Notice of Entering Into a Compact With the Government of the Republic of Mali, 69226-69268 [E6-19696]

Agencies

• Millennium Challenge Corporation

[Federal Register Volume 71, Number 230 (Thursday, November 30, 2006)]
[Notices]
[Pages 69226-69268]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19696]



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Part II





Millennium Challenge Corporation





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 Notice of Entering into a Compact With the Government of the Republic 
of Mali; Notice

Federal Register / Vol. 71, No. 230 / Thursday, November 30, 2006 / 
Notices

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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 06-20]


Notice of Entering Into a Compact With the Government of the 
Republic of Mali

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: In accordance with Section 610(b)(2) of the Millennium 
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium 
Challenge Corporation (MCC) is publishing a summary and the complete 
text of the Millennium Challenge Compact between the United States of 
America, acting through the Millennium Challenge Corporation, and the 
Government of the Republic of Mali. Representatives of the United 
States Government and the Government of the Republic of Mali executed 
the Compact documents on November 13, 2006.

    Dated: November 16, 2006.
William G. Anderson, Jr.,
Vice President & General Counsel (Acting), Millennium Challenge 
Corporation.

Summary of Millennium Challenge Compact With the Government of the 
Republic of Mali

I. Introduction

    The five-year, approximately $460 million Millennium Challenge 
Compact aims to support policy reform and the development of key 
infrastructure for productive sectors, by addressing Mali's constraints 
to growth and capitalizing on two of the country's major assets, the 
Bamako-S[eacute]nou International Airport (the ``Airport''), a gateway 
for regional and international trade and the Niger River Delta for 
irrigated agriculture. These investments will create a platform for 
increased production and productivity of agriculture and small- and 
medium-sized enterprises, as well as expand Mali's access to markets 
and trade.
    The MCC investments will be strengthened by policy reforms and 
institutional support, such as formal land titles for the rural poor, 
demand-driven rural advisory services, an improved business 
environment, and increased access to markets and trade. These 
institutional and infrastructure investments will impact the poor in 
Mali, particularly Malian farmers and small- and medium-sized 
entrepreneurs, not only in project intervention zones but, over time, 
on a regional and national scale.

II. Program

    The projects under the Compact are as follows:
    1. Airport Improvement Project: Establish an independent and secure 
link to the regional and global economy, addressing the specific need 
of a landlocked developing country.
    2. Industrial Park Project: Provide properly managed and serviced 
land for close to 200 businesses and leverage reforms that will 
decrease the cost of doing business.
    3. Alatona Irrigation Project: Provide a catalyst for the 
transformation and commercialization of family farms, supporting Mali's 
national development strategy objectives to increase the contribution 
of the rural sector to economic growth and help achieve national food 
security.
Airport Improvement Project
    The Airport Improvement Project is intended to remove constraints 
to air traffic growth and increase the Airport's efficiency in both 
passenger and freight handling through airside and landside 
infrastructure improvements, as well as the establishment of 
appropriate institutional mechanisms to ensure effective management, 
security, operation, and maintenance of the Airport facilities over the 
long term.
    The Airport Improvement Project includes the following activities:
     Airside Infrastructure: Improvements will include 
reinforcement overlay to, and expansion of, the runway, taxiway, and 
apron areas; replacement of deteriorating navigational equipment; and 
upgrades of Airport security systems.
     Landside Infrastructure: Improvements will be made to the 
existing passenger terminal and a new passenger terminal will be 
constructed, as well as support facilities, Airport roads, and parking 
lots. Certain utilities, including water supply, solid waste disposal 
facilities, wastewater treatment, and power generation, are also 
planned to be constructed and designed as joint systems to support both 
the proposed investments at the Airport and the adjacent Industrial 
Park.
     Institutional Strengthening: Infrastructure improvements 
will be accompanied by the establishment of appropriate institutional 
mechanisms to ensure effective management, operation and maintenance of 
the Airport facilities over the long term. These measures will involve 
both the management of the Airport, as well as the wider regulatory 
framework governing the civil aviation sector in Mali.
Industrial Park Project
    The Industrial Park Project, located within the Airport domain, 
will develop a platform for industrial activity (initially 100 hectares 
(ha)) to meet the high and growing demand for well managed and serviced 
industrial land. The 100 ha industrial park (the ``Industrial Park'') 
is intended to be an anchor for a growing industrial sector in Mali, 
thereby alleviating a key constraint to value added production and 
economic growth. Reliable provision of utility services, including 
electricity, water, and wastewater, will increase business 
productivity.
    The Industrial Park Project includes the following activities:
     Primary and Secondary Infrastructure: The Industrial Park 
Project will fund primary and secondary infrastructure systems for the 
100 ha Industrial Park, designed for potential expansion to a larger 
200 ha industrial zone. The primary infrastructure will include major 
road systems and utilities such as water supply mains and pump 
stations. Secondary infrastructure will include roads leading into 
Industrial Park sub-zones as well as lateral water/drainage piping, 
etc. to service the smaller parcels. The tertiary (on-lot) 
infrastructure, to be financed and built by the industries locating in 
the Industrial Park, includes interior roads and parking, water supply 
taps/connections and fire protection, electrical and 
telecommunications, and wastewater collection (and possibly 
pretreatment).
     Resettlement: Resettlement activities, which must be 
consistent with World Bank Operational Policy 4.12 on Involuntary 
Resettlement, require compensation for loss of livelihoods as a result 
of both physical and economic displacement. The scope of this 
displacement is larger than the 200 ha acquisition of land and 
compensation of users for the Industrial Park. Common infrastructure 
facilities \1\ require acquisition and clearing of land and rights of 
way outside the Industrial Park, both inside and outside the Airport 
domain. To compensate peri-urban cultivators who practice rain-fed 
agriculture in the Airport domain and whose lands are required for the 
Industrial Park Project and the Airport Improvement Project, the 
Industrial Park Project will develop serviced garden plots offered on a 
long-term (e.g., 40-year) lease on land elsewhere in the

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Airport domain. Acquisition of other land for infrastructure and rights 
of way located outside the Airport domain will also require 
compensation, the nature of which will be determined during the 
development of the RAP, which will cover the resettlement and 
compensation issues related to both the Industrial Park Project and the 
Airport Improvement Project.
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    \1\ This infrastructure includes wastewater treatment, power 
generation, water supply, conveyance and storage, and solid and 
hazardous waste disposal to serve both the Industrial Park and the 
Airport.
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     Institutional Strengthening: Infrastructure improvements 
will be accompanied by the establishment of appropriate mechanisms that 
will ensure effective management, operation and maintenance of the 
facilities over the long term. These mechanisms will involve the 
management of the Industrial Park itself, as well as administrative and 
regulatory reforms to alleviate current constraints to business 
development in Mali. To encourage the development of small- and medium-
sized enterprises (``SMEs''), the Industrial Park Project will provide 
business services such as access to financial and market information 
and export facilitation services. The Industrial Park Project will also 
focus on how to ensure coordination in operations and maintenance of 
shared utilities between the Airport and Industrial Park operators.
Alatona Irrigation Project
    The Alatona Irrigation Project is focused on increasing production 
and productivity, increasing farmer incomes, improving land tenure 
security, modernizing irrigated production systems and mitigating the 
uncertainty from subsistence rain-fed agriculture. This project seeks 
to develop 16,000 ha of newly irrigated lands in the Alatona production 
zone of the Office du Niger (the ``ON''), representing an almost 20 
percent increase of ``drought-proof'' cropland. The Alatona Irrigation 
Project will introduce innovative agricultural, land tenure, and water 
management practices, as well as policy and organizational reforms 
aimed at realizing the ON's potential to serve as an engine of rural 
growth for Mali.
    The Alatona Irrigation Project includes the following activities:
     Niono-Goma Coura Road: This activity will involve 
upgrading an 81 kilometer north-south road within the national highway 
network from its current earth/gravel condition to a paved standard. 
The investment will also include an additional access spur to the 
Alatona perimeter at the village of Dogofry.
     Irrigation Planning and Infrastructure: This activity will 
involve main conveyance system expansion, Alatona irrigation system 
development, and support to the ON agency on water management.
     Land Allocation: The Alatona Irrigation Project will 
improve rural land tenure security in Mali by allocating newly 
developed, irrigated land to family farmers, women market gardeners, 
and farming companies in private ownership. These land recipients will 
purchase the land by making annual payments over a 15-20 year period. 
This activity consists of land parcel creation, land rights education, 
registration system upgrade, land parcel allocation and titling, and 
management of land revenues.
     Resettlement, Social Infrastructure, and Social Services: 
This activity will compensate families residing in the perimeter or 
with rights to land therein, consistent with World Bank Operational 
Policy 4.12 on Involuntary Resettlement, by offering land in the 
irrigation perimeter or, if the land option is not chosen, other 
compensation alternatives. This activity will provide social 
infrastructure to serve these project affected persons as well as 
incoming settlers and other migrant families and will also support 
social services (primarily education and health staff) during the last 
three years of the Compact.
     Agricultural Services: This activity will support a range 
of agricultural, institutional and related services to strengthen 
capacity and improve agricultural practice through applied agricultural 
research, extension and farmer training, support to farmer 
organizations, and support to water users associations.
     Financial Services: This activity will encourage 
agricultural lending by reducing the risks of extending credit in this 
newly developed zone, improving transparency within the existing 
financial system, and strengthening the capabilities of local financial 
institutions through a credit risk sharing program, microfinance credit 
bureau strengthening, financial institution capacity building, and 
direct support to farmers.
    The table below outlines the estimated MCC contribution to the 
program by year and category over the term of the Compact.
[GRAPHIC] [TIFF OMITTED] TN30NO06.000

III. Impacts

    The Airport Improvement Project will expand Mali's access to 
markets and trade through improvements in the transportation 
infrastructure at the Airport, as well as better management of the 
national air transport system. Evidence suggests that economic growth 
and poverty reduction depend on enhanced access to markets and trade. 
However, Mali's access is severely constrained. Mali is landlocked and 
heavily dependent on inadequate rail and road networks. Mali depends on 
freight transport through ports in unstable countries, such as Conakry, 
Guinea (Bamako's closest port, which is 1000 km away) and Abidjan, Cote 
d'Ivoire. In the last few years, the instability in Cote d'Ivoire has 
dramatically limited Mali's market access. Before the outbreak of the 
Ivorian crisis, 70 percent of Malian exports were leaving via the port 
of Abidjan. In 2003, this amount dwindled to less than 18 percent. Mali 
cannot control overland routes to international and regional markets. 
Therefore, air traffic has become Mali's lifeline for transportation of 
both passengers and export products.
    Malian exports are predominantly agriculture based and depend on 
rural

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small-scale producers, who would benefit from increased exports in 
high-value products such as mangoes, green beans, and gum arabic. 
Additionally, international tourists arriving at the Airport spend the 
majority of their time in rural areas, benefiting businesses in far-
away places such as Timbuktu, Mopti, and Djenne. Finally, the improved 
management of the national airport system will facilitate links to 
primary destinations through regional air travel.
    The Industrial Park Project will leverage national reforms in the 
business sector, reducing the cost and time to register a business, and 
enhance management and planning of the industrial sector. The existing, 
heavily congested, poorly managed, and degraded ``industrial zone'' is 
inappropriately located, lacks basic utilities and services, and has no 
room for expansion. The proposed Industrial Park would become the 
anchor for a growing industrial sector in Mali and alleviate a key 
constraint to value-added production and economic growth. Businesses in 
the agro-processing sector, where Mali has a comparative advantage, are 
likely to install in the Industrial Park. Growth generated by the 
Industrial Park will generally be poverty reducing due to the link to 
small-scale agricultural production.
    The Alatona Irrigation Project focuses on a high-potential 
geographical zone in one of the poorest areas of central Mali. The 
Alatona Irrigation Project will develop 16,000 ha of irrigable 
agricultural land in the Alatona zone of the ON resulting in increased 
productivity and production, as well as diversification of high-value 
crops. MCC's investments will include construction of a road, 
irrigation infrastructure, and social infrastructure, such as schools, 
clinics, and water and sanitation facilities. This project will provide 
social services, access to credit, and agricultural extension and will 
help establish and empower rural producer organizations by giving them 
access to information and productive assets. The Alatona Irrigation 
Project will leverage policy reforms expected to have a broad impact on 
the agricultural landscape throughout Mali.
    Together, the three projects will result in increased industrial 
growth in the urban area, increased agricultural production and 
productivity in the ON and improved access to national, regional, and 
international markets.

IV. Program Management

    The accountable entity (the ``MCA-Mali'') will be organized under 
the laws of Mali as a service rattach[eacute] attached to the Prime 
Minister's office. MCA-Mali will have a mixed public-private board of 
directors responsible for program oversight. The board will consist of 
eleven voting members and two non-voting members. A management team 
will have overall management responsibility for the day-to-day 
implementation of the program. MCA-Mali will remain accountable for the 
successful execution of the program while working through implementing 
entities, contractors and consultants, whose interaction will be 
facilitated by a fiscal agent and a procurement agent. The Government 
of Mali (``GOM'') will also create two advisory councils to represent 
beneficiaries for each of the project sites--the Airport domain and the 
Alatona zone. In addition to the fiscal agent and the procurement 
agent, financial auditors and possibly a data quality agent will 
provide external controls.

V. Other Highlights

A. Consultative Process
    The program strongly supports the third pillar of Mali's Poverty 
Reduction Strategy Paper (``PRSP'')--development of infrastructure and 
key support for productive sectors. The participatory process of the 
PRSP is characterized as having ``breadth'' and being ``systematic.'' 
The PRSP identifies the following as top constraints to economic growth 
in its consultative process:
     Climatic risks affecting the rural sector with 
consequences on the national economy.
     High cost of factors of production.
     Fluctuations in prices of principal import and export 
products.
     Isolation/landlocked nature of the country.
    The Compact was designed to address these constraints. Priorities 
were defined by the national PRSP structure and refinement occurred in 
consultation with civil society and the private sector. This 
consultative process enriched and helped form the GOM proposal and its 
development. The insistence on rural land ownership and titling derived 
from dialogue with civil society and private sector actors. The need 
for inclusion of a strong component of social services for the Alatona 
zone was also reinforced through the consultative process.
    Members of the GOM, private sector, and civil society (Malian and 
U.S. non-governmental organizations (``NGOs'')) played an active role 
in developing the Compact proposal. Local NGOs, including village-level 
women's associations, were directly involved in the process through 
numerous on-site workshops and meetings in the ON region. Consultations 
also took place with private sector and civil society actors around 
Bamako, as well as communities surrounding the Airport domain, who 
emphasized the need for improved infrastructure and increased economic 
activity to reduce poverty. In addition, the consultative process 
involved participation of the U.S. NGO community, which has a strong 
presence in Mali, working on health, education, agriculture, 
governance, and economic development programs throughout the country.
B. GOM Commitment and Effectiveness
    MCC and GOM have been in discussions over the following policy and 
institutional reforms that will reinforce the implementation and 
sustainability of the program. Relevant reforms will serve as 
conditions precedent in the disbursement agreement. Below is a list of 
policy and institutional reforms that have been adopted or are pending:
Airport Improvement Project
     GOM is in the process of restructuring several aspects of 
the civil aviation sector to reflect the recommendations of 
international organizations such as the International Civil Aviation 
Organization (``ICAO'') and the U.S. Federal Aviation Administration 
(``FAA''). Among these reforms:
    [cir] GOM recently (December 2005) created an independent and 
financially autonomous civil aviation agency, the Agence Nationale de 
l'A[eacute]ronautique Civile (ANAC). Implementation of the new agency 
is considered by GOM to be a high priority and a proposal has been made 
to include approximately $5 million in the national budget of Mali over 
the next three years for this purpose.
    [cir] A new law is expected to be approved before the end of 2006 
that will modernize the operations and management of Aeroports du Mali 
(``AdM''), the operator of the landside facilities. The text of the new 
law will grant AdM more flexibility, better define its mandate, and lay 
the groundwork for the eventual possibility of opening its capital to 
participation by third parties and creation of a soci[eacute]t[eacute] 
d'[eacute]conomie mixte.
Industrial Park Project
     Law 05-019 was ratified by Parliament in September 2005 
establishing API-Mali, a new investment promotion agency. This agency 
will encourage and sustain foreign direct and national investment, 
improve the business climate, and

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develop and regulate industrial zones and other economic activities. 
Implementation of this law will determine the agency's exact role vis-
[agrave]-vis the Industrial Park Project.
     In response to the Doing Business Indicators and the 
Multilateral Investment Guarantee Agency benchmarking study, GOM has 
developed a short-term action plan to improve Mali's performance. 
Recently, the Ministry of Investment Promotion has engaged the 
International Finance Corporation to develop a legal regulatory 
framework, in addition to frameworks relating to land allocation and 
taxation for industrial zone activities in the country.
     Among the various efforts that GOM is undertaking to 
address weaknesses in the Malian business climate, an important and 
innovative measure includes the establishment of the Presidential 
Investors' Council (``PIC'') in September 2004. The purpose of the PIC 
is to introduce a global business perspective into policy formulation 
and implementation. In response to one of its recommendations, GOM is 
targeting early 2007 to put in place a one-stop shop for business 
registration housed in the newly established API-Mali.
Alatona Irrigation Project
     GOM has expressed its high-level commitment to increase 
land-tenure security, to secure property rights and to increase 
issuance of land titles in the Alatona zone. This represents a major 
policy departure for GOM. Although Alatona will not be the first 
experiment with land titles in the rural area, the Alatona Irrigation 
Project is on an unprecedented scale.
     GOM reforms have included (a) the restructuring of the 
National Directorate of Public Works to create the National Directorate 
of Roads, including the establishment of a unit for emergency road 
works and (b) the establishment of a Road Authority (as a successor to 
the old Road Fund) with sole responsibility for managing the financing 
of road maintenance activities. The initial steps to create a 
specialized autonomous contracting agency for road maintenance, the 
AGEROUTE, have also been made. These steps provide assurance to MCC of 
GOM's commitment to a sustainable road maintenance program.
C. Sustainability
    The Mali program is embedded in the institutional framework of Mali 
with the limited creation of parallel structures. It reinforces GOM's 
approach and commitment to democracy, decentralization, and empowerment 
of local communities. MCC-supported interventions will complement and 
reinforce national strategies for poverty reduction and economic 
growth. The program objectives draw from the following national 
development strategies: PRSP, National Food Security Strategy, ON 
Master Plan, and Agriculture Orientation Law.
    Airport Improvement Project. Under the present division of 
jurisdictions, a number of entities have responsibility for the civil 
aviation sector in Mali in general and the regulation, oversight, 
management, operation, and development of the Airport in particular. In 
response to ICAO safety and security audits and FAA assessments, GOM is 
in the process of restructuring and consolidating this institutional 
framework. One major result has been the establishment of ANAC in 
December 2005, which now has financial and administrative independence.
    The Airport Improvement Project will reinforce the new civil 
aviation regulatory and oversight agency (ANAC) by providing technical 
assistance to establish a new organizational structure, administrative 
and financial procedures, staffing and training, and provision of 
equipment and facilities. Additionally, the project will rationalize 
and reinforce the Airport's management and operations agency (AdM) by 
providing technical assistance to establish a model for the management 
of the Airport and the long-term future status and organizational 
structure of AdM.
    Industrial Park Project. In 1999, GOM passed Decree 99-252 
declaring the 7,194 ha of land encompassing the Airport and the 
proposed Industrial Park as public domain land. Based on this decree, 
the Ministry of Public Works and Transportation and Ministry of 
Territorial Administration were named the responsible parties for the 
management of the Airport domain. Although AdM is viewed as the asset 
holding agency, GOM intends to enter into a management contract with a 
private operator for the Industrial Park. Under the World Bank Mali 
Growth Support Project, API-Mali will serve as the public-sector 
regulator for the Industrial Park, while day-to-day management will be 
assigned to a private entity (the ``Operator'') through an 
international, competitive procurement process. MCC will support the 
recruitment and start-up of the Operator, and will finance limited 
business support services to tenants.
    To ensure the creation of new SMEs, the Industrial Park Project 
will help these SMEs access financial and market information, as well 
as export facilitation services. In addition, the project will focus on 
how to ensure coordination in operations and maintenance of shared 
utilities between the Airport and Industrial Park operators.
    Alatona Irrigation Project. The Alatona perimeter is located at the 
``tail end'' of the ON gravity-fed irrigation system. Long term success 
hinges on effective and efficient management of the entire system. The 
project addresses this issue by financing additional capacity on the 
main conveyance structures, as well as supporting the ON to achieve 
sustainable management of its entire stock of assets. In addition, the 
Alatona Irrigation Project will address the need to update the existing 
ON Master Plan, which is based on scenarios and assumptions developed 
in 2001, and upon which current expansion plans are based. Maintenance 
of the main system and structures is the financial responsibility of 
GOM, which delegates this to the ON. Through a two-tiered system of 
joint ON-farmer committees, the ON also maintains the distributors and 
secondary canals within the five regional zones, while farmer 
organizations manage the tertiary canals. The water fees collected 
would seem adequate to cover the operations and maintenance cost of the 
major distribution systems within the zones.
    The Niono-Goma Coura road is part of GOM's annual routine 
maintenance program. Current allocations should ensure routine 
maintenance on this road. Periodic maintenance funding (about every 10 
years) is considered a major challenge, although it is anticipated that 
EU and World Bank efforts to increase user fees will over time ensure 
such funding.
    The financial services activity will provide microfinance 
institutions and banks with training in agricultural credit and other 
aspects of managing the delivery of financial services to the 
inhabitants of Alatona. The project will create a new legal entity--the 
Revenue Authority--to collect and manage the revenues generated through 
land payments. MCC funding will support the costs of structuring this 
entity and facilitate some initial capacity building. Following this, 
the Revenue Authority will support itself through the land revenues 
collected. This structure has the potential to encourage local 
institutions to organize themselves around project design and 
implementation, thereby building local capacity for community planning 
and service delivery and helping to strengthen nascent decentralized 
government.

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    Research and extension are considered public goods and are funded 
by GOM. Over the life of the Compact, demand-driven and fee-based 
research and extension techniques will be tested. It is expected that 
the financially self-sufficient Alatona producers' organization as well 
as farmers' groups and village associations will play a key role in 
demanding and paying for these services.
D. Environment and Social Assessment
    Airport Improvement Project. A Category A environmental impact 
assessment (``EIA''), following MCC Environmental Guidelines and Malian 
law, will be required. The recommended wastewater treatment, expanded 
water supply and distribution, solid and hazardous waste disposal, 
power supplies, drainage and other infrastructure are currently 
conceived and sized to serve both the Airport and the Industrial Park. 
Therefore, the Airport and the Industrial Park will be treated together 
for purposes of the EIA and the resettlement action plan (``RAP''), 
because of their common infrastructure, joint road access, shared space 
within the Airport domain and the cumulative effects of both projects. 
The joint RAP (covering physical and economic displacement, both 
temporary and permanent in areas inside and outside the Airport domain) 
will be prepared based on the World Bank's Operational Policy 4.12 on 
Involuntary Resettlement. Some of the infrastructure poses 
implementation risks, because they are municipal facilities not yet 
funded or built and located outside the Airport domain.
    Industrial Park Project. The Industrial Park will be assessed in 
the joint Airport/Industrial Park EIA. In this context, the RAP will 
address compensation for those cultivating and using land in the 
Industrial Park and in other locations, both on and off the Airport 
domain. The approach and issues discussed above for the Airport 
Improvement Project with respect to common infrastructure construction 
impacts, the EIA, and the RAP remain the same.
    Alatona Irrigation Project. Irrigation-related activities of the 
Alatona Irrigation Project, including activities external to the 
Alatona zone (such as presettlement activities and expansion and 
enhancement of the overall conveyance capacity of the ON's main canal 
system) will require a full Category A EIA, under MCC Environmental 
Guidelines and Malian law. The Niono-Goma Coura road's Category B 
environmental and social assessment will be prepared in advance of the 
irrigation EIA to expedite implementation of road improvements. The 
Environmental Assessment (2003) and updated Environmental Management 
Plan (2005), which already exist for road rehabilitation of a much 
longer stretch of the national route, will be supplemented and updated 
for the 80-kilometer section to be funded under the Compact. Cumulative 
impacts of the road as well as the irrigation activities will be 
addressed in the Alatona EIA. Both documents will include HIV/AIDS 
mitigation plans. Two RAPs consistent with World Bank Operational 
Policy 4.12 on Involuntary Resettlement will also be needed, one for 
the road activity and another for the irrigation activities. A 
prerequisite to preparing the Alatona EIA is preparation of an overall 
land use and natural resources management plan to address the 
sustainability of the Alatona large-scale land development and 
population increase of about 60,000.
E. Donor Coordination
    All three projects complement and leverage other donors' efforts in 
Mali. The World Bank is also investing in activities to improve the 
Airport, Industrial Park, and business climate. Due to the World Bank's 
funding gap, GOM requested additional funds from the MCC to support the 
larger and more costly infrastructure improvements. For the Alatona 
Irrigation Project, the Dutch Development Agency, French Development 
Agency (``AFD''), the World Bank, and the U.S. Agency for International 
Development (``USAID''), in particular, have been working in the ON 
over the past several decades, resulting in a more efficient, 
decentralized management structure, while increasing production and 
productivity of the zone. Relevant donor activities are described in 
more detail below.
    USAID: The Mali program builds on USAID's Accelerated Economic 
Growth and Trade Development Project (2003-2012), which includes the 
Program in Development of Agricultural Production, Mali Finance, and 
Trade Mali.
    World Bank: The Mali program complements and reinforces several 
ongoing or recently launched World Bank programs such as the Mali 
Growth Support Project, the National Project for Rural Infrastructure, 
the Agricultural Competitiveness and Diversification Project, and the 
Rural Community Development Project. The World Bank is also assisting 
in the funding of a regional program in West and Central Africa aimed 
at improving civil aviation safety and security as a key element of 
improving the performance and affordability of air transportation and 
optimizing its role as an engine of economic and social development.
    Regional Civil Aviation Cooperation: ANAC has recently received a 
draft Common Civil Aviation Code and Regulatory Texts from the West 
African Economic and Monetary Union. These documents were prepared as a 
model to be used by states belonging to regional groupings, as part of 
an effort sponsored by ICAO to reduce the financial burden for 
inspections on the part of countries with small aviation markets, by 
establishing common civil aviation regulations and the creation of 
regional entities to assist countries.
    U.S. Department of Transportation (USDOT) Safe Skies for Africa 
(SSFA): The SSFA program is intended to promote sustainable 
improvements in aviation safety and security, air navigation, and to 
support Africa's integration into the global economy. The SSFA program 
coordinates activities of other agencies, such as the FAA, the 
Transportation Security Administration and the National Transportation 
Safety Board, to improve the capacities of African aviation 
organizations. MCC has signed a Memorandum of Understanding with USDOT 
to collaborate on projects such as the present effort in Mali and 
discussions regarding the coordination of our respective projects have 
already taken place.
    AFD: The AFD has supported various initiatives in the ON for many 
years and is a lead donor in the donors group for the ON. The proposed 
expansion of the main canal system will complement a planned AFD 
project to strengthen certain sections of a primary canal.
    Other Donors: The Mali program complements other donors' programs, 
such as the Dutch Development Agency's activities in agricultural 
diversification and marketing, agricultural processing, improved water 
management, and institutional strengthening in the ON. The Dutch have 
recently approved financing for a cold-storage facility in Bamako that 
will be located in the Airport domain. This facility will be used for 
mangoes and other high value horticulture products, such as green 
beans.

Millennium Challenge Compact Between the United States of America 
Acting Through the Millennium Challenge Corporation and the Government 
of the Republic of Mali

Table of Contents

Article I. Purpose and Term

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    Section 1.1 Compact Goal; Objectives
    Section 1.2 Projects
    Section 1.3 Entry into Force; Compact Term
Article II. Funding and Resources
    Section 2.1 MCC Funding
    Section 2.2 Government Resources
    Section 2.3 Limitations on the Use or Treatment of MCC Funding
    Section 2.4 Incorporation; Notice; Clarification
    Section 2.5 Refunds; Violation
    Section 2.6 Bilateral Agreement
Article III. Implementation
    Section 3.1 Implementation Framework
    Section 3.2 Government Responsiblities
    Section 3.3 Government Deliveries
    Section 3.4 Government Assurances
    Section 3.5 Implementation Letters; Supplemental Agreements
    Section 3.6 Procurement; Awards of Assistance
    Section 3.7 Policy Performance; Policy Reforms
    Section 3.8 Records and Information; Access; Audits; Review
    Section 3.9 Insurance; Performance Guarantees
    Section 3.10 Domestic Requirements
    Section 3.11 No Conflict
    Section 3.12 Reports
Article IV. Conditions Precedent; Deliveries
    Section 4.1 Conditions Prior to the Entry into Force and 
Deliveries
    Section 4.2 Conditions Precedent to MCC Disbursements or Re-
Disbursements
Article V. Final Clauses
    Section 5.1 Communications
    Section 5.2 Representatives
    Section 5.3 Amendments
    Section 5.4 Termination; Suspension
    Section 5.5 Privileges and Immunities
    Section 5.6 Attachments
    Section 5.7 Inconsistencies
    Section 5.8 Indemnification
    Section 5.9 Headings
    Section 5.10 Interpretation
    Section 5.11 Signatures
    Section 5.12 Designation
    Section 5.13 Survival
    Section 5.14 Consultation
    Section 5.15 MCC Status
    Section 5.16 Language
    Section 5.17 Publicity; Information and Marking
Exhibit A: Definitions
Exhibit B: List of Certain Supplemental Agreements
Schedule 2.1(a)(iii): Compact Implementation Funding
Annex I: Program Description
    Schedule 1: Airport Improvement Project
    Schedule 2: Industrial Park Project
    Schedule 3: Alatona Irrigation Project
Annex II: Summary of Multi-Year Financial Plan
Exhibit A: Multi-Year Financial Plan Summary
Annex III: Description of the M&E Plan

Millennium Challenge Compact

    This Millennium Challenge Compact (the ``Compact'') is made between 
the United States of America, acting through the Millennium Challenge 
Corporation, a United States Government corporation (``MCC'') and the 
Government of the Republic of Mali (the ``Government'') (referred to 
herein individually as a ``Party'' and collectively, the ``Parties''). 
A compendium of capitalized terms defined herein is included in Exhibit 
A attached hereto.

Recitals

    Whereas, MCC, acting through its Board of Directors, has selected 
the Republic of Mali (``Mali'') as eligible to present to MCC a 
proposal for the use of Millennium Challenge Account (``MCA'') 
assistance to help facilitate poverty reduction through economic growth 
in Mali;
    Whereas, the Government has carried out a consultative process with 
the country's private sector and civil society to outline the country's 
priorities for the use of MCA assistance and developed a proposal, 
which final proposal was submitted to MCC on October 28, 2005 (the 
``Proposal'');
    Whereas, the Proposal focused on, among others, increasing farmer 
incomes through modernizing Mali's agricultural sector, together with 
investments in developing transportation infrastructure and rural 
institutions, all designed to dismantle obstacles to realizing Mali's 
agricultural potential as an engine of economic growth;
    Whereas, MCC has evaluated the Proposal and related documents to 
determine whether the Proposal is consistent with core MCA principles 
and includes projects and related activities that will advance the 
progress of Mali towards achieving poverty reduction through economic 
growth; and
    Whereas, based on MCC's evaluation of the Proposal and related 
documents and subsequent discussions and negotiations between the 
Parties, the Government and MCC determined to enter into this Compact 
to implement a program using MCC Funding to advance Mali's progress 
towards poverty reduction through economic growth (the ``Program'');
    Now, Therefore, in consideration of the foregoing and the mutual 
covenants and agreements set forth herein, the Parties hereby agree as 
follows:

Article I. Purpose and Term

Section 1.1 Compact Goal; Objectives

    The goal of this Compact is to reduce poverty through economic 
growth in Mali by increasing production and productivity of agriculture 
and small and medium-sized enterprises, as well as expanding Mali's 
access to markets and trade (the ``Compact Goal''). The key to 
advancing the Compact Goal is through the development of critical 
infrastructure and policy reform for productive sectors and addressing 
Mali's constraints to growth by capitalizing on two of its major 
assets, the Bamako-S[eacute]nou International Airport (the 
``Airport''), the gateway for regional and international trade, and the 
agricultural potential of the Niger River (collectively, the ``Program 
Objective''). The Parties have identified the following project-level 
objectives (each, a ``Project Objective'') of this Compact to advance 
the Program Objective, and thus the Compact Goal, each of which is 
described in more detail in the Annexes attached hereto:
    (a) Establish an independent and secure link to the regional and 
global economy through infrastructure investments at the Airport and 
policy reform of the national air transport system (the ``Bamako-
S[eacute]nou Airport Improvement Project Objective'');
    (b) Develop a platform for industrial activity to be located within 
the Airport domain in response to the growing demand for well managed 
and serviced industrial land (the ``Industrial Park Project 
Objective''); and
    (c) Increase the agricultural production and productivity in the 
Alatona zone of the Office du Niger (``ON'') through the construction 
of a road, irrigation infrastructure, social infrastructure, 
agricultural services, land allocation and increased access to credit 
(the ``Alatona Irrigation Project Objective'').
    The Government expects to achieve, and shall use its best efforts 
to ensure the achievement of, the Compact Goal, Program Objective and 
Project Objectives during the Compact Term. The Program Objective and 
the individual Project Objectives are collectively referred to herein 
as ``Objectives'' and each individually as an ``Objective.''

Section 1.2 Projects

    The Annexes attached hereto describe the specific projects, the 
policy reforms and other activities related thereto (each, a 
``Project'') that the Government will carry out, or cause to be carried 
out, in furtherance of this Compact to achieve the Objectives and the 
Compact Goal.

Section 1.3 Entry into Force; Compact Term

    This Compact shall enter into force on the date of the last letter 
in an exchange of letters between the Principal Representatives of each 
Party confirming that each Party has

[[Page 69232]]

completed its domestic requirements for entry into force of this 
Compact (including as set forth in Section 3.10) and that all 
conditions set forth in Section 4.1 have been satisfied by the 
Government and MCC (the ``Entry into Force''). This Compact shall 
remain in force for five (5) years from the Entry into Force, unless 
earlier terminated in accordance with Section 5.4 (the ``Compact 
Term'').

Article II. Funding and Resources

Section 2.1 MCC Funding

    (a) MCC's Contribution. MCC hereby grants to the Government, 
subject to the terms and conditions of this Compact, an amount not to 
exceed Four Hundred Sixty Million and Eight Hundred Eleven Thousand One 
Hundred Sixty Four United States Dollars (US$ 460,811,164) (``MCC 
Funding'') during the Compact Term to enable the Government to 
implement the Program and achieve the Objectives.
    (i) Subject to Sections 2.1(a)(ii), 2.2(b) and 5.4(b), the 
allocation of MCC Funding within the Program and among and within the 
Projects shall be as generally described in Annex II or as otherwise 
agreed upon by the Parties from time to time.
    (ii) If at any time MCC determines that a condition precedent to an 
MCC Disbursement has not been satisfied, MCC may, upon written notice 
to the Government, reduce the total amount of MCC Funding by an amount 
equal to the amount estimated in the applicable Detailed Budget for the 
Program, Project, Project Activity or sub-activity for which such 
condition precedent has not been met. Upon the expiration or 
termination of this Compact, (A) any amounts of MCC Funding not 
disbursed by MCC to the Government shall be automatically released from 
any obligation in connection with this Compact and (B) any amounts of 
MCC Funding disbursed by MCC to the Government as provided in Section 
2.1(b)(i), but not re-disbursed as provided in Section 2.1(b)(ii) or 
otherwise incurred as permitted pursuant to Section 5.4(e) prior to the 
expiration or termination of this Compact, shall be returned to MCC in 
accordance with Section 2.5(a)(ii).
    (iii) Notwithstanding any other provision of this Compact and 
pursuant to the authority of Section 609(g) of the Millennium Challenge 
Act of 2003, as amended (the ``Act''), upon the conclusion of this 
Compact (and without regard to the satisfaction of all of the 
conditions for Entry into Force required under Section 1.3), MCC shall 
make available up to Nine Million Two Hundred Thousand United States 
Dollars (US$ 9,200,000) (``Compact Implementation Funding'') to 
facilitate certain aspects of Compact implementation as described in 
Schedule 2.1(a)(iii) attached hereto; provided, such Compact 
Implementation Funding shall be subject to (A) the limitations on the 
use or treatment of MCC Funding set forth in Section 2.3, as if such 
provision were in full force and effect, and (B) any other requirements 
for, and limitations on the use of, such Compact Implementation Funding 
as may be required by MCC in writing; provided further, that any 
Compact Implementation Funding granted in accordance with this Section 
2.1(a)(iii) shall be included in, and not additional to, the total 
amount of MCC Funding; and provided further, any obligation to provide 
such Compact Implementation Funding shall expire upon the expiration or 
termination of this Compact or five (5) years from the conclusion of 
this Compact, whichever occurs sooner, and in accordance with Section 
5.4(e). Notwithstanding anything to the contrary in this Compact, this 
Section 2.1(a)(iii) shall provisionally apply, prior to Entry into 
Force, upon execution of this Compact by the Parties.
    (b) Disbursements.
    (i) Disbursements of MCC Funding. MCC shall from time to time make 
disbursements of MCC Funding (each such disbursement, an ``MCC 
Disbursement'') to a Permitted Account or through such other mechanism 
agreed by the Parties under and in accordance with the procedures and 
requirements set forth in Annex I, the Disbursement Agreement or as 
otherwise provided in any other Supplemental Agreement.
    (ii) Re-Disbursements of MCC Funding. The release of MCC Funding 
from a Permitted Account (each such release, a ``Re-Disbursement'') 
shall be made in accordance with the procedures and requirements set 
forth in Annex I, the Disbursement Agreement or as otherwise provided 
in any other Supplemental Agreement.
    (c) Interest. Unless the Parties agree otherwise in writing, any 
interest or other earnings on MCC Funding that accrue (collectively, 
``Accrued Interest'') shall be held in a Permitted Account and accrue 
in accordance with the requirements for the accrual and treatment of 
Accrued Interest as specified in Annex I or any Supplemental Agreement. 
On a quarterly basis and upon the termination or expiration of this 
Compact, the Government shall return, or ensure the return of, all 
Accrued Interest to any United States Government account designated by 
MCC.
    (d) Currency; Conversion. The Government shall ensure that all MCC 
Funding that is held in any Permitted Account shall be denominated in 
the currency of the United States of America (``United States 
Dollars,'' ``US$'' or ``$'') prior to Re-Disbursement. To the extent 
that any amount of MCC Funding held in United States Dollars must be 
converted into the currency of Mali for any purpose, including for any 
Re-Disbursement or any transfer of MCC Funding into a Local Account, 
the Government shall ensure that such amount is converted consistent 
with the requirements of the Bank Agreement or any other Supplemental 
Agreement between the Parties.
    (e) Guidance. From time to time, MCC may provide guidance to the 
Government through Implementation Letters on the frequency, form and 
content of requests for MCC Disbursements and Re-Disbursements or any 
other matter relating to MCC Funding. The Government shall apply such 
guidance in implementing this Compact.

Section 2.2 Government Resources

    (a) The Government shall provide or cause to be provided such 
Government funds and other resources, and shall take or cause to be 
taken such actions, including obtaining all necessary approvals and 
consents, as are specified in this Compact or in any Supplemental 
Agreement to which the Government is a party or as are otherwise 
necessary and appropriate effectively to carry out the Government 
Responsibilities or other responsibilities or obligations of the 
Government under or in furtherance of this Compact during the Compact 
Term and through the completion of any post-Compact Term activities, 
audits or other responsibilities.
    (b) If at any time during the Compact Term, the Government 
materially reallocates or reduces the allocation in its national budget 
or any other governmental authority of Mali at a departmental, 
municipal, regional or other jurisdictional level materially 
reallocates or reduces the allocation in its respective budget of the 
normal and expected resources that the Government or such other 
governmental authority, as applicable, would have otherwise received or 
budgeted, from external or domestic sources, for the activities 
contemplated herein, the Government shall notify MCC in writing within 
fifteen (15) days of such reallocation or reduction, such notification 
to contain information regarding the amount of the

[[Page 69233]]

reallocation or reduction, the affected activities, and an explanation 
for the reallocation or reduction. In the event that MCC independently 
determines, upon review of the executed national annual budget that 
such a material reallocation or reduction of resources has occurred, 
MCC shall notify the Government and, following such notification, the 
Government shall provide a written explanation for such reallocation or 
reduction and MCC may (i) reduce, in its sole discretion, the total 
amount of MCC Funding or any MCC Disbursement by an amount equal to the 
amount estimated in the applicable Detailed Budget for the activity for 
which funds were reduced or reallocated or (ii) otherwise suspend or 
terminate MCC Funding in accordance with Section 5.4(b).
    (c) The Government shall use its best efforts to ensure that all 
MCC Funding is fully reflected and accounted for in the annual budget 
of Mali on a multi-year basis.

Section 2.3 Limitations on the Use or Treatment of MCC Funding

    (a) Abortions and Involuntary Sterilizations. The Government shall 
ensure that MCC Funding shall not be used to undertake, fund or 
otherwise support any activity that is subject to prohibitions on use 
of funds contained in (i) paragraphs (1) through (3) of section 104(f) 
of the Foreign Assistance Act of 1961 (22 U.S.C. 2151b(f)(1)-(3)), a 
United States statute, which prohibitions shall apply to the same 
extent and in the same manner as such prohibitions apply to funds made 
available to carry out Part I of such Act; or (ii) any provision of law 
comparable to the eleventh and fourteenth provisos under the heading 
``Child Survival and Health Programs Fund'' of division E of Public Law 
108-7 (117 Stat. 162), a United States statute.
    (b) United States Job Loss or Displacement of Production. The 
Government shall ensure that MCC Funding shall not be used to 
undertake, fund or otherwise support any activity that is likely to 
cause a substantial loss of United States jobs or a substantial 
displacement of United States production, including:
    (i) Providing financial incentives to relocate a substantial number 
of United States jobs or cause a substantial displacement of production 
outside the United States;
    (ii) Supporting investment promotion missions or other travel to 
the United States with the intention of inducing United States firms to 
relocate a substantial number of United States jobs or a substantial 
amount of production outside the United States;
    (iii) Conducting feasibility studies, research services, studies, 
travel to or from the United States, or providing insurance or 
technical and management assistance, with the intention of inducing 
United States firms to relocate a substantial number of United States 
jobs or cause a substantial displacement of production outside the 
United States;
    (iv) Advertising in the United States to encourage United States 
firms to relocate a substantial number of United States jobs or cause a 
substantial displacement of production outside the United States;
    (v) Training workers for firms that intend to relocate a 
substantial number of United States jobs or cause a substantial 
displacement of production outside the United States;
    (vi) Supporting a United States office of an organization that 
offers incentives for United States firms to relocate a substantial 
number of United States jobs or cause a substantial displacement of 
production outside the United States; or
    (vii) Providing general budget support for an organization that 
engages in any activity prohibited above.
    (c) Military Assistance and Training. The Government shall ensure 
that MCC Funding shall not be used to undertake, fund or otherwise 
support the purchase or use of goods or services for military purposes, 
including military training, or to provide any assistance to the 
military, police, militia, national guard or other quasi-military 
organization or unit.
    (d) Prohibition of Assistance Relating to Environmental, Health or 
Safety Hazards. The Government shall ensure that MCC Funding shall not 
be used to undertake, fund or otherwise support any activity that is 
likely to cause a significant environmental, health, or safety hazard. 
Unless MCC and the Government agree otherwise in writing, the 
Government shall ensure that activities undertaken, funded or otherwise 
supported in whole or in part (directly or indirectly) by MCC Funding 
comply with environmental guidelines delivered by MCC to the Government 
or posted by MCC on its Web site or otherwise publicly made available, 
as such guidelines may be amended from time to time (the 
``Environmental Guidelines''), including any definition of ``likely to 
cause a significant environmental, health, or safety hazard'' as may be 
set forth in such Environmental Guidelines.
    (e) Taxation.
    (i) Taxes. The Government shall ensure that the Program, MCC 
Funding and Accrued Interest, and any other Program Asset, shall be 
free from any taxes imposed under the laws currently or hereafter in 
effect in Mali during the Compact Term. This exemption shall apply to 
any use of MCC Funding and Accrued Interest, and any other Program 
Asset, including any Exempt Uses, and to any work performed under or 
activities undertaken in furtherance of this Compact by any person or 
entity (including contractors and grantees) funded by MCC Funding, and 
shall apply to all taxes, tariffs, duties, and other levies (each a 
``Tax'' and collectively, ``Taxes''), including:
    (1) To the extent attributable to MCC Funding, income taxes and 
other taxes on profit or businesses imposed on organizations or 
entities, other than nationals of Mali, receiving MCC Funding, 
including taxes on the acquisition, ownership, rental, disposition or 
other use of real or personal property, taxes on investment or deposit 
requirements and currency controls in Mali, or any other tax, duty, 
charge or fee of whatever nature, except fees for specific services 
rendered; for purposes of this Section 2.3(e), the term ``national'' 
refers to organizations established under the laws currently or 
hereafter in effect in Mali, other than MCA-Mali or any other entity 
established solely for purposes of managing or overseeing the 
implementation of the Program or any wholly-owned subsidiaries, 
divisions, or Affiliates of entities not registered or established 
under the laws currently or hereafter in effect in Mali;
    (2) Customs duties, tariffs, import and export taxes, or other 
levies on the importation, use and re-exportation of goods, services, 
or the personal belongings and effects, including personally-owned 
automobiles, for Program use or the personal use of individuals who are 
neither citizens nor permanent residents of Mali and who are present in 
Mali for purposes of carrying out the Program or their family members, 
including all charges based on the value of such imported goods;
    (3) Taxes on the income or personal property of all individuals who 
are neither citizens nor permanent residents of Mali, including income 
and social security taxes of all types and all taxes on the personal 
property owned by such individuals, to the extent such income or 
property are attributable to MCC Funding; and
    (4) Taxes or duties levied on the last transaction for the purchase 
of goods or services funded by MCC Funding, including sales taxes, 
tourism taxes, value-added taxes or other similar charges. For purposes 
of this Section 2.3(e)(i)(4), the term ``last transaction'' refers to 
the last transaction by which

[[Page 69234]]

the goods or services were purchased for use in the activities funded 
by MCC Funding.
    (ii) This Section 2.3(e) shall apply, but is not limited, to (A) 
any transaction, service, activity, contract, grant or other 
implementing agreement funded in whole or in part by MCC Funding; (B) 
any supplies, equipment, materials, property or other goods (referred 
to herein collectively as ``goods'') or funds introduced into, acquired 
in, used or disposed of in, or imported into or exported from, Mali by 
MCC, or by any person or entity (including contractors and grantees) as 
part of, or in conjunction with, MCC Funding or the Program; (C) any 
contractor, grantee, or other organization carrying out activities 
funded in whole or in part by MCC Funding; and (D) any employee of such 
organizations (the uses set forth in clauses (A) through (D) are 
collectively referred to herein as ``Exempt Uses'').
    (iii) If a Tax has been levied and paid contrary to the 
requirements of this Section 2.3(e), whether inadvertently, due to the 
impracticality of implementation of this provision with respect to 
certain types or amounts of taxes, or otherwise, the Government shall 
refund promptly to an account designated by MCC the amount of such Tax 
in the currency of Mali, within thirty (30) days (or such other period 
as may be agreed in writing by the Parties) after the Government is 
notified in writing of such levy and tax payment, in accordance with 
procedures agreed by the Parties, whether by MCC or otherwise; 
provided, however, the Government shall apply national funds to satisfy 
its obligations under this paragraph and no MCC Funding, Accrued 
Interest, or any assets, goods, or property (real, tangible, or 
intangible) purchased or financed in whole or in part (directly or 
indirectly) by MCC Funding (collectively, the ``Program Assets'') may 
be applied by the Government in satisfaction of its obligations under 
this paragraph.
    (iv) At MCC's request, the Parties shall memorialize in a mutually 
acceptable Supplemental Agreement, Implementation Letter or other 
suitable document the mechanisms for implementing this Section 2.3(e), 
including (A) a formula for determining refunds for Taxes paid, the 
amount of which is not susceptible to precise determination; (B) a 
mechanism for ensuring the tax-free importation, use, and re-
exportation of goods, services, or the personal belongings of 
individuals (including all Providers) described in Section 2.3(e)(i)(2) 
above; (C) a requirement for the provision by the Government of a tax-
exemption certificate which expressly includes, inter alia, the thirty 
(30) day refund requirement of Section 2.3(e)(iii) above; and (D) any 
other appropriate Government action to facilitate the administration of 
this Section 2.3(e).
    (f) Alteration. The Government shall ensure that no MCC Funding, 
Accrued Interest or other Program Asset shall be subject to any 
impoundment, rescission, sequestration or any provision of law now or 
hereafter in effect in Mali that would have the effect of requiring or 
allowing any impoundment, rescission or sequestration of any MCC 
Funding, Accrued Interest or other Program Asset.
    (g) Liens or Encumbrances. The Government shall ensure that no MCC 
Funding, Accrued Interest or other Program Asset shall be subject to 
any lien, attachment, enforcement of judgment, pledge, or encumbrance 
of any kind (each a ``Lien''), except with the prior approval of MCC in 
accordance with Section 3(c) of Annex I. In the event of the imposition 
of any Lien not so approved, the Government shall promptly seek the 
release of such Lien and, if required by final non-appealable order, 
shall pay any amounts owed to obtain such release; provided, however, 
the Government shall apply national funds to satisfy its obligations 
under this Section 2.3(g) and no MCC Funding, Accrued Interest, or 
other Program Asset may be applied by the Government in satisfaction of 
its obligations under this Section 2.3(g).
    (h) Other Limitations. The Government shall ensure that the use or 
treatment of MCC Funding, Accrued Interest, and other Program Assets 
shall be subject to and in conformity with such other limitations (i) 
as required by the applicable law of the United States of America now 
or hereafter in effect during the Compact Term, (ii) as advisable under 
or required by applicable United States Government policies now or 
hereafter in effect during the Compact Term, or (iii) to which the 
Parties may otherwise agree in writing.
    (i) Utilization of Goods, Services and Works. The Government shall 
ensure that any Program Assets and any services, facilities or works 
funded in whole or in part (directly or indirectly) by MCC Funding, 
unless otherwise agreed by the Parties in writing, shall be used solely 
in furtherance of this Compact.
    (j) Notification of Applicable Laws and Policies. MCC shall notify 
the Government of any applicable United States law or policy affecting 
the use or treatment of MCC Funding, whether or not specifically 
identified in this Section 2.3, and shall provide to the Government a 
copy of the text of any such applicable law and a written explanation 
of any such applicable policy.

Section 2.4 Incorporation; Notice; Clarification

    (a) The Government shall include, or ensure the inclusion of, all 
of the requirements set forth in Section 2.3 in all Supplemental 
Agreements (except for Supplemental Agreements with Providers defined 
in Section 2.4(b)(ii) below) to which MCC is not a party.
    (b) The Government shall ensure notification of all of the 
requirements set forth in Section 2.3 to any Provider and all relevant 
officers, directors, employees, agents, representatives, Affiliates, 
contractors, sub-contractors, grantees and sub-grantees of any 
Provider. The term ``Provider'' shall mean (i) MCA-Mali, (ii) any 
Government Affiliate or Permitted Designee (other than MCA-Mali) that 
receives or utilizes any Program Asset in carrying out activities in 
furtherance of this Compact, or (iii) any third party who receives at 
least US$ 50,000 in the aggregate of MCC Funding (other than employees 
of MCA-Mali) during the Compact Term or such other amount as the 
Parties may agree in writing, whether directly from MCC, indirectly 
through Re-Disbursements, or otherwise.
    (c) In the event the Government or any Provider requires 
clarification from MCC as to whether an activity contemplated to be 
undertaken in furtherance of this Compact violates or may violate any 
provision of Section 2.3, the Government shall notify MCC in writing 
and provide in such notification a detailed description of the activity 
in question. In such event, the Government shall not proceed, and shall 
use its best efforts to ensure that no relevant Provider proceeds, with 
such activity, and the Government shall ensure that no Re-Disbursements 
shall be made for such activity, until MCC advises the Government or 
such Provider in writing that the activity is permissible. MCC shall 
use good faith efforts to respond timely to such notification for 
clarification.

Section 2.5 Refunds; Violation

    (a) Notwithstanding the availability to MCC, or exercise by MCC, of 
any other remedies, including under international law, this Compact or 
any Supplemental Agreement:
    (i) If any amount of MCC Funding, Accr