implementation ofthe Program (each, an "Implementation Letter"). The Government will use 

such guidance or instructions 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 ofthis Agreement or other related agreements. 

ARTICLE 5. 

DISBURSEMENT OF GRANT FUNDING 

Section 5.1 Disbursement Process. 

(a) Disbursement Requests. The Accountable Entity may request Disbursements of 

the Grant by submitting a written request to MCC substantially in the form of the "Disbursement 

Request" provided by MCC or posted on the MCC Website (each, a "Disbursement Request"), 

duly completed, not later than 20 days (or such other period of time as may be agreed by MCC) 

prior to the commencement of each Disbursement Period. Unless MCC agrees otherwise, the 

Accountable Entity may submit only one Disbursement Request for each calendar quarter (such 

quarter, or any other period oftime as agreed by MCC, the "Disbursement Period"). 

(b) Approval ofDisbursement Requests; Release of Proceeds. 

(i) Upon receipt of a Disbursement Request, MCC will determine the 

appropriate aggregate amount of Disbursements permitted for the applicable Disbursement 

Period based on, among other things: (A) progress achieved under the Implementation Plan; (B) 

the amount of funds required to complete the activities described in the accompanying 

Disbursement Request during such Disbursement Period; and (C) the satisfaction, waiver, or 

deferral ofthe conditions precedent applic:;ible to the requested Disbursements. 

12 

(ii) MCC may, in its sole discretion, reject any Disbursement Request 

completely, or reject or reduce the amount of any Disbursement requested thereunder, based on 

among other things: (A) any modification made to, or failure to achieve progress under, the 

Implementation Plan; or (B) if any condition precedent applicable to the requested 

Disbursements has not been satisfied, waived, or deferred. 

(iii) Subject to MCC's approval of a Disbursement Request, the proceeds of 

the Disbursements approved thereunder may be transferred, at MCC's sole election: (A) to a 

Permitted Account; (B) directly to a third party as payment for goods, works, or services 

received by the Government or the Accountable Entity, as applicable, in accordance with MCC's 

common payment system (the "Common Payment System") or any alternate payment system 

approved by MCC; or (C) directly to an employee ofthe Accountable Entity (or to the 

Government, as reimbursement for authorized expenses ofthe Accountable Entity); provided, 

however, that any expenditure of such proceeds is authorized by the Government or the 

Accountable Entity, as applicable, and any related payment complies with the most recently 

approved Detailed Financial Plan and the standards and procedures set forth in the Fiscal 

Accountability Plan. 

(iv) Unless MCC agrees otherwise, any Disbursement, or financial 

commitment involving Grant funding may be made, and a Disbursement Request may be 

submitted, only if the related expense is provided for in the Detailed Financial Plan and sufficient 

uncommitted funds exist in the Detailed Financial Plan for that object of expense and for the 

relevant Disbursement Period. 

(c) Permitted Accounts. 

(i) Any Grant funding to be disbursed to a bank account must be deposited in 

a bank account (the "Local Account") established by the Accountable Entity in the local 

currency ofKosovo or United States dollars, as agreed by the Parties, at a financial institution 

acceptable to MCC. With prior MCC approval, the Accountable Entity may establish such other 

bank accounts as are needed for the purposes of implementing the Program (each such other 

bank account, together with the Local Account, a "PermittedAccount"). Before any Grant 

funding is deposited into a Permitted Account, the Government will ensure that the Accountable 

Entity enters into an agreement, in form and substance satisfactory to MCC, with the financial 

institution approved by MCC to hold such Permitted Account (each a "Bank"), which sets forth 

the signatory authority, access rights, anti-money laundering and anti-terrorist financing 

provisions, and other terms related to such Permitted Account (each a "Bank Agreement"). The 

terms and operation ofthe Permitted Accounts will be set forth in the Fiscal Accountability Plan 

and the Bank Agreement. 

(ii) Unless MCC agrees otherwise, Grant funding held in a Permitted Account 

will accrue interest or other earnings in accordance with the applicable Bank Agreement. On a 

quarterly basis and upon the termination or expiration ofthis Agreement or the relevant Bank 

Agreement, the Accountable Entity will ensure the transfer to MCC of any interest accrued on 

amounts held in a Permitted Account. 

13 

(iii) Unless MCC agrees otherwise, no funds will be commingled in a 

Permitted Account other than Grant funding and accrued interest and earnings thereon. MCC 

will have the right, among other things, to view any Permitted Account statements and activity 

directly on-line, and where such viewing is not feasible, the Accountable Entity will provide 

copies of such statements to MCC upon its request. 

(iv) Unless MCC agrees otherwise, if Grant funding is held in any Permitted 

Account other than the Local Account, the Accountable Entity will ensure that such Grant 

funding will be denominated in United States dollars prior to release. To the extent that any 

amount of Grant funding held by the Bank in United States dollars must be exchanged into the 

currency of Kosovo for any purpose, the Government will ensure that such exchange is 

consistent with Section 2.5 and the requirements ofthe Bank Agreement. 

Section 5.2 Conditions Precedent to the Initial Disbursement. Unless waived or deferred by 

MCC in writing, the conditions set forth in this Section 5.2 and the conditions set forth in Section 

5.3 must have been met to MCC's satisfaction prior to the initial Disbursement ofthe Grant: 

(a) Legal Opinion. The Government has delivered to MCC a signed legal opinion by 

counsel acceptable to MCC. 

(b) Implementation Plan. The Accountable Entity has developed and adopted the 

Implementation Plan Documents (other than the Work Plan). 

(c) Permitted Account. To the extent that any portion of the Disbursement will be 

held in a Permitted Account, the Accountable Entity has established the Local Account and any 

other required Permitted Account. 

(d) Fiscal Accountability Plan. The Accountable Entity has developed and adopted 

the Fiscal Accountability Plan (or an interim version). 

(e) Key Staff. Each Key Staff member has been selected and engaged by the 

Accountable Entity and approved by MCC or if a Key Staff member has not been selected, the 

Government is actively engaged, to MCC's satisfaction, in ensuring the recruitment for the 

vacant position. 

Section 5.3 Conditions Precedent to Each Disbursement. Unless waived or deferred in writing 

by MCC, the following conditions must have been met to MCC's satisfaction prior to each 

Disbursement ofthe Grant (including the initial Disbursement ofthe Grant): 

(a) Deliverables. The Accountable Entity has delivered to MCC the following 

documents, in form and substance satisfactory to MCC: 

(i) a completed Disbursement Request, together with the periodic reports 

required under Section 4.6 covering the related Disbursement Period; and 

(ii) a certificate from the Accountable Entity, dated as ofthe date of such 

Disbursement Request, substantially in the form provided by MCC. 

14 

(b) Other Conditions Precedent. MCC has determined in its sole discretion that: 

(i) any applicable conditions precedent in Annex II have been duly satisfied, 

deferred or waived pursuant to the terms ofthis Agreement; 

(ii) the Government's representations set forth in Section 3.1 are true and 

correct on and as ofthe date of such Disbursement Request as though made on and as of such 

date; 

(iii) no material breach of any responsibility, covenant or obligation by the 

Government, the Accountable Entity or any other Government entity has occurred and is 

continuing under this Agreement or any related agreement or document; 

(iv) the activities to be funded with such Disbursement will not violate any 

applicable law or regulation; 

(v) 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 ofthe Implementation Plan related to such 

Disbursement; 

(vi) there has been progress satisfactory to MCC on the M&E Plan (including 

the targets set forth therein, any related baseline data collection requirements set forth therein or 

any applicable reporting requirements set forth therein for the relevant Disbursement Period); 

(vii) there has been no material negative finding in any financial audit report 

delivered in accordance with this Agreement and the Audit Plan for the prior year (or such other 

period as the Audit Plan may require); 

(viii) any Taxes paid with Grant funding through the date 90 days prior to the 

start of the applicable Disbursement Period have been reimbursed by the Government in full in 

acco~dance with Section 2.5; and 

(ix) each Key Staff member remains engaged, or if a position is vacant, the 

Government is actively engaged, to MCC's satisfaction, in ensuring the recruitment of a 

replacement. 

ARTICLE 6. 

COMPLETION DATE; TERMINATION AND SUSPENSION 

Section 6.1. Completion Date. Unless the Parties agree otherwise, September 30, 2021, is the 

date by which the Parties estimate that all of the activities related to the implementation ofthe 

Program and the achievement ofthe Project Objectives will be completed (the "Completion 

Date"). Unless MCC agrees otherwise, Grant funding may not be used for expenditures incurred 

after the Completion Date. 

15 

Section 6.2. Termination and Suspension; Expiration. 

(a) Either Party may terminate this Agreement without cause in its entirety by giving 

the other Party 30 days' written notice; provided, however, that notwithstanding such 

termination, this Agreement will continue to be effective with respect to any Activity for which a 

Disbursement has already been issued or approved by MCC. 

(b) MCC may, upon written notice to the Government, immediately suspend or 

terminate this Agreement or the Grant, 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 Website) has 

occurred, which circumstances include but are not limited to the following: 

(i) the Government fails to comply with its commitments under this 

Agreement or any other agreement or arrangement entered into by the Government in connection 

with this Agreement or the Program; 

(ii) an event or series of events has occurred that MCC determines makes it 

improbable that the Program can be performed, that the Project Objectives will be achieved 

before the Completion Date or that the Government will be able to perform its obligations under 

this Agreement; 

(iii) a use ofthe Grant or continued implementation ofthis Agreement would 

violate applicable law or United States Government policy, whether now or hereafter in effect; 

(iv) the Government or any other person or entity receiving Grant funding or 

using assets acquired in whole or in part with Grant funding is engaged in activities that are 

contrary to the national security interests ofthe United States of America; 

(v) an act has been committed or an omission or an event has occurred that 

would render Kosovo 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 ofthe 

application of any provision ofthe Foreign Assistance Act of 1961 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 ofKosovo for assistance under the Threshold Program; 

and 

(vii) a person or entity receiving Grant funding or using assets acquired in 

whole or in part with Grant funding is found to have been convicted of a narcotics offense or to 

have been engaged in drug trafficking. 

(c) All Disbursements will cease upon expiration, suspension or termination ofthis 

Agreement; provided, however, that Grant funding may be used, in compliance with this 

Agreement, to pay for: (i) reasonable expenditures for goods, works or services that are properly 

incurred under or in furtherance ofthis Agreement before expiration, suspension or termination 

ofthis Agreement; and provided, further, that the request for such expenditures is submitted 

within 90 days after such expiration, suspension or termination; and (ii) reasonable expenditures 

16 

(including administrative expenses) properly incurred in connection with the winding up ofthe 

Program within 120 days after the expiration, suspension or termination ofthis Agreement. 

(d) Subject to Section 6.2( c ), upon the expiration, suspension or termination of this 

Agreement: (i) any amounts ofthe Grant not disbursed by MCC will be automatically released 

from any obligation in connection with this Agreement without any action from the Government 

or MCC; and (ii) any amounts ofthe Grant disbursed by MCC to the Government but not 

expended before such expiration, suspension or termination ofthis Agreement, including any 

amounts in a Permitted Account, plus accrued interest thereon, will be returned to MCC within 

30 days after the Government receives MCC's request for such return, and the Government will 

ensure that such amount will be returned promptly to such account(s) designated by MCC. 

(e) At least one year prior to the expiration, or upon termination, ofthis Agreement, 

the Parties will consult in good faith with a view to reaching agreement in writing on (i) the 

treatment ofthe Accountable Entity after the Program, (ii) the process for ensuring the refunds of 

Disbursements that have not yet been released from a Permitted Account or committed in 

accordance with Sections 6.2( c) and ( d), and (iii) any other matter related to the winding up of 

the Program, including the proper disposition of all Program Assets. Ifthe Accountable Entity 

continues operations after the Completion Date, or following the termination ofthis Agreement, 

with sources of funding other than the Grant, the Accountable Entity will cease to use the name 

and logo that it used during implementation of the Program, except as otherwise agreed in 

writing by MCC. 

(f) MCC and the Government recognize that the effects ofthe Program will be longranging and its impact may not be measurable for several years after the Completion Date. 

Accordingly, MCC and the Government agree to cooperatively monitor the results and evaluate 

the impacts ofthe Program in Kosovo after the termination or expiration ofthis Agreement. 

Section 6.3. Refunds. MCC may reinstate any suspended or terminated portion ofthe Grant 

under this Agreement if MCC determines that the Government, or other relevant person or entity, 

has committed to correct each condition for which the Grant was suspended or terminated. 

(a) If any Grant funding, any interest or earnings thereon, or any asset acquired in 

whole or in part with Grant funding is used for any purpose in violation ofthe terms ofthis 

Agreement, then MCC may require the Government to repay to MCC in United States dollars the 

value ofthe misused portion ofthe Grant, interest, earnings or asset, plus interest within 30 days 

after the Government's receipt of MCC's request for repayment. The Government will not use 

Grant funding, proceeds thereof or any other funds received from MCC (assets acquired with 

Grant funding or with any such other funds) to make such payment. 

(b) Notwithstanding any other provision in this Agreement or any other existing 

agreement to the contrary, MCC's right under this Section 6.3 to obtain a refund will continue 

during the term ofthis Agreement and for a period of (i) five years thereafter or (ii) one year 

after MCC receives actual knowledge of such violation, whichever is later. 

17 

ARTICLE 7. 

GOVERNING LAW; AMENDMENTS; GENERAL 

Section 7.1 Governing Law. This Agreement is an international agreement and as such will be 

governed by the principles of international law. 

Section 7.2 Consultations. Either Party may, at any time, request consultations relating to the 

interpretation or implementation ofthis Agreement. Such consultations will begin at the earliest 

possible date. 

Section 7.3 Representatives. For all purposes relevant to implementation of this Agreement, 

the Government will be represented by the individual holding the position of, or acting as, the 

President ofthe Republic ofKosovo, and MCC will be represented by the individual holding the 

position of, or acting as, the Vice President ofthe Department of Policy and Evaluation (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") for 

all purposes ofthis Agreement except for purposes of Section 7.7(a). The Government hereby 

designates the Chief of Staff ofthe Presidency, the Chief of Staff ofthe Prime Minister, and the 

Chief Executive Officer ofthe Accountable Entity as Additional Representatives. MCC hereby 

designates the Deputy Vice President ofthe Department of Policy and Evaluation as 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 7.4 Communications. Any document or communication required or submitted by 

either Party to the other under this Agreement must be submitted in writing and, unless MCC 

agrees otherwise, in English, to such Party's Principal Representative, and, if applicable, to such 

Party's Additional Representative(s). For this purpose, the address of each Party is set forth 

below. 

ToMCC: 

Millennium Challenge Corporation 

Attention: Vice President, Department of Policy and Evaluation 

(with a copy to the Vice President and General Counsel) 

1099 Fourteenth Street NW 

Washington, DC 20005 

United States ofAmerica 

Facsimile: +1 (202) 521-3700 

Telephone: +1 (202) 521-3600 

Email: VPPolicyEvaluation@mcc.gov (Vice President, Department of Policy and 

Evaluation) 

VPGeneralCounsel@mcc.gov (Vice President and General Counsel) 

18 

To the Government: 

Presidency ofthe Republic of Kosovo 

Attention: President ofthe Republic ofKosovo 

Mother Teresa Boulevard PN 

10000 Pristina 

Kosovo 

Facsimile: +381 (0) 38 211 651 

Telephone: +381 (0) 38 211 650 ext. (200) 12 503 

Email: protocol@president-ksgov.net 

Section 7.5 MCC Status. MCC is a United States government corporation acting on behalf of 

the United States Government in the implementation ofthis Agreement and the Program. MCC 

and the United States Government assume no liability for any claims or loss arising out of 

activities or omissions under this Agreement. The Government waives any and all claims against 

MCC or the United States Government or any current or former officer or employee ofMCC or 

the United States Government for all loss, damage, injury, or death arising out of activities or 

omissions under this Agreement, and agrees that it will not bring any claim or legal proceeding 

of any kind against any ofthe 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 ofKosovo for any claim or loss arising out of activities or 

omissions under this Agreement. 

Section 7.6 No Assurance of Future Assistance. Nothing contained in this Agreement will be 

construed as creating an obligation on the part of MCC to provide any further funding or 

assistance, other than the Grant, in relation to any other project or program in Kosovo. 

Section 7.7 Amendment. 

(a) This Agreement may be amended by written agreement ofthe Parties. Such 

agreement will specify how it enters into force. 

(b) Notwithstanding subsection (a) ofthis Section, the Parties agree that the 

Government and MCC may by written agreement which will enter into force upon signature (i) 

modify any Annex to this Agreement to, in particular, but without limitation, (A) suspend, 

terminate or modify any Activity described in Annex I or create a new Activity, (B) add, delete 

or waive any condition precedent described in Annex II, or (C) modify the designation or 

allocation of funds among the activities identified in Annex III; or (ii) extend the Completion 

Date; provided that, in each case, any such modification (A) is consistent in all material respects 

with the Project Objectives, (B) does not cause the amount ofthe Grant to exceed the aggregate 

amount specified in Section 2.1 (a), and (C) does not cause the Government's responsibilities or 

contribution of resources to be less than as specified in this Agreement. Any such modification 

pursuant to this subsection (b) will not be deemed an amendment ofthis Agreement pursuant to 

subsection (a). 

19 

Section 7.8 Survival. The Government's obligations under Sections 2.4, 2.5, 3.2, 4.6, 6.2, 6.3, 

7.1, and this Section 7.8 will survive the expiration, suspension, or termination of this 

Agreement. 

Section 7.9 Definitions; Interpretation. 

(a) Except as otherwise expressly provided herein, capitalized terms used in this 

Agreement will have the respective meanings given to such terms in Annex IV. 

(b) Any reference to the term "including" in this Agreement will be deemed to mean 

"including, without limitation," except as expressly provided otherwise. Unless the context 

requires otherwise: (i) each definition of or reference to any agreement, instrument, law, 

regulation, policy, guideline, or similar document in this Agreement (or any other agreement 

entered into in connection with this Agreement), unless otherwise expressly set forth herein, will 

be construed as a reference to such agreement, instrument, law, regulation, policy, guideline, or 

similar document as it may, from time to time, be amended, revised, replaced, or extended, and 

will include any agreement, instrument, law, regulation, policy, guideline, or similar document 

issued under or otherwise applicable or related to such agreement, instrument, law, regulation, 

policy, guideline, or similar document; (ii) the words "herein", "hereof' and "hereunder," and 

words of similar import, will be construed to refer to this Agreement in its entirety and not to any 

particular provision hereof; (iii) all references herein to Articles, Sections, and Annexes I - IV 

will be construed to refer to the Articles and Sections of, and Annexes to, this Agreement, all of 

which form an integral part ofthis Agreement; (iv) any reference to the phrases "Unless MCC 

agrees otherwise" or "Unless the Parties agree otherwise" in this Agreement will be deemed to 

be followed by "in writing", except as expressly provided otherwise; (v) any approval right 

granted to MCC herein will only be satisfied upon the prior written approval ofMCC. 

Section 7 .10 References to MCC Website. Each reference in this Agreement, or any other 

agreement entered into in connection with this Agreement, to a document or information 

available on, or notified by posting on, the MCC Website will be deemed a reference to such 

document or information as updated or substituted on the MCC Website by MCC from time to 

time. 

Section 7 .11 Signatures. Signatures to this Agreement and to any amendment to this 

Agreement (and to any other legally binding international agreement related to this Agreement) 

will be original signatures appearing on the same page or in an exchange of letters or diplomatic 

notes. With respect to all other documents arising out ofthis Agreement and amendments 

thereto, signatures may 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. 

Section 7 .12 Grant Reference. In all notices, requests, reports, or correspondence in connection 

with Grant funding, the following number should appear on any such document as the grant 

reference: TR16XKX17001. 

20 

ARTICLES. 

ENTRY INTO FORCE 

This Agreement will enter into force on the date of signature by the Parties. 

SIGNATURE PAGE FOLLOWS ON NEXT PAGE. 

21 

IN WITNESS WHEREOF, the undersigned, duly authorized by their respective 

Governments, have signed this Agreement. 

Done at Washington, DC, this 12th day of September, 2017, in the English language. 

FOR THE UNITED ST A TES OF FOR THE REPUBLIC OF KOSOVO, acting 

AMERICA, acting through THE through THE PRESIDENT OF THE 

MILLENNIUM CHALLENGE REPUBLIC OF KOSOVO 

CORPORATION 

Name: Jon than G. Nash Name 


Title: Chief Executive Officer (Acting) Title: 


SIGNATURE PAGE TO MILLENNIUM CHALLENGE ACCOUNT THRESHOLD PROGRAM GRANT AGREEMENT 


BETWEEN THE UNITED STATES OF AMERICA, ACTING THROUGH THE MILLENNIUM CHALLENGE CORPORATION 


AND THE REPUBLIC OF Kosovo, ACTING THROUGH THE PRESIDENT OF THE REPUBLIC OF Kosovo 

ANNEX I 

PROGRAM DESCRIPTION 

Unless the Parties agree otherwise, the assistance provided under this Agreement will be utilized 

by the Government to support the following Program. 

A. SUMMARY OF PROGRAM 

The Program includes two Projects and their activities (each, an "Activity" and collectively, the 

"Activities"): 

1. Reliable Energy Landscape Project. 

The objective of the Reliable Energy Landscape Project is to reduce the current gap between 

energy demand and supply, by lowering energy use through piloting household investments in 

energy efficiency, switching to cost-effective non-electricity sources of heating, and reducing 

barriers to IPP entrants to the market. 

The proposed Activities under this Project include: 

(a) Activity 1.1: Pilot Incentives for Household Investment in Energy Efficiency 

("PIE Activity"). 

This Activity will support an investigation of the types of interventions, incentives, and program 

modalities that are the most cost-effective, so that these can inform the Government, which can 

adopt its own programs if desired, potentially through the Kosovo Energy Efficiency Agency's 

Energy Efficiency Fund. 

(i) Household Incentives for Energy Efficiency Sub-Activity. This SubActivity is designed to address two root causes of consumer over-use of electricity: (a) the 

general lack of consumer awareness of energy saving measures and their benefits; and (b) the 

lack of ability for low-income households to pay for them, through incentive piloting, regulatory 

support, and technical assistance/capacity building. Grant funding will support: 

• 	 Assessing and identifying barriers to household energy consumers adopting energy 

efficiency measures and developing a behavior change strategy to address these barriers, 

including engagement with women as primary household energy managers and users. 

This pilot will include various types of incentives and modality of delivery in order to 

identify which are the most cost-effective for reducing energy use for all households and 

particularly those feasible for lower-income households. 

• 	 Conducting outreach to consumers and identifying the most cost-effective and affordable 

measures for each household through energy audits and appropriate design. A formative 

assessment during the course of the pilot will provide cost-effectiveness data and guide 

which household-level incentives might be recommended for scale-up by the Kosovo 

Energy Efficiency Agency's Energy Efficiency Fund. 

ANNEX 1-1 
• 	 Providing technical assistance which is expected to include: investigating the potential of 

private energy service companies to serve public infrastructure and industrial/commercial 

sectors; ensuring the electricity tariff structure incentivizes energy efficiency to the 

greatest extent possible; and supporting the development of a two-tiered certification 

program for energy auditors that would create employment opportunities, including in 

particular for women, while maintaining an appropriate level oftechnical rigor. 

(ii) Ensuring Equal Economic Opportunities in the Energy Sector SubActivity. This Sub-Activity is designed to address the barriers to the participation of women in 

the energy sector as employees and entrepreneurs. It will implement a series of proactive 

measures to leverage and create new opportunities to increase the employment of women, within 

the energy sector. This Sub-Activity will also support women's entrepreneurship in the energy 

sector through direct support that could include training and/or additional incentives. The SubActivity will seek concrete employment opportunities through entities that will be implementing 

threshold program activities, and will also partner with educational institutions and universities, 

government entities, and the private sector to strengthen women's economic opportunities in the 

sector. 

(b) Activity 1.2: District Heating Metering. 

This Activity is designed to test the cost-effectiveness of charging households for the energy they 

use through the district heating system and the responsiveness of households to direct price 

signals. Grant funding will support: 

• 	 Piloting different models to roll out district heating metering in the distribution system of 

Termokos, the public heating utility in Pristina, in order to gain information on costeffectiveness of expanding consumption-based metering systems to all Termokos 

customers. This will entail feasibility work, formative research to design and implement a 

social and behavior change campaign, and small works. 

• 	 Supporting the design of tariffs for consumption based district heating, and assessing the 

needs ofthe Termokos billing system to support the transition from spatial billing to 

billing based on actual consumption. 

• 	 Investigating the formation of heat accounting companies or other options to provide 

related services to building owners and occupants as well as the formation of 

homeowners associations in larger apartment buildings as a means of encouraging 

collective decisions regarding energy efficiency. 

• 	 Investigating modalities for ensuring long-term s.ustainability ofthe district heating 

system. 

(c) Activity 1.3: IPP Project Finance Facilitation. 

Given the technical and financial gaps for renewable energy IPPs, this Activity will support 

technical assistance to bridge project development and financing hurdles faced by small and 

medium scale renewable energy projects. This Activity will support the development of.financial 

ANNEX I-2 

and technical assistance strategies and the exploration of new tools for potential partners in 

project preparation and new approaches to implementing commercial finance investments to 

generate longer-term funding capable of delivering IPP commercialization. MCC technical 

assistance is anticipated to provide project development support and institutional technical 

assistance to project sponsors, as well as help identify potential lending and investment partners. 

Grant funding will support: 

• 	 Developing feasibility studies to design the financial and technical assistance strategies. 

• 	 Providing technical expertise and administrative support to develop, and secure financing 

for, bankable projects through a sustainable mechanism. 

2. Transparent and Accountable Governance Project. 

The objective ofthe Transparent and Accountable Governance Project is to improve the public 

availability and analytical use ofjudicial, environmental, and labor force data by civil society, 

business, and the Government, thus promoting data driven decision-making. 

The proposed Activities under this Project include: 

(a) Activity 2.1: Public Access to Judicial Information. 

Existing efforts by the Kosovo Judicial Council and Kosovo Prosecutorial Council, with the 

assistance ofthe Government ofNorway, are targeting improvements to the judicial sector by 

implementing a case management information system and using that system to improve the 

administration ofjustice in Kosovo. This Activity would use data and information created by 

these and other related efforts and make it available and useful to the public. Grant funding will 

support: 

• 	 Creating an online platform for the public to access their personal case information and 

statistical data generated by the case management information system, as well as enabling 

disaggregation and analysis of data by meaningful categories, such as gender, region, or 

ethnicity; 

• 	 Supporting improved quality ofjudicial decisions for publication; 

• 	 Making judicial decisions publicly available through the online platform to encourage 

wider accessibility and analysis; 

• 	 Supporting improvement of communication and outreach by the judiciary and other rule 

of law institutions. 

(b) Activity 2.2: Environmental Data Collection. 

This Activity will support Government institutions involved in environmental protection and 

health, such as the Kosovo Environmental Protection Agency ("KEPA"), the Kosovo 

Hydrometeorological Institute ("KHMr'), and the Kosovo Institute of Public Health ("KIPH'), 

to effectively monitor and report on select environmental indicators to a variety of stakeholders, 

ANNEX 1-3 
including the public. The Activity will also strengthen the ability of civil society to interpret the 

data in order to engage more productively with the Government on environmental and health 

issues. 

There may be other factors that drive KEPA and KHMI's ability to report data and use data for 

decision making, including incentives (both within the organization and in the environment in 

which KEP A operates), organizational structures, organizational processes, and staff knowledge. 

This Activity will discern the root causes of performance gaps as well as the assets and strengths 

that target organizations can leverage to improve performance. It will analyze factors that 

prevent data from being shared and used for decision-making. The Activity will address these 

constraints by working at the institutional level to deal with organizational processes and 

structures that create openings for data-driven decision making. 

Proposed interventions include: 

• 	 Supporting a needs assessment ofthe factors that drive KEP A's ability to report and use 

data for decision-making, as well as current monitoring, data collection, reporting 

capacity for air, land and water, gaps in target indicators, and assessment ofwhere other 

institutions are collecting environmental data; 

• 	 Providing support to ensure all equipment that monitors air quality is well placed, 

functional and communicating data automatically on the indicators of air quality that are 

currently measured, and ensuring that KEP A is able to keep those assets properly 

maintained and calibrated; 

• 	 Improving KEP A's environmental data management platform and reporting ability, 

ensuring data is shared regularly and publically in a machine-readable format; 

• 	 Supporting a needs assessment of KIPH' s data analysis and communication capacity; 

• 	 Improving communication and coordination between KIPH, KEP A, and KHMI regarding 

the frequency, location, elements and parameters of data needs; and 

• 	 Improving KIPH' s capacity to use environmental data to identify risks, prevent disease 

and the health consequences of environmental hazards. 

In order to foster a constructive relationship with civil society, this Activity will also support 

civil society capacity building. Media representatives (digital, paper, television and radio), 

educational, and civil society organizations, will receive trainings on how to interpret, analyze, 

and present data about environmental pollution. Efforts will be made to ensure participation of 

women's civil society organizations and those of social minority groups, and to highlight 

environmental risks of particular relevance to these groups, and will include working closely 

with municipalities and local governments to use and contribute to data. 

(c) Activity 2.3: Kosovo Open Data Challenge 

This Activity aims to foster productive partnerships between the Government, private sector, and 

civil society, support innovation in data use and analysis, and develop a culture of information 

ANNEX 1-4 
sharing and evidence-based decision-making. The Kosovo Open Data Challenge ("KODC') 

Activity will award grants through a competitive process to individuals or organizations who 

have innovative ideas about how to use, analyze, and present data to influence and support the 

Government's analytical and public communication needs. To ensure the newly available data 

resulting from the Program and other sources is used to drive decision-making, the KODC 

Activity will engage, support, and connect local innovators, developers, and solution providers to 

use open data to help produce tools and analysis that responds to Government needs, thereby 

creating examples of constructive relationships between the Government, private sector, and 

civil society. The KODC Activity will support relevant Government entities to creatively share 

data, formulate their critical needs or questions, which they would like help in answering and 

identify innovative solutions that would help Government transparency and efficiency. The 

KODC Activity will also support the Government to implement or plan for implementation of 

solutions identified as part ofthe Activity. Through this process, the KODC Activity will in 

particular emphasize identification of potential inequalities related to gender, ethnicity, region, or 

other relevant disaggregations, and solution-oriented analysis of data, and adoption ofthose 

solutions. 

The KODC Activity will award grants through multiple challenge windows in the following 

areas: 

• Time use and Labor Force data with an emphasis on analysis of gender-specific barriers; 

• Judicial data; and 

• Environmental and energy data. 

B. IMPLEMENTATION ARRANGEMENTS 

The Program will be implemented through an Accountable Entity (with MCC oversight). The 

roles and responsibilities ofthe various entities involved in implementation are set forth below. 

1. MCC 

MCC will take all appropriate actions to carry out its responsibilities in connection with this 

Agreement and the Program, including, without limitation, exercise of its approval rights. MCC 

oversight ofthe Program is expected to include an MCC country director based in Pristina and an 

implementation support team from MCC headquarters, as well as MCC-managed consultants, 

who will work in Kosovo from time to time as necessary to perform their duties. 

2. Fiscal Agent 

Unless MCC agrees otherwise in writing, the Accountable Entity will engage a fiscal agent (a 

"Fiscal Agent"), who will be responsible for assisting the Accountable Entity with its financial 

management and assuring appropriate fiscal accountability of Grant funding, and whose duties 

will include those set forth in the agreement that the Accountable Entity enters into with the 

Fiscal Agent, which agreement will be in form and substance satisfactory to MCC. 

ANNEX I- 5 
3. Procurement 

Based upon an assessment oflocal capacity and significant experience with donor-led 

procurements, a procurement unit within the Accountable Entity will manage procurements. A 

procurement manager who has the requisite skills and experience to manage the procurement 

processes planned for this Threshold Program (the "Procurement Manager") will be hired by 

the Accountable Entity. The Procurement Manager will assure that the Accountable Entity 

adheres to the MCC Program Procurement Guidelines and ensure procurements are consistent 

with the Procurement Plan adopted by the Accountable Entity pursuant to this Agreement, unless 

MCC agrees otherwise in writing. MCC may require that the Accountable Entity engage an 

independent procurement advisor during the term of this Agreement. 

4. The Government and the Accountable Entity. 

The Government will take all appropriate actions to carry out its responsibilities in connection 

with this Agreement and the Program. To do so, the Government has designated the Accountable 

Entity pursuant to Section 3 .2(b) 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 ofthe Projects, allocating resources and 

managing procurements. Specifically, the Accountable Entity will have operational and legal 

independence, including, inter alia, the ability to (1) enter into contracts in its own name; (2) sue 

and be sued; (3) establish a bank account in its own name; (4) expend Grant funding; and (5) 

engage contractors, consultants, and/or grantees. 

The internal operations ofthe Accountable Entity will be governed by the terms and conditions 

of this Agreement, any related MCC policies and the Governing Documents, which will include 

bylaws providing further details on the Accountable Entity's internal operations. The bylaws 

must be in form and substance acceptable to MCC. 

The governance structure of the Accountable Entity will include a board of directors (the 

"Board'') that will have ultimate responsibility for the oversight, direction, and decisions of the 

Accountable Entity, as well as the overall implementation of the Program. It comprises seven 

voting members. The Board is initially expected to include the following voting members: 

(a) Chief of Staff ofthe Presidency; 

(b) Chief of Staff ofthe office ofthe Prime Minister; 

( c) Minister responsible for the energy sector; 

( d) Minister responsible for the justice sector; and 

(e) Three non-Government representatives (e.g., representatives from the private 

sector, civil society, academia, or representatives from non-majority communities). 

The members ofthe Board may be represented by alternates appointed pursuant to the Governing 

Documents. The non-Government representatives will be selected through an open and 

transparent process in form and substance acceptable to MCC. Other non-voting observers may 

ANNEX l-6 
be included as named in the Governing Documents. In addition, the Chief Executive Officer of 

the Accountable Entity and MCC's resident country director in Kosovo will serve as non-voting 

observers ofthe Board. The Accountable Entity may also establish other non-executive and nonsupervisory bodies, such as advisory councils or stakeholders committees. 

In addition, the Grant will support the compensation ofthe staff ofthe Accountable Entity, upon 

prior written approval by MCC. The Government will ensure an open and competitive 

recruitment for Program-funded positions within the Accountable Entity. The Chief Executive 

Officer ofthe Accountable Entity will report to the Board. The management ("Management 

Unit") ofthe Accountable Entity will be led by the Chief Executive Officer and will be 

composed of other specialists and managers and will be primarily responsible for the day-to-day 

operations and management ofthe Accountable Entity, including contracting, program 

management, financial management, reporting, and monitoring and evaluation. The Management 

Unit will be supported by appropriate additional staff to enable the Management Unit to execute 

its roles and responsibilities. The Government is encouraged to contribute funds for office space, 

utilities, generators and related fuel, and the Accountable Entity will be supported by 

Government-funded staff as needed and provide such other in-kind support as required in the 

performance oftheir duties. 

The Government will ensure that Government ministries, departments, agencies, and entities 

cooperate with the Accountable Entity in the implementation ofthe Program. As needed, the 

Accountable Entity and such other Government ministries, departments, agencies, and entities 

will enter into appropriate agreements to memorialize such cooperation and to assure the 

sustainability and maintenance of any Program Assets. 

As needed, the Accountable Entity will enter into contracts, grants, cooperative agreements, or 

any other, similar arrangements with providers of goods and services in order to carry out the 

Program. 

In addition, in carrying out its obligations pursuant to Section 4.5, the Accountable Entity will 

develop an environmental and social management system ("ESMS") to ensure that the Projects 

and Activities comply with the MCC Environmental Guidelines including the IFC Performance 

Standards, as well as with all national environmental laws and regulations, licenses and permits, 

except to the extent such compliance would be inconsistent with the Program and applicable 

MCC policies. Specifically, the Accountable Entity will: (a) cooperate with or complete, as the 

case may be, specifically for the Reliable Energy Landscape Project, a resettlement policy 

framework ("RPF'), together with any ongoing environmental and social impact assessments, 

and if necessary, undertake and complete any additional environmental and social assessments 

and analyses, such as environmental and social management plans, environmental and social 

audits, and resettlement action plans ("RAPs") required under the laws of Kosovo, the MCC 

Environmental Guidelines, or this Agreement, or as otherwise required by MCC, each in form 

and substance satisfactory to MCC; (b) ensure that environmental and social management plans 

are developed for relevant activities 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 

ANNEX I-7 
assessments or plans or developed to address environmental and social issues identified during 

Program implementation. 

C. MONITORING AND EVALUATION 

This Part C of Annex I summarizes the M&E Plan for this Program. The actual structure and 

content ofthe M&E Plan, which may differ from those specified in this Part C of Annex I will be 

agreed to by MCC and the Government in accordance with the M&E Policy. In addition, the 

M&E Plan may be modified from time to time as described in the M&E Policy without requiring 

an amendment to this Part C of Annex I. The M&E Plan will be posted publicly on the MCC 

Website and updated as necessary. 

1. Objective. 

MCC and the Government will formulate and agree to, and the Government will implement or 

cause to be implemented, an M&E Plan that explains in detail how and what MCC and the 

Accountable Entity will (i) monitor to determine whether the Projects are on track to achieve 

their intended results ("Monitoring Component"), and (ii) evaluate to assess implementation 

strategies, provide lessons learned, determine cost-effectiveness and estimate the impact of 

Threshold interventions ("Evaluation Component"). The M&E Plan will summarize all 

indicators that must be reported to MCC on a regular basis, as well as a description of any 

complementary data to be collected for evaluation ofthe Program. The M&E Plan will also 

include any monitoring and evaluation requirements that the Accountable Entity must meet in 

order to receive Disbursements, and will serve as a communication tool so that staff ofthe 

Accountable Entity and other stakeholders clearly understand the objectives and targets the 

Accountable Entity is responsible for achieving. The results ofM&E activities, measured by 

monitoring data and evaluations, will be made publicly available on the website ofthe 

Accountable Entity and on the MCC Website. 

The M&E Plan will be finalized within 90 days ofthe beginning ofimplementation, after 

Activity-level work plans have been developed and adopted. In any case, the M&E Plan must be 

finalized prior to the second Disbursement of the Grant. 

2. Program Logic. 

The M&E Plan will summarize the clearly defined Project-level logic models, which for each 

Project illustrate how the Activities and sub-Activities (as necessary) contribute to the Project 

Objectives. These higher-level logic models will be complemented by lower level logic models 

at the Project, Activity, and/or sub-Activity levels (as necessary) depending on Program design 

and implementation. All logic models will clearly summarize the outputs, outcomes, and goal 

expected to result from the Program. A description ofthe logic underlying each Project is 

included below: 

Reliable Energy Landscape Project. 

The fact that demand for electricity significantly outstrips supply in Kosovo is the identified 

problem. Household electricity demand is mainly driven by household demand for outputs like 

lighting, heating, cooling, and cooking. Investments in energy efficiency are made to produce the 

ANNEXl-8 
same level of output from a reduced number of units of energy input. The Reliable Energy 

Landscape Project will address two root causes and barriers to investment: the general lack of 

consumer awareness of energy saving measures and their benefits, and for poor households, the 

lack of ability to pay for them. The proposed approach to address these root causes involves a 

mix of awareness raising, incentive piloting (to make investments affordable to the poor), 

regulatory support, and technical assistance/capacity building. 

The objective ofthe Reliable Energy Landscape Project is to reduce the current gap between 

energy demand and. supply, by lowering energy use through piloting household investments in 

energy efficiency, switching to cost-effective non-electricity sources of heating, and reducing 

barriers to IPP entrants to the market. As a pilot, this Project also aims to create knowledge. As 

such, results beyond this objective in the logic are notional and not to be causally claimed by this 

Project. They are what is logically expected to happen if the pilot were to be scaled. 

The adoption of energy efficiency investments by consumers should reduce overall electricity 

demand in Kosovo, thereby reducing the stress on the grid (especially in winter, when demand is 

very high) leading to a reduction in outages and cost savings for businesses that currently must 

pay for expensive mitigation measures. Reducing overall demand will also decrease the total 

number of days each year that demand exceeds supply, when imports ofrelatively expensive 

electricity is required. This will reduce the overall cost of electricity, and would be reflected, 

compared to the counterfactual, in a lower tariff or taxes. 

Potential barriers to women's activity in the labor market are a critical cross-cutting risk that 

might impact the ability to deliver benefits, in particular economic and employment 

opportunities in a largely male-dominated sector. The proposed approach to addressing this is 

through designing a set of incentives to boost women's employment and entrepreneurship in the 

sector, directly tied to the economic opportunities that the project is likely to provide. 

The Project logic below also shows the potential supply Activity (IPP Project Finance 

Facilitation Activity), and how it fits into the Program logic, ifwe decide to include it in the 

Program. It directly addresses some ofthe longer-term outcomes that the Program foresees. 

ANNEX 1-9 
I! ~ 

GillD m

-

I 

• 

Project Logic Diagram: Reliable Energy Landscape Project 

Problem Statement! A.core problem causing} lack ofreliable.electricity supply in Kosovo is that·demand-signiflcantly outstr[ps'Supply. 

!Objective: The objective of the Reliable Energy.landscape Protect is to'reddce the current gap between.energy demand and supply, by lowering energy_.use through piloting household 

nvestmentS'irf'<energy efficiency, switching to cost-,effective non-electricity sources of heating, and reducing barriers to independent power producer ("/pp'') entrants to the market. 

ANNEXI-10 

Transparent and Accountable Governance Project 

The fact that civil society and non-governmental organizations ("NGOs") cannot engage 

constructively with the Government due to lack ofpublically available data and adequate 

outreach is the identified problem. This leads to a perception ofpoor government performance, at 

least part ofwhich is based on reality, and undermines investor confidence. The objective ofthe 

Transparent and Accountable Governance Project is to improve the public availability and 

analytical use ofjudicial, environmental, and labor force data by civil society, business, and the 

Government, thus promoting data driven decision-making. This may logically address the 

inability of civil society to constructively engage with the Government._As a first step, public 

perception must align with the reality ofpublic performance. 

The creation of a public judicial portal will support improved quality and readiness ofjudicial 

·decisions for publication on the internet, and allow judicial accountability to the public. 

Regularly produced, machine-readable environmental data on the internet as well as the KODC 

Activity will make data available to the civil society and NGOs. This will support critical 

analyses and use ofkey judicial, environmental, and labor force statistics by the public. There 

may be an opportunity for Government officials to use these analyses in policy related decisionmaking. With additional support to the communication capabilities ofselect ministries and 

agencies to conduct outreach with civil society, as well as each other, greater trust and 

collaboration is expected to be fostered between civil society and Government stakeholders to 

produce creative solutions to respond to Government needs. This should contribute to an 

improvement in the perception of Government function and improved investor confidence. This 

theory of change is contingent upon the scale and adoption of the data transparency culture, and 

therefore the higher order outcomes may be. modest. 

Amrnxl-11 
Project Logic Diagram: Transparent and Accountable Governance Project 

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ANNEXI-12 

Risks and Assumptions 

The M&E Plan will also outline key assumptions and risks that underlie the accomplishment of 

the theory of change summarized in th~ program logic. However, such assumptions and risks 

will not excuse any party's performance unless otherwise expressly agreed to in writing by the 

other party. The known assumptions and risks include: 

. ~iifti'lfii\ ~l·1,w.!.~!!,! Tafiffrate risk: Tariffs will 

go up more than household 

energy bills go down, so 

households don't save 

money even ifthey're 

using les$ electricity 

Tariff structure risk: A High 

proposed change to 

eliminate certain features 

ofthe current tariff(rising 

block rates, seasonal 

differences) remove price 

signals that incentivize 

effic;iency measures 

Behavior change: Adopting High 

efficiency solutions may 

involve investments or 

coordination (e.g., forming 

~ homeowners assooiations) 

"' ·~ ~ "" that are too difficult 

The pilots may not give us Low 

the information we need to 


make strong 


recommendations due to 


problems with power, 


timing, etc. ofthe 


evaluation activities 

compared with the 


implementation. 


'• 

<I' "1 

Medium 

Medium 

. High 

policies. 

A concerted public education 

and outreach campaign will 

focus on the benefits of 

investments in energy 

efficiency.· 

Energy audits should help at 

least provide information to 

coordinate around. 

Evaluation (though not 

independent evaluation) 

should be built into the 

activities themselves to ensure 

that some informat~on comes 

out as the Programyroceeds. 

Additionally, requirements for 

close coordination between • 

implementers and independent 

program evalnators will be 

, bujlf. i)lto the. contra<;t~, 

ANNEXI-13 

Behavior risk: A switch to 

conswnption-based billing 

alone may not affect 

conswner behavior to 

reduce use ofheating. 

Will metering result in 

both lower household bills . 

for customers and higher 

profits for Termokos (who 

must invest in expanding 

infr!lstructure)? 4 ·tsti'lts.!'!SR "v-.··· ·• ,: ,,:< "·} :; '\: ,,•";!{;:~'?, E< -·~ ~ , 

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"';;~' "'"" <'~~~~~~ r,Sils't!iinab IUX 

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Saved energy in the district 

heating system may not 

actually be able to be used 

for expansion ofthe 

network ifdemand rises 

and falls unifonnly and the 

~ system is at cap3city~ The switch to individual 

conswnption metering may 

not be cost-effective. 

Customers may tamper 

with meters/heat cost 

allocators to avoid paying 

High ' · · · · ivrediwn 

Mediwn Mediwn 

Low Medium 

Mediwn Mediilln 

Energy auditing to ensure 

conswners know the benefits 

ofbehavior change; marketing 

to provide social pressl/l'e to ' 

lower energy conswnption._ 

The Program will work with 

Termokos and the regulatopi 

office to consider other billing · 

mechanisms 

Designing tampe~·resistant 

systems and working wit;!i 

Termokos to conduct regular 

maintenance and enforcem~n! 

of jnstajled syste!71§ .. 

0

p;.'h;;'!:: ' i'!§f. ~ ,;!Cka11SMfi't.hlift§ilil'iit'lib'i\@>jei"'lliiC11p.f'o:jiiitl''ffislts·' »£" • • t ;·~, I 

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Users of data provided by 

the Govermnent will 

continue to use it in an 

adversarial fashion, 

providing a disincentive to 


the Govermnent to release 


Delays in CMIS completion 


may cause delays in 


implementing the 


Transparent and 


Accountable Governance 


Project 


Data will not be available 


in time to analyze data as 


part of the KODC Activity 


Judges will object to their 

decisions being published 

on the internet 

Mediwn High 

Low High 

Mediwn Medium 

Mediwn High 

Project is explicitly designed 

to.teach and encoirrage 

stakeholders to work with the · 

Government in a constructive · 

fashion 

Design the project 

implementation to run in 

parallel 

Ifsome data is not available, 

conduct KODC Activity 

windows with other ayailaJ;>le 

data. Work to ensuresustainability ofinterest and 

ability of civil society.and 

others in collaboratfug with 

government 

Provide judges a stapl!ard 

template for publishing 

decisions, oritreaCh, and 

teplu.!.ipal as~istan9e. 

ANNEXI-14 

j ~~ 

,v ~ 

•" ~ \. ti 

~ ...@ ~ 

Kosovo Judicial 'coilncil · 'l\.l.edltim . . Medium ioin with other donors to puS'h · 

and Kosovo Prosecutorial for reforms that will have the · Council may not be willing biggest impact on 

to press for greater improvement on judicial 

openness in judicial data or functioning. 

use ofjudicial statistics in 

performance ll)anagement 

There may not be sufficient Medium High Work with KHMI, KEPA, 

resources allocated to and MESP to use new data to 

KEPA and KHMI to cover identify priorities in the sector 

their human resource, and advocate for necessary 

maintenance, and data resources during budgetary 

management needs in order 	 review processes. 

for the institutions to fulfill 


their environmental data 


monitoring and reporting 


, _ !lJ.'1\ld~te. 

3. 	 Monitoring Component 

As defined in the M&E Policy, monitoring is the continuous, systematic collection of data on 


specified indicators to provide indications ofprogress toward objectives and the achievement of 


. intermediate results along the way. To monitor progress toward the achievement ofresults ofthis 

Program, the Monitoring Component ofthe M&E Plan will identify (i) the Indicators (as defined 

below), (ii) the definitions ofthe Indicators, (iii) the sources and methods for data collection, (iv) 

the frequency for data collection, (v) the party or parties responsible for collecting and analyzing 

relevant data, and (vi) the timeline for reporting on each Indicator to MCC. It sh0uld be noted 

that some indicators will continue to be tracked after the Completion Date as necessary. 

3.1 Goal, Outcome, Output, and Process Indicators. The M&E Plan will measure the results 

ofthe Program using quantitative, objective, and reliable data ("Indicators"). 

The M&E Plan will establish baselines for every Indicator (each a, "Baseline''). An Indicator's 

Baseline should be established prior to the start ofthe corresponding Project, Activity; and/or 

sub-Activity. Baselines demonstrate that the problem can be specified in measurable terms, and 

are thus a pre-requisite (or adequate intervention design. The Government will establish 

Baselines on the selected Indicators or verify already collected Baselines where applicable. 

(a) 	 The M&E Plan will' establish a benchmark for each Indicator that specifies the 

expected value and the expected time by which the result will be achieved 

("Target'). 

(b) 	 The M&E Plan will indicate which Indicators will be disaggregated by gender, 

income level, and age, and beneficiary types to the extent practical and applicable. 

(c) 	 MCC's Common Indicators (as described in the M&E Policy) will also be 

included as relevant. These will be denoted by the Common Indicator code. 

ANNEXI-15 

( d) Subject to prior written approval from MCC and in accordance with the M&E 

Policy, the Government may add Indicators or refine the definitions and Targets 

of existing Indicators. 

( e) The Accountable Entity must report to MCC on monitoring Indicators in the 

M&E Plan on a quarterly basis using an Indicator Tracking Table ("ITT') in the 

form provided by MCC. No changes to Indicators, Baselines, or Targets may be 

made in the ITT until the changes have been approved in the M&E Plan. 

Additional guidance on Indicator reporting is contained in MCC's Guidance on 

Quarterly MCA Disbursement Request and Reporting Package. In the case that 

the Accountable Entity submits a six-month disbursement request, the ITT must 

still be submitted quarterly. 

Key Indicators that can be reported on at least an annual basis will be included in quarterly 

monitoring indicator reports, while Indicators that require survey data or a longer time period to 

track will be tracked for evaluation purposes. The M&E Plan will contain the monitoring 

Indicators listed in Schedule A to Annex I. 

4. 	 Evaluation Component 

While good program monitoring is necessary for program management, it is not sufficient for 

assessing ultimate results. MCC therefore advocates the use of different types of evaluations as 

complementary tools to better understand the effectiveness of its programs. As defined in the 

M&E Policy, evaluation is the objective, systematic assessment of a program's design, 

implementation, and results. MCC is committed to making its evaluations as rigorous as 

warranted in order to understand the causal impacts ofits programs on the expected outcomes 

and to assess cost-effectiveness. The Evaluation Component ofthe M&E Plan may contain three 

types of evaluation activities as necessary: (i) independent evaluations (impact and/or 

performance evaluations); (ii) self-evaluation, and (iii) special studies, each of which is further 

described in the M&E Policy. 

(a) 	 Independent Evaluations. Every Project must undergo a comprehensive, 

independent evaluation (impact and/or performance) in accordance with the M&E 

Policy. The Evaluation Component ofthe 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. All independent 

evaluations must be designed and implemented by independent, third-party 

evaluators. Ifthe Government wishes to engage an evaluator, the engagement will 

be subject to the prior written approval of MCC. Contract terms must be 

acceptable to MCC and ensure non-biased results and the publication ofresults. 

For each independent evaluation, the Accountable Entity is expected to review 

and provide feedback to independent evaluators on the evaluation design reports, 

evaluation materials (including questionnaires), baseline report (if applicable), 

and any interim/final reports in order to ensure proposed evaluation activities are 

feasible, and final evaluation products are technically and factually accurate. 

ANNEX I - 16 

Evaluation: Reliable Energy Landscape Project. 

This Project may be evaluated through a combination of impact and performance evaluation 

methods. 

To meet MCC's requirement of an independent evaluation, the independent evaluator cannot 

influence project design. While the PIE and District Heating Metering Activities are planned to 

include a formative evaluation, the independent evaluator will have to be a separate entity. 

However, both the formative and the independent evaluator can share data and MCC M&E staff 

will provide technical assistance to both aspects. 

The evaluation will include a process study, assessing the fidelity of implementation to the 

original design, and setting the stage for the assessment of results further down the logical chain. 

Performance evaluation methods may be used to assess results beyond the project objective, 

making use of quantitative data from the Kosovo energy sector as a whole. 

The questions that will guide the design ofthe evaluation may include: 

• 	 Do households consume less electricity as a result ofthe Project? This links to the 

following indicators in Schedule A to Annex I: Household Electricity Consumption 

• 	 Does a reduction in household electricity demand reduce the incidence of peak demand 

outstripping electricity supply, and subsequent power outages and import of power? This 

links to the following indicators in Schedule A to Annex I: Supply & Demand Gap, Load 

Factor, System Average Interruption Frequency Index, Imported Power. 

Evaluation: Transparent and Accountable Governance Project. 

This Project is expected to be evaluated through a performance evaluation, incorporating 

quantitative data where feasible. The evaluation will include a process study, assessing the 

fidelity of implementation to the original design, and setting the stage for the assessment of 

results further down the logical chain. The questions that will guide the design ofthe evaluation 

may include: 

• 	 To what degree does the Government pay attention to or consume analyses done by nongovernment entities and whether that factors into any policy decision-making? This links 

to the following indicator in Schedule A to Annex I: Data-driven policy process Gudicial 

& environmental) 

• 	 Does the availability and of publically available data change the perception of 

Government function and performance within the judicial and environmental sectors? 

This links to the following indicators in Schedule A to Annex I: Public perception based 

on UNDP Pulse Survey Gudicial & environmental), Public perception based on Kosovo 

Mosaic Gudicial & environmental) 

• 	 Is there a measureable improvement in judicial efficiency as defined by case processing 

time and variance? Is it attributable to the intervention? This links to the following 

indicators in Schedule A to Annex I: Processing Time and Processing Variation 

ANNEX I- 17 
• 	 Does the existence oftransparent environmental data create enough political will for the 

Government to act? This links to the following indicator in Schedule A to Annex I: 

Reality Improvement (TBD) 

• 	 Is there a noticeable change after in investment by businesses this intervention? This 

links to the following indicator in Schedule A to Annex I: Business Investment 

The M&E Plan will contain the evaluation Indicators listed in Schedule A to Annex I. 

(b) 	 Self-Evaluation. Following the Completion Date, both MCC and the Accountable 

Entity will comprehensively assess three fundamental questions: (i) Did the 

Program meet the Project Objectives; (ii) Why did the Program meet or not meet 

the Project Objectives; and (iii) What lessons can be learned from the 

implementation experience (both procedural and substantive). Relevant MCC 

staff will draft a performance review within six months after the Completion Date 

to evaluate these fundamental questions and other aspects of Program 

performance. Each MCC division will be responsible for drafting its own section 

ofthe performance review, subject to cross-department review. 

(c) 	 Special Studies. Plans for conducting special studies will be determined jointly 

between the Government and MCC before the approval ofthe M&E Plan. The 

M&E Plan will identify and make provision for any special studies, ad hoc 

evaluations, and research that may be needed as part ofthe monitoring and 

evaluating of Program. Either MCC or the Government may request special 

studies or ad hoc evaluations of Projects, Activities, or the Program as a whole, 

prior to the Completion Date. 

The results of all evaluations will be made publicly available in accordance with the M&E 

Policy. 

5. 	 Data Quality Reviews. 

Data Quality Reviews ("DQR") are a mechanism to review and analyze the utility, objectivity, 

and integrity of performance information. DQRs are to cover: a) quality of data, b) data 

collection instruments, c) survey sampling methodology, d) data collection procedures, e) data 

entry, storage and retrieval processes, f) data manipulation and analyses and g) data 

dissemination. MCC requires that an independent entity conduct the DQR, such as a local or 

international specialized firm or research organization, or an individual consultant, depending on 

the size ofthe Program or Project in review. The frequency and timing of data quality reviews 

must be set forth in the M&E Plan; however MCC may request a DQR at any time. DQRs should 

be timed to occur before or early enough in the term ofthis Agreement that meaningful remedial 

measures (if any) may be taken depending on the results of the review. The methodology for the 

review should include a mix of document and record reviews, site visits, key informant 

interviews, and focus groups. 

ANNEX I- 18 
6. 	 Other Components of the M&E Plan. 

In addition to the monitoring and evaluation components, the M&E Plan will include the 

following components: 

(a) 	 Data Collection and Reporting. The M&E Plan will describe the guidelines 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 guidelines will take into consideration the requirement and data 

needs of the components of the Program, identify responsible parties, and will be 

aligned with existing MCC systems, other service providers, and ministries. The 

M&E Plan will describe any interim MCC approvals for data collection, analysis, 

and reporting plans. 

(b) 	 Budget. A detailed cost estimate for all components ofthe M&E Plan. 

7. 	 Responsibility for Developing the M&E Plan. 

MCC desires to "[refrain] from requesting the introduction of performance indicators that are not 

consistent with countries' national development strategies."1 For this reason, primary 

responsibility for developing the M&E Plan lies with the M&E staff ofthe Accountable Entity 

with support and input from MCC's M&E and economist staff. The M&E Plan must be 

developed in conjunction with key stakeholders, including the leadership and sector leads of the 

Accountable Entity, the MCC Resident Country Mission, and other MCC staff (such as 

Environmental and Social Performance and Gender and Social Inclusion), as well as external 

stakeholders, as applicable. While the entire M&E Plan must be developed collaboratively, MCC 

and the Accountable Entity Project/ Activity leads are expected to guide the selection of 

Indicators at the process and output levels that are particularly useful for management and 

oversight of Projects and Activities. 

8. 	 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 this Agreement, any other relevant supplemental agreement and the M&E 

Policy. All M&E Plan modifications proposed by the Accountable Entity must be submitted to 

MCC for prior written approval. The M&E Plan may undergo peer review within MCC before 

the beginning ofthe formal approval process. 

9. 	 Post-Program M&E Plan. 

As part of the planning process for winding up the Program at the end ofthe term of this 

Agreement, MCC and the Accountable Entity will develop a post-Program M&E Plan designed 

to observe the persistence of benefits created under this Program. This plan should describe 

future monitoring and evaluation activities, identify the individuals and organizations that will 

1 Busan Partnership for Effective Development Cooperation. Busan Outcome Document, I December 2011, p. 5 

ANNEX I- 19 
undertake these activities, and provide a budget framework for future monitoring and evaluation. 

The post-Program M&E Plan should build directly off the M&E Plan. 

ANNEXI-20 

SCHEDULE A TO ANNEX I 

INDICATORS 

Indicators that will be used for monitoring and evaluating the Program and that will be included in 

the M&E Plan are set forth below. Evaluation indicators are marked with a (*); the remaining 

indicators are Monitoring indicators: 

~.~~~--- -T­ - ! -·~-----

1 --­ l --~--~----~-~-~ 

..,. Baser . rn..rMl\OW. ~ Resmt 

r 

Jn.di:ea:tor Name I Hd'htitiml . I I ..:n . _____ me I T ·n-rwe. ~ 

Pro.i;ect l: R.eliable En.ertIT Lauds-cape Pro_je:ct 

Outcome Indicators 

Savings Reflected in Tariff Rate Cost per KWH of USD TBD Tariff or Taxes Electricity to Consumers 

Reduced Cost of Maximum 

Electricity Cost of Electricity Allowed/ Authorized Euro 253,100,0002 

Revenue 

Reduced Imports Imported Power Quantity of Imports MWh TBD 

Reduced Spending Spending on Amount Businesses Spend 

on Mitigation Mitigation on Electricity Outage USD TBD 

Measures Measures* Mitigation Measures 

Sum of customerSystem Average interruptions in a quarter I 50.7 (2015) 

Total number of customers Source: ERO Fewer Outages Interruption connected to network in Number Annual Report Frequency Index the same quarter. 2015,pg.57 

(Unplanned, Distribution) 

Less Stress on the The average load/peak load 

Power Grid Load Factor in a specified time period Percentage TBD 

(usually a year) 

Lowered Utility Electricity Household Total USD TBD Bills Expenditure* Electricity Bill 

Objective: Reduced 

Gap Between Supply & Demand Demand minus Supply GWh TBD Supply and Demand Gap 

Reduced Electricity Household Electricity Consumption 

Consumption Electricity Per Household in Project kWh TBD 

Con.sumption * Participant Population -

Activity 1.1: PIE Activity 

Outcome Indicators 

More Trained Energy Auditors Number of Certified Number TBD Energy Auditors Energy Audit Technicians 

Number ofEnergy Audits 

Energy Audits Energy Audits Conducted by project Number TBD 

implementer(s) 

TBD 

TBD 

TBD 

TBD 

TBD 

TBD 

TBD 

TBD 

TBD 

TBD 

TBD 

-­

2 Source: Consultation Paper, The Tenth Electricity Tariff Review ETRlO (2016-201) Public Electricity Supplier 

(KESCO) Maximum Allowed Revenues Calculation (Relevant Year 4), February 2016, pg. xiii, Table "PES MAR", 

Column "ETR9 Actual", Row "FPEE MAR" 

ANNEX I - 21 
- -

Female 

entrepreneurs Invest Business Investment Amonnt (USO) ofFemale 

in Energy Efficiency 

More Households 


Invest in Energy 


Efficiency 


Household Energy 

Efficien~y 

Incentives Tested· 

. 

Incentives to 

Households · 

Female 

Entrepreneurs Invest 

in Energy Efficiencv 

Energy Audit 


Certification 


Program 


~ . 

New Household 


Shift to District 


Heating 


Decreased Heat 


Consumption 


. 


Households Metered 

. . 

. 

TBD 

in Energy Efficiency entrepreneurs Investment 

(Amonnt)* 

USO 

in Energy Efficiency 

TBD TBD I 

Business Investment 

in Energy Efficiency 

(Number)* 

Number 

Number ofFemale 

entrepreneurs Investing in 

Energv Efficiencv 

TBD TBD 

Household 

Investment in 

Enerm• Efficiencv 

USO 

Amonnt (USO) of 

. Household Investment in 

Enerau Efficiencv 

TBD TBD 

Incentives Tested _Number 

Number ofVariations of 

Incentive Packages 

Rigorously Tested 

0 TBD 

-

. . .. ·Oufout Indicators 6 ' 

. . ' . ~ ···'

Incentives Provided Number of households 

provided incentives Number 0 TBD 

TBD TBD TBD TBD TBD 

Energy Audit 

Certification 

Program 

Two-Tiered Certification 

Program for Energy 

Auditors Developed Date NIA TBD 

Xctivitv i'.2: Distrfi:t,Heatinl! Meterin!! 

duteome. Indf'tiitors' ' 

. .. . 

- ' 

New District 

Heating Households 

Number ofHouseholds 

Using District Heating Number TBD TBD 

District Heating 

Energy 

Consumption 

Decreased Energy 

Consumption from the 

District Heating System 

MegaWatt 

Thermal TBD TBD 

- . 

Meters Installed 

ner Connection 

Outnuflmlicators . . Number ofDistrict Heating 

Meters Installed in Number 

Households 

Ac'tiyifv 1..3:'1~ ,l!rcli;t!cr Finance Facilitation 

-Oulconuilndicators . . TBD TBD TBD 

. . 0 

. 

TBD 

• ·. . 

TBD 

. . 

. 

TBD 

TBD 

. . 

. . .. • Outnui Indicators . TBD TBD TaD TBD TBD TBD

Proiect 2: '.J;ra'n.snarfnt and'Accountable~overn3;nce Profoct • 

Result lndica,tor Name Definition l Unit Baselin~ Target ~ . . . Outcomelnd;cat1>rs roro;: ct,- even 

Increased Increased investment by 

investment by Business investment business as measured by Percentage TBD TBD 

businesses national accounts 

ANNEXl-22 
. . Act'lvitv 2'.1.: Eubilc-~ccess· to Judicial Information 

'.f! " Outcome Indicator,s . . .. . Processing Time Average length of 

Real situation Gudicial) Days TBD TBD proceedings 

improved 

Processing Variation Variance in length of 

Qudicial) Days TBD TBD proceedings 

Perception aligned Public Perception Positive public perception 

with reality; Greater ba,ed on UNDP about judicial ministry 

Pulse survey performance as measured Percentage TBD TBD

trust in and 

understanding of (judicial)* bv the UNDP Pulse Survey 

Government's' Public perception Public perception about 

, function based on UNDP judicial government 

Kosovo Mosaic Percentage TBD performance as measured TBD 

(iudicial)* by Kosovo Mosaic Survey 

Increased 

engagement Number of public 

between program Number ofpublic information sessions or 

related institutions, meetings Number TBD TBD Qudicial) meetings held by ROL 

and civil society and institutions 

orivate sector 

Increased 

consumption by 

government of 

Percentage of govermnent analyses and 

products generated Data-driven policy officials considering Percentage TBD TBD 

by civil society and process Qudicial)* judicial analyses in the 

private sector using decision-making process 

publically available 

data 

Number of analytical 

Objective: 

articles/ reports generated 

Public Data Used by domestic civil society Increased Judicial, TBD Qudicial) and private sector based on Number 0 

Environmental, and the judicial data that has 

labor force data is been made public used by civil society . Website traffic (hits) on the and private sector Public Data public sites for judicial Number 0 TBD accessed Gudicial) data, per month . . . . . . . Output .Indicators. ,; .. . . Judicial and 

environmental data Public data Number ofmachine 

is regularly availability readable datasets publica!Iy Number 0 TBD 

published and Gudicial) available Gudicial) 

oublically available . Activitv 2.2:..Environinental Data .Collection 

' . ., ~ 

. . . . \'l' 011.tcorl:u:-lndicator~ . Real Situation TBD Reality 

Improved Improvement TBD TBD TBD TBD 

(environmental) 

ANNEXI-23 

Public Perception Positive public perception 

Perception aligned based on UNDP about environmental I with reality: Greater 

Pulse survey ministry perfonnance as Percentage TBD TBD 

trust in and measured by the UNDP 

understanding of (environmental)* Pulse Survev 

Government's Public perception Public perception about 

function based on Kosovo environmental government 

Mosaic performance as measured Percentage TBD TBD 

renvironmental)* bv Kosovo Mosaic Survey 

Increased 

engagement Number of public · number ofpublic 

. between program meetings information sessions or Number TBD TBD related institutions, (environmental meetings held by 

and civil society and ministry) environmental ministries 

nrivate sector 

Increased 

consumption by 

government of Percentage ofgovernment 

analyses and Data-driven policy officials considering 

products generated process environmental analyses in Percentage TBD TBD 

by civil society and (environmental)* the decision-making 

private sector using process 

publically available 

data 

Number of analytical 

articles/reports generated 

· Objective: Public Data Used by domestic civil societ:Y Number 0 TBD Increased Judicial, (environmental) and NGOs based on the 

Environmental, and environmental data that has 

Labor Force data is been made nublic 

used by civil society Website traffic (hits) on the 

and private sector · Public data accessed public sites for Number 0 TBD (environmental) enVironmental data, per 

month . • Output Indicators . ' . . . . . . Judicial and 

en\'ironmental data Public data Number of machine 

is regularly availability readable datasets publically Number 0 TBD 

published and (environmental) available (environmental) 

nublicallv available . ¥~~ -~-

~2.3: Kosqvo Ot"'n~D;l,. "G,hallenee "" "-.-w'll:' 

.Activ1 . ' . . . . . ., butcome Iu.dfcators . 

Result TBD TBD TBD TBD 0 TBD 

. . ,(' . "Outnut·lndicators " ' " .. .. .. 

Kosovo Open Data KODC Grants Number ofGrants Number 0 TBD 

Challenge Grants Awarded Awarded 

ANNExl-24 
ANNEX II 

CONDITIONS PRECEDENT TO DISBURSEMENTS 

Applicable to the Program: 

1. 	 Prior to the second Disbursement, the Accountable Entity must have developed and 

adopted a Work Plan pursuant to Section 4.l(c), in form and substance acceptable to 

MCC. 

2. 	 Prior to the second Disbursement, the Accountable Entity will have developed and 

approved a comprehensive Program-wide ESMS. · 

3. 	 Prior to the second Disbursement, the Accountable Entity will have developed and 

approved a comprehensive Program-wide Social and Gender Integration Plan. 

4. 	 Prior to the second Disbursement, the Accountable Entity must have developed and 

adopted an M&E Plan pursuant to Section 4.2, in form and substance acceptable to MCC. 

5. 	 Prior to the third Disbursement, the Accountable Entity will have developed and 

approved an RPF. 

6. 	 Prior to the initial Disbursement that includes any payment for physical works under a 

given Project or Activity, as determined by MCC, the Accountable Entity must have 

submitted to MCC evidence in form and substance satisfactory to MCC that: 

(a) 	 The Account~ble Entity has developed an Environmental and Social Impact 

Assessment ("ES/A"); an Environmental and Social Management Plan ( "ESMP"); 

and/or a RAP (in each case as appropriate), and/or the relevant Government entity has 

enacted any necessary national legal provisions necessary for timely implementation 

of property takings required by such RAP, each of which must be in form and 

substance satisfactory to MCC in accordance with the MCC Environmental 

Guidelines and IFC Performance Standards; and 

(b) 	 The Accountable Entity or the appropriate Govehlment entity is implementing. the 

requirements of each ESMS, ESIA, ESMP, Health and Safety Management Plan 

("HSMP") or RAP, as appropriate, in all material respects and consistent with the 

MCC Environmental Guidelines (including the IFC Performance Standards that are 

incorporated by reference therein). 

7. 	 Prior to the initial Disbursement ·for the Environmental Data Collection Activity, the 

Ministry ofEnvironment and Spatial Planning ("MESP'') will have provided evidence 

that it has removed the prohibition that prevents KEP A from publishing data in machine 

readable formats. 

8. 	 Prior to the initial Disbursement for the Environmental Data Collection Activity, MESP 

will have adopted a maintenance and calibration plan, acceptable to MCC, to ensure that 

air quality sens.ors owned by KEPA are kept in working order. 
ANNEX III 


ALLOCATION OF GRANT FUNDING 


w 

,,, «l 

1,700,000 

Activity I. I Pilot Incentives for Household Investment in Energy Efficiency 20,700,000 

Activity 1.2 District Heating Metering I0,900,000

Activity 1.3 IPP Project Finance Facilitation 2,400,000

Activity 2.1 Public Access to Judicial Information 4,000,000

Activity 2.2 Environmental Data Collection 3,000,000

Activity 2.3 Kosovo Open Data Challenge I,300,000

Program Administration 5,000,000
ANNEX IV 


DEFINITIONS 


The following compendium of capitalized terms that are used herein is provided for the 

convenience ofthe reader. To the extent that there is a conflict or inconsistency between the 

definitions in this Annex IV and the definitions elsewhere in the text ofthis Agreement, the 

definition elsewhere in this Agreement will prevail over the definition in this Annex IV. 

Accountable Entity has the meaning provided in Section 3.2(b). 

Activity or Activities has the meaning provided in Part A ofAnnex I. 

Additional Representative has the meaning provided in Section 7. 3. 

Agreement has the meaning provided in the Preamble. 

Audit Plan has the meaning provided in Section 4.1 (d). 

Auditor has the meaning provided in Section 4.1 (d). 

Bank has the meaning provided in Section 5.1 (c)(i). 

Bank Agreement has the meaning provided in Section 5.1 (c)(i). 

Baseline has the meaning provided in paragraph 3.1 (a) ofPart C ofAnnex I 

Board has the meaning provided in paragraph 4 ofPart B ofAnnex I 


Common Payment System has the meaning provided in Section 5.1 (b)(iii). 


Completion Date has the meaning provided in Section 6.1. 


Covered Provider has the meaning given to that term in the MCC Audit Guidelines. 


Detailed Financial Plan has the meaning provided in Section 4.1 (a). 

Disbursement has the meaning provided in Section 2.1 (b). 

Disbursement Period has the meaning provided in Section 5.1 (a). 


Disbursement Request has the meaning provided in Section 5.1 (a). 


DQR has the meaning provided in paragraph 5 ofPart C ofAnnex I 


Economic and Technical Cooperation Agreement has the meaning provided in Section 2.5(b). 


ES/A has the meaning provided in paragraph 6(a) ofAnnex II 

ESMP has the meaning provided in paragraph 6(a) ofAnnex II 

ESMS has the meaning provided in paragraph 4 ofPart B ofAnnex I 

Evaluation Component has the meaning provided in paragraph 1 ofPart C ofAnnex I 

Fiscal Accountability Plan has the meaning provided in Section 4. 4. 

Fiscal Agent has the meaning provided in paragraph 2 ofPart B ofAnnex I 

Governing Document has the meaning provided in Section 4. 9(g). 

Government has the meaning provided in the Preamble. 

Grant has the meaning provided in Section 2.1 (a). 

GWh means gigawatt-hours. 

HSMP has the meaning provided in paragraph 6(a) ofAnnex II 

IFC Performance Standards has the meaning provided in Section 4.5(a). 

Implementation Letter has the meaning provided in Section 4.10. 

Implementation Plan has the meaning provided in Section 4.1. 

Implementation Plan Document has the meaning provided in Section 4.1. 

Indicator has the meaning provided in paragraph 3.1 ofPart C ofAnnex I 

Inspector General has the meaning provided in Section 4. 7(c). 

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 ofthe foregoing, that are financed, in whole or in part, using 

the Grant. 

/PP has the meaning provided in Section l.2(a). 

ITT has the meaning provided in paragraph 3.1 (/) ofPart C ofAnnex I 

KEPA has the meaning provided in paragraph 2(b) ofPart A ofAnnex I 

Key Staffhas the meaning provided in the MCC Governance Guidelines. 

KHMI has the meaning provided in paragraph 2(b) ofPart A ofAnnex I 

ANNEX IV-2 
KIPH has the meaning provided in paragraph 2(b) ofPart A ofAnnex I 

KODC has the meaning provided in paragraph 2(c) ofPart A ofAnnex I 

Kosovo has the meaning provided in the Preamble. 

kWh means kilowatt-hours. 


Lien has the meaning provided in Section 3.2(g). 


Local Account has the meaning provided in Section 5.1 (c)(i). 


M&E Plan has the meaning provided in Section 4.2. 


M&E Policy has the meaning provided in Section 4. 2. 


Management Unit has the meaning provided in paragraph 4 ofPart B ofAnnex I. 


Material Agreement has the meaning provided in Section 4. 9(c). 


MCC has the meaning provided in the Preamble. 


MCC Audit Guidelines has the meaning provided in Section 4. 8(a). 


MCC Cost Principles has the meaning provided in Section 4. 4. 


MCC Environmental Guidelines has the meaning provided in Section 2.4(b)(iii). 


MCC Gender Integration Guidelines means MCC 's Gender Integration Guidelines, as such 


may be posted on MCC 's Website from time to time. 


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 Website or otherwise 


made available to the Government. 


MCC Governance Guidelines has the meaning provided in Section 3.2(b). 


MCC Marking Standards has the meaning provided in Section 3. 2(k). 


MCC Program Procurement Guidelines has the meaning provided in Section 4.3(a). 


MCC Reporting Guidelines has the meaning provided in Section 4. 6(a). 


MCC Website has the meaning provided in Section 2.4(b)(iii). 


MESP has the meaning provided in paragraph 7 ofAnnex II 


Monitoring Component has the meaning provided in paragraph I ofPart C ofAnnex I 


ANNEX IV-3 
MWh mean megawatt-hours. 


NGO has the meaning provided in paragraph 2 ofPart C ofAnnex I 


Party or Parties has the meaning provided in the Preamble. 


PermittedAccount has the meaning provided in Section 5.1 (c)(i). 


PIE Activity has the meaning provided in paragraph 1 (a) ofPart A ofAnnex I. 


Principal Representative has the meaning provided in Section 7.3. 


Procurement Manager has the meaning provided in paragraph 3 ofPart B ofAnnex I 


Procurement Plan has the meaning provided in Section 4.1 (b). 


Program has the meaning provided in the Recitals. 


Program Asset means any assets, goods or property (real, tangible or intangible) purchased or 


financed in whole or in part (directly or indirectly) by the Grant, including any Intellectual 


Property. 


Program Goal has the meaning provided in Section 1.1. 


Program Grant has the meaning provided in Section 4.3(b). 


Program Guidelines means collectively the MCC Audit Guidelines, the MCC Cost Principles, 


the MCC Environmental Guidelines, the MCC Gender Policy, the MCC Gender Integration 


Guidelines, the MCC Governance Guidelines, the MCC Marking Standards, the MCC Program 


Procurement Guidelines, the MCC Reporting Guidelines, the M&E Policy, (including any 


successor to any ofthe foregoing) and any other guidelines, policies or guidance papers relating 


to the administration ofa Threshold Program, and, in each case, as from time to time published 


on the MCC Website. 


Project or Projects has the meaning provided in Section 1.2. 


Project Objective or Project Objectives has the meaning provided in Section 1. 2. 


Provider means (i) any entity ofthe Government that receives or uses Grant funding or any other 


Program Asset in carrying out activities in furtherance ofthis Agreement or (ii) any third party 

that receives at least US$50,000 in the aggregate ofGrant funding (other than as salary or 

compensation as an employee ofan entity ofthe Government) during the implementation ofthis 

Agreement. 

RAP has the meaning provided in paragraph 4 ofPart B ofAnnex I 

Records has the meaning provided in Section 4. 7(a). 

RPF has the meaning provided in paragraph 4 ofPart B ofAnnex I 

ANNEX IV-4 
Target has the meaning provided in paragraph 3.1 (b) ofPart C ofAnnex I 


Taxes has the meaning provided in Section 2. 5(a). 


Threshold Program has the meaningprovided in the Recitals. 


Work Plan has the meaning provided in Section 4.1 (c). 


ANNEXIV-5