TREATIES AND OTHER INTERNATIONAL ACTS SERIES 10-923 

________________________________________________________________________ 

ECONOMIC ASSISTANCE 

 Millennium Challenge Compact 

 Between the 

UNITED STATES OF AMERICA 

and SENEGAL 

Signed at Washington September 16, 2009 

with 

Annexes 
 NOTE BY THE DEPARTMENT OF STATE 

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

(80 Stat. 271; 1 U.S.C. 113)—

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

under the authority of the Secretary of State shall be competent 

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

treaties, and proclamations by the President of such treaties and 

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

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

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

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

or authentication thereof.” 
SENEGAL 

Economic Assistance 

 Millennium Challenge Compact 

 signed at Washington September 16, 2009; 

 Entered into force September 23, 2010. 

 With annexes. 
MILLENNIUM CHALLENGE COMPACT

BETWEEN

THE UNITED STATES OF AMERICA

ACTING THROUGH

THE MILLENNIUM CHALLENGE CORPORATION

AND

THE REPUBLIC OF SENEGAL
MILLENNIUM CHALLENGE COMPACT

TABLE OF CONTENTS

Pa2e

Article 1. Goal and Objectives 1

Section 1.1 Compact Goal 1

Section 1.2 Program Objective 1

Section 1.3 Project Objectives 1

Article 2. Funding and Resources 2

Section 2.1 Program Funding 2

Section 2.2 Compact Implementation Funding 2

Section 2.3 MCC Funding 3

Section 2.4 Disbursement 3

Section 2.5 Interest 3

Section 2.6 Government Resources; Budget 3

Section 2.7 Limitations on the Use of MCC Funding 3

Section 2.8 Taxes 4

Article 3. Implementation 6

Section 3.1 Program Implementation Agreement 6

Section 3.2 Government Responsibilities 6

Section 3.3 Policy Performance 7

Section 3.4 Government Assurances 7

Section 3.5 Implementation Letters 7

Section 3.6 Procurement 7

Section 3.7 Records; Accounting; Covered Providers; Access 8

Section 3.8 Audits; Reviews 9

Article 4. Communications 9

Section 4.1 Communications 9

Section 4.2 Representatives 10

Section 4.3 Signatures 10

Article 5. Termination:, Suspension: Refunds 11

Section 5.1 Termination: Suspension 1 1

Section 5.2 Refunds; Violation 12

Section 5.3 Survival 12

Article 6. Compact Annexes: Amendments; Governing Law 12

Section 6.1 Annexes 12

Section 6.2 Amendments 12

Section 6.3 Inconsistencies 13
Section 6.4 Governing Law 13

Section 6.5 Additional Instruments 13

Section 6.6 References to MCC Website 13

Section 6.7 References to Laws. Regulations. Policies and Guidelines 13

Section 6.8 MCC Status 14

Section 6.9 English Language 14

Section 6.10 Counterparts: Electronic Delivery 14

Article 7. Entry Into Force 14

Section 7.1 Domestic Requirements 14

Section 7.2 Conditions Precedent to Entry into Force 15

Section 7.3 Date of Entry into Force 15

Section 7.4 Compact Term 15

Section 7.5 Provisional Application 15

Article 8. Additional Government Covenants 15

Section 8.1 Additional Government Resources 15

Section 8.2 Procurement 16

Annex I: Program Description

Schedule 1 - Delta Activity Construction Activities

Schedule 2 - Form of MCA-Senegal Decree

Annex II: Multi-Year Financial Plan Summary'

Annex III: Description of the Monitoring and Evaluation Plan

Annex IV: Conditions to Disbursement of Compact Implementation Funding

Annex V: Definitions

Annex VI: Specific Tax Exemption Mechanisms

Schedule A - Value Added Tax (VAT)

Schedule B - Customs Duties

Schedule C - Corporate Income Tax

Schedule D - Individual Income Tax

Schedule E - Fuel Tax

Schedule F - Registration Tax. Registration Fees and Stamp Duty
MILLENNIUM CHALLENGE COMPACT

PREAMBLE

This MILLENNIUM CHALLENGE COMPACT (this "Compact') is between the United States

of America. acting through the Millennium Challenge Corporation, a United States government

corporation ("MCC'). and the Republic of Senegal ("Senegal"). acting through its Government

(the "Government-) (individually a -Party- and collectively, the -Parties").

Recalling that the Government consulted with the private sector and civil society of Senegal to

determine the priorities for the use of Millennium Challenge Account assistance and developed

and submitted to MCC a proposal for such assistance focused on poverty reduction: and

Recognizing that MCC wishes to help Senegal implement a program to achieve the goal and

objectives described herein (the "Program");

Capitalized terms used herein shall have the meanings specified in Annex V hereto.

The Parties hereby agree as follows:

ARTICLE 1.

GOAL AND OBJECTIVES

Section 1.1 Compact Goal. The goal of this Compact is to reduce poverty in Senegal through

economic growth (the "Compact Goan.

Section 1.2 Program Objective. The objective of the Program (as further described in

Annex I) (the "Program Objective -) is to enable improved agricultural productivity and to

expand access to markets and services through critical infrastructure investments in roads and

irrigation sectors.

Section 1.3 Project Objectives. The objectives of the Projects (as further described in

Annex I) (each a "Project Objective" and collectively, the "Project Objectives") are as follows:

(a) The objective of the Roads Rehabilitation Project is to expand access to markets

and services by improving the condition of certain strategic roads and reducing transportation

time and costs.

(b) The objective of the Irrigation and Water Resources Management Project is to

improve the productivity of the agricultural sector by extending and improving the quality of the

irrigation system in certain agriculture-dependent areas of northern Senegal.
ARTICLE 2.

FUNDING AND RESOURCES

Section 2.1 Program Funding.

MCC hereby grants to the Government. under the terms of this Compact. an amount not to

exceed Five Hundred Thirty Five Million United States Dollars (USS535,000,000) ("Program

Funding-) for use by the Government to implement the Program. The allocation of Program

Funding uses is generally described in Annex II to this Compact.

Section 2.2 Compact Implementation Funding.

(a) MCC hereby grants to the Government. under the terms of this Compact, in

addition to the Program Funding described in Section 2.1, an amount not to exceed Five Million

United States Dollars (US$5,000,000) ("Compact Implementation Funding-) under Section

609(g) of the Millennium Challenge Act of 2003. as amended (the "MCA Act"), for use by the

Government as agreed by the Parties, which may include use for the following purposes:

(i) financial management and procurement activities;

(ii) administrative activities including start-up costs such as staff salaries and

administrative support expenses such as office equipment, and computers and other information

technology or capital equipment; and

(iii) other Compact implementation activities approved by MCC.

The allocation of Compact Implementation Funding among uses is generally described in

Annex II to this Compact.

(b) Notwithstanding Section 7.3 of this Compact, this Section 2.2 and any other

provisions of this Compact necessary to make use of Compact Implementation Funding for the

purposes set forth herein, shall be effective. for purposes of Compact Implementation Funding

only, as of the date this Compact is signed by MCC and the Government.

(c) Each Disbursement of Compact Implementation Funding is subject to satisfaction

of the conditions to such disbursement as set forth in Annex IV.

(d) If. after the first anniversary of this Compact entering into force. MCC determines

that the full amount of Compact Implementation Funding under Section 2.2(a) of this Compact

exceeds the amount which reasonably can be utilized for the purposes and uses set forth in

Section 2.2(a) of this Compact. MCC. by written notice to the Government. may withdraw the

excess amount. thereby reducing the amount of the Compact Implementation Funding as set

forth in Section 2.2(a) (such excess. the "Excess CIF Amount .). In such event, the amount of

Compact Implementation Funding granted to the Government under Section 2.2(a) will be

reduced by the Excess CIF Amount. and MCC will have no further obligations with respect to

such Excess CIF Amount.

e) MCC. at its option by written notice to the Government. may elect to grant to the

Go‘emment an amount equal to all or a portion of such Excess CIF Amount as an increase in the
Program Funding. and such additional Program Funding will be subject to the terms and

conditions of this Compact and any relevant supplemental agreement applicable to Program

Funding.

Section 2.3 MCC Funding.

Program Funding and Compact Implementation Funding are collectively referred to in this

Compact as "MCC Funding.-

Section 2.4 Disbursement.

In accordance with this Compact and the Program Implementation Agreement. MCC will

disburse MCC Funding for expenditures incurred in furtherance of the Program (each instance, a

"Disbursement-). Subject to the satisfaction of all applicable conditions, the proceeds of such

Disbursements will be made available to the Government, at MCC's sole election, by (a) deposit

to one or more bank accounts established by the Government and acceptable to MCC (each, a

"Permitted Account-) or (b) direct payment to the relevant provider of goods, works or services

for the implementation of the Program MCC Funding may be expended only to cover Program

expenditures as provided in this Compact and the Program Implementation Agreement.

Section 2.5 Interest. The Government will pay to MCC any interest or other earnings that

accrue on MCC Funding (whether by directing such payments to a bank account outside Senegal

that MCC may from time to time indicate or as otherwise directed by MCC).

Section 2.6 Government Resources: Budget.

(a) The Government will provide all funds and other resources, and will take all

actions. that are necessary to carry out the Government's responsibilities and obligations under

this Compact.

(b) The Government will use its best efforts to ensure that all MCC Funding it

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

budget on a multi-year basis.

( c) The Government will not reduce the normal and expected resources that it would

otherwise receive or budget from sources other than MCC for the activities contemplated under

this Compact and the Program.

(d) Unless the Government discloses otherwise to MCC in writing, MCC Funding

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

the activities contemplated under this Compact and the Program.

Section 2.7 Limitations on the Use of MCC Funding. The Government will ensure that MCC

Funding (or any refunds or reimbursements of MCC Funding paid by the Government in

accordance w ith this Compact that MCC permits to be used in connection with the Program) will

not be used for any purpose that would violate United States law or policy. as specified in this

Compact or as further notified to the Government in writing or by posting from time to time on

the MCC website at www.mcc.gov (the 'MCC Website-). including but not limited to the

following purposes:
7".

(a) for assistance to. or training of the military. police. militia. national guard or

other quasi-military organization or unit;

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

substantial displacement of United States production;

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

significant environmental. health. or safety hazard, as further described in MCC's environmental

and social guidelines posted from time to time on the MCC Website or otherwise made available

to the Government by MCC (the "MCC Environmental Guidelines"); or

(d) to pay for the performance of abortions as a method of family planning or to

motivate or coerce any person to practice abortions. to pay for the performance of involuntary

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

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

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

of family planning.

Section 2.8 Taxes.

(a) Unless the Parties otherwise specifically agree in writing, the Government will

ensure that each of the following is free from the payment or imposition of any existing or future

taxes, duties, levies. contributions, or other similar charges ( -Taxes-) of or in Senegal (including

any such Taxes imposed by a national, regional. local, or other governmental or taxing authority

of or in Senegal) (i) the Program: (ii) MCC Funding; (iii) interest or earnings on MCC Funding;

(iv) any Project or activity implemented under the Program: (v) MCA-Senegal (or MFG-MCA

prior to MCA-Senegal's establishment): (vi) goods. works, services. technology, and other assets

and activities under the Program or any Project: (vii) persons and entities that provide such

goods. works, services. technology, and assets, or perform such activities; and (viii) income,

profits. and payments with respect thereto. The Parties acknowledge and agree that "Taxes"

include, among other things, value added and other transfer taxes (including exemption

therefrom with credit), profit and income taxes, property and ad valorem taxes, import and

export duties and taxes (including for goods imported and re-exported for personal use),

withholding taxes, payroll taxes, social security and social insurance contributions.

(b) Without limiting the generality of the definition of Taxes as set forth in

Section 2.8(a). the Parties hereby agree that the following taxes. duties, fees, and similar charges

are also specifically included in the definition of "Taxes" requiring exemptions in accordance

with this Compact: (i) customs duties and associated fees (including redevances statistiques

(RS. currently 1%). droits de douanes (DD. currently 0-20%). WA (VAT. currently 18%). les

droits des chargeurs (COSEC. currently 0.20%). and les prelêvements communazdaires de

I 7:E:110A ou de la CEDEAO (for example. PCS. currently. 1% and CEDEAO. currently 0.5%)):

(ii) value added taxes (VAT): (iii) taxes on petroleum products. including but not limited to the

tax speciale st ir hydrocarbons: (iv) registration and stamp taxes: (v) taxes on the corporate

income of professional. accounting or consulting firms ("benefices 11011 C0111111e1TiClUX — ) derived

from Compact-related work: (vi) taxes on the corporate income of companies or other legal

persons ("benefices indu.striels el commerciaux -1 derived from Compact-related work: and (vii)

taxes on the personal income of indiN iduals working under the Compact.
(c) Unless otherwise agreed by MCC in writing. set forth in Annex VI are procedures

that the Government will implement to effectuate the exemption from Taxes required by Section

2.8(a) and Section 2.8(b) above with respect to each of the Taxes addressed therein. To the

extent that there are Taxes not addressed in Annex VI. whether currently in force or established

in the future, that MCC determines, in its sole discretion. are not being exempted by the

Government in accordance with this Section 2.8. the Government hereby agrees that it will

implement appropriate procedures (approved in writing by MCC) to ensure that such additional

Taxes are exempted in accordance with this Section 2.8. For the avoidance of doubt, the

identification (or lack of identification) of Taxes in Annex VI, or the description (or lack of

description) of procedures to implement the required exemption from such Taxes in Annex VI.

shall in no way limit the scope of the tax exemption required by this Section 2.8.

(d) Unless otherwise agreed in writing by the Parties. the provisions of Section 2.8(a)

and 2.8(b) shall not apply to income Taxes on, and contributions with respect to, individuals or

legal persons who are nationals of Senegal, provided that such Taxes and contributions are not

discriminatory and are generally applicable to all nationals in Senegal.

(e) In complying with the tax exemption obligations set forth herein. the Government

will exempt MFG-MCA. MCA-Senegal, the Fiscal Agent, the Procurement Agent, and/or any

other provider of goods, services, or works in connection with the Program from any obligation

imposed by the laws of Senegal to withhold any Taxes from any payments made to any natural

persons or legal persons working under the Program to the extent that such natural persons or

legal persons are not nationals of Senegal

(t) For the purposes of Section 2.8(d) and 2.8(e), the term ' national - means natural

persons who are citizens or permanent residents of Senegal and legal persons who are formed

under the laws of Senegal (excluding MCA-Senegal, MFG-MCA and any other entity formed for

the purpose of implementing the Government's obligations hereunder); provided that in

determining if a natural person is a permanent resident of Senegal or if a legal person has been

formed under the laws of Senegal, the taxable status of such individual or legal person shall be

based on its status at the time it is awarded or executes a Compact-related agreement or contract,

and such initial determination shall not change regardless of: (i) the type of agreement or

contract used to employ or engage such individual, company. or other legal person, (ii) any laws

of Senegal that purport to change such status based on period of contract performance or period

of time residing and/or working in Senegal, and/or (iii) any requirement under the laws of

Senegal that a company or other legal person must establish a branch office in Senegal. or

otherwise register or organize itself under the laws of Senegal, in order to provide goods,

sery ices. or works in Senegal.

(g) The Government will from time to time execute and deliver. or cause to be

executed and delivered. such other instructions. instruments or documents. and to take or cause

to be taken such other actions as may be necessary or appropriate in the determination of MCC

in order to implement this Section 2.8 of the Compact. Such further assurances may include.

without limitation. (i) passage of an -urine d 'application- (or such similar document (or

documents) having the same legal effect). in form and substance satisfactory to MCC to provide

specific instructions to Government aaents with respect to their role in the implementation of the

exemption from Taxes required by this Compact: or (ii) provision of an attestation arexoneration

to appropriate beneficiaries of the lax exemption described in this Compact.
(h) If a Tax has been levied and paid contrary to the requirements of this Section 2.8.

or any agreement entered into pursuant to this Section 2.8. the Government will refund promptly

to MCC (or to another party as designated by MCC) the amount of such Tax in United States

Dollars or the currency of Senegal within thirty (30) days (or such other period as may be agreed

in writing by the Parties) after the Government is notified in writing (whether by MCC. MFGMCA. or MCA- Senegal) that such Tax has been paid.

(i) No MCC Funding, proceeds thereof, or Program assets may be applied by the

Government in satisfaction of its obligations under this Section 2.8.

ARTICLE 3.

IMPLEMENTATION

Section 3.1 Program Implementation Agreement. Prior to entry into force, the Government

and MCC will enter into an agreement relating to, among other matters, implementation

arrangements, fiscal accountability and disbursement, and use of MCC Funding (the "Program

Implementation Agreement' or "PIA"). The Government will implement the Program in

accordance with the Compact and the PIA.

Section 3.2 Government Responsibilities.

(a) The Government has principal responsibility for overseeing and managing the

implementation of the Program.

(b) The Government hereby designates MCA-Senegal. an entity to be established

through passage of a decree substantially in the form and substantially on the terms of the form

of decree set forth in Schedule 2 to Annex I, as the accountable entity to implement the Program

and to exercise and perform the Government's rights and responsibilities with respect to the

oversight, management, and implementation of the Program. including, without limitation,

managing the implementation of Projects and their Activities, allocating resources, and

managing procurements. Such entity will be referred to herein as -MCA-Senegal, - and will

have the authority to bind the Government with regard to all Program activities. Prior to MCASenegal's establishment, the Government hereby designates the Mission de Formulation et du

Gestion du MCA Senegal ("MFG-MCA" ), established by Decret N° 2008-53 dated January 29.

2008, to act on behalf of the Government with respect to the Compact and the Program. For the

avoidance of doubt. the designation of MCA-Senegal (and MFG-MCA prior to MCA-Senegal's

establishment) as set forth in this Section 3.2(b) will not relieve the Government of any of its

obligations or responsibilities as set forth hereunder, under any related agreement (including.

upon execution thereof. the PIA). or in the Program Guidelines, for which the Government

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

Section 3.2(b).

(c ) The Government will ensure that no law or regulation in Senegal now or

hereinafter in effect makes or will make unlawful or otherwise prevent or hinder the performance

of any of the Government's obligations under this Compact, the PIA. or any other related

agreement or any transaction contemplated hereby or thereby.

6
(d) The Government will ensure that any assets or services funded in whole or in part

(directly or indirectly) by MCC Funding will be used solely in furtherance of this Compact and

the Program unless otherwise agreed by MCC in writing.

(e) The Government will take all necessary or appropriate steps to achieve the

Program Objective and Project Objectives during the Compact Term.

(f) The Government will fully comply with the Program Guidelines, as applicable, in

its implementation of the Program.

Section 3.3 Policy Performance. In addition to undertaking the specific policy. legal and

regulatory reform commitments identified in Annex I (if any). the Government will seek to

maintain and to improve its level of performance under the policy criteria identified in

Section 607 of the MCA Act, and the selection criteria and methodology used by MCC.

Section 3.4 Government Assurances. The Government assures MCC that:

(a) as of the date this Compact is signed by the Government, the information

provided to MCC by or on behalf of the Government in the course of reaching agreement with

MCC on this Compact is true. correct and complete in all material respects;

(b) this Compact. upon its ratification by the Government. does not. and will not,

conflict with any other international agreement or other obligation of the Government or any of

the laws of Senegal: and

(c) the Government will not invoke any of the provisions of its internal law to justify

or excuse a failure to perform its duties or responsibilities under this Compact.

Section 3.5 Implementation Letters. From time to time, MCC may provide guidance to the

Government in writing on any matters relating to this Compact. MCC Funding, or

implementation of the Program (each, an "Implementation Letter-). The Government will apply

such guidance in implementing the Program. Without limiting the foregoing, either Party may,

through its Principal Representative or any Additional Representative, as the case may be,

initiate discussions that may result in a jointly agreed-upon Implementation Letter to confirm and

record their mutual understanding on aspects related to the implementation of this Compact, the

PIA. or other related agreements.

Section 3.6 Procurement. The Government will ensure that the procurement of all goods,

works. and services by the Government. or any applicable provider providing goods, works, and

sen- ices, to implement the Program will be consistent with the program procurement guidelines

posted from time to time on the MCC Website (the "IVICC Program Procurement Guidelines").

The MCC Program Procurement Guidelines include, among others, the following requirements:

(a) open. fair. and competitive procedures must be used in a transparent manner to

solicit. award and administer contracts and to procure goods. works. and services:

(b) solicitations for goods. works. and services must be based upon a clear and

accurate description of the goods. works. and services to be acquired:
(c) contracts must be awarded only to qualified contractors that have the capability

and willingness to perform the contracts in accordance with their terms on a cost effective and

timely basis: and

(d) no more than a commercially reasonable price, as determined, for example. by a

comparison of price quotations and market prices, will be paid to procure goods. works, and

services.

Section 3.7 Records: Accounting: Covered Providers: Access.

(a) Government Books and Records. The Government will maintain, and will use its

best efforts to ensure that all Covered Providers maintain accounting books, records. documents.

and other evidence relating to the Program adequate to show. to MCC's satisfaction, the use of

all MCC Funding ("Compact Records"). In addition, the Government will furnish or cause to be

furnished to MCC, upon its request, all such Compact Records.

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

that all Covered Providers maintain Compact Records in accordance with generally accepted

accounting principles prevailing in the United States, or at the Government's option and with

MCC's prior written approval. other accounting principles, such as those (i) prescribed by the

International Accounting Standards Board, or (ii) then prevailing in Senegal. Compact Records

must be maintained for at least five (5) years after the end of the Compact Term or for such

longer period. if any. required to resolve any litigation, claims or audit findings or any statutory

requirements.

(c) Providers and Covered Providers. Unless the Parties agree otherwise in writing, a

"Provider" is (i) any entity of the Government that receives or uses MCC Funding or any other

Program asset in carrying out activities in furtherance of this Compact or (ii) any third party that

receives at least US$50.000 in the aggregate of MCC Funding (other than as salary or

compensation as an employee of an entity of the Government) during the Compact Term. A

"Covered Provider" is (i) a non-United States Provider that receives (other than pursuant to a

direct contract or agreement with MCC) US$300,000 or more of MCC Funding in any

Government fiscal year or any other non-United States person or entity that receives, directly or

indirectly. US$300.000 or more of MCC Funding from any Provider in such fiscal year, or (ii)

any United States Provider that receives (other than pursuant to a direct contract or agreement

with MCC) US$500,000 or more of MCC Funding in any Government fiscal year or any other

United States person or entity that receives, directly or indirectly. US$500,000 or more of MCC

Funding from any Provider in such fiscal year.

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

permit. or cause to be permitted, authorized representatives of MCC. an authorized United States

inspector general. the United States Government Accountability Office. any auditor responsible

for an audit contemplated herein or otherwise conducted in furtherance of this Compact. and any

agents or representatives engaged by MCC or the Government to conduct any assessment.

review. or evaluation of the Program. the opportunity to audit. review. evaluate, or inspect

facilities and activities funded in whole or in pan by MCC Funding.
Section 3.8 Audits: Reviews.

(a) Government Audits. Except as the Parties may otherwise agree in writing, the

Government will, on at least a semi-annual basis. conduct, or cause to be conducted, financial

audits of all disbursements of MCC Funding covering the period from signing of this Compact

until the earlier of the following December 31 or June 30 and covering each six-month period

thereafter ending December 31 and June 30. through the end of the Compact Term. In addition.

upon MCC's request. the Government will ensure that such audits are conducted by an

independent auditor approved by MCC and named on the list of local auditors approved by the

Inspector General of MCC (the "Inspector General-) or a United States-based certified public

accounting firm selected in accordance with the "Guidelines for Financial Audits Contracted by

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

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

Guidelines and be subject to quality assurance oversight by the Inspector General. Each audit

must be completed and the audit report delivered to MCC no later than ninety (90) days after the

first period to be audited and no later than ninety (90) days after each June 30 and December 31

thereafter. or such other period as the Parties may otherwise agree in writing.

(b) Audits of United States Entities. The Government will ensure that agreements

between the Government or any Provider. on the one hand, and a United States nonprofit

organization, on the other hand, that are financed with MCC Funding state that the United States

nonprofit organization is subject to the applicable audit requirements contained in OMB Circular

A-133 issued by the United States Government Office of Management and Budget ( -OMIT).

The Government will ensure that agreements between the Government or any Provider, on the

one hand. and a United States for-profit Covered Provider, on the other hand. that are financed

with MCC Funding state that the United States for-profit organization is subject to audit by the

applicable United States Government agency, unless the Government and MCC agree otherwise

in writing.

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

Covered Providers take, where necessary, appropriate and timely corrective actions in response

to audits, (ii) consider whether a Covered Provider's audit necessitates adjustment of the

Government's records, and (iii) require each such Covered Provider to permit independent

auditors to have access to its records and financial statements as necessary.

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

Government's use of MCC Funding.

(e) Cost of Audits. Reviews or Evaluations. MCC Funding may be used to fund the

costs of any audits. reviews, or evaluations required under this Compact.

ARTICLE 4.

COMMUNICATIONS

Section 4.1 Communications. Any document or communication required or submitted by

either Part) to the other under this Compact must be in writing and. except as otherwise agreed

ith MCC. in English. For this purpose. the address of each Party is set forth below.
To MCC:

Millennium Challenge Corporation

Attention: Vice President. Compact Implementation

(in each case. with a copy to the Vice President and General Counsel)

875 Fifteenth Street, N.W.

Washington. DC 20005

United States of America

Facsimile: (202) 521-3700

Telephone: (202) 521-3600

Email: VPImplementationrilmcc.gox (Vice President. Compact Implementation)

VPGeneralCounselritmcc.gov (Vice President and General Counsel)

To the Government:

Ministry of Economy and Finance

Rue Rene Ndiaye

BP 4017

Dakar, Senegal

Tel: +221 (33) 822 2899

Fax: +221 (33) 822 4195

with a copy to:

To MFG-MCA (until MCA-Senegal's establishment)

Avenue Bourguiba

Immeuble Gamma. 3eme etage

Dakar. Senegal

Tel: +221 (33) 869 1665

Fax: +221 (33) 825 0887

Upon establishment of MCA-Senegal, MCA-Senegal will notify the Parties of its contact details.

Section 4.2 Representatives. For all purposes of this Compact, the Government will be

represented by the individual holding the position of. or acting as. the Minister of Economy and

Finance of Senegal. and MCC will be represented by the individual holding the position of. or

acting as, Vice President. Compact Implementation (each of the foregoing, a "Principal

Representative"). Each Party. by written notice to the other Party, may designate one or more

additional representatives (each, an "Additional Representative") for all purposes other than

signing amendments to this Compact. The Government hereby irrevocably designates the

Director General of MFG-MCA as an Additional Representative, to be replaced by the Director

General of MCA-Senegal. upon the establishment of MCA-Senegal. A Party may change its

Principal Representative to a new representative that holds a position of equal or higher rank

upon written notice to the other Party.

Section 4.3 Signatures. With respect to all documents other than this Compact or an

amendment to this Compact. a signature delivered by facsimile or electronic mail will he binding

on the PartN. deli \ erin2 such shmature to the same extent as an original signature would be.

I0
ARTICLE 5.

TERMINATION; SUSPENSION; REFUNDS

Section 5.1 Termination: Suspension.

(a) Either Party may terminate this Compact without cause in whole by giving the

other Party thirty (30) days' written notice. MCC may also terminate this Compact without

cause in part by giving the Government thirty (30) days' written notice.

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

terminate this Compact or MCC Funding, in whole or in part. and any obligation related thereto,

if MCC determines that any circumstance identified by MCC as a basis for suspension or

termination (whether in writing to the Government or by posting on the MCC Website) has

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

(i) the Government fails to comply with its obligations under this Compact,

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

with this Compact or the Program,

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

probable that the Program Objective or any of the Project Objectives will not be achieved during

the Compact Term or that the Government will not be able to perform its obligations under this

Compact;

(iii) a use of MCC Funding or continued implementation of this Compact or

the Program violates or would violate applicable law or United States Government policy,

whether now or hereafter in effect:

(iv) the Government or any other person or entity receiving MCC Funding or

using assets acquired in whole or in part with MCC Funding is engaged in activities that are

contrary to the national security interests of the United States;

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

would render Senegal ineligible to receive United States economic assistance under Part I of the

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

application of any provision of the Foreign Assistance Act of 1961 or any other provision of law;

(vi) the Government has engaged in a pattern of actions inconsistent with the

criteria used to determine the eligibility of Senegal for assistance under the MCA Act; or

(vii) the Government or another person or entity receiving MCC Funding or

using assets acquired in whole or in part with MCC Funding is found to have been convicted of a

narcotics offense or to have been engaged in drug trafficking.

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

Compact: provided. however. MCC may permit NICC Funding to be used. in compliance with

this Compact and the PIA. to pay for (i) reasonable expenditures for goods. works, or services

that are properly incurred under or in furtherance of the Program before expiration. suspension.

or termination of this Compact. and (ii) reasonable expenditures (including administrative
expenses) properly incurred in connection with the winding up of the Program within one

hundred twenty (120) days after the expiration. suspension. or termination of this Compact, so

long as, with respect to (i) and (ii) herein, the request for such expenditures is submitted within

ninety (90) days after such expiration, suspension, or termination.

(d) Subject to Section 5.1(c), upon the expiration. suspension. or termination of this

Compact. (i) any amounts of MCC Funding not disbursed by MCC in accordance with the

Compact and the PIA will be automatically released from any obligation in connection with this

Compact, and (ii) any amounts of MCC Funding disbursed to the Permitted Account by MCC

but not expended before the expiration, suspension or termination of this Compact. plus accrued

interest thereon will be returned to MCC within thirty (30) days after the Government receives

MCC's request for such return; provided, however, that if this Compact is suspended or

terminated in part, MCC may request a refund for only the amount of MCC Funding allocated to

the suspended or terminated portion.

(e) MCC may reinstate any suspended or terminated MCC Funding under this

Compact if MCC determines that the Government or other relevant person or entity has

committed to correct each condition for which MCC Funding was suspended or terminated.

Section 5.2 Refunds: Violation.

(a) If any MCC Funding, any interest or earnings thereon, or any asset acquired in

whole or in part with MCC Funding is used for any purpose in violation of the terms of this

Compact or the PIA. including but not limited to any violation of the Program Guidelines, then

MCC may require the Government to repay to MCC in United States Dollars the value of the

misused MCC Funding, interest. earnings, or asset. plus interest within thirty (30) days after the

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

Funding, proceeds thereof or Program assets to make such payment.

(b) Notwithstanding any other provision in this Compact or any other agreement to

the contrary. MCC's right under this Section 5.2 for a refund will continue during the Compact

Term and for a period of (i) five years thereafter or (ii) one year after MCC receives actual

knowledge of such violation, whichever is later

Section 5.3 Survival. The Government's responsibilities under Sections 2.4. 2.6. 2.7. 2.8, 3.7.

3.8, 5.1(c), 5.1(d), 5.2. 5.3. 6.2 6.4, 6.9. and 8.1 of this Compact will survive the expiration.

suspension or termination of this Compact.

ARTICLE 6.

COMPACT ANNEXES; AMENDMENTS; GOVERNING LAW

Section 6.1 Annexes. Each annex to this Compact constitutes an integral part hereof. and

references to "Annex . ' mean an annex to this Compact unless otherwise expressly stated.

Section 6.2 Amendments.

(a) The Parties may amend this Compact only by a written agreement signed by the

Principal Representatives.

12
(b) Without formally amending this Compact. the Government hereby acknowledges

and agrees that the Parties. may. through the Principal Representatives or any Additional

Representative, as the case may be. in writing. modify any Annex to this Compact to (i) suspend.

terminate, or modify any project described in Annex I (each, a "Project- and collectively. the

"Projects-) or to create a new project, (ii) change the allocations of funds among the Projects, the

Project activities. or any activity under Program administration or monitoring and evaluation, or

between a Project identified as of the signature of this Compact and a new project. (iii) modify

the terms of Section B.3 of Annex I. or (iv) add, delete. or waive any condition precedent

described in Annex IV, provided that any such modification described in (i) through (iv) (I) is

consistent in all material respects with the Program Objective, (2) does not cause the amount of

Program Funding to exceed the aggregate amount specified in Section 2.1 of this Compact (as

may be modified by operation of Section 2.2(e) of this Compact), (3) does not cause the amount

of Compact Implementation Funding to exceed the aggregate amount specified in Section 2.2(a)

of this Compact, (4) does not cause the Government's responsibilities or contribution of

resources to be less than specified in this Compact, (5) does not extend the Compact Term, and

(6) in the case of a modification to change allocations of funds among Projects or the creation of

a new project, does not materially adversely affect any activity under Program administration or

monitoring and evaluation.

(c) Any modification of any annex to this Compact executed in accordance with

Section 6.2(b), or any modification of any other provision of this Compact pursuant to

Section 6.2(a), shall be binding on the Government without the need for further action by the

Government, any further parliamentary action, or satisfaction of any additional domestic

requirements of Senegal.

Section 6.3 Inconsistencies. In the event of any conflict or inconsistency between:

(a) any annex to this Compact and any of Articles 1 through 8, such Articles 1

through 8 will prevail; or

(b) this Compact and any other agreement between the Parties regarding the Program,

this Compact will prevail.

Section 6.4 Governing Law. This Compact is an international agreement and as such will be

governed by the principles of international law.

Section 6.5 Additional Instruments. Any reference to activities. obligations, or rights

undertaken or existing under or in furtherance of this Compact or similar language will include

activities. obligations. and rights undertaken by or existing under or in furtherance of any

agreement. document, or instrument related to this Compact and the Program.

Section 6.6 References to MCC Website. Any reference in this Compact. the PIA, or any

other agreement entered into in connection with this Compact. to a document or information

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

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

Section 6.7 References to Laws. Reaulations. Policies, and Guidelines. Each reference in this

Compact. the PIA. or any other agreement entered into in connection kith this Compact. to a

law. regulation. policy. guideline. or similar document (including but not limited to the Program

Guidelines) \xill be construed as a reference to such law.. regulation. policy. guideline. or similar
document as it may. from time to time, be amended. revised. replaced. or extended and will

include any law. regulation. policy. guideline. or similar document issued under or otherwise

applicable or related to such law, regulation, policy. guideline, or similar document.

Section 6.8 MCC Status. MCC is a United States government corporation acting on behalf of

the United States government in the implementation of this Compact. MCC and the United

States government have no liability under this Compact. the Program Implementation

Agreement. or any related agreement. are immune from any action or proceeding arising under

or relating to any of the foregoing documents, and the Government hereby waives and releases

all claims related to any such liability. In matters arising under or relating to this Compact. the

Program Implementation Agreement. or any related agreement neither MCC nor the United

States government will be subject to the jurisdiction of the courts of Senegal or of any other

jurisdiction or of any other body.

Section 6.9 English Language. This Compact is executed in English and in the event of any

ambiguity or conflict between this official English version and any translation prepared for the

convenience of the Parties, this official English version will prevail.

Section 6.10 Counterparts; Electronic Delivery.

(a) Counterparts. This Compact, and any amendment or other agreements arising out

of this Compact. may be executed in one or more counterpart signatures. and each counterpart

when so executed and delivered shall be an original instrument. but such counterparts together

shall constitute a single agreement.

(b) Electronic Delivery. A signature to this Compact shall be delivered only as an

original signature. With respect to all other signatures. including for an amendment or any other

agreements arising out of this Compact. a signature delivered by facsimile or electronic mail in

accordance with Section 4.1 of this Compact shall be deemed an original signature and shall be

binding on the Party delivering such signature. and the Parties hereby waive any objection to

such signature or to the validity of the underlying document. certificate, notice. instrument, or

agreement on the basis of the signature's legal effect, validity or enforceability solely because it

is in facsimile or electronic form.

ARTICLE 7.

ENTRY INTO FORCE

Section 7.1 Domestic Requirements. Before this Compact enters into force. the Government

will take all necessary steps to ensure that immediately upon this Compact entering into force (a)

this Compact and the PIA and all of the provisions of this Compact and the PIA are valid and

binding and are in full force and effect in Senegal. (b) this Compact the PIA and any other

agreement entered into in connection with this Compact to which the Government and MCC are

parties are international agreements under international law such that the Government may not

invoke the provisions of its internal law as justification for failure to perform its obligations

thereunder . and ( c) no law s of Senegal (other than the constitution of Senegal). whether now or

hereafter in effect. will take precedence or prev ail over the terms of this Compact or the PIA.
Section 7.2 Conditions Precedent to Entry into Force. Before this Compact enters into force:

(a) the PIA must have been executed by the parties thereto:

(b) The Government must have delivered to MCC:

(i) a certificate. in form and substance satisfactory to MCC. signed and dated

by the Principal Representative of the Government. or such other duly authorized representative

of the Government acceptable to MCC. certifying that the Gov ernment has satisfied the

requirements of Section 7.1:

(ii) a legal opinion from the Secretariat General du Gouvernernent of Senegal

(or such other legal representative of the Government acceptable to MCC). in form and

substance satisfactory to MCC: and

(iii) complete. certified copies of all decrees, legislation. regulations, or other

governmental documents relating to the Government's domestic requirements for this Compact

to enter into force and the satisfaction of Section 7.1. which MCC may post on its website or

otherwise make publicly available; and

(c) MCC must determine that after signature of this Compact. the Government has

not engaged in any action or omission that is inconsistent with the eligibility criteria for MCC

Funding.

Section 7.3 Date of Entry into Force. This Compact will enter into force on the later of (a) the

date of the last letter in an exchange of letters between the Principal Representatives confirming

that each Party has completed its domestic requirements for entry into force of this Compact and

(b) the date that all conditions set forth in Section 7.2 have been satisfied.

Section 7.4 Compact Term. This Compact will remain in force for five years after its entry

into force, unless terminated earlier under Section 5.1 (the -Compact Term").

Section 7.5 Provisional Application. Upon signature of this Compact and until this Compact

has entered into force in accordance with Section 7.3. the Parties will provisionally apply the

terms of this Compact and the PIA: provided that, no Program Funding will be made available or

disbursed before this Compact enters into force.

ARTICLE 8.

ADDITIONAL GOVERNMENT COVENANTS

Section 8.1 Additional Gov ernment Resources.

(a) Without limiting the generality of Section 2.6(a). the Government will contribute,

through provision in the law containing the annual governmental budget for Senegal, an amount

necessary and adequate to cover all costs associated with the following (no MCC Fundina,

proceeds thereof or Program assets may be applied by the Government in satisfaction of its

obligations under this Section 8.1(a)):
(i) the staffing and operations of a "Cellule d Appui au IA Senegal . ' (as

further described in Annex I);

(ii) consultant services. including but not limited to. any such services already

contracted by MFG-MCA for the purpose of producing detailed designs in connection with the

Roads Rehabilitation Project; the independent audit required in connection with the Irrigation

and Water Resources Management Project as described in the PIA; and any other consultant

services in connection with the Program that will not be financed with MCC Funding but are

required for the successful implementation of the Program. as may be required by MCC from

time to time;

(iii) any incurred severance costs or other financial liabilities triggered by

termination or expiration of the MFG-MCA or MCA-Senegal employee contracts, pursuant to

the terms of such contracts; and

(iv) required office space for MFG-MCA, MCA Senegal, the "Cellule dAppui

cm MCA-Senegal.- and the MCC resident country mission.

Section 8.2 Procurement. The Government. including MCA-Senegal (and MFG-MCA prior

to MCA-Senegal's establishment), will exclusively use the MCC Program Procurement

Guidelines in connection with Program procurements financed with MCC Funding. With

respect to Program procurements financed by the Government, the Government, including

MCA-Senegal (and MFG-MCA prior to MCA-Senegals establishment), will ensure that such

procurements are consistent with the general principles set forth in Section 3.6 of this Compact.

SIGNATURE PAGE FOLLOWS ON THE NEXT PAGE

6
IN WITNESS WHEREOF. the undersigned. duly authorized by their respective

governments. have signed this Compact this 16th day of September, 2009.

Done at Washington D.C.

FOR MILLENNIUM CHALLENGE

CORPORATION. ON BEHALF OF THE

UNITED STATES OF AMERICA

FOR THE REPUBLIC OF SENEGAL

Name: Darius Mans

Title: Acting Chief Executive Officer

Name: Abdoulaye Diop

Title: Minister of Economy and Finance

SR. \ Afl RE PAGE 10 MIL LENNR AI ClittAINGE COMM( f

REIN\ FEN TIIE LNI I ED S f 1/211-S OF .XMERR

[INC I IIRCa CH THE SiIL! EN \ R AI CII tl \ CE CORVOR V PION

\ Di HE LIEN DER Of SEM!. kl
ANNEX I

PROGRAM DESCRIPTION

This Annex I describes the Program that MCC Funding will support in Senegal during the

Compact Term.

A. PROGRAM OVERVIEW

1. Background and Consultative Process.

With a population of approximately 12 million inhabitants, the west African nation of Senegal

was originally declared eligible for MCC assistance in 2004. Senegal shares borders in the north

with Mauritania. in the east with Mali and in the south with Guinea and Guinea-Bissau, and the

Gambia runs through its center. spatially separating its Casamance region (the "Casamance)

from the rest of Senegal's territory. Based on national poverty reduction and food security

priorities contained in the Government's 1998 Master Plan for agricultural development in the

Senegal River Valley (the "Valley-) and the Government's Road Sector Master Plan, and

confirmed in broad-based Government consultations that occurred from February through July

2008, the Program focuses on poverty reduction in the Valley in northern Senegal. and the

Casamance in southern Senegal.

The Valley has been targeted by the Government, numerous donors, and nongovernmental

organizations ("NG01. ) for investment, both to encourage economic growth in this region and to

increase Senegal's food security in years to come. The Valley. like the Casamance, is rich in

agricultural production. especially for rice. the principal staple of the Senegalese diet. The

Valley benefits from a very favorable environment for intensive irrigation; however, low

agricultural yields have been a persistent problem due to the poor quality of the existing

irrigation and drainage infrastructure; insufficient delivery of available water to agricultural

areas; and lack of an appropriate drainage system. The Irrigation and Water Resources

Management Project will address these constraints.

The Casamance is the poorest region of Senegal, but also has the highest potential for economic

development after the Valley. The Casamance is rich in natural resources and has the potential

for enormous agricultural productivity, which could contribute significantly both to national

growth and food security in the entire country. The Government identified the Casamance's

poor road transport network. which leaves few means for goods and services currently produced

in the region to be exported nationally or regionally, as a major constraint to economic

development in the region. The Roads Rehabilitation Project will address this constraint.

2. Description of Program and Beneficiaries.

The Program Objective is to enable improved agricultural productivity and to expand access to

markets and services through critical infrastructure investments in the roads and irrigation

sectors. The Program consists of the Roads Rehabilitation Project and the Irrigation and Water

Resources Management Project as further described in this Annex I.

By 2029. the Program is expected to benefit approximately 1.66 million individuals. or

approximately. I 38.600 households. The largest number of beneficiaries - approximately 1.1

million -- would be located in the Casamance. About 75 0 of the Program beneficiaries in the
Casamance are expected to come from households living on less than 2 dollars per person per

day. An estimated 42% of total Program beneficiaries in the Casamance live on US$1.25 per

person per day. or less. Although Program activities in the Casamance are expected to cast a

wider net over beneficiaries. about 38% of total benefits generated by the Program would accrue

to beneficiaries in that region. Approximately 62% of Program benefits would accrue to

beneficiaries in the Valley. Here. approximately 45% of total beneficiaries are expected to be

from households subsisting on less than US$2 per person per day and 25% from households

living on US$1.25. or less. Whereas Program investments in the Valley will affect the welfare of

a smaller number of people than in the south, they together are expected to extend significantly

and solidify gains in the reduction of poverty in the north. The Program would be an important

preliminary contribution to the development of the Casamance and greatly facilitate other future

investment there.

3. Environmental and Social Accountability.

The two Projects. both of which are classified as Category A due to potential site-specific

environmental and social impacts. will be implemented in compliance with the MCC

Environmental Guidelines, MCCs guidance on the integration of gender in program

implementation delivered by MCC to the Government or posted on the MCC Website (the

"MCC Gender Policy"), and the MCC Guidance on the Implementation of Resettlement

Activities (or any other MCC policy comparable to the World Bank's Operational Policy on

Involuntary Resettlement in effect as of July 2007 ("OP 4.12") notified to the Government from

time to time) (the -MCC Resettlement Guidance"). The Government will also ensure that the

Projects comply with all national environmental laws and regulations. licenses and permits.

except to the extent such compliance would be inconsistent with this Compact. The Government

will: (a) undertake and complete any environmental review required by MCC or under the laws

of Senegal; (b) implement to MCC's satisfaction environmental and social mitigation measures

identified in such environmental review; and (c) commit to fund environmental mitigation.

(including costs of resettlement) in excess of MCC Funding not specifically provided for in the

budget for any Project. The Government will ensure that all construction contractors develop,

implement and monitor an HIV/AIDS awareness program acceptable to MCC.

B. DESCRIPTION OF THE PROJECTS

Set forth below is a description of each of the Projects that the Government will implement. or

cause to be implemented. using MCC Funding to advance the applicable Project Objective. In

addition. specific activities that will be undertaken within each Project (each. an "Activity").

including sub-activities. are also described. To the extent that there are cost savings with respect

to a Project's implementation. such savings. with express written approval by MCC. may be used

to expand the scope of any activity undertaken as part of the Program. consistent with the

Program Objective and subject to the limitations set forth in Section 6.2 of this Compact.

1. Roads Rehabilitation Project.

(a) Summary of Project and Activities.

The Roads Rehabilitation Project is designed to increase beneficiary access to domestic and

international markets through improved road quality and a reduction in tray el times and costs.

The road sector plays a critical role in Senegal. About 999 "0 of goods produced in Senegal are

kNmix 1-2
transported by roads. and 95% of domestic travel is done by road. The roads addressed by the

Roads Rehabilitation Project. national road no. 2 ("RN2`) and national road no. 6 ("RNC). are

prioritized in the Government's Road Sector Master Plan, and their rehabilitation is in line with

the national policy of increasing growth through road creation. renovation. and maintenance to

thcilitate transport of manufactured products, minerals. and agricultural production, and to

encourage tourism throughout the country.

The RN2 is the northernmost road of Senegal. bordering the Senegal River. It links the capital

city of Dakar to St. Louis, the second largest city of Senegal. and continues toward the eastern

region of Senegal to the city of Kidira, close to the border with Mali. The RN2 serves as the

primary road to transport and export products from irrigation areas along the Senegal River. It is

also a strategic connector road from Dakar Harbor to Mauritania and Mali and to southern cities

in Senegal. The RN6 links Senegal with Guinea Bissau, Guinea (Conakry). and Mali. The RN6

is also a strategic road that allows transportation of local agricultural products and other goods

and services from the Casamance to the rest of Senegal without having to travel through the

Gambia. The RN6 provides the only domestic land access to and from the Casamance. For local

agricultural producers to transport their products from the Casamance to the rest of Senegal, the

only land alternative to the RN6 is a road through the Gambia and a ferry boat across the Gambia

River.

The Roads Rehabilitation Project consists of the following Activities:

(i) RN2 Road Activity.

MCC Funding will be used to rehabilitate and upgrade approximately 120 kilometers of the RN2

road. from Richard Toll to Ndioum, and replace or upgrade associated structures. such as bridges

and culverts. to eliminate flooding and improve road safety. The RN2's improvement is

expected to stimulate domestic and trans-border traffic and commerce generally as well as

specifically provide reliable, year-round access to markets, schools. and hospitals. including

during the rainy seasons, throughout the primarily agricultural and agricultural processing area

where the Activity is focused. Specifically, MCC Funding will support:

(I) Construction Costs. These costs include, without limitation,

pavement strengthening, road widening, road safety improvements, replacement or upgrading of

associated structures, such as bridges and culverts. and any activity associated with the

environmental management plan developed with respect to the Activity.

(2) Non-Construction Costs. These costs include, without limitation.

studies, construction supervision, implementation of any resettlement action plan developed with

respect to the Activity. and other project management costs to be incurred in connection with the

RN2 Road Activity.

(ii) RN6 Road Activity.

MCC Funding will be used to rehabilitate and upgrade approximately 256 kilometers of the RN6

road from Ziguinchor. and replace or upgrade associated structures of the RN6. Specifically.

MCC Funding will support:

Construction Costs. These costs include. V■ ithout limitation.

pavement strengthening. road widening. road safety improvements. and replacement or

\ I -
upgrading of associated structures. such as bridges and culverts. and any activity associated with

the environmental management plan developed with respect to the Activity.

(2) Non-Construction Costs. These costs include. without limitation.

studies. construction supervision. implementation of any resettlement action plan developed with

respect to the Activity, and other project management costs to be incurred in connection with the

RN6 Road Activity.

(b) Beneficiaries.

The RN2 Road Activity is expected to benefit approximately 21.000 households or 250.000

individuals over the next 20 years. At present there are about 9.290 households, or 111.500

beneficiaries residing along the RN2. The RN6 Road Activity would affect some 102.000

households or approximately 1.1 million people over the next 20 years. At present there is a

population of about 44.000 households, or 474.000 people along the road; but about 15.600

households outside the road catchment would also initially benefit, as much traffic also

originates and ends outside the particular segments of the RN6 being upgraded by the RN6 Road

Activity. Over the life of the investment, total average benefits per beneficiary for the RN2 are

approximately US$870. Similarly, total average benefits per beneficiary for the RN6 are

approximately US$530.

(c) Environmental and Social Mitigation Measures.

The RN2 Road Activity and the RN6 Road Activity are classified as "Category A. - The

Activities will produce site-specific and possibly cumulative environmental and social impacts.

Environmental impact assessments have been initiated for both Activities: both will produce

environmental management plans. The Roads Project will be implemented in accordance with

MCC Environmental Guidelines, the MCC Gender Policy, and the MCC Resettlement Guidance,

which will ensure that any necessary mitigation measures will be taken with respect to the issues

identified in the environmental impact assessments and environmental management plans.

(d) Donor Coordination.

The Roads Rehabilitation Project conforms both to the Economic Community of West African

States' standards, as well as to standards used by other donors in projects that link to Program

investments. The two donor organizations also involved in road construction are the European

Union ("EU') for the RN2 and the African Development Bank for the RN6. The U.S. Agency

for International Development ("USAID") is not significantly involved in investments in the

road sector in Senegal

(e) Sustainability.

Senegal has appropriate laws. structures. capacity, systems. and governance to continually

improve sustainability of the road sector. The Government has shown willingness to strengthen

the maintenance funding reaime_ and the country has shown much progress in its maintenance

funding performance. An autonomous aaency. the .4gence Autonume tie Transports Runners. _ or

the Independent Agency for Road Transportation ("AA TR..). was created w ith the assistance of

other donors to take responsibility for road development and maintenance in Senegal. AAIR

has been the beneficiary of rapid capacity development measures with the support of other

donors. As a result. the agency is now operating with technical]) capable staff \\ ithin both its

\\\E\ 1-4
headquarters and its regional offices. Several institutional strengthening measures have been

implemented by AATR, including the systemization of road inventory and road condition. and

prioritization of maintenance activities based on traffic, condition, cost-benefit, and hydraulics.

Maintenance funding has been increasing rapidly since 1989. The available road maintenance

funds were 3 billion CFA in 1989; 15 billion CFA in 1995; 18 billion CFA in 2007; and 37

billion CFA in 2009. As a result of this increase in maintenance funding, road conditions have

improved significantly: only 35% of paved roads were deemed to be in -good" or -average"

condition in 2000, but 60% were deemed to be in 2007.

The Government has created a road fund managed by an autonomous unit and governed by a

board of directors with members from the public and private sectors (the "Road Fund"). In

2008, the Road Fund was migrated to a second generation fund, whereby fuel levy collections

were deposited directly through adoption of a funding law. The law allows for fuel levies of

about 35 CFA for super diesel, 32 CFA for diesel, and 16 CFA for gasoline.

Nevertheless, there is a persistent gap between the need for maintenance and available funds.

The 2009 budget gap is currently 26%; the 2009 available maintenance budget provides only

74% of the annual road maintenance funding actually required for 2009. As part of the Program,

the Government has agreed on a schedule to reduce and eventually eliminate any annual funding

gap by 2015. Measurable progress monitors are set forth in the Program Implementation

Agreement as conditions precedent to disbursement for the Roads Rehabilitation Project.

(f) Policy. Legal and Regulatory Reforms.

There are no policy, legal. or regulatory reforms required to implement the Roads Rehabilitation

Project, other than those that may be required with respect to the Government's need to satisfy

conditions precedent in connection with reducing the funding gap with respect to the road

maintenance fund.

2. Irrigation and Water Resources Management Project.

(a) Summary of Project and Activities.

The Valley. the other region in Senegal rich in agricultural production. benefits from a very

favorable environment for intensive irrigation for several reasons. First, there is a long irrigation

history and experience in the Valley (some irrigation schemes have existed for more than 30

years). Second. the region has strong Government support and a reliable institution for

maintenance and technical support through the regional. semi-autonomous agency responsible

for all aspects of agricultural development in the Valley, the Societe Nationale d'Amenagement et

d'Exploitation des Terres du Delta du fieuve Senegal et des Vallees du fleuve Senegal et de la

Faleine (-SAED-). Third. farmer associations, supported by SAED. have demonstrated their

capability to manage and maintain large irrigation schemes. Finally. organized

commercialization exists throughout the region. although improvements are still required along

the value chain.

Optimal agricultural production in the Valley could supply Senegal with more than a significant

share of its agricultural products. especially rice. the principal staple of the Senegalese diet.

However. low agricultural yields have resulted in several thousand hectares of abandoned land.

Three factors contribute directly to lo -\\. yields: (i ) poor quality of the existing irrigation and
drainage infrastructure: (ii) insufficient delivery of available water to agricultural areas: and (iii)

lack of an appropriate drainage system, which leads to soil salinity.

The Irrigation and Water Resources Management Project — comprising infrastructure

investments in the Senegal River Delta (the -Delta-) and Department of Podor (the "Podor-)

areas — conforms to Senegal's 1998 Master Plan for poverty reduction and agricultural

development in the Valley and is designed to address the factors contributing to low agricultural

yields described above. The Project will: (1) increase the volume of irrigation water in the

Valley to develop approximately 8,500-10,500 hectares of additional irrigated land; (2) eliminate

the risk of abandonment of approximately 26,000 hectares of existing irrigable land; and (3)

provide additional supply of water for human and animal use in the Delta, Podor. and adjoining

areas. The Project will also rehabilitate drainage canals. which will further eliminate the risk of

abandonment of irrigated land, as well as increase crop yields. The Project will also support a

land tenure security activity, to provide for, or maintain, a secure land tenure environment for all

of inhabitants of the region directly affected by the Project. The Project may also invest in

complementary social safeguard measures.

The Irrigation and Water Resources Management Project consists of the following Activities:

(i) Delta Activity.

Irrigation in the Delta, situated in the northwestern section of Senegal, is heavily influenced by

the operation level of the Diama Dam, situated at the mouth of the Senegal River. Currently,

31.080 hectares represents the total theoretically irrigable land in the area of the Delta targeted

by the Project. However, due to insufficient water delivery and poor drainage, only 11.800

hectares are cultivated at any time over the year. MCC Funding will be used for improvements

to the irrigation and drainage channels in the Delta. Specifically. MCC Funding will support:

(1) Irrigation and Drainage Construction Activities. With respect to

irrigation, these consist of weed removal, dredging, profiling of berms, and increasing levee

heights. along with the rehabilitation or replacement of associated structures and pumping

stations along eight irrigation sections. With respect to drainage, these consist of construction of

a pump station. a bridge, a siphon, elevation of the levees and construction of compensatory

channels. More details with respect to the Delta Activity construction activities are set forth in

Schedule 1 attached to this Annex I.

(2) Non-Construction Activities. These costs include. without

limitation. studies. construction supervision. and other project management costs to be incurred

in connection with the Delta Activity.

(ii) Podor Activity.

Senegal's 1998 Master Plan for poverty reduction and agricultural development in the Valley

specifies the installation of 28 irrigation sites in the Podor, and one of these sites is at

N'Gallenka. The Podor Activity. focused on the site of N'Gallenka, expands the Program's

irrigation investments east of the Delta, into an area that is far more economically depressed than

the Delta. The N'Gallenka site was chosen because of its high potential for rice production.

sufficiency of water resources. available population. cost of dikes per hectare. and existing

irrigation facilities. Furthermore. demonstration of the cost-effectiveness of irriaation expansion

in Podor should attract other priN ate sector and donor investment in this area of high potential

A,V\ EX - 6
returns. MCC Funding will be used for the development of primary and secondary irrigation and

drainage channels, and associated structures at the N'Gallenka site. Specifically. MCC Funding

will support the construction costs associated with the development of the primary and secondary

irrigation and drainage channels and associated structures. as well as related non-construction

costs (studies, construction supervision, and other project management costs).

(iii) Social Safeguard Measures Activity.

The Government is actively seeking support to strengthen irrigation investments in the Valley

with social development activities designed to diversify current livelihood strategies. slow

emigration from the Delta. link Podor to markets, and improve the ability of women and youth to

take advantage of the economic opportunities presented by the improved prospects for

agricultural production. The Program may support the Government's efforts by financing certain

social safeguard measures directly related to the Irrigation and Water Resources Management

Project. Specifically, MCC Funding may be used for the construction of day care facilities, as

well as the construction and initial operation of agricultural storage and information centers. and

livestock multipurpose centers. In each case, these social safeguard measures are intended to

complement the objectives of the Irrigation and Water Resources Management Project and/or to

mitigate potential adverse impacts of the Project. For instance, the day care facilities should

allow women to spend more time engaged in revenue-generating activities on the newly irrigated

lands that will be allocated through the Project, while still providing their children with quality

care. The agricultural storage and information centers are intended to provide much-needed

price information and technical resources to decrease crop loss due to poor storage conditions.

Finally, the livestock multipurpose centers are intended to provide much-needed technical

resources and supplies to livestock owners, thereby reassuring pastoralists that might otherwise

be marginalized by the Project because of the reduced amount of rangeland available for their

herds. It should be noted that any use of MCC Funding for the Social Safeguard Measures

Activity is entirely contingent upon the following three conditions being met: (1) provision by

the Government of any supplemental information required by MCC. in form and substance

satisfactory to MCC. to enable MCC to make a funding decision with respect to this Activity

(this may include, inter alia, a comprehensive operational plan for each measure that describes

diligenced costs, staffing and equipment information and requirements, and information on dayto-day operations and maintenance of the centers, both during the Compact Term and

afterwards); (2) a decision by MCC in writing agreeing to fund the Activity, in whole or in part.

together with any conditions to such agreement; and (3) satisfaction of the first two conditions

prior to the third anniversary of this Compact's entry into force.

(iv) Land Tenure Security Activity.

To improve the investment climate in the Project area and to mitigate the potential for land

conflict due to increased demand for irrigated land as a result of the Irrigation and Water

Resources Management Project. the Land Tenure Security Activity will support development

and implementation of transparent. fair, and efficient processes for land allocation to ensure

equitable and secure access to land in the irrigated perimeters. It will also equip local authorities

with tools. such as manuals of procedures and land registries. to improve land management. and

reinforce capacity through communication and training on the newly provided tools as well as

existing land management tools. The Land Tenure Security activity will primarily support the

allocation and formalization of land use rights by local rural councils ('CRs") and local
communal councils ( -CC's-) according to existing Senegalese land law. Specifically, MCC

Funding will support:

(1) Design and implementation of a participatory and multi-step

process for allocation by the CRs and CCs to producer groups and individual producers of

parcels in irrigated perimeters developed or improved through the Irrigation and Water

Resources Management Project. Land allocations will be formalized according to Senegalese

land law through award of titres d'affectation (land certificates) to all holders of land rights in

the irrigated perimeters. The process will include documentation of existing rights, identification

and mapping of improved parcels, development of criteria for selection of beneficiaries. and

transparent selection followed by award of the titres d'affectation and recordation of all land

allocations in registers to be maintained by the CRs and CCs.

(2) Reinforcement of land management capacity of CRs (and CCs).

producer groups (GIEs and GPFs), and selected government agencies responsible for supporting

rural community land management. Activities will center on development of new tools designed

to adapt and more efficiently apply Senegalese land law in the context of the Valley. including a

land allocation manual and land registry. and training on existing tools such as land occupation

and allocation plan (-110AS-) and the Charter for the Irrigated Domain ( -CDT-).

(b) Beneficiaries.

Beneficiaries of the Irrigation and Water Resources Management Project include households.

owners or shareholders of farming enterprises. and households that have individuals employed in

the operation of enterprise farms. The Project would benefit approximately 22.390 households.

or 268.700 individuals. through participation in own agricultural production or employment in

agriculture. Assuming that households would, on average. cultivate two hectares of irrigated

area. the scale of net revenue from a holding would have a substantial impact on the welfare of

poor households. Average household size is about twelve persons. Average future revenues of

about purchasing power parity (PPP) US$4,470 per two-hectare farm would increase household

incomes by more than PPP US$1 per person per day. For households subsisting with incomes of

PPP US$1.25 or less per person per day, this increment would move households from being

extremely poor to being near poor (not far below or above PPP US$2 per person per day). It is

estimated that the full development of the irrigated areas targeted by the Project will provide

employment for approximately 9.000 households (benefits accruing to approximately 105.000

persons).

(c) Environmental and Social Mitigation Measures.

The Irrigation and Water Resources Management Project is classified as **Category A. -

Environmental impact assessments have been initiated, and they will produce environmental

management plans. The Project will be implemented in accordance with MCC Environmental

Guidelines. the MCC Gender Policy. and the MCC Resettlement Guidance, which will ensure

that any necessary mitigation measures will be taken with respect to the issues raised above.

(d) Donor Coordination.

The Government. from the earliest days of project identification and development. partnered and

coordinated with all of the stakeholders in the Valley to ensure that ti ) MCC's investments

would be complementary to other existing and planned investments throughout the re:4ion. and

..\\NEX 1- 8
(ii) would be supported by Government agencies, donors. and NGOs. All donors have endorsed

the Program investments in the Valley because they recognize the need for significant

investment in the region's infrastructure to complement their own investments. The current

field-level focal points for donor coordination and collaboration are SAED and the Support

Program for Local Development, respectively responsible for implementation of programs

sponsored by the World Bank ( -PDMAS") and the Agence Francaise de Developpement (the

French Development Agency (-AFD")).

The principal donors investing in the region are USAID. the U.S. Department of Agriculture

( -USDA"), the EU, AFD. the Japanese Development Agency, and the World Bank. USAID, for

example. is increasing agricultural productivity through improvements to the agricultural value

chain, including improving the quality and availability of inputs, cold storage and warehousing,

and access to credit, and it is also implementing a natural resource management program that

focuses on forest management for the production of select products (timber, resin, fruit, and

crafts) for regional and international markets. The USDA, through its "Food for Progress'

program, partners with NGOs such as Counterpart International to work directly with farmers

and farmers' associations to provide training in agricultural best practices. AFD's -Programme

d'Appui aux Communautes Rurales" ('PACR"). or "Technical Assistance Program for Rural

Communities, - shares common objectives and geographical focus with the Land Tenure Security

Activity; accordingly. MCC and AFD expect to coordinate closely implementation of the

respective initiatives and target opportunities for synergy.

(e) Sustainability.

SAED is responsible for maintaining primary and secondary irrigation systems throughout the

Valley. SAED's considerable human resources, technical capacity and experience have been

enhanced in recent decades through the agency's central role in implementation of several

international donor-sponsored programs, such as the PDMAS project and specific activities of

the PACR. It also provides technical assistance and training to farmers for them to maintain

tertiary irrigation systems.

However, project maintenance activities in the Delta are funded with fees collected from

farmers, and with funds provided by the Government to cover the gap between annual

maintenance costs and total fees collected. Fee collection from farmers in the Delta zone is poor,

with a collection efficiency of only 30%. Poor collection is primarily attributable to unreliable

water supply and inadequate water availability. A lack of transparency in collection is also a

contributor to poor collection efficiency. In order to improve collection of water user fees and to

make more maintenance funds available for SAED to undertake required. periodic maintenance

work, the Government will take specific steps agreed by MCC to improve collection of water

user fees: these include the Government conducting an independent audit of maintenance,

including roles. responsibilities, current arrangements. service performance and collection

performance. as well as a financial analysis of maintenance, with the objective of identifying

principal issues and recommending an action plan to improve sustainability (the -Irrigation

Maintenance Action Plan"). The Irrigation Maintenance Action Plan must be approved by the

Ministry of Agriculture and implementation of the action plan — with measurable targets and a

progress monitoring mechanism to evaluate performance and outcomes of implementation — will

be monitored throughout the Compact Term.
(f) Policy. Legal and Regulatory Reforms.

There are no policy. legal. or regulatory reforms required to implement the Irrigation and Water

Resources Management Project other than those that may be required by the Irrigation

Maintenance Action Plan and implementing measures arising out of the Land Tenure Security

Activity, such as the passage of an arrete by the appropriate administrative authorities

establishing land allocation committees and describing land allocation principles.

3. Implementation Framework.

(a) Overview.

The implementation framework and the plan for ensuring adequate governance, oversight,

management, monitoring and evaluation, and fiscal accountability for the use of MCC Funding

are summarized below. MCC and the Government will enter into the Program Implementation

Agreement. and any other agreements in furtherance of this Compact, all of which, together with

this Compact, set out certain rights, responsibilities, duties and other terms relating to the

implementation of the Program.

(b) MCC.

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

Compact and the Program Implementation Agreement, including the exercise of its approval

rights in connection with the implementation of the Program.

(c) MCA-Senegal (and. prior to its establishment. MFG-MCA).

The Government will establish MCA-Senegal through passage of a decree in substantially the

form and on substantially the terms of the form of decree set forth in Schedule 2 to this Annex I 

(the "Establishment Decree"). In accordance with Section 3.2(d) of this Compact, MCASenegal will act on the Government's behalf to implement the Program and to exercise and

perform the Government's rights and responsibilities with respect to the oversight, management.

and implementation of the Program, including, without limitation, managing the implementation

of Projects and their Activities, allocating resources, and managing procurements. The

Government will ensure that MCA-Senegal takes all appropriate actions to implement the

Program. including the exercise and performance of the rights and responsibilities designated to

it by the Government pursuant to this Compact and the Program Implementation Agreement.

Without limiting the foregoing. the Government will also ensure that MCA-Senegal has full

decision-making autonomy. including, inter alia, the ability, without consultation with, or the

consent or approval of, any other party, to (i) enter into contracts in its own name. (ii) sue and be

sued, (iii) establish an account in a financial institution in the name of MCA-Senegal and hold

MCC Funding in that account. (iv) expend MCC Funding. (v) engage one or more fiscal agents

who will act on behalf of MCA-Senegal on terms acceptable to MCC, (vi) engage one or more

procurement agents who will act on behalf of MCA-Senegal. on terms acceptable to MCC. to

manage the acquisition of the goods. works, and services required by MCA-Senegal to

implement the activities funded by this Compact, and (vii) competitively engage one or more

auditors to conduct audits of its accounts. In accordance with Section 3.2(d) of this Compact.

MFG-MCA. established by Decret N° 2008-53 dated January 29. 2008. will act on behalf of the

Government with respect to the Compact and the Program until MCA-Senegal is established.

For the avoidance of doubt. the Government will take all appropriate actions to ensure that

NNEX I - 10
MCA-Senegal is established as soon as possible after the ratification of this Compact, and, in any

event. in accordance with the applicable condition precedent to the disbursement of Compact

Implementation Funding set forth in Annex IV to this Compact.

MCA-Senegal will be administered and managed by the following bodies: (1) le Conseil de

Surveillance. acting as its board of directors (the "Board"); (2) la Direction Generale, acting as

its management unit (the "Management Unit"); and (3) le Comite des Parties Prenantes. acting

as its stakeholders committee (the -Stakeholders Committee"). The governance of MCASenegal will be set forth in more detail in the Establishment Decree, the Program

Implementation Agreement. and the internal regulations of MCA-Senegal (MCA-Senegal

Bylawsl, which will, collectively, set forth the responsibilities of the Board, the Management

Unit, and the Stakeholders Committee. The MCA-Senegal Bylaws will be developed and

adopted in accordance with MCC's Guidelines for Accountable Entities and Implementation

Structures. published on the MCC Website (the -Governance Guidelines"), and will be in form

and substance satisfactory to MCC.

( 1 ) Board (le Conseil de Surveillance).

( 1 ) Composition. MCA-Senegal will be governed by the Board,

which will consist of voting members representing those Government ministries and civil society

and private sector organizations set forth in the Establishment Decree. The Board will also

consist of those non-voting observers set forth in the Establishment Decree. All voting members

will be named in writing by their respective Government ministries and civil society and private

sector organizations. as applicable, and must be sufficiently senior and qualified to make

decisions on behalf of their respective ministries and civil society and private sector

organizations, as applicable. Each voting member named to serve on the Board, and any

replacement for any voting member or any alteration of the size or composition of the Board,

shall be subject to MCC prior approval.

(ii) Roles and Responsibilities. The Board will be responsible for overseeing

the implementation of the Program and will have final decision-making authority over the

implementation of the Program. The Board will meet regularly; the frequency of meetings will

be set forth in the MCA-Senegal Bylaws and will be in accordance with the Governance

Guidelines. The specific roles of the voting members and non-voting observers will be set forth

in the Establishment Decree and the MCA-Senegal Bylaws.

(iii) Management Unit (la Direction Generale).

(1) Composition. The Management Unit, which will be led by a

competitively selected Director General. will be composed of competitively recruited Directors

with expertise in the key components of the Program. including, without limitation, a Roads

Director. an Irrigation and Water Resources Management Director, and a Land Tenure Security

Director. as well as a Deputy Director General. a Chief Financial Officer. a General Counsel. and

other key Directors, including, without limitation. an Environmental and Social Assessment

Director. a Procurement Director. a Monitoring and Evaluation Director, and a Communications

Director. The Management Unit will also include such other managers and officers as may be

agreed by the Government and MCC. including. without limitation. an internal auditor and a

Human Resources Officer. The Directors will be supported by appropriate additional staff to

enable the Management [nit to execute its roles and responsibilities.

\\\E\ I - 11
(iv) Roles and Responsibilities. The Management Unit will be based in Dakar.

Senegal, and will be responsible for managing the day-to-day implementation of the Program,

with oversight from the Board. The Management Unit will serve as the principal link between

MCC and the Government, and will be accountable for the successful execution of the Program,

each Project. and each Activity. As a Government entity, MCA-Senegal will be subject to

Government audit requirements. As a recipient of MCC Funding, MCA-Senegal will also be

subject to MCC audit requirements.

(v) Stakeholders' Committee (le Comite des Parties Prenantes).

(1) Composition. Pursuant to the Establishment Decree. the

composition of the Stakeholders Committee will be determined by the Board in accordance with

the Governance Guidelines and subject to MCC approval. Without limiting the foregoing, the

Establishment Decree provides that the Stakeholders Committee will be composed of. inter alia.

Program beneficiaries, regional and local government representatives, entities with an interest or

involvement in the implementation of the Program, key NGOs, and any applicable civil society

and private sector representatives. In addition, the Board may establish regional, informal

stakeholders committees in the project intervention zones composed of, inter alia, Program

beneficiaries, regional and local government representatives, entities with an interest or

involvement in the implementation of the Program. key NGOs, and any applicable civil society

and private sector representatives. The establishment and composition of any such regional.

informal stakeholders committees will also be subject to MCC approval.

(2) Roles and Responsibilities. Consistent with the Governance

Guidelines. the Stakeholders Committee (and any informal, regional stakeholders committees

established by the Board) will be responsible for continuing the consultative process throughout

implementation of the Program. While the Stakeholders Committee (and any informal, regional

stakeholders committees established by the Board) will not have any decision-making authority.

it will be responsible for, inter alia, reviewing, at the request of the Board or the Management

Unit, certain reports, agreements, and documents related to the implementation of the Program in

order to provide advice and input to MCA-Senegal regarding the implementation of the Program.

(d) The "Cellule d'Appui au MCA-Senegal. -

As referenced in Article 8 of the Compact, the Government will contribute to the Program, inter

alia, through the establishment of and financial support for a -Cellule d'Appui au MCA-Senegal"

(the "Cellule-). Exclusively Government-funded and exclusively Government-run, the Cellule's

focus would be distinct from. but related to, the Program. The Cellule will contain staff to

perform certain functions, which may include. but are not limited to. the following:

(i) Guichet Unique. Certain Cellule staff will be engaged to assist MCASenegal and contractors working, on the Program with navigating the tax exemption procedures

to ensure that they benefit from the tax exemptions provided by the Compact.

(ii) Administration and Finance. Certain Cellule staff will he engaged to

perform administration and finance functions with respect to the Cellule's operations, any

mesures d'accompagnement described in paragraph b above, the start up or closure of MCASenegal. and any Government financial obligations arising out of the Compact. including. but not

limited to. Sections 2.6(a) or 8.1 of the Compact.

F.\ 1 - 12
(iii) Monitoring Eligibility Criteria. Certain Cellule staff will be engaged to

monitor and evaluate Senegal's level of performance under the policy criteria identified in

Section 607 of the MCA Act, and the selection criteria and methodology used by MCC.

(iv) Mesures d Accompagnement. To the extent the Government undertakes

certain social development activities outside of the Program in the Project areas (such activities

may be designed to, inter alia, diversify current livelihood strategies, slow emigration from the

Delta, link Podor to markets, and improve the ability of women and youth to take advantage of

the economic opportunities presented by an improved environment for agricultural production),

the Cellule may contain staff to manage the implementation of such social development

activities.

(e) Implementing Entities.

Subject to the terms and conditions of this Compact and any other related agreements entered

into in connection with this Compact, the Government and MCC have identified certain principal

public institutions that may or will serve as implementing entities (each, an "Implementing

Entity') to implement and carry out certain Projects and/or Activities (and/or any component

thereof) in furtherance of this Compact. Such Implementing Entities include, but are not limited

to, (i) AATR, for the Roads Rehabilitation Project and (ii) SAED, for the Irrigation and Water

Resources Management Project. The Government will ensure that the roles and responsibilities

of each Implementing Entity and other appropriate terms are set forth in an agreement between

MCA-Senegal and each Implementing Entity, which agreement must be in form and substance

satisfactory to MCC (each an -Implementing Entity Agreement").

(f) Fiscal Agent.

Unless MCC otherwise agrees in writing, the Government will engage a fiscal agent (a "Fiscal

Agent-), who will be responsible for assisting the Government with its fiscal management and

assure appropriate fiscal accountability of MCC Funding, and whose duties will include those set

forth in the Program Implementation Agreement.

(g) Procurement Agent.

Unless MCC otherwise agrees in writing, the Government will engage one or more procurement

agents (each, a "ProcurementAgent-) to carry out and certify specified procurement activities in

furtherance of this Compact. The roles and responsibilities of each Procurement Agent will be

set forth in the Program Implementation Agreement or such agreement as the Government enters

into with each Procurement Agent. which agreement shall be in form and substance satisfactory

to MCC. Each Procurement Agent will adhere to the procurement standards set forth in the

MCC Program Procurement Guidelines and ensure procurements are consistent with the

procurement plan adopted by the Government pursuant to the Program Implementation

Agreement. unless MCC otherwise agrees in writing.

.-\\\E\ I - 13
SCHEDULE 1 OF ANNEX I

DELTA ACTIVITY CONSTRUCTION ACTIVITIES

The work on the main irrigation channels of the Delta Activity consists of weed removal.

dredging, profiling of berms. and increasing levee heights, as well as the rehabilitation or

replacement of the associated structures and pumping stations of the following sections:

Irrigation Section

Gorom Amont

Length/ Targeted Flow

Rate

25 km 1 30 m's"'

Associated Improvements

Ronkh Intake: increase of gravity flow capacity

from 20m3 s-1 to 30m3 s-1 by reopening two

additional gates and increase of pumping

capacity from 8.3m3 s-I to 20m3 sGorom Aval 22 km / 23 m's'

Intake G: construction of an additional control

bridge with four gates to increase the gravity

flow capacity from 20mss-I to 40m3 s-1 ;

Rehabilitation of the Boundoum Dam Bridge

Lampsar Amont 20 km Replacement of the Boundoum Bridge with a

control bridge

Lampsar Aval 24 ktni 12 171 3 S.1

Replacement of the Lampsar Bas Bridge with a

control bridge:

Repairs on the Bango Bridge

Ngalam 8 km Rehabilitation of the Ndiaoudoun Bridge.

Djawel 14 km Rehabilitation of the Djawel Bridge

Kassack 20 km Rehabilitation of the Demba and Diambar

Bridges

D euss Partial transformation into a main drainage

channel
SCHEDULE 2 TO ANNEX I

FORM OF MCA-SENEGAL DECREE

REPUBLIQUE DU SENEGAL

Un Peuple — Un But — Une Foi

Decret N° .portant creation

du Millenium Challenge Account Senegal (ci-aprês, « MCA-Senegal

LE PRESIDENT DE LA REPUBLIQUE,

Vu la Constitution de la Republique du Senegal (ci-aprês, le « Senegal »), notamment en

ses articles 43 et 76

Vu le Millennium Challenge Compact (ci-aprês, le « Compact ») signe [a inserer : la date

de signature] entre l'Etat du Senegal (ci-aprês, « l'Etat ») agissant par son

gouvernement (ci-apres, le « Gouvernement ») et le gouvernement des Etats-Unis

d'Amerique. agissant a travers le Millennium Challenge Corporation (ci-aprês,

o MCC »)

Vu la loi no. [inserer le numero et la date] par laquelle l'Assemblee Nationale autorise le

President du Senegal a ratifier le Compact :

Vu la Lettre No. [a inserer : le numero et la date] par lequel le President ratifie le

Compact

Vu le Decret No. 2008-53 de 29 janvier 2008 portant creation du Mission de Formulation

et de Gestion du Millenium Challenge Account Senegal;

Considerant que le Compact definit les termes 2eneraux et les conditions auxquelles le MCC

offre un don financier d'un montant plaforme a [a inserer, montant en mots et en chiffres] au

Gouvernement pour un programme qui a pour but la reduction de la pauyrete a travers la

promotion de la croissance economique au Senegal (ci-aprês. le o Programme >>);

Considerant l'engagement du Gouvernement stipule dans le Compact (annexe I : description du

programme) de creer une entite. dote avec la personnalite morale et une autonomie financiêre.

responsable de la coordination et de l'execution du Programme:
DECRETE

Article 1: Creation et caractires juridique.

11 est cree une entite juridique autonome, denommee « MCA-Senigal ». dot& de la personnalite

morale et de l'autonomie financiêre, chargee de la gestion du Programme du Compact pour le

Senegal. Le MCA-Senegal est administrativement rattache a la primature. Le MCA-Senegal

jouit pleinement de la personnalite juridique et de l'autonomie financiêre, it peut a cet effet

notamment: signer des contrats et des accords. ouvrir, maintenir et termer des comptes bancaires,

recruter un personnel a travers des processus competitifs, et les licencier. et ester en justice.

Article 2: Missions du MCA-Senegal.

Les missions du MCA-Senegal sont :

- assurer, pour le compte du l'Etat, en tant qu'entite responsable. les missions de maitrise

d'ouvrage liees a la gestion et la mise en oeuvre du Programme du Compact pour l'Etat ;

- assurer, pour le compte de l'Etat, en relation avec les services competents de l'Etat, les

negociations avec la partie americaine sur toutes les questions techniques, financiéres, et

administratives liees au Programme du Compact.

- Passer tous les actes, dans les relations avec les autres acteurs et toutes les personnes

intervenant dans la gestion. le suivi, et la mise en oeuvre du Programme du Compact pour

l'Etat.

Article 3: Organes du MCA-Senegal.

Dans le cadre de l'execution de ces missions, le MCA-Senegal est dote d'un organe de

deliberation, d'un organe executif, et d'un organe consultatif :

le Conseil de Surveillance est l'organe de deliberation.

- la Direction Generale, l'organe d'execution.

- le Comite des Parties Prenantes, l'organe consultatif.

Aucun membre du Conseil de Surveillance. de la Direction Generale, du Comite des Parties

Prenantes ou tout autre agent du MCA-Senegal ne doit être directement ou indirectement en

situation de conflits d'interêts avec l'execution des missions confiees au MCA-Senegal.

Article 4: Prerogatives du Conseil de Surveillance.

Le Conseil de Surveillance du MCA-Senegal est investi des pouvoirs les plus etendus pour agir

en toute circonstance pour la prise des decisions relatives a la definition des objectifs.

l'orientation. a l'administration, et au contrOle de la gestion assuree par la direction generale.

A cet effet it est charge notamment de :

- definir les orientations strateaiques du programme MCA-Seneaal.

- approuver l'organisation administrative du MCA-Senegal.

approuver toute decision modifiant la structure du MCA-Senegal ou sa dissolution.

- adopter le rapport annuel d'activite du MCA-Senegal prepare par le Directeur General.

SCHEDL LE 2 - 2
approuver le budget annuel du MCA-Senegal,

approuver les etats financiers arfetes par le Directeur General. au plus tard dans les trois

mois qui suivent la cloture de l'exercice.

- Recruter le Directeur General.

- Approuver le contrat du Directeur General et approuver l'organigramme de la Direction

Generale et la forme de contrat de travail pour le personnel cle,

- Licencier le Directeur General et approuver le licenciement du personnel cadre ou

personnel cle du MCA-Senegal,

- Approuver les plans de passation des marches.

- Faire toutes les autres taches prescrites par les directives de MCC et par le reglement

interieur de Conseil de Surveillance.

Les decisions du Conseil de Surveillance sont soumises a l'avis de non objection du MCC.

Article 5: Composition du Conseil du Surveillance.

Le Conseil de Surveillance est compose des membres suivants ayant le droit de vote (chaque, un

« Membre »):

Un representant du Premier Ministre.

- Un representant du ministre chargé des affaires etrangeres,

Un representant du ministre charge de reconomie et des finances.

- Un representant du ministre charge de Finfrastructure,

- Un representant du ministre chargé de l'environnement,

- Un representant du ministre chargé des collectivites locales.

Un representant du ministre charge de la justice.

- Un representant du ministre chargé de l'agriculture.

- Un representant du ministre en charge du developpement social et du genre,

Deux representants des organisations patronales les plus representatives.

- Deux representants des organisations de la societe civile les plus representatives, dont

une de femme.

Chaque Membre dispose dune voix.

Siegent au Conseil de Surveillance en qualite d'observateurs permanents, sans droit de vote.

mais avec voix consultative. les individus suivants:

- Un representant du MCC.

- Le Directeur General du MCA-Senegal.

Les Membres du Conseil de Surveillance representant le Gouvernement sont designes par voie

&rite par leurs ministres de tutelle respectifs. Its doivent avoir la competence et le pouvoir de

representer leurs structures et de prendre toute decision pendant les sessions du Conseil de

Surveillance. La fonction de membre au titre de representant du Gouvernement prend fin par la

cessation des fonctions au niN eau du ministêre concerne ou par suite de remplacement intervenu

sur decision &rite du ministre de tutelle.

Les Membres representant la societe civile et les organisations patronales sont designes par voie

eerite par l'organe de deliberation de leur organisation. Les Membres representant la societe

SCHEDULE 2 -

;
civile et les organisations patronales sont investis de tous les pouvoirs entrant dans le cadre de

leur mission pour agir au nom de leur organisation. La fonction de membre au titre de

representant de la societe civile et des organisations patronales prend fin par suite de

remplacement intervenu sur decision ecrite de 1"organe de deliberation de l'organe concernee.

Les Membres du Conseil de Surveillance entrent en fonction et siegent a partir de leur

designation.

L'avis de non objection du MCC est requis pour toute proposition ou modification dans la

composition du Conseil de Surveillance.

Article 6: Fonctionnement du Conseil du Surveillance.

Le Conseil de Surveillance se reunit au moins une fois par trimestre et chaque fois que de besoin.

II est convoque par le representant de la Primature ou a la demande au moins de quatre (4)

Membres. Les rêgles relatives aux modalites de convocations des reunions, a la determination

du quorum et aux regles de prise des decisions sont determinees par le reglement interieur.

Le Directeur General du MCA Senegal assure le secretariat du Conseil de Surveillance.

Les fonctions de Membre du Conseil de Surveillance sont gratuites. Toutefois, chaque Membre

du Conseil de Surveillance a droit au remboursement de frais raisonnables supportees qui sont

liees a sa participation aux reunions du Conseil de Surveillance et en conformite avec les

directives du MCC.

Le Conseil de Surveillance peut decider de faire appel a des personnes ressources susceptibles de

l'assister dans l'exercice de ses missions. Les personnes ressources participent aux reunions du

Conseil de Surveillance avec voix consultative.

Le Conseil de Surveillance peut, en fonction des besoins. mettre en place des comites, composes

de Membres et /ou d'observateurs, a qui it peut confier des taches specifiques liees a sa mission.

Article 7: Comite des Parties Prenantes.

Le Comite des Parties Prenantes est un organe consultatif qui est chargé d'assurer le suivi des

projets et d'assister au plan technique la Direction Generale et le Conseil de Surveillance

auxquels it peut donner des axis.

Le Comite des Parties Prenantes est constitue des beneficiaires du projet. des structures

impliquees et interessees a l'execution du Programme du Compact, de representants du

Gouvernement, des organisations patronales et de la societe civile.

Les membres du Comite des Parties Prenantes representant le Gouvernement sont designes par

leur autorite de tutelle. les membres representants les onaanisations patronales et de la societe

civile par leurs organisations respectives.

La liste des membres du Comite des Partie Prenantes est arretee par le Conseil de Surveillance

qui fixe la composition et les modalites de fonctionnement du Comite des Partie Prenantes.

(11-1EDl. LE 2 - 4
Dans les zones d' intervention du Programme du Compact. le Conseil de Surveillance peut

decider de creer des sous comite locaux des parties prenantes. dont les membres sont designes

dans les memes conditions que ceux du Comite national des Parties Prenantes.

Article 8: Direction Generale.

Le MCA-Senegal est administree par une Direction Generale. qui est dirigee par un Directeur

General. Le Directeur General est recrute par le Conseil de Surveillance conformement aux

directives du MCC.

Le MCC est implique a la procedure de recrutement du personnel de la Direction Generale par

un avis de non objection.

Le personnel cle du MCA-Senegal est recrutee ou licencie par le Directeur General

conformement aux directives du MCC et avec rapprobation du Conseil de Surveillance.

Le Directeur General assure le contrOle et le suivi quotidien de la gestion du MCA-Senegal, et il

est le Representant Additionnel dans le sens que revét ce terme dans le Compact. II prepare les

travaux du Conseil de Surveillance et met en ceuvre les orientations qu'il arréte.

A cet effet, il est chargé notamment de :

• exercer les pouvoirs d'administration et de direction sur l'ensemble du personnel et les

services du MCA-Senegal,

• rendre compte aux interesses, y compris le Conseil de Surveillance et le Comite des

Partie Prenantes, de l'etat d'avancement de la mise en ceuvre du Programme du Compact,

• preparer et executer le budget du MCA-Senegal dans les conditions fixees a Particle 9,

• etablir un rapport annuel d'activites qu'il soumet a l'approbation du Conseil de

Surveillance.

• arréter les etats financiers et les soumettre au Conseil de Surveillance pour approbation,

• executer toutes les autres -Caches prevues par les directives de MCC et par le Conseil de

Surveillance.

Article 9: Budget du MCA-Senegal.

Le MCA-Senegal est dotee d'un budget qui retrace ses recettes et ses depenses.

Les recettes du MCA-Senegal sont constituees par la dotation budgetaire prevue dans la

Compact. Les ressources du MCA-Senegal sont constituees aussi par une dotation budgetaire

annuelle allouee par l'Etat conformement au Compact et ses accords lies et gere par la Cellule

d'Appui au MCA-Senegal prevue dans be Compact.

Les ressources du MCA-Senegal. qu'elles proviennent du Compact ou de l'Etat. sont entierement

et exclusivement utilisees pour l'execution de la mission du MCA-Senegal telle qu'il est decrite

dans article 2.

En conformite avec Particle 8. le budget est prepare et execute par le Directeur General sous le

contrele du Conseil de Surveillance.

SCHED1 LE 2 -
Article 10: ContrOle et Audit.

Le MCA-Senegal est soumis aux contrOles de r Inspection Generale des Finances. de

1"Inspection Generale d'Etat. et da la Cour des Comptes vise notamment par la Loi no 90-07 du

26 juin 1990. Conformement au Compact et ses accords lies. ainsi que les directives du MCC. it

est aussi soumis aux audits de cabinets independants, du MCC. de rInspecteur General de

« United States Agency for International Development » et du « United States Government

Accountability Office ».

Article 11: Effets du decret.

Le present decret abroge le decret 2008-53 de 29 janvier 2008 portant creation de la Mission de

Formulation et de Gestion du MCA Senegal (ci-aprês « MFG-MCA »). L'Etat du Senegal se

substitue a la MFG-MCA dans l'exercice de ses droits et l'execution de ses obligations legales et

contractuelles, notamment les obligations sociales, fiscales, et les sommes dues par la MFGMCA aux prestataires de services ; toutefois, le MCA Senegal, peut. exclusivement au cas ou it

manifesterait de facon expresse lintention de le faire : (1) beneficier des prestations qui etaient

executes au profit de la MFG-MCA et exercer les droits attaches a ces prerogatives (sans

assumer aucune obligation). ou (2) assumer des obligations et des droits qui etaient executes au

profit de la MFG-MCA.

Article 12: Dispositions Transitoires

Sans prejudice des autres dispositions du present decret, jusqtra 1"adoption du reglement

interieur le Conseil de Surveillance se reunit, soit a la demande au moins de 4 Membres, soit

rinitiative du Premier Ministre ou de son representant.

Les reunions du Conseil de Surveillance sont convoquees par le Premier Ministre ou son

representant, qui les preside.

Le Conseil de Surveillance statue valablement lorsque la moitie de ses Membres sont presents ou

representes. Les decisions du Conseil de Surveillance sont prises a la majorite absolue des

Membres presents ou representes a r exception de 1"adoption du reglement interieur. Le

reglement interieur ne pourra are adopt& et les decisions par voie &rite ne pourront étre prises,

que par la majoritd absolue des Membres du Conseil de Surveillance.

Article 13: Execution du decret.

Le Premier Ministre, le Ministre d'Etat, ministre des Affaires etraneres; le Ministre d'Etat,

ministre de I" Economie et des Finances ; le Ministre d'Etat, ministre de 1" Interieur ; le Ministre

d'Etat. ministre de Environnement. de la Protection de la Nature. des Bassins de retention et

des Lacs artificiels : le Ministre d'Etat. ministre des Infrastructures et de ramenagement du

territoire: le Ministre d'Etat, ministre de la Decentralisation et des Collectivites locales; le

SC HEM LE 2 - 6
Ministre de la Justice : Le Ministre chargé du developpement social et du genre sont charges.

chacun en cc qui le concerne. de Fexecution du present decret qui sera publie au Journal officiel:

Fait a Dakar. le

Par le President de la Republique Abdoulaye WADE

Le Premier Ministre

Les titres exactes a confirmer.

C.HEDl._ LE 2 -
MULTI-YEAR FINANCIAL PLAN SUMMARY

This Annex II summarizes the Multi-Year Financial Plan for the Program.

1. General.

A multi-year financial plan summary (-Multi-Year Financial Plan Summary -) is attached

hereto as Exhibit A. By such time as specified in the PIA, the Government will adopt. subject to

MCC approval, a Multi-Year Financial Plan that includes. in addition to the multi-year summary

of estimated MCC Funding and the Government's contribution of funds and resources, the

annual and quarterly funding requirements for the Program (including administrative costs) and

for each project, projected both on a commitment and cash requirement basis.
EXHIBIT A

MULTI-YEAR FINANCIAL PLAN SUMMARY

Mt LTI-1 . EAR FINANCIAL PLAN

• (I SS)

Project CIF Year 1 1 ear 2 Year 3 Year 4 Year 5 Total

1.Irrigation & Water Resources

Management Project

Infrastructure Activity

Land Tenure Security Activity

Social Safeguard Measures

Sub-Total 0 19.812.280 69.915.184 63.538.624 16.667.272 75.500 170.008.860

2.Roads Rehabilitation Project

National Road #2

National Road #6

Sub-Total 0 48,695.302 101.844.436 95.320.317 56.859.947 21.342,497 324.062.499

3. Monitoring and Evaluation (M&E)

Monitoring and Evaluation

Su b-Total 0 571.500 771.500 546.500 671.500 1.196.500 3.757.500

4. Program Administration and Audit'

MCA-Senegal

Fiscal Agent / Procurement Agent

Audit

Sub-Total 5.000.000 7.248.022 7.324.764 7.403.964 7.383.539 7.810.852 42.171.141

Grand Total 5,000,000 76.327.104 179.855.884 166.809.405 81.582.258 30,425.349 540.000,000

These amounts do not include any costs required to be borne by the Government pursuant to the Compact. including,

but not limited to Sections 2.6(a) and Section 8.1 of the Compact.

A'N\FA 11-
ANNEX III

DESCRIPTION OF MONITORING AND EVALUATION PLAN

This Annex III (this "111&E Annex") generally describes the components of the Monitoring and

Evaluation Plan ("M&E Plan-) for the Program. The actual content and form of the M&E Plan

will be agreed to by MCC and the Government, and may be modified from time to time without

requiring an amendment to this Annex III.

Overview.

MCC and the Government will formulate. agree to and the Government will implement. or cause

to be implemented, an M&E Plan that specifies (a) how progress toward the Compact Goal,

Program Objective and Project Objectives will be monitored, ("Monitoring Component"), (b) a

process and timeline for the monitoring of planned, ongoing, or completed Project Activities to

determine their efficiency and effectiveness, and (c) a methodology for assessment and rigorous

evaluation of the outcomes and impact of the Program ("Evaluation Component-). Information

regarding the Program's performance. including the M&E Plan, and any amendments or

modifications thereto, as well as progress and other reports. will be made publicly available on

the website of MCA-Senegal and elsewhere.

2. Program Logic.

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

Activities contribute to poverty reduction and economic growth in Senegal. In sum. the goal of

the Program is to contribute to economic growth and poverty reduction by: (a) increasing

household and firm incomes through increased irrigated agricultural production and productivity

on irrigated perimeters: and (b) increasing household and firm access to domestic and

international markets through improved road quality and reduced travel times and costs.

3. Monitoring Component.

To monitor progress toward the achievement of the impact and outcomes, the Monitoring

Component of the M&E Plan will identify (a) the Indicators (as defined below), (b) the

definitions of the Indicators. (c) the sources and methods for data collection. (d) the frequency

for data collection. (e) the party or parties responsible. and (f) the timeline for reporting on each

Indicator to MCC.

Further, the Monitoring Component will track changes in the selected Indicators for measuring

progress towards the achievement of the objectives during the Compact Term. Before the

initiation of implementation activities for each Project. MCA-Senegal will collect baseline data

on the selected Indicators or verify already collected baseline data.

(a) Indicators. The M&E Plan will measure the results of the Program using

quantitative, objective and reliable data ("Indicators.). Each Indicator will have benchmarks

that specify the expected value and the expected time by which that result will be achieved

("Target"). The M&E Plan will be based on a logical framework approach that classifies

Indicators as goal. outcome. output. and process milestones. The Compact Goal Indicators

( -Goal Indicators") will measure the general contribution of the Projects to the national

economic growth and poverty reduction. Second. the Project Objective and outcome Indicators
("Project Objective and Outcome indicators-) will measure the final result of each Project.

Third. output Indicators and process milestones ("Activity Indicators-) will measure the early

and intermediate results of the Project Activities. For each Project Objective and Outcome

Indicator and each Activity Indicator, the M&E Plan will define a strategy for obtaining and

verifying the value of such Indicator prior to undertaking any activity that affects the value of

such Indicator (such value, a "Baseline"). All Indicators will be disaggregated by gender,

income level and age. and beneficiary types to the extent practicable. Subject to prior written

approval from MCC, MCA-Senegal may add Indicators or refine the definitions and Targets of

existing Indicators.

(i) Goal. The M&E Plan will contain the Goal Indicators listed below

specifying the definition, baseline, and end of Compact Target for each. The economic analysis

estimates that:

• Over a 20-year period, the Irrigation and Water Resources Management Project is

expected to contribute to an average increase in net revenue of 35% among beneficiaries.

• Over a 20-year period, benefits of the RN2 Road Activity are expected to be comparable

to an average increase of 13 percent of annual consumption among the catchment area

population (5 kilometers on either side of the road).'

• Over a 20-year period, benefits of the RN6 Road Activity are expected to be comparable

to an average increase of 9 percent of annual consumption among the catchment area

population (5 kilometers on either side of the road).

(ii) Project Objective and Outcome Indicators and Activity Indicators. The

M&E Plan will contain Project Objective and Outcome Indicators, which will measure the two

Projects and are listed below with their definitions, baselines and targets. Prior to the initiation

of implementation of an Activity, MCC and MCA-Senegal will agree on a final set of Activity

Indicators. The M&E Plan will contain these Indicators or will be amended to contain these

Indicators.

Note: some of the beneficiaries of the RN2 will overlap NA ith those of the Irrigation and Water Resources

Management Project.

EIX III -2
Irrigation and Water Resources Management Project

Objective and Outcome Indicators

Irrigation and

Water Resources

Management

Project

Indicator Definition Baseline Value Year 5 Target

Project Objective:

Increased irrigated

agricultural

production and

productivity on

newly irrigated

perimeters in the

Delta and

N 'Gal lenka

Volumes of irrigated

rice production (Tons)

dry season).

Total quantity of rice

cultivated by year on the

irrigated areas (irrigation and 55.000 263.000

Agricultural cropping

intensity

Total number of hectares

cultivated by year/Total

irrigated area

0.95 1.50

Area of land under

irrigation (hectares)

Total number of hectares of

land using irrigation for

agricultural production

11,800 39.740'

Outcomes Indicator Definition Baseline value Year 5 Target

Increased efficiency

of water

infrastructure for

irrigated agriculture

Efficiency of irrigation

infrastructure (m'is) Water flow over time in the

Lampsar canal

13 I 65

Improved land tenure

management on

irrigated perimeters

Percent of allocated

parcels with "titres

d'affectation-4

Total numbers of parcels with

land titles (i.e., -titres

d' affectation'')/total numbers

of parcels allocated

0 100%

Percent of "titres

d'affectationregistered at the CRs

Total numbers of registered

land titles (i.e.. -titres

d' affectation-)1 total numbers

of parcels allocated

0 100%

Percent of new land

conflicts resolved

Total numbers of new

conflicts resolved/total

numbers of new conflicts

registered

0 95%

Incremental increase of 19,490 hectares rehabilitated and 8000 hectares in extension in the Delta region, and 440

hectares in extension in N .Gallenka. All hectares are expected to be formalized under the and tenure securir■,

activity.

See the Land Tenure Security Activity section of this document for definitions of French terms.

The total number of parcels to be allocated and registered will be determined b■. the land allocation criteria.

\\N-\ III-3
Roads Rehabilitation Project

National Road #2 Indicator

Objective and Outcome Indicators

Definition Baseline Value Year 5 Target

Activity Objective:

Increased access to

domestic and international

markets

Average Annual Daily

Traffic

Total number of

vehicles on rehabilitated

road

RichardTollNdioum: 870

RichardTollNdioum: 1240

Transport times

Travel time saved due

to improved conditions

on rehabilitated road 1

TBD 50% reduction

Outcomes Indicator Definition Baseline value Year 5 Target

Improved road quality

International

Roughness Index

(proxy for vehicle

operating costs)

Measurement of

pavement roughness on

rehabilitated road

RichardTollNdioum: 8.4

RichardTollNdioum: 2.4

Extended road network Kms of road

rehabilitated

Total number of

kilometers of road

rehabilitated 0 120 km

National Road #6 Indicator Definition Baseline Value Year 5 Target

I Activity Objective:

Increased access to

domestic and international

I markets

Average Annual Daily

Traffic

Total number of

vehicles on rehabilitated

road

1 Ziguinchor —

i1 Tanaf: 540

Ziguinchor —

Tanaf: 680

Tanaf— Kolda:

820

Tanaf— Kolda:

1490

KoldaKounkane:

1200 1850

Kolda-Kounkane:

Transport times

Travel time saved due

to improved conditions

on rehabilitated road TBD 50% reduction

Outcomes Indicator Definition Baseline value Year 5 Target

Improved road quality

International

Roughness Index (IRI)

(proxy for vehicle

operating costs)

Measurement of

pavement roughness

on rehabilitated road

15 /.5

Extended road network Kms of road

rehabilitated

Total number of

kilometers of road

rehabilitated

0 260 km'

(b) Data Collection and Reporting. The M&E Plan will establish euidelines for data

collection and reporting. and identify the responsible parties. Compliance with data collection

and reporting timelines will be conditions for Disbursements for the relevant Project Activities as

set forth in the Program Implementation Agreement. The M&E Plan will specify the data

collection methodologies. procedures, and analysis required for reporting on results at all levels.

" Baseline values for travel times will be available N‘ ith final results of the onzoina studies.

Final value to be confirmed.

\-\\[\ 111-4
The M&E Plan will describe any interim MCC approvals for data collection, analysis. and

reporting plans.

(c) Data Quality Reviews. As determined in the M&E Plan or as otherwise requested

by MCC. the quality of the data gathered through the M&E Plan will be reviewed to ensure that

data reported are as valid. reliable, and timely as resources will allow. The objective of any data

quality review will be to verify the quality and the consistency of performance data across

different implementation units and reporting institutions. Such data quality reviews also will

serve to identify where those levels of quality are not possible, given the realities of data

collection.

(d) Management Information System. The M&E Plan will describe the information

system that will be used to collect data, store. process and deliver information to relevant

stakeholders in such a way that the Program information collected and verified pursuant to the

M&E Plan is at all times accessible and useful to those who wish to use it. The system

development will take into consideration the requirement and data needs of the components of

the Program. and will be aligned with MCC existing systems. other service providers. and

ministries.

(e) Role of MCA-Senegal. The monitoring and evaluation of this Compact spans

across two discrete Projects and will involve a variety of governmental, non-governmental, and

private sector institutions. MCA-Senegal holds full responsibility for implementation of the

M&E Plan. MCA-Senegal will oversee all Compact-related monitoring and evaluation activities

conducted for each of the Projects. ensuring that data from all implementing entities is

consistent, accurately reported and aggregated into regular Compact performance reports as

described in the M&E Plan.

4. Evaluation Component.

The Evaluation Component of the M&E Plan will contain three types of evaluations: Impact

Evaluations. Project Performance Evaluations, and Special Studies. Plans for each type of

evaluation will be finalized before any Disbursement for specific Program or Project activities.

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

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

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

accordance with MCC's guidelines for monitoring and evaluation plans posted from time to time

on the MCC Website (the "MCC Policy for Monitoring and Evaluation of Compacts and

Threshold Programs").

(a) Impact Evaluation. The M&E Plan will include a description of the methods to

be used for impact evaluations and plans for integrating, the evaluation method into Project

design. Based on in-country consultation with stakeholders. the strategies outlined below were

jointly determined as having the strongest potential for rigorous impact evaluation. The M&E

Plan will further outline in detail these methodologies. Final impact evaluation strategies are to

be jointly determined before the approval of the M&E Plan. The following is a summary of the

potential impact evaluation methodologies:

.-V\NEN -
(i) Irrigation and Water Resources Management Project.

An impact evaluation will be conducted to estimate the causal relationship between the project

and its objective of increasing agricultural production and productivity; as well as its long-term

goal of increasing household and firms' incomes. The evaluation will likely use a difference-indifference methodology comparing three geographic zones: (1) areas expected to benefit from

the irrigation systems rehabilitation under the project. (2) areas that will benefit from irrigation

systems extension, and (3) a comparison area that is not covered by the Compact. Surveys

conducted in all three areas before and after the project will allow rigorous analysis to estimate

the project's incremental contribution to the targeted objectives and goals.

(ii) Roads Rehabilitation Project.

Similarly, a difference-in-difference methodology will be used to estimate the causal relationship

between road rehabilitation and increased economic activity. Surveys will be conducted before

and after road rehabilitation in two zones: (1) one area within five kilometers of each side of the

road8: (2) one area outside of the five kilometer corridor. Analyzing conditions among the two

groups over two points in time will allow estimates of the project's incremental impact.

(b) Final Evaluation. The M&E Plan will make provision for Final Project level

evaluations (-Final Evaluations"). With the prior written approval of MCC. MCA-Senegal (or

MCC independently) will engage independent evaluators to design the Final Evaluations to be

conducted at the end of each Project. The Final Evaluations will review progress during

Compact implementation and provide a qualitative context for interpreting monitoring data.

They must at a minimum (i) evaluate the efficiency and effectiveness of the Project Activities;

(ii) determine if and analyze the reasons why the Compact Goal. Program Objective and Project

Objective(s) were or were not achieved; (iii) identify positive and negative unintended results of

the Program; (iv) provide lessons learned that may be applied to similar projects; and (v) assess

the likelihood that results will be sustained over time.

(i) Special Studies. The M&E Plan will include a description of the methods

to be used for special studies funded through this Compact or by MCC. Plans for conducting the

special studies will be determined jointly between MCA-Senegal and MCC before the approval

of the M&E Plan. The M&E Plan will identify and make provision for any other special studies,

ad hoc evaluations, and research that may be needed as part of the monitoring and evaluating of

this Compact. Either MCC or MCA-Senegal may request special studies or ad hoc evaluations

of Projects. Project Activities. or the Program as a whole prior to the expiration of the Compact

Term. When MCA-Senegal engages an evaluator. the evaluator will be externally contracted

and independently source selected by MCA-Senegal. The aforementioned engagement will be

subject to the prior written approval of MCC. following a tender in accordance with the MCC

Program Procurement Guidelines. and in accordance with any relevant Implementation Letter or

The economic analysis used 5 kilometers on either side of the road as an estimated -catchment area-- of

beneficiaries.

.-\\NEIN Ill - 6
supplemental aereement. Contract terms must ensure non-biased results and the publication of

results.

(c) Request for Ad Hoc Evaluation or Special Study. If MCA-Senegal requires an ad

hoc independent evaluation or special study at the request of the Government for any reason.

including for the purpose of contesting an MCC determination with respect to a Project or

Activity or to seek funding from other donors, no MCC Funding or MCA-Senegal resources may

be applied to such evaluation or special study without MCC's prior written approval.

5. Other Components of the M&E Plan.

In addition to the Monitoring and Evaluation Components, the M&E Plan will include the

following components for the Proeram. Projects and Project Activities, including, where

appropriate, roles and responsibilities of the relevant parties and providers:

(a) Costs. A detailed cost estimate for all components of the M&E Plan.

(b) Assumptions and Risks. Any assumption or risk external to the Program that

underlies the accomplishment of the Program Objective, Project Objectives and Activity

outcomes. However, such assumptions and risks will not excuse any Party's performance unless

otherwise expressly agreed to in writing by the Parties.

6. Implementation of the M&E Plan.

(a) Approval and Implementation. The approval and implementation of the M&E

Plan, as amended from time to time, will be in accordance with this Annex III, the Program

Implementation Agreement and any other relevant supplemental agreement, and the MCC Policy

for Monitoring and Evaluation of Compacts and Threshold Programs.

A \ \ I I\ llI
ANNEX IV

CONDITIONS TO DISBURSEMENT OF COMPACT IMPLEMENTATION FUNDING

This Annex IV sets forth the conditions precedent applicable to Disbursements of Compact

Implementation Funding (each a "CIF Disbursement.). Capitalized terms used in this Annex IV

and not defined in this Annex IV or in the Compact have the meanings assigned to such terms in

the form of Program Implementation Agreement attached to the Compact as Annex VII. Upon

execution of the Program Implementation Agreement. each CIF Disbursement shall be subject to

the terms and conditions of the Program Implementation Agreement (including, without

limitation. Section 3.3 thereof).

1. Conditions to All CIF Disbursements (Including the Initial CIF Disbursement).

Each of the following conditions precedent must have been met to MCC's satisfaction prior to

each CIF Disbursement:

(a) Delivery by MFG-MCA (or. upon its establishment, MCA-Senegal) to MCC of a

complete, correct, and fully executed Disbursement Request for the relevant Disbursement

Period, together with any applicable Periodic Reports covering such Disbursement Period, in

each case in form and substance satisfactory to MCC and submitted in accordance with the

Reporting Guidelines. Each Disbursement Request shall include the following reference

number: GRO9SEN09010.

(b) MCC is satisfied, in its sole discretion, that: (i) each activity being funded by such

CIF Disbursement is necessary, advisable. or is otherwise consistent with the goal of facilitating

the implementation of the Compact; (ii) there has been no violation of, and the use of the

requested funds for the purposes requested will not violate, the limitations on the use or

treatment of (x) MCC Funding, as set forth in this Compact, including under Section 2.7. or (y)

Compact Implementation Funding; (iii) no material default or breach of any covenant,

obligation, or responsibility of the Government or MFG-MCA (or, upon its establishment, MCASenegal) under this Compact, the Program Implementation Agreement, any supplemental

agreement. or any Program Guidelines has occurred or is continuing; and (iv) any Taxes paid

with MCC Funding through the date ninety (90) days prior to the start of the applicable

Disbursement Period have been reimbursed by the Government in full in accordance with this

Compact.

(c) MCC is satisfied, in its sole discretion, that MFG-MCA (or. upon its

establishment. MCA-Senegal) is sufficiently mobilized in order for MFG-MCA (or MCASenegal, as the case may be) to be able to fully perform its obligations and act on behalf of the

Government.

(d) MFG-MCA (or, upon its establishment. MCA-Sene(zal), shall have adopted a

Procurement Plan. in form and substance satisfactory to MCC. with respect to the Compact

Implementation Funding. and such Procurement Plan remains in full force and effect.

(e) MFG-MCA (or. upon its establishment. MCA-Senegal). shall have adopted an

Fiscal Accountability Plan. in form and substance satisfactory to MCC. and such Fiscal

Accountability Plan remains in full force and effect.

ANNEX V

DEFINITIONS

AA TR has the meaning provided in paragraph I (e) of Part B of Annex I.

Additional Representative has the meaning provided in Section 4.2.

Activity has the meaning provided in Part B of Annex I.

Activity Indicators has the meaning provided in paragraph 3(a) of Annex 111.

AE has the meaning provided in Schedule A of Annex VI.

AFD has the meaning provided in paragraph 2(d) of Part B of Annex I.

Approval Documents has the meaning provided in Schedule B of Annex VI.

Audit Guidelines has the meaning provided in Section 3.8(a).

Baseline has the meaning provided in paragraph 3(a) of Annex III.

Bilateral Agreement has the meaning provided in Schedule A of Annex H.

Board has the meaning provided in paragraph 3(c) of Part B of Annex I.

Casamance has the meaning provided in paragraph 1 of Part A of Annex I.

CCs has the meaning provided in paragraph 2(a)(iv) of Part B of Annex I.

Cellule has the meaning provided in paragraph 3(d) of Part B of Annex I.

CIF Disbursement has the meaning provided in Annex IV.

CDI has the meaning provided in paragraph 2(a)(iv)(2) of Part B of Annex I.

Compact has the meaning provided in the Preamble.

Compact Contract has the meaning provided in Schedule C of Annex H.

Compact Goal has the meaning provided in Section 1.1.

Compact Implementation Funding has the meaning provided in Section 2.2(a).

Compact Records has the meaning provided in Section 3.7(a).

Compact Term has the meaning provided in Section 7.4.

Covered Provider has the meaning provided in Section 3. 7 (c).

CRs has the meaning provided in paragraph 2(a)(iv) of Part B of Annex I.

DD has the meaning provided in Schedule B of Annex 
Delta has the meaning provided in paragraph 2(a) of Part B of Annex 1.

DGD has the meaning provided in Schedule B of Annex VI.

DGID has the meaning provided in Schedule A of Annex VI.

Disbursement has the meaning provided in Section 2.4.

Establishment Decree has the meaning provided in paragraph 3(c) of Part B of Annex 

EU has the meaning provided in paragraph 1(d) of Part B of Annex I.

Evaluation Component has the meaning provided in paragraph 1 ofAnnex 

Excess CIF Amount has the meaning provided in Section 2.2(d).

Exempt Person has the meaning provided in Schedule D of Annex VI.

Exempt Vendor has the meaning provided in Schedule C ofAnnex VI.

Fuel Approval Documents has the meaning provided in Schedule E of Annex VI.

Final Evaluations has the meaning provided in paragraph 4(h) of Annex III.

Fiscal Agent has the meaning provided in paragraph 3(f) of Part B of Annex I.

Goal Indicators has the meaning provided in paragraph 3(a) ofAnnex 

Government has the meaning provided in the Preamble.

Governance Guidelines has the meaning provided in paragraph 3(c) of Part B of Annex I

Implementation Letter has the meaning provided in Section 3.5.

Implementing Entity has the meaning provided paragraph 3(e) of Part B of Annex I.

Implementing Entity Agreement has the meaning provided in paragraph 3(e) of Part B of Annex I

Indicators has the meaning provided in paragraph 3(a) of Annex III.

Inspector General has the meaning provided in Section 3.8(a).

Irrigation Maintenance Action Plan has the meaning provided in paragraph 2(e) of Part B 0 fill777eX 

Management Unit has the meaning provided in paragraph 3(c) of Part B ofA nnex I.

.i'I&E Annex has the meaning provided in Annex III.

M&E Plan has the meaning provided in Annex III.

MCA Act has the meaning provided in Section 2.2(w.

MCA-Senegal has the Meaning provided in Section 3.2(h ).
MCA-Senegal Bylaws has the meaning provided in paragraph 3(c) of Part B of Annex I.

MCC has the meaning provided in the Preamble.

MCC Environmental Guidelines has the meaning provided in Section 2.7(c).

MCC Funding has the meaning provided in Section 2.3.

MCC Gender Policy has the meaning provided in paragraph 3 of Part A of Annex I.

MCC Policy for Monitoring and Evaluation of Compacts and Threshold Programs has the meaning

provided, for in paragraph 4 ofAnnex III.

MCC Program Procurement Guidelines has the MeeMing - provided in Section 3.6.

MCC Resettlement Guidance has the meaning provided in paragraph 3 of Part A of Annex I.

MCC Website has the meaning provided in Section 2. 7.

MFG-MCA has the meaning provided in Section 3.2(b).

MoEF has the meaning provided in Schedule A ofAnnex VI.

Monitoring Component has the meaning provided in paragraph 1 ofAnnex 

Multi-Year Financial Plan Summary has the meaning provided in paragraph 1 of Annex II.

NGOs has the meaning provided in paragraph 1 of Part A ofAnnex I.

OMB has the meaning provided in Section 3.8(b).

OP 4.12 has the meaning provided in paragraph 3 of Part A of Annex I.

PACR has the meaning provided in paragraph 2(d) of Part B of Annex I.

Party and Parties has the meaning provided in the Preamble.

PDMAS has the meaning provided in paragraph 2(d) of Part B of -41711eX I.

Permitted Account has the meaning provided in Section 2.4.

POAS has the meaning provided in paragraph 2(a)(r0(2) of Part B of Annex I.

Podor has the meaning provided in paragraph 2(a) of Part B ofAnnex I

Principal Representative has the meaning provided in Section 4.2.

Procurement Agent has the meaning provided in paragraph 3(g) of Part B of Annex I.

Program has the meaning provided in the Preamble.

Program Funding has the meaning provided in Section 2.1.

NNNEX V - 3
Program Guidelines means collectively the Audit Guidelines. the MCC Environmental Guidelines. the

Governance Guidelines, the MCC' Program Procurement Guidelines, the Reporting Guidelines. the MCC

Policy, fin- Monitoring and Evaluation of Compacts and Threshold Programs, and any other guidelines.

policies or guidance papers .from time to time published on the MCC Website.

Program Implementation Agreement or PIA has the meaning provided in Section 3.1.

Program Objective has the meaning provided in Section 1.2.

Project(s) has the meaning provided in Section 6.2(b).

Project Objective(s) has the meaning provided in Section 1.3.

Project Objective and Outcome Indicators has the meaning provided in paragraph 3(a) of Annex 

Provider has the meaning provided in Section 3.7(c).

RN2 has the meaning provided in paragraph 1(a) of Part B of Annex I.

RN6 has the meaning provided in paragraph 1(a) of Part B of Annex I.

Road Fund has the meaning provided in paragraph 1(e) of Part B of Annex I.

SAED has the meaning provided in paragraph 2(a) of Part B of Annex I.

Senegal has the meaning provided in the Preamble.

Stakeholder's Committee has the meaning provided in paragraph 3(C) of Part B ofAnnex I.

Target has the meaning provided in paragraph 3(a) of Annex III.

Taxes has the meaning provided in Section 2.8(a).

TE has the meaning provided in Schedule B of Annex VI

Temporary Admission Request has the meaning provided in Schedule B of Annex VI.

United States Dollars means the lai4ful currency of the United States of America.

US$ means United States Dollars.

USAID has the meaning provided in paragraph 1(d) of Part B of Anne.x I.

USDA has the meaning provided in paragraph 2(d) of Part B of Annex I.

Valley has the meaning provided in paragraph 1 of Part A of Annex I.

Vendor has the meaning provided in Schedule A of Annex VI.

\\\EX V -4
ANNEX VI

SPECIFIC TAX EXEMPTION MECHANISMS
SCHEDULE A

VALUE ADDED TAX (VAT) 9

LEGAL BASIS FOR EXEMPTION.

I . The Compact

The Agreement dated May 13, 1961, by and between the United States

Government and the Government relating to Economic, Financial and Technical

Assistance. which entered into force on May 13. 1961 (the "Bilateral

Agreement.")

3. Applicable provisions of the Code General des ImpOts

4. Applicable textes d'application

BENEFICIARIES OF EXEMPTION.

MFG-MCA (to be replaced by MCA-Senegal, both of which shall be referred to herein

collectively as -MCA-Senegal"), each Implementing Entity and any individuals or legal persons

providing services. goods or works in connection with the Compact Program (each a "Vendor").

PROCEDURES.

A. Local Purchases by MCA-Senegal.

• MCA-Senegal requests a final invoice free of VAT ("hors TVA") for the services,

goods or works to be purchased from the applicable supplier.'

• MCA-Senegal submits the final invoice to the "Direction Generale des Impots et

Domaines" ("DGID") of the Ministry of Economy and Finance ("MoEF'),

requesting exoneration from VAT, together with (i) a reference to the registered

Compact or (ii) a copy of the instrument of Compact ratification and the applicable

Compact tax provisions. For the avoidance of doubt. MCA-Senegal may also submit

the final invoice together with a copy of its "Attestation d 'Exoneration - (-AE") and a

copy of the Compact.

• Within forty-eight (48) hours. DGID stamps the final invoice and returns the same to

MCA-Senegal and the purchase(s) can be made by MCA-Senegal free of VAT ("hors

To the extent that VAT is imposed at the port of entr., ("bureau d'entree") on imported foods. together with

custom duties. the applicable tax exemption procedures are described in Schedule B below.

For efficiency. the request should reflect the amount of goods needed for several months.
B. Local Purchases by any Implementing Entity or any Vendor.

• The Implementing Entity/Vendor requests a final invoice free of VAT (-hors TVA-)

for the goods or services to be purchased from the applicable supplier."

• The Implementing Entity/Vendor submits the final invoice to MCA-Senegal for

approval and onward submission to DGID.

• MCA-Senegal submits a request to DGID with the final invoice, requesting

exoneration from VAT, together with (i) a reference to the registered Compact or (ii)

a copy of the instrument of Compact ratification and the applicable Compact tax

provisions. For the avoidance of doubt. MCA-Senegal may also submit the final

invoice together with a copy of its AE and a copy of the Compact.

• Within forty-eight (48) hours, DGID stamps the final invoice and returns the same to

MCA-Senegal.

• MCA-Senegal delivers the stamped, final invoice to the Implementing Entity/Vendor

as soon as practicable and the purchase(s) can be made by the Implementing

Entity/Vendor free of VAT (-hors TVA-).

For efficiency. the request should reflect the amount of goods needed for several months.

SCHEDLLE
SCHEDULE B

CUSTOMS DUTIES

LEGAL BASIS FOR EXEMPTION.

1. The Compact

2. The Bilateral Agreement

3. Applicable provisions of the Code des Douanes

4. Applicable textes d'application

BENEFICIARIES OF THE EXEMPTION.

MCA-Senegal, each Implementing Entity and any Vendor importing goods in connection with

the Compact Program.

PROCEDURES.

A. Purchases of Imported Goods by MCA-Senegal.

• MCA-Senegal obtains a pro .forma invoice free of all customs duties. including but

not limited to VAT and any other applicable Taxes (-hors taxes - hors douane"), for

the specific items being imported for Compact-related work. and completes a "Titre

a''Exoneration" ( -TE"), which can be obtained from the Chamber of Commerce.'

• MCA-Senegal properly signs the TE and submits a request to the -Direction

Generale des Douanes" ("DGD") of the MoEF requesting the exoneration of all

customs duties, including but not limited to VAT and any other applicable Taxes

("hors taxes - hors douane"), on the goods to be imported. The TE and seven (7)

copies of the pro forma invoice are attached to the request.

• Within forty-eight (48) hours, the DGD stamps the TE, and the pro forma invoices,

and returns all of the documents (collectively, the -Approval Documents-) to MCASenegal.

• MCA-Senegal provides the Approval Documents to its "Commissionnaire Agree en

Douane" to prepare a "Declaration de Douane" which can be obtained at the

port of entry. The -Comnzissionnaire Agree en Douane" files the DD. together with

the Approval Documents. with the "Bureau Des Douanes d'Importation."

2

The TE is actually completed by MCA-Senegal's "Commissionnuire Agree' en Douane . - with the appropriate

customs codes for each item to he imported.
• Within seventy-two (72) hours, the imported goods can be retrieved free of all

customs duties. including but not limited to VAT and any other applicable Taxes

("hors taxes - hors douane -).

B. Purchases of Imported Goods by any Implementing Entity or any Vendor.

• The Implementing Entity/Vendor submits a request to MCA-Senegal. which shall

include (i) seven (7) copies of a pro forma invoice free of all customs duties,

including but not limited to VAT and any other applicable Taxes ( -hors taxes - hors

douane-). for the specific items being imported for Compact-related work and (ii) a

completed TE.''

• MCA-Senegal, on the Implementing EntityNendor's behalf, submits a request to

DGD requesting the exoneration of all customs duties. including but not limited to

VAT and any other applicable Taxes ("hors taxes - hors douane-). on the goods to be

imported. The TE and the pro forma invoices are attached to the request.

• Within forty-eight (48) hours, the DGD stamps the Approval Documents and returns

the Approval Documents to MCA-Senegal.

• MCA-Senegal provides the stamped Approval Documents to the Implementing

Entity/Vendor as soon as practicable.

• The Implementing Entity/Vendor provides the Approval Documents to its

-Commissionnaire Agree en Douane- to prepare a DD, which can be obtained at the

port of entry. The -Commissionnaire .4gree en Douane - files the DD. together with

the Approval Documents, with the -Bureau Des Douanes d'Importation. -

• Within seventy-two (72) hours, the imported goods can be retrieved free of all

customs duties, including but not limited to VAT and any other applicable Taxes

("hors taxes - hors douane-).

C. Temporary Admission of Equipment, Including But Not Limited to Automobiles

and Household Goods, by Vendors."

• The Vender obtains a pro forma invoice free of all customs duties, including but not

limited to VAT and any other applicable Taxes ("hors taxes - hors douane -), for the

equipment. including but not limited to automobiles and household goods. to be

imported and prepares a "temporary admission of equipment" request (a "Temporary

Admission Request-).

13 The TE is actually completed by the Implementing Entity :Vendor's "Commissionnaire Agree en Dottane- with

the appropriate customs codes for each item to be imported.

1 4 The Government permits the temporary. tax exempt admission of equipment, including but not limited to

automobiles and household goods. if such equipment will be re-exported upon the earlier of (i) the completion

of the applicable contract or (ii) the expiration or termination of the Compact: provided that such equipment.

including. but not limited to automobiles and household goods. is used solely for Compact-related work. If the

equipment. including but not limited to automobiles and household goods. is later sold in Senegal or is used in

Senegal in connection with work that is not related to the Compact Program. then the pro rata share of the

applicable Taxes must be paid at such time in accordance with the laws of Senegal.

SCHEL B - 2
• MCA-Senegal. on the Vendor's behalf. submits the Temporary Admission Request

and seven (7) copies of the pro forma invoice to the Director of Studies and

Legislation within DGD as soon as practicable.

• Within seventy-two (72) hours. DGD stamps the Temporary Admission Request and

the pro forma invoices, which permits the applicable equipment to be imported free

of all customs duties, including but not limited to VAT and any other applicable

Taxes ( -hors taxes - hors douane"). for a period of twelve (12) months.

• MCA-Senegal provides the stamped Temporary Admission Request to the Vendor as

soon as practicable.

• The Vendor, through its -Conunissionnaire Agree en Douane." completes the

procedures for the importation of goods set forth in Section B of this Schedule B.

• Thereafter. COTECNA, the control structure approved by the Government (or any

successor entity thereto), must validate the purchase price of the equipment, as

indicated on the pro forma invoice. COTECNA will identify the origin of the

equipment, obtain the actual price of such equipment. and issue a certificate of value,

confirming or denying the price set forth in the pro forma invoice. If the purchase

price is denied, DGD will correct the purchase price as set forth in the Temporary

Admission Request and in its internal records. The time required for COTECNA to

validate the purchase price of the equipment varies, but in any case shall not delay the

time required for DGD to stamp the Temporary Admission Request and the pro

forma invoice.

• The stamped Temporary Admission Request also exempts the applicable equipment

from any fees and/or charges associated with the "service des mines." including

without limitation any registration, sticker and/or license fees.

• The Temporary Admission Request must be renewed every twelve (12) months until

the earlier of (i) the completion of the applicable agreement or contract, (ii) the end of

the work related to the Compact Program and/or (iii) the expiration or termination of

the Compact.

• If the duration of the work related to the Compact Program exceeds twelve (12)

months. the Vendor shall submit two requests to MCA-Senegal (for onward

submission to the Director of Studies and Legislation within the DGD) prior to the

expiration of original Temporary Admission Request:

o a request for exemption from any Taxes payable on the consumption of

equipment previously admitted by the DGD: and

o a request for renewal of the Temporary Admission Request.

• Upon the earlier of (i) the completion of the applicable agreement or contract, (ii) the

end of the work related to the Compact Program and/or (iii) the expiration or

termination of the Compact. the equipment must be re-exported or placed in a bonded

warehouse. DGD must provide prior authorization for the equipment to be released

for consumption in Senegal. and the pro rata share of any applicable Taxes must be

paid at such time in accordance with the laws of Senegal.

SCHELLDE B - 3
SCHEDULE C

CORPORATE INCOME TAX

LEGAL BASIS FOR EXEMPTION.

1. The Compact

2. The Bilateral Agreement

3. Applicable provisions of the Code General des Impeits

4. Applicable textes dapplication

BENEFICIARIES.

All Vendors (including companies or other legal persons), other than Vendors formed under the

laws of Senegal (each an "Exempt VendorTh provided that in determining if a Vendor has been

formed under the laws of Senegal for the purposes of this Schedule C. the status of such Vendor

shall be based on its status as of the time it is awarded or executes a Compact-related agreement

or contract, and such initial determination shall not change regardless of: (i) the type of

agreement or contract used to employ or engage such Vendor, (ii) any laws of Senegal that

purport to change such status based on period of contract performance or period of time residing

and/or working in Senegal and/or (iii) any requirement under the laws of Senegal that a company

or other legal person must establish a branch office in Senegal. or otherwise register or organize

itself under the laws of Senegal. in order to provide goods, services or works in Senegal.

PROCEDURES.

• Any Exempt Vendor earning only Compact-related corporate income in Senegal in

any given fiscal year shall be exempt from paying any applicable Taxes on such

Compact-related corporate income and shall declare such Compact-related corporate

income in its year-end tax filing with DGID solely for informational purposes.

• Any Exempt Vendor earning Compact-related corporate income and non-Compactrelated corporate income in any given fiscal year shall:

o Submit and register each Compact-related contract or agreement (each a

"Compact Contract-) with DGID. together with a certification from MCASenegal confirming that the goods, services or works to be provided under the

Compact Contract form a part of the Compact program.

At the end of any such fiscal year. the Exempt Vendor shall be permitted to

exclude. the gross income derived from any Compact Contract( s) (as verified by

the registered Compact Contract( s)) for the purposes of determining its corporate

income tax liability in Senegal for any such fiscal year. The Exempt Vendor shall

declare such Compact-related gross corporate income in its year-end tax filing

wth DGID solely for informational purposes.

o For example. if an Exempt Vendor earned US$100.000 of gross corporate income

under a Compact Contract(s) and an additional LS5500.000 in other Senegal-
related gross corporate income, the Exempt Vendor shall be permitted to exclude.

the US$100,000 for the purposes of determining its corporate income tax liability

in Senegal for such fiscal year.

SCHEDL LE C - 2
SCHEDULE D

INDIVIDUAL INCOME TAX

LEGAL BASIS FOR EXEMPTION.

1. The Compact

2. The Bilateral Agreement

3. Applicable provisions of the Code Gèneral des ImpOts

4. Applicable textes d 'application

BENEFICIARIES.

All individuals, other than citizens and permanent residents of Senegal. working in connection

with the Compact Program (each an "Exempt Person"); provided that in determining if an

individual is a permanent resident for the purposes of this Schedule D. the status of such

individual shall be based on his/her status as of the time that such individual is awarded or

executes a Compact-related agreement or contract. and such initial determination shall not

change regardless of: (i) the type of contract used to employ or engage such individual and/or (ii)

any laws of Senegal that purport to change such status based on period of contract performance

or period of time residing and/or working in Senegal.

PROCEDURES.

• Any Exempt Person earning only Compact-related personal income in Senegal in any

given fiscal year shall be exempt from paying any applicable Taxes on such

Compact-related personal income, and shall declare such Compact-related personal

income in its year-end tax filing with DGID solely for informational purposes.

• Any Exempt Person earning Compact-related personal income and non-Compactrelated personal income in any given fiscal year shall be permitted to exclude the

gross amount of such Compact-related personal income for the purposes of

determining his/her personal income tax liability in Senegal for any such fiscal year.

The Exempt Person shall declare such Compact-related Gross personal income in its

year-end tax filing with DGID solely for informational purposes.
SCHEDULE E

FUEL TAX

LEGAL BASIS FOR EXEMPTION.

I . The Compact

2. The Bilateral Agreement

3. Applicable provisions of the Code Gènèral des ImpOts

4. Applicable provisions of the Code des Douanes

5. Applicable textes d'application

BENEFICIARIES.

Any fuel purchased for use exclusively in connection with the Compact Program.

PROCEDURES.

A. Purchases of Fuel by MCA-Senegal through Gas Coupons.

• MCA-Senegal obtains a pro forma invoice from a Senegal-based oil company for a

particular quantity of fuel free of all of customs duties, including but not limited to

VAT. the -tax speciale sur hydrocarbons- and any other applicable Taxes ("hors

taxes - hors douane -), and completes a TE. which can be obtained from the Chamber

of Commerce.'

• MCA-Senegal properly signs the TE and submits a request to DGD requesting the

exoneration of all customs duties, including but not limited to VAT, the "tax speciale

sur hydrocarbons- and any other applicable Taxes ("hors taxes - hors douane”), on

the fuel to be imported. The TE and seven (7) copies of the pro forma invoice are

attached to the request.

• Within seventy-two (72) hours, DGD stamps the TE and the pro forma invoices

(collectively, the "Fuel Approval Documents") and returns the same to MCASenegal.

• Thereafter. MCA-Senegal submits the Fuel Approval Documents to DGID requesting

the exoneration of any additional Taxes.

15 The TE is actually completed by MCA-Senegal's -Commissionnuire 4gret; en Douane" with the appropriate

customs code.
• Within seventy-two (72) hours. DGID stamps the Fuel Approval Documents and

returns the same to MCA-Senegal.

• The stamped Fuel Approval Documents shall entitle MCA-Senegal to purchase free

from customs duties, including but not limited to VAT. the "tax speciale sur

hydrocarbons- and any other applicable Taxes ("hors taxes - hors douane"). for the

price set forth in the pro Ibrma invoice. gas coupons from the Senegal-based oil

company equal to, in the aggregate. the quantity of fuel represented on the pro . /brina

invoice.

• Subject to the specific terms of the arrangement with the Senegal-based oil company,

the gas coupons can be redeemed at the oil company's various gas stations in

Senegal. Each coupon entitles the bearer to the quantity of fuel set forth on such

coupon.

B. Purchase of Fuel by Implementing Entities/Vendors through Gas Coupons.

• The Implementing Entity/Vendor submits a request to MCA-Senegal, which shall

include (i) seven (7) copies of a pro forma invoice from a Senegal-based oil company

for a particular quantity of fuel free of all of customs duties, including VAT, the "tax

speciale sur hydrocarbons" and any other applicable Taxes (-hors taxes - hors

douane-). and (ii) a completed TE.'

• MCA-Senegal. on the Implementing Entity/Vendor's behalf. submits a request to

DGD requesting the exoneration of all customs, including VAT, the -tax speciale sur

hydrocarbons" and any other applicable Taxes ("hors taxes - hors douane"). on the

fuel to be imported. The TE and pro forma invoices are attached to the request.

• Within seventy-two (72) hours, DGD stamps the Fuel Approval Documents and

returns the same to MCA-Senegal.

• Thereafter, MCA-Senegal submits the Fuel Approval Documents to DGID requesting

the exoneration of any additional Taxes.

• Within seventy-two (72) hours, DGID stamps the Fuel Approval Documents and

returns the same to MCA-Senegal.

• MCA-Senegal provides the stamped Fuel Approval Documents to the Implementing

Entity/Vendor as soon as practicable.

• The stamped Fuel Approval Documents shall entitle the Implementing Entity/Vendor

to purchase free from customs duties, including but not limited to VAT. the "tax

.speciale sur hydrocarbons- and any other applicable Taxes (-hors taxes - hors

douane-). for the price set forth in the pro .forma invoice, gas coupons from the

Senegal-based oil company equal to, in the aggregate. the quantity of fuel represented

on the pro,forma invoice.

I " The TE is actually completed by the Implementing Entity Vendor's "C,minussionnaire Agyee; en Dozeane" with

the appropriate customs code.

SCHEDLLE E - 2
• Subject to the specific terms of the arrangement with the Senegal-based oil company.

the gas coupons can be redeemed at the oil company's various gas stations in

Senegal. Each coupon entitles the bearer to the quantity of fuel set forth on such

coupon.

C. Purchases of Fuel by MCA-Senegal To Be Imported in Bulk.

• MCA-Senegal obtains a pro forma invoice from an oil company for a particular

quantity of fuel free of all of customs duties. including but not limited to VAT, the

"tax speciale sur hydrocarbons- and any other applicable Taxes ("hors taxes - hors

douane-), and completes a TE.' 7

• MCA-Senegal properly signs the TE and submits a request to DGD requesting the

exoneration of all customs duties, including but not limited to VAT, the -tax speciale

sur hydrocarbons- and any other applicable Taxes ("hors taxes - hors douane -), on

the fuel to be imported. The TE and seven (7) copies of the pro forma invoice are

attached to the request.

• Within seventy-two (72) hours, DGD stamps the Fuel Approval Documents and

returns the same to MCA-Senegal.

• Thereafter, MCA-Senegal submits the Fuel Approval Documents to DGID requesting

the exoneration of any additional Taxes.

• Within seventy-two (72) hours, DGID stamps the Fuel Approval Documents and

returns the same to MCA-Senegal.

• MCA-Senegal provides the Fuel Approval Documents to its "Commissionnaire Agree

en Douane" to prepare a DD. which can be obtained at the port of entry. The

-Commissionnaire Agree en Douane" files the Da together with the Fuel Approval

Documents, with the "Bureau Des Douanes d'Importation. -

• Within seventy-two (72) hours. the fuel can be retrieved free of all of customs duties,

including VAT, the "tax speciale sur hydrocarbons- and any other applicable Taxes

("hors taxes - hors douane").

D. Purchases of Fuel by an Implementing Entity/Vendor To Be Imported in Bulk.

• The Implementing Entity/Vendor submits a request to MCA-Senegal, which shall

include (i) seven (7) copies of a pro forma invoice from an oil company for a

particular quantity of fuel free of all of customs duties. including VAT, the "tax

speciale sur hydrocarbons" and any other applicable Taxes ("hors taxes - hors

douane"). and (ii) a completed TE. 18

The TE is actually completed by MCA-Senegal's "Commissionnaire . -4grèe en Douane- with the appropriate

customs code.

The TE is actually completed by the Implementing- Entity :Vendor's -Commissionnaire Agrëe en Dowie. ' with

the appropriate customs code.

S(._ HEIDE_ LE E - 3
• MCA-Senegal. on the Implementing Entity/Vendor's behalf. submits a request to

DGD requesting the exoneration of all customs, including VAT. the "tax speciale sur

hydrocarbons" and any other applicable Taxes ("hors taxes - hors douane"), on the

fuel to be imported. The TE and pro liffnia invoices are attached to the request.

• Within seventy-two (72) hours, DGD stamps the Fuel Approval Documents and

returns the same to MCA-Senegal.

• Thereafter, MCA-Senegal submits the Fuel Approval Documents to DGID requesting

the exoneration of any additional Taxes.

• Within seventy-two (72) hours, DGID stamps the Fuel Approval Documents and

returns the same to MCA-Senegal.

• MCA-Senegal provides the stamped Fuel Approval Documents to the Implementing

Entity/Vendor as soon as practicable.

• The Implementing Entity/Vendor provides the Fuel Approval Documents to its

"Commissionnaire Agree en Douane" to prepare a DD, which can be obtained at the

port of entry. The -Commissionnaire Agree en Douane files the DD, together with

the Fuel Approval Documents, with the "Bureau Des Douanes d'Importation."

• Within seventy-two (72) hours, the fuel can be retrieved free of all of customs duties,

including VAT, the "tax speciale sur hydrocarbons" and any other applicable Taxes

("hors taxes - hors douane").

SCHEDLLE E --4
SCHEDULE F

REGISTRATION TAX, REGISTRATION FEES AND STAMP DUTY

LEGAL BASIS FOR EXEMPTION.

1. The Compact

2. The Bilateral Agreement

3. Applicable provisions of the Code Genèral des ImpOts

4. Applicable textes d'application

BENEFICIARIES.

MCA-Senegal and any Vendors, for any act or transaction related to the Compact Program that is

subject to registration fees. stamp duty and/or any other registration taxes.

PROCEDURES.

A. MCA-Senegal.

• At the time MCA-Senegal presents the applicable Compact Contract to DGID to be

stamped and/or registered, MCA-Senegal shall present a copy of the Compact

• Upon presentation of such documentation, DGID shall stamp and/or register the

applicable Compact Contract without charge and free from any applicable Taxes.

B. Vendors.

• At the time a Vendor presents the applicable Compact Contract to DGID to be

stamped and/or registered, the Vendor shall present a copy of the Compact, together

with a certification from MCA-Senegal confirming that the goods. services or works

to be provided under the Compact Contract form a part of the Compact program.

• Upon presentation of such documentation. DGID shall stamp and/or register the

applicable Compact Contract without charge and free from any applicable Taxes.