Readout of the June 2015 MCC Board of Directors Meeting
For Immediate Release
June 19, 2015
At its quarterly meeting on June 17, the Millennium Challenge Corporation’s (MCC) Board of Directors approved a new power-sector-focused compact with Benin and discussed a draft five-year strategic plan for the agency. The Board also received an update from the audit committee on its assessments of the agency’s financial performance and operations and an update on policy performance and compact development in partner countries.
The newly approved $375-million compact with Benin includes MCC’s largest power generation project, its largest investment in solar power and its largest off-grid electrification project. The compact also contains MCC’s largest policy reform budget to date. The MCC investment will significantly enhance the engagement of Benin in Power Africa and help the government in appropriately opening the power sector to private investment. The Government of Benin will make a financial contribution of $28 million towards the program. MCC expects the compact will benefit 9.8 million people over 20 years.
Five-Year Strategic Plan
MCC presented the Board with a draft version of a new five-year strategic plan. The formulation of the plan has been guided by four overarching principles: (1) simplicity and focus – rather than a laundry list, the plan should identify meaningful priorities; (2) MCC should preserve what works best in our model while adapting it for scale and impact; (3) greater emphasis on how we work, rather than on where and what, since the latter are addressed, respectively, by MCC’s country selection system and by the country-specific economic analysis that identifies particular sectors for MCC to work in; and (4) ensuring a firm grounding in theory and practice, both MCC’s and that of the broader development community. MCC will be seeking input from stakeholders as it finalizes the plan.
The MCC partner country updates discussion focused on Tanzania, Lesotho and El Salvador.
MCC continues to closely follow events in Tanzania. Work to develop the second compact in Tanzania continues, but the compact will not be considered for approval until, among other pending items, the Tanzanian government makes progress on energy sector reform commitments made in 2014. Once the compact is ready, MCC will scrutinize the government’s track record on good governance, including control of corruption and freedom of expression.
The Board discussed a May 27 State Department statement expressing concerns about the state of the rule of law in Lesotho. MCC has communicated similar concerns directly to the Government of Lesotho and will continue to closely follow the situation.
The Board also expressed concern over rule of law in El Salvador, including a current case involving two American citizens. Both the U.S. ambassador and MCC have raised the case with the Salvadoran government, emphasizing the importance of a just and speedy resolution of the matter.
Audit Committee Report
The Board heard a summary of the audit committee meeting, during which positive progress on addressing recommendations from MCC’s fiscal 2014 financial statements and recent performance audits was discussed. The committee also reported on MCC’s focus on improving the effectiveness and efficiency of the integration of agency data, processes and controls within its financial management systems.