ADVANCING 

PROSPERITY

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012

ADVANCING 

PROSPERITY
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ADVANCING 

PROSPERITY

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012
MCC’s energy investments in central Tanzania are helping students at Hogoro Primary School study not just during the school day but also at night.

CONTENTS
i

Foreword by MCC’s Chief Executive Officer 

Daniel W. Yohannes.................................................................. 1

MCC’s Focus on Results .......................................................... 4

When a New Vision meets Reality ........................................ 8

Milestones Timeline................................................................ 20

Compact Completions

Honduras ............................................................................... 24

Cape Verde ............................................................................ 32

Georgia.................................................................................... 40

Vanuatu................................................................................... 48

Nicaragua ............................................................................... 54

Armenia .................................................................................. 62

Benin........................................................................................ 70

Ghana ...................................................................................... 78

El Salvador ............................................................................. 86

Madagascar ............................................................................ 94

Mali........................................................................................... 96

The Evolution of MCC’s Threshold Program...................... 98

MCC’s Board of Directors and Senior Management ........ 99

Notes .......................................................................................100

www.mcc.gov
FOREWORD

This farmer displays the produce he grew with help from MCC’s compact with Honduras. www.mcc.gov
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 1

One of the most powerful moments as the Millennium 

Challenge Corporation’s chief executive officer has been my 

trip to Honduras in September 2010.

It was MCC’s first compact completion, and our staff was thrilled 

to reach that milestone. Even more excited were the hundreds of 

Hondurans who joined us at a celebration in Comayagua. A student 

marching band played festive music, and residents approached me to talk 

about the positive impact MCC’s investments made on their lives. 

It was a remarkable experience—a first in 

MCC’s history and one that still resonates with me today. After Honduras, 

MCC successfully completed compacts 

with eight other countries through the 

end of 2012. Through modernized ports 

in Cape Verde and Benin, improved agriculture in Georgia and Armenia and new 

roads in Vanuatu, Ghana and El Salvador, 

MCC’s investments are providing critical 

infrastructure to fuel economic growth to 

break the cycle of poverty for millions 

worldwide. 

This first group of compact closeouts also teaches us valuable lessons 

about how MCC’s principles work in practice. As a learning organization, we are constantly looking to improve how we do business and 

taking on the challenging yet critical work to perform the necessary 

monitoring and evaluation to honestly, fully and transparently measure 

the entire “continuum of results” that flow from our investments. 

What I have seen so far is incredibly encouraging: farmers who are 

producing higher yields; households connected to water, sanitation and 

electricity for the first time; entrepreneurs getting access to the capital they need to start or grow their businesses; and students attending 

classes in renovated schools that provide healthy learning environments. 

I have watched countries take on the difficult work of reforming their 

policies to promote strong democratic governance and adopt unprecedented measures to maintain new infrastructure and improve business 

conditions. I have observed partners consult with all segments of their 

societies—the private sector, civil society, 

nonprofit actors, women, marginalized 

groups—in order to design and implement homegrown development solutions. I have seen communities insist on 

the highest standard of transparency to 

ensure that governments and donor partners are accountable. I am proud of the 

fact that MCC is pushing even beyond 

these achievements as we learn now 

from the findings of our first independent evaluations, test assumptions and 

raise a new standard for evidence-based 

decision-making that is helping to define 

the future of development. I believe MCC’s legacy will be defined, in 

large part, by this groundbreaking work to assess the tangible and lasting 

impact of our investments. 

When I came to MCC, I set five priorities for the agency. First, I wanted 

to deepen the focus on results, including an emphasis on tracking the 

effect MCC has on beneficiaries throughout the life of a compact and 

MCC CEO Daniel W. Yohannes at the closeout of the Honduras Compact.
beyond. Second, I believe MCC should maintain a strong commitment 

to policy reform, which often can help countries attract the kinds of 

private-sector investments that fuel and sustain economic growth. 

Third, I stressed the need for MCC to establish and maintain strong 

partnerships, including with the private sector and nongovernmental 

organizations. Fourth, since gender plays a crucial role in development 

and poverty reduction, I strengthened gender considerations throughout 

compact design and implementation in real and meaningful ways. Lastly, 

I reorganized MCC’s structure to maximize organizational effectiveness.

In these ways, MCC’s model helps ensure U.S. taxpayer dollars are 

effectively serving U.S. and our partner countries’ national interests to 

see their people become more prosperous and well governed. And when 

countries do not remain committed to good governance, we are prepared to make the tough decision to terminate our partnership, as we did 

in Madagascar and Mali.

Through MCC’s investments, we are seeing how the generosity of the 

American people is helping our brothers and sisters across the world 

build sustainable communities. Across our partner countries, people are 

finding homegrown solutions to reduce poverty, build capacity to tackle 

roadblocks to growth and achieve self-sufficiency. This book provides a 

look at the progress we have made. We hope our partners enjoy seeing 

these pictures of opportunity and growth as much as we do.

Daniel W. Yohannes

Chief Executive Officer

2 ADVANCING PROSPERITY 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 3

MCC helped Honduran farmers grow high-value crops, access credit and more efficiently move their goods to markets.
MCC’s Focus on Results

Alvaro Baptista Mochangane and Filomena Rafael show off the legal title to their land outside Nampula, Mozambique.

4 ADVANCING PROSPERITY 

www.mcc.gov
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 5

MCC EFFECT BUILDING CAPACITY FINANCIAL SUPPORT GOODS AND SERVICES PRODUCED OUTCOMES AND IMPACTS LESSONS LEARNED

POLICY 

PERFORMANCE

POLICY AND 

INSTITUTIONAL 

REFORMS

INPUTS OUTPUTS OUTCOMES ULTIMATE 

IMPACTS

FEEDBACK 

AND LEARNING

I

mproved roads in Honduras will help more than 1.3 million people. 

Upgrades to the country’s main port will affect almost all of Benin’s 

8.8 million people. And improved irrigated agriculture across nine 

compact countries in Africa, Eastern Europe and Central America will 

make farming a more reliable livelihood for rural households supporting 

more than 1.7 million people.

These results—helping people enjoy a better quality of life immediately 

and well into the future—are at the core of the Millennium Challenge 

Corporation’s approach to foreign assistance. Since its founding in 2004, 

MCC has changed the conversation about how best to deliver smart U.S. 

foreign aid by focusing on good policies, country ownership and results. 

MCC will ultimately be judged by the results it produces. That is why 

MCC defines, measures and tracks results along a comprehensive ”continuum of results,” from policy reform and project outputs to outcomes 

and ultimate impacts. 

MCC tracks policy reforms associated with its investments, like reforms 

to ensure that the roads it finances are maintained and that conditions 

are improved for a new business to formally register or get its products through customs. MCC assesses inputs and outputs that indicate 

whether projects are on track, like how much money has been invested 

in a given quarter and the number of farmers trained or the miles of 

new roads built. MCC also measures interim outcomes as programs 

reach completion, like increased traffic volume on improved roads—

signaling more commerce—or if farmers are growing more high-value 

crops to sell. And, because the ultimate result MCC is committed to 

producing and attributing to its program is to create the conditions for 

increased economic growth that will benefit everyone—including the 
6 ADVANCING PROSPERITY 

poor—it turns to independent impact evaluations to determine if the 

income gains it seeks are a direct result of its investments. MCC hires 

outside firms for these evaluations to determine if investments actually 

did increase household incomes. Ultimately, MCC looks to measure the 

lasting effect of its work on the lives of the poor.

MCC’s focus on results is built on a culture of constant transparency 

and critical learning. MCC’s commitment to transparency means making all results—positive and negative—public. By examining what works 

and what does not work in past investments, MCC is able to inform 

better development projects that it and the entire development community can pursue.

By the end of 2012, 11 MCC compacts will have closed or been 

completed: Madagascar, Honduras, Cape Verde, Georgia, Vanuatu, 

Nicaragua, Armenia, Benin, Ghana, Mali, and El Salvador. The results 

from these compacts are encouraging. For example, in El Salvador, dairy 

farmers who received MCC-funded training saw their annual farm 

income increase by more than $1,800 compared to farmers who did not 

receive assistance. After MCC helped strengthen the national inspection system, the Government of Cape Verde lifted a 25-year embargo 

on inter-island agricultural exports from Santo Antão, opening new 

markets for farmers on that island. And poverty rates in Vanuatu’s rural 

Efate region, where MCC’s investment improved road transport, have 

fallen by half.

These are the kinds of results that will have a long-term impact on the 

lives of the poor in partner countries worldwide. These are the kinds 

of changes that lift millions out of poverty. These are the real stories of 

progress captured in the pages to follow.

A focus on results

Some of the top lessons MCC has learned putting its “focus on results” principle into practice:

1. Impact evaluations allow MCC to keep our eyes on the “results” prize and can become a global asset for the development community. However, the best 

evaluation approach depends on the type of program evaluated, and the type of questions MCC seeks to answer. 

2. Robust economic analysis, monitoring and evaluation take resources—but are worth it in terms of improving project design, course correcting and 

learning what works and what doesn’t.

3. Data quality is the cornerstone of a robust focus on results.

4. MCC is helping to change the evaluation culture in partner countries.

5. Transparency means sharing good and bad results as an important part of accountability and learning. 

To read Principles into Practice: Focus on Results, visit: www.mcc.gov/principles-results. 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 7

 El Salvador’s Northern Zone was considered a forgotten area and had been largely cut off from the rest of the country. MCC’s five-year, $461 

million compact with El Salvador put the foundation in place for a more prosperous future: roads, bridges, water, electrification, sanitation, and 

a trained workforce. The compact rehabilitated or constructed more than 220 kilometers of road and 23 bridges of a national east-west highway 

that connects the Northern Zone with the rest of the country. MCC also assisted an estimated 17,500 out of a total of 32,000 producers in selected value chains in the Northern Zone by providing training, seeds, equipment, and technical assistance. And the compact's Human Development 

Project invested in education, water, sanitation, and electrification.
When a New Vision Meets Reality

MCC is constructing about 3,000 kilometers of power lines in seven districts of Tanzania, helping connect many households to the national grid for the first time.

8 ADVANCING PROSPERITY 

www.mcc.gov
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 9

Few imagined 2002 would be the time when help for the world’s poor would take center stage.

The global economy was in a slump. Contributions to foreign assistance 

were at a historic low. Skeptics in the United States and beyond worried 

their money was being wasted on bad projects or going to autocratic 

regimes. And the attacks of September 11 highlighted the link between 

security and economic prosperity around the world.

It was the right time for new thinking and a new approach.

More than 50 heads of state—along with representatives from the 

United Nations, the donor community, NGOs, and civil society—met 

in Mexico to determine a better way to finance development. There was 

talk of poverty reduction, new partnerships, international trade, country 

ownership, and linking aid to good governance.

For the U.S. Government, the talk meant creating an agency that would 

embody a new, practical approach to development. President George 

W. Bush announced this agency would “promote development from the 

bottom up, helping citizens find the tools and training and technologies 

to seize the opportunities of the global economy.”

Less than two years later and with strong bipartisan support, the U.S. 

Congress established the Millennium Challenge Corporation to fulfill 

that vision. 

From the start, MCC was designed to operate differently: It embraced innovation, held potential partner countries to strict policy standards, relied 

on country ownership and leadership to design and implement cost-effective projects, and committed itself to transparency and accountability. It 

had a singular mission: reduce global poverty through economic growth. 

A board of directors composed of U.S. Government and private-sector 

officials drove home the idea that MCC would take a business-like 

approach to foreign development to provide structure and ensure results. 

And even before its creation, MCC attracted a diverse group of supporters united around the common goal of reducing global poverty.

Just days before the Mexico conference, President Bush provided the first 

hints of this new approach to foreign aid during a speech at the InterAmerican Development Bank. He painted a picture that this would be 

a different kind of partnership. The president spoke at the bank’s headquarters in Washington; seated behind him were a rock star, a Catholic 

priest and the president of the world’s largest development agency.

These leaders came from diverse backgrounds: President Bush was a 

former governor and co-owner of the Texas Rangers. Bono, the Irish 

lead singer of U2, used his fame to keep the plight of Africa’s neediest on 

the world’s conscience. Cardinal Theodore McCarrick was the Catholic 

archbishop of Washington who spoke seven languages and had a long 

history of serving the world's most vulnerable. And James Wolfensohn 

was the president of the World Bank. They also shared a vision that 

global poverty reduction should be a priority for the United States, and 

that this new approach would help the country’s foreign assistance have 

a greater impact and produce tangible results.

Eight years later—and $9.1 billion invested in 25 MCC partner countries—this idealistic vision has given way both to marked improvements 

for millions of beneficiaries but also critical lessons for dealing with the 
10 ADVANCING PROSPERITY 

difficult realities of sustainably and effectively changing the lives of the 

world’s poor. 

Changing business as usual

For decades, foreign aid has been a contentious issue. Critics pointed to 

examples of wasteful projects or aid money that helped support repressive regimes. Proponents provided anecdotes of lives transformed and 

how foreign aid deepens goodwill toward the United States. 

MCC was created to be a different approach, built upon the successes of 

the past and designed to address many concerns about the status quo of 

foreign aid. The agency is selective, focuses on results, ensures accountability of tax dollars, bases decisions on evidence, and is committed to 

a high level of transparency. It is also small, with a limit of 300 full-time 

federal employees, many of whom left private sector firms to be a part 

of MCC’s new model.

From the beginning, MCC pledged to work only with poor but well 

governed countries that demonstrated commitment to ruling justly, 

economic freedom and investing in their citizens. MCC tracks these 

commitments by using a range of third-party indicators that measure 

factors like control of corruption, expenditures on primary education, 

fiscal policy, and natural resource protection. For developing countries 

across the world, a partnership with MCC is a source of pride and a 

coveted stamp of approval, signaling that the country is primed for 

outside investment.

The high-profile nature of MCC’s compacts often provides governments the impetus to reform crucial policies. Observers have dubbed 

a country’s willingness to unilaterally reform policies with the goal 

of becoming eligible for a compact the “MCC Effect.” Efforts by Côte 

d'Ivoire, Sierra Leone, Senegal, and Niger to assess or eliminate legal 

restrictions against women’s participation in their economies exemplify 

this effect in action. 

After selecting the right partners, MCC delivers foreign aid in a whole 

new way. MCC and partner countries sign compacts with a strict fiveyear deadline and work together to address the challenges that most 

hinder economic growth. The five-year compacts help partner countries 

plan development strategies around MCC investments. Open bidding 

on program-related contracts helps ensure that MCC and partner counReform is Challenging

Policy and institutional reform is critical to the success, impact and 

sustainability of MCC’s investments. What operational lessons has MCC 

learned to be more strategic, purposeful and deliberate in its approach 

to policy and institutional reform?

1. Thoroughly understand how policy and institutional issues affect the 

problems that MCC and partner countries aim to solve, and then determine what reforms to include in a compact partnership and structure 

programs to maximize impact. 

2. Make policy and institutional reform considerations a priority early in 

compact design and development. 

3. Understand the politics of reform, including potential winners and 

losers, support for reform within and outside of government, engagement by other donors, likely timelines, and potential roadblocks.

4. Build local institutional capacity to support the sustainability of 

reform. 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 11

tries get the best deal on investments while providing U.S. taxpayers the 

best value for their hard-earned tax dollars. In addition to compacts, 

MCC also provides assistance through smaller Threshold Program 

grants to help countries reform policies with the hope of potentially 

becoming eligible for a compact. 

Country ownership is a cornerstone of this new approach. Potential 

partner countries are required to identify their own priorities for sustainable economic growth and poverty reduction. These governments 

consult with a wide range of society on these priorities, and then they 

work closely with MCC officials to help refine project proposals. The 

country creates a Millennium Challenge Account (MCA) to implement 

the compact using locally recruited professionals who will contribute 

to development long after compact completion. MCC establishes a resident mission of one or two full-time U.S. staff in each partner country 

to help implement the compact; this small footprint ensures that the 

partner country leads implementation, which helps provide its citizens 

with valuable experience they can use to build up their own skills to 

further develop their country.

Another key MCC difference is the focus on results and evidence-based decision making throughout the process, from compact 

design to implementation and beyond. Proposed projects undergo economic analyses to provide an estimate on how beneficiaries’ incomes 

will improve. Monitoring and evaluation teams track selected indicators across each project and report their findings quarterly. And after a 

compact closes, MCC hires independent firms to conduct independent 

evaluations on every major activity it funds—of which 40 percent to 

date are impact evaluations that establish a counterfactual and use 

rigorous scientific methods to determine the direct effect of compact 

investments. This allows MCC to share data about what works—and 

doesn’t—in international development by carefully analyzing the impacts of its investments. 

Transparency and accountability are woven throughout this entire 

process. Results data is updated quarterly on MCC’s website. MCC 

was created and continues to operate at a time when the American 

people ask difficult questions about how well their tax dollars are being 

spent—and this commitment to transparency provides answers to 

many of those questions, even when the answers reveal challenges or 

missed targets.

Taken together, these new approaches in an entirely new agency represent the largest shift in U.S. foreign aid practices in decades. Yet some of 

these lofty ideals were quickly put to the test.

Solar power, Tanzania
12 ADVANCING PROSPERITY 

Encountering challenges

One common thread ran through MCC’s early compacts: successfully 

designing and implementing large-scale projects proved difficult. MCC 

struggled at times to put its core principles into practice because of 

limited country capacity and the tension between showing short-term 

results and planning for long-term impacts. Many supporters also 

assumed that one compact could transform an entire country within 

five years. 

First, in the face of limited country capacity—but with an unwavering 

commitment to country ownership—MCC still expected partners to 

conduct evidence-based analysis upfront, consult extensively with their 

citizens, engage in project design and planning, and demonstrate a real 

willingness to making the necessary policy reforms that would enable 

capital investments to pay dividends and deliver real and sustainable 

impact. For example, the Government of Nicaragua originally proposed 

renewable energy and rural electrification projects, but the policy environment around independent regulation, tariff rates and restructuring 

of the electricity sector remained too uncertain and raised significant 

concerns about the potential results and sustainability of the projects. 

MCC overcame capacity issues in Ghana by providing extensive training to officials at the local level to conduct procurements for community services like water, sanitation, schools, and electricity. MCC also 

established a capacity-building initiative to train country partners in 

project management, construction contracting, procurement, accounting, and other core skills needed to ensure effective oversight over U.S. 

taxpayer funding. 

Second, several early partner countries backslid on their commitments 

to good governance, economic freedom and investments in their 

citizens during compact design and implementation, sometimes 

leading to an operational hold or termination of MCC funds. In 

addition to terminating the Madagascar and Mali compacts, MCC 

terminated parts of the Honduras and Nicaragua compacts and placed 

a hold on a project in Armenia, which was kept in place until the end 

of the compact. 

Third, the agency was caught in the tension between looking for early 

Lessons on Country Ownership

Practicing the principle of country ownership over the past eight years 

has given MCC insights into what works best. 

1. Country ownership means a partnership based on mutual accountability that benefits from structure and clear expectations. 

2. Country ownership requires a balancing act between MCC principles, 

operational approaches and country priorities. 

3. Country ownership goes beyond national governments, both in setting investment priorities in compact development and in implementing compact programs. 

4. Country ownership includes capacity building, but not everything has 

to be about capacity building. 

5. Country ownership includes using elements of country systems where 

feasible, but doesn’t mean that countries have to do everything. 

6. Country ownership pays off in both tangible and intangible ways, both 

for results and for leveraging policy reform. 

To read Principles into Practice: Country Ownership, visit www.mcc.gov/

principles-ownership.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 13

results versus planning for effective program implementation and 

long-term growth. With the fanfare that accompanied MCC’s launch, 

stakeholders wanted to see quick results—even though projects can take 

years to properly design and then implement. 

Fourth, many early compacts were overly ambitious in their goals given 

budget realities. This led to rescopings or reducing the planned scope 

of MCC’s investment in order to stay within the allocated funding 

envelope. 

Despite the early struggles, a pattern began to emerge: MCC was learning lessons and making course corrections—and its investments were 

helping poor people lift themselves out of poverty.

Embracing a commitment to learning

As MCC evolved from a start-up with big ideas to a maturing organization, it increasingly focused on embracing a culture of change, adopting 

processes for continuous improvement in how it does business. 

Within this culture of learning, MCC made important changes to how it 

selected countries, designed compacts, implemented projects, integrated gender into project design and implementation, managed risk, 

monitored fraud and corruption, factored in social and environmental 

assessments, and assessed results. MCC reaffirmed its commitment to 

transparency, reorganized to maximize organizational and staff efficiency and published studies about what did and did not work.

MCC modified its country selection criteria in 2011 to include new data 

related to economic and political governance. MCC introduced indicators to track Internet freedom, access to credit and gender equality, 

as well as adding a “hard hurdle” related to political rights and civil 

liberties that a country must pass to be considered for a compact. MCC 

also introduced a selection process for countries pursuing subsequent 

compacts that requires potential partner countries to show meaningful 

progress toward achieving first compact results before being considered 

for a second compact.

The agency improved its approach to compact development. The most 

significant reform was the introduction of a constraints analysis, a 

process by which MCC’s economists identify the root causes that deter 

households and firms from making investments of their financial resources, time and effort that would significantly increase their incomes. 

The results of these studies help inform compact projects designed to 

remove those barriers to investment.

Vocational training, Mongolia
14 ADVANCING PROSPERITY 

MCC also created guidelines aimed at enhancing and streamlining the 

development and implementation of compacts to provide for better 

advance planning, simpler processes and clearer expectations for MCC 

partner countries. These guidelines promoted compacts with a sharper 

focus, such as the $355 million partnership with Zambia focused on a 

single project: improving water supply, sanitation and drainage infrastructure in Zambia's capital, Lusaka, and a greater emphasis on improving policies that support sectors critical to economic advancement.

In 2012, MCC strengthened its commitment to health, safety and the 

environment by adopting the International Finance Corporation’s performance standards. MCC’s integrated approach to environmental and 

social performance now begins at the earliest stages of project design 

and continues throughout implementation, involving stakeholders at all 

levels, from government ministries to local authorities and, most importantly, the farmers, shopkeepers and other people whose livelihoods are 

affected on the ground.

MCC reinforced its focus on gender issues, sending a clear message: 

Integrating women in society is not only the right thing to do, but it 

can also help a country’s economy boom. In 2011, it unveiled a revamped country scorecard that measured a government’s commitment 

to promoting gender equality. The indicator examines equality in 10 

areas: if men and women have equal opportunity to get a job, register a 

business, sign a contract, open a bank account, choose where to live, get 

passports, travel domestically and abroad, pass citizenship on to their 

children, and become heads of households.

MCC also strengthened the role gender played during compact design and implementation. The creation of guidelines in 2011 provided 

explicit operational procedures, requirements and accountability 

mechanisms to ensure that gender is effectively integrated throughout 

the compact. For example, staff working on the development of Benin’s 

proposed second compact created a matrix to identify the relationships 

between growth constraints by sector as well as by gender, other social 

inequalities and investment opportunities. After a decision to focus 

on certain sectors is made, further social and gender analysis can go 

in-depth in these sectors. This analysis can help better understand the 

nature of the underlying causes of the constraints and the implications 

of different choices regarding project selection and their effects on 

potential beneficiaries.

MCC also changed internal policies and organization in order to 

improve project implementation. Its 2009 policy on preventing, detecting and remediating fraud and corruption provides a number of 

tools, including a requirement for companies receiving MCC funds to 

certify they have acceptable commitments and procedures in place to 

address the potential for fraudulent and corrupt practices in their MCCfunded work. MCAs must now develop anti-fraud and corruption 

risk assessments and action plans, and MCA staff must undergo fraud 

and corruption training. The agency also created the Investment and 

Risk Management division to identify, assess and manage risk during 

compact development and implementation with the aim of safeguarding taxpayer-funded investments from unnecessary risks. The division 

also performs reviews of projects worldwide and identifies areas where 

operations could be improved. 

The lessons from MCC’s first eight years are not just meant to improve the agency’s model and operations; MCC hopes to impact the 

operations of the development community worldwide. This concerted 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 15

Under the leadership of Daniel W. Yohannes, MCC moved from a start-up culture to a mature, business-like approach to delivering development assistance, grounded in results, accountability and transparency. Yohannes, with a 30-year career in the private sector, brought five priorities to his tenure 

as CEO. This approach sets the foundation for MCC’s future success. 

A renewed focus 

on results

MCC strengthened its economic analysis and 

monitoring of program outcomes to better capture 

and communicate results, as well as to continually 

improve operations. 

To continue its rigorous focus on results, MCC released its first set of 

independent impact evaluations. MCC’s use of these studies, which rely on 

scientific methodology to study a potential link between investments and 

income growth, has established the agency as a leader on accountability and 

learning within the international development community.

Increased use 

of new partnerships, including 

with the private 

sector

MCC leveraged its work with the work of other 

organizations, non-traditional partners and agencies. 

It increased the emphasis placed on private sector 

participation and on the use of innovative program 

approaches.

Symbion Power of Washington, D.C., won a contract as part of the Tanzania 

Compact’s Energy Sector Project and has since expanded its investment in 

East Africa, including the purchase of a 120-megawatt power plant that had 

been sitting idle for three years. Symbion and Pike Electric of Mount Airy, 

North Carolina, also sent senior Tanzanian workers to the Northwest Lineman College in Idaho to learn about electrical systems, accident prevention 

and construction methods—skills they will use to train others in Tanzania.

Emphasis on 

effective policy 

reform

MCC recognized that continued policy reforms at the 

national and sector levels were essential for bolstering the sustainability of its investments. It focused 

internal resources and leveraged external expertise to 

support policy improvement in partner countries and 

to integrate sector policy reform more effectively in 

project design. 

Entrepreneurs in Honduras have greater access to credit because the 

government enacted a new secured transaction law and established a 

movable property registry system that allows individuals to use as collateral 

property they own, such as tractors, sewing machines and shop inventory. 

The registry began operations in January 2011 and registered almost 3,500 

guarantees in its first year. It has served as a model for potential reform in 

Costa Rica, the Dominican Republic, El Salvador, Guatemala, Panama, Peru, 

Jamaica, and other Caribbean countries.

Strengthened 

focus on gender 

and social 

assessment

MCC ensured greater emphasis on gender and social 

assessment, with the knowledge that these issues 

play a central role in reducing poverty.

MCC increased the number of staff dedicated to gender and social integration. In 2011, MCC updated its Gender Policy and released guidelines to 

integrate gender into current and future investments. The same year, it began measuring a government’s commitment to promoting gender equality 

during partner country selection. MCC also requires that partners develop a 

social and gender integration plan. And MCC invests in greater accountability by improving the mechanisms for gender to be part of economic analysis 

and monitoring and evaluation.

Improving 

organizational 

effectiveness

MCC realigned its structure to improve the use of 

limited resources and strive toward maximum effectiveness. 

MCC streamlined the process for the development of compacts and created 

a more rigorous selection process for countries seeking subsequent compacts. It also adopted a policy on preventing, detecting and resolving fraud 

and corruption, as well as other policies to ensure maximum effectiveness of 

taxpayer resources. The agency launched an Investment and Risk Management division for identifying, assessing and managing risk during compact 

development and implementation and the Finance, Investment and Trade 

team for implementing the agency’s revamped private sector strategy.
16 ADVANCING PROSPERITY 

outreach includes the Principles into Practice series, which takes a hard 

look at what it takes to make MCC’s core principles operational. The reports focus on a variety of results—positive and negative, intended and 

unintended—that provide lessons for MCC and the donor community. 

The series has examined issues such as the focus on results, country 

ownership, property rights and land policy, irrigated agriculture, and 

gender integration.

Producing results 

In its first eight years, the agency signed 26 compacts worth $9.1 billion. 

It has formed partnerships with countries in Africa, Europe, Asia, the 

Americas, and the Pacific. More than a third of MCC’s investments 

have gone to the transport infrastructure sector, and another 18 percent 

have gone to agriculture, making MCC one of the leaders in promoting 

food security and agricultural productivity at a time when investments 

in agriculture were historically low. The agency signed compacts with 

the world’s third-most populous country (Indonesia, population: 238 

million) and one of the least-populated (Vanuatu, population: 234,000). 

As of June 2012, MCC has financed training for more than 200,000 

farmers, invested in the education of over 244,000 students, improved 

nearly 1,600 kilometers of roads, and connected almost 40,000 households to an improved water supply. Other investments have branched 

into new areas, like the construction of health clinics in Lesotho.

In El Salvador, few roads linked the Northern Zone with the more prosperous south. MCC invested $461 million in the Northern Zone, helping 

build roads, provide farmer training, expand access to crop insurance and 

credit guarantees, build vocational schools, electrify remote towns, and 

link communities with clean water. 

 “We now live in a new Northern Zone,” one dairy farmer said. “We are 

now living in a land of opportunity.”

This kind of broadly shared change is at the heart of the MCC model. 

Some results are far less visible but offer the promise of changes in governments, economies and societies. MCC works with its partner countries to 

reform policies that enhance the impact and sustainability of investments.

These policy reforms can take place before compacts: One requirement 

Roadmap to Stronger Gender Integration

Because gender inequality can be a significant constraint to economic 

growth and poverty reduction, MCC continues to assess lessons learned 

and best practices for strengthening operational procedures and process 

to lead to better gender integration in MCC-funded projects.

1. Gender integration is more than a focus on women.

2. Tackling the relationships among growth, poverty reduction and gender equality in compact development is complex and challenging. 

3. Advancing gender equality often requires pushing the policy envelope 

as well as project design. 

4. Systematic and early gender integration is critical in infrastructure 

projects.

5. Thorough understanding of programmatic results requires gender 

analysis as an integral rather than an “add-on” feature.

To read Principles into Practice: Gender Equality and Poverty Reduction 

through Growth, visit www.mcc.gov/principles-gender.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 17

of MCC’s funding in Lesotho was a change in the law that placed married women at the same legal status as minors. In 2006, the kingdom 

passed the Legal Capacity of Married Persons Act, which means women 

now have equal access to economic resources and expanded opportunities for meaningful participation in the economy.

Reforms can take place during compacts: Entrepreneurs in Honduras 

have greater access to credit because the government enacted a new secured transaction law and established a movable property registry system that allows individuals to use as collateral property they own, such 

as tractors, sewing machines and shop inventory. The registry began 

operations in January 2011 and registered almost 3,500 guarantees in 

its first year. The registry has served as a model for potential reform in 

Costa Rica, the Dominican Republic, El Salvador, Guatemala, Panama, 

Peru, Jamaica, and other Caribbean countries.

Other policy reforms occur during and after implementation: During its 

first compact, Cape Verde graduated from the low income country category to the more competitive lower middle income group, in which it did 

not pass enough MCC indicators to be eligible for a new compact. Cape 

Verde made a dedicated effort to address areas of weak policy performance—including improving immunization rates and business start-up—

and by 2010 had improved to be considered eligible for a second compact.

And in one of the most visible cases yet of a compact helping leverage 

serious policy reform, MCC suspended the $350 million Malawi Compact 

after the government’s heavy-handed response to nationwide protests 

in 2011. When President Joyce Banda took office following the death of 

President Bingu wa Mutharika in April 2012, she immediately began to 

address the concerns that led MCC to suspend its assistance. By June, 

Malawi adopted new laws, new patterns of action, a renewed respect 

for human rights, and a stronger, more sustainable economic policy. In 

response, MCC’s Board approved the reinstatement of Malawi’s compact, 

demonstrating a compact’s power to incentivize policy reforms. 

Changing the conversation

Standing before a gathering of world leaders, President Barack Obama 

took center stage at the U.N. General Assembly in 2010 to discuss his 

administration's approach to helping the world's poor. 

Recognizing that “the old ways will not suffice,” President Obama 

announced the U.S. Global Development Policy, the first of its kind by 

a U.S. administration. It recognized the vital role development plays in 

American national security and laid out the U.S. Government's strategy 

for promoting broad-based, sustainable growth around the world. It 

Road construction, Mozambique
18 ADVANCING PROSPERITY 

focused on economic growth, selectivity, country-led planning, transparency, and accountability for results.

The central purpose of development, President Obama said, was to 

create the conditions where assistance was no longer needed. That 

meant seeking partners who want to build their own capacity to pursue 

sustainable development.

“And building in part on the lessons of the Millennium Challenge 

Corporation, which has helped countries like El Salvador build rural 

roads and raise the incomes of its people, we will invest in the capacity of 

countries that are proving their commitment to development,” he said.

By crafting his global development policy on MCC’s principles, President 

Obama demonstrated that global poverty reduction transcends politics. 

Through changes of administrations and in Congress, MCC retained 

strong bipartisan support and helped play an outsized role in the way 

the U.S. Government and others approach development assistance. In 

the nascent Partnership for Growth—a partnership between the United 

States and a select group of high-performing developing countries that 

works to accelerate and sustain broad-based economic growth—MCC’s 

evidence-based decision-making, country selection process and technical expertise served as the initiative’s foundation.

MCC also contributed to the results and accountability framework of 

Feed the Future, the Obama administration’s marquee food security 

initiative. This involved defining performance indicators to monitor U.S. 

Government investments in food security and outcomes across countries and agencies. It meant coordinating whole-of-government reporting on global food security performance. It entailed using economic 

analysis during strategic planning and project design at USAID’s Bureau 

for Food Security to emphasize rigorous impact evaluations. 

The World Bank’s Program-for-Results specifically mentions MCC 

too as a defining influence, drawing on such MCC lessons as the link 

between transparency, accountability and results, as well as differing 

definitions of results during different times in a project cycle.

In addition, MCC received praise for its commitment to transparency 

and results. Publish What You Fund hailed MCC for being one of 

only three agencies to publish obligation and expenditure data on the 

Foreign Assistance Dashboard. The Organization for Economic Cooperation and Development recognized MCC’s leadership in measuring development results and found that “through the MCC, the US has 

shown that it can deliver development co-operation that is in line with 

the principles on effective aid.” 

And in 2012, MCC launched its Open Data Catalog, where it posts 

financial, performance and evaluation data in machine-readable format. 

By putting the data and evidence that it uses to make decisions and 

measure results in the hands of the larger community, MCC hopes to 

foster innovative development practices.

Looking toward the future

MCC has entered a new era. The Threshold Program has a refined focus. 

In February 2012, MCC signed the agency’s first second compact, a $66 

million agreement with Cape Verde. There remains momentum for deeper 

collaboration with the private sector. Tough standards for second compacts 

help ensure the agency works with deserving partners while continuing to 

provide the incentive for partner countries to further reforms. 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 19

It is an era of introspection. As MCC ends its eighth year, it is receiving 

the first results of its independent impact evaluations, which measure 

whether its programs helped raise beneficiary income. Some results are 

good and some are inconclusive, but all offer valuable lessons. Learning 

from those lessons will help the agency design better programs and 

better impact evaluations moving forward.

It is an era of influence. MCC is showing that its non-traditional model 

for delivering development assistance is influencing practices throughout 

the U.S. Government and beyond. For example, the agency’s model and 

focus on results played a prominent role in the discussions at the 4th 

High Level Forum on Aid Effectiveness in Busan, South Korea, in 2011. 

It is an era of innovation. MCC will continue to learn, evolve and make 

development assistance more business-like with a distinct commitment 

to impact, accountability, transparency, and partnership. MCC remains 

committed to setting a new standard for development effectiveness that 

will continue to innovate and inspire the way forward in an increasingly 

interconnected world. 

This is good news for the American people, who rightfully demand more 

from their government as it spends their tax dollars to fight global poverty 

and promote economic growth at home and abroad. And this is good 

news for the world’s poor, many of whom now will have the opportunity 

to pull themselves out of poverty and create a more prosperous future.

About one-third of MCC investments are in transportation, the largest of any sector in the agency's portfolio. Road rehabilitation and construction 

lower transport costs by reducing travel time and vehicle operating costs; improve access to public services like health and education, particularly 

for the rural poor; and facilitate international and regional trade. With agriculture projects, transportation infrastructure primarily links producers 

to markets for their goods and to inputs for their production year-round.
MILESTONES TIMELINE

20 ADVANCING PROSPERITY 

A family carries bundles of firewood past an MCC-funded road construction site in Mozambique. www.mcc.gov
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 21

January 23, 2004 .......Congress establishes the Millennium Challenge 

Corporation.

May 5, 2004............... Paul V. Applegarth is confirmed as MCC’s first CEO. 

April 18, 2005................MCC signs a compact with Madagascar. 

June 13, 2005.................MCC signs a compact with Honduras. 

July 4, 2005 ...................MCC signs a compact with Cape Verde. 

July 14, 2005..................MCC signs a compact with Nicaragua. 

July 22, 2005.................MCC and USAID launch the first Threshold Program 

with Burkina Faso. 

September 12, 2005....MCC signs a compact with Georgia. 

September 23, 2005...MCC and USAID launch a Threshold Program with 

Malawi. 

November 7, 2005.......Ambassador John J. Danilovich is sworn in as MCC’s CEO. 

February 22, 2006......MCC signs a compact with Benin. 

March 2, 2006...............MCC signs a compact with Vanuatu. 

March 26, 2006.............MCC signs a compact with Armenia. 

April 3, 2006..................MCC and USAID launch a Threshold Program with 

Albania. 

May 3, 2006 ...................MCC and USAID launch a Threshold Program with 

Tanzania. 

May 8, 2006...................MCC and USAID launch a Threshold Program with 

Paraguay.

May 22, 2006.................MCC and USAID launch a Threshold Program with 

Zambia. 

July 26, 2006.................MCC and USAID launch a Threshold Program with the 

Philippines. 

August 1, 2006..............MCC signs a compact with Ghana. 

October 17, 2006..........MCC and USAID launch a Threshold Program with 

Jordan. 

November 13, 2006.....MCC signs a compact with Mali. 

MCC’s first eight years have been spent signing compacts and threshold programs; developing policies; sharing lessons learned as a practice 

and thought leader in global development; holding, suspending and terminating programs that consistently failed to meet standards of 

good governance; marking program completions; and increasingly witnessing the larger development community embrace its principles. 

Highlights include:

Road construction, Vanuatu
22 ADVANCING PROSPERITY 

November 17, 2006 .....MCC and USAID launch a Threshold Program with 

Indonesia. 

November 29, 2006....MCC signs a compact with El Salvador. 

December 4, 2006......MCC and USAID launch a Threshold Program with 

Ukraine. 

December 15, 2006.....MCC and USAID launch a Threshold Program with 

Moldova.

 March 23, 2007 ...........MCC and USAID launch a Threshold Program with 

Kenya. 

March 29, 2007.............MCC and USAID launch a Threshold Program with 

Uganda. 

July 13, 2007 ..................MCC signs a compact with Mozambique. 

July 23, 2007 .................MCC signs a compact with Lesotho. 

August 23, 2007...........MCC and USAID launch a Threshold Program with 

Guyana. 

August 31, 2007............MCC signs a compact with Morocco. 

October 22, 2007.........President Bush signs a MCC compact with Mongolia. 

November 9, 2007 ......MCC and the U.S. Department of Treasury launch a 

Threshold Program with São Tomé and Principe. 

February 17, 2008........President Bush signs a MCC compact with Tanzania. 

March 14, 2008..............MCC and USAID launch a Threshold Program with the 

Kyrgyz Republic. 

March 17, 2008 ..............MCC and USAID launch a Threshold Program with 

Niger.

June 10, 2008................MCC and USAID launch a Threshold Program with Peru. 

July 14, 2008..................MCC signs a compact with Burkina Faso. 

July 28, 2008.................MCC signs a compact with Namibia. 

October 15, 2008 .........MCC and USAID launch a Threshold Program with 

Rwanda. 

October 17, 2008..........A MCC Stage II Threshold Program is signed with 

Albania.

January 20, 2009 ..... Rodney Bent becomes MCC’s acting CEO. 

March 11, 2009...............MCC’s Board approves the suspension of assistance 

for certain activities in Nicaragua’s MCC compact. MCC 

continues its hold on assistance to rehabilitate roads 

in Armenia based on a pattern of actions inconsistent 

with MCC’s selection criteria. 

April 13, 2009...............A MCC Stage II Threshold Program is signed with 

Paraguay. 

May 8, 2009..................The first independent impact evaluation is completed 

Gender workshop, Morocco of Burkina Faso’s Threshold Program. 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 23

June 10, 2009................MCC’s Board approves the partial termination of MCC’s 

compact assistance to Nicaragua for activities previously suspended. MCC decides to not resume funding 

for further road rehabilitation in Armenia. 

August 1, 2009..........Darius Mans becomes MCC’s acting CEO. 

August 31, 2009 ...........Madagascar’s compact is terminated due to an undemocratic change in government. 

September 9, 2009.....MCC’s Board approves the termination of some compact activities with Honduras due to an undemocratic 

change in government. 

September 16, 2009 ...MCC signs a compact with Senegal. 

December 8, 2009....Daniel W. Yohannes is sworn in as MCC’s CEO.

January 22, 2010 .........MCC signs a compact with Moldova.

July 7, 2010.....................MCC and USAID launch a Threshold Program with 

Liberia.

September 23, 2010....MCC signs a compact with the Philippines.

September 29, 2010....MCC marks the completion of Honduras’s compact.

October 17, 2010...........MCC marks the completion of Cape Verde’s compact.

October 25, 2010..........MCC signs a compact with Jordan.

January 14, 2011...........MCC and USAID launch a Threshold Program with 

Timor-Leste.

April 7, 2011.....................MCC marks the completion of Georgia’s compact.

April 7, 2011.....................MCC signs a compact with Malawi.

April 28, 2011..................MCC marks the completion of Vanuatu’s compact.

May 26, 2011 ...................MCC marks the completion of Nicaragua’s compact.

July 26, 2011....................Malawi’s compact is placed on hold due to a pattern of 

actions inconsistent with MCC’s selection criteria. 

September 6, 2011 .......MCC marks the completion of Benin’s compact.

September 29, 2011.....MCC marks the completion of Armenia’s compact.

November 18, 2011 .......MCC signs a compact with Indonesia.

February 10, 2012........MCC signs a second compact with Cape Verde.

February 16, 2012 .........MCC marks the completion of Ghana’s compact.

May 10, 2012 ...................MCC signs a compact with Zambia. 

June 21, 2012 ..................MCC reinstates Malawi’s compact.

August 24, 2012............Mali’s compact is terminated due to an undemocratic 

change in government. 

September 20, 2012....MCC marks the completion of El Salvador’s compact.

Agriculture activity, El Salvador
24 ADVANCING PROSPERITY 

completed compact: honduras

www.mcc.gov/honduras
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 25

I

n 2005, Honduras became the second country to sign a compact 

with MCC. Low agricultural productivity and high transportation 

costs were identified as key constraints to economic growth, limiting Honduras’ ability to take advantage of its strategic location. The 

compact was designed to help small-scale farmers become small-scale 

entrepreneurs through training to improve their productivity, access to 

new markets and access to credit. It is also expected to reduce transportation costs through improvements in road networks to enhance market 

access and foster greater market integration.

At a glance

Compact signed: June 13, 2005

Compact entry into force: September 29, 2005

Compact end date: September 29, 2010

Compact total: $205 million

Estimated number of beneficiaries: 1,704,698

Estimated rise in household income: $238 million

MCC’s investments in Honduras are expected to benefit its population for many years 

to come.

MCC’s compact with Honduras was a true partnership, from design through 

implementation.

Note: In September 2009, MCC’s Board of Directors approved the partial termination of MCC’s assistance under the Honduras Compact, ceasing funding associated with the Weight Control System Activity 

and a portion of the Farm to Market Roads Activity. The partial termination was in response to actions by the Government of Honduras inconsistent with MCC’s eligibility criteria.
26 ADVANCING PROSPERITY 

Policies Matter

MCC supported the government to enact a secured transaction law and established a moveable property registry system that allows individuals to use 

property they own, such as tractors, sewing machines and shop inventory, as 

collateral in order to increase entrepreneurs’ access to credit. This has served as 

a model for potential reform in Costa Rica, the Dominican Republic, El Salvador, 

Guatemala, Panama, Peru, Jamaica, and other Caribbean countries.

 MCC supported efforts by the Government of Honduras to develop legislation to 

empower Fondo Vial, the national road maintenance authority, to better address 

road maintenance issues by becoming the responsible entity for weight control. 

The Government of Honduras increased its road maintenance budget from $37 

million in 2005 progressively to $64 million in 2010 and recognized the importance of protecting the investments made in the national road network.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 27

Transportation Project

The project’s rehabilitated roads are expected to benefit more than 1 

million people by improving their access to markets, social services and 

economic opportunities. These roads are expected to lower transportation costs by reducing transportation times and vehicle repair costs, 

freeing up resources to be productively invested elsewhere in Honduras.

Project cost: $121 million

Estimated number of beneficiaries: 1,347,297 

Estimated rise in household income: $185 million

Kilometers of CA-5 highway improved: 49.5 

Kilometers of secondary roads paved: 65.5 

MCC helped improve 49.5 kilometers of the CA-5 highway. The road connects Puerto 

Cortes, the main port for goods exported from Central America, to San Pedro Sula and 

Tegucigalpa, the two largest cities in Honduras. MCC’s work on upgrading the CA-5 highway created 4,000 temporary jobs.
28 ADVANCING PROSPERITY 

Rural Development Project

This project trained farmers in high-value horticulture production and 

commercialization, provided access to credit to farmers and agribusinesses, supported research and initiatives that enhance and accelerate 

the development of market-based commercial agriculture, and rehabilitated rural roads to provide farmers with improved access to markets. 

These activities aimed to increase private investment and the adoption 

of more sophisticated agriculture techniques and marketing practices 

and were designed to help thousands of small farmers all over the country diversify their crops, increase their yields and expand their access to 

new customers nationally, regionally and internationally. 

Project cost: $68 million

Estimated number of beneficiaries: 357,401

Estimated rise in household income: $53 million

Farmers who received technical assistance: 7,264 

Number of farmers who adopted improved techniques: 6,996

Hectares harvesting high-value horticulture crops: 9,287

Loans disbursed: 10,855 totaling $12 million

Kilometers of rural roads rehabilitated: 495

The project was designed to help thousands of small farmers all over the country diversify their crops, increase their yields and expand their access to new national, regional 

and international customers.

A grant to the Honduran Institute of Coffee supported the construction and equipping 

of a high-tech laboratory that is now producing improved hybrid coffee seeds and 

better yields.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 29

Success story

José Ordóñez used to grow corn and barely earned enough money 

to support his wife and children. In 2007, José switched to growing 

papaya and guavas (crops that sell at higher prices, given greater market 

demand) because of the new skills and knowledge gained from the compact’s Rural Development Project.

Since he lives along a recently improved rural road that connects to an 

improved secondary road that connects to the CA-5 highway—the vital 

CA-5 corridor that runs between Tegucigalpa and Puerto Cortés, the 

principal port in Central America—José reports that he can now transport his papayas and guavas to market more quickly. Because of MCC’s 

investments in improving the roads and José’s adoption of improved 

agricultural practices, he also reports that he has increased his earnings 

and was able to make improvements to his home and provide his children with greater opportunities.

Improvements to the CA-5 highway allow José Ordóñez to move his crops to market 

more quickly and bring in more income. A section of the improved CA-5 highway is ready.
30 ADVANCING PROSPERITY 

Partnership in the Field

Working at MCA-Honduras has become an unprecedented experience. Throughout our transport and rural development projects, I have 

witnessed heavy-duty machinery and hundreds of workers constructing and improving roads in different parts of the country. I also saw 

7,000 trained and provided with technical assistance. This is making an 

important contribution to the national economic growth, and I feel very 

proud of being part of all this progress for my country.

I am a member of MCA-Honduras’ legal staff, which provided a variety 

of services like processing the importation and exportation of vehicles 

and equipment, processing environmental licenses, negotiating with 

land tenants affected and resettled, ensuring contractors have access 

to banks of materials, and taking care of other legal matters related to 

the compact.

I feel not only proud and privileged but also blessed to be part of the 

implementation of such an extraordinary program. MCA-Honduras 

represents the most credible and extraordinary program in Honduras, 

with a great reputation among international cooperation agencies, civil 

society, private companies, media, government, and the population 

of Honduras. I say proudly: I am very glad to be part of the MCAHonduras team.

—Alex Moraes, MCA-Honduras legal officer 

MCA-Honduras staff Mario Magaña (left) and Alex Moraes provided an array of legal 

services for the organization.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 31

Partnership in the Field

When I joined MCC in early 2006, I was thrilled to learn I would have 

the opportunity to work on the Honduras Compact. I had developed a 

special affinity for Honduras and the Honduran people during my time 

there as a Peace Corps volunteer in the late 1990s. 

From the start, both the MCC and MCA-Honduras teams were motivated by the belief that the compact would have a positively transformative impact on the lives of many Hondurans. MCA-Honduras 

never ceased to impress me, particularly as they worked urgently and 

tirelessly—often in uncertain political environments—to achieve their 

ambitious plans. One project that I worked closely on involved the 

relocation of a number of families to make room for the expansion of 

the main highway. MCA treated each of these families with the upmost 

respect and ensured that their livelihoods were not only restored, but 

improved—all without creating delays for the construction of the road. 

The legacy that MCA-Honduras leaves behind is the proof that a small 

group of Honduran government officials can achieve great things in a 

short amount of time through hard work and a commitment to transparency and delivering high-quality results. 

—Jonathan Nash, MCC senior director for 

environment and social assessment

Jonathan Nash poses with one of the families who was resettled to make way for the 

expansion of the CA-5 highway.
completed compact: CAPE VERDE

32 ADVANCING PROSPERITY 

www.mcc.gov/capeverde
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 33

Cape Verde identified the need for investments in infrastructure, watershed management and private sector development as essential for creating economic opportunity for its people. 

The compact was designed to raise incomes by reducing transportation 

costs by rehabilitating roads, bridges and the Port of Praia; increasing 

agricultural productivity through investments in water management 

and soil conservation, technology transfer, access to credit, and sustainable microfinance institutions; and developing the private sector by 

reducing obstacles to investment.

At a glance

Compact signed: July 4, 2005

Compact entry into force: October 17, 2005

Compact end date: October 17, 2010

Compact total: $110 million

Estimated number of beneficiaries: 384,765

Estimated rise in household income: $149 million

MCC’s investments in Cape Verde are expected to make an impact in the lives of these two business women and thousands of others.
34 ADVANCING PROSPERITY 

Policies Matter

As a condition of MCC’s provision of technical assistance to microfinance institutions, the Government of Cape Verde approved a microfinance law that authorized collection of savings and made other improvements to the sector.

The Citizens’ House offers improved and streamlined government services. MCC 

contributed to this e-government initiative by investing in equipment, software 

and technical assistance. Company registration can now be completed online in 

just one day, and the time required to start a business dropped from 52 days in 

2007 to 11 days in 2012, according to the International Finance Corporation.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 35

Infrastructure Project

This project integrated internal markets and reduced transportation 

costs by improving roads and bridges on the islands of Santiago and 

Santo Antão and by upgrading the Port of Praia. Improved transportation provides better links to social services, employment opportunities, 

local markets, ports, and airports. 

Project cost: $82.6 million

Estimated number of beneficiaries: 384,465

Estimated rise in household income: $137.6 million

Kilometers of roads paved on Santiago: 40.6 

Bridges built on Santo Antão: 4

Import/export firms projected to benefit from port modernization: 712

The project converted more than 40 kilometers of mountainous roads from earth or cobblestone to asphalt. Four new bridges on Santo Antão ensure reliable, all-weather access to 

urban markets.
36 ADVANCING PROSPERITY 

Watershed Management and Agriculture Support Project

 This project was designed to increase agricultural productivity in 

watershed areas on the islands of Santo Antão, Fogo and São Nicolau. 

The project helped farmers overcome critical constraints to accessing a 

growing domestic demand for high-value fruits and vegetables. Project 

investments focused on increasing the capture, storage and distribution 

of spring-fed and rain-fed water resources, enabling farmers to irrigate 

their fields and increase agricultural productivity. 

Project cost: $12 million

Farm households expected to benefit: 8,591

Estimated rise in household income: $9.7 million

Reservoirs constructed: 28 

Farmers trained on producing high-value crops: 553

Private Sector Project

This project supported Cape Verde’s long-term strategy of becoming 

less dependent on remittances and donor aid by developing a competitive, private-sector driven economy. The project included the establishment of the first private credit bureau in Cape Verde (in collaboration with the International Finance Corporation’s Private Enterprise 

Partnership for Africa program) and financial sector reform to increase 

access to financial services and improve financial intermediation.

Project cost: $2.1 million

Estimated number of beneficiaries: 900 

Microfinance institutions that received technical training: 8 

Microfinance institutions classified as operationally self-sufficient: 5 of 5

The Government of Cape Verde lifted a 25-year embargo on inter-island agricultural 

exports from Santo Antão. MCA-Cape Verde, through an agreement with the University 

of Cape Verde, trained 31 phyto- and zoo-sanitary inspectors to reinforce the national 

inspection system on the islands of Santo Antão, Sal and Boavista. This allowed the 

lifting of the ban and enabled the farmers of San Antão to expand their livelihoods. The project helped increase the availability of credit to rural communities for capital 

investments in a more productive agricultural sector.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 37

Success story

Maria Celina Pina Horta, a single mother of six, worked as a sand harvester to support her family. Through the support of ASDIS, a microfinance institution that received MCC funding, Maria Celina obtained 

her first loan and began growing and selling agricultural produce. She 

eventually doubled her income, built a house and continued to diversify her crops. Maria Celina always repaid her microloans on time, and 

she believes the access to finance allowed her to realize her dreams. 

Maria Celina’s good business acumen and support from ASDIS led her 

to expand her small business and start selling her products to other 

islands. As a result, she owns cows, pigs and chickens, and she pays for 

her eldest son’s schooling in Portugal. Maria Celina now earns $647 

each month—almost 10 times the income she earned collecting and 

selling sand.

Maria Celina Pina Horta

ASDIS, a microfinance institution that works with low-income populations involved in 

the agriculture sector, was one of five microfinance institutions to participate in the 

MCC-funded technical assistance training and credit line expansion program.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 37
Partnership in the Field

There is a difference between MCC and other donors. During preparation of the second compact, we held many consultations with stakeholders from the private sector, civil society and government departments to inform the constraints analysis, the concept papers and other 

studies—all this before we even prepared the project design. We had a 

lot of consultations, and a wide range of partners gave their inputs in 

preparation for the projects. This is the difference between MCC and 

other donors—consultation allowed us to select the right projects for 

the compact. 

Anyone can see the results the first compact has made. All international 

donors are interested in results. But for MCC, since the beginning, the 

compact is aimed toward impact. I'm sure the compact will make huge 

impacts on Cape Verde.

—Luis Silva, MCA-Cape Verde project manager

Luis Silva describes the construction taking place to modernize the Port of Praia.

38 ADVANCING PROSPERITY 
Partnership in the Field

I started as program assistant at MCC’s resident country mission in 

Cape Verde in 2006, when the first compact’s implementation had just 

started. I feel privileged because I was able to accompany the implementation phase, the closeout work, the second compact development 

phase, and currently the mobilization period for the second compact. 

All of these compact phases are challenging, exciting and bring a lot 

of knowledge and opportunities to improve not only at project and 

program level but also at the MCC process level. I later moved into a 

position as a program analyst, in which I am more involved with documentation revisions and more exposed to technical and cross-cutting 

aspects of our work.

There were remarkable infrastructure results in the first compact: For 

me, the Port of Praia and the roads and bridges of Santo Antão Island 

had important impact in people’s lives. Before the bridges were constructed, people could not cross to go to schools, hospitals and other 

places during the rainy season. The agriculture project brought a new 

approach to our traditional farming. They adopted new work approaches and are open to modern techniques to increase and improve 

their productivity. Results go well beyond infrastructure! 

Capacity building and country ownership principles are a reality in 

Cape Verde. 

—Sónia Schofield, MCC program analyst

Sónia Schofield, seated center, worked with her colleagues from MCC and MCA-Cape 

Verde to impact the lives of her fellow Cape Verdeans.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 39
completed compact: georgia

40 ADVANCING PROSPERITY 

www.mcc.gov/georgia
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 41

Georgia’s compact addressed two main barriers to economic 

growth: lack of reliable infrastructure and slow business 

development, particularly agribusiness. The Government of 

Georgia and MCC agreed that lifting these barriers through a program of investments focused on the regions outside the capital, Tbilisi, 

would help unlock the entire country’s economic growth potential. The 

compact projects focused on rehabilitating regional infrastructure and 

enterprise development to improve the lives of the poor by improving 

access to jobs, markets and basic services, as well as providing capital 

for enterprise development. 

At a glance

Compact signed: September 12, 2005

Compact entry into force: April 7, 2006

Compact end date: April 7, 2011

Compact total: $395 million

Estimated number of beneficiaries: 143,000

Estimated rise in household income: $277 million

The Enterprise Development Project helped build farm service centers, one-stop 

agricultural shops that sell fertilizers, seeds, tools, veterinary preparations, and disinfectants. The centers also provide training on the use of modern agricultural technologies.

The rehabilitation of 217 kilometers of road reduced travel time from more than eight 

hours to less than three hours, resulting in an estimated cost savings to vehicle operators of more than $13.7 million in 2011. The road also improves the link between Georgia 

and Armenia and opens a new route to Turkey, creating a key corridor for international 

trade and investment.

Note: In November 2008, MCC and the Government of Georgia signed an amendment to the compact, which provided an additional $100 million to the initial funding level of $295 million to expand existing 

activities under the compact.
42 ADVANCING PROSPERITY 

Policies Matter

As a condition precedent for the Samtskhe-Javakheti Road Activity, the 

Government of Georgia increased its annual road maintenance appropriations 

from $33.6 million in 2006 to more than $56 million in 2010.

As a condition precedent for the Energy Rehabilitation Activity, the Government 

of Georgia focused on the financial performance of the Georgian Oil and Gas 

Corporation and ensured that the company would achieve a collections rate of 95 

percent. The government also ensured GOGC would reduce technical losses from 

its pipeline infrastructure from more than 5 percent of throughput in 2006 to less 

than 2 percent by 2009.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 43

Regional Infrastructure Rehabilitation Project

This project rehabilitated key regional infrastructure by improving 

transportation for regional trade, increasing the reliability of the energy 

supply and improving municipal services.

Project cost: $314 million

Estimated number of beneficiaries: 125,000 

Estimated rise in household income: $216 million

Kilometers of roads rehabilitated: 217

People who received improved water services: 67,865

Sections of key gas pipeline rehabilitated: 22

The Center for Global Development, a Washington think tank, singled out country ownership as one of the defining features of the Georgia Compact. MCC’s work with the 

Georgian Oil and Gas Corporation to repair the main natural gas pipeline exemplifies country-led development.
44 ADVANCING PROSPERITY 

Enterprise Development Project

This project increased profitable investments in small- and mediumsized enterprises and improved the economic performance of agribusinesses. The project provided matching grants and technical assistance 

to a wide range of agribusinesses. It also provided medium-term risk 

capital and technical assistance to small- and medium-sized enterprises 

outside the capital through the Georgia Regional Development Fund 

(GRDF), an independently managed investment fund.

Project cost: $52 million

Estimated number of beneficiaries: 17,000

Estimated rise in household income: $14 million

Increase in gross revenues of GRDF portfolio companies: $16.8 million 

Agribusiness grants awarded: 296

The project’s Agribusiness Development Activity awarded grants to small farmers, farm service centers that serve local communities and value-adding enterprises focused on 

collection, storage, distribution, processing, and packaging. It helped create more than 3,200 jobs and improved the economic performance of 290 agribusiness and farm production projects. Businesses involved in the activity reported a wage increase of almost $3.2 million.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 45

Success story

The Millennium Challenge Georgia Fund held the official opening of the 

Milk Processing Enterprise in Tibaani in November 2008. The Kakheti 

Livestock Growers Association, founded in 2003 by a group of 45 local 

farmers, owns the enterprise. Prior to MCC’s investments, it operated 

four milk-collection centers and a laboratory with modern equipment.

A grant through the Agribusiness Development Activity allowed the enterprise to expand into dairy processing. The enterprise now processes 

and sells four kinds of cheese and serves more than 100 farmers in the 

Kakheti region. Fifteen jobs were created because of the grant.

Nino Siprashvili, director of the Kakheti Livestock Growers Association, has seen her 

organization expand into new markets and create jobs because of MCC’s investments. The Kakheti Livestock Growers Association now sells Imeruli, Georgian, Sulguni, and 

Gouda cheeses.
Partnership in the Field

It will not be an exaggeration to say MCC means one big step forward 

to boost economic growth in Georgia. I truly believe this new mechanism of smart aid for countries in transition, in combination with 

country ownership, will make fundamental changes in people’s lives 

and will prove to be the most effective and sustainable investment in 

the long-term economic development of Georgia. I am proud to be 

part of this significant, meaningful, achievable, results-oriented, and 

tangible program and am looking forward to seeing the compact goals 

accomplished.

George Abdushelishvili, Millennium Challenge 

Georgia Fund chief executive officer

George Abdushelishvili (right) believes MCC’s compact will make real changes in the 

lives of Georgians.

46 ADVANCING PROSPERITY 
Partnership in the Field

I am really inspired by the way MCC makes its investments: countries 

lead and we support. I joined MCC during the fifth year of the Georgia 

Compact, and I was not quite sure what this support would look like 

on the ground—or what was in store for me as deputy resident country 

director.

It was quickly apparent that the support is partnership—one that spans 

the globe from Washington to Tbilisi. Joining the team near the end, 

I had an outsider’s eye to witness the tireless commitment from both 

our headquarters and Millennium Challenge Georgia Fund (MCG) staff 

to make sure that MCC’s investments would succeed. Many of MCG’s 

consultants and implementing entities also put in extraordinary efforts 

to make the most of MCC’s investments. It is difficult to truly convey 

the ways that dedication, passion and sacrifice were expressed.

Driving back from the project sites at night, we would see silhouettes of 

fortresses and monasteries dotting the mountainsides on our ride home. 

We would drive by this breathtaking past having just had the opportunity to partner with Georgia and Georgians to build an important bit of 

their future. I feel grateful to have been a part of it.

—Jennifer Lappin, MCC deputy resident country director

Jennifer Lappin relied on a strong partnership with counterparts in Washington, Tbilisi 

and elsewhere to successfully implement the Georgia Compact. 

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 47
completed compact: vanuatu

48 ADVANCING PROSPERITY 

www.mcc.gov/vanuatu
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 49

Agriculture and tourism are central to Vanuatu’s growth. Underdeveloped, sub-standard and poorly maintained transportation infrastructure was identified as a critical constraint to 

economic activity and private sector investment in the agriculture and 

tourism sectors. The compact sought to reduce poverty and stimulate 

economic growth by reducing transportation costs and improving access 

to transportation, markets and social services through the upgrading 

and sealing of the country’s two most important national roads, the Efate 

Ring Road (92.5 kilometers) and the Santo East Coast Road (57.2 kilometers). The compact also included initiatives to strengthen the operation 

and maintenance of Vanuatu’s transport infrastructure network. 

At a glance

Compact signed: March 2, 2006

Compact entry into force: April 28, 2006

Compact end date: April 28, 2011

Compact investment: $66 million

Estimated number of beneficiaries: 39,203

Estimated rise in household income: $73.8 million

The poverty rate in rural areas of Efate has decreased from 37.7 percent to 19.1 percent, and poverty along the east coast of Santo dropped from 14.6 percent to 5.2 percent, according to government surveys conducted between 2006 and 2010.

Note: The compact was formally restructured in early 2008 because of escalating global construction costs, currency fluctuations and other considerations. The construction and tar sealing of the two most 

important national roads, the Efate Ring Road (92.5 kilometers) and the Santo East Coast Road (57.2 kilometers), became the focus of the restructured compact in order to reduce transportation costs and 

improve access to markets and social services for the island populations. The New Zealand Aid Programme also provided critical supplemental funding for the completion of the road works.
50 ADVANCING PROSPERITY 

Policies Matter

The Government of Vanuatu used MCC’s eligibility criteria to guide policy reform. 

In 2010, it made a substantial increase in efforts and resources directed toward 

immunizing children against polio, measles, tetanus, tuberculosis, and whooping 

cough; it implemented a policy of free basic education; it established the Utility 

Regulatory Authority to protect consumers and implement a long-term land 

reform program; and it created the Law Reform Commission and Human Rights 

Commission.

Vanuatu committed $5 million to its road maintenance fund in 2006, which 

increased to $5.5 million in 2011. These funds are in addition to the Public Works 

Department’s ongoing road maintenance funds. The Public Works Department 

entrusted local communities to organize teams, including women’s organizations 

and youth groups, to regularly clear vegetation and sight lines. Those involved 

are compensated for their work, generating additional income for the community, as well as ownership, pride and respect for the roads. As a result of training 

and capacity building, a more systematic approach toward road maintenance 

planning was introduced in the Public Works Department.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 51

Transport Infrastructure Project

The project rehabilitated national roads on two islands, helping poor, 

rural agricultural producers and providers of tourist-related goods and 

services through reduced transportation costs and improved access to 

transportation services. The project also helped strengthen institutions 

and reform national policies to ensure the sustainable operation and 

maintenance of Vanuatu’s transport infrastructure network.

Project cost: $60 million

Estimated number of beneficiaries: 39,203 

Estimated rise in household income: $73.8 million

Kilometers of roads rehabilitated: 149.7

Reduced average travel time on Santo Island: 75 percent

Value of plant and maintenance equipment procured by MCA-Vanuatu for the 

Public Works Department: $1 million

Success story

Earnest Kalkoa has operated his small World War II museum for 

more than 10 years but struggled to maintain his business. Between the 

museum’s rural location and poor road conditions, efforts to increase 

revenue have been difficult. In 2010, Earnest’s dream to expand his 

business and increase his revenue came true after the Efate Ring Road, 

which passes by his museum, was rehabilitated. 

Other business owners like Earnest report that improved road conditions have led to an expansion in guided bus tours for travelers, boosting revenues for both tour operators and businesses. With improved 

access to commercial centers, resort owners use the improved roads 

to stock their hotels and restaurants. A recent tourism survey in 

Vanuatu underscores the importance of the sector to the economy and 

reveals very promising trends: The number of visitors arriving by air 

increased by 9 percent each year from 2007 to 2010, and the number of 

cruise-ship passengers increased 13 percent annually during the same 

timeframe. Direct value added to local incomes derived from tourism 

expenditures increased by 24 percent from 2007 to 2010.

Because of improvements to roads, the average travel time has been reduced by 50 

percent on Efate Island and 75 percent on Santo Island. The number of days per year 

that the Efate Ring Road is impassable has dropped from nine in 2006 to zero in 2011.

The new roads have withstood earthquakes, cyclones and heavy rains, important tests 

given the frequency of natural disasters.

Earnest Kalkoa greets visitors to his World War II museum.
Partnership in the Field

These roads will open access for the majority of our people to improve 

their quality of life and move from subsistence farming and a cashless 

existence to economic growth. The compact is the biggest single development program ever managed by the people of Vanuatu. The enthusiasm, smiles and tears of joy are everywhere. There have been many celebrations and a lot of singing, dancing and speeches, as is our custom. 

I have seen rural chiefs and elders break down in tears as they see their 

road completed. The roads have already saved the lives of mothers and 

babies as they have a smooth and safer trip to the hospital.

—Johnson Wabaiat, MCA-Vanuatu program director 

MCA-Vanuatu program director Johnson Wabaiat speaks with stakeholders during a 

meeting in Epau.

52 ADVANCING PROSPERITY 
Partnership in the Field

Three things come to mind when I reflect on the Vanuatu Compact: 

great collaboration among implementation partners, real-time creativity 

on the ground in problem-solving and enhancing value, and a drive to 

achieve optimal bang for MCC’s buck. 

I have been working in the engineering and construction industry for 

over three decades and witnessed the completion of many projects 

around the world. The road projects in Vanuatu not only were completed ahead of schedule but under budget, with high-quality workmanship. There were no contractual disputes or claims—a rarity in the 

industry. 

Smooth collaboration and constructive partnership opened up opportunities for creativity. Various management, engineering and construction problems were solved within the project budget throughout 

the compact implementation period. Opportunities for inexpensive 

measures to improve road safety were identified, reducing the potential 

for accidents significantly. With funding from the New Zealand Aid 

Programme, bridges were strengthened—something not programmed 

in the compact—to add years to the service life of the road and enable it 

to withstand major recurrent floods. 

—Yohannes Abebe, MCC director of infrastructure

Yohannes Abebe (left) and Tom Schell, MCC senior director of environmental and social 

assessment, take a break from work to share a coconut.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 53
completed compact: nicaragua

54 ADVANCING PROSPERITY 

www.mcc.gov/nicaragua
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 55

After consultations with a diverse set of government and civil 

society stakeholders, Nicaragua identified a regional development strategy for MCC to improve insecure property rights, 

underdeveloped infrastructure and low-value agricultural production. 

The compact focused on creating an engine for economic growth in 

the country’s northwest region, a poor region with significant growth 

potential because of its fertile land and connection to markets in 

Honduras and El Salvador.

At a glance

Compact signed: July 14, 2005

Compact entry into force: May 26, 2006

Compact end date: May 26, 2011

Compact investment: $113.5 million

Estimated number of beneficiaries: 119,870

Estimated rise in household income: $83.5 million

Rural farmers and artisans were among the beneficiaries of the Rural Business Development Project, which provided business-development services as well as technical and financial assistance.

Note: Conditions leading up to, during and following municipal elections of November 2008 were inconsistent with MCC’s eligibility criteria. In June 2009, the MCC Board approved the termination of 

a portion of the compact, reducing compact funding from $175 million to $113.5 million. Funding was terminated for activities in the Transportation Project that were not already under contract, 

including upgrading a major stretch of the Pacific Corridor highway. MCC also terminated the Property Regularization Project; prior to termination, MCC invested $7.2 million in this project, out of a 

projected $26.4 million.
56 ADVANCING PROSPERITY 

Policies Matter

Prior to 2005, the Nicaraguan government maintained an average of 500 

kilometers of roads, with an annual maintenance budget of about $2.4 million. 

During compact negotiations, MCC insisted that the Government of Nicaragua 

establish a permanent source of funds for road maintenance. In 2005, the 

Nicaraguan National Assembly approved funding for a road maintenance fund 

that increases annually. The Nicaraguan government is now maintaining more 

than 3,000 kilometers of roads annually, with more than $31 million allocated to 

road maintenance. 

MCC supported passage of the Public Registry General Law as a necessary legal 

framework to launch the operation of the Integrated Cadastre and Registry 

System, which allowed for electronic registration of real estate and helped reduce 

processing time and cost. 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 57

Transportation Project

The Transportation Project aimed to reduce transportation costs between 

Nicaraguan production centers and national, regional and global markets. 

MCC invested $58 million to rehabilitate 74 kilometers of one primary 

and two secondary road sections, connecting Nicaragua to the rest of 

Central America and providing a key link to greater regional trade. 

Project cost: $58 million

Estimated number of beneficiaries: 97,110

Estimated rise in household income: $32.4 million

Kilometers of rehabilitated roads: 74 

Kilometers of roads Government of Nicaragua maintains annually: 3,000

Increase in average daily traffic on Somotillo-Cinco Pinos road: 140 percent 

 Traffic along the León-Poneloya-Las Peñitas road (left column) has increased by 33 percent because of the MCC-funded improvements. Improvements to the Somotillo-Cinco 

Pinos road helped revitalize the area's economy, with products reaching domestic and international markets more quickly.
58 ADVANCING PROSPERITY 

Rural Business Development Project

The Rural Business Development Project aimed to increase the value 

and productivity of farms and rural businesses in León and Chinandega 

through the provision of business development services, technical assistance and financial assistance to farmers and rural business owners working in agriculture, livestock, tourism, artisan production, and forestry.

Project cost: $33 million

Estimated number of beneficiaries: 45,520

Estimated rise in household income: $51.1 million

Farmers who adopted improved technologies: 9,104

New hectares with high-value crops: 18,037

Hectares of new forests planted: 7,163

Property Regularization Project

Missing, outdated and conflicting property records have been a problem that date back to the civil wars in Nicaragua, deterring national and 

foreign investment. MCC provided support to set up a registry system, 

reducing costs and time in property transactions. 

Project cost: $7.2 million

Estimated number of beneficiaries: 3,951

Urban parcels registered: 2,449

Rural parcels registered: 396

New protected-area management plans: 3

Prior to the compact, there was only one milk collection center in western Nicaragua. 

Now, there are 12 new milk collection centers equipped with cooling tanks and labs to 

test milk quality.

In spring 2010, the World Bank approved $10 million of financing to leverage MCC 

assets and continue with property regularization in León.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 59

Success story

Many Nicaraguan farm families use an abundance of wood from surrounding forests as fuel for cooking. This puts a significant strain on the 

natural resources of the area; by investing in the establishment of 185 

biodigestors, MCA-Nicaragua helped cattle farmers reduce their impact 

on the environment and save time and money. 

Biodigestors are waste-management solutions that convert organic 

waste into a nutrient-rich liquid fertilizer and bio-gas. This allows farms 

to take advantage of organic waste, especially cattle manure, for the 

production of renewable forms of energy. Biodigestors trap methane 

from manure, making it available for cooking and, in certain instances, 

for electricity generation. This not only gives rural families a green alternative for cooking fuel for their homes, but also reduces the emission of 

harmful greenhouse gases from their farms.

Because of MCC’s investments, Gladys Francisca Baldizón from León 

now has a biodigestor on her farm, where she cooks meals for 12 people 

every day. Her daily wood use dropped from ten sticks a day to four. 

Gladys Francisca Baldizón cooks with renewable energy.

The compact also introduced environmentally-friendly methods of creating handicrafts.
Partnership in the Field

After two years of the design of the proposal and negotiations with 

MCC and five years of compact implementation, I have to say that 

having worked hand-in-hand with MCC has been the greatest experience of my professional life. I was able to see thousands of families 

change their livelihoods. We began changing their vision of the future, 

from poverty and underdevelopment to hope and entrepreneurship. 

Through the projects we invested in them to reach new possibilities in 

the form of markets for their products, and better access to social services through new paved roads. We contributed to their well-being in a 

sustainable way, and we were able to see how these families used their 

increased earnings to educate their children or purchase goods that 

were impossible to acquire in the past. 

One of the greatest things about my Nicaraguan team working for the 

Nicaraguan people was the sense of pride we shared about doing our 

job. In the future, every time we will visit these communities or travel 

along those roads ourselves, we will tell our children that we contributed to their construction, thanks to the American people. 

—Juan Sebastian Chamorro, MCA-Nicaragua general director

Juan Sebastian Chamorro believes the benefits of the compact will resonate with future 

generations.

60 ADVANCING PROSPERITY 
Partnership in the Field

My immersion into the MCC program in Nicaragua began in 2008, 

after much work and energy had been poured into the development of 

road projects for the country. I was new at MCC at the time, and the 

full evidence of this investment was not really apparent for me until a 

couple years later. 

In the country’s northwest region, three road projects began to slowly 

take shape as resources were put into place. Dirt was churned, bitumen 

was delivered and signage finally went up. While many rave about the 

impact of these projects in the connection of domestic and international 

markets—and we should—I often think about the sense of collaboration, sacrifice and commitment many individuals demonstrated while 

delivering these projects. 

Among these individuals, I will always remember Don César, as he was 

fondly known. A seasoned engineer and fully committed to the program, he was instrumental in leading the road infrastructure team at 

MCA-Nicaragua and delivering the road projects. Because of individuals like him, and others, tourists, merchants and residents now 

have comfortable road access to the El Guasaule border crossing into 

Honduras, North Pacific beaches of Poneloya and Las Penitas and a 

fishing village near the Juan Venado Wildlife Reserve, as well as unrestricted access between the towns of Somotillo and Cinco Pinos.

—Rodney Chow, MCC infrastructure senior program officer

Rodney Chow and his partners in Nicaragua helped build roads and connect communities.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 61
completed compact: armenia

62 ADVANCING PROSPERITY 

www.mcc.gov/armenia
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 63

MCC’s compact with Armenia, which sought to strengthen 

the agricultural sector, included one of the country’s largest 

irrigation infrastructure projects to date. The partnership also 

included assistance to the nation’s farmers, agribusinesses and water 

supply institutions, as well as investments in rural road construction 

and maintenance. The increase in productivity of farm households 

through improved water supply, higher yields, higher value crops, and 

a more competitive agricultural sector should catalyze economic 

growth, improve food security and reduce poverty in Armenia for 

decades to come.

At a glance

Compact signed: March 26, 2006

Compact entry into force: September 29, 2006

Compact end date: September 29, 2011

Compact investment: $177 million

Estimated number of beneficiaries: 427,600

Estimated rise in household income: $300 million

The compact represented the single largest grant investment in the country’s irrigation 

infrastructure in the past 30 years.

Improved irrigation gives Armenian farmers the comfort that water will be supplied 

regularly, allowing them to better plan their planting and harvest seasons and ultimately providing more financial stability.

Note: As a result of the June 2009 meeting of MCC’s Board of Directors, MCC did not resume funding for the Rural Roads Rehabilitation Project. This hold on funding was a result of actions by the 

Government of Armenia that were inconsistent with MCC principles promoting democratic governance.
64 ADVANCING PROSPERITY 

Policies Matter

MCC encouraged Government of Armenia efforts to reform its water code, including legislative amendments to applied taxes, management of irrigation systems 

and legal status of water-user associations, all of which are designed to improve 

the efficiency of the irrigation sector and improve the operation and maintenance 

of MCC-financed irrigation assets. 

The Rural Roads Rehabilitation Project stimulated the implementation of the 

Road Lifeline Network concept, which the Government of Armenia utilized as 

justification to formally mandate the provision of operation and maintenance services for more than 2,700 kilometers of roads. Prior to MCC involvement, none of 

these roads were eligible for Government of Armenia operation and maintenance 

expenditures.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 65

Irrigated Agriculture Project

MCC funded the repair and upgrade of vital irrigation infrastructure 

across Armenia to provide the rural population with a more reliable 

supply of water, increase available farmland and reduce the cost of 

operating irrigation systems. The project improved 780 kilometers of 

canals, providing access to reliable irrigation for more than 420,000 

farmers—40 percent of the rural population. As farmers gain confidence 

in water reliability and choose to invest in cultivating more profitable 

crops, yields and productivity will increase, compared to before the 

investment. The project also included assistance to the nation’s farmers, 

agribusinesses and water supply institutions through training, technical 

assistance and a farmer credit component.

Project cost: $154 million

Estimated number of beneficiaries: 421,400 

Estimated rise in household income: $290 million

Farmers trained in on-farm water management: 45,639

Loans disbursed: $8.5 million to more than 760 farmers

Water-user associations trained: 44

MCC encouraged farmers to shift from low-value to high-value crops and expects 

income from agriculture in rural areas to increase because of the compact.

Water-user associations received technical assistance, including the use of Geographic 

Information System software. Thanks in part to the MCC-funded technical training, 

water-user associations can better manage Armenia’s irrigation systems. Efforts by the 

Government of Armenia, supported by MCC, helped raise the collection of water fees 

from 50 percent of users in 2008 to 69 percent in 2010. This increase is expected to 

result in water-user associations’ ability to cover 60 percent of costs with user revenue 

in 2011, up from 37 percent in 2007.
66 ADVANCING PROSPERITY 

Rural Roads Rehabilitation Project

The project aimed to ensure that every rural community in Armenia has 

essential road access to markets, social services and the main road and 

interstate network. In addition, the compact program was designed to 

fund a technical audit of ongoing maintenance contracts and a strategic 

road maintenance plan. 

Project cost: $8.4 million

Estimated number of beneficiaries: 6,216 

Estimated rise in household income: $10 million

Kilometers of roads rehabilitated: 24.5 

Improvement in road roughness: 78 percent

Increase in average daily traffic: 15 percent

Improved road conditions have contributed to a significant decrease in travel time. Vehicular activity on the road increased following the improvements, and public and private 

transportation options are more readily available.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 67

Success story

Margarita Grigoryan is a subsistence farmer with a small parcel of land 

in the rural town of Khoronk. Like many Armenian farmers, Margarita 

and her family have lived on her agricultural income of approximately 

$1,000 per year for the past 15 years. 

Margarita and her neighbors’ three-kilometer canal, rehabilitated 

through the MCC compact, allows her to plan her growing season more 

effectively: When she submits her water request with her water-user 

association, she has confidence that her farm will receive an appropriate 

amount of water on a predictable schedule. 

Today, Margarita is making close to $8,000 per year from her new 

irrigated fields and an additional $2,000 from her new greenhouse. 

Margarita’s income increases have made it possible for her to provide 

for her family and to continue to reinvest in and grow her business. 

Margarita Grigoryan has seen her annual income increase eightfold, thanks to MCC’s 

investments in Armenia. Margarita and her neighbors’ three-kilometer canal is just a small segment of approximately 220 kilometers of tertiary canal rehabilitated under the MCC compact.
Partnership in the Field

This has been worth its title: the Millennium Challenge Account. The 

five-year compact has been challenging, not just for me as CEO, but 

for all the parties involved. In the beginning, during the first days of 

the compact, we started off as a fairly small team compared to the size 

and scale of the investments to be made. Gradually, we gathered one by 

one the implementing entities, design consultants and, eventually, the 

contractors to implement the work. There is no doubt that the most 

memorable part of my time as CEO is the team that works on this program. It is an excellent team—if you would look at the staff list it never 

changed dramatically. The constancy of key people staying shows how 

much value was attached to the team and teamwork. We started with 

20, now we are 40. That is most memorable. 

I also have some really positive feelings about the good things we did 

for individual people within the country—farmers, groups of farmers, 

water users. There were some memorable visits to farmers’ houses or 

land plots, with increased income, positive feelings, tangible results, and 

better knowledge.

—Ara Hovsepyan, MCA-Armenia chief executive officer

Ara Hovsepyan (right) discusses MCC's investments with Armenian President Serzh 

Sargsyan, center, and U.S. Ambassador Marie L. Yovanovitch.

68 ADVANCING PROSPERITY 
Partnership in the Field

When people ask me to describe what we have accomplished in 

Armenia, I sometimes simplify by saying we have created a partnership 

that is not just helping to invest in irrigation infrastructure, but actually 

helping farmers and government systems maintain and grow Armenia’s 

agriculture sector in the long run. 

In Armenia, agriculture is essential for the national economy and particularly critical for food security and for the alleviation of poverty in rural 

areas. More than a third of the country’s population lives in rural areas 

and depends on agriculture. But Armenia is an arid country, and little 

can be grown without the help of manmade irrigation systems, which 

are rapidly deteriorating. This is one reason why MCC’s investment 

in irrigation infrastructure will have a significant impact on reducing 

poverty in the country. 

For MCC’s investments to last, there needs to be a complementary 

investment in farmers’ knowledge and the institutional management of 

the irrigation system. With an eye on sustainability, MCC invested in 

activities that will increase farmer productivity, increase their incomes 

and allow them to contribute through water-user fees to the long-term 

maintenance of the irrigation infrastructure. 

In my five years living and working in Armenia, I sincerely believe the 

compact has created an example of how good development assistance 

builds successfully on strong partnerships and mutual understanding of 

how to make lasting investments. And as I leave the country, I am most 

impressed with the fact that even though the program has reached its 

formal end, the Government of Armenia continues to actively study the 

impact and effectiveness of the compact so as to build on its successes 

and further ensure the value of the single largest grant investment in the 

country’s irrigation infrastructure in the last 30 years.

—Alex Russin, MCC resident country director

Alex Russin (right) helped oversee the largest grant investment in the country’s irrigation sector in three decades.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 69
completed compact: benin

70 ADVANCING PROSPERITY 

www.mcc.gov/benin
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 71

The Benin Compact sought to improve access to markets by 

eliminating constraints hindering the flow of goods through the 

Port of Cotonou; expand access to financial services through 

grants for micro-, small- and medium-sized enterprises and through 

other activities to strengthen the microfinance sector; improve the legal 

and administrative instruments of land tenure to increase security and 

allow more citizens to have access to land; and provide access to the 

justice system by strengthening and streamlining the existing judicial 

system through training, procedural improvements and construction of 

new courthouses.

At a glance

Compact signed: February 22, 2006

Compact entry into force: September 6, 2006

Compact end date: September 6, 2011

Compact investment: $307 million

Estimated number of beneficiaries: 8,792,000

Estimated rise in household income: $409 million

The Port of Cotonou is a key trading hub for neighboring countries, including Niger, Mali, Nigeria, and Burkina Faso, and is the driver of economic growth in Benin. MCC invested 

$188 million to improve the port. The volume of merchandise flowing through the port increased from 4 million metric tons in 2004 to 7 million metric tons in 2010, exceeding its 

previous capacity.
72 ADVANCING PROSPERITY 

Policies Matter

Benin’s National Microfinance Policy, adopted in November 2007, formalizes 

the government's commitment to supporting access to financial services by 

enhancing the professional status of the microfinance sector and improving its 

integration into the national financial sector. The policy establishes a National 

Microfinance Committee to set national microfinance policy and supports the unit 

responsible for conducting microfinance institution inspections and sanctions.

The Government of Benin adopted the Declaration of National Policy on 

Landholding and the Domain, which consolidated the elements of the nation’s 

rural and urban land reform, including those assisted by the compact. The declaration directs all government agencies to pursue the same policies and reform 

approaches in their programming and budgeting, ensuring consistency and 

predictability. It also recognizes the equal treatment and protection of customary 

law in rural areas and civil property law in urban areas in all administration and 

transactions. Under the compact, 294 rural communities established rural 

landholding plans that provide legal, written records of land rights for about 

68,700 landholders. 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 73

Access to Markets Project

The project improved the Port of Cotonou’s security, expanded its 

capacity, enhanced intraport traffic flow, and invested in cost-reduction 

measures—all of which helped create a more modern facility prepared 

for increased movement of goods.

Project cost: $188 million

Estimated number of beneficiaries: 8,792,000

Meters of extension of sand-stopping jetty: 300 

Amount saved in annual dredging and maintenance costs: $2.1 million

Meters of new container ship wharf capacity: 550

Average customs clearance time: 3 days, down from 4 days in 2006

Access to Land Project

The project was designed to expand the use of more secure land tenure 

instruments and assist in building effective and transparent land governance institutions. Only 1 percent of urban households hold a proprietorship title to land; most rural landholders hold unwritten customary 

rights in land, and disputes are widespread. 

Project cost: $31 million

Estimated number of beneficiaries: 261,000

Urban land parcels surveyed: 31,000

Rural communities that established rural landholding plans: 294

Regional offices of the state land registry opened: 3

The extended sand-stopping jetty ensures that sand does not enter the port entrance 

channel and reduces maintenance costs, estimated to save the port more than $2.1 

million annually.

Advanced technology—like a Continuously Operating Reference Station that collects and records Global Positioning System data for surveying and mapping—helps 

strengthen land rights.
74 ADVANCING PROSPERITY 

Access to Justice Project

The project aimed to reform Benin’s legal and judicial environment, 

which prior to the compact suffered from insufficiently qualified personnel, untimely court decisions, corruption, difficulties enforcing decisions, and outdated laws and codes regulating economic and social life. 

The alternative dispute resolution intended to complement the traditional court system was not being utilized, and the time and procedures 

required to register a business were lengthy and complicated. 

Project cost: $19.4 million

Estimated number of beneficiaries: 2,237,000

Judges trained: 100

Courthouses built: 5

New enterprises registered during compact’s life: 19,000

Access to Financial Services Project

The project improved the ability of micro-, small- and medium-sized 

enterprises (MSMEs) to respond to economic opportunities and improve MSMEs’ access to financial services. It strengthened supervision 

of microfinance institutions (MFIs) and established the grant-making 

Challenge Facility to support projects strengthening MSMEs and 

MFIs—steps that have helped the microfinance sector improve financial stability and increase operational self-sufficiency. 

Project cost: $15.5 million

Estimated number of beneficiaries: 981,000

MSMEs and MFIs receiving a Challenge Facility grant: 65

Operational self-sufficiency of participating MFIs: 95 percent

Average time for processing an MFI license application: 42 days, down from 

90 in 2006.

MCC’s compact created a legal information center (shown here) and built four courts 

of first instance and one appellate court to reduce processing time, save money and 

promote the development of modern business activity and investments.

Challenge Facility grants ranged from $25,000 to $500,000. This consortium of rabbit 

farmers used their grant to expand their facilities.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 75

Success story

Like most rural landholders in Benin, Nestor Hassou had no formal 

property title. Situations like his can lead to major land disputes, which 

comprise 70 percent of all of Benin’s court cases. MCC worked with 

Nestor and people in 294 communities to establish rural landholding plans that provide legal, written records of rights. These plans 

will strengthen property rights for about 70,000 rural landholders. 

Improvements in land security will encourage landholders like Nestor to 

invest in their land and use it as collateral to access credit. 

Beninese land registry agencies now use computer technology for registry operations. For the first time, Nestor Hassou can proudly display his rural land certificate.

Because of MCC’s investment, Benin now has some of the most sophisticated geodetic 

and surveying technology in Africa.
Partnership in the Field

Although I had interacted with donors before, working with MCC was 

different—exciting, demanding and full of challenges, especially having 

to base projects on solid economic analysis. We had to quickly learn and 

follow a participative process involving civil society, produce reliable 

statistics and operate in a climate of disbelief and lack of confidence in 

our own national capacity to implement such a program.

I understood from the beginning that MCC was offering Benin an unprecedented opportunity to demonstrate the talents and capacity of the 

Beninese people and to undertake major infrastructure projects which 

had never been dreamed of before. In addition, MCC urged Benin to 

take on audacious and ambitious reforms that no other donor agency 

had ever proposed. 

After five years of implementation, the majority of the original objectives have been achieved. I was filled with a sense of joy, satisfaction and 

pride to have been part of the modernization of the Port of Cotonou 

and putting into place port and custom reforms. The experience MCC 

afforded me is priceless. There is no university education equal to what 

I learned about development, managing and monitoring large construction projects, working with international experts, consultants and contractors, managing teams and risk, and succeeding in spite of setbacks.

With the will to succeed, belief in the results and respect for rules and 

procedures that operate in a climate of transparency and good governance, MCC has proven to the world that country ownership in Benin 

produces results.

—Gabriel Degbegni, MCA-Benin Access to Markets project director

Gabriel Degbegni believes the success of the Benin Compact sends a message to 

the world.

76 ADVANCING PROSPERITY 
Partnership in the Field

I was very excited when I joined MCC in the spring of 2005 because I 

saw an opportunity to apply the financial and institutional knowledge 

I had acquired over 25 years in the private sector to helping the lives of 

the world’s poor in a new and creative way. I was assigned to evaluate 

the compact infrastructure investment proposal from Benin. I quickly 

reviewed the information provided, developed an acquisition plan to hire 

the specialized consultants needed and dove head-first into the realm of 

the Port of Cotonou. 

After thoroughly assessing the proposed physical investments in the 

Benin request, it became clear to us that the institutional and operational issues were greater impediments to meeting the rising demands 

on Benin’s largest business. We took time to work with the MCA-Benin 

and port staff to develop institutional technical assistance to complement 

the new wharf, roads, rail, security, and other physical improvements 

proposed by the port’s management. 

While we did not achieve as many visible successes with these institutional changes, we did see significant benefits to the port, such as dramatically reduced container ship waiting times and improved financial 

operations. Reforms to the customs department proved to be the most 

challenging, but we moved forward in modernizing customs organization and providing needed information technology to track goods 

transiting Benin.

I will never forget the cooperation and creativity shown by my counterparts at MCA-Benin and the port in making this compact a success. 

—Jonathan Saiger, MCC senior director of infrastructure

Jonathan Saiger believes reforms associated with modernizing the Port of Cotonou 

provided significant benefits to Benin.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 77
completed compact: GHANA

78 ADVANCING PROSPERITY 

www.mcc.gov/ghana
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 79

Ghana's compact sought to raise farmer incomes through 

private sector-led agribusiness development. It consists of 

three types of strategic investments to transform and modernize the agricultural sector in order to promote economic growth 

through projects to strengthen production, more efficiently move goods 

to market and improve farm communities and farmers' livelihoods and 

living conditions.

At a glance

Compact signed: August 1, 2006

Compact entry into force: February 16, 2007

Compact end date: February 16, 2012

Compact total: $547 million

Estimated number of beneficiaries: 1,217,000

Estimated rise in household income: $690 million

MCC helped expand access to potable water in rural areas in northern Ghana, one of 

the last places afflicted by Guinea worm disease, by constructing new water points, 

promoting awareness of water-borne disease and training water and sanitation officers.

The Ghana Compact was designed to benefit farmers by helping them boost their 

yields and more efficiently move their products to markets.
80 ADVANCING PROSPERITY 

Policies Matter

Ghana’s parliament passed landmark legislation on seeds, plant protection and 

fertilizer in June 2010, providing access to improved seed varieties, certified fertilizer and pest-free plant material. These developments are key for Ghana's food 

security and agricultural productivity.

Through the Government of Ghana’s multi-year Land Administration Project, 

five public land sector agencies were restructured into a single agency under 

the direction of one chief executive officer. Building upon this restructuring, the 

compact strengthened the new Ghana Lands Commission at the national level by 

providing technical, legal, administrative, and managerial training to 400 agency 

staff as well as providing modern surveying equipment to conduct field work. 

The compact also funded three new regional land administration offices that 

were equipped and staffed to provide local landowners with direct access to land 

administration services. The compact reduced the time for landowners to travel 

to Accra to conduct land-related business and put responsibility and accountability for the provision of land services directly in the regions. Compact funding 

also resulted in the development of a methodology for the systematic surveying, 

formalization and registration of rural land rights. 
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 81

Agriculture Project

This project sought to enhance returns from staple food and horticulture crops produced by poor smallholder farmers and to improve 

delivery of business and technical services to support the expansion of 

commercial agriculture.

Project cost: $196 million

Estimated number of beneficiaries: 878,000

Estimated rise in household income: $294 million

Farmers trained: 66,930 

Hectares under production: 58,568 

Feeder roads rehabilitated: 357 kilometers

The compact provided training to improve farmers’ agronomic skills and business capacity. This is intended to enable farmers to shift their focus from subsistence farming 

to commercial agriculture and maximize their sales. 

During the compact period, Ghanaian producers exported an additional 15,162 metric 

tons of pineapples and 5,825 metric tons of mangoes.
82 ADVANCING PROSPERITY 

Rural Development Project

This project provided community services, including education, water, 

sanitation, and electrification to rural agricultural facilities. It also was 

intended to enhance the capacity of local governments and communities to deliver the related services, ensure maintenance and support 

sustainability.

Project cost: $76 million

Estimated number of beneficiaries: 356,000 

Estimated rise in household income: $75 million 

Water points constructed: 392

Households with access to improved water supply: 27,407 

Students enrolled in schools affected by the activity: 41,109 

Transportation Project

Poor quality roads and transportation linkages inhibit sustainable economic growth by limiting expansion of agricultural opportunities and 

restricting access to domestic and international agricultural markets. 

This project aimed to facilitate growth, promote access to social services 

and support expansion of Ghana’s export-directed horticulture base.

Project cost: $225 million

Estimated number of beneficiaries: 314,000

Estimated rise in household income: $321 million

Length of N1 highway paved: 14 kilometers

Length of trunk roads improved: 75 kilometers

MCC built or rehabilitated 250 school blocks, aiming to improve access to education for 

children living in rural communities.

Following improvements to the N1 highway, travel time at peak hours was reduced from 

one hour prior to the compact to 19 minutes over the 14-kilometer stretch, allowing 

Ghanaians to more easily travel to their jobs and access social services. As a symbol 

of gratitude to the United States, the highway was renamed the George Walker Bush 

Motorway.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 83

Success story

The Nyohini Women’s Group, a farmer-based organization of 50 female 

rice processers in Tamale, received MCC-funded training—and their 

product is helping feed the world’s hungriest people.

The group received nine weeks of training on methods to develop their 

businesses and increase crop production as part of the commercial 

training activity, which addressed several constraints faced by smallholder farmers and agribusinesses like poor production, outdated postharvest techniques and limited business and management skills. 

Before the training, Ayesha Otibo, the chairwoman of the Nyohini 

Women’s Group, did not produce the quality of rice required to integrate 

into the value chain and compete in larger markets. Ayesha and her colleagues can now grow better rice, accurately track their profits and losses 

and successfully negotiate better prices with suppliers and service providers. 

The group is selling its product to the World Food Programme, the United 

Nations’ food aid organization, which purchases 100-kilogram bags of rice 

from the women at prices higher than they would receive in local markets. 

The women, many of whom are widows, credit the MCC-funded 

training for their newfound income, empowering them to pay for their 

children’s school fees and household electricity bills.

The Nyohini Women’s Group boosted their rice yields and sold their crops to the United Nations World Food Programme.
Partnership in the Field

Prior to the MCC compact, Ghanaians were awakened to the fact that 

there would be an investment by U.S. taxpayers of $547 million into our 

country. Through the compact, we demonstrated what can be done. 

We showed that Ghanaians can use the U.S. money effectively to showcase results for Ghana. We enjoyed good collaboration between the 

Millennium Development Authority (MiDA) and MCC colleagues. We 

proved that development projects could be implemented in an apolitical 

manner, in a way that benefits all Ghanaians. 

Rural communities really benefitted from the compact. The way we 

interacted with the district assemblies and beneficiary communities 

gave them a voice. Through district assemblies and regional ministers, 

communities told us when implementation was not going well and we 

responded. MiDA was accountable to the beneficiaries. 

This level of accountability is why the MCC approach should become 

the benchmark in Ghana.

—Martin Eson-Benjamin, Millennium 

Development Authority chief executive officer

Martin Eson-Benjamin worked to ensure that MiDA remained accountable to beneficiaries.

84 ADVANCING PROSPERITY 
Partnership in the Field

One of MCC’s guiding principles is country ownership, which recognizes that development investments are more effective and sustainable 

when they reflect countries’ own priorities and strengthen governments’ 

accountability to their citizens. My travels and work on the Ghana 

Compact constantly reminded me of this principle. I was reminded by 

the cab driver who spoke glowingly about the MCC-funded highway 

in Accra without knowing that I was affiliated with the project. I was 

reminded by news clips of local leaders speaking about the MCA as a 

model for future development programs in Ghana. I was reminded by 

our local partners who worked long hours to implement the projects 

and measure their results. I was reminded and humbled by the schoolchildren who thanked me and MCC for rehabilitating their school. 

These experiences demonstrated the depth of country ownership in 

Ghana. 

While the people I met were excited about individual projects, many 

more were excited by the concept of the compact and what it symbolized. To the cab driver, it symbolized a strong partnership with the 

United States. To the local leaders, it showcased a development program designed and led by Ghanaians. To our local partners, it represented transparency and accountability for results. To the children, it 

represented a brighter future. Each owned the compact in his or her 

own way, and I hope this ownership contributes to continued economic 

development in Ghana.

—Tim Breitbarth, MCC senior program officer

Throughout his travels in Ghana, Tim Breitbarth (right) listened to praise about the 

compact.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 85
completed compact: el salvador

86 ADVANCING PROSPERITY 

www.mcc.gov/elsalvador
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 87

The El Salvador Compact sought to reduce poverty in the country's Northern Zone by improving human and physical capital and increasing production and employment. The compact also 

seeks to reduce travel costs and time in El Salvador and throughout 

Central America.

At a glance

Compact signed: November 29, 2006 

Compact entry into force: September 20, 2007

Compact end: September 20, 2012

Compact total: $460.9 million

Estimated number of beneficiaries: 706,335 

Estimated rise in household income: $570 million

MCC funded the construction of the Technological Institute in Chalatenango, a state-ofthe-art technical and vocational facility.MCC helped connect more than 6,300 Northern Zone households to potable water 

systems.
88 ADVANCING PROSPERITY 

Policies Matter

El Salvador is the second-most deforested country in the Western Hemisphere. 

As part of the Productive Development Project, the Government of El Salvador 

developed a sustainable forestry policy.

Prior to compact signing, the Government of El Salvador undertook significant 

reforms to the rules, regulations and cost factors required to formally create a 

new business.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 89

Connectivity Project

The project aimed to reduce travel cost and time within the Northern 

Zone by designing, constructing and rehabilitating a two-lane paved 

road that serves as a national transport artery and augments El 

Salvador's international transportation connectivity. 

Project cost: $279.8 million 

Estimated beneficiaries: 533,667

Estimated rise in household income: $377 million

Anticipated length of roads paved as a result of the compact: 223 kilometers

Bridges built: 23

The project is expected to reduce travel time between Guatemala and Honduras from 12 hours to six hours. Thousands of people who live along the Northern Transnational 

Highway received training on road safety.
90 ADVANCING PROSPERITY 

Human Development Project

The project sought to increase the human and physical capital of 

Northern Zone residents to take advantage of employment and business 

opportunities by providing formal and non-formal education, improved 

access to potable water systems and basic sanitation services, electricity 

coverage, and improved community infrastructure. 

Project cost: $84.4 million 

Estimated beneficiaries: 243,395 

Estimated rise in household income: $105 million 

Households connected to electricity supply: 27,942

Households connected to potable water: 6,324 

High schools rehabilitated: 20

Productive Development Project

The project increased production and employment in the Northern 

Zone through technical assistance to farmers and small businesses; 

capital investment in commercial projects; credit guarantees for micro-, 

small- and medium-sized enterprises; and technical assistance to financial institutions. 

Project cost: $64.3 million 

Estimated beneficiaries: 47,600 

Estimated rise in household income: $88 million

Improved land under production: 23,566 hectares

Agricultural producers who received assistance: 17,467

Partial guarantees to micro-, small- and medium-sized businesses: 5,310

MCC helped build almost 280 kilometers of pipes—equivalent to the length of El 

Salvador—to connect beneficiaries with clean water.

MCC helped more than half of the Northern Zone’s agricultural producers through the 

provision of seeds, equipment, training, and technical assistance.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 91

Success story

For years, residents of El Salvador’s Northern Zone waited for electrical 

connections for their homes. To work and read at night, they burned 

gas lamps that spewed harmful smoke and caused respiratory diseases. 

Children could study for fewer hours.

Because of the El Salvador Compact and an agreement with the private 

sector, tens of thousands of households have been connected to the 

national power grid or to solar-powered systems. 

FOMILENIO, the organization implementing the compact, attracted 

private-sector financing in 2009 with Virginia-based AES Corporation 

for construction and operation of electricity distribution networks. The 

public-private partnership built 1,300 kilometers of power lines, as well 

as connections and extensions throughout the Northern Zone.

Through the agreement, MCC and the Government of El Salvador 

funded up to 85 percent of the electrification project. AES El Salvador 

funded the remainder—and helped change the lives of thousands of 

poor Salvadorans.

“I never lost hope of having electricity,” beneficiary Maria Guevara 

Marcos Aguilar said. “I am very grateful, because now I can weave the 

reeds at night.”

About 28,000 families now have electricity in their homes, and because 

of those connections and additional ones made by other organizations, 

the percentage of households in the Northern Zone with electricity 

connections rose from 78 percent in 2007 to 90 percent in 2012. 

“What we have learned and what we are implementing,” said José 

Transito Romero, who received basic electrical skills training, “is for the 

benefit of the community.”
Partnership in the Field

FOMILENIO has reached its final year, and I can say with great satisfaction that the results of this great compact are impacting the lives 

of many Salvadorans living in the Northern Zone. The Northern 

Transnational Highway is no longer a distant dream but is a road that 

begins to form an essential part of the development of the population in 

this important region.

During the past five years, I was surprised to experience what a welldesigned plan is able to achieve in meeting the agendas of various people, 

institutions and communities to reduce the poverty of the region. The 

commitment of mayors and communities to accept projects and their 

willingness to do things differently under the principles of sustainability, 

producers eager to learn new techniques to improve crops and motivated to boost income, and employees and contractors exceeding their 

obligations to fulfill goals are just a few examples of this happy story.

The big challenge we now have is to ensure sustainable development 

and accept that poverty will not end with the compact. We must now 

work to make sure El Salvador’s most vulnerable have opportunities to 

live a better life.

—José Angel Quirós, FOMILENIO executive director

José Angel Quirós, back row, visits with beneficiaries of the Productive Development 

Project.

92 ADVANCING PROSPERITY 
Partnership in the Field

When El Salvador was announced as eligible for a MCC compact 

in November 2005, I jumped at the chance to work on its compact 

development team. The initial collaboration with the Salvadorans was 

exciting and fast-paced—we worked together to develop the compact in 

less than one year. 

Surprisingly, the intensity of the effort put in by the Salvadorans and my 

MCC colleagues never really slowed down over the five years of implementation. The compact was a complicated program involving investments in more than five different sectors, but the extra effort was made 

to make sure that all of the moving parts came together in the end.

We already know that all of the hard work has paid off—more children 

are attending school, water systems were built on time and farmers 

were trained in improved technologies—but the evaluation of the impact of those investments on economic growth and people’s well-being 

is ongoing.

In El Salvador, the end of the compact is just the end of one phase and 

the beginning of another, since our dedication to working together to 

measure impacts does not end when the program ends.

—Rebecca Goldsmith, MCC director 

for monitoring and evaluation

Rebecca Goldsmith (third from left) visits with a group of handicraft producers.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 93
madagascar

94 ADVANCING PROSPERITY 

MCC and Madagascar signed a $110 million compact in 2005 

to increase land security, modernize the financial sector and 

spur investment in farms and other rural businesses. In May 

2009, MCC’s Board of Directors authorized the orderly termination of 

the compact with Madagascar because of the military coup and undemocratic transfer of power that occurred in March 2009. The compact 

was formally terminated by MCC on August 31, 2009. At the time of 

termination, a number of activities had already been completed or were 

well underway; therefore, the compact still produced significant results: 

restoration of 95,000 disintegrating land rights documents in regional 

offices, the issuance of 38,121 land certificates, construction of 29 land 

office buildings, strengthening the national inter-bank payment system 

at the Central Bank, increasing the population’s access to savings products, establishing a network of over 350 farmer leaders, and providing 

technical assistance training to about 35,000 farmers and 324 small 

businesses, farmers associations and cooperatives.

www.mcc.gov/madagascar
Partnership in the Field

Who better to take care of the land than those who live, work and 

depend on it for their very existence? The answer to this fundamental question is what impressed me most about how the compact was 

designed and implemented. The Government of Madagascar, MCC, 

farmers, and private sector operators worked together to identify key 

constraints to growth (such as poor land tenure policy, limited improved production and processing technologies and lack of access to 

credit) and developed a compact that responded to these constraints in 

a well-integrated manner.

Integrating specific compact projects (land tenure, agricultural business investment promotion and finance) provided farmers with the 

opportunity to secure their land, acquire business and technical skills 

and access low-cost financial tools. This improved their living conditions through increased agricultural productivity while simultaneously 

helping them manage their natural resources in a sustainable and environmentally-friendly way.

To these farmers, the stewards of their land, an integrated approach 

was not political rhetoric or a means to financial support. It was 

simply the way they live their lives—day to day. They are proving that 

they can produce food in an environmentally-sound manner without 

over reliance on chemical fertilizers, pesticides, herbicides, or petroleum-based energy. They are doing it by following the land’s lead in 

managing their farms and finding ways to produce food and fibers that 

are both economically-sound and ecologically-sustainable. They are 

living evidence that farming as if nature matters is a viable economic 

growth alternative.

Development is never easy. Each and every decision needs to be carefully considered and implemented, balancing environmental concerns 

and the well-being of farm families. This is where the MCC compact 

helped most. It helped families help themselves by providing them 

with the tools to make environmentally-sound, economically-viable 

decisions that protected their natural resource base and that reduced 

poverty with the adoption of sustainable agricultural techniques.

—Glenn Lines, MCC resident country director

Glenn Lines witnessed the changes the Madagascar Compact made in the lives of the 

country’s farmers.

THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 95
96 ADVANCING PROSPERITY 

MALI

MCC and Mali signed a $460 million compact in 2006 to create 

economic growth through investments in the Bamako Sénou 

Airport and an irrigation perimeter in the Alatona zone. 

MCC terminated the compact August 24, 2012, following the undemocratic change of government in the country. Despite the termination, 

the compact produced a number of results: It extended and improved 

the airport’s runway, brought new irrigation to 4,942.4 hectares, distributed 2,929 land titles, improved 81 kilometers of rural roads, and made 

investments in improved financial and social services.

www.mcc.gov/mali
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 97

Partnership in the Field

Earlier this year Aburu Sangare, a project beneficiary in our agriculture 

program, sent us a lengthy, very moving and well-written essay on the 

project. He spoke of a transformed region where people have enough to 

eat, livelihoods are improving and the communities are filled with “contentment and happiness and joy and calm and peace and laughter.”

More recently he sent us another letter.

“In the Alatona rice fields there is great happiness,” he wrote. “People’s 

hearts are joyful. They have gotten something wonderfully good. 

Everyone you see has a smile on his or her face and is laughing. What 

brought this about? It’s farming the dry-season rice, which produced a 

great harvest. Some people threshed 67 sacks, some threshed 75 sacks, 

some threshed 97, some 58. Overall, we’ll just say that what they have 

gotten is wonderfully good.

“The women of Alatona say that they are the ones that MCA-Mali came 

to help. They say this because they have gotten many good things and 

they have seen great improvement. In past years, they were suffering the 

most. But now they thank God and they thank MCA-Mali. 

“I have heard them saying these things on the streets and in meetings. 

We always had to leave home and go into the towns, all day long we 

would ask people ‘Is there any work?’ But now we see that they themselves are coming asking us for work.

“So with all that can be said about MCA-Mali, we’ll just say, ‘Wow, the 

people full of kindness and smiles—those are Americans.’”

The last time I was in Alatona, I asked to meet Aburu. He is a middle-aged man and dressed traditionally. He had just started with his 

one hectare of double-cropped land. We asked how he did. For his one 

hectare, he got 67 bags of paddy—about $3,000 worth of crops. I asked 

him if he was satisfied. 

He looked at me and said, “That is a question that does not need to 

be asked.”

—Jon Anderson, MCC resident country director

Aburu Sangare (left) delivered a letter of gratitude to Jon Anderson.
 Evolution of MCC’s Threshold Program

98 ADVANCING PROSPERITY 

I

n July 2005, MCC approved its first Threshold Program grant in the 

amount of $13 million to Burkina Faso to improve girls’ primary education completion rates. Since then, 20 other countries have implemented 22 additional Threshold Programs, totaling nearly $495 million, 

to improve their policy performance. 

Three-quarters of Threshold Program funding has been dedicated to 

anti-corruption and rule of law reforms.

THRESHOLD PROGRAMS

Africa Burkina Faso*, Kenya, Liberia, Malawi*, Niger, 

Rwanda, São Tomé and Príncipe, Tanzania*, Uganda, 

Zambia*

Asia Indonesia*, Kyrgyz Republic, Philippines*, 

Timor-Leste

Eastern Europe 

and the 

Middle East

Albania I, Albania II, Jordan*, Moldova*, Ukraine

The Americas Guyana, Paraguay I, Paraguay II, Peru

*In addition to completing a Threshold Program, this country also signed a compact.

Reflecting lessons learned from independent program evaluations and 

an extensive internal review, the Threshold Program was redesigned 

to employ a targeted policy focus and program design that is based on 

deeper diagnostic, feasibility and cost-effectiveness analyses. It requires 

increased country ownership and participation. To develop a program, 

the process now includes an analysis to identify the binding constraints 

to economic growth as well as deeper, sector-specific analyses. These 

analyses are performed jointly by partner country economists and MCC 

and are tailored for each country’s policy environment and resource 

capacity. Four countries—Tunisia, Honduras, Niger, and Nepal—are 

currently participating in MCC’s redesigned Threshold Program.

Threshold Program Success

The World Customs Organization praised Paraguay’s second Threshold 

Program for the implementation of a single-window system for imports, 

which has strengthened the capacity of Paraguayan customs to combat 

evasion and corruption while reducing the cost and time required to process import permits. In 2011, Paraguay’s Threshold Program also rolled 

out a new, integrated logistics system for medicines and supplies, allowing officials to track medicines throughout the country’s supply chain of 

warehouses, hospitals and clinics. The efficiency of the new system saves 

about $6.2 million per year and prevents shortages, waste and fraud. 

Paraguay’s Ministry of Health is using its own budget and management 

resources to maintain the system to ensure its sustainability.
THE STORY OF THE MILLENNIUM CHALLENGE CORPORATION | 2004–2012 99

leadership

MCC’s Board of Directors 

Hillary Rodham Clinton, U.S. Secretary of State, Chair

Timothy F. Geithner, U.S. Secretary of the Treasury, Vice Chair

Dr. Rajiv Shah, Administrator, U.S. Agency for International 

Development

Ambassador Ron Kirk, U.S. Trade Representative

Daniel W. Yohannes, MCC Chief Executive Officer

Mark Green, Senior Director, U.S. Global Leadership Coalition

Alan J. Patricof, Founder and Managing Director, Greycroft, LLC

MCC’s Senior Management 

Cassandra Q. Butts, Senior Advisor, Office of the Chief Executive 

Officer

T. Charles Cooper, Vice President, Department of Congressional and 

Public Affairs 

Patrick C. Fine, Vice President, Department of Compact Operations 

Sheila Herrling, Vice President, Department of Policy and Evaluation

Steven M. Kaufmann, Chief of Staff, Office of the Chief Executive 

Officer 

Frances Reid, Senior Investment and Risk Officer, Office of the Chief 

Executive Officer 

Melvin F. Williams, Jr., Vice President, General Counsel and Corporate 

Secretary

Chantale Yokmin Wong, Vice President and Chief Financial Officer, 

Department of Administration and Finance 

Jonathan Bloom, Deputy Vice President, West Africa

Thomas F. Hurley, Deputy Vice President, Europe, Asia, Pacific, and 

Latin America

Andrew J. Mayock, Deputy Vice President, East and Southern Africa

James Parks, Deputy Vice President, Department of Policy and 

Evaluation

Henry C. Pitney, Deputy General Counsel

Jolyne Sanjak, Deputy Vice President, Technical Services Division

Margaret L. Yao, Deputy Vice President, Department of Administration 

and Finance

Sixto F. Aquino, Managing Director, Monitoring and Evaluation

James R. Blades, Managing Director, Contracts and Grants 

Management

Jonathan Brooks, Managing Director, Europe, Asia, Pacific, and Latin 

America

Nasserie Carew, Managing Director, Public Affairs

Thomas Kelly, Managing Director, Cooperation and Policy Improvement

Kyeh Kim, Managing Director, East and Southern Africa

Paul Malone, Chief Information Officer

Alicia Phillips Mandaville, Managing Director, Development Policy

James Mazzarella, Managing Director, Congressional Affairs

Agnieszka Rawa, Managing Director, West Africa

Lori White, Acting Managing Director, Administrative Services and 

Human Resources

As of November 5, 2012
100 ADVANCING PROSPERITY 

NOTES

Data Notes

Statistics cited in this book come from projections compiled by MCC. The number of beneficiaries and the expected impact on their income are 

projections of the compact’s impact over 20 years. 

Due to different closing dates for each compact, all data for Madagascar, Honduras, Cape Verde, Georgia, Nicaragua, Armenia, and Benin is 

current as of February 2012. 

All data for Ghana, Mali and El Salvador is current as of September 2012.

Data for Vanuatu is current as of April 2011. 

Photography Notes

Cover: National Transnational Highway, El Salvador, Luis Toba for Fomilenio

Pages i, 4, 8, 11, 17, 20, inside back cover: Jake Lyell for MCC

Publication Notes

Publication Production Team:

Scott Fontaine and Linda Smiroldo Herda, Writing

Andrew S. Ladson, Art Direction and Graphic Design

Nasserie Carew, Production Management

Department of Congressional and Public Affairs

Reducing Poverty Through Growth

2012-001-1204-01 www.mcc.gov