Notice of Entering Into a Compact With the Government of the Kingdom of Lesotho, 43380-43410 [E7-14812]
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Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Notices
Dated: July 26, 2007.
William G. Anderson Jr.,
Vice President & General Counsel,
Millennium Challenge Corporation.
MILLENNIUM CHALLENGE
CORPORATION
[MCC FR 07–07]
Notice of Entering Into a Compact With
the Government of the Kingdom of
Lesotho
Millennium Challenge
Corporation.
ACTION: Notice.
AGENCY:
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 Kingdom of Lesotho.
Representatives of the United States
Government and the Government of the
Kingdom of Lesotho executed the
Compact documents on July 23, 2007.
SUMMARY:
Summary of Millennium Challenge
Compact With the Government of the
Kingdom of Lesotho
A. Introduction
Lesotho is strategically located within
the rapidly growing Southern African
Development Community which will
become a common market in 2008. It
could benefit greatly from the expected
economic upsurge in the region led by
the private sector, but it will miss this
opportunity if it is unable to unlock the
potential of its two greatest resources—
its water and its people. Without
immediate and sustainable
interventions to harness its abundant
water resources and to improve the
health of the productive workforce,
Lesotho has limited prospects of
achieving economic growth. Another
critical element to Lesotho’s future
economic growth is a dynamic private
sector. In recent years, the Government
of Lesotho (‘‘GoL’’) has embarked on a
major reform program developed jointly
with the World Bank and other bilateral
donors, to remove legal and regulatory
impediments to private sector growth,
improve access to credit and increase
the participation of women in the
economy.
B. Program
1. Goal and Objectives
The $362.6 million Compact focuses
on water, health and private sector
development (the ‘‘Program’’), as
summarized in the table below. The
Program is focused on improving the
provision of water supplies for
industrial and domestic use, improving
health outcomes and productivity
through strengthening the health
infrastructure, and removing barriers to
foreign and local private sector
investment. The Compact is designed to
have a high economic growth impact,
and its potential impact on poverty
reduction is significant and widespread
due to its broad geographical scope.
Totals including contingencies (in millions USD)
Multi-year financial plan (by project)
CIF
1.
2.
3.
4.
5.
Year 1
Year 2
Year 3
Year 4
Year 5
Total
Water Sector Project .......................................................
Health Sector Project .......................................................
Private Sector Development Project ...............................
Monitoring & Evaluation ...................................................
Program Management and Oversight .............................
4.913
4.436
0.710
0.5
5.109
21.092
17.961
7.142
2.605
4.173
24.233
27.927
10.906
0.684
5.395
49.074
37.616
8.525
0.755
6.196
47.878
24.846
5.47
0.664
6.926
16.838
9.612
3.352
2.6
4.413
164.028
122.398
36.105
7.808
32.212
Total MCC Contribution ................................................
15.668
52.973
69.145
102.166
85.784
36.815
362.551
C. Program Description
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1. Water Sector Project ($164 million)
The Water Sector Project is aimed at
improving water supply for industrial
and domestic needs. With respect to the
industrial sector, the Project will
provide infrastructure to deliver water
to garment and textile operations.
Domestic users in selected urban and
rural areas will benefit from water
system upgrades and expansion to
achieve better sanitation and a reliable
supply of water. Finally, the Project is
designed to enhance rural livelihoods
through improved watershed
management.
The Water Sector Project activities
include: (a) Construction of a bulk water
conveyance system and establishment of
a program management unit for the
Metolong Dam construction activity; (b)
extension and rehabilitation of the
urban and peri-urban water network; (c)
provision of improved sanitation
services to rural households through
construction of ventilated improved pit
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latrines and water systems; and (d)
restoration of degraded wetlands at
three areas in the highland pastures and
preparation of a strategic environmental
assessment to support development of a
national watershed management and
wetlands conservation plan.
2. Health Sector Project ($122 million)
Approximately 24 percent of adults
ages 15–49 in Lesotho are Human
Immunodeficiency Virus/Acquired
Immune Deficiency Syndrome (‘‘HIV/
AIDS’’) positive, the third highest
prevalence rate in the world. The Health
Sector Project is designed to mitigate the
negative economic impacts of poor
maternal health, HIV/AIDS, tuberculosis
(‘‘TB’’) and other diseases by
substantially strengthening the
country’s health care infrastructure.
MCC funding will support the GoL’s
efforts to significantly increase access to
life-extending anti-retroviral therapy
(‘‘ART’’) by providing a sustainable
platform to deliver this and other
essential health services throughout the
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country. This has the potential to result
in a measurable extension of productive
life-years for people living with HIV/
AIDS, TB and other debilitating
diseases.
A major issue in Lesotho, as in the
rest of southern Africa, is the crisis in
human health resources. The country
has difficulty retaining nurses and
clinicians due to opportunities outside
the country and poor working
conditions in Lesotho. Extensive studies
have been conducted on improving the
retention of health care workers. Top
concerns are salary levels, physical
working conditions and supervision and
career management structures. Together
with the GoL, the President’s Emergency
Plan for AIDS Relief (‘‘PEPFAR’’), and
other donor efforts, the Health Sector
Project is designed to address these
issues. Currently the GoL is proposing
salary reforms and PEPFAR is providing
assistance to improve training curricula
and programs, reduce red tape in hiring
new graduates, and rationalize Ministry
of Health and Social Welfare
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(‘‘MoHSW’’) staff positions. The Project
is designed to improve health sector
infrastructure, including residences for
rural health staff, improve supervision
and management of staff, increase the
number of nurses and allied health
professionals trained, and provide
opportunities for staff to build skills and
competencies through continuing
education. These efforts are designed to
increase production and retention of
health workers for delivery of essential
health services.
The Health Sector Project activities
include: (a) Renovation of up to 150
health centers in order to establish a
national stock of health centers that
achieve a common standard; (b)
establishment of ART clinics in and
improved management of up to 14
hospital out-patient departments
(‘‘OPDs’’); (c) construction and
equipping of a new central laboratory
and training laboratory staff; (d)
construction of a dedicated, central
facility for collecting and processing
blood and provision of mobile blood
collection and storage equipment; (e) an
increase in the number of dormitories
and staff residences at Lesotho’s
National Health Training College
(‘‘NHTC’’); (f) strengthened health
systems through increased capacity for
pre-service and in-service nurse training
and improved district-level public
human health care resources
management; and (g) improved
occupational health and safety and
medical waste management practices.
3. Private Sector Development (‘‘PSD’’)
Project ($36 million)
The PSD Project is designed to
increase private sector economic
activity in Lesotho by improving access
to credit, reducing transaction costs and
increasing the participation of women
in the economy. The activities within
the PSD Project represent an essential
component of the GoL’s major policy
reform program and are designed to
contribute to the broader efforts to
attract foreign investment and stimulate
growth of Basotho-owned companies.
The PSD Project activities include: (a)
Reform of the civil legal system through
the development of the Commercial
Court, including creation of case
management systems for courts, and
promotion of alternative dispute
resolution; (b) support for the
production and issuance costs of
national identification cards as well as
establishment of the necessary legal and
regulatory reforms for data privacy and
establishment and operations of a crossborder credit bureau; (c) support for
implementation of a new payments and
settlement system in Lesotho; (d)
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technical assistance to the GoL in the
development of land policy in Lesotho,
and funding for the implementation of
a systematic land regularization
program for urban and peri-urban areas
and development of a new land
administration authority; and (e)
implementation of a training and public
awareness program dedicated to
implementing gender equality in
economic rights and building of local
capacity to continue advocacy.
D. Impacts
The Program, if successfully
implemented, could nearly double GDP
growth by the end of the Compact
implementation period (using a baseline
of 2.6 percent). The acceleration of GDP
growth is expected to continue beyond
Compact completion, propelling growth
towards seven percent per annum
within five years after Compact
completion. This acceleration is
required to reduce poverty significantly
in line with the objectives of the GoL’s
Poverty Reduction Strategy Papers
(‘‘PRSP’’).
The Water Sector Project is expected
to benefit urban and rural communities
through each of the four activities: (1)
The Metolong Dam—Bulk Water
Conveyance System activity is expected
to preserve existing industrial
production and 28,000 jobs and create
an additional 6,000 jobs by the end of
the Compact; (2) The Urban and PeriUrban Water Network activity has the
potential to benefit approximately
304,000 people or 50,700 households by
Compact end; (3) The Rural Water
Supply and Sanitation activity has the
potential to directly benefit
approximately 150,000 people or 25,000
households; and (4) The Wetlands
Restoration and Conservation activity
has the potential to improve rangeland
productivity and benefit rural
livelihoods for an estimated 55,000
people who live within a 16 kilometer
radius of the three target wetland sites.
The Health Sector Project is designed
to directly improve delivery of health
care services to the entire population.
The health center activity is designed to
improve service quality and availability
for health center clients, including:
Most of the 90 percent of pregnant
women who seek prenatal care; the
more than 90 percent of infants and
young children who are immunized
against childhood infectious diseases;
the approximately 9,000 TB patients
treated at the health center level each
year; and the 34,000 persons expected to
have ART services follow up at the
health center during the life of the
Project. The ART clinic activity is
designed to reduce waiting times and
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TB co-infection of clients seeking care at
an OPD, particularly the predicted
additional 17,000 new clients seeking
ART services during the Compact, the
80 percent of those clients expected to
be co-infected with TB, and the clients
of other OPD services in these 14
hospitals. This activity is designed to
complete national coverage of ART
services at the hospital level. The
central laboratory and blood transfusion
activities are designed to benefit all
Basotho by expanding the capacity of
the MoHSW to conduct needed
laboratory tests and assuring access to
safe blood. The NHTC activity is
designed to expand the number of
graduates in the health field, filling
some of the numerous vacancies in rural
areas for community nurses and allied
health professionals. As a result, more
than 1.3 million individuals in the rural
areas are more likely to have an
adequate level of service provision at
the local health center level. The health
systems strengthening and medical
waste management activities are
designed to impact the quality and level
of services provided, particularly at the
health center level and improve
environmental health and safety
conditions throughout the health sector.
All activities focus on improving
physical working conditions and safety
for health workers and on human
resources management.
The Private Sector Development
Project has the potential to benefit
approximately 2,000 persons and
companies operating in the formal
sector through more efficient
commercial court procedures. Through
the Land Administration Reform
activity, potentially up to 55,000 urban
households may benefit from having
formally recognized titles. The National
ID activity has the potential to directly
benefit the entire national population by
providing an identification card and/or
unique identification number to every
citizen within the country, improving
the availability of credit and other
financial services to a wider crosssection of the population. Finally, the
Payments and Settlements system has
the potential to directly benefit more
than 86,000 government pensioners and
more than 98,000 employed outside
Lesotho by lowering the costs of
receiving and sending money.
E. Program Management
1. Governance Structure
The GoL will establish an
autonomous body within the Ministry of
Finance and Development Planning
known as MCA-Lesotho that will serve
as the accountable entity responsible for
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the implementation of the Program. The
MCA-Lesotho board of directors will be
made up of government officials
representing each of the GoL ministries
associated with the Program as well as
private sector and civil society members
representing constituencies impacted by
the Program. This board will have
independent decision making authority
and will be the final authority with
respect to implementation of the
Compact. It will provide oversight and
be responsible for the success or failure
of the Program.
A management unit will support the
board of directors in implementing the
Program and will be responsible for the
day-to-day management and operations
of MCA-Lesotho. A stakeholders
committee will inform the various
constituent groups about Program
implementation, provide advice and
input to MCA-Lesotho concerning the
Program, and select the private sector
members of the board of directors.
External procurement and fiscal
agents will be used during Compact
implementation. A procurement process
is currently underway with a target date
of August 2007 to sign contracts for
these services.
2. Implementation Arrangements
Line ministries, project
implementation units and the Central
Bank of Lesotho will serve as
implementing entities (‘‘IEs’’) and
service providers for the various
projects related to the Compact under
contractual relationships with MCALesotho. IEs will be responsible for
developing the operational requirements
for the Projects and performance
monitoring of contractors. Teams will be
located within the IEs to ensure
institutional strengthening and close
collaboration and communication. To
help ensure Program success, the
Compact has budgeted nearly $75
million for technical assistance,
capacity building, and institutional
strengthening. In addition,
competitively selected external service
providers will perform the Procurement
and Fiscal Agent functions. MCALesotho will remain ultimately
responsible for the successful
implementation of the Program.
F. Other Highlights
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1. Transformational Change
The Program has the potential for
significant transformational change to
help unlock the economic potential of
the country by providing additional
water supplies for industrial and
domestic use, improving health
outcomes and productivity and by
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removing barriers to foreign and
domestic investment. Overall the
Program is expected to impact a broad
cross-section of the country through its
various activities. In additional, the
Compact is designed to have a
substantive impact on extending full
economic rights to women in Lesotho.
2. Consultative Process
The Program builds upon the GoL’s
PRSP and the Lesotho Vision 2020. The
consultative processes associated with
these two initiatives identified the
following as top priorities for poverty
reduction and economic growth: (a)
Private sector development; (b)
provision of infrastructure; (c) natural
resource management; and (d) improved
access to health care.
Shortly after Lesotho was selected as
an MCC-eligible country in 2004, the
GoL established a consultative proposal
development process that included the
private sector, non-governmental
organizations (‘‘NGOs’’) and civil
society organizations. Recognizing that
consultations are ongoing and must be
meaningful, timely and participatory,
the MCA-Lesotho Core Team within the
Ministry of Finance and Development
Planning was proactive in developing
an outreach and consultative process
strategy in early 2007 to plan for
consultations and outreach activities
beyond Compact signing and into
implementation.
3. Government Commitment and
Effectiveness
The 2006 enactment of the Legal
Capacity of Married Persons Act was a
strong signal of the GoL’s commitment
to remove barriers to married women’s
full participation in the economy,
thereby enhancing the Program’s
prospects of successful implementation
and sustainability. This significant
commitment to gender equality was
recently acknowledged by resolutions
adopted by both the U.S. Senate and the
U.S. House of Representatives. Prior to
first disbursement of Compact funds,
the GoL will submit to its Parliament
legal reforms designed to assure that
economic rights achieved in the Legal
Capacity of Married Persons Act are not
contradicted in other laws.
The GoL has agreed with the World
Bank on a comprehensive water sector
reform program. In the rural water and
sanitation sub-sectors, the GoL—
consistent with its policy on
decentralization—is divesting financial
management, project planning,
supervisory services and asset
ownership to locally elected water
committees.
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In 2000, the GoL embarked on a ten
year plan to improve health service
delivery. The GoL has successfully
piloted decentralized health services in
three districts and is expanding
decentralized management to the
remaining seven districts. New financial
management and procurement systems
have been put in place, and a new
human resources system is being
developed. The Health Sector Project is
designed to complement other donor
funded activities. Despite the HIV/AIDS
epidemic, Lesotho has met both MCC
eligibility indicators on immunization
and health expenditure which signals
the GoL’s commitment to good
performance in the health sector.
The GoL, as chair of the Southern
Africa Development Community, has
committed to regional integration of
financial systems. They also have
initiated the process of implementing
policy reforms to improve the business
and investment climate with the
support of donors such as the World
Bank. In order to realize the maximum
economic benefits for the PSD Project
activities, the GoL must continue this
policy reform momentum and
harmonize its legislation with other
Common Monetary Area countries,
especially South Africa.
G. Sustainability
The Program is designed to enhance
the sustainability of its benefits by: (a)
Supporting policy reforms in relevant
sectors; (b) ensuring adequate funding
will be allocated to fully cover
additional recurrent costs; (c) requiring
adherence to environmental and social
standards; (d) building capacity within
the GoL to facilitate implementation of
the Program and to develop long-term
management capabilities of GoL
institutions; (e) assuring improved
maintenance programs to maintain the
economic life of assets; and (f)
promoting participation of a large cross
section of Basotho, especially women
and the poor.
1. Water Sector
The sustainability of the Water Sector
Project activities depends on the GoL’s
pace of implementation of sector policy
reforms and its commitment to ensure
that tariff levels provide for cost
recovery of operations and maintenance
costs. Disbursements of Compact
funding will be tied to agreed progress
on implementing water sector reforms.
2. Health Sector
The sustainability of health services is
a critical issue, particularly given the
increase of donor-supported provision
of ART. In partnership with donors, the
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GoL is developing a national health
financing strategy to identify the costs of
the essential health services package,
including ART, and gaps and potential
sources of funds. This strategy will be
jointly monitored by MCC and other
health donors.
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3. Private Sector Development
The sustainability of several PSD
Project activities is expected to be
enhanced because they will be carried
out with the assistance of established
private sector entities with a successful
track record in the Southern African
region. Compact funding also is
designed to help establish sustainable
improvements in land administration
through an active capacity building,
training, and public education effort.
4. Environmental and Social Impacts
The assessment, management, and
monitoring of potential environmental
and social impacts is an integral part of
the Compact. The Compact will fund
several measures to: (a) Mitigate the
adverse effects of infrastructure
construction or rehabilitation; (b)
promote natural resource management
and environmental conservation
consistent with the priorities of the
GoL’s PRSP; (c) assure women’s
participation in the economy and as
beneficiaries in the Compact; and (d)
integrate HIV/AIDS awareness programs
into all construction contracts. The
Compact will also support measures to
strengthen the regulatory framework
and build institutional capacity required
to improve occupational health and
safety and waste management practices
in the health sector.
The Metolong Dam activity is a
Category A project under MCC’s
Environmental Guidelines due
primarily to the potential environmental
and social risks associated with the
project, which include loss of
communal resources, loss of traditional
access routes across the river,
inundation of cultural resources and
alteration of downstream surface water
hydrology. The entities funding the dam
have agreed that the entire project,
including advanced infrastructure, the
dam and reservoir and downstream bulk
water conveyance system, will be
designed and constructed according to
common standards that meet MCC’s
Environmental Guidelines, the MCC
Gender Policy, GoL law, and World
Bank Operational Policy 4.12 on
Involuntary Resettlement. Compact
funding for the bulk water conveyance
system will be conditioned on strict
adherence with the larger project’s
environmental management plan
(‘‘EMP’’) and resettlement action plan
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(‘‘RAP’’), completed earlier this year
with World Bank funding. The urban,
peri-urban and rural water activities are
considered Category B and Category C
projects under MCC’s Environmental
Guidelines and do not pose significant
adverse environmental and social
impacts. Standard EMPs will be
developed for each activity to assure
compliance with MCC’s Environmental
Guidelines and GoL laws. The wetlands
restoration and conservation activity is
expected to result in mostly positive
environmental and socioeconomic
impacts by rehabilitating three severely
degraded wetland areas which support
livestock grazing and other rural
livelihood benefits.
The Health Sector Project consists of
both Category A and Category B projects
under MCC’s Environmental Guidelines
due to greenfield construction and
concerns regarding current medical
waste management practices in Lesotho.
To make long-term improvements to the
current situation and assure that MCCfunded facilities comply with MCC’s
Environmental Guidelines, Compact
funds will be used to update Lesotho’s
2005 National Health Care Waste
Management Plan, develop medical
waste management regulations and
standards, prepare a financial plan and
provide technical assistance to the
relevant GoL agencies. Additionally, all
proposed health infrastructure activities
must comply with MCC’s
Environmental Guidelines and
applicable GoL environmental
permitting requirements.
The PSD Project, a Category C project,
is not likely to have adverse
environmental or social impacts. The
MCA-Lesotho social-gender specialist
will work to ensure that social
safeguards are integrated into project
design, implementation and monitoring
to ensure that the activities do not,
unnecessarily or unlawfully, infringe
upon rights or privacy.
H. Donor Coordination
The design and technical aspects of
many of the Compact Program activities
have benefited significantly from the
experiences of other donors working in
Lesotho. The MCA-Lesotho Core Team
has engaged the donor community
frequently in all phases of the
consultative process and has
coordinated with donors to refine
Compact activities, collaborate on
shared objectives to prevent duplication
of efforts, and ensure complementary
activities throughout Compact
implementation.
In the various Health Sector Project
activities, including those associated
with HIV/AIDS, MCC has maintained
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regular communications and
participated in joint donor reviews.
These donors include: PEPFAR; Irish
Aid; World Bank; African Development
Bank; United Nations agencies; and the
Global Fund for AIDS, Tuberculosis and
Malaria. These and other donors
provided design support to the MoHSW
and assisted MCC in the due diligence
process. The Compact’s Health Sector
Project is designed to support the GoL’s
reform efforts and fits within the
combined donor strategy for the health
sector. In particular, the MCC Health
Sector Project and planned PEPFAR
activities are mutually reinforcing. As
MCC has moved forward with the
proposed Health Sector Project, PEPFAR
has provided encouragement and
support at central and country level. Incountry PEPFAR staff has grown from
one person in 2006 to a staff of seven
professionals by end of 2007, with an
expected concomitant increase in
resources. Together, MCC and PEPFAR
inputs are expected to result in a major
increase in the quality and quantity of
ART services and in the production and
retention of human resources for health.
The Metolong Dam activity is being
developed in coordination with several
donors, including the OPEC Fund for
International Development, the Kuwait
Fund for Arab Economic Development,
the Arab Bank for Economic
Development in Africa and the Saudi
Fund for Development. The European
Union also has a sustained presence in
Lesotho’s water sector and is currently
funding detailed designs for
components of the Metolong Dam bulk
water conveyance system, as well as
components of the larger lowlands
water supply system. Irish Aid is also a
significant donor in the water sector.
MCC has also been actively
collaborating with other donors on the
PSD Project. These donors include: the
World Bank with respect to the national
identification card; the United
Kingdom’s Department for International
Development on matters concerning
civil legal reform and land
administration reform; the German
development agency Deutsche
¨
Gesellschaft fu Technische
Zusammenarbeit (GTZ) on land
administration reform; and USAID
through its Women’s Legal Rights
Initiative project.
Millennium Challenge Compact
Between The United States of America
Acting Through the Millennium
Challenge Corporation And The
Government of The Kingdom of Lesotho
Table of Contents
Article 1. Goal and Objectives
Section 1.1 Compact Goal
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Section 1.2 Program Objectives
Article 2. Funding and Resources
Section 2.1 MCC Funding
Section 2.2 Compact Implementation
Funding
Section 2.3 Disbursement
Section 2.4 Interest
Section 2.5 Government Resources;
Budget
Section 2.6 Limitations on the Use of
MCC Funding
Section 2.7 Taxes
Article 3. Implementation
Section 3.1 Program Implementation
Agreement
Section 3.2 Government Responsibilities
Section 3.3 Policy Performance
Section 3.4 Government Assurances
Section 3.5 Implementation Letters
Section 3.6 Procurement
Section 3.7 Records; Accounting; Covered
Providers; Access
Section 3.8 Audits; Reviews
Article 4. Communications
Section 4.1 Communications
Section 4.2 Representatives
Section 4.3 Signatures
Article 5. Termination; Suspension; Refunds
Section 5.1 Termination; Suspension
Section 5.2 Refunds; Violation
Section 5.3 Survival
Article 6. Compact Annexes; Amendments;
Governing Law
Section 6.1 Annexes
Section 6.2 Inconsistencies
Section 6.3 Amendments
Section 6.4 Governing Law
Section 6.5 Additional Instruments
Section 6.6 References to MCC Web site
Section 6.7 References to Law,
Regulations, Policies and Guidelines
Article 7. Entry Into Force
Section 7.1 Domestic Requirements
Section 7.2 Conditions Precedent
Section 7.3 Date of Entry into Force
Section 7.4 Compact Term
Annex I: Program Description
Annex II: Summary of Multi-Year
Financial Plan
Annex III: Description of the Monitoring
and Evaluation Plan
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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 Government of the
Kingdom of Lesotho (the
‘‘Government’’) (individually a ‘‘Party’’
and collectively, the ‘‘Parties’’).
Recalling that the Government
consulted with the private sector and
civil society of the Kingdom of Lesotho
(‘‘Lesotho’’) to determine the priorities
for the use of Millennium Challenge
Account assistance and developed and
submitted to MCC a proposal focused on
providing water supplies for industrial
and domestic use and improving
watershed management, improving
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health outcomes and productivity
through strengthening the health
system, and removing barriers to foreign
and local private sector investment; and
Recognizing that MCC wishes to help
Lesotho implement a program to
achieve the goal and objectives
described herein (the ‘‘Program’’);
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 Lesotho through economic
growth (the ‘‘Compact Goal’’).
Section 1.2
Program Objectives.
The objectives of this Program (as
further described in Annex I) (the
‘‘Objectives’’) are to:
(a) Improve the water supply for
industrial and domestic needs and
enhance urban and rural livelihoods
through improved watershed
management;
(b) Increase access to life-extending
anti-retroviral therapy and essential
health services by providing a
sustainable delivery platform; and
(c) Stimulate investment by
improving access to credit, reducing
transaction costs and increasing the
participation of women in the economy.
The Government will take all the
steps necessary or appropriate to
achieve the Objectives during the term
of this Compact.
Article 2. Funding and Resources
Section 2.1
MCC Funding.
(a) MCC grants to the Government,
under the terms of this Compact, an
amount not to exceed Three Hundred
Sixty-Two Million, Five Hundred FiftyOne Thousand United States dollars
(US$362,551,000) (‘‘MCC Funding’’) to
help the Government implement the
Program.
(b) Annex II of this Compact describes
the use of MCC Funding.
Section 2.2
Funding
Compact Implementation
(a) Of the total amount of MCC
Funding, MCC will make up to Fifteen
Million Six Hundred and Sixty-Nine
Thousand United States dollars
(US$15,669,000) (‘‘Compact
Implementation Funding’’) available to
the Government under Section 609(g) of
the Millennium Challenge Act of 2003,
as amended, to support:
(i) provision of fiscal and
procurement agent services;
(ii) start-up costs including staff
salaries and administrative support and
related goods and services;
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(iii) baseline surveys for monitoring
and evaluation and administrative
support for the surveys as appropriate;
(iv) initiation of environmental and
social assessments and design work in
conjunction with certain water and
health sector activities;
(v) additional gender assessment and
input for project design;
(vi) additional work with respect to
activities to remove forms of
discrimination, in laws or policies,
affecting the economic rights of women;
(vii) additional work with respect to
clarifying roles and responsibilities for
decentralized health services at the
central and district levels, and in
developing a training plan for health
sector project activities;
(viii) technical assistance to support
development of terms of reference for
consultants, including, without
limitation, health system strengthening,
capacity building, and medical waste
management;
(ix) procurement of field monitoring
equipment and initiation of
environmental baseline studies for the
wetlands conservation project;
(x) a study of land administration
services in Lesotho and
recommendations for modernization
and improvement of those services;
(xi) a review of existing payments and
settlements and cross-border financial
transactions legislation and related
regulations;
(xii) a review of existing legislation
authorizing credit bureaus and a
national identification card and any
related regulations;
(xiii) a review of data privacy
legislation and regulations;
(xiv) establishment of Project
Implementation Units (as defined in
Annex I) and related start-up costs
including recruitment of key personnel,
staff salaries and administrative support
and related goods and services; and
(xv) other Compact implementation
expenses approved by MCC.
(b) Notwithstanding anything to the
contrary in this Compact, this Section
2.2 will provisionally apply, after MCC
and the Government sign this Compact,
without regard to whether this Compact
has entered into force under Section 7.3.
(c) Compact Implementation Funding
is subject to: (i) The limitations on the
use or treatment of MCC Funding set
forth in Sections 2.6 and 2.7 as if such
provisions were in full force and effect,
and (ii) any other requirements and
limitations as may be required by MCC
in writing.
Section 2.3
Disbursement
In accordance with this Compact and
the Program Implementation Agreement
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(as defined in Section 3.1), MCC will
disburse MCC Funding for expenditures
incurred in furtherance of the Program
(each instance, a ‘‘Disbursement’’). The
proceeds of such Disbursements will be
made available to the Government, at
MCC’s sole election, (a) by deposit to a
bank account established by the
Government and acceptable to MCC (a
‘‘Permitted Account’’) or (b) through
direct payment to a provider of goods,
works or services under this Compact.
MCC Funding may be expended only to
cover Program expenditures as provided
in this Compact and the Program
Implementation Agreement.
Section 2.4 Interest
The Government will pay to MCC any
interest or other earnings that accrue on
MCC Funding in accordance with the
Program Implementation Agreement.
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Section 2.5 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 during each year it receives MCC
Funding to ensure that all MCC Funding
it receives or is projected to receive in
such year is fully accounted for in the
annual budget of Lesotho. To the extent
feasible under the budgeting processes
of Lesotho, MCC Funding will be
accounted for 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.
(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 for the Program.
Section 2.6 Limitations on the Use of
MCC Funding
The Government will ensure that
MCC Funding 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 on
the MCC Web site (https://www.mcc.gov)
(the ‘‘MCC Web site’’), including but not
limited to the following purposes:
(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
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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, where the
phrase ‘‘likely to cause a significant
environmental, health, or safety hazard’’
has the meaning set forth in
environmental guidelines delivered by
MCC to the Government or posted by
MCC on the MCC Web site or otherwise
publicly made available, as the
guidelines may be amended from time
to time (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 2.7 Taxes
(a) Unless the Parties otherwise
specifically agree in writing, the
Government will not impose, and will
not permit any other governmental or
taxing authority to impose any taxes,
duties, levies, contributions or other
charges (‘‘Taxes’’) in Lesotho on the
Program, MCC Funding, interest or
earnings on MCC Funding, any Project
or activity implemented under the
Program, goods, works, services and
other assets and activities related to the
Program or any Project, persons and
entities that provide such goods, works,
services and assets or perform such
activities, and income, profits and
payments with respect thereto. The
Government will exempt from Taxes,
inter alia, value added and other
transfers (including exemption
therefrom with credit), property and ad
valorem items, import and export of
goods (including exemptions for goods
imported and re-exported for personal
use of expatriate employees and their
family members) and income and profit.
(b) Before the initial Disbursement is
made, the Government and MCC may, at
MCC’s discretion, enter into one or more
agreements setting forth the
mechanisms for implementing this
Section 2.7, including exemptions from
filing and compliance requirements
relating to Taxes. If entered into, it is
expected that such agreement(s) will
provide that the Government may
impose: (i) Taxes on certain individuals
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43385
who are nationals or permanent
residents of Lesotho; (ii) Taxes other
than transfer Taxes and import and
export Taxes on certain entities that are
organized in Lesotho; and (iii) fees or
charges for services that are generally
applicable in Lesotho, reasonable in
amount and imposed on a nondiscriminatory basis.
Article 3. Implementation
Section 3.1 Program Implementation
Agreement
The Government will implement the
Program in accordance with this
Compact and as further specified in an
agreement to be entered into by MCC
and the Government and dealing with,
among other matters, implementation
arrangements, fiscal accountability,
disbursement and use of MCC Funding,
procurement and applicable tax
exemptions (the ‘‘Program
Implementation Agreement’’).
Section 3.2 Government
Responsibilities
(a) The Government has principal
responsibility to oversee and manage
the implementation of the Program.
(b) With the prior written consent of
MCC, the Government may designate an
entity to implement some or all of the
Government’s obligations or to exercise
any rights of the Government under this
Compact or the Program
Implementation Agreement. Such a
designation will not relieve the
Government of any designated
obligations and rights, for which the
Government will retain full
responsibility.
(c) The Government will ensure that
no law or regulation in Lesotho now or
hereinafter in effect makes or will make
unlawful or otherwise prevent or hinder
the performance of any obligation under
this Compact, the Program
Implementation Agreement or any other
agreement related thereto or any
transaction contemplated thereunder.
(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.
Section 3.3 Policy Performance
In addition to the specific policy and
legal reform commitments identified in
Annex I, the Government will seek to
maintain and to improve its level of
performance under the policy criteria
identified in Section 607 of the
Millennium Challenge Act of 2003, as
amended, and the selection criteria and
methodology used by MCC.
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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 does not, and will
not, conflict with any other
international agreement or obligation of
the Government or any of the laws of
Lesotho; 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 through
implementation letters on the
frequency, form or content of requests
for Disbursements or on any other
matter relating to MCC Funding, this
Compact or implementation of the
Program (each, an ‘‘Implementation
Letter’’). The Government will apply
such guidance in implementing this
Compact.
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Section 3.6
Procurement
The Government will ensure that the
procurement of all goods, works and
services by the Government or any
Provider (as defined in Section 3.7(c)) in
furtherance of this Compact will be
consistent with the program
procurement guidelines of which MCC
will inform the Government in writing
or by posting on the MCC Web site or
otherwise make publicly available, as
the guidelines may be amended from
time to time (the ‘‘MCC Program
Procurement Guidelines’’), which MCC
Program Procurement Guidelines will
include but will not be limited to 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 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
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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 (as defined in clause
(c) below) maintain, accounting books,
records, documents and other evidence
relating to this Compact 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 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
Committee (an affiliate of the
International Federation of
Accountants) or (ii) then prevailing in
Lesotho. Compact Records must be
maintained for at least five (5) years
after the end of the Compact Term (as
defined in Section 7.4) or for such
longer period, if any, required to resolve
any litigation, claims or audit findings
or any statutory requirements.
(c) Covered Provider. 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 (1) 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
(2) 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.
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(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 part 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 semiannual 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 accordance with the terms of
the Program Implementation
Agreement. As requested by MCC in
writing, the Government will use, or
cause to be used, to conduct such audits
an auditor approved by MCC and named
on the list of local auditors approved by
the Inspector General of the Millennium
Challenge Corporation (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.
Audits will be performed in accordance
with the Audit Guidelines and be
subject to quality assurance oversight by
the Inspector General. An 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 organization is subject to the
applicable audit requirements contained
in OMB Circular A–133. The
Government will ensure that agreements
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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 organization is subject to audit by
the cognizant United States Government
agency, unless the Government and
MCC agree otherwise in writing.
(c) Corrective Actions. The
Government will use its best efforts to
ensure that Covered Providers take,
where necessary, appropriate and timely
corrective actions in response to audits,
consider whether a Covered Provider’s
audit necessitates adjustment of the
Government’s records, and 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, including as reflected on
Annex II.
Article 4. Communications
Section 4.1 Communications.
Any document or communication
required or submitted by either Party to
the other under this Compact must be in
writing and, except as otherwise agreed
with MCC, in English. For this purpose,
the address of each Party is set forth
below.
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To MCC
Millennium Challenge Corporation,
Attention: Vice President for Operations
(with a copy to the Vice President and
General Counsel), 875 Fifteenth Street,
N.W., Washington, D.C. 20005, United
States of America, Facsimile: +1 (202)
521–3700, Phone:+1 (202) 521–3600, Email: VPOperations@mcc.gov (Vice
President for Operations),
VPGeneralCounsel@mcc.gov (Vice
President and General Counsel)
To the Government
Government of the Kingdom of
Lesotho, Attention: Minister of Finance
and Development Planning, (with a
copy to the Principal Secretary),
Address: P.O. Box 395, Maseru—100,
The Kingdom of Lesotho, Facsimile:
+266 223 10622/223 10157, Phone: +266
223 23703/223 16304/223 11101, Email: ps@finance.gov.ls.
Section 4.2 Representatives
For all purposes of this Compact, the
Government will be represented by the
individual holding the position of, or
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acting as, the Minister of Finance and
Development Planning of the Kingdom
of Lesotho, and MCC will be
represented by the individual holding
the position of, or acting as, Vice
President for Operations (each, a
‘‘Principal Representative’’), each of
whom, by written notice to the other
Party, may designate one or more
additional representatives for all
purposes other than signing
amendments to this Compact. 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 be
binding on the Party delivering such
signature to the same extent as an
original signature would be.
Article 5. Termination; Suspension;
Refunds
Section 5.1
Termination; Suspension
(a) Subject to Section 5.2, either Party
may terminate this Compact in its
entirety by giving the other Party thirty
(30) days written notice.
(b) MCC may, 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 such circumstance is notified
in writing to the Government or by
posting on the MCC Web site) 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 Program Implementation Agreement
or any other agreement or arrangement
entered into by the Government in
connection with this Compact or the
Program;
(ii) An event has occurred that MCC
determines makes it improbable that the
Objectives will be achieved during the
term of this Compact or that the
Government will be able to perform its
obligations under this Compact;
(iii) A use of MCC Funding or
continued implementation of this
Compact 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
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national security interests of the United
States;
(v) An act has been committed or an
omission or an event has occurred that
would render Lesotho 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 Lesotho for assistance
under the Millennium Challenge Act of
2003, as amended; and
(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,
that MCC Funding may be used, in
compliance with the Program
Implementation Agreement, to pay for
(i) reasonable expenditures for goods,
works and services that are properly
incurred under or in furtherance of this
Compact 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 120
days after the expiration, suspension or
termination of this Compact.
(d) Subject to clause (c) of this Section
5.1, upon the expiration, suspension or
termination of this Compact, (i) any
amounts of MCC Funding not disbursed
by MCC to the Government will be
automatically released from any
obligation in connection with this
Compact, and (ii) any amounts of MCC
Funding disbursed by MCC but not
expended under Section 2.3 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.
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Section 5.2
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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,
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 must
use national funds (and no assets of the
Program) 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 term of this
Compact 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, 2.5, 2.6, 2.7, 3.2,
3.4(a), 3.5, 3.7, 3.8, 4.1, 4.2, 4.3, 5.1, 5.2,
5.3, 6.1, 6.2, 6.3, 6.4 and 6.5 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 attached hereto
constitutes an integral part of this
Compact.
Section 6.2
Inconsistencies
In the event of any conflict or
inconsistency between:
(a) Any annex to this Compact and
any of Articles 1 through 7, such
Articles 1 through 7 will prevail; or
(b) This Compact and any other
agreement between the Parties regarding
the Program, this Compact will prevail.
Section 6.3
Amendments
The Parties may amend this Compact
only by a written agreement signed by
the Principal Representatives and
subject to the respective domestic
approval requirements to which this
Compact was subject.
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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
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similar language will include activities,
obligations and rights undertaken by or
existing under any agreement,
document or instrument related to this
Compact and the Program.
Section 6.6
site
References to MCC Web
Each reference in this Compact, the
Program Implementation Agreement, 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 Web
site will be deemed a reference to such
document or information as updated or
substituted on the MCC Web site by
MCC from time to time, and will be
deemed to be incorporated by reference
into, and to constitute an integral part
of, this Compact, the Program
Implementation Agreement or such
other agreement entered into in
connection with this Compact.
Section 6.7 References to Laws,
Regulations, Policies and Guidelines
Each reference in this Compact, the
Program Implementation Agreement, or
any other agreement entered into in
connection with this Compact, to a law,
regulation, policy, guidelines or similar
document shall be construed as a
reference to such law, regulation,
policy, guidelines or similar document
as it may, from time to time, be
amended, revised, replaced or extended
and shall include any law, regulation,
policy, guidelines or similar document
issued under or otherwise applicable or
related to such law, regulation, policy,
guidelines or similar document.
Article 7. Entry Into Force
Section 7.1
Domestic Requirements
The Government will take all steps
necessary to ensure that: (a) This
Compact and the Program
Implementation Agreement and all of
the provisions of this Compact and the
Program Implementation Agreement are
valid and binding and are in full force
and effect under the laws of Lesotho; (b)
this Compact, the Program
Implementation Agreement and any
other agreement entered into in
connection with this Compact to which
the Government and MCC are parties
will be given the status of an
international agreement; and (c) no laws
of Lesotho, other than the Constitution
of Lesotho, whether now or hereafter in
effect, will take precedence or prevail
over the terms of this Compact or the
Program Implementation Agreement.
Section 7.2
Conditions Precedent
Before this Compact enters into force:
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(a) The Government and MCC must
have executed the Program
Implementation Agreement and it must
be effective;
(b) The Government will have
delivered to MCC:
(i) A certificate 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 Government has
completed all of its domestic
requirements in order that the
requirements of Section 7.1 have been
satisfied;
(ii) A legal opinion from the Attorney
General of Lesotho (or other legal
opinion 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 its
domestic requirements for this Compact
to enter into force and the satisfaction
of Section 7.1, which MCC may post on
its Web site 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’’).
In Witness Whereof, the undersigned,
duly authorized by their respective
governments, have signed this Compact
this 23rd day of July, 2007.
Done at Washington, D.C.
For Millennium Challenge
Corporation, on behalf of the United
States of America,
Name: John J. Danilovich,
Title: Chief Executive Officer.
For the Government of the Kingdom
of Lesotho,
Name: Mohlabi Kenneth Tsekoa,
Title: Minister of Foreign Affairs and
International Relations.
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Annex I Program Description
A. Overview
This Annex I describes the Program
that MCC Funding will support in
Lesotho during the term of this Compact
and the results to be achieved using
MCC Funding. In all cases, an activity
described herein will be carried out
subject to any relevant approvals on the
part of MCC and to the extent funds are
made available under this Compact for
purposes of that activity.
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1. The Program and Its Projects
The Program will include the Water
Sector Project, the Health Sector Project,
and the Private Sector Development
Project as further described in this
Annex I (the ‘‘Projects’’).
The Parties may agree to modify,
amend, terminate or suspend these
Projects or to create a new project by
written agreement signed by the
Principal Representative of each Party
without amending this Compact;
provided, however, that any such
modification or amendment of a Project
or creation of a new project does not (a)
cause the amount of MCC Funding to
exceed the aggregate amount specified
in Section 2.1(a) of this Compact, (b)
cause the Government’s responsibilities
or contribution of resources to be less
than specified in this Compact, or (c)
extend the term of this Compact.
2. Program Implementation
The implementation framework for
the use of MCC Funding is summarized
in this Annex I.
(a) MCC and the Government will sign
the Program Implementation
Agreement, and may sign other
agreements contemplated by this
Compact, all of which, together with
this Compact, will set out certain rights,
responsibilities, duties and other terms
relating to the implementation of this
Compact and the Program.
(b) The Government will:
(i) Enact or cause to be enacted an act
of Parliament to form the entity
empowered to implement some or all of
the Government’s obligations or to
exercise any rights of the Government as
provided under the terms of this
Compact and the Program
Implementation Agreement (‘‘MCALesotho’’); and
(ii) Take all necessary and appropriate
actions to carry out each of the other
Government responsibilities in
connection with this Compact and the
Program Implementation Agreement,
including, but not limited to, the actions
necessary to ensure (1) this Compact,
the Program Implementation Agreement
and any other agreement entered into in
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connection with this Compact to which
the Government and MCC are parties
will be given the status of an
international agreement and (2) no laws
of Lesotho, other than the Constitution
of Lesotho, whether now or hereafter in
effect, will take precedence or prevail
over the terms of this Compact, the
Program Implementation Agreement or
such other agreement.
(c) MCC will take all necessary and
appropriate actions to carry out each of
its responsibilities in connection with
this Compact and the Program
Implementation Agreement, including
the exercise of its various approval
rights in connection with the
implementation of this Compact and the
Program.
(d) MCA-Lesotho will take all
necessary and appropriate actions to
implement this Compact and the
Program, including the performance of
the rights and responsibilities
designated to it by the Government
pursuant to the Program
Implementation Agreement.
3. Fiscal Accountability
(a) Fiscal Agent. The Government will
ensure that a fiscal agent (‘‘Fiscal
Agent’’) is appointed in accordance with
the terms of this Compact and the
Program Implementation Agreement.
The Fiscal Agent will provide a broad
range of financial management services
required by MCA-Lesotho to implement
this Compact and the Program. The
Government and MCA-Lesotho will take
all necessary and appropriate actions to
ensure the Fiscal Agent performs these
services in accordance with the terms of
this Compact, the Program
Implementation Agreement and any
agreements to which the Fiscal Agent is
a party and in accordance with
internationally accepted standards of
accounting and financial management.
This will include, but not be limited to,
the Fiscal Agent’s responsibilities to
collect and report information useful to
the governing board and senior
management of MCA-Lesotho, managers
charged with supervision of the
Projects, MCC and certain other entities
responsible for the verification of the
manner in which MCC Funding is used.
The roles and responsibilities of the
Fiscal Agent will be set out in a Fiscal
Agent Agreement to be entered into
between MCA-Lesotho and the Fiscal
Agent (the ‘‘Fiscal Agent Agreement’’).
The role of the Fiscal Agent and the
terms of the Fiscal Agent Agreement are
more fully described in the Program
Implementation Agreement.
(b) Permitted Accounts. The
Government will ensure that the
Permitted Accounts are established, and
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banking services provided, in
accordance with the terms of this
Compact, the Program Implementation
Agreement and any other agreements
related to the Permitted Accounts. The
Central Bank of Lesotho will not
provide banking services to MCALesotho or otherwise in connection with
MCC Funding.
(c) Procurement Agent. The
Government will ensure that a
procurement agent (the ‘‘Procurement
Agent’’) is appointed in accordance with
the terms of this Compact and the
Program Implementation Agreement.
The Procurement Agent will act on
behalf of MCA-Lesotho to provide
specified procurement activities
required by MCA-Lesotho to implement
this Compact and the Program. The
Government and MCA-Lesotho will take
all necessary and appropriate actions to
ensure the Procurement Agent performs
these services in accordance with the
terms of this Compact, the Program
Implementation Agreement, the MCC
Program Procurement Guidelines and
any agreements to which the
Procurement Agent is a party. The roles
and responsibilities of the Procurement
Agent will be set out in a Procurement
Agent Agreement to be entered into
between MCA-Lesotho and the
Procurement Agent.
(d) Proposals for Goods, Works and
Services. Public solicitations for
proposals are anticipated to procure
goods, works and services, as
appropriate, to implement the Program
and its Projects. All such procurements
will be conducted in accordance with
Section 3.6 of this Compact. MCALesotho may also consider, using a
process approved by MCC in writing,
any unsolicited proposals it might
receive.
4. Management and Consultation
Arrangements of MCA-Lesotho
(a) Board of Directors. MCA-Lesotho
will be governed by a board of directors
that will have independent decision
making authority and will be the final
authority with respect to
implementation of this Compact. It will
make strategic decisions, provide
oversight and be responsible for the
success or failure of the Program. The
initial board of directors will be
comprised of 11 voting members,
representing: (i) The Ministry of Finance
and Development Planning; (ii) the
Ministry of Foreign Affairs; (iii) the
Ministry of Health and Social Welfare;
(iv) the Ministry of Local Government;
(v) the Ministry of Natural Resources;
(vi) the Ministry of Justice, Human
Rights and Rehabilitation; (vii) three
members from the private sector; and
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(viii) two members from the Lesotho
Council of Non-Governmental
Organizations (‘‘LCNGO’’). The
members of the board of directors
representing the private sector will be
selected by the stakeholders committee
(described in clause (c) below) and the
members of the board of directors
representing the LCNGO will be
selected by the LCNGO through the
stakeholders committee, in each case in
accordance with a process agreed upon
by the Government and MCC. A
representative of MCC and the chief
executive officer of MCA-Lesotho will
serve as non-voting members of the
MCA-Lesotho board of directors.
(b) Management Unit. A management
unit will support the board of directors
in implementing the Program. A chief
executive officer will manage the dayto-day activities of MCA-Lesotho and
will be supported by key officers, to
include a: (i) Chief financial officer; (ii)
head of administration; (iii) head of
procurement; (iv) head of infrastructure;
(v) head of environment and social
assessment; (vi) head of monitoring and
evaluation; (vii) head of operations;
(viii) legal officer; (ix) communications
and public outreach specialist; and (x)
such other key officers as may be agreed
upon by the Government and MCC. The
key officers will be supported by
appropriate administrative and other
personnel deemed to be necessary for
implementing the Program. The CEO
will be selected and hired by the board
of directors following an open and
competitive recruitment and selection
process. The other key officers and staff
will be selected and hired by the CEO
following an open and competitive
recruitment and selection process. The
appointment of the CEO and all other
MCA-Lesotho management unit
personnel will be subject to MCC’s prior
approval.
(c) Stakeholders Committee. A
stakeholders committee, in form
satisfactory to MCC, will be created to
represent the constituencies of the
various Projects. MCA-Lesotho will use
the stakeholders committee to continue
the consultative process throughout
Compact implementation. The
stakeholders committee will be used
primarily to inform the various
constituent groups about Program
implementation, provide advice and
input to MCA-Lesotho concerning the
Program, and select the private sector
members and civil society members of
the board of directors.
5. Gender Integration Plan
MCA-Lesotho will draft, implement
and monitor a Program-wide gender
integration plan (‘‘Gender Integration
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Plan’’) to ensure compliance, optimum
program design and maximum
beneficiary impact across all Compact
Project activities. This Gender
Integration Plan will include, as
appropriate, recommendations for
meaningful and inclusive consultations
with women and other vulnerable and
underrepresented groups; projectspecific gender analyses; and strategies
for incorporating findings of the gender
analyses into final Project designs.
MCA-Lesotho will also hire a fulltime, dedicated social/gender specialist
for the entire term of this Compact to
ensure that social safeguards are fully
integrated into the design, terms of
references, work plans and monitoring
and evaluation plans, and to ensure that
all Project activities in every aspect of
the Program are compliant with the
gender policy delivered by MCC to the
Government or posted by MCC on its
Web site or otherwise publicly made
available, as the policy may be amended
from time to time (the ‘‘MCC Gender
Policy’’), and with the rights afforded to
married women in the 2006 Legal
Capacity of Married Persons Act.
6. HIV/AIDS Risk Mitigation Plans
MCA-Lesotho will assure that all
construction contractors develop,
implement and monitor an HIV/AIDS
awareness program acceptable to MCC
that includes, but is not limited to, the
following elements:
(a) Activities directed to construction
laborers and all associated formal and
informal sector workers engaged in
building and supporting construction
works, including components for those
who provide food, laundry and any
other services providers and subcontractors;
(b) Activities directed to the
communities affected by the
construction works;
(c) Activities designed to be gender
and age-appropriate in content and
delivery, reflecting an analysis of gender
differences and inequalities to ensure
the most effective program to reach
various stakeholders;
(d) A component for independent
monitoring of contractor compliance;
(e) Testing made available on or near
construction sites; and
(f) Components necessary to ensure
the contractor’s program is coordinated
with other HIV/AIDS awareness and
prevention programs being
implemented in Lesotho during the time
of construction works.
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B. Water Sector Project
1. Summary of Project and Related
Activities
This Project is designed to provide
additional access to improved water
supplies and sanitation facilities for
rural and urban domestic, commercial
and industrial users. In its design,
funding under the Water Sector Project
will be used to (a) construct a
conveyance system from the Metolong
Dam and establish a project
management unit to manage the
implementation, (b) rehabilitate existing
infrastructure returning it to a
functional state and expand the
reticulated network to unconnected
urban and peri-urban areas, (c) provide
additional access to improved water
supply and sanitation facilities in
remote, rural areas through the
rehabilitation and/or construction of up
to 250 water supply points and up to
10,000 ventilated improved pit (‘‘VIP’’)
latrines and (d) execute a pilot-scale
wetlands restoration and conservation
program at three project areas in the
Lesotho highlands.
In the industrial sector, the Project
will provide the critical infrastructure
necessary to provide additional water to
support the growth of garment and
textile operations—the country’s
principal engine of economic growth
and poverty reduction. Currently,
Lesotho’s textile sector accounts for
approximately 40 percent of the
country’s gross domestic product and
employs nearly 50,000 individuals,
many of whom support extended
families.
Expansion and rehabilitation of rural
water supply and sanitation facilities,
coupled with public health and hygiene
awareness training for rural
communities, supports the goals of
Lesotho’s 2004 Poverty Reduction
Strategy Paper (‘‘PRSP’’), which
highlights the need for investment in
rural infrastructure to help foster
conditions for economic growth and
poverty reduction. The wetlands
restoration activity also supports the
goals of the PRSP by helping Lesotho
conserve and manage natural resources
that are vital to sustainable development
and directly contribute to the
livelihoods and well-being of Lesotho’s
poorest people.
In connection with the Water Sector
Project activities, MCA-Lesotho will
assist and take all necessary steps to
ensure that, where and when required
by MCC Environmental Guidelines,
MCC Gender Policy and/or Lesotho
laws, an environmental impact
assessment (each, an ‘‘EIA’’) or, as
applicable, environmental assessment
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(each, an ‘‘EA’’), an environmental
management plan (each, an ‘‘EMP’’), an
HIV/AIDS awareness plan, and a
resettlement action plan (each, a ‘‘RAP’’)
or resettlement policy framework (each,
a ‘‘RPF’’) (consistent with World Bank
Operational Policy 4.12 on Involuntary
Resettlement) are prepared to the
satisfaction of MCC and in accordance
with the Lesotho National Environment
Act of 2001 and Lesotho Guidelines for
Environmental Impact Assessment, in
each case as the same may be amended
from time to time. MCA-Lesotho shall
also ensure that, for each activity
requiring an environmental license
under the Lesotho National
Environment Act of 2001, a ‘‘Project
Brief’’ (as defined in the Lesotho
National Environment Act of 2001) and
any necessary supporting studies will be
submitted to, and approved by, the
Government’s environmental authorities
prior to the initiation of construction
activities, and that such environmental
license will be maintained in good
standing throughout the Compact Term.
MCC Funding will support
implementation of the environmental
and social mitigation measures
identified in the EIA(s) and/or EA(s),
EMP(s), and RAP/RPF(s). The following
summarizes each Project activity under
the Water Sector Project:
(a) Metolong Dam—Bulk Water
Conveyance System and Metolong
Program Management Unit.
The Metolong Dam bulk water
conveyance system activity involves the
construction of downstream works for
the supply of water to Maseru and the
neighboring towns of Mazenod, Roma
and Morija.
Furthermore, MCC Funding will
support the establishment of an
independent project management unit,
the Metolong Program Management Unit
(the ‘‘Metolong Program Management
Unit’’ or ‘‘MPMU’’), which will act as a
dedicated project management unit for
the Metolong Dam activity, as well as a
portion of the estimated costs for
environmental and social mitigation
associated with the Metolong Dam
project.
The construction of downstream
works relating to the Metolong Dam
project includes the following:
(i) An 800m, 700mm diameter raw
water transmission main from the dam
to a downstream water treatment
facility;
(ii) A 75 ML/day water treatment
plant with a peak capacity of 93.8 ML/
day;
(iii) A transmission system to Maseru
that includes:
(1) A pump station (Ha Seeiso PS) at
the WTP with an average pumping
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capacity of 859 l/s (74.25 ML/day) and
a peak discharge capacity of 1,088 L/S
(94 ML/day),
(2) A break pressure tank on a high
ground near the Village of Ha Nchela
with a capacity of 4ML or 4,000m 3,
(3) A 7.54km–700mm transmission
main from Ha Seeiso PS (at WTP) to the
Ha Nchela break pressure tank,
(4) A 23.5km–800mm gravity main
from Ha Nchela break pressure tank to
the High South Reservoir (‘‘HSR’’)
outside of Maseru, and
(5) Expansion of the HSR with two
additional storage units, each with a
capacity of 27ML or 27,000m3;
(iv) Bulk water supply components
for Roma and Mazenod, which include:
(1) A 29 l/s booster pump station at
Roma,
(2) A 300mm diameter transmission
main toward Roma & Mazenod,
(3) A 13.5 km, 160mm diameter
transmission line for Roma,
(4) An 8.8 km, 250mm diameter
transmission line for Mazenod, and
(5) 3 ML reservoirs for each town;
(v) Bulk water supply components for
Morija, which include:
(1) A 25 km, 160mm diameter
transmission main between Mazenod &
Morija,
(2) A 19 l/s Booster Pump Station at
Morija, and
(3) A 0.5 to 1.0 ML reservoir at Morija;
(vi) Detailed designs for the
Teyateyaneng (‘‘TY’’) conveyance
system, pending successful completion
of feasibility studies for TY water
supply from Metolong (funded by the
European Union ); and
(vii) Implementation of environmental
and social mitigation measures,
including preparation of supplemental
studies and management plans
pertaining to the construction and
operation of the bulk water conveyance
system funded under this Compact, in
accordance with the requirements of the
Metolong Dam Environmental and
Social Impact Assessment (‘‘ESIA’’),
EMP, RAP and the MCC Environmental
Guidelines.
(b) Urban and Peri-Urban Water
Network Activity.
The Urban and Peri-Urban Water
Network activity involves reticulation
extensions and infrastructure
rehabilitation of the urban and periurban water network, including
reticulation extension to the towns of
Semonkong and augmented supply to
the town of Mazenod.
This activity includes the following
components:
(i) Infrastructure rehabilitation
including the following:
(1) Reservoir rehabilitation; including
repair and replacement of existing
reservoirs,
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(2) Pipeline rehabilitation; including
repair and replacement of existing
pipelines,
(3) Water treatment works
rehabilitation; including rehabilitation
and/or replacement of sand filters, presettlement tanks and water treatment
facilities, and
(4) Other rehabilitation works;
including rehabilitation of a limited
number of boreholes, pump houses and
sewer pipes;
(ii) Reticulation extensions including
the following:
(1) Extensions in Maseru, Mohales’
Hoek, Mafeteng, Maputsoe, Mokhotlong
and Butha-Buthe, and
(2) Rising main extensions in
Mafeteng-Thabaneng;
(iii) The Semonkong water supply
system including the following:
(1) Rehabilitation of the existing
distribution system,
(2) 15.75 km of transmission pipelines
diameter 90 mm PVC,
(3) 18.4 km of distribution network
diameter 32 mm–90 mm PVC,
(4) Two reservoirs of 990 m 3 and 424
m 3 storage capacity,
(5) Water kiosks,
(6) One office building and three staff
houses,
(7) Chlorination and nitrates
treatment facility,
(8) Service roads,
(9) Nine borehole pumps,
(10) Nine spring pumps,
(11) 604 house connections, and
(12) Allowance for additional
abstraction with boreholes;
(iv) Mazenod Reticulation:
(1) Extension of the existing
distribution 250mm pipeline from the
existing 5ML High South Reservoir that
is serving the Maseru southeast
reticulation system, to a 1ML reservoir
in Mazenod for approximately 5.8km,
(2) Connection of the airport pump
station to an extended pipeline,
(3) Connection of the Mazenod
Reservoir to the existing pipeline
between the airport pump station and
the airport reservoir, and
(4) Construction of the reticulation
system for Mazenod.
MCC Funding will also support the
following preparation activities for the
urban water supply components:
(v) Development of detailed design,
and specifications that can be procured
through tendering; and
(vi) Preparation of environmental
‘‘Project Briefs’’ and any supporting EA/
EIA, EMP, and/or RAP/RPF required to
meet MCC Environmental Guidelines
and environmental licensing
requirements under the Lesotho
National Environment Act of 2001.
The activity will also support the
following components:
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(vii) Implementation of environmental
and social mitigation measures
pertaining to the construction and
operation of urban water supply projects
funded under this Compact per the
requirements of the EA/EIA(s), EMP(s),
and RAP/RPF(s) referenced above; and
(viii) Establishment of a small,
dedicated project implementation unit
for the activity (the ‘‘WASA PIU’’)
within the Lesotho Water and Sewerage
Authority (‘‘WASA’’).
(c) Rural Water Supply and Sanitation
Activity.
MCC Funding will assist the
Government in meeting its goal of
providing improved water and sanitary
services to the entire rural population.
The total target population impacted by
this project is 150,000 persons. The VIP
latrine construction approach is based
on training and employing local artisans
in latrine construction, and then
providing materials and support to
construct latrines with input, both in
kind and financial, on an individual
basis. The activity will be managed by
an existing project implementation unit,
and MCC will provide funding for the
enhancement of capacity and capability
of that project implementation unit.
Specifically, MCC Funding will
support the following:
(i) Construction, rehabilitation, and/or
expansion of up to 250 water systems;
(ii) Construction of up to 10,000 VIP
latrines; and
(iii) Public health and hygiene
awareness training and support.
MCC Funding will support the
following preparation activities for the
rural water supply and sanitation
projects:
(iv) Preparation of feasibility studies,
detailed design, and tender documents;
and
(v) Preparation of environmental
‘‘Project Briefs’’ and any supporting EA/
EIA, EMP, and/or RAP/RPF required to
meet MCC Environmental Guidelines
and environmental licensing
requirements under the Lesotho
National Environment Act of 2001.
Additionally, MCC Funding will
support the following:
(vi) Implementation of environmental
and social mitigation measures
pertaining to the construction and
operation of rural water supply and
sanitation projects funded under this
Compact, per the requirements of the
EA/EIA(s), EMP(s), and RAP/RPF(s)
referenced above; and
(vii) Strengthening of the existing
project implementation unit for the
activity (the ‘‘DRWS PIU’’) within the
Department of Rural Water Supply
(‘‘DRWS’’) and appointing project
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coordinators to manage the public
health and hygiene programs.
(d) Wetlands Restoration and
Conservation Activity.
The wetlands restoration and
conservation activity will help Lesotho
address widespread overgrazing and
degradation of alpine wetlands, which
are prevalent throughout the highlands
of Lesotho and are an important
ecological and economic resource that
naturally regulates flow in the Senqu/
Orange River Basin and provides
livestock pasture, medicinal plants,
thatch, and other rural livelihood
benefits. Using MCC Funding, a pilotscale project will be implemented to
design and apply restoration measures
and examine alternative land
management prescriptions at three
target study areas, including wetlands at
Khalong-la-Lithunya (Oxbow area),
Kotisephola (Sani Pass area), and
´
Letseng-la-Letsie (an internationally
protected Ramsar site near Quithing). In
conjunction with the pilot studies, a
broad-based assessment of Lesotho’s
wetlands will be undertaken to
characterize the environmental, social,
and economic implications of current
management practices and to identify
potential economic opportunities
beyond herding. Based on the results of
the pilot studies and environmental and
socio-economic assessment, a strategic
action plan will be developed that
outlines requirements for establishing a
national watershed management and
wetlands conservation program,
focusing on specific measures to restore
degraded wetlands, protect water
resources, improve and maintain the
productivity of highland pastures, and
promote expanded economic
development through community-based
resource management and conservation
programs.
Specifically, MCC Funding will
support the following tasks:
(i) Establishment of a project
implementation unit within the Lesotho
Department of Water Affairs (i.e., the
DWA PIU referred to in Section B.2(d)
of this Annex I) that will be responsible
for executing the MCC wetlands
restoration and conservation activity;
(ii) Environmental and social baseline
data collection and monitoring at each
of the three target wetland areas,
including purchase and installation of
field monitoring equipment;
(iii) Restoration of degraded wetlands
and assessment of alternative long-term
management prescriptions at each of the
three target wetland areas; and
(iv) Preparation of a strategic
environmental and socio-economic
assessment (‘‘SEA’’) of Lesotho’s
wetlands that will, as part of its primary
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objectives, provide a basis for
establishing a national watershed
management and wetlands conservation
program.
2. Project Implementation
(a) Metolong Dam—Bulk Water
Conveyance Activity.
The preferred institutional
arrangement for delivering the Metolong
Dam project is within the MPMU with
the appropriate staffing, structure and
business processes to deliver the entire
project within the costs and schedule
objectives of the Government. The
MPMU chief executive will report
through a responsible Government
agency project director to a Metolong
project advisory board representing
other donors and key stakeholders. The
Government’s project director will
obtain independent input from expert
panels on dam safety and environmental
and social responsibility, and report on
compliance with donor covenants to the
funding agencies. The MPMU will
house the capability and responsibility
for delivering both the ancillary bulk
water supply components and the
Metolong Dam itself. In the interest of
time and resource effectiveness, the
MPMU function will be outsourced to a
private program management or
construction management firm, with
prior successful experience in Africa.
An international competitive bidding
process, using a qualifications and costbased selection protocol will be
employed to select this firm.
(b) Urban and Peri-Urban Water
Network Activity.
WASA will have primary
responsibility for the implementation of
this activity. WASA is a parastatal
public corporation which reports to the
Lesotho Commissioner of Water under
the Ministry of Natural Resources. The
primary responsibility of WASA is to
provide potable water supplies and
sewerage treatment and disposal
facilities to the urban areas in both the
lowlands and the highlands. The WASA
PIU will be responsible for
implementation of this activity.
(c) Rural Water Supply and Sanitation
Activity.
The DRWS will be responsible for the
implementation of this activity. Water
system design, construction and
operation is built around the DRWS
‘‘project life cycle’’ which is a revolving
and continuous implementation
methodology by which rural water
system designs are continuously
developed at the district level through
the coordinated efforts of the target
community, through their water
committee and chief and from the
DRWS village affairs coordinator,
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district project officer and district
engineer. Historically, the Ministry of
Health and Social Welfare has had the
primary responsibility for implementing
sanitation initiatives, including the
provision of VIP latrines. However, in
line with the Government’s policy on
decentralization, the DRWS will retain
responsibility for this activity as well.
(d) Wetlands Restoration and
Conservation Activity.
The wetlands restoration and
conservation activity will be
implemented by the Department of
Water Affairs (‘‘DWA’’). Compact funds
will be allocated to staffing a dedicated
project implementation unit (the ‘‘DWA
PIU’’) that will work on behalf of, and
report to, the head of the wetlands
management unit within the DWA. The
DWA PIU will be responsible for
managing procurements, coordinating
work activities, and assuring the work
meets the cost, schedule and technical
objectives of the project. The DWA PIU
will work closely with DWA district
project officers to execute project
activities at each of the three target
wetland sites and will assist the DWA,
as necessary, with inter-agency
coordination, stakeholder engagement,
and performance monitoring and
reporting. International consultants
working with local partners will be
procured to carry out the wetlands
restoration and SEA activities. The
National Wetlands Committee (‘‘NWC’’),
which consists of representatives from
various Government agencies, will play
an advisory role in the implementation
of the wetlands restoration and
conservation activity.
3. Beneficiaries
The Metolong Dam and Urban Water
project activities will include a
reduction in unaccounted-for-water,
increased connections to the urban
water supply system, and expanded
employment in industries that depend
on a reliable water supply. At the
household level, results are expected to
include a reduction in water-borne
diseases through increased availability
of clean water and sanitation facilities
for domestic use. The project also will
contribute to time savings, which could
allow time to be used more productively
than for collecting water. The wetlands
restoration activity is expected to
improve livestock productivity and
benefit rural livelihoods in communities
in the vicinity of the three target
wetland areas, while also providing a
basis for implementation of a national
watershed management plan that would
have much broader environmental,
social and economic benefits to the
country as a whole over the long-term.
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4. Donor Coordination; Role of Private
Sector and Civil Society
The Metolong Dam project is being
developed in coordination with several
donors, including the OPEC Fund for
International Development, the Kuwait
Fund for Arab Economic Development,
the Arab Bank for Economic
Development in Africa (BADEA), the
Saudi Fund for Development, and the
World Bank. The European Union has a
sustained presence in Lesotho’s water
sector. The European Union is currently
funding detailed designs for
components of the Metolong bulk water
conveyance system, as well as
components of the larger lowlands
water supply system. The European
Investment Bank is currently funding
the Greater Maseru wastewater
improvement project.
The World Bank has been an active
development partner in Lesotho’s water
sector, primarily through the 2004
Lesotho Water Sector Improvement
Project. Performance benchmarks, as
defined in the Water Sector
Improvement Project, will be monitored
against, and in some cases will be
linked to, Disbursements for this
activity.
Irish Aid has been the only active
donor in Lesotho’s rural water supply
and sanitation sub-sectors. Through
Irish Aid, a total of ÷2.35 million was
disbursed during 2005 for continued
implementation of the DRWS five-year
strategic plan. Outputs included the
maintenance of 626 hand pumps and
over 15 villages were provided with
new tapped water sources. Fifty-five
more sources were designed and are
now under construction. Finally, the
DRWS’s new maintenance strategy was
implemented over the course of the year
with the inspection of 1,786 existing
waster systems.
5. USAID
USAID currently has no water sector
projects within Lesotho.
6. Sustainability
Sustainability of the Water Sector
Project activities is dependent upon the
Government’s pace of implementation
of water sector policy reforms.
Institutional reform and establishment
of a regulatory regime, both of which are
critical to sustainability, are expected to
be completed in the second year of the
Compact Term. Disbursements of MCC
Funding will be tied to agreed progress
on specific salient components of the
water sector reforms.
The estimated additional annual
budget requirement to meet the increase
in operations and maintenance cost is:
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US$2,850,000 for the Metolong Dam
Project activity and US$820,000 for the
Urban and Peri-Urban Water Network
activity. Financial sustainability, at a
minimum, will depend on the ability of
WASA to independently cover the
incremental budget requirement for the
additional operations and maintenance.
With an effective annual tariff increase
of five percent, revenues generated by
WASA are expected to fully cover
operations and maintenance cost and
the assumed costs of Metolong raw
water within the period of this Compact.
This Compact provides funding for
capacity building and technical
assistance to WASA, DRWS and the
DWA to facilitate the implementation
and long-term management capabilities
of these institutions.
The most critical component of
environmental and social sustainability
of the Water Sector Project is
implementation of long-term
environmental management and
monitoring plans, including on-going
public outreach and other social impact
mitigation measures, in accordance with
project-specific EIAs, EMPs, and, where
necessary, RAPs or RPFs. Disbursements
of MCC Funding will be conditioned on
the Government completing each of
these studies to the satisfaction of MCC
prior to construction and then
demonstrating continued compliance
with applicable EMPs and RAPs
throughout the life of the Project.
Environmental sustainability also
depends on WASA maintaining an
environmental management unit which
will be responsible for environmental
compliance of the urban water supply
and Metolong bulk water conveyance
systems. The DWA, which will (a)
implement the wetlands restoration
activity, (b) in conjunction with the
DRWS, monitor performance of rural
water supply systems and (c) in
conjunction with the Ministry of Health
and Social Welfare (‘‘MoHSW’’),
monitor performance of rural sanitation
systems, must continue to expand field
staff in its district offices to strengthen
its monitoring and oversight
capabilities. Technical assistance will
be provided to the DWA through the
course of this Compact to assure
sufficient resources to implement
Compact activities.
C. Health Sector Project
1. Summary of Project and Related
Activities
The latest demographic and health
survey estimated that 24 percent of
adults ages 15–49 in Lesotho are HIV/
AIDS positive; the third highest
prevalence rate in the world. This has
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the potential to severely hamper the
country’s efforts to reduce poverty and
promote economic growth.
This Project is designed to mitigate
the negative economic impacts of poor
maternal health, HIV/AIDS, tuberculosis
(‘‘TB’’) and other diseases by
strengthening the country’s health care
system. The primary Project activities
include: rehabilitating health centers,
rehabilitating and constructing antiretroviral therapy (‘‘ART’’) clinics in
selected hospital out-patient
departments, constructing a central
laboratory and blood transfusion center
and strengthening key complementary
inputs to the health care system
(including training, medical waste
management, health management
information systems and decentralized
management). MCC Funding will
support the Government’s efforts to
significantly increase access to lifeextending ART by providing a
sustainable platform to deliver this and
other essential health services
throughout the country. This has the
potential to result in a measurable
extension of productive life-years for
people living with HIV/AIDS, TB and
other debilitating diseases. In-country
staff of the President’s Emergency Plan
for AIDS Relief (‘‘PEPFAR’’) and other
donors have worked with the
Government and MCC staff in the design
and assessment of this Project activity.
In connection with the Health Sector
Project activities, MCA-Lesotho will
assist and take all necessary steps to
ensure that where and when required by
the MCC Environmental Guidelines, the
MCC Gender Policy or the laws of
Lesotho, an EIA or EA, an EMP, an HIV/
AIDS awareness plan, and, if necessary,
a RAP or RPF (consistent with World
Bank Operational Policy 4.12 on
Involuntary Resettlement) are prepared
to the satisfaction of MCC and in
accordance with the Lesotho National
Environment Act of 2001 and Lesotho
Guidelines for Environmental Impact
Assessment, in each case as the same
may be amended from time to time.
MCA-Lesotho also will ensure that, for
each activity requiring an
environmental license under the
Lesotho National Environment Act of
2001, a ‘‘Project Brief’’ (as defined in the
Lesotho National Environment Act of
2001) and any necessary supporting
studies will be submitted to, and
approved by, the Government’s
environmental authorities prior to the
initiation of construction activities, and
that such environmental license will be
maintained in good standing throughout
the Compact Term. MCC Funding will
support implementation of the
environmental and social mitigation
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measures identified in the EIA(s) or
EA(s), EMP(s), and RAP/RPF(s).
The following summarizes each
Project activity under the Health Sector
Project:
(a) Health Centers Activity.
This Project activity focuses on
renovation and rehabilitation of up to
150 health centers, to bring the national
stock of health centers up to a common
standard. These centers play a primary
role in the provision of HIV/AIDS
prevention, TB treatment and maternal
and child health services. Renovations
are timely given the devolution of
responsibility for these centers to
districts and communities. The MoHSW
and the Ministry of Local Government
can use this visible opportunity of
renovated health services to empower
local leaders with revitalizing
community health services. The
renovation of associated staff housing
and improvement of water, power and
communications will also improve
retention of nurses and health personnel
at these facilities.
The 150 health centers are owned by
MoHSW, the Christian Health
Association of Lesotho (‘‘CHAL’’), and
the Red Cross of Lesotho. Eighteen of
these facilities will be enlarged due to
current and projected patient loads and
facility conditions, and six health
centers will be relocated.
Construction and rehabilitation
contracts will include capital project
maintenance for the life of this
Compact. In addition, during years two
and three of the term of this Compact,
MCC Funding will support technical
assistance to work with the MoHSW in
developing maintenance systems
options for decentralized services.
Specifically, MCC Funding will
support the following:
(i) The design and construction
supervision for up to 150 health centers;
(ii) The rehabilitation and/or
construction of these health centers,
including, but not limited to, the
rehabilitation of related staff housing
where appropriate;
(iii) Preparation of environmental
‘‘Project Briefs’’ and any supporting EA
or EIA, EMP, and/or RAP or RPF
required to meet MCC Environmental
Guidelines and environmental licensing
requirements under the Lesotho
National Environment Act of 2001, as
the same may be amended from time to
time;
(iv) Implementation of environmental
and social mitigation measures
pertaining to the rehabilitation and/or
construction of health centers funded
under this Compact per the
requirements of the EA/EIA(s), EMP(s),
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and RAP/RPF(s) referred to in clause
(iii) above;
(v) Power, water, telecommunications
equipment as needed to reach MoHSW
standards for these health centers; and
(vi) Medical equipment and
instruments and clinical furniture as
required to meet MoHSW clinic
standards.
(b) ART Clinics Activity.
This Project activity will improve
infrastructure in up to 14 hospital outpatient departments (‘‘OPDs’’) and
provide management training to support
extension of ART. This will complete
national coverage of ART at the hospital
level. Designs for reconfiguring the
current OPD to include adequate space
and appropriate patient flow for
incorporating ART services will be
tailored to each hospital. The status of
OPD facilities for managing TB coinfection will also be addressed in the
design.
Specifically, MCC funding will
support the following:
(i) The design and construction
supervision to incorporate ART services
for up to 14 hospital out-patient
departments;
(ii) The rehabilitation and/or
construction of up to 14 expanded
hospital out-patient departments;
(iii) Preparation of environmental
‘‘Project Briefs’’ and any supporting EA
or EIA, EMP, and/or RAP or RPF
required to meet MCC Environmental
Guidelines and environmental licensing
requirements under the Lesotho
National Environment Act of 2001, as
the same may be amended from time to
time;
(iv) Implementation of environmental
and social mitigation measures
pertaining to the rehabilitation and/or
construction of ART clinics funded
under this Compact per the
requirements of the EA/EIA(s), EMP(s),
and RAP/RPF(s) referred to in clause
(iii) above;
(v) Power, water and
telecommunications equipment as
needed to reach MoHSW standards for
hospital OPDs;
(vi) Medical equipment and
instruments, clinical furniture, and
office equipment and furniture as
required to meet MoHSW ART
standards; and
(vii) Training for medical and
administrative personnel on OPD
management.
(c) Central Laboratory Activity.
The central laboratory to be
constructed with MCC Funding is
critical to the national HIV/AIDS
prevention, ART and TB programs. The
current laboratory is too small to house
the current level of testing, and has no
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room for expansion. It is also slated for
decommissioning when the new
National Reference Hospital is
developed. In-country and short-term
external training for laboratory staff also
will be supported through this Project
activity.
Specifically, MCC Funding will
support the following:
(i) design and construction of the new
central laboratory;
(ii) equipping of the new central
laboratory;
(iii) preparation of environmental
‘‘Project Briefs’’ and any supporting EA
or EIA, EMP, and/or RAP or RPF
required to meet MCC Environmental
Guidelines and environmental licensing
requirements under the Lesotho
National Environment Act of 2001, as
the same may be amended from time to
time;
(iv) implementation of environmental
and social mitigation measures
pertaining to the rehabilitation and/or
construction of the central laboratory
funded under this Compact per the
requirements of the EA/EIA(s), EMP(s),
and RAP/RPF(s) referred to in clause
(iii) above; and
(v) training for new equipment,
service expansion and quality assurance
associated with the new central
laboratory.
(d) Blood Transfusion Service
Activity.
Safe blood for transfusions is an
important element of a health system. A
more formal system of blood supplies is
needed. Countries that have expanded
ART services have also seen the need
for transfusions increase, as severely
anemic patients are able to recover
when on medication. A dedicated,
central facility for collecting and
processing blood, two mobile collection
units, and blood storage equipment for
two Government-owned and operated
regional centers will be funded by this
Project activity. The central blood
collection and processing facility will be
developed at Botsabelo, in Maseru.
Specifically, MCC Funding will
support the following:
(i) the design and construction of the
new central blood collection and
processing facility;
(ii) equipping of the new central
blood collection and processing facility;
(iii) preparation of environmental
‘‘Project Briefs’’ and any supporting EA
or EIA, EMP, and/or RAP or RPF
required to meet MCC Environmental
Guidelines and environmental licensing
requirements under the Lesotho
National Environment Act of 2001, as
the same may be amended from time to
time;
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(iv) implementation of environmental
and social mitigation measures
pertaining to the rehabilitation and/or
construction of the blood transfusion
service activity funded under this
Compact per the requirements of the
EA/EIA(s), EMP(s), and RAP/RPF(s)
referred to in clause (iii) above;
(v) training for new equipment,
service expansion and quality
assurance;
(vi) two mobile blood collection
vehicles;
(vii) one blood transportation vehicle;
and
(viii) refrigeration equipment for
blood storage and limited blood
collection furniture for two Government
owned collection sites operated by the
Blood Transfusion Service at Leribe and
Mohales’ Hoek.
(e) National Health Training College
Activity.
The human resources situation has
deteriorated over the past decade in all
the countries of Southern Africa.
Lesotho has undertaken a number of
initiatives to reverse this trend. This
Program activity will support efforts to
increase the number of graduates from
nursing and allied health (for example,
pharmacy and lab technicians) programs
by developing additional dormitories
and staff residences at Lesotho’s
National Health Training College
(‘‘NHTC’’). Other inputs, discussed in
the Health Systems Strengthening
Activity section below, will strengthen
tutor and mentoring capacities.
Specifically, MCC Funding will
support the following:
(i) the design and construction of 120
dormitory spaces and 6 apartment
residences at the NHTC, which
apartments will be initially allocated for
use on a priority basis by tutors and
international technical staff working in
connection with the Project;
(ii) preparation of environmental
‘‘Project Briefs’’ and any supporting EA
or EIA, EMP, and/or RAP or RPF
required to meet MCC Environmental
Guidelines and environmental licensing
requirements under the Lesotho
National Environment Act of 2001, as
the same may be amended from time to
time;
(iii) implementation of environmental
and social mitigation measures
pertaining to the rehabilitation and/or
construction of NHTC dormitories and
staff residences funded under this
Compact per the requirements of the
EA/EIA(s), EMP(s), and RAP/RPF(s)
referred to in clause (ii) above; and
(iv) furniture, appliances, and
furnishings for these new dormitories
and staff residences.
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(f) Health Systems Strengthening
Activity.
The overall success of this Project
hinges upon improved delivery of the
national essential health services
package, including HIV/AIDS
prevention and treatment. In the context
of Lesotho, the poor quality of
infrastructure was identified by the
Government as a constraint to improved
and expanded service delivery. In
addition, key health systems areas have
been identified for Program support.
These key interventions are necessary to
ensure that improved, vital services are
cost-effectively provided at the
community level.
Training
This Project activity will strengthen
pre-service and in-service training
capacities. Currently, a large number of
qualified applicants are rejected by the
training institutions due to a lack of
tutors for the program; this, in turn,
results in too few graduates to fill
MoHSW and CHAL vacancies resulting
from retirement, death, and outmigration. This Project activity will
assist in developing qualified tutors,
mentoring programs, and improved
curricula for preparing a consistently
larger cadre of nurses to provide health
services at the community level.
In-service training is a vital element of
job satisfaction, professional growth,
and quality assurance. Currently, there
is no plan for continuing education of
MoHSW and CHAL professionals. The
Project will assist the Government in
developing an in-service training plan
within the context of devolved services,
and assist in implementing the most
critical elements of the plan. This is
likely to include health center level
training of health center staff, local
administrations, and communities
regarding the new roles and
responsibilities of each.
Decentralization
The Government is in the process of
devolving service delivery to the district
level. The MoHSW is one of the first
ministries to implement the new plan.
To date, three districts have piloted
decentralized health services. Between
2007 and 2010, this is to be expanded
to the remaining seven districts. In
Lesotho, as well as in other countries,
there is evidence that the process of
decentralization—particularly if not
well-managed—can disrupt health
services delivery. This is a critical point
for health status and health services in
Lesotho. This Project activity will
provide additional support, in
collaboration with the World Bank, to
ensure that decentralization is rapidly
and sustainably effected in the health
sector. Areas of particular attention
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include health information systems,
district health management, TB
surveillance and infection control,
health services quality, health facility
maintenance, communications and
public outreach.
Research and Development Unit
within MoHSW
Medicine is strongly evidence-based
and research plays a vital role in
developing interventions and assessing
practices. The MoHSW has a two person
health research unit with a mandate to
provide oversight to research activities
in the health sector. This team will be
supported through MCC Funding to
increase their capacity to coordinate
research activities and to share vital
lessons learned from Lesotho-specific
health research.
Specifically, MCC Funding will
support the following:
(i) expatriate tutors and mentors;
(ii) in-service, in-country and limited
short-term external training of nurse and
allied professional tutors;
(iii) incentives for current tutors to
increase the number of students trained;
(iv) consulting services in continuing
education and decentralization;
(v) in-service training on health center
management, decentralization, research
and infection control;
(vi) office equipment and computers
for program management, district health
information offices and the research
unit; and
(vii) limited funding for external
travel for Program related activities.
(g) Medical Waste Management
Activity.
MCC funding will be used to help the
Government improve occupational
health and safety and medical waste
management practices, which at present
pose significant environmental, health,
and safety hazards and do not comply
with MCC Environmental Guidelines. In
2005, in conjunction with a World Bank
health sector reform project, the
Government conducted a
comprehensive assessment of its
medical waste management practices
and prepared a National Health Care
Waste Management Plan (‘‘WMP’’),
though little progress has been made in
its implementation. The primary
objective of this activity will be to
update and implement the WMP,
provide institutional strengthening of
Government agencies that will be
responsible for implementing,
monitoring, and enforcing the policies
and standards established under the
new WMP, and support public outreach
and awareness campaigns. All work
conducted under this activity will be
closely coordinated with the World
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Bank and other donors involved in
health sector reform.
This activity is critical to ensuring
that health sector interventions under
this Compact comply with MCC
Environmental Guidelines. Moreover,
meaningful improvements in medical
waste management and occupational
health and safety are considered an
important factor in the environmental
and social sustainability of the health
sector overall.
Specifically, MCC Funding will
support the following activities:
(i) supplement previous studies
(including the 2005 WMP) with new
field investigations and literature
reviews in order to characterize baseline
conditions and identify the
environmental, health, and safety risks
of current occupational health and
safety and medical waste management
practices;
(ii) based on the results of
supplemental studies, update the 2005
WMP and the estimated capital and
recurrent costs for implementing the
plan;
(iii) develop a comprehensive finance
plan for funding capital and recurrent
costs;
(iv) develop new hazardous waste
management policies, regulations,
standards, and operating procedures,
per the recommendations in the
updated WMP;
(v) develop an environmental
management and monitoring system,
per the recommendations in the
updated WMP;
(vi) develop occupational health and
safety and waste management licensing
and accreditation procedures, per the
recommendations of the updated WMP;
(vii) provide technical assistance and
capacity building to Government
agencies pertinent to the
implementation and sustainability of
the updated WMP; and
(viii) support and/or conduct public
awareness and training programs.
2. Project Implementation.
The Government and the donor
community have collaborated to build
capacity to undertake donor-financed
programs in the health sector. Currently,
a large portion of the total health
resources are provided through bilateral
and multilateral donors. The Health
Sector Project’s implementation
structure has been developed in an
effort to take advantage of and build on
current capacities and structures, while
being careful not to overwhelm them.
Specifically, the major elements of the
Health Sector Project’s implementation
structure consist of:
(a) MCA-Lesotho.
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MCA-Lesotho will include a full-time
health sector project manager who
reports to the director of operations.
This person will be responsible for
overseeing smooth Project
implementation across all activities. He
or she will ensure that critical
milestones are met and activities
progress as planned. This program
manager will be responsible for
ensuring that implementation problems
are resolved and alerting the
Government of any constraints. The
manager will ensure that Procurement
Agent actions for the Health Sector
Project are prioritized based on the
Project’s implementation plan. This
person will also serve as MCA-Lesotho’s
liaison to the Health Sector PIU (as
defined below) and to health donors’
forums.
(b) MoHSW.
The MoHSW has overall
responsibility for oversight of
implementation of the Health Sector
Project. The MoHSW also will be
responsible for technical quality,
timeliness of implementation, and
integration into MoHSW of Project
activities. The MoHSW will coordinate
activities in relation to the Ministry of
Local Government, and with CHAL and
the Lesotho Red Cross Society.
A dedicated Health Sector Project
Implementation Unit (‘‘Health Sector
PIU’’) will be established within the
MoHSW to administer the Project. The
establishment of the Health Sector PIU
will be the responsibility of the MoHSW
with assistance from MCA-Lesotho. The
MoHSW will be responsible for
integrating Project activities within the
framework of the MoHSW as
appropriate. For purposes of this
Compact, the Health Sector PIU, the
MPMU, the DRWS PIU, the DWA PIU
and the WASA PIU, may each be
referred to as a ‘‘Project Implementation
Unit’’ and, collectively as the ‘‘Project
Implementation Units.’’
The Health Sector PIU will draft
technical specifications and terms of
reference for the following:
(i) design and construction
supervision of health clinics and related
staff accommodation including the
supply of equipment and furniture for
renovation, relocation or rebuild of up
to 150 health centers;
(ii) design and construction
supervision of the Botsabelo complex
activities, including the Blood
Transfusion Services center, the Central
Laboratory, and NHTC dormitories and
residences, including laboratory
equipment, furnishings, furniture and IT
equipment;
(iii) design and construction
supervision of ART centers in 14
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hospitals including the supply of
equipment, instruments and furniture
per region;
(iv) preparation of EA(s) or EIA(s),
EMP(s), and if necessary RAP(s) or
RPF(s) for the above infrastructure
activities in accordance with MCC
Environmental Guidelines and the
National Environment Act of 2001;
(v) engagement of technical assistance
contracts/contractors for capacity
building in human resources,
decentralization and waste
management; and
(vi) Project-related training activities.
The Health Sector PIU will be
responsible for the above-listed
activities which include, but are not
limited to, design reviews, tender
document reviews, environmental
management and compliance, and
public outreach and stakeholder
engagement.
Rehabilitation of the health centers
will require participation of the local
government structures, CHAL and the
Lesotho Red Cross Society. The MoHSW
is responsible for developing formal
agreements with CHAL and the Lesotho
Red Cross Society with respect to MCAfunded infrastructure improvements.
The Ministry of Local Government,
CHAL and the Lesotho Red Cross
Society will each identify a main
counterpart to represent the
organization on Compact activities.
These individuals will have
responsibility and authority for
coordination and implementation of
Program activities within their
respective organizations.
In addition, consultations will be
conducted with affected parties and
other stakeholders in support of
preparation of any EA (or EIA as
applicable), EMP, and, if necessary, RAP
(or RPF as applicable) for the Health
Sector Project activities in accordance
with MCC Environmental Guidelines
and Government environmental
regulations.
3. Beneficiaries
The immediate primary beneficiaries
of the Health Sector Project are the
17,000 HIV positive persons in need of
ART that are not currently receiving it,
who will be able to access these
expanded clinic and laboratory services
from the Government, CHAL and the
Lesotho Red Cross Society.
Additionally, many of the 17,000
persons already enrolled in ART
services will be able to access
medication and follow-up from a local
health center, rather than having to wait
hours in line at a hospital-based center,
with much higher risk of exposure to TB
and other co-infectious diseases.
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Services will also benefit the additional
38,000 Basotho who are estimated to
need ART services in the coming ten
years. The majority of these
beneficiaries are adults, aged 15–49.
Currently, more women than men seek
services, as expected given that HIV
rates are higher for women than for
men. Program statistics will be
periodically reviewed to ensure that age,
gender, income, or geographic biases are
not reflected in client statistics.
Mitigation efforts will be instituted if
needed.
Other primary beneficiaries of this
Project include poor urban and rural
citizens who seek and receive improved
health services from the nearest
Government, CHAL, or Lesotho Red
Cross Society health centers. These
persons will have the opportunity to
learn of life-saving programs; locally
obtain referrals, medical follow-up and
medications; and have a resource to
protect the health of mothers and
newborns. More than one million visits
are made to health facilities per year—
with Project success, this number will
increase, especially at lower levels of
facilities. This will result in costsavings, time-savings, and improved
health status and longevity, and
ultimately in improved productivity and
incomes. In particular, services that
reduce co-infection with TB and
improve maternal health and safe
delivery will benefit the poor.
Secondary beneficiaries include those
who, because of the Project activities,
are less exposed to infectious TB,
particularly multi-drug and extreme
drug resistant TB, from other patients
and from the population at large due to
improved facility design and
management, and better disease
management.
Secondary beneficiaries also include
nurses and medical workers who will
have the skills and materials to lower
their risk of infection from hazardous
wastes in the workplace. Communities
will also benefit with reduced risks of
infection from improper disposal of
hazardous wastes by health personnel.
4. Donor Coordination; Role of Private
Sector and Civil Society.
Other donors and health partners are
working together on health systems
issues. MCC inputs in these areas are
coordinated with these donors and with
Government programs.
In 2000, the Government embarked on
a 10-year reform of the health sector
with donor assistance, particularly Irish
Aid and the World Bank. The reform
program is oriented to improving health
services delivery, financial management
and accountability, monitoring and
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evaluation, and donor coordination. Key
features include decentralization of
public and primary health services to
the district level, greater involvement of
local administrations and communities
in health decision making, new
financial management systems,
improved medical waste management,
increased partnerships for health
delivery, and better planning and
management of infrastructure and
human resources. The Project activities
are also in concordance with broader
public administration and financial
reforms being undertaken across
ministries and sectors by the
Government.
As part of this reform process, a
sector-wide approach (SWAP)
mechanism for health is being
developed, with the World Bank and
others likely to contribute to basket
funding by 2009. Participating donors
have already agreed to common health
sector indicators based on the 10-year
reform program and participate in
annual joint reviews.
This Project’s activities have been
designed within this coordinated
context. The Project will strengthen the
infrastructure for integrated delivery of
services and will provide HR
strengthening. Major donors of
particular relevance to the Health Sector
Project include the United States
government (through PEPFAR), Irish
Aid, the World Bank, the African
Development Bank, United Nations
agencies and the Global Fund for AIDS,
Tuberculosis and Malaria (‘‘GFATM’’).
Multiple consultations have been
undertaken by MCC with each of these
parties.
In addition, donor relations in the
health sector are coordinated by the
MoHSW and through two consortia: the
Health Partners who provide assistance
more broadly to the health sector, and
the UN Expanded Theme Group on
HIV/AIDS. Both fora meet monthly, and
there is overlap between the groups.
There is also an AIDS Country
Coordinating Mechanism for the
GFATM, currently chaired by the
Principal Secretary of MoHSW, that
meets monthly, or as needed, and
includes national organizations
involved in AIDS prevention and
outreach, and major donors in these
efforts. The United States government
also has monthly meetings of all USbased partners working on HIV/AIDS.
MCA-Lesotho is expected to become an
active participant in these fora as
appropriate.
In Lesotho, the major non-government
providers of health services are the
mission and church-related providers
under the umbrella organization, CHAL.
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CHAL provides roughly half of the
health services in Lesotho, with the
MoHSW the main provider of the
remaining fifty percent. CHAL operates
health centers and hospitals, and for the
past decade, has received subvention
from the Government for providing
basic services. The relationship between
the public and non-government sectors
has recently been strengthened by
signing of a formal Memorandum of
Understanding between the MoHSW
and CHAL. Under this Project, MCA
funding will be made available for
renovation of health infrastructure
under CHAL auspices.
Civil society organizations that will
influence and participate in Project
activities include the Lesotho Red Cross
Society, the Lesotho Nurses Association,
the Lesotho Association of People
Living with AIDS, and communitybased organizations with interests in
community health. International NGOs,
including Medecins Sans Frontiers,
Partners In Health, and others have been
consulted in program development and
assessment.
An extensive consultative process was
undertaken in designing this activity.
The World Bank has taken the lead in
providing funding for the initial waste
management assessment for the health
sector in 2005. As the World Bank’s
program has been defined for the next
five years, MCC and MCA-Lesotho have
and will continue to collaborate with
the World Bank team to ensure that our
respective interventions in waste
management have complementary short
and long-term objectives and a mutually
agreed upon strategy for action.
MCC has closely coordinated with
other donors in the health sector to
ensure that the Project supports national
health priorities and does not duplicate
other donor efforts. MCC has
maintained regular communications and
participated in joint reviews with the
donors most involved in HIV/AIDS and
health. These and other donors
provided design support to the MoHSW,
and assisted MCC in the due diligence
process. In addition, MCC periodically
met with and briefed the donor
coordinating groups for the health
sector: the Health Partners, chaired
jointly by the World Health
Organization Representative and Irish
Aid, the UN Expanded Theme Group on
HIV/AIDS and US-based partners
working on HIV/AIDS with the support
of PEPFAR funding. The proposed
project strengthens the infrastructure for
integrated delivery of services and
would provide support to augment
human resources. It supports the
Government’s reform efforts and fits
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within the combined donor strategy for
the health sector.
The U.S. Government does not have a
large bi-lateral program with Lesotho.
The only agency which has a significant
program with a presence in Lesotho is
PEPFAR, focused on HIV/AIDS. The
U.S. Government’s HIV/AIDS
Coordinator based in Lesotho has
provided guidance to MCC in
undertaking due diligence on the health
sector project since May 2006. The
Project has been designed partially with
support from PEPFAR Regional HIV/
AIDS Program partners, including the
Centers for Disease Control and
Prevention, Southern Africa Regional
Office, the Capacity Project, and Safe
Blood for Africa. In addition, the
Clinton Foundation, Partners in Health,
the African Development Bank, and
other MoHSW health partners have
contributed.
5. USAID
Current USAID involvement in health
in Lesotho is through support for and
oversight of PEPFAR activities. The
Health Sector Project was designed and
will be implemented in close
coordination with United States
government efforts relating to HIV/
AIDS, including PEPFAR interventions.
Formal mechanisms, including joint
meetings, for in-country coordination
already exist and will be utilized.
6. Sustainability
Sustainability of health services is a
critical issue, particularly given the
rapid increase of donor-supported ART.
In partnership with the World Bank and
other donors, the Government is
developing a national health financing
strategy to identify the costs of the
essential health services package,
including ART, and to identify gaps and
potential sources of funds. This strategy
will include means of regular dialogue
with health donors in order to ensure
continued financing and identify
potential commitment gaps early.
Implementation of the critical elements
of this strategy will be jointly monitored
by MCC and other health donors.
In other areas, the relationship
between CHAL and the MoHSW has
been formalized through a January 2007
Memorandum of Understanding in an
effort to improve the quality of service
delivery throughout the country. The
Government is working with the
International Finance Corporation to
replace the current national referral
hospital through a public-private
partnership arrangement, hoping to free
up a portion of the 26 percent of the
health budget utilized for that hospital.
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The Health Sector Project was
designed with an eye toward containing
incremental recurrent costs. Facilities
were slated for rehabilitation or
development where the use of
incremental staff and financial resources
could provide the most impact and only
where staff and budget increments were
deemed manageable and within the
framework of the Government’s
‘‘Medium Term Expenditure
Framework’’ for health. Architectural
and engineering briefs for all facilities
aim to reduce long-term maintenance
and utility costs. Decentralization of
health services management to the
district level will increase the local
voice in assuring that quality health
services are delivered. Training
activities will largely be undertaken in
Lesotho, to reduce potential staff
migration. Capacity building activities
in the areas of district health
management, outpatient department
management, laboratory quality
assurance, and in-service training of
district health providers will increase
program sustainability.
The environmental and social
sustainability of the Health Sector
Project is dependent on the
implementation of a national medical
waste management plan. This activity is
both an immediate safeguard against
infection and environmental risk with
MCC investments in the heath sector
and also an opportunity for MCC to
contribute to a sustainable regulatory
structure that will last beyond MCC’s
five-year Compact schedule. MCC will
also require political and financial
assurances that the plan be
institutionalized within the regulatory
framework, funded by the recurrent
budget and overseen by a qualified
government entity by the completion of
the five-year program.
In addition, long-term environmental
management and monitoring plans,
including on-going public outreach and
other social impact mitigation measures,
will be implemented in accordance with
project-specific EIAs, EMPs, and, where
necessary, RAPs or RPFs. Disbursements
of MCC Funding will be conditioned on
the Government completing each of
these studies to the satisfaction of MCC
prior to construction and then
demonstrating continued compliance
with applicable EMPs and RAPs
throughout the life of the Project.
Special efforts will be undertaken to
attract male rural health care workers
through the human resources nurse
outreach training program. This should
encourage more men in the rural areas
to seek out medical assistance, to
discuss sexual histories and to address
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ongoing risky behavior which puts all
Basotho at risk.
D. Private Sector Development Project
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1. Summary of Project and Related
Activities
This Project is designed to increase
private sector activity in Lesotho by
improving access to credit, reducing
transaction costs and increasing the
participation of women in the economy.
The activities include improving land
administration, modernizing the
commercial legal system, strengthening
payment and settlement systems,
supporting the provision of credit
bureau services, including assisting the
roll-out of a national ID scheme, and
training and outreach to support gender
equality in economic rights. These
Project activities are an essential
component of the Government’s major
policy reform program and will
contribute to the broader efforts to
attract foreign investment and stimulate
growth of Basotho-owned companies.
The Government has already obtained
funding for several components related
to the Private Sector Development
Project from the World Bank, which
recently approved a private sector
competitiveness and economic
diversification credit.
The following summarizes each
Project activity under the Private Sector
Development Project:
(a) Credit Bureau and National
Identification Card Activity.
The main objective of the credit
bureau activity is to establish a register
that facilitates the exchange of
information and the screening of
prospective debtors. Establishing a
credit bureau has been cited by credit
grantors as a prerequisite to expanding
access to financial services, especially
credit, to poor and rural populations.
The Government has opted to link
with one or more private credit bureaus
now operating outside of Lesotho.
Several South African credit bureau
operators have expressed an interest in
extending existing infrastructure and
expertise into Lesotho to support its
credit bureau needs. The cross-border
solution selected is less expensive and
more comprehensive than a ‘‘Lesotho
only’’ credit bureau. In addition to cost
savings, linking with a South African
credit bureau will allow members to
track the heavy volume of cross-border
borrowing. In order to implement a
cross-border credit bureau, the
Government will have to undertake a
legal and regulatory review and update
its legislation and regulations as needed
to ensure harmonization with South
African privacy and information
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protection principles and relevant
provisions of the South African National
Credit Act.
Development of a national
identification card (‘‘NIDC’’) is a
necessary step in the process of
establishing a credit bureau. The NIDC
will restrict all citizens and lawful
residents to a single unique identity
number that can be used to recognize
individuals in multiple information
technology (‘‘IT’’) systems. MCC will
collaborate with the World Bank, which
has approved the engagement of an
international consultant to conduct a
feasibility study that will determine the
most effective and cost efficient
approach to launch the NIDC, in the
final design of this activity. The NIDC
will be implemented by a third party
and managed by the Lesotho Ministry of
Home Affairs (‘‘MoHA’’), with oversight
provided by the Public-Private Steering
Committee, an existing ministerial
committee chaired by the Deputy Prime
Minister. MCC Funding will support
training and capacity building for
MoHA employees to assure
sustainability.
The social/gender specialist employed
by MCA-Lesotho will review the World
Bank’s feasibility study and provide
inputs to assure that the NIDC program
is safeguarded against human rights
abuses and is compliant with the MCC
Gender Policy. This system should help
protect against gender, HIV and marital
status discrimination in banking and
credit schemes by providing lenders
accurate and objective information on
an individual’s credit history regardless
of gender or HIV/AIDS status. In
addition, human rights groups will be
consulted during the course of the
development and implementation of the
scheme to prevent potential human
rights abuses or infringements on
individuals’ private lives.
Specifically, MCC Funding will
support the following:
(i) Production and issuance costs for
NIDC cards, including hardware,
software, data capture, staff training and
development for the MoHA;
(ii) Consultation in respect of
necessary legal and regulatory reforms;
and
(iii) Development and execution of a
public awareness campaign with respect
to the NIDC.
(b) Payments and Settlement Systems
Activity.
The main objectives of the payment
system modernization Project activity
are the introduction of automated
clearing and alternative payment
options that will reduce payment and
settlement times and lessen the use of
cash and checks. Automated clearing
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and additional payment options should
facilitate trade and improve clearing
times for all payment streams, decrease
costs associated with funds transfer,
reduce fraud, widen access to financial
services and reduce poverty by
increasing economic growth. Another
objective is to strengthen Lesotho’s
financial infrastructure and promote
further integration of its payment and
settlement systems with those of its
neighbor, South Africa.
A large percentage of the population
of Lesotho is ‘‘unbanked,’’ including an
estimated 85 percent of businesses. In
many parts of the country, people travel
up to 120 kilometers to access banking
services. One of the primary focuses of
this activity is to expand the reach of,
and institutional participation in, the
payments system by, among other
things, adding functionality for
telephone and other smart card
transactions. Another focus is to include
the Post Bank in the payments system,
which will greatly expand its reach and
will provide benefits to rural
populations relatively quickly. Adding
payment options and channels, such as
payments through remote, battery or
crank operated point-of-sale terminals
will make access more convenient and
economical for much of the unbanked
population.
Specifically, MCC funding will
support the following:
(i) Reviewing the legal and regulatory
structure governing domestic and crossborder payments;
(ii) Harmonizing laws regarding crossborder payments and currency controls;
(iii) Paying for the initial year of the
Automated Clearing House (‘‘ACH’’)
provider’s fee for implementation,
consultation, training and contract
execution in connection with making
multiple payment streams available in
Lesotho;
(iv) Paying for the costs associated
with two imaging machines and
ancillary hardware, software and
training for operations at the Central
Bank of Lesotho if the Central Bank of
Lesotho and financial institutions agree
to a system for delivering checks
directly to the Central Bank of Lesotho
from all bank branches for imaging and
subsequent forwarding to the ACH
provider;
(v) Paying for the costs associated
with the distribution of payment
options and channels, such as point of
sales terminals; and
(vi) Implementing a public awareness
campaign for banks and consumers with
respect to this Project activity.
(c) Land Administration Reform
Activity.
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Policy and Legal Reform
Under this Project activity, MCC
Funding will support technical
assistance to the Government to revise
land reform legislation currently in draft
form and to develop its land policy,
thereby promoting the use of land as an
economic asset. Gender analysis will
ensure that revisions to the draft Land
Bill are congruent with the Legal
Capacity of Married Persons Act and
other gender equality reforms and
principles. MCC Funding will permit
the Government to obtain technical
assistance to draft laws and related
implementing regulations as needed to
realize land policy reforms. Finally,
MCC Funding will support the
education and training of land
administration officials, community
councils and the public on land
administration issues and the
formalization of rights to land. The
expected outcomes of this Project
activity include adopting a new land
policy reinforced by the passage of a
new Land Act and the promulgation of
its implementing regulations and
spreading a wider understanding and
awareness of the new land policy among
officials and citizens.
Systematic Regularization of Land in
Urban Areas and Improvement of Rural
Land Allocation Processes
This Project activity will fund the
systematic regularization and upgrading
of informal settlements in urban and
peri-urban areas, beginning in Maseru
and extending to other cities and towns
to the extent MCC Funding is available.
As part of systematic regularization,
local adjudication teams and surveyors
will work with occupants to define the
boundaries of parcels and establish
cadastral plans, design access roads and
utility rights of way as needed, and
issue leases to the legally recognized
title holders. Registration of existing
land occupants will be based on
inclusive adjudication provisions
enacted as part of the legal and
regulatory framework. Activities related
to systematic regularization of land and
improvement of the land allocation
process will be designed to increase
gender equity through mandatory joint
titling of rights to married couples.
A public outreach and training
program will support the activity by
informing occupants of regularization
activities and encouraging their
cooperation with adjudication teams.
Special efforts will be made to ensure
that training, public awareness and
access to information is available to
women and socially vulnerable
individuals. MCC Funding will also
assist community councils to improve
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their records of rural land allocations
and to support the Government’s efforts
to train community councils and
traditional authorities on the land
allocation process. This Project will
help train district land teams to
complete an inventory of existing land
allocations and establish improved
record keeping procedures. MCC
Funding will also support the
Government’s (and other donors’)
ongoing efforts to train community
councils and traditional authorities on
their roles in land allocation and land
management. The expected outcomes of
these activities include the
formalization and registration of the
rights to over 55,000 parcels of
informally occupied land in Maseru and
other cities of Lesotho; the improvement
of records on rural land allocations
maintained by community councils; and
the training of community councils,
traditional authorities, and rural citizens
on land allocation and management
procedures.
Modernization and Improvement of
Land Administration Services
This Project activity will fund the
simplification of land administration
procedures and the development of a
new land administration authority
(‘‘LAA’’) that will be:
(i) Professionally managed and
operated;
(ii) Operated in a largely autonomous
manner in accordance with its
objectives;
(iii) Capable of providing costeffective and efficient services to the
public and land information users
(including the poor);
(iv) Able to hire and retain qualified
managerial and technical staff; and
(v) Self-sustaining.
The LAA will be modeled after the
Lesotho Revenue Authority, an
autonomous parastatal body that
collects taxes for the Government. MCC
Funding will support the establishment
of the technical platform for operation
of the LAA, support hiring and training
of managerial and technical staff, and
provide material resources for
the initial operation of the LAA. The
expected outcomes of this Project
activity include the adoption of a legal
basis for the LAA; establishment of the
LAA with qualified managerial and
technical staff; and development of an
appropriate technical platform (e.g., the
appropriate land information systems
and internal culture) for delivery of
streamlined, cost effective and efficient
land administration services to the
public.
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Public Outreach and Training
This Project activity will fund public
outreach and awareness activities in
support of all of the land administration
reform activities. MCC Funding will
support training of land administration
staff, community councils and
traditional authorities as needed to
implement land administration reform
in Lesotho. The expected outcomes for
this activity are greater public
awareness of land matters and the
benefits of formal title to land (i.e., a
lease) and well-trained land
administration staff and community
councils.
Gender analysis to ensure that
revisions of the new Land Act are
congruent with the Legal Capacity of
Married Persons Act and other gender
equality reforms and gender-responsive
methodologies and approaches for
training, such as separate meetings and
training sessions, will be undertaken to
ensure that women are included in all
education and training for public
officials and the public.
(d) Civil Legal Reform Activity.
This Project activity is an element of
a broader Government program of legal
reform and will provide faster, fairer
and less expensive resolution of
commercial disputes, whether large or
small. According to the World Bank
‘‘Doing Business’’ survey, it takes nearly
700 days to resolve a dispute in the
courts. This Project activity aims to cut
the time and cost required to resolve a
commercial dispute in half. This
activity will promote an improved
investment environment for businesses
of all sizes, and will afford ordinary
citizens better access to courts for
economic disputes.
Specifically, MCC funding will
support the following:
(i) The development of the
Commercial Court, including the
drafting and promulgation of
procedures, capacity building, and—
eventually—reconstruction of a
currently unused court building to
house the Commercial Court. The
court’s focus will be on larger
commercial disputes;
(ii) The creation of modern case
management procedures. All the courts
of Lesotho suffer from a lack of modern
case management procedures and
technology. Modern case management
will be introduced to the High Court,
the new Commercial Court, and the
Magistrate Court of Maseru;
(iii) Promotion of alternative dispute
resolution (‘‘ADR’’). The focus of this
sub-activity will be a program of courtannexed mediation for commercial
disputes. Increased use of private ADR
will also be promoted; and
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(iv) The development of a simplified
and expedited small claims process.
Smaller commercial claims may have
limited recourse to the judicial system.
Introduction of a small claims process
seeks to provide inexpensive and rapid
resolution of the smallest commercial
disputes.
Any potential gender-based
constraints to participation in the
Project will be explored during the
development of the Program-wide
Gender Integration Plan. This Plan will
include, as appropriate,
recommendations for meaningful and
inclusive consultations with women
and other vulnerable/underrepresented
groups, project-specific gender analyses
and strategies for incorporating findings
of the gender analyses into final Project
designs.
(e) Training and Public Awareness to
Support Gender Equality in Economic
Rights.
MCC and the Government of Lesotho
recognize that gender inequality can be
a significant constraint to economic
growth and poverty reduction. In
December 2006, the Government passed
into law the Legal Capacity of Married
Persons Act which removes the
minority status of married women. With
assistance from MCC, the Government
has already contracted for two related
activities: A gender review of laws and
policies with recommendations for
reform, and the development of a
training and public outreach program to
realize in practice gender equality in
economic rights.
The gender review of laws and
policies and additional due diligence on
the effects of the Legal Capacity of
Married Persons Act have revealed
contradictions in Lesotho law.
Removing these contradictions is
important to assure the application of
rights in the judiciary and also because
poor, rural women do not usually have
the resources to initiate an appeal if the
conflicting law is the basis for a legal
decision.
Prior to the first Disbursement, the
Government will undertake additional
legal reform efforts to assure that the
following economic rights are not
contradicted by laws enacted prior to
the Legal Capacity of Married Persons
Act, including the right to:
(i) Enter into a contract, including
incurring indebtedness;
(ii) Sue or be sued;
(iii) Register immovable property in
her name;
(iv) Act as an executor of a decedent’s
estate;
(v) Act as a director of a company;
(vi) Act as a trustee of an estate;
(vii) Bind oneself as a surety; and
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(viii) Buy, sell and use property as
collateral for loans.
The PSD Project includes a training
and public awareness activity designed
to realize gender equality in economic
rights and promote enhanced access to
credit for women.
The first sub-activity is a training
program to promulgate the Legal
Capacity of Married Persons Act and
other reforms aimed at gender equality
in the economy. Specifically, MCC
Funding will support:
(ix) training the legal community,
including judges, magistrates, lawyers,
prosecutors, and police, and inclusive of
the local and central courts that handle
most of the matrimonial disputes;
(x) training and training-of-trainers for
relevant government ministries; and
(xi) sector-specific training with
special attention to the banking
industry, potential women borrowers
and those Government entities
responsible for regulation and oversight.
The second sub-activity is a public
awareness and outreach program
designed to develop knowledge,
awareness and practices in support of
these economic rights. This sub-activity
will involve traditional authorities,
religious leadership, civil society
organizations, local government,
churches, NGOs, and community-based
organizations, including support groups,
as stakeholders, and it will be
implemented in all ten districts of
Lesotho. Specifically, MCC funding will
support the following:
(xii) a five-year public awareness
campaign dedicated to implementing
gender equality in economic rights;
(xiii) activities designed to be
appropriate for specific stakeholder
groups; and
(xiv) The building of local capacity to
continue advocacy for equality in
economic rights following the MCC
interventions.
2. Project Implementation
(a) Credit Bureau and National
Identification Card Activity.
Implementation of the credit bureau
activity will be managed by the Central
Bank of Lesotho with oversight
provided by the Public-Private Steering
Committee, an existing ministerial
committee chaired by the Deputy Prime
Minister. The Public-Private Steering
Committee’s membership will include
representation from the Central Bank of
Lesotho, which will also have regulatory
responsibility for the credit bureau, and
the MoHA, which will have regulatory
responsibility for the National
Identification Card. MCC Funding will
pay for the related legal and regulatory
review and the consultation needed to
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43401
ensure harmonization with South
African privacy and information
protection principles (as well as other
relevant provisions of the South African
National Credit Act) and will support
training for the Central Bank as the
credit bureau regulator. The credit
bureau will be privately owned and
funded and the private credit bureau
operator will be responsible for
soliciting credit bureau membership and
gathering the information needed to
populate the credit bureau data base.
MCC Funding will assist the roll-out
of the NIDC in support of the launching
and operation of the credit bureau.
MoHA will manage the NIDC
implementation with oversight provided
by the Public-Private Steering
Committee. It is expected that the World
Bank will engage the services of an
international consultant to determine
the most effective and cost efficient
approach to launch the NIDC.
Recommendations will include card
design and implementation processes,
as well as the appropriate ID card
production system and long-term
support systems best suited for Lesotho.
Additionally, the consultant will design
an advertisement and a public
awareness campaign and detail final
development processes and costs.
(b) Payments and Settlement Systems
Activity.
The Government, as the current chair
of the South African Development
Community, has committed to regional
integration of financial systems. In line
with that commitment, the Government
has opted to implement its payment
system improvement by linking with a
South African payment system provider
rather than developing a standalone,
proprietary system with the Central
Bank of Lesotho.
Implementation of the payments and
settlement systems activity will be
managed by the Central Bank of Lesotho
with oversight by the Public-Private
Steering Committee referenced in
subsection (a) above. Representation
from the Central Bank of Lesotho, which
will have regulatory responsibility for
the credit bureau, will be added to this
committee to address issues related to
both the Credit Bureau activity and the
Payments and Settlement System
Improvement activity. MCC Funding
will pay for the related legal and
regulatory review and the consultation
needed to ensure harmonization with
other countries in the region.
(c) Land Administration Reform
Activity.
Implementation of the land
administration reform activity will
require that a project implementation
unit (‘‘Land Administration Reform
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PIU’’) be established. The Land
Administration Reform PIU will provide
technical assistance to the Department
of Lands, Surveys, and Physical
Planning (‘‘LSPP’’) and the new LAA
during the course of the Project, but will
be more specifically focused on
supporting the land administration
bodies to meet Compact-related
requirements for documentation (for
example, project work plans, budgets
and quarterly reports), procurements
(drafting terms of reference for private
sector providers) and performance
monitoring and coordination of the
activities of various implementers as
necessary to achieve component
objectives. The LSPP and the new LAA
are expected to concentrate on day-today business and implementation of the
changes in land policy expected during
the term of this Compact. The Land
Administration Reform PIU, although a
separate entity, will be located within
the LSPP offices or nearby to ensure
close collaboration and communication
on subjects related to project
implementation. The four sub-activities
under this Project activity and the
implementing arrangement for each are
as follows.
jlentini on PROD1PC65 with NOTICES3
Policy and Legal Reform
The main implementer of this subactivity is to be a legal consulting team
made up of a legal specialist familiar
with international best practices and
lawyers with knowledge of legal
practices in Lesotho. The legal
consulting team will support the LSPP/
LAA in the formation of new land
policy, drafting laws and regulations
implementing the policy, advocating in
support of the adoption and broad
acceptance of the new land policy, and
implementing the land administration
reforms (including, for example,
training and public outreach, procedural
analysis and reform). The legal team
will interact and cooperate with other
implementers selected to work on land
administration reform, supporting their
efforts to implement new land policy
and assisting in problem resolution.
Systematic Regularization and
Registration of Urban Land and
Improvement of Rural Land Allocation
Procedures
This sub-activity will be implemented
jointly by the LSPP/LAA and a land
registration consulting firm that will
support the efforts to conduct
systematic regularization and
registration of urban land rights
(focusing on rights to land in informal
settlements). The land registration
consultant will provide the LSPP/LAA
with technical assistance and material
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19:11 Aug 02, 2007
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Public Outreach and Training
for formalizing one’s rights to land, and
the benefits of formalizing land rights.
(d) Civil Legal Reform Activity.
The High Court will be the primary
implementer of the civil legal reform
Project activity, and will coordinate
with the Ministry of Justice as
appropriate. A consulting firm will be
hired to provide a resident advisor for
the first two years of the Project, and
other short-term experts and support as
required. The High Court will also
involve other courts, the Law Society of
Lesotho, representatives of the private
sector and NGOs—in each case, in an
advisory capacity—in planning and
implementing all aspects of the Project.
Compact Implementation Funding will
be used to hire a consultant to develop
a detailed implementation plan and to
draft a scope of work for the consulting
firm.
(e) Training and Public Awareness to
Support Gender Equality in Economic
Rights.
The training and public awareness to
support gender equality in economic
rights Project activities will be
coordinated by the Ministry of Gender,
Youth, Sports and Recreation as
appropriate. Implementation will be
carried out by one or two firms, with
partners who have deep knowledge and
experience of the context. This firm, or
firms, will be selected after an
international competition managed by
MCA-Lesotho and tendered with the
approval of MCC. The social/gender
specialist employed by MCA-Lesotho
will be charged with providing
oversight and general guidance
throughout the life of the contract. The
social/gender specialist employed by
MCA-Lesotho will meet regularly with
the representative of the Ministry of
Gender, Youth, Sports and Recreation to
ensure that benchmarks are being met,
the work plan is being followed and that
results of the training and public
awareness activities are being
monitored.
The main implementer of this subactivity will be an outreach and training
consultant (an NGO), supported by a
public education consultant. The
consultants will be responsible for
organizing all public outreach activities
in support of the various activity
implementers, including community
councils and the LSPP/LAA. The
consultants will draft an outreach and
training strategy that meets the needs of
the LAA and the implementers of each
activity. For example, the consultants
will cooperate with the LSPP/LAA to
form a strategy for raising public
awareness of the new LAA, the new
simplified procedures and reduced costs
3. Beneficiaries
(a) Credit Bureau, National
Identification Card and Payment and
Settlement Systems Activity.
All economically active (formal sector
and informal sector) citizens and legal
residents, including married women, are
potential beneficiaries of these Project
activities. The activities combine to
improve the availability of credit and
other financial services. There will be a
significant reduction in transaction
costs for financial institutions both in
gathering the information needed to
evaluate credit decisions and the cost of
payments and settlement, which should
result in a reduction in fees for these
resources support (for example,
temporary human resource and
financial assistance) necessary to
complete the systematic regularization
and registration task in a timely manner.
The LSPP/LAA will also develop and
implement improvements in the
procedures for recording rural land
allocations and the maintenance of such
records with technical assistance from
the land registration consultant. The
consultant, in cooperation with the
public outreach consultant and other
donor projects, will support the
Ministry of Local Government’s program
for training of community councils and
traditional authorities on land allocation
procedures under the Law on Local
Government of 1997 and new
procedures established as part of this
activity.
Modernize and Improve Land
Administration Procedures
The main implementer of this subactivity will be a land information
systems consulting firm (‘‘LIS
Consultant’’), which will work with the
current land administration authorities
and the Director of the new LAA to
establish the LAA. Based on a study of
land administration services and needs
in Lesotho carried out with MCC
Funding, the LIS Consultant will
develop appropriate business processes,
implement necessary software and
hardware solutions, train LAA staff and
management on new systems, and
monitor the implementation of the new
procedures and systems to ensure their
efficiency and effectiveness in providing
land administration services to private
and public users. The LIS Consultant
will cooperate closely with the land
registration consultant and the legal
consulting team to ensure that new
processes meet the needs of public and
private users and are properly
established in the regulatory framework.
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services to clients. The payment and
settlement system will likely put
competitive pressures on the bank and
non-bank service providers since many
of the transactions for which they are
now charging high fees (such as
remittances) can eventually be provided
by other parties unless they remain
competitive in pricing and service
provision.
(b) Land Administration Reform
Activity.
The targeted beneficiaries of these
Project activities are informal land
occupants who now lack formalized
rights to land and the security and
economic benefits that derive from
registered rights in land. All land
occupants and right holders will benefit
from the adoption of a new land policy
that improves access to land and
security of land rights. Improvements in
land allocation and land record keeping
procedures will also benefit all rural
land occupants. These improvements
will lead to the increased marketability
of land, incentives to invest in land and
the ability of land to be used to obtain
credit. Private business will also benefit
from these improvements by generating
jobs and increased economic activity in
sectors such as mortgage lending,
construction, and real property related
services (for example, estate agents,
property valuers, and land surveyors).
(c) Civil Legal Reform Activity.
All active participants in the formal
economy of Lesotho are intended
beneficiaries of the civil legal reform
Project activity. Initially, those
economic actors most greatly impacted
by the current backlog of High Court
cases, such as banks, will benefit most
directly. In addition, those individual
citizens who now suffer from limited
recourse to courts to settle their
economic disputes will also be direct
beneficiaries. With increasing access to
formal justice, it is hoped that fewer
individuals will simply accept unfair
results from economic transactions or
‘‘take the law into their own hands’’ to
settle disputes. Individual Basotho will
also benefit by increased access to credit
when banks are able to offer increased
access to credit, as a result of easier
processes developed to collect unpaid
debts.
(d) Training and Public Awareness to
Support Gender Equality in Economic
Rights.
Because gender inequality can be a
significant constraint to growth and
poverty reduction, reducing the barriers
to women’s full participation as
economic actors will benefit all
members of Basotho society.
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19:11 Aug 02, 2007
Jkt 211001
4. Donor Coordination; Role of Private
Sector and Civil Society
MCC has been actively collaborating
with other donors on the NIDC system
and the legal reform activities. MCC will
work with the World Bank in the rollout of the NIDC sub-activity. The World
Bank has approved the engagement of
an international consultant to determine
the most effective and cost efficient
approach to launch the NIDC. MCC will,
upon approval of design and cost
elements, assist with funding the rollout.
The development of the private sector
development project relied on
stakeholder steering committees and
consultations with chambers of
commerce, textile, and garment industry
associations to provide feedback on the
impediments to private sector growth
and proposed solutions to improving
the business and investment climate. In
particular, there has been extensive
consultation with the banking sector at
all stages in establishing the need for
and in designing the NIDC, credit
bureau and payments and settlement
systems sub-activities.
The land administration reform
activity has been discussed and
continues to be discussed with the
United Kingdom’s Department for
International Development (‘‘DfID’’) and
the German development agency,
Deutsche Gesellschaft fr Technische
Zusammenarbeit (‘‘GTZ’’). These donors
are currently active in Lesotho and have
experience addressing land
administration reform activities and
related activities. In particular, project
activities on improvement of land
allocation practices in rural areas will
be coordinated with GTZ and the
establishment of the new LAA will be
done in consultation with DfID. The
land administration reform activities
also include a significant role for the
private sector and civil society. Private
land surveyors will conduct land
surveys as part of mass regularization
and registration or urban land and
public education and outreach activities
will largely be implemented by an NGO.
5. USAID
USAID does not currently have any
financial and private sector
development initiatives that focus
specifically on the areas identified by
MCC for funding in this Project.
6. Sustainability
The credit bureau will be privately
owned and private sector funded.
Formation of a credit bureau has been
consistently identified by credit grantors
as a prerequisite to granting credit and
PO 00000
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Fmt 4701
Sfmt 4703
43403
the cross-border solution selected is less
expensive and more comprehensive
than a ‘‘Lesotho only’’ credit bureau.
The banks have indicated that they will
become paying members of the credit
bureau. The NIDC activity will be
implemented by a third party and
managed by the MoHA. A significant
portion of the cost will be allocated to
hiring experienced (third party)
consulting experts to manage the
implementation, providing technical
expertise (hardware and software) and
for training and capacity building for
MoHA employees in an effort to assure
sustainability.
Sustainability is dependent largely on
the participation of the four largest
banks in Lesotho, three of which have
South African parents and already send
much of their clearing information to
the South African ACH that would
likely provide services to Lesotho. The
fourth bank is the Post Bank, which is
owned by the Government. As a result
of the Government’s choice to link with
a regional payments provider and the
consequential reduction in cost and
broadening of payment options, the
Central Bank of Lesotho has received
assurances from each of the banks that
they will be a participating (and paying)
member of the ACH over the long term.
It is also the Central Bank of Lesotho’s
intent to allow participation of
indigenous financial institutions as they
become credit worthy and have the
capacity to become contributing
members.
A primary focus to ensure
sustainability in the private sector
development Project activities will be to
fully realize the rights afforded to
women under the Legal Capacity of
Married Persons Act in each private
sector development component. This
will be done by integrating women and
other individuals with no formal
financial history or access to credit, land
or litigation experience into each of the
activities through targeted outreach and
training. In addition, MCA-Lesotho will
ensure that all activities are compliant
with The Labor Code of 1992 which
establishes the minimum age for
employment at 15.
MCC funding will help establish
sustainable improvements in land
administration reform through an active
capacity building, training, and public
education effort. Each activity helps
improve local capacity by training local
stakeholders on all aspects of land
administration and educating the public
on processes involved in formalizing
land rights and transferring rights to
land using formal mechanisms.
Establishment of a new land
administration authority, with the
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characteristics described in paragraph
D1(c) of this Annex I, will raise capacity
in land administration, ensuring that the
LAA is capable of serving both private
and public users of land information
efficiently and cost effectively.
Social safeguards and gender
integration will be reviewed and
monitored by the Social/Gender
specialist in coordination with the
MCA-Lesotho officer responsible for
environmental and social impact
assessment (the ‘‘ESI Officer’’).
The private sector development
Project activity is not expected to result
in adverse environmental impacts.
However, the MCA-Lesotho ESI Officer
will review terms of reference and work
plans for all projects and activities to
verify that potential environmental
impacts are not anticipated. If
necessary, the ESI Officer will act in
accordance with the MCC
Environmental Guidelines and
applicable environmental laws and
requirements in Lesotho to assess
potential impacts, acquire the necessary
environmental license and ensure the
adequate mitigation is completed during
implementation. The Government will
be responsible for any environmental
mitigation cost not included in the
activity budgets.
Annex II Summary of Multi-Year
Financial Plan
1. General
The Multi-Year Financial Plan
Summary below sets forth the estimated
annual contribution of MCC Funding for
Program administration, Program
monitoring and evaluation, and
implementing each Project. The
Government’s contribution of resources
will consist of ‘‘in-kind’’ and other
contributions or amounts required
effectively to satisfy the requirements of
Section 2.5(a) of this Compact. In
accordance with the Program
Implementation Agreement, the
Government will develop and adopt on
a quarterly basis a detailed financial
plan (as approved by MCC) setting forth
annual and quarterly funding
requirements for the Program (including
administrative costs) and for each
project, projected both on a commitment
and cash requirement basis.
2. Modifications
To preserve administrative flexibility,
the Parties may by written agreement (or
as otherwise provided in the Program
Implementation Agreement), without
amending this Compact, change the
designations and 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 Entry into Force and a
new project; provided, however, that
any such change (a) is consistent with
the Objectives and the Program
Implementation Agreement, (b) does not
materially adversely affect the
applicable Project or any activity under
Program administration or monitoring
and evaluation, (c) does not cause the
amount of MCC Funding to exceed the
aggregate amount specified in Section
2.1(a) of this Compact and (d) does not
cause the Government’s obligations or
responsibilities or overall contribution
of resources to be less than that
specified in Section 2.5(a) of this
Compact.
MULTI-YEAR FINANCIAL PLAN SUMMARY
[Totals including Contingencies (US$)]
Project
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1. Water Sector Project
A. Metolong Dam
Bulk Water Conveyance System
B. Metolong Dam
Program Management Unit
Activity ...............
C. Urban and PeriUrban Water Infrastructure Activity ...................
D. WASA Project
Implementation
Unit ....................
E. Rural Water
Supply and Sanitation Infrastructure Activity ........
F. Wetlands Restoration and
Conservation Activity ...................
Subtotal ..........
2. Health Sector Project
A. Health Care
Centers Infrastructure Activity
B. ART Clinic Infrastructure Activity
C. Central Lab Infrastructure ........
D. Blood Transfusion Center .....
VerDate Aug<31>2005
CIF
funding
Year 1
Year 2
Year 3
Year 4
Year 5
Total
1,490,000
5,840,000
5,700,000
21,540,000
32,300,000
5,590,000
72,460,000
1,390,000
1,590,000
1,590,000
3,160,000
3,250,000
3,330,000
14,310,000
1,250,000
6,520,000
6,450,000
16,690,000
5,540,000
1,010,000
37,460,000
459,000
459,000
918,000
918,000
918,000
918,000
4,590,000
........................
5,900,000
7,550,000
5,740,000
5,330,000
5,720,000
30,240,000
324,000
783,000
2,025,000
1,026,000
540,000
270,000
4,968,000
4,913,000
21,092,000
24,233,000
49,074,000
47,878,000
16,838,000
164,028,000
1,023,000
10,770,000
16,008,000
24,688,000
16,155,000
4,290,000
72,934,000
238,000
922,000
1,393,000
1,393,000
696,000
........................
4,642,000
........................
........................
305,000
1,221,000
1,221,000
305,000
3,052,000
........................
538,000
672,000
1,076,000
403,000
........................
2,689,000
19:11 Aug 02, 2007
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MULTI-YEAR FINANCIAL PLAN SUMMARY—Continued
[Totals including Contingencies (US$)]
Project
E. National Health
Training College
Dormitory Infrastructure Activity
F. Health System
Interventions Activity ...................
G. Medical Waste
Management .....
H. Health PIU ........
CIF
funding
Year 1
Year 2
Year 3
Year 4
Year 5
Total
........................
741,000
3,336,000
2,966,000
371,000
........................
7,414,000
500,000
2,650,000
3,100,000
3,000,000
3,000,000
2,750,000
15,000,000
87,000
2,588,000
1,046,000
1,294,000
1,172,000
1,941,000
684,000
2,588,000
412,000
2,588,000
326,000
1,941,000
3,727,000
12,940,000
4,436,000
17,961,000
27,927,000
37,616,000
24,846,000
9,612,000
122,398,000
70,000
600,000
775,000
925,000
315,000
185,000
2,870,000
95,000
2,977,000
2,481,000
1,900,000
1,455,000
1,092,000
10,000,000
510,000
2,415,000
6,800,000
5,200,000
3,600,000
1,975,000
20,500,000
........................
800,000
600,000
300,000
........................
........................
1,700,000
35,000
350,000
250,000
200,000
100,000
100,000
1,035,000
Subtotal ..........
4. Monitoring and Evaluation
Monitoring and
Evaluation ..........
710,000
7,142,000
10,906,000
8,525,000
5,470,000
3,352,000
36,105,000
500,000
2,605,000
684,000
755,000
664,000
2,600,000
7,808,000
Subtotal ..........
5. Program Management and Oversight
A. MCA Lesotho ...
B. Fiscal Agent 1 ...
C. Procurement
Agent 2 ...............
D. Bank Contract ..
E. Auditing ............
F. Environmental/
Social Oversight
(consultants) ......
500,000
2,605,000
684,000
755,000
664,000
2,600,000
7,808,000
1,981,000
1,250,000
1,905,000
740,000
2,142,000
1,250,000
2,323,000
1,570,000
3,423,000
1,375,000
2,660,000
475,000
14,434,000
6,660,000
1,250,000
5,000
623,000
700,000
5,000
623,000
1,175,000
5,000
623,000
1,475,000
5,000
623,000
1,300,000
5,000
623,000
450,000
5,000
623,000
6,350,000
30,000
3,738,000
........................
200,000
200,000
200,000
200,000
200,000
1,000,000
Subtotal ..........
5,109,000
4,173,000
5,395,000
6,196,000
6,926,000
4,413,000
32,212,000
Total Estimated
MCC
Contribution
15,668,000
52,973,000
69,145,000
102,166,000
85,784,000
36,815,000
362,551,000
Subtotal ..........
3. Private Sector Development Project
A. Civil Legal Reform Activity .......
B. National ID/
Credit Bureau ....
C. Land Administration Reform
Activity ...............
D. Payment and
Settlement System Activity ........
E. Gender Equality
in Economic
Rights Activity ....
Note: Health and Water Sector infrastructure costs include estimated costs for environmental/social studies and mitigation.
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Annex III. Description of the
Monitoring and Evaluation Plan
meaning given such term elsewhere in
this Compact.
This Annex III to this Compact (the
‘‘M&E Annex’’) generally describes the
components of the plan to measure and
evaluate progress toward achievement
of the Compact Goal and the Objectives
(the ‘‘M&E Plan’’). Except as defined in
this M&E Annex, each capitalized term
in this M&E Annex will have the same
1. Overview
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MCC and the Government (or a
mutually acceptable Government
affiliate or a permitted designee of 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
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the Compact Goal, Objectives, and the
intermediate results of each Project and
Project activity set forth in this M&E
Annex (the ‘‘Outcomes’’) will be
monitored (the ‘‘Monitoring
Component’’); (b) a methodology,
process and timeline for the evaluation
of planned, ongoing, or completed
Projects and Project activities to
determine their efficiency, effectiveness,
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impact and sustainability (the
‘‘Evaluation Component’’); and (c) other
components of the M&E Plan described
below.
Information regarding the Program’s
performance, including the M&E Plan,
and any amendments or modifications
thereto, as well as periodically
generated reports, will be made publicly
available on the MCA-Lesotho Web site
and elsewhere. The Compact Goal,
Objectives, and Outcomes of the
Program can be summarized as follows:
2. Monitoring Component
(‘‘Indicators’’). Each Indicator will have
one or more expected values that
specify the expected results and
expected time for the impacts to be
achieved (‘‘Target’’). The M&E Plan will
measure and report on Indicators at four
levels. First, the Indicator(s) at the
Compact Goal level (‘‘Goal Indicator’’)
will measure the impact of the overall
Program and each Project. Second, the
Indicators at the Objective level
(‘‘Objective Indicator’’) will measure the
final results of each of the Projects,
including impacts on the intended
beneficiaries identified in Annex I
(collectively, the ‘‘Beneficiaries’’).
Third, Indicators at the intermediate
level (‘‘Outcome Indicator’’) will
measure the results achieved under each
of the Project activities and will provide
an early measure of the likely impact
under each of the Projects. A fourth
level of Indicators (‘‘Output Indicator’’)
will be included in the M&E Plan to
measure the direct outputs of Project
activities. Indicators will be
disaggregated by sex, income level and
age, to the extent practicable. Subject to
prior written approval from MCC, MCALesotho may add Indicators or modify
the Targets of existing Indicators.
To monitor progress toward the
achievement of the Compact Goal,
Objectives, and Outcomes, the
Monitoring Component of the M&E Plan
will identify (a) the Indicators (as
defined below); (b) the party or parties
responsible, the timeline, and the
instrument for collecting data and
reporting on each Indicator to MCA–
Lesotho; and (c) the method by which
the reported data will be validated.
(a) Indicators. The M&E Plan will
measure the impacts of the Program
using objective and reliable information
COMPACT GOAL INDICATORS, BASELINES AND TARGETS 3
Indicator
Baseline
GDP growth (annual percent) ......................................................................................................
GDP per capita (US$) .................................................................................................................
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WATER PROJECT INDICATORS AND DEFINITIONS 4
Objective: ‘‘Improve water supply for industrial and domestic needs, and enhance rural
livelihoods through improved watershed management’’
Objective-level result
Indicator
Definition of Indicator
Morbidity due to water borne diseases is decreased.
Jobs in garment industry are retained/expanded.
Outcome-level Result
Urban domestic water supply is improved ........
Incidence of water and sanitation related diseases, nationally (number).
Employment (in water related industries)
(number).
Cases of diarrhea reported to health facilities.5
Urban access to potable water supply (percent).
Flow delivered after treatment at Metolong site
(m3/year).
Unaccounted for urban water (percent) ...........
Proportion of urban customers within 150 meters from a water supply.6
The m3/year of water after treatment at
Metolong site.
The percentage of urban water that is not accounted for (non-revenue losses plus physical losses).7
New people covered per year in rural areas.
Covered: within 150m walking distance, 30l/
person/day.
Total number of new VIP latrines provided to
households.8
Bulk water supply to lowlands is increased ......
WASA operations are improved ........................
Rural water supply is expanded ........................
Number of people covered with MCC rural
water supply (number).
Rural sanitation is improved ..............................
Number of new VIP latrines provided to
households (number).
Total factory workers employed in Thetsane
and Tikoe industrial parks.
4 Note:
the wetlands project will be monitored at the output level.
will serve as a proxy for all water borne diseases. This information will be disaggregated by urban and rural communities receiving
intervention from MCC.
6 This will be disaggregated by WASA center.
7 Ibid.
8 This information will be disaggregated by District.
5 Diarrhea
WATER PROJECT INDICATORS AND TARGETS
Objective: ‘‘Improve water supply for industrial and domestic needs, and enhance rural
livelihoods through improved watershed management’’
Objective-level indicator
Baseline
Incidence of water and sanitation related diseases (number) .....................................................
Employment (in water related industries) (number) .....................................................................
Outcome-level Indicator ................................................................................................................
Urban access to potable water supply (percent) .........................................................................
Flow delivered after treatment at Metolong site (m3/year) ...........................................................
Unaccounted for urban water (percent) .......................................................................................
Number of people covered with MCC rural water supply (number) ............................................
Number of new VIP latrines provided to households (number) ...................................................
55,045 .........................
22,700 .........................
Baseline ......................
55% .............................
0 ..................................
27% .............................
0 ..................................
0 ..................................
Year 5
40,000.
40,000.
Year 5.
70%.
7,640.
22%.
100,000.
10,000.
HEALTH PROJECT INDICATORS AND DEFINITIONS
Objective: Increase access to life-extending ART and essential health services by providing a sustainable delivery platform
Indicator
Definition of Indicator
Mortality rate (per 1000)
Number of deaths per 1000.9
People with HIV still alive 12 months after initiation of treatment (percent).
Numerator: Number of individuals still alive
and on therapy after initiating treatment
after 12 months. Denominator: Number of
individuals initiating treatment at the same
time.
Annual notification of all forms of TB per
100,000 population.10
Objective-level result
Lives are extended ............................................
Prevalence of TB (per 100,000) .......................
Outcome-level result
Quality of health service delivery is improved ..
Essential health services available (percent) ...
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TB treatment success rate (percent) ...............
Facilities staffed with standard number and
type of qualified staff (percent).
Usage of health services is increased ..............
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Total patient visits (number) .............................
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Percentage of facilities providing full package
of standard services for level of center
disaggregated by ownership.11
Numerator: Number of patients smear positive
declared cured + Number of smear positive
patients who completed treatment. Denominator: Total number of TB positive smear
cases (national figures).
Percentage of facilities staffed with standard
number and type of qualified staff according
to level of facility standard.12
Total number of patients treated in health centers in Lesotho.
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HEALTH PROJECT INDICATORS AND DEFINITIONS—Continued
Objective: Increase access to life-extending ART and essential health services by providing a sustainable delivery platform
Indicator
Definition of Indicator
Mortality rate (per 1000)
Number of deaths per 1000.9
Immunization rate (percent) .............................
Percent of children under one year of age receiving measles antigen nationwide.
TBD.13
Total number with advanced HIV/AIDS receiving ARV treatment per year. 14
Percent of health facilities with functioning utilities. 15
Number of students enrolled. 16
Average referred tests performed at the central laboratory per quarter during the past
year.17
Average number of blood units collected per
quarter during the past year.
Objective-level result
Health centers are equipped and maintained at
standards.
Health professionals are trained and retained ..
Laboratory services are improved .....................
Blood transfusion services are improved ..........
Health centers deliveries ..................................
Total number of people receiving ARV treatment (number).
Utility availability (percent) ...............................
Total annual enrollment at NHTC (number) ....
Referred tests performed per quarter (number)
Blood units collected per quarter (number) .....
9 This
information will be disaggregated by age and gender.
information will be disaggregated by district, age and gender.
information will be disaggregated by type of facility-MOHSW and CHAL. The summary statistic is the simple average.
12 Ibid.
13 This indicator definition still requires confirmation.
14 This information will be disaggregated by age and gender and health facility (health centers and hospitals).
15 This information will be disaggregated by electricity, water and communications.
16 This information will be disaggregated by gender and by area of study (e.g., general nursing, lab science, pharmacy technology, and midwifery).
17 This information will be disaggregated by test type: clinical chemistry, cytologty, histology (summary statistic is sum of types).
10 This
11 This
HEALTH PROJECT INDICATORS AND TARGETS
Objective: Increase access to life-extending ART and essential health services by providing a sustainable delivery platform
Objective-level result
Baseline
Mortality rate (per 1000) ..........................................................................
Under 5 = 113 ...............................
F:15–49 = 9.9 ................................
M:15–49 = 12.3 .............................
82% ................................................
Same as baseline.18
592 .................................................
400.
TBD 19 ............................................
64% ................................................
5% ..................................................
80%.
85%.
60%.
800,000 ..........................................
78% ................................................
17,966 ............................................
TBD ................................................
TBD 20 ............................................
350 .................................................
885 .................................................
700 .................................................
1,000,000.
90%.
35,000.
TBD.
90%.
938.
1,800.
1,500.
People with HIV still alive 12 months after initiation of treatment (percent).
Prevalence of TB (per 100,000) ..............................................................
Outcome-level result
Essential health services available (percent) ..........................................
TB treatment success rate (percent) ......................................................
Facilities staffed with standard number and type of qualified staff (percent).
Total patient visits (number) ....................................................................
Immunization rate (percent) ....................................................................
Number of people receiving ARV treatment (number) ...........................
Health centers deliveries .........................................................................
Utility availability (percent) ......................................................................
Total annual enrollment at NHTC (number) ...........................................
Referred tests performed per quarter (number) .....................................
Blood units collected per quarter (number) ............................................
18 Mortality
19 Baseline
Year 5
90%.
rates would increase in the absence of MCC’s intervention.
should be available with the results of the accreditation exercise—expected to be completed by August 2007.
20 Ibid.
PSD PROJECT INDICATORS AND DEFINITIONS
Objective: ‘‘Stimulate investment by improving access to credit, reducing transaction costs and increasing the participation of women in the
economy’’
Definition of Indicator 21
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Objective-level result
Indicator
Increased private sector economic activity .......
Value of investment (million maluti) .................
Value of credit extended (million maluti) ..........
Outcome-level Results
Access to credit is expanded ............................
Private credit bureau coverage (percent) ........
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The percentage of the adult population listed
by a private credit bureau with current information on repayment history, unpaid debts
or credit outstanding.
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PSD PROJECT INDICATORS AND DEFINITIONS—Continued
Objective: ‘‘Stimulate investment by improving access to credit, reducing transaction costs and increasing the participation of women in the
economy’’
Objective-level result
Definition of Indicator 21
Indicator
Utilization of electronic funds transfer is increased.
Domestic electronic funds transfers (number)
Use of land as collateral is increased ...............
Land used as collateral (number) ....................
Land transactions costs (percent of property
value).
Use of land as collateral is increased ...............
Land transactions times (days) ........................
Commercial dispute resolution is increased .....
Pending civil cases (number) ...........................
Knowledge, attitudes, and practices of women’s economic rights are improved.
Gender equality index ......................................
Total number of payments associated with
salaries and pensions made through EFT
per year. 22
Total annual number of mortgage bonds registered.
Official costs required by law for businesses to
purchase land and a building to transfer the
property title from the seller to the buyer so
that the buyer can use the property for expanding its business, as collateral in taking
new loans or, if necessary, to sell to another
business.
The median duration that property lawyers or
registry officials indicate is necessary to
complete a procedure.
Total number of pending civil cases in the
High Court.
Percent change in index of knowledge, attitudes, and practices for supporting gender
equality in economic rights.
21 These
22 This
indicator definitions still require confirmation.
number will be disaggregated by salaries and pensions paid by government agencies.
PSD PROJECT INDICATORS AND TARGETS
Objective: ‘‘Stimulate investment by improving access to credit, reducing transaction costs and increasing the participation of women in the
economy’’
Objective level indicators
Baseline 23
Value of investment (million maluti) .............................................................................................................................
Value of credit extended (million maluti) ......................................................................................................................
Outcome Level Indicators
Private credit bureau coverage (percent) .....................................................................................................................
Domestic electronic funds transfers (number) .............................................................................................................
Land used as collateral (number) ................................................................................................................................
Land transactions costs (percent of property value) ....................................................................................................
Land transactions times (days) ....................................................................................................................................
Pending civil cases (number) .......................................................................................................................................
Gender equality index ..................................................................................................................................................
TBD .............
TBD .............
TBD.
TBD.
0% ...............
0 ..................
108 ..............
8.40% ..........
10124 ...........
1031 ............
TBD25 ..........
13%.
200,000.
430.
4.20%.
30.
600.
TBD.
Year 5
23 These
indicator baselines and targets still require confirmation.
baseline figure is based on the World Bank’s ‘‘Doing Business’’ report. As the deeds registry improves its data management, the baseline will be revised according to deeds registry figures.
25 A baseline survey is planned before the end of Year 1.
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24 This
(b) Data Collection and Reporting. The
M&E Plan will establish guidelines for
data collection and a reporting
framework, including a schedule of
Program reporting and responsible
parties. The management of MCALesotho will conduct regular
assessments of Program performance to
inform the MCA-Lesotho board of
directors and MCC of progress under the
Program and to alert these parties to any
problems. These assessments will report
the actual results compared to the
Targets on the Indicators referenced in
the Monitoring Component, explain
deviations between these actual results
and Targets, and in general, serve as a
management tool for implementation of
the Program. With respect to any data or
reports received by MCA-Lesotho, MCA-
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Lesotho will promptly deliver such
reports to MCC along with any other
related documents, as specified in the
M&E Plan or as may be requested from
time to time by MCC.
(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 reliable, timely and
valid 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
consistent levels of quality are not
possible, given in-country capacity or
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other constraints. MCA-Lesotho will
enter into an agreement (in a form
acceptable to MCC) with the Reviewer
to fulfill the provisions set forth in
Section 1 of this Annex III and this
clause (c).
3. Evaluation Component
The Program will be evaluated on the
extent to which the interventions
contribute to the Compact Goal. The
Evaluation Component of the M&E Plan
will contain a methodology, process and
timeline for collecting and analyzing
data in order to assess planned, ongoing,
or completed Project activities to
determine their efficiency, effectiveness,
impact and sustainability. The
evaluations should use state-of-the-art
methods for addressing selection bias.
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The Government will implement, or
cause to be implemented, surveys to
collect longitudinal data on both
Beneficiary and non-Beneficiary
households. The Evaluation Component
will contain two types of reports: Final
Evaluations and Ad Hoc Evaluations
(each as defined below), and will be
finalized before any Disbursement for
specific Project activities or the
Program.
(a) Final Evaluation. MCA-Lesotho
will engage an independent evaluator to
conduct a program evaluation at the
expiration or termination of the Program
(‘‘Final Evaluation’’). The evaluation
methodology, timeline, data collection,
and analysis requirements will be
finalized and detailed in the M&E Plan.
The Final Evaluations must at a
minimum (i) estimate quantitatively and
in a statistically valid way, the causal
relationship between the Compact Goals
(to the extent possible), the Objectives
and Outcomes; (ii) determine if and
analyze the reasons why the Compact
Goals, Objectives and Outcomes were or
were not achieved; and (iii) assess the
overlapping benefits of the Projects.
(b) Ad Hoc Evaluations or Special
Studies. Either MCC or MCA-Lesotho
may request ad hoc or interim
evaluations or special studies of
Projects, Project activities, or the
Program as a whole prior to the
expiration of the Compact Term (each,
an ‘‘Ad Hoc Evaluation’’). If MCALesotho engages an evaluator for an Ad
Hoc Evaluation, the evaluator will be an
externally contracted independent
source selected by MCA-Lesotho,
subject to the prior written approval of
MCC, following a tender in accordance
with the MCC Program Procurement
Guidelines, and otherwise in
accordance with any relevant
Implementation Letter, the Program
Implementation Agreement or any other
agreement or arrangement entered into
by the Government in connection with
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this Compact or the Program. If MCALesotho 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 Project activity or
seeking funding from other donors, no
MCC Funding or MCA-Lesotho
resources may be applied to such
evaluation or special study without
MCC’s prior written approval.
4. Other Components of the M&E Plan
In addition to the Monitoring
Components and the Evaluation
Components, the M&E Plan will include
the following components for the
Program, Projects and Project activities,
including, where appropriate, roles and
responsibilities of the relevant parties
and Providers:
(a) Costs. A detailed annual budget
estimate for all components of the M&E
Plan.
(b) Assumptions and Risks. Any
assumptions and risks external to the
Program that underlie the
accomplishment of the Objectives and
Outcomes; provided such assumptions
and risks will not excuse performance of
the Parties, unless otherwise expressly
agreed to in writing by the Parties.
5. 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
M&E Annex, the Program
Implementation Agreement or any other
agreement or arrangement entered into
by the Government in connection with
this Compact or the Program.
(b) Stakeholders Committee. The
completed portions of the M&E Plan
will be presented to the stakeholders
committee formed in accordance with
the Guidelines for Accountable Entities
and Implementation Structures
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provided on the MCC Web site at such
stakeholders committee’s initial
meeting, and any amendments or
modifications to and any additional
components of the M&E Plan will be
presented to such stakeholders
committee at appropriate subsequent
meetings of such committee. Such
stakeholders committee will have the
opportunity to present its suggestions to
the M&E Plan, which the board of
directors of MCA-Lesotho will take into
consideration in its review of any
amendments to the M&E Plan during the
Compact Term.
(c) Disbursement for a Project
Activity. As a condition to each
Disbursement there will be satisfactory
progress on the M&E Plan for the
relevant Project or Project activity, and
substantial compliance with the M&E
Plan, including any reporting
requirements. In addition, for certain
activities, collection of baseline data
may be a condition precedent for
specified Disbursements.
(d) Modifications. Notwithstanding
anything to the contrary contained in
this Compact, including the
requirements of this M&E Annex, the
Parties may modify or amend the M&E
Plan or any component thereof,
including those elements described
herein, without amending this Compact;
provided, however, that any such
modification or amendment of the M&E
Plan is reviewed by the stakeholders
committee referenced in clause (b)
above and has been approved by MCC
in writing and is otherwise consistent
with the requirements of this Compact
and its Objectives, the Program
Implementation Agreement and any
other relevant agreement or arrangement
entered into by the Government in
connection with this Compact or the
Program.
[FR Doc. E7–14812 Filed 8–2–07; 8:45 am]
BILLING CODE 9211–03–P
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[Federal Register Volume 72, Number 149 (Friday, August 3, 2007)]
[Notices]
[Pages 43380-43410]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14812]
[[Page 43379]]
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Part III
Millennium Challenge Corporation
-----------------------------------------------------------------------
Notice of Entering Into a Compact With the Government of the Kingdom
of Lesotho; Notice
Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 /
Notices
[[Page 43380]]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 07-07]
Notice of Entering Into a Compact With the Government of the
Kingdom of Lesotho
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
-----------------------------------------------------------------------
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 Kingdom of Lesotho. Representatives of the United
States Government and the Government of the Kingdom of Lesotho executed
the Compact documents on July 23, 2007.
Dated: July 26, 2007.
William G. Anderson Jr.,
Vice President & General Counsel, Millennium Challenge Corporation.
Summary of Millennium Challenge Compact With the Government of the
Kingdom of Lesotho
A. Introduction
Lesotho is strategically located within the rapidly growing
Southern African Development Community which will become a common
market in 2008. It could benefit greatly from the expected economic
upsurge in the region led by the private sector, but it will miss this
opportunity if it is unable to unlock the potential of its two greatest
resources--its water and its people. Without immediate and sustainable
interventions to harness its abundant water resources and to improve
the health of the productive workforce, Lesotho has limited prospects
of achieving economic growth. Another critical element to Lesotho's
future economic growth is a dynamic private sector. In recent years,
the Government of Lesotho (``GoL'') has embarked on a major reform
program developed jointly with the World Bank and other bilateral
donors, to remove legal and regulatory impediments to private sector
growth, improve access to credit and increase the participation of
women in the economy.
B. Program
1. Goal and Objectives
The $362.6 million Compact focuses on water, health and private
sector development (the ``Program''), as summarized in the table below.
The Program is focused on improving the provision of water supplies for
industrial and domestic use, improving health outcomes and productivity
through strengthening the health infrastructure, and removing barriers
to foreign and local private sector investment. The Compact is designed
to have a high economic growth impact, and its potential impact on
poverty reduction is significant and widespread due to its broad
geographical scope.
----------------------------------------------------------------------------------------------------------------
Totals including contingencies (in millions USD)
Multi-year financial plan (by ----------------------------------------------------------------------------
project) CIF Year 1 Year 2 Year 3 Year 4 Year 5 Total
----------------------------------------------------------------------------------------------------------------
1. Water Sector Project............ 4.913 21.092 24.233 49.074 47.878 16.838 164.028
2. Health Sector Project........... 4.436 17.961 27.927 37.616 24.846 9.612 122.398
3. Private Sector Development 0.710 7.142 10.906 8.525 5.47 3.352 36.105
Project...........................
4. Monitoring & Evaluation......... 0.5 2.605 0.684 0.755 0.664 2.6 7.808
5. Program Management and Oversight 5.109 4.173 5.395 6.196 6.926 4.413 32.212
----------------------------------------------------------------------------
Total MCC Contribution......... 15.668 52.973 69.145 102.166 85.784 36.815 362.551
----------------------------------------------------------------------------------------------------------------
C. Program Description
1. Water Sector Project ($164 million)
The Water Sector Project is aimed at improving water supply for
industrial and domestic needs. With respect to the industrial sector,
the Project will provide infrastructure to deliver water to garment and
textile operations. Domestic users in selected urban and rural areas
will benefit from water system upgrades and expansion to achieve better
sanitation and a reliable supply of water. Finally, the Project is
designed to enhance rural livelihoods through improved watershed
management.
The Water Sector Project activities include: (a) Construction of a
bulk water conveyance system and establishment of a program management
unit for the Metolong Dam construction activity; (b) extension and
rehabilitation of the urban and peri-urban water network; (c) provision
of improved sanitation services to rural households through
construction of ventilated improved pit latrines and water systems; and
(d) restoration of degraded wetlands at three areas in the highland
pastures and preparation of a strategic environmental assessment to
support development of a national watershed management and wetlands
conservation plan.
2. Health Sector Project ($122 million)
Approximately 24 percent of adults ages 15-49 in Lesotho are Human
Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (``HIV/
AIDS'') positive, the third highest prevalence rate in the world. The
Health Sector Project is designed to mitigate the negative economic
impacts of poor maternal health, HIV/AIDS, tuberculosis (``TB'') and
other diseases by substantially strengthening the country's health care
infrastructure. MCC funding will support the GoL's efforts to
significantly increase access to life-extending anti-retroviral therapy
(``ART'') by providing a sustainable platform to deliver this and other
essential health services throughout the country. This has the
potential to result in a measurable extension of productive life-years
for people living with HIV/AIDS, TB and other debilitating diseases.
A major issue in Lesotho, as in the rest of southern Africa, is the
crisis in human health resources. The country has difficulty retaining
nurses and clinicians due to opportunities outside the country and poor
working conditions in Lesotho. Extensive studies have been conducted on
improving the retention of health care workers. Top concerns are salary
levels, physical working conditions and supervision and career
management structures. Together with the GoL, the President's Emergency
Plan for AIDS Relief (``PEPFAR''), and other donor efforts, the Health
Sector Project is designed to address these issues. Currently the GoL
is proposing salary reforms and PEPFAR is providing assistance to
improve training curricula and programs, reduce red tape in hiring new
graduates, and rationalize Ministry of Health and Social Welfare
[[Page 43381]]
(``MoHSW'') staff positions. The Project is designed to improve health
sector infrastructure, including residences for rural health staff,
improve supervision and management of staff, increase the number of
nurses and allied health professionals trained, and provide
opportunities for staff to build skills and competencies through
continuing education. These efforts are designed to increase production
and retention of health workers for delivery of essential health
services.
The Health Sector Project activities include: (a) Renovation of up
to 150 health centers in order to establish a national stock of health
centers that achieve a common standard; (b) establishment of ART
clinics in and improved management of up to 14 hospital out-patient
departments (``OPDs''); (c) construction and equipping of a new central
laboratory and training laboratory staff; (d) construction of a
dedicated, central facility for collecting and processing blood and
provision of mobile blood collection and storage equipment; (e) an
increase in the number of dormitories and staff residences at Lesotho's
National Health Training College (``NHTC''); (f) strengthened health
systems through increased capacity for pre-service and in-service nurse
training and improved district-level public human health care resources
management; and (g) improved occupational health and safety and medical
waste management practices.
3. Private Sector Development (``PSD'') Project ($36 million)
The PSD Project is designed to increase private sector economic
activity in Lesotho by improving access to credit, reducing transaction
costs and increasing the participation of women in the economy. The
activities within the PSD Project represent an essential component of
the GoL's major policy reform program and are designed to contribute to
the broader efforts to attract foreign investment and stimulate growth
of Basotho-owned companies.
The PSD Project activities include: (a) Reform of the civil legal
system through the development of the Commercial Court, including
creation of case management systems for courts, and promotion of
alternative dispute resolution; (b) support for the production and
issuance costs of national identification cards as well as
establishment of the necessary legal and regulatory reforms for data
privacy and establishment and operations of a cross-border credit
bureau; (c) support for implementation of a new payments and settlement
system in Lesotho; (d) technical assistance to the GoL in the
development of land policy in Lesotho, and funding for the
implementation of a systematic land regularization program for urban
and peri-urban areas and development of a new land administration
authority; and (e) implementation of a training and public awareness
program dedicated to implementing gender equality in economic rights
and building of local capacity to continue advocacy.
D. Impacts
The Program, if successfully implemented, could nearly double GDP
growth by the end of the Compact implementation period (using a
baseline of 2.6 percent). The acceleration of GDP growth is expected to
continue beyond Compact completion, propelling growth towards seven
percent per annum within five years after Compact completion. This
acceleration is required to reduce poverty significantly in line with
the objectives of the GoL's Poverty Reduction Strategy Papers
(``PRSP'').
The Water Sector Project is expected to benefit urban and rural
communities through each of the four activities: (1) The Metolong Dam--
Bulk Water Conveyance System activity is expected to preserve existing
industrial production and 28,000 jobs and create an additional 6,000
jobs by the end of the Compact; (2) The Urban and Peri-Urban Water
Network activity has the potential to benefit approximately 304,000
people or 50,700 households by Compact end; (3) The Rural Water Supply
and Sanitation activity has the potential to directly benefit
approximately 150,000 people or 25,000 households; and (4) The Wetlands
Restoration and Conservation activity has the potential to improve
rangeland productivity and benefit rural livelihoods for an estimated
55,000 people who live within a 16 kilometer radius of the three target
wetland sites.
The Health Sector Project is designed to directly improve delivery
of health care services to the entire population. The health center
activity is designed to improve service quality and availability for
health center clients, including: Most of the 90 percent of pregnant
women who seek prenatal care; the more than 90 percent of infants and
young children who are immunized against childhood infectious diseases;
the approximately 9,000 TB patients treated at the health center level
each year; and the 34,000 persons expected to have ART services follow
up at the health center during the life of the Project. The ART clinic
activity is designed to reduce waiting times and TB co-infection of
clients seeking care at an OPD, particularly the predicted additional
17,000 new clients seeking ART services during the Compact, the 80
percent of those clients expected to be co-infected with TB, and the
clients of other OPD services in these 14 hospitals. This activity is
designed to complete national coverage of ART services at the hospital
level. The central laboratory and blood transfusion activities are
designed to benefit all Basotho by expanding the capacity of the MoHSW
to conduct needed laboratory tests and assuring access to safe blood.
The NHTC activity is designed to expand the number of graduates in the
health field, filling some of the numerous vacancies in rural areas for
community nurses and allied health professionals. As a result, more
than 1.3 million individuals in the rural areas are more likely to have
an adequate level of service provision at the local health center
level. The health systems strengthening and medical waste management
activities are designed to impact the quality and level of services
provided, particularly at the health center level and improve
environmental health and safety conditions throughout the health
sector. All activities focus on improving physical working conditions
and safety for health workers and on human resources management.
The Private Sector Development Project has the potential to benefit
approximately 2,000 persons and companies operating in the formal
sector through more efficient commercial court procedures. Through the
Land Administration Reform activity, potentially up to 55,000 urban
households may benefit from having formally recognized titles. The
National ID activity has the potential to directly benefit the entire
national population by providing an identification card and/or unique
identification number to every citizen within the country, improving
the availability of credit and other financial services to a wider
cross-section of the population. Finally, the Payments and Settlements
system has the potential to directly benefit more than 86,000
government pensioners and more than 98,000 employed outside Lesotho by
lowering the costs of receiving and sending money.
E. Program Management
1. Governance Structure
The GoL will establish an autonomous body within the Ministry of
Finance and Development Planning known as MCA-Lesotho that will serve
as the accountable entity responsible for
[[Page 43382]]
the implementation of the Program. The MCA-Lesotho board of directors
will be made up of government officials representing each of the GoL
ministries associated with the Program as well as private sector and
civil society members representing constituencies impacted by the
Program. This board will have independent decision making authority and
will be the final authority with respect to implementation of the
Compact. It will provide oversight and be responsible for the success
or failure of the Program.
A management unit will support the board of directors in
implementing the Program and will be responsible for the day-to-day
management and operations of MCA-Lesotho. A stakeholders committee will
inform the various constituent groups about Program implementation,
provide advice and input to MCA-Lesotho concerning the Program, and
select the private sector members of the board of directors.
External procurement and fiscal agents will be used during Compact
implementation. A procurement process is currently underway with a
target date of August 2007 to sign contracts for these services.
2. Implementation Arrangements
Line ministries, project implementation units and the Central Bank
of Lesotho will serve as implementing entities (``IEs'') and service
providers for the various projects related to the Compact under
contractual relationships with MCA-Lesotho. IEs will be responsible for
developing the operational requirements for the Projects and
performance monitoring of contractors. Teams will be located within the
IEs to ensure institutional strengthening and close collaboration and
communication. To help ensure Program success, the Compact has budgeted
nearly $75 million for technical assistance, capacity building, and
institutional strengthening. In addition, competitively selected
external service providers will perform the Procurement and Fiscal
Agent functions. MCA-Lesotho will remain ultimately responsible for the
successful implementation of the Program.
F. Other Highlights
1. Transformational Change
The Program has the potential for significant transformational
change to help unlock the economic potential of the country by
providing additional water supplies for industrial and domestic use,
improving health outcomes and productivity and by removing barriers to
foreign and domestic investment. Overall the Program is expected to
impact a broad cross-section of the country through its various
activities. In additional, the Compact is designed to have a
substantive impact on extending full economic rights to women in
Lesotho.
2. Consultative Process
The Program builds upon the GoL's PRSP and the Lesotho Vision 2020.
The consultative processes associated with these two initiatives
identified the following as top priorities for poverty reduction and
economic growth: (a) Private sector development; (b) provision of
infrastructure; (c) natural resource management; and (d) improved
access to health care.
Shortly after Lesotho was selected as an MCC-eligible country in
2004, the GoL established a consultative proposal development process
that included the private sector, non-governmental organizations
(``NGOs'') and civil society organizations. Recognizing that
consultations are ongoing and must be meaningful, timely and
participatory, the MCA-Lesotho Core Team within the Ministry of Finance
and Development Planning was proactive in developing an outreach and
consultative process strategy in early 2007 to plan for consultations
and outreach activities beyond Compact signing and into implementation.
3. Government Commitment and Effectiveness
The 2006 enactment of the Legal Capacity of Married Persons Act was
a strong signal of the GoL's commitment to remove barriers to married
women's full participation in the economy, thereby enhancing the
Program's prospects of successful implementation and sustainability.
This significant commitment to gender equality was recently
acknowledged by resolutions adopted by both the U.S. Senate and the
U.S. House of Representatives. Prior to first disbursement of Compact
funds, the GoL will submit to its Parliament legal reforms designed to
assure that economic rights achieved in the Legal Capacity of Married
Persons Act are not contradicted in other laws.
The GoL has agreed with the World Bank on a comprehensive water
sector reform program. In the rural water and sanitation sub-sectors,
the GoL--consistent with its policy on decentralization--is divesting
financial management, project planning, supervisory services and asset
ownership to locally elected water committees.
In 2000, the GoL embarked on a ten year plan to improve health
service delivery. The GoL has successfully piloted decentralized health
services in three districts and is expanding decentralized management
to the remaining seven districts. New financial management and
procurement systems have been put in place, and a new human resources
system is being developed. The Health Sector Project is designed to
complement other donor funded activities. Despite the HIV/AIDS
epidemic, Lesotho has met both MCC eligibility indicators on
immunization and health expenditure which signals the GoL's commitment
to good performance in the health sector.
The GoL, as chair of the Southern Africa Development Community, has
committed to regional integration of financial systems. They also have
initiated the process of implementing policy reforms to improve the
business and investment climate with the support of donors such as the
World Bank. In order to realize the maximum economic benefits for the
PSD Project activities, the GoL must continue this policy reform
momentum and harmonize its legislation with other Common Monetary Area
countries, especially South Africa.
G. Sustainability
The Program is designed to enhance the sustainability of its
benefits by: (a) Supporting policy reforms in relevant sectors; (b)
ensuring adequate funding will be allocated to fully cover additional
recurrent costs; (c) requiring adherence to environmental and social
standards; (d) building capacity within the GoL to facilitate
implementation of the Program and to develop long-term management
capabilities of GoL institutions; (e) assuring improved maintenance
programs to maintain the economic life of assets; and (f) promoting
participation of a large cross section of Basotho, especially women and
the poor.
1. Water Sector
The sustainability of the Water Sector Project activities depends
on the GoL's pace of implementation of sector policy reforms and its
commitment to ensure that tariff levels provide for cost recovery of
operations and maintenance costs. Disbursements of Compact funding will
be tied to agreed progress on implementing water sector reforms.
2. Health Sector
The sustainability of health services is a critical issue,
particularly given the increase of donor-supported provision of ART. In
partnership with donors, the
[[Page 43383]]
GoL is developing a national health financing strategy to identify the
costs of the essential health services package, including ART, and gaps
and potential sources of funds. This strategy will be jointly monitored
by MCC and other health donors.
3. Private Sector Development
The sustainability of several PSD Project activities is expected to
be enhanced because they will be carried out with the assistance of
established private sector entities with a successful track record in
the Southern African region. Compact funding also is designed to help
establish sustainable improvements in land administration through an
active capacity building, training, and public education effort.
4. Environmental and Social Impacts
The assessment, management, and monitoring of potential
environmental and social impacts is an integral part of the Compact.
The Compact will fund several measures to: (a) Mitigate the adverse
effects of infrastructure construction or rehabilitation; (b) promote
natural resource management and environmental conservation consistent
with the priorities of the GoL's PRSP; (c) assure women's participation
in the economy and as beneficiaries in the Compact; and (d) integrate
HIV/AIDS awareness programs into all construction contracts. The
Compact will also support measures to strengthen the regulatory
framework and build institutional capacity required to improve
occupational health and safety and waste management practices in the
health sector.
The Metolong Dam activity is a Category A project under MCC's
Environmental Guidelines due primarily to the potential environmental
and social risks associated with the project, which include loss of
communal resources, loss of traditional access routes across the river,
inundation of cultural resources and alteration of downstream surface
water hydrology. The entities funding the dam have agreed that the
entire project, including advanced infrastructure, the dam and
reservoir and downstream bulk water conveyance system, will be designed
and constructed according to common standards that meet MCC's
Environmental Guidelines, the MCC Gender Policy, GoL law, and World
Bank Operational Policy 4.12 on Involuntary Resettlement. Compact
funding for the bulk water conveyance system will be conditioned on
strict adherence with the larger project's environmental management
plan (``EMP'') and resettlement action plan (``RAP''), completed
earlier this year with World Bank funding. The urban, peri-urban and
rural water activities are considered Category B and Category C
projects under MCC's Environmental Guidelines and do not pose
significant adverse environmental and social impacts. Standard EMPs
will be developed for each activity to assure compliance with MCC's
Environmental Guidelines and GoL laws. The wetlands restoration and
conservation activity is expected to result in mostly positive
environmental and socioeconomic impacts by rehabilitating three
severely degraded wetland areas which support livestock grazing and
other rural livelihood benefits.
The Health Sector Project consists of both Category A and Category
B projects under MCC's Environmental Guidelines due to greenfield
construction and concerns regarding current medical waste management
practices in Lesotho. To make long-term improvements to the current
situation and assure that MCC-funded facilities comply with MCC's
Environmental Guidelines, Compact funds will be used to update
Lesotho's 2005 National Health Care Waste Management Plan, develop
medical waste management regulations and standards, prepare a financial
plan and provide technical assistance to the relevant GoL agencies.
Additionally, all proposed health infrastructure activities must comply
with MCC's Environmental Guidelines and applicable GoL environmental
permitting requirements.
The PSD Project, a Category C project, is not likely to have
adverse environmental or social impacts. The MCA-Lesotho social-gender
specialist will work to ensure that social safeguards are integrated
into project design, implementation and monitoring to ensure that the
activities do not, unnecessarily or unlawfully, infringe upon rights or
privacy.
H. Donor Coordination
The design and technical aspects of many of the Compact Program
activities have benefited significantly from the experiences of other
donors working in Lesotho. The MCA-Lesotho Core Team has engaged the
donor community frequently in all phases of the consultative process
and has coordinated with donors to refine Compact activities,
collaborate on shared objectives to prevent duplication of efforts, and
ensure complementary activities throughout Compact implementation.
In the various Health Sector Project activities, including those
associated with HIV/AIDS, MCC has maintained regular communications and
participated in joint donor reviews. These donors include: PEPFAR;
Irish Aid; World Bank; African Development Bank; United Nations
agencies; and the Global Fund for AIDS, Tuberculosis and Malaria. These
and other donors provided design support to the MoHSW and assisted MCC
in the due diligence process. The Compact's Health Sector Project is
designed to support the GoL's reform efforts and fits within the
combined donor strategy for the health sector. In particular, the MCC
Health Sector Project and planned PEPFAR activities are mutually
reinforcing. As MCC has moved forward with the proposed Health Sector
Project, PEPFAR has provided encouragement and support at central and
country level. In-country PEPFAR staff has grown from one person in
2006 to a staff of seven professionals by end of 2007, with an expected
concomitant increase in resources. Together, MCC and PEPFAR inputs are
expected to result in a major increase in the quality and quantity of
ART services and in the production and retention of human resources for
health.
The Metolong Dam activity is being developed in coordination with
several donors, including the OPEC Fund for International Development,
the Kuwait Fund for Arab Economic Development, the Arab Bank for
Economic Development in Africa and the Saudi Fund for Development. The
European Union also has a sustained presence in Lesotho's water sector
and is currently funding detailed designs for components of the
Metolong Dam bulk water conveyance system, as well as components of the
larger lowlands water supply system. Irish Aid is also a significant
donor in the water sector.
MCC has also been actively collaborating with other donors on the
PSD Project. These donors include: the World Bank with respect to the
national identification card; the United Kingdom's Department for
International Development on matters concerning civil legal reform and
land administration reform; the German development agency Deutsche
Gesellschaft fu Technische Zusammenarbeit (GTZ) on land administration
reform; and USAID through its Women's Legal Rights Initiative project.
Millennium Challenge Compact Between The United States of America
Acting Through the Millennium Challenge Corporation And The Government
of The Kingdom of Lesotho
Table of Contents
Article 1. Goal and Objectives
Section 1.1 Compact Goal
[[Page 43384]]
Section 1.2 Program Objectives
Article 2. Funding and Resources
Section 2.1 MCC Funding
Section 2.2 Compact Implementation Funding
Section 2.3 Disbursement
Section 2.4 Interest
Section 2.5 Government Resources; Budget
Section 2.6 Limitations on the Use of MCC Funding
Section 2.7 Taxes
Article 3. Implementation
Section 3.1 Program Implementation Agreement
Section 3.2 Government Responsibilities
Section 3.3 Policy Performance
Section 3.4 Government Assurances
Section 3.5 Implementation Letters
Section 3.6 Procurement
Section 3.7 Records; Accounting; Covered Providers; Access
Section 3.8 Audits; Reviews
Article 4. Communications
Section 4.1 Communications
Section 4.2 Representatives
Section 4.3 Signatures
Article 5. Termination; Suspension; Refunds
Section 5.1 Termination; Suspension
Section 5.2 Refunds; Violation
Section 5.3 Survival
Article 6. Compact Annexes; Amendments; Governing Law
Section 6.1 Annexes
Section 6.2 Inconsistencies
Section 6.3 Amendments
Section 6.4 Governing Law
Section 6.5 Additional Instruments
Section 6.6 References to MCC Web site
Section 6.7 References to Law, Regulations, Policies and
Guidelines
Article 7. Entry Into Force
Section 7.1 Domestic Requirements
Section 7.2 Conditions Precedent
Section 7.3 Date of Entry into Force
Section 7.4 Compact Term
Annex I: Program Description
Annex II: Summary of Multi-Year Financial Plan
Annex III: Description of the Monitoring and Evaluation Plan
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
Government of the Kingdom of Lesotho (the ``Government'') (individually
a ``Party'' and collectively, the ``Parties'').
Recalling that the Government consulted with the private sector and
civil society of the Kingdom of Lesotho (``Lesotho'') to determine the
priorities for the use of Millennium Challenge Account assistance and
developed and submitted to MCC a proposal focused on providing water
supplies for industrial and domestic use and improving watershed
management, improving health outcomes and productivity through
strengthening the health system, and removing barriers to foreign and
local private sector investment; and
Recognizing that MCC wishes to help Lesotho implement a program to
achieve the goal and objectives described herein (the ``Program'');
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 Lesotho through
economic growth (the ``Compact Goal'').
Section 1.2 Program Objectives.
The objectives of this Program (as further described in Annex I)
(the ``Objectives'') are to:
(a) Improve the water supply for industrial and domestic needs and
enhance urban and rural livelihoods through improved watershed
management;
(b) Increase access to life-extending anti-retroviral therapy and
essential health services by providing a sustainable delivery platform;
and
(c) Stimulate investment by improving access to credit, reducing
transaction costs and increasing the participation of women in the
economy.
The Government will take all the steps necessary or appropriate to
achieve the Objectives during the term of this Compact.
Article 2. Funding and Resources
Section 2.1 MCC Funding.
(a) MCC grants to the Government, under the terms of this Compact,
an amount not to exceed Three Hundred Sixty-Two Million, Five Hundred
Fifty-One Thousand United States dollars (US$362,551,000) (``MCC
Funding'') to help the Government implement the Program.
(b) Annex II of this Compact describes the use of MCC Funding.
Section 2.2 Compact Implementation Funding
(a) Of the total amount of MCC Funding, MCC will make up to Fifteen
Million Six Hundred and Sixty-Nine Thousand United States dollars
(US$15,669,000) (``Compact Implementation Funding'') available to the
Government under Section 609(g) of the Millennium Challenge Act of
2003, as amended, to support:
(i) provision of fiscal and procurement agent services;
(ii) start-up costs including staff salaries and administrative
support and related goods and services;
(iii) baseline surveys for monitoring and evaluation and
administrative support for the surveys as appropriate;
(iv) initiation of environmental and social assessments and design
work in conjunction with certain water and health sector activities;
(v) additional gender assessment and input for project design;
(vi) additional work with respect to activities to remove forms of
discrimination, in laws or policies, affecting the economic rights of
women;
(vii) additional work with respect to clarifying roles and
responsibilities for decentralized health services at the central and
district levels, and in developing a training plan for health sector
project activities;
(viii) technical assistance to support development of terms of
reference for consultants, including, without limitation, health system
strengthening, capacity building, and medical waste management;
(ix) procurement of field monitoring equipment and initiation of
environmental baseline studies for the wetlands conservation project;
(x) a study of land administration services in Lesotho and
recommendations for modernization and improvement of those services;
(xi) a review of existing payments and settlements and cross-border
financial transactions legislation and related regulations;
(xii) a review of existing legislation authorizing credit bureaus
and a national identification card and any related regulations;
(xiii) a review of data privacy legislation and regulations;
(xiv) establishment of Project Implementation Units (as defined in
Annex I) and related start-up costs including recruitment of key
personnel, staff salaries and administrative support and related goods
and services; and
(xv) other Compact implementation expenses approved by MCC.
(b) Notwithstanding anything to the contrary in this Compact, this
Section 2.2 will provisionally apply, after MCC and the Government sign
this Compact, without regard to whether this Compact has entered into
force under Section 7.3.
(c) Compact Implementation Funding is subject to: (i) The
limitations on the use or treatment of MCC Funding set forth in
Sections 2.6 and 2.7 as if such provisions were in full force and
effect, and (ii) any other requirements and limitations as may be
required by MCC in writing.
Section 2.3 Disbursement
In accordance with this Compact and the Program Implementation
Agreement
[[Page 43385]]
(as defined in Section 3.1), MCC will disburse MCC Funding for
expenditures incurred in furtherance of the Program (each instance, a
``Disbursement''). The proceeds of such Disbursements will be made
available to the Government, at MCC's sole election, (a) by deposit to
a bank account established by the Government and acceptable to MCC (a
``Permitted Account'') or (b) through direct payment to a provider of
goods, works or services under this Compact. MCC Funding may be
expended only to cover Program expenditures as provided in this Compact
and the Program Implementation Agreement.
Section 2.4 Interest
The Government will pay to MCC any interest or other earnings that
accrue on MCC Funding in accordance with the Program Implementation
Agreement.
Section 2.5 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 during each year it
receives MCC Funding to ensure that all MCC Funding it receives or is
projected to receive in such year is fully accounted for in the annual
budget of Lesotho. To the extent feasible under the budgeting processes
of Lesotho, MCC Funding will be accounted for 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.
(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 for
the Program.
Section 2.6 Limitations on the Use of MCC Funding
The Government will ensure that MCC Funding 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 on the MCC Web site (https://www.mcc.gov) (the
``MCC Web site''), including but not limited to the following purposes:
(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,
where the phrase ``likely to cause a significant environmental, health,
or safety hazard'' has the meaning set forth in environmental
guidelines delivered by MCC to the Government or posted by MCC on the
MCC Web site or otherwise publicly made available, as the guidelines
may be amended from time to time (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 2.7 Taxes
(a) Unless the Parties otherwise specifically agree in writing, the
Government will not impose, and will not permit any other governmental
or taxing authority to impose any taxes, duties, levies, contributions
or other charges (``Taxes'') in Lesotho on the Program, MCC Funding,
interest or earnings on MCC Funding, any Project or activity
implemented under the Program, goods, works, services and other assets
and activities related to the Program or any Project, persons and
entities that provide such goods, works, services and assets or perform
such activities, and income, profits and payments with respect thereto.
The Government will exempt from Taxes, inter alia, value added and
other transfers (including exemption therefrom with credit), property
and ad valorem items, import and export of goods (including exemptions
for goods imported and re-exported for personal use of expatriate
employees and their family members) and income and profit.
(b) Before the initial Disbursement is made, the Government and MCC
may, at MCC's discretion, enter into one or more agreements setting
forth the mechanisms for implementing this Section 2.7, including
exemptions from filing and compliance requirements relating to Taxes.
If entered into, it is expected that such agreement(s) will provide
that the Government may impose: (i) Taxes on certain individuals who
are nationals or permanent residents of Lesotho; (ii) Taxes other than
transfer Taxes and import and export Taxes on certain entities that are
organized in Lesotho; and (iii) fees or charges for services that are
generally applicable in Lesotho, reasonable in amount and imposed on a
non-discriminatory basis.
Article 3. Implementation
Section 3.1 Program Implementation Agreement
The Government will implement the Program in accordance with this
Compact and as further specified in an agreement to be entered into by
MCC and the Government and dealing with, among other matters,
implementation arrangements, fiscal accountability, disbursement and
use of MCC Funding, procurement and applicable tax exemptions (the
``Program Implementation Agreement'').
Section 3.2 Government Responsibilities
(a) The Government has principal responsibility to oversee and
manage the implementation of the Program.
(b) With the prior written consent of MCC, the Government may
designate an entity to implement some or all of the Government's
obligations or to exercise any rights of the Government under this
Compact or the Program Implementation Agreement. Such a designation
will not relieve the Government of any designated obligations and
rights, for which the Government will retain full responsibility.
(c) The Government will ensure that no law or regulation in Lesotho
now or hereinafter in effect makes or will make unlawful or otherwise
prevent or hinder the performance of any obligation under this Compact,
the Program Implementation Agreement or any other agreement related
thereto or any transaction contemplated thereunder.
(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.
Section 3.3 Policy Performance
In addition to the specific policy and legal reform commitments
identified in Annex I, the Government will seek to maintain and to
improve its level of performance under the policy criteria identified
in Section 607 of the Millennium Challenge Act of 2003, as amended, and
the selection criteria and methodology used by MCC.
[[Page 43386]]
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 does not, and will not, conflict with any other
international agreement or obligation of the Government or any of the
laws of Lesotho; 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
through implementation letters on the frequency, form or content of
requests for Disbursements or on any other matter relating to MCC
Funding, this Compact or implementation of the Program (each, an
``Implementation Letter''). The Government will apply such guidance in
implementing this Compact.
Section 3.6 Procurement
The Government will ensure that the procurement of all goods, works
and services by the Government or any Provider (as defined in Section
3.7(c)) in furtherance of this Compact will be consistent with the
program procurement guidelines of which MCC will inform the Government
in writing or by posting on the MCC Web site or otherwise make publicly
available, as the guidelines may be amended from time to time (the
``MCC Program Procurement Guidelines''), which MCC Program Procurement
Guidelines will include but will not be limited to 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 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 (as
defined in clause (c) below) maintain, accounting books, records,
documents and other evidence relating to this Compact 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 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 Committee (an
affiliate of the International Federation of Accountants) or (ii) then
prevailing in Lesotho. Compact Records must be maintained for at least
five (5) years after the end of the Compact Term (as defined in Section
7.4) or for such longer period, if any, required to resolve any
litigation, claims or audit findings or any statutory requirements.
(c) Covered Provider. 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 (1) 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 (2) 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 part 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 accordance with the terms of the Program
Implementation Agreement. As requested by MCC in writing, the
Government will use, or cause to be used, to conduct such audits an
auditor approved by MCC and named on the list of local auditors
approved by the Inspector General of the Millennium Challenge
Corporation (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. Audits will be performed in accordance with the Audit
Guidelines and be subject to quality assurance oversight by the
Inspector General. An 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
organization is subject to the applicable audit requirements contained
in OMB Circular A-133. The Government will ensure that agreements
[[Page 43387]]
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 organization is
subject to audit by the cognizant United States Government agency,
unless the Government and MCC agree otherwise in writing.
(c) Corrective Actions. The Government will use its best efforts to
ensure that Covered Providers take, where necessary, appropriate and
timely corrective actions in response to audits, consider whether a
Covered Provider's audit necessitates adjustment of the Government's
records, and 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, including as reflected on Annex II.
Article 4. Communications
Section 4.1 Communications.
Any document or communication required or submitted by either Party
to the other under this Compact must be in writing and, except as
otherwise agreed with MCC, in English. For this purpose, the address of
each Party is set forth below.
To MCC
Millennium Challenge Corporation, Attention: Vice President for
Operations (with a copy to the Vice President and General Counsel), 875
Fifteenth Street, N.W., Washington, D.C. 20005, United States of
America, Facsimile: +1 (202) 521-3700, Phone:+1 (202) 521-3600, E-mail:
VPOperations@mcc.gov (Vice President for Operations),
VPGeneralCounsel@mcc.gov (Vice President and General Counsel)
To the Government
Government of the Kingdom of Lesotho, Attention: Minister of
Finance and Development Planning, (with a copy to the Principal
Secretary), Address: P.O. Box 395, Maseru--100, The Kingdom of Lesotho,
Facsimile: +266 223 10622/223 10157, Phone: +266 223 23703/223 16304/
223 11101, E-mail: ps@finance.gov.ls.
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 Finance and Development Planning of the Kingdom of
Lesotho, and MCC will be represented by the individual holding the
position of, or acting as, Vice President for Operations (each, a
``Principal Representative''), each of whom, by written notice to the
other Party, may designate one or more additional representatives for
all purposes other than signing amendments to this Compact. 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 be binding on the Party delivering such signature
to the same extent as an original signature would be.
Article 5. Termination; Suspension; Refunds
Section 5.1 Termination; Suspension
(a) Subject to Section 5.2, either Party may terminate this Compact
in its entirety by giving the other Party thirty (30) days written
notice.
(b) MCC may, 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
such circumstance is notified in writing to the Government or by
posting on the MCC Web site) 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 Program Implementation Agreement or any other agreement or
arrangement entered into by the Government in connection with this
Compact or the Program;
(ii) An event has occurred that MCC determines makes it improbable
that the Objectives will be achieved during the term of this Compact or
that the Government will be able to perform its obligations under this
Compact;
(iii) A use of MCC Funding or continued implementation of this
Compact 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 Lesotho 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
Lesotho for assistance under the Millennium Challenge Act of 2003, as
amended; and
(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, that MCC Funding may be
used, in compliance with the Program Implementation Agreement, to pay
for (i) reasonable expenditures for goods, works and services that are
properly incurred under or in furtherance of this Compact 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 120
days after the expiration, suspension or termination of this Compact.
(d) Subject to clause (c) of this Section 5.1, upon the expiration,
suspension or termination of this Compact, (i) any amounts of MCC
Funding not disbursed by MCC to the Government will be automatically
released from any obligation in connection with this Compact, and (ii)
any amounts of MCC Funding disbursed by MCC but not expended under
Section 2.3 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.
[[Page 43388]]
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, 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 must use national funds (and no assets of
the Program) 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 term of this Compact 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, 2.5, 2.6,
2.7, 3.2, 3.4(a), 3.5, 3.7, 3.8, 4.1, 4.2, 4.3, 5.1, 5.2, 5.3, 6.1,
6.2, 6.3, 6.4 and 6.5 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 attached hereto constitutes an integral part of this
Compact.
Section 6.2 Inconsistencies
In the event of any conflict or inconsistency between:
(a) Any annex to this Compact and any of Articles 1 through 7, such
Articles 1 through 7 will prevail; or
(b) This Compact and any other agreement between the Parties
regarding the Program, this Compact will prevail.
Section 6.3 Amendments
The Parties may amend this Compact only by a written agreement
signed by the Principal Representatives and subject to the respective
domestic approval requirements to which this Compact was subject.
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 any agreement, document or instrument related to this
Compact and the Program.
Section 6.6 References to MCC Web site
Each reference in this Compact, the Program Implementation
Agreement, 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 Web site will be deemed a reference to such
document or information as updated or substituted on the MCC Web site
by MCC from time to time, and will be deemed to be incorporated by
reference into, and to constitute an integral part of, this Compact,
the Program Implementation Agreement or such other agreement entered
into in connection with this Compact.
Section 6.7 References to Laws, Regulations, Policies and Guidelines
Each reference in this Compact, the Program Implementation
Agreement, or any other agreement entered into in connection with this
Compact, to a law, regulation, policy, guidelines or similar document
shall be construed as a reference to such law, regulation, policy,
guidelines or similar document as it may, from time to time, be
amended, revised, replaced or extended and shall include any law,
regulation, policy, guidelines or similar document issued under or
otherwise applicable or related to such law, regulation, policy,
guidelines or similar document.
Article 7. Entry Into Force
Section 7.1 Domestic Requirements
The Government will take all steps necessary to ensure that: (a)
This Compact and the Program Implementation Agreement and all of the
provisions of this Compact and the Program Implementation Agreement are
valid and binding and are in full force and effect under the laws of
Lesotho; (b) this Compact, the Program Implementation Agreement and any
other agreement entered into in connection with this Compact to which
the Government and MCC are parties will be given the status of an
international agreement; and (c) no laws of Lesotho, other than the
Constitution of Lesotho, whether now or hereafter in effect, will take
precedence or prevail over the terms of this Compact or the Program
Implementation Agreement.
Section 7.2 Conditions Precedent
Before this Compact enters into force:
(a) The Government and MCC must have executed the Program
Implementation Agreement and it must be effective;
(b) The Government will have delivered to MCC:
(i) A certificate 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 Government has
completed all of its domestic requirements in order that the
requirements of Section 7.1 have been satisfied;
(ii) A legal opinion from the Attorney General of Lesotho (or other
legal opinion 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 its domestic
requirements for this Compact to enter into force and the satisfaction
of Section 7.1, which MCC may post on its Web site 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'').
In Witness Whereof, the undersigned, duly authorized by their
respective governments, have signed this Compact this 23rd day of July,
2007.
Done at Washington, D.C.
For Millennium Challenge Corporation, on behalf of the United
States of America,
Name: John J. Danilovich,
Title: Chief Executive Officer.
For the Government of the Kingdom of Lesotho,
Name: Mohlabi Kenneth Tsekoa,
Title: Minister of Foreign Affairs and International Relations.
[[Page 43389]]
Annex I Program Description
A. Overview
This Annex I describes the Program that MCC Funding will support in
Lesotho during the term of this Compact and the results to be achieved
using MCC Funding. In all cases, an activity described herein will be
carried out subject to any relevant approvals on the part of MCC and to
the extent funds are made a