TREATIES AND OTHER INTERNATIONAL ACTS SERIES 16-216

________________________________________________________________________

FOREIGN ASSISTANCE

Millennium Challenge 

Agreement Between the 

UNITED STATES OF AMERICA

and SIERRA LEONE

Signed at Freetown November 17, 2015

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.”
 SIERRA LEONE

 Foreign Assistance: Millennium Challenge

 Agreement signed at Freetown 

 November 17, 2015;

 Entered into force February 16, 2016.

 With annexes.
EXECUTION VERSION 

MILLENNIUM CHALLENGE ACCOUNT THRESHOLD PROGRAM 

GRANT AGREEMENT 

BETWEEN 

THE UNITED STATES OF AMERICA, 

ACTING THROUGH THE MILLENNIUM CHALLENGE CORPORATION 

AND 

THE REPUBLIC OF SIERRA LEONE, 

ACTING THROUGH THE MINISTRY OF FINANCE AND ECONOMIC 

DEVELOPMENT 
Article 1. 

Section 1.1 

Section 1.2 

Section 1.3 

Article 2. 

Section 2.1 

Section 2.2 

Section 2.3 

Section 2.4 

Section 2.5 

Article 3. 

Section 3.1 

Section 3.2 

Article 4. 

Section 4.1 

Section 4.2 

Section 4.3 

Section 4.4 

Section 4.5 

Section 4.6 

Section 4.7 

Section 4.8 

TABLE OF CONTENTS 

Page 

Goal and Objectives ................................................................................................ 1 

Program Goal .................................................................................................. 1 

Program Objective .......................................................................................... 1 

Project Objectives ........................................................................................... 1 

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

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

Interest. ............................................................................................................ 2 

Government Resources; Budget ..................................................................... 2 

Use of the Grant .............................................................................................. 3 

Taxes ............................................................................................................... 3 

Government Representations And Obligations ...................................................... 4 

Government Representations .......................................................................... 4 

Government Responsibilities .......................................................................... 4 

Implementation Framework .................................................................................... 7 

Program Implementation Plan ........................................................................ 7 

Monitoring and Evaluation ............................................................................. 8 

Procurement and Grants .................................................................................. 8 

Fiscal Accountability ...................................................................................... 9 

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

Reports ............................................................................................................ 9 

Records; Accounting; Providers; Access ...................................................... 10 

Audits; Reviews ............................................................................................ 10 

Section 4.9 

Section 4.10 

Required MCC Approvals ............................................................................ 11 

Implementation Letters ................................................................................. 12 

Article 5. 

Section 5.1 

Section 5.2 

Section 5.3 

Article 6. 

Section 6.1 

Section 6.2 

Section 6.3 

Article 7. 

Section 7.1 

Section 7.2 

Section 7.3 

Section 7.4 

Disbursement of Grant Funding ............................................................................ 13 

Disbursement Process ................................................................................... 13 

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

Conditions Precedent to Each Disbursement.. .............................................. 15 

Completion Date; Tennination and Suspension ................................................... 16 

Completion Date ........................................................................................... 16 

Termination and Suspension; Expiration ...................................................... 16 

Refunds ......................................................................................................... 18 

Governing Law; Amendments; General ............................................................... 18 

Governing Law ............................................................................................. 18 

Consultations ................................................................................................. 18 

Representatives ............................................................................................. 18 

Communications ........................................................................................... 18 
Section 7.5 

Section 7.6 

Section 7.7 

Section 7.8 

Section 7.9 

Section 7.10 

Section 7.11 

Section 7.12 

MCC Status ................................................................................................... 19 

No Assurance of Future Assistance .............................................................. 19 

Amendment ................................................................................................... 19 

Survival ......................................................................................................... 20 

Definitions; Interpretation ............................................................................. 20 

References to MCC Website ......................................................................... 20 

Signatures ...................................................................................................... 21 

Grant Reference ............................................................................................ 21 

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

Annex I: Program Description 

Schedule A to Annex I: Indicators 

Annex II: 

Annex Ill: 

Annex IV: 

Conditions Precedent to Disbursements 

Allocation of Grant Funding 

Definitions 

Toe- ii 
THRESHOLD PROGRAM GRANT AGREEMENT 

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

November 17, 2015, is made between the United States of America, acting through the 

Millennium Challenge Corporation ("MCC'), and the Republic of Sierra Leone ("Sierra 

Leone"), acting through the Ministry of Finance and Economic Development (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 of 2003, 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"); and 

WHEREAS, MCC has selected Sierra Leone 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 of this Agreement is to assist Sierra Leone 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 Sierra 

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

good governai1ce, economic freedom and investments in the people of Sierra Leone 

Section 1.2 Program Objective. The objective of the Program (the "Program Objective") is to 

establish a foundation for the more effective and financially-sustainable provision of water and 

electricity services in greater Freetown by establishing independent regulation, strengthening key 

institutions improving and expanding customer service, and increasing transparency and 

accountability in the provision of these services in order to improve service delivery and limit 

opportunities for corruption. The Program consists of the projects described in Annex I (each, a 

"Project" and collectively, the "Projects"). 

Section 1.3 Project Objectives. The objective of each of the Projects (each, a "Project 

Objective" and collectively, the "Project Objectives") is as follows: 
(a) The objective of the Regulatory Strengthening Project is to suppoti the 

Government in its efforts to operationalize and build core capacities at the Electricity and Water 

Regulatory Commission in order to ensure transparency, support the long-term financial 

sustainability of the water and electricity sectors, and improve overarching sector governance. 

(b) The objective ofthe Water Sector Reform Project is to support Government 

cff01ts to (i) improve water sector coordination; (ii) strengthen commercial practices, operational 

independence, and planning capacity at the Guma Valley Water Company; and (iii) enhance 

transparency, accountability and customer service practices through improved community, 

consumer, and customer engagement, as well as the establishment and utilization of new 

accountability mechanisms. 

(c) The objective of the Electricity Sector Reform Project is to support Government 

efforts to (i) operationalize the emerging institutional framework and market structure in Sierra 

Leone's electricity sector; (ii) improve integrated planning capacity; and (iii) strengthen 

operational efficiency and corporate governance at targeted electricity sector institutions, 

particularly the Electricity Generation and Transmission Company. 

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-four million four hundred thousand United States dollars 

(US$44,400,000) (the "Grant") to support implementation of the 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 of this 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 of the Grant 

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

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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 of the Grant. 

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

the Grant, in whole or in pati, will be used solely in furtherance of this 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 

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

purposes: 

(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 of involuntary 

sterilizations as a method of family planning or to coerce or provide any financial incentive to 

any person to undergo sterilizations or to pay for·any biomedical research which relates, in whole 

or in part, to methods of, or the performance of, abortions or involuntary sterilization as a means 

of family planning. 

Section 2.5 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 

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

in Sierra Leone (including any such Taxes imposed by a national, regional, local or other 

governmental or taxing authority of or in Sierra Leone). 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 Sierra Leone in connection with the Program; (ii) sales tax, goods and services 

3 
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 (A) natural persons who arc citizens or permanent residents of Sierra Leone; and (B) legal 

persons formed under the laws of Sierra Leone (but excluding the Accountable Entity and any 

other entity formed for the purpose of implementing the Government's obligations hereunder). 

(b) The Government and MCC may enter into one or more agreements setting f01th 

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 of Taxes 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 of the 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(b) 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 Sierra Leone. 

(c) If a Tax has been paid contrary to the requirements of this 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 of Sierra Leone within thirty 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. 

(d) 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 of the Government in the course of reaching 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 of the Program. 

(b) Accountable Entity. The Government hereby establishes the Millennium 

Challenge Coordinating Unit ("MCCU") in the Office of the President as an independent entity 

with legal personality pursuant to the terms and conditions of this Agreement, and hereby 

designates the Millennium Challenge Coordinating Unit to implement the Program and to 

exercise and perform the Government's right and obligation to oversee, manage and implement 

4 
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 Enti(v"; (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 fully responsible. MCC hereby acknowledges and consents to the 

designation in this Section 3.2(b). With the prior written consent ofMCC, 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. 

(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 of2003, 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 of this Agreement and the Program. 

(e) Achievement of Program Objective. The Government will take all necessary or 

appropriate steps to achieve the Program Objective and 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 of Intellectual 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 of judgment, 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 of the Grant funding or any other funds received from MCC (or assets acquired with 

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

5 
(h) Insurance; Performance Guaranties. The Government 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 

Govemment 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 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 funding; provided, however, that, 

at MCC's election, such procr:eds 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 of the Accountable Entity will not be expanded, restricted, or otherwise 

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

writing. 

G) 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 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 

MDCi0.rtthefact 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. 

6 
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 Government 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 Government 

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

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

Program, or when the Government 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 Government 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 Government 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 Government 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 of the 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 UI may be modified from time to time by 

agreement of the Parties in accordance with the terms of this Agreement. 

(b) Procurement Plan. The Government 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 Government 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 Government 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 Government will develop, adopt and implement such other work 

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

7 
(d) Audit Plan. The Government will develop, adopt and implement a plan, in 

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

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

the entities that arc 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 sixty days before the end of the first period to be audited. Unless MCC agrees otherwise in 

writing, the Government 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 Government 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 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 Government 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 ofthe 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 cost 

effective 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 Government 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 of this requirement, and prior to the issuance of any Program 

Grant, the Government 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. 

8 
Section 4.4 Fiscal Accountability. Unless MCC agrees otherwise, the Government 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 of the 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; (f) personnel and payroll; (g) travel and vehicle 

use; (h) asset and inventory control; (i) audits; and U) reporting. The Fiscal Accountability Plan 

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

Section 4.5 Environmental, Gender and other Program Guidelines. 

(a) 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 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 Government 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. 

Unless MCC agrees otherwise in writing, the Government will fund all necessary costs of 

environmental and social mitigation measures (including, without limitation, costs of 

resettlement) not specifically provided for, or that exceed the amount of Grant funding 

specifically allocated for such costs, in the Detailed Financial Plan for any Project. 

(b) 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!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 Government 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 

9 
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 

Government will provide to MCC within thirty 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 of the 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. 

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

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

generally accepted accounting principles prevailing in the United States, or at the Government's 

option and with MCC's prior written approval, other accounting principles, such as those (i) 

prescribed by the International Accounting Standards Board or (ii) then prevailing in Sierra 

Leone. Records must be maintained for at least five years after the end of the term of this 

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 Generaf'), the United States Government Accountability Office, any auditor 

responsible for an audit contemplated herein or otherwise conducted in furtherance of this 

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

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

or inspe<;tfa,cili~ies, assets and activities funded in whole or in parLby:Gr~ntJunding. 

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 of this Agreement until the following March 31 and covering each twelve-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 

10 
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. 

(c) Corrective Actions. The Government will use its best efforts to ensure that each 

Covered Provider (i) takes, where necessary, appropriate and timely corrective actions in 

response to audits, (ii) considers whether the results of the Covered Provider's audit necessitates 

adjustment of the Government's records, and (iii) pennits independent auditors to have access to 

its records and financial statements as necessary. 

(d) Audit by MCC. MCC will have the right to arrange for audits of the 

Government's use of Grant funding. 

Section 4.9 Required MCC Approvals. Each of the 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 of the foregoing; 

(c) All agreements between the Government and the Accountable Entity, and 

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

foregoing, a "Material Agreement"): 

(i) Auditor; 

(ii) Bank; 

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

observer) or any Officer of the Accountable Entity (including agreements modifying 

compensation for any such person); 

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

action that would have equivalent effect; 

11 
(e) Any agreement or transaction of the 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, charier, 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 pari, liquidation, dissolution, winding up, 

reorganization or other change of the 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; 

G) (i) any change of any member of the Accountable Entity's board of directors, any 

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

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

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

any vacant position of any Officer of the Accountable Entity; 

(k) Any decision by the Accountabie 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; 

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

approval is required under any of the 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 of the 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 of this Agreement or other related agreements. 

12 
ARTICLES. 

DISBURSEMENT OF GRANT FUNDING 

Section 5.1 Disbursement Process. 

(a) Disbursement Requests. The Government may request Disbursements of the 

Grant by submitting a written request to MCC substantially in the fonn 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 

Government may submit only one Disbursement Request for each calendar quarter (such quarter, 

or any other period of time as agreed by MCC, the "Disbursement Period"). 

(b) Approval of Disbursement 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 of the conditions precedent applicable to the requested Disbursements. 

(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 

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

received by the Government octhe 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 of the Accountable Entity (or to the 

Government, as reimbursement for authorized expenses of the 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. 

13 
(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 of Sierra Leone 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 "Permitted Account"). 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 of the 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 of this Agreement or the relevant Bank 

Agreement, the Government will ensure the transfer to MCC of any interest accrued on amounts 

held in a Permitted Account. 

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

Pennitted 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 Government 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 Government will ensure that such Grant funding will 

be denominated in United States dollars prior to release. Unless MCC agrees otherwise, to the 

extent that any amount of Grant funding held by the Bank in United States dollars must be 

exchanged intothe,currency of Sierra Leone for any purpose, the Govemmentwill ensure that 

such exchange is consistent with Section 2.5 and the requirements of the 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 of the Grant: 

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

the Attorney General of Sierra Leone or other counsel acceptable to MCC. 

(b) Implementation Plan. The Government 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 Government has established the Local Account and any other 

required Permitted Account. 

14 
. (d) Fi~c.al Accountability Plan. The Government has developed and adopted the 

Fiscal Accountab!ltty Plan (or an interim version). 

(e) Officers. Each of the Officers has been selected and engaged by the Accountable 

Entity and approved by MCC. 

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

(a) Deliverables. The Government 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 of the date of such 

Disbursement Request, substantially in the form provided by MCC. 

(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 of this Agreement; 

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

correct on and as of the 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 of the 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 two quarters (or 

such other period as the Audit Plan may require); 

15 
(viii) any Taxes paid with Grant funding through the date ninety days prior to 

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

in accordance with Section 2.5; and 

(ix) each of the Officers remains engaged, or if a position is vacant, the 

Govemment is actively engaged, to MCC's satisfaction, in recruiting a replacement. 

ARTICLE6. 

COMPLETION DATE; TERMINATION AND SUSPENSION 

Section 6.1. Completion Date. Unless the Patiies agree otherwise, the date four years after this 

Agreement enters into force in accordance with Article 8 is the date by which the Parties 

estimate that all of the activities related to the implementation ofthe Program and the 

achievement of the Program Objective and the 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. 

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 arrangemept 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 Program Objective or 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 of the Grant or continued implementation of this 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 of the United States of America; 

16 
(v) an act has been committed or an omission or an event has occurred that 

would render Sierra Leone ineligible to receive United States economic assistance under Part I of 

the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2151 et seq.), by reason of the 

application of any provision of the 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 of Sierra Leone 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 of this 

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 fwiherance of this Agreement before expiration, suspension or termination 

of this 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 

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

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

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

Agreement: (i) any amounts of the 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 of the Grant disbursed by MCC to the Government but not 

expended before such expiration, suspension or termination of this 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, of this Agreement, 

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

treatment of the 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. If the Accountable Entity 

continues operations after the Completion Date, or following the termination of this 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 of the 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 of the Program in Sierra Leone after the termination or expiration of this Agreement. 

17 
Section 6.3. Refunds. MCC may reinstate any suspended or terminated potiion of the Grant 

under this Agreement ifMCC 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 patt with Grant funding is used for any purpose in violation ofthe terms of this 

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

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

after the Government's receipt ofMCC'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 of this 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. 

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 of this 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 

Minister of Finance and Economic Development, and MCC will be represented by the individual 

holding the position of, or acting as, the Vice President of the Department of Policy and 

Evaluation (each of tl)e foregoing, a "Principal Representative"). Each Party,Jby written notice 

to the other Party, may designate one or more additional representatives (each, an "Additional 

Representative") for all purposes of this Agreement except for purposes of Section 7.7(a). The 

Government hereby designates the Chief of Staff of the Office of the Presidency as an Additional 

Representative. MCC hereby designates the Deputy Vice President of the 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. 

18 
To the Government: 

Ministry of Finance and Economic Development 

Attention: Minister of Finance and Economic Development 

MOFED Secretariat Building 

George Street 

Freetown, Sierra Leone 

Telephone: +232 22 222 211 

Email: info@mofed.gov.sl 

To MCC: 

Millennium Challenge Corporation 

Attention: Vice President, Department of Policy and Evaluation 

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

875 Fifteenth Street, NW 

Washington, DC 20005 

United States of America 

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) 

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

the United States Government in the implementation of this 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 of MCC 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 of the above entities or persons for any such l9_ss,damage, injury, or 

death. The Government agrees that MCC and the United States Government or any current or 

former officer or employee of MCC or the United States Government will be immune from the 

jurisdiction of all courts and tribunals of Sierra Leone 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 Sierra Leone. 

Section 7.7 Amendment. 

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

agreement will specify how it enters into force. 

19 
(b) Notwithstanding subsection (a) of this 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, (I) suspend, 

terminate or modify any activity described in Annex I or create a new activity, (2) add, delete or 

waive any condition precedent described in Annex II, or (3) 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 Program Objective and the Project Objectives, (B) does not cause the amount of the 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 of this Agreement pursuant to subsection (a). 

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 ofthis 

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 will be 

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

form an integral part of this 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. 

20 
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 of this 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: TR15SLE16001. 

ARTICLES. 

ENTRY INTO FORCE 

The Government will notify MCC in writing when the Government's necessary internal 

procedures for entry into force have been completed. Following receipt of this notification, MCC 

will notify the Government in writing when MCC's necessary internal procedures for entry into 

force have been completed. The Agreement will enter into force on the date ofMCC's written 

notification to the Government. 

SIGNATURE PAGE FOLLOWS ON NEXT PAGE. 

21 
IN WITNESS WHEREOF, the undersigned, duly authorized by their respective 

Governments have signed this Agreement. 

Done at Freetown, Sierra Leone, this 17th day ofNovember, 2015 in the English language. 

FOR THE UNITED STATES OF 

AMERICA, ACTING THROUGH THE 

MILLENNIUM CHALLENGE 

CORPORATION 

/_./~ /- , ,;; c:--n --.-J..Larne: Beth C. Tntter 

Title: Vice President, Department of Policy 

and Evaluation 

FOR THE REPUBLIC OF SIERRA LEONE, 

ACTING THROUGH THE MINISTRY OF 

FINANCE AND ECONOMIC 

DEVELOPMENT 

Name: Dr. Kaifala Marah 

Title: Minister of Finance and Economic 

Development 

SIGNATURE PAGE TO MILLENNIUM CHALLENGE THRESHOLD PROGRAM GRANT AGREEMENT 

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

AND THE REPUBLIC OF SIERRA LEONE, ACTING THROUGH THE MINISTRY OF FINANCE AND ECONOMIC 

DEVELOPMENT 
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 three Projects and their activities (each, an "Activity" and collectively, the 

"Activities"). Collectively, the projects seek to 

• establish effective and independent regulation of the water and electricity sectors, 

including a framework for transparent tariff setting, and improve sector governance; 

• strengthen commercial practices, operational independence, and planning capacity in 

sector institutions; and 

• enhance transparency, accountability, and customer service through stakeholder 

engagement and the incorporation of new tools to fight corruption and petty bribery. 

1. Regulatory Strengthening Project 

The objective of the Regulatory Strengthening Project is to support Government reforms to 

operationalize the Electricity and Water Regulatory Commission ("EWRC') and build its core 

capacities to ensure transparency, support the long-term financial sustainability of the water and 

electricity sectors, and improve overarching sector governance. 

(a) Activity 1.1. Electricity and Water Regulatory Commission Institutional 

Strengthening Activity. 

This Activity will support the Government's efforts to operationalize and build core capacities at 

EWRC. Specifically, this Activity will provide technical assistance to review recruitment plans 

and train staff, implement applicable business plans, and promulgate and implement essential 

regulations, such as licensing procedures, a grid code, and water and electricity technical and 

quality standards. The Activity will also assist EWRC to develop and implement a public 

engagement strategy, including outreach to unconnected and marginalized people. 

Under EWRC's leadership, this Activity will also support the development of a regulated tariff 

setting framework and process in each sector, including without limitation the preparation of 

rate-case requirements, conducting cost-of-service assessments, and the establishment of an 

automatic tariff adjustment policy. 

To assess the performance of regulated utilities, the Activity will also support EWRC to identify 

and monitor key performance indicators. This will include relevant data generated by the "Pay 

No Bribe" reporting platform, which the Government will establish in cooperation with the 

United Kingdom's Department for International Development. Upon completion, this platform 

will provide citizens with an open and transparent system through which to register reports of 
corruption and petty bribery using mobile phones and other means. Monitoring by EWRC is 

expected to reinforce the development and implementation of accountability mechanisms at 

regulated utilities to reduce and resolve such reports and allegations. 

It is anticipated that technical assistance under this Activity will include the development a 5-

year budget for EWRC identifying total funding needs as well as sources of revenue (e.g., levies 

and licensing fees). The Government agrees to fund any shortfalls in EWRC funding 

requirements- either through its own budget or by securing alternative donor funding- for each 

fiscal year during the term of the Program. 

(b) Activity 1.2. Performance-Based Regulation Activity. 

This Activity is designed to strengthen EWRC's role, incentivize performance by regulated 

utilities, and enhance accountability by providing conditional, performance-based disbursements 

to regulated utilities if they achieve increased performance outcomes on key performance 

indicators ("[(Pis"). It is anticipated that this Activity would only commence 12-18 months prior 

to the Completion Date. The tenns and conditions applicable to such performance-based 

disbursements under this Activity, including without limitation the frequency of EWRC 

perfmmance assessments, third party verification requirements, specific KPI targets and the 

value of associated payments, and conditions on the utilization of such payments by regulated 

utilities, will be memorialized in an agreement, or similar instrument, as further described in 

Section 10 of Annex II. 

2. Water Sector Reform Project 

The objective of the Water Sector Reform Project is to support Government efforts to (1) 

improve water sector coordination; (2) strengthen commercial practices, operational 

independence, and planning capacity at the Guma Valley Water Company; and (3) enhance 

transparency, accountability and customer service practices at the Guma Valley Water Company 

through improved community, consumer, and customer engagement, as well as the establishment 

and utilization of new accountability mechanisms at the Guma Valley Water Company. 

(a) Activity 2.1. Water Sector Roadmap and Coordination Activity. 

This Activity will support the Government's ongoing efforts to reform the overarching 

institutional structure for the water sector and water resource management, both nationally and in 

greater Freetown. Specifically, Grant funding will provide technical assistance to support the 

development of an institutional roadmap for water sector to better delineate the roles and 

responsibilities of institutions in the sector, building on new and pending legislation and the 

Government's National Water and Sanitation Policy. The Activity will also support the 

establishment of a water sector reform steering committee to institutionalize sector coordination 

and provide guidance on implementation of the broader Water Sector Reform Project. 

ANNEX I- 2 
(b) Activity 2.2. Guma Valley Water Company Institutional Strengthening Activity. 

This Activity will strengthen the Guma Valley Water Company's capacity to perform core 

business functions and comply with emerging regulatory requirements developed under the 

Regulatory Strengthening Project. The Program will support: 

• system-wide mapping, system condition assessments, customer mapping, and hydraulic 

modeling, all ofwhich are needed to improve the Guma Valley Water Company's 

understanding of water system performance and enable proper planning; 

• technical assistance to improve utility operations, including technical, financial, and 

commercial management, service quality, investment planning, procurement, contract 

management, corporate govemance, and environmental sustainability; 

• development of a strategy to reduce losses due to leaks, illegal or mischaracterized 

connections, theft, and other commercial losses (so-called non-revenue water), to be 

implemented and tested within the district metering area (see below); 

• standing up the Gum a Valley Water Company's pro-poor unit, and development of a 

strategy to improve, and build capacity for, service delivery to low-income consumers; 

and 

• community and consumer outreach, including publication of service charters and 

consumer education on the need to pay for water. 

This Activity will also leverage the Pay No Bribe platform by assisting the Guma Valley Water 

Company to respond to reports of corruption and to incentivize improved staff performance. This 

may include investigations of allegations, audits of implicated accounts, establishment of 

reduction targets with associated recognition, and/or development of administrative sanctions. 

(c) Activity 2.3. District Metering Area and Standpipe Demonstration Activity. 

This Activity will leverage the technical assistance provided under the Guma Valley Water 

Company Institutional Strengthening Activity by identifying and establishing a controlled district 

metering area, within which the Guma Valley Water Company can implement and test its 

improved business practices and operationalize a non-revenue water strategy. The Guma Valley 

Water Company expects to measure water flows in and out of the district metering area, assess the 

scope of physical and commercial losses, and implement a plan to reduce non-revenue water 

including control of illegal or mischaracterized connections within the district metering area. This 

will enable the Guma Valley Water Company to improve service reliability within the district 

metering area and collaborate closely with stakeholders to determine which strategies are most 

effective to reduce water losses. 

In addition to establishing the district metering area, a key component of this activity will be the 

piloting of a public-private partnership model for the operation and management of public 

standpipes. These standpipes, which provide water for a substantial portion ofGuma Valley 

Water Company's customer base, and from which little revenue is collected by the Guma Valley 

Water Company, provide unreliable service and often contaminated water to low-income users. 

Under the pilot, up to ten existing standpipes within the district metering area will be rehabilitated 

ANNEX I- 3 
and transformed into water kiosks. Kiosks will be operated and managed by private operators 

(ideally local entrepreneurs) selected through an open and transparent concession process. Kiosk 

operators will have contracts with the Guma Valley Water Company to pay for water and the 

Guma Valley Water Company will monitor the operators' performance. It is also anticipated that 

water kiosks will provide sanitation and hygiene, health, and other community services. This 

Activity will also support a participatory study to better understand community concerns about 

water service delivery in pilot areas and their level of engagement (including the participation of 

women and marginalized groups) with key stakeholders. The study will also look into aspects of 

gender-based violence while fetching water, and interventions will be identified and implemented 

in pilot areas. 

3. Electricity Sector Reform Project 

The objective ofthe Electricity Reform Project is to support Government efforts to (l) 

operationalize the emerging institutional framework and market structure in Sierra Leone's 

electricity sector and enhance the capacity of sector institutions to fulfill their mandates in the 

reformed power sector; (2) improve integrated planning and other technical capacities; and (3) 

strengthen operational efficiency and corporate governance at targeted electricity sector 

institutions, particularly the Electricity Generation and Transmission Company. 

(a) Activity 3.1. Electricity Sector Roadmap and Coordination Activity. 

This Activity will support the Government to operationalize the electricity market restructuring 

that began in 2014 with the unbundling of the National Power Authority and the creation of 

EWRC. Specifically, the Activity will convene a steering committee tasked with developing a 

roadmap for electricity sector reform. The roadmap will clarify the roles and responsibilities of 

various sector institutions in the new power sector framework, including the Electricity 

Distribution and Supply Authority, the Electricity Generation and Transmission Company, 

EWRC, the Ministry of Energy, and potentially other entities. Importantly, this Activity will 

establish and facilitate a forum to encourage improved coordination around key sector priorities, 

including increasing generation capacity, establishing a viable financial strategy for the sector, 

and planning for system growth. 

Building on the roadmap and with guidance from the steering committee, this Activity will also 

support development of a Government policy for future financial contributions to the power 

sector, including studies required to provide related analysis. The policy will recognize a 

continued but diminishing role for government financing in conjunction with greater 

expectations for utility performance and the ability to become self-financing. The policy will also 

outline the Government's commitment to an independent and transparent tariff review process, 

while providing an opportunity for Government input regarding the timeline for transition to 

cost-reflective tariffs. The policy will draw on a willingness-to-pay and subsidy policy study to 

establish a policy for vulnerable consumer groups for EWRC to consider as it develops its tariffsetting processes. In addition, this Activity will support the development of a framework for 

procuring new power generation through a transparent and competitive process. 

ANNEX I -4 
(b) Activity 3 .2. Institutional Strengthening Activity. 

This Activity will strengthen the capacity of key sector institutions to develop system plans, 

improve integrated system planning and interface with EWRC and comply with regulatory 

requirements. Grant funding will support the development of actionable, foundational sector 

studies, such as an industrial load assessment and an integrated investment master plan. If an 

integrated master plan and framework for soliciting independent power producers is adopted, 

conditional funding may also be available under this activity for project preparatory studies 

required to identify and prepare a viable independent power producer transaction to bring to 

market. 

Grant funding will also support the development of a strategic business plan and technical 

assistance for the Electricity Generation and Transmission Company, in each case corresponding 

to the role defined for it in the sector roadmap. Technical assistance to the Electricity Generation 

and Transmission Company will support implementation of the business plan and development 

of core capacities, including transmission operations and planning, and overall operations and 

maintenance. Technical assistance will also strengthen corporate governance and support the 

Electricity Generation and Transmission Company's Board of Directors in the execution of its 

duties. 

In addition, the Activity will support targeted technical assistance for the Electricity Distribution 

and Supply Authority in coordination with the Government and other development partners. 

Interventions may include (but are not limited to) a consumer census, geographic information 

system mapping and training for the Board of Directors to strengthen corporate governance 

practices and support successful oversight of the management contractor to be recruited with 

support from the World Bank to manage operations at the Electricity Distribution and Supply 

Authority. 

4. Mid-Term Review 

The Parties hereby agree to jointly conduct a comprehensive mid-term performance review at the 

completion of the second year after entry into force of this Agreement. Based on quantifiable 

performance indicators iricltided in the M&E Plan developed pursuant to Section C below, the 

Parties will assess the progress of the Program and each Project. Based on this mid-term review, 

the Parties may agree to modify the Program, or any Project or Activity, in each case in 

accordance with Section 7.7(b). 

B. IMPLEMENTATION ARRANGEMENTS 

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

roles and responsibilities of the 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 of the Program is expected to include an MCC country director based in Freetown and 

ANNEX 1-5 
an implementation support team from MCC headquarters, as well as MCC-managed consultants, 

who will work in Sierra Leone from time to time as necessary to perfonn their duties. MCC 

expects that the MCC-managed consultants will include individuals with expertise in fiscal 

management and accountability ofMCC funding (the "Fiscal Accountabili(V Consultant") and 

in the procurement of goods, works and services using MCC funding under the MCC Program 

Procurement Guidelines (the "Procurement Consultant"). It is expected that the Fiscal 

Accountability Consultant and Procurement Consultant, respectively, will perform all services 

necessary to assist the Government to ensure that: (1) all financial management activities related 

to the Program are conducted in strict compliance with the principles, rules, and procedures set 

out in th:s Agreement and related MCC policies, procedures, or guidance, and (2) all Programrelated p ocurements are conducted in strict compliance with the principles, rules, and 

procedures set out in this Agreement, the MCC Program Procurement Guidelines, and related 

MCC policies. 

2. 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 established and 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 of the Projects, allocating resources 

and managing procurements. Specifically, by its establishment pursuant to this Agreement, 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 of the 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.~ bom;d 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 is comprised of 

seven voting members. The Board includes the following representatives: 

(a) Chief of Staff of the Office of the Presidency, who will serve as the chair of the 

Board; 

(b) Minister of Energy; 

(c) Minister of Water Resources; 

(d) Minister of Finance and Economic Development; and 

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

sector, civil society, and consumer groups). 

ANNEX I -6 
The members of the 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, at the conclusion of which the 

President of Sierra Leone will formally nominate such members for approval by Sierra Leone's 

parliament. Other non-voting members may be included as named in the Governing Documents. 

In addition, MCC's resident country director in Sierra Leone will serve as a non-voting observer 

ofthe Board. 

The Government will conduct an open and competitive recruitment for Program-funded 

positions within the Accountable Entity. The Government will contribute funds for office space, 

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

Government staff as needed. 

In addition, the Grant will support compensation for the following positions (each an "Officer" 

and collectively, "O.fficers") at the Accountable Entity: 

• Chief Executive Officer 

• Chief Operating Officer 

• Electricity Sector Director 

• Water Sector Director 

• Social and Community Development Director 

• Monitoring and Evaluation and Economic Analysis Director 

• Procurement and Finance Director 

The Officers will be supported by such additional staff as may be necessary, including as needed 

additional Officers, and in each case with MCC approval and subject to availability of Grant 

funds. At a minimum, this additional staff will include the following positions: 

• Press and Communications Officer 

• At least two Procurement and Finance Officers 

• Resettlement Expert 

The Government will ensure that Government miriistr'ies,·aepartments, agencies and entities 

cooperate with the Accountable Entity in the implementation of the 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. 

The Government will coordinate and cooperate on a day-to-day basis with any MCC-managed 

consultants, including without limitation the Fiscal Accountability Consultant and the 

Procurement Consultant, to assure achievement of the Program Objective. This includes 

coordination and cooperation with the Fiscal Accountability Consultant and the Procurement 

Consultant to accomplish the Government's fiscal- and procurement-related responsibilities 

ANNEX I -7 
under the Agreement, including but not limited to: (1) compliance with the MCC Program 

Procurement Guidelines and development and implementation of a procurement operations 

manual for the Accountable Entity; (2) the development and implementation of the Fiscal 

Accountability Plan and compliance with the MCC Cost Principles and MCC Audit Guidelines; 

(3) preparation and implementation of procurement plans and related procurement reporting 

requirements; (4) preparation ofDisbursement Requests, the Detailed Financial Plans and related 

financial reporting requirements; and (5) the administration of contracts financed under this 

Agreement. 

As agreed from time to time in writing with MCC, the Government will make available to the 

Fiscal Accountability Consultant and Procurement Consultant, respectively, information and 

documents relating to the Government's fiscal accountability and procurement activities under 

this Agreement. In addition, the Government will make office space available and provide such 

other in-kind suppmi as required by the Fiscal Accountability Consultant and Procurement 

Consultant, or any other MCC-managed consultants, in the performance of their duties. 

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 Water Sector Reform 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 Sierra Leone, 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 Activity 2.3 District Metering Area and Standpipe Demonstration Activity 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 M<I:C's satisfaction appropriate environmental and 

social mitigation measures identified in such assessments or plans or developed to address 

environmental and social issues identified during Program implementation. 

C. MONITORING AND EVALUATION 

1. General. 

In accordance with this Agreement, MCC and the Government will formulate and agree to, and 

the Government will adopt and implement, an M&E Plan that specifies: (1) how progress toward 

the Program Goal, the Program Objective and the Project Objectives will be monitored 

("Monitoring Component"); (2) a process and time line for the monitoring of planned, ongoing 

or completed Activities to determine their efficiency and effectiveness; and (3) a methodology 

for assessment and rigorous evaluation of the outcomes and impact of the Program ("Evaluation 

Component"). The actual content and form of the M&E Plan will be agreed to by MCC and the 

ANNEX I- 8 
Government in accordance with MCC's M&E Policy. In addition, the M&E Plan may be 

modified from time to time as outlined in MCC's M&E Policy with MCC approval and without 

requiring an amendment to this Agreement. Information regarding the Program's performance, 

including the M&E Plan, and any amendments or modifications thereto, as well as progress and 

other reports, will be made publicly available. 

The M&E Plan will be finalized within six months of the beginning of implementation, after 

Activity-level work plans have been developed and adopted. In any case, the M&E Plan must be 

finalized prior to the third Disbursement of the Grant. 

2. Program Logic. 

The M&E plan will be built on a logic model which illustrates how the Program, Projects and 

Activities contribute to the Program Goal, the Program Objective and the Project objectives. 

3. Monitoring Component. 

The Government will be responsible for developing the M&E Plan, with support from MCC and, 

in most cases, the relevant implementing agencies or partners. To monitor progress toward the 

achievement of the impact and outcomes of the Program, the Monitoring Component of the 

M&E Plan will identify: (1) the Indicators (as defined below), (2) the definitions ofthe 

Indicators, (3) the sources and methods for data collection, (4) the frequency for data collection, 

(5) the party or parties responsible for collecting and analyzing relevant data, and (6) the timeline 

for reporting on each Indicator to MCC. 

(a) Indicators. 

The M&E Plan will measure the results of the Program using quantitative, objective and reliable 

data (each, an "Indicator"). Each Indicator will have benchmarks that specify the expected value 

and the expected time by which that result will be achieved (each, a "Target"). All Indicators 

will be disaggregated by gender and beneficiary types to the extent practicable. Subject to prior 

written approval from MCC, the Government may add Indicators or refine the definitions and 

Targets of existing Indicators. Indicators that will be used for monitoring the Program and that 

will be included in the M&E Plan are set forth in Schedule A to this Annex I. . 

The M&E Plan will also establish baselines that measure the situation prior to a development 

intervention, against which progress can be assessed or comparisons made (each, a "Baseline"). 

The Government will collect Baselines on the selected Indicators or verify already collected 

Baselines where applicable and as set forth in the M&E Plan. 

(b) Data Collection and Reporting. 

The M&E Plan will establish guidelines for data collection and reporting, and identify the 

responsible parties. Compliance with data collection and reporting timelines will be conditions 

for Disbursements for the relevant Activities. The M&E Plan will specify the data collection 

methodologies, procedures and analysis required for reporting on results at all levels. The M&E 

Plan will describe any interim MCC approvals for data collection, analysis, and reporting plans. 

ANNEX I -9 
(c) Data Quality Reviews. 

As determined in the M&E Plan, or as otherwise requested by MCC, the quality of the data 

gathered through the M&E Plan will be reviewed to ensure that data reported are as valid, 

reliable, and timely as resources will allow. The objective of any data quality review will be to 

verify the quality and the consistency of performance data across different implementation units 

and rep01iing institutions. Such data quality reviews also will serve to identify where those levels 

of quality are not possible, given the realities of data collection. 

4. Evaluation Component. 

The Evaluation Component of the M&E Plan will describe the purpose of the evaluation, 

methodology, timeline, required MCC approvals, and the process for collection and analysis of 

data for each evaluation. The results of all evaluations will be made publicly available in 

accordance with MCC's M&E Policy. 

MCC will commission independent evaluations of the Program to examine the effectiveness and 

sustainability of the Projects. The evaluation section ofthe M&E Plan will outline key evaluation 

questions, and will focus its efforts on understanding the extent to which: 

• Activities were undetiaken and fully implemented; 

• Activities led to outcomes; 

• · The likelihood that outcomes will be sustained over the short- and long-term; and 

• Cost effectiveness of the program activities, where feasible. 

ANNEX I- 10 
SCHEDULE A TO ANNEX I 

INDICATORS 

Indicators that will be used for monitoring the Program and that will be included in the M&E Plan 

are set forth are set forth below: 

EWRC Institutional Stt·engthening Activity 

5-year budget developed 

EWRC 5-year for EWRC, including Not To be 

Output budget approved proposed sources of Date applicable determined 

funding, with support from ("NA") ("TBD") 

contractor 

Outreach events 

Number of outreach events 

held with organized and held by 

Output electricity sector 

EWRC with electricity Number TBD TBD 

stakeholders sector stakeholders, 

consumers 

Outreach events 

Number of outreach events 

held with water organized and held by 

Output sector 

EWRC with water sector Number TBD TBD 

stakeholders stakeholders, including 

consumers 

Rate-case Rate-case requirements for 

requirements tariff application/review 

Output developed and process developed by Date NA EWRC and issued to TBD issued to regulated entities (i.e. regulated entities 

Automatic tariff Automatic tariff indexation 

Output indexation process developed by Date NA TBD 

process developed electricity sector 

stakeholders 

EDSA/EGTC and GVWC 

Outcome Existing utilities licensed according to Date NA TBD licensed EWRC licensing 

uirements 

Tariff EDSA and GVWC tariff applications applications submitted to Outcome submitted by Date NA TBD 

EDSA and EWRC according to 

GVWC roadmap timeline 

Updated tariff Updated tariff approved by 

Outcome approved for EWRC for electricity and Date NA TBD 

water sectors 

ANNEX I -11 
electricity and 

water sectors 

Automatic tariff 

indexation Ratio of actual average process Outcome implemented on 

tariff charged to approved Percentage TBD TBD 

as needed basis average tariff 

reporting KPls and reporting 

Outcome requirements for requirements for EDSA, Date NA TBD EDSA,EGTC EGTC and/or GVWC 

and/or GVWC established by EWRC 

established 

EDSA,EGTC 

and/or GVWC EDSA, EGTC and/or 

reporting GVWC reporting 

Outcome submitted submitted to EWRC Date NA TBD 

according to according to reporting 

reporting requirements 

Water Sector Roadmap and Coordination Activity 

Sector Roadmap approved by 

Output Sector Steering Committee Date NA TBD 

members and 

Mapping of water system and 

Output customer base completed by Date NA TBD 

contractor 

assessment of Condition assessment of water 

Output water distribution system completed Date NA TBD distribution 

system by contractor 

Hydraulic Hydraulic modeling completed Output modeling by contractor 

Date NA TBD 

ANNEX 1- 12 
Cost-of-service Cost-of-service study Output study Date NA TBD 

leted completed by contractor 

Number of Number of consumer 

consumer education and marketing Output education Number TBD TBD 

initiatives campaigns conducted by 

conducted GVWC 

Total number Total number of registered Outcome of registered Number TBD TBD 

customers GVWC customers 

Average Receivables divided by credit Outcome collection sales times 360 days Days TBD TBD 

Total annual operational 

revenues divided by total 

annual operating costs. 

(International Benchmarking 

Network for Water and 

Outcome Operating cost Sanitation Utilities Indicator Ratio TBD TBD 

coverage 24.1) (Calculation: OPC =RIC 

where OPC = Operation Cost 

Coverage, R =Total Annual 

Operational Revenue and C = 

Total Annual Operational Cost 

District metering area 

District established through a process 

Output metering area 'of:i'tegotiation and consensus- Date NA TBD 

established building with relevant 

stakeholders 

Number of Number of standpipe 

Output standpipe entrepreneurs selected to Number NA TBD 

entrepreneurs operate water kiosks selected 

The difference between water 

Non-revenue supplied and water sold (i.e. 

Outcome 

water volume of water "lost") Percentage TBD TBD 

expressed as a percentage of 

water 

Continuity of Average hours of service per service, Outcome disaggregated day for water supply, Hours/Day TBD TBD 

measured for private 

ANNEX I- 13 
connections connections and standpipes 

and es 

Time spent gathering water, 

based on household water 

gathering activities performed 

during a one-week period (one 

day recall). Time spent 

Time spent gathering water includes time 

Outcome fetching water spent getting to the closest Hours/Week TBD TBD from home in water point, time queuing to 

last week wait for one's turn, time 

queuing to wait for water 

supply, time 

drawing/collecting water and 

time spent returning from the 

closest water 

Treatment of Percentage of standpipe 

Outcome drinking water customers reporting treatment Percentage TBD TBD 

at point-of-use of drinking water at point-ofuse 

Payments made Average payment made by 

Outcome from standpipe standpipe entrepreneurs to U.S. Dollars NA TBD entrepreneurs GVWC per month toGVWC 

·Electricity Sector Roadmap and Coordination Activity 

Sector Roadmap approved 

Output Sector Roadmap by Sector Steering Date NA TBD approved Committee members and 

Steering Sector Steering Committee Committee Output quarterly meetings meets on quarterly basis to Date NA TBD 

conducted assess sector reform process 

Analysis of Analysis of willingness and 

Output willingness and ability to pay completed by Date NA TBD ability to pay contractor 

Analysis of 

Output Government Date NA TBD 

financial 

ANNEX 1- 14 
to sector sector conducted, packaged 

completed into a report, and submitted 

to Government 

Policy on Policy on reducing transfers Government Output financial support to the electricity sector over Date NA TBD 

to sector issued time issued by Government 

EGTC business plan 

Output EGTC business approved by EGTC Board Date NA TBD plan approved and Sector Steering 

Committee 

Output Consumer census Consumer census completed Date NA TBD 

contractor 

Output Load forecast study Date NA TBD leted contractor 

Total revenue collected I 

Operating cost- total operating cost. Total 

Outcome 

recovery ration* operating cost is defined as Percentage TBD TBD 

operating expenses plus 

MWh of electricity 

Quantity of delivered to EDSA, 

Outcome electricity measured on a quarterly Number TBD TBD delivered to basis based on meter 

EDSA* readings at Kingtom and 

Blackhall 

Outcome Revenue from Revenues earned by EGTC U.S. TBD TBD sales* from sales to EDSA Dollars 

Power sector Power sector investment Outcdine investment plan plan completed DMe NA TBD 

*: Whether or not these performance indicators are tracked throughout on 

recommendations that come out of the for EGTC which the 

ANNEX I- 15 
ANNEX II 

CONDITIONS PRECEDENT TO DISBURSEMENTS 

Applicable to the Program: 

I. Prior to the second Disbursement, the Government must have developed and adopted a Work 

Plan pursuant to Section 4.1 (c), in form and substance acceptable to MCC. 

2. Prior to the second Disbursement, MCCU will have developed and approved a 

comprehensive Program-wide ESMS 

3. Prior to the third Disbursement, the Government must have developed and adopted an M&E 

Plan pursuant to Section 4.2, in form and substance acceptable to MCC. 

4. Prior to the third Disbursement, MCCU will have developed and approved an RPF. 

5. Prior to the initial Disbursement that includes any payment for physical works under a given 

Project or Activity, as detetmined by MCC, MCCU must have submitted to MCC evidence 

in form and substance satisfactory to MCC that: 

(a) MCCU has developed an Environmental and Social Impact Assessment ("ESIA ");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) M~CU or the appropriate Government 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). 

Applicable to the Regulatory Strengthening Project: 

6. Prior to the second Disbursement, and any subsequent Disbursement that includes funding 

for the Regulatory Strengthening Project, the Government must have allocated adequate 

funding for EWRC in its then-current annual national budget. 

7. Prior to the fourth Disbursement, and any subsequent Disbursement that includes funding for 

the Regulatory Strengthening Project, the Government must have transferred, or otherwise 

made available, to EWRC its allocation for the quarter ending 90 days prior to the applicable 

Disbursement Period, each as evidenced to MCC's satisfaction. 
8. Prior to the initial Disbursement that includes any payment for technical assistance under the 

Regulatory Strengthening Project, EWRC will have selected and engaged qualified staff 

acceptable to MCC for the following positions: (a) Director General, (b) Head- Engineering, 

Water, (c) Head- Engineering, Energy, (d) Head- Finance and Administration, (e) HeadLegal and Consumer Services, and (f) Head- Economic Regulation. 

9. Prior to each subsequent Disbursement that includes payment for technical assistance under 

the Regulatory Strengthening Project, each position noted in Condition Precedent #8 above 

must remain filled, or if a position is vacant, the Government and EWRC are actively 

engaged, to MCC's satisfaction, in recruiting a replacement 

10. Prior to any Disbursement that includes funding for payments to utilities regulated by EWRC 

under the Performance-Based Regulation Activity, the Government will have delivered to 

MCCone or more executed agreements or similar instruments, in form and substance 

acceptable to MCC, pursuant to which such payments will be made. Each such agreement or 

similar instrument must set forth: (a) the key performance indicators and targets against 

which payments will be made to regulated utilities for achieving the targets and (b) the 

amounts of payments to be made to the utilities for each applicable target. Each such 

agreement or similar instrument must be executed in advance of performance for which 

payment will be made and must take into account a reasonable estimate of the costs and 

benefits of achieving the targets. 

Applicable to the Water Sector Reform Project: 

11. Prior to the initial Disbursement for technical assistance under the Guma Valley Water 

Company Institutional Strengthening Activity, the Government will have enacted legislation 

acceptable to MCC reflecting the principles identified in the currently pending water 

resources bill, Guma Valley Water Company bill and related pending bills, including without 

limitation the Government's commitment to commercially-oriented water service delivery 

and a strengthened institutional framework for water delivery, independent water sector 

regulation, and a framework for water resource management. 

12. Prior to the initial Disbursement for the District Metering Area and Standpipe Demonstration 

Activity, the Guma Valley Water Company will have established and operationalized a propoor unit, or an equivalent designated unit or group of staff, in each case satisfactory to 

MCC. 

ANNEX II- 2 
ANNEX III 

ALLOCATION OF GRANT FUNDING 
ANNEX IV 

DEFINITIONS 

The following compendium of capitalized terms that are used herein is provided for the 

convenience of the 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 of this Agreement, the 

definition elsewhere in this Agreement will prevail over the definition in this Annex IV. 

Accountable Entity has the meaning given to that term in Section 3.2(b). 

Activity or Activities has the meaning given to that term in Section A of Annex I. 

Additional Representative has the meaning given to that term in Section 7.3. 

Agreement has the meaning given to that term in the preamble to this Agreement. 

Audit Plan has the meaning given to that term in Section 4.1 (d). 

Auditor has the meaning given to that term in Section 4.1 (d). 

Bank has the meaning given to that term in Section 5.1 (c)(i). 

Bank Agreement has the meaning given to that term in Section 5.1 (c)(i). 

Baseline has the meaning given to that term in Section C.3(a) of Annex I 

Board has the meaning given to that term in Section B.2 of Annex I. 

Common Payment System has the meaning given to that term in Section 5.1(b)(iii). 

Completion Date has the meaning given to the term in Section 6.1. 

Covered Provider has the meaning given to that term in the MCC Audit Guidelines. 

Detailed Financial Plan has the meaning given to that term in Section 4.1 (a). 

Disbursement has the meaning given to that term in Section 2.1(b). 

Disbursement Period has the meaning given to that term in Section 5.1 (a). 

Disbursement Request has the meaning given to that term in Section 5.1 (a). 

District Metering Area and Standpipe Demonstration Activity has the meaning given to the 

term in Section A.2(c) of Annex I 

EDSA means the Electricity Distribution and Supply Authority. 
EGTC means the Electricity Generation and Transmission Company. 

Electricity and Water Regulatory Commission Institutional Strengthening Activity has the 

meaning given to the term in Section A. I (a) of Annex I 

Electricizv Sector Reform Project has the meaning given to the term in Section A.3 of Annex I 

Electricity Sector Roadmap and Coordination Activity has the meaning given to the term in 

Section A.3(a) of Annex I 

ESIA has the meaning given to the term in Section 5(a) of Annex 1l 

ESMP has the meaning given to the term in Section 5(a) of Annex II 

ESMS has the meaning given to the term in Section B. 2 of Annex I 

Evaluation Component has the meaning given to that term in Section C. I of Annex I 

EWRC has the meaning given to the term in Section A. I of Annex I 

Fiscal Accountability Consultant has the meaning given to the term in Section B. I of Annex I 

Fiscal Accountability Plan has the meaning given to that term in Section 4.4. 

Governing Document has the meaning given to that term in Section 4.9(g). 

Government has the meaning given to that term in the preamble to this Agreement. 

Grant has the meaning given to that term in Section 2.1 (a). 

Guma Valley Water Company Institutional Strengthening Activity has the meaning given to the 

term in Section A.2(b) of Annex I 

GVWC means the Guma Valley Water Company. 

HSMP has the meaning given to the term in Section 5(b) of Annex II 

IFC Performance Standards has the meaning given to the term in Section 4.5(a). 

Implementation Letter has the meaning given to that term in Section 4.1 0. 

Implementation Plan has the meaning given to that term in Section 4.1. 

Implementation Plan Document has the meaning given to that term in Section 4.1. 

Indicator has the meaning given to that term in Section C.3(a) of Annex I 

Inspector General has the meaning given to that term in Section 4. 7(c). 

ANNEX IV -2 
Institutional Strengthening Activity has the meaning given to the term in Section A.3(b) of 

Annex I. 

Intellectual Property means all registered and unregistered trademarks, service marks, logos, 

names, trade names and all other trademark right .• ·; 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, spec{fications, 

and other proprietary technology and similar information; and all registrations for, and 

applications for registration of, any of the foregoing, that are financed, in whole or in part, using 

the Grant. 

KPI has the meaning given to that term in Section A. I (b) of Annex I. 

Lien has the meaning given to that term in Section 3.2(g). 

Local Account has the meaning given to that term in Section 5.1 (c)(i). 

M&E Plan has the meaning given to that term in Section 4.2. 

M&E Policy has the meaning given to that term in Section 4.2. 

Material Agreement has the meaning given to that term in Section 4.9(c). 

MCC has the meaning given to that term in the preamble to this Agreement. 

MCC Audit Guidelines has the meaning given to that term in Section 4.8(a). 

MCC Cost Principles has the meaning given to that term in Section 4.4. 

MCC Environmental Guidelines has the meaning given to that term 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 given to that term in Section 3.2(b). 

MCC Marking Standards has the meaning given to that term in Section 3.2(k). 

MCC Program Procurement Guidelines has the meaning given to that term in Section 4.3(a). 

MCC Reporting Guidelines has the meaning given to that term in Section 4.6(a). 

MCC Website has the meaning given to that term in Section 2.4(b)(iii). 

MCCU has the meaning given to that term in Section 3.2(b). 

ANNEX IV -3 
Montoring Component has the meaning given to that term in Section C.1 of Annex 1. 

NAhas the meaning given to the term in Table 1.1 of Schedule A to Annex 1. 

Officer or Officers has the meaning given to that term in Section B.2 of Annex I. 

Par(v or Parties has the meaning given to that term in the preamble to this Agreement. 

Peiformance-Based Regulation Activity has the meaning given to the term in Section A.1 (b) of 

Annex 1. 

Permitted Account has the meaning given to that term in Section 5.1 (c)(i). 

Principal Representative has the meaning given to that term in Section 7.3. 

Procurement Consultant has the meaning given to the term in Section B.1 of Annex I. 

Procurement Plan has the meaning given to that term in Section 4.1 (b). 

Program has the meaning given to that term in the recitals to this Agreement. 

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 given to that term in Section 1.1. 

Program Grant has the meaning given to that term 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 and Operational Procedures, 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 of the foregoing) and any other guidelines, policies 

or guidance papers relating to the administration of a Threshold Program, and, in each case, as 

from time to time published on the MCC Website. 

Program Objective has the meaning given to that term in Section 1.2. 

Project or Projects has the meaning given to that term in Section 1.2. 

Project Objective or Project Objectives has the meaning given to that term in Section 1.3. 

Provider has the meaning given to that term in the MCC Audit Guidelines. 

RAP has the meaning given to that term in Section B.2 of Annex I. 

Records has the meaning given to that term in Section 4. 7(a). 

ANNEX IV -4 
Regulatory Strengthening Project has the meaning given to the term in Section A. I of Annex I. 

RPF has the meaning given to that term in Section B.2 of Annex I. 

Sierra Leone has the meaning given to that term in the preamble to this Agreement. 

Target the meaning given to that term in Section C.3(a) of Annex I. 

Taxes has the meaning given to that term in Section 2.5(a). 

TBD has the meaning given to that term in Table I. I of Schedule A to Annex I. 

Threshold Program has the meaning given to that term in the recitals to this Agreement. 

Water Sector Reform Project has the meaning given to the term in Section A.2 of Annex I. 

Water Sector Roadmap and Coordination Activity has the meaning given to the term in Section 

A.2(a) of Annex I. 

Work Plan has the meaning given to that term in Section 4. I (c). 

ANNEX IV -5