Notice of Entering Into a Compact With the Government of the United Republic of Tanzania, 10472-10496 [E8-3661]

Agencies

• Millennium Challenge Corporation

[Federal Register Volume 73, Number 39 (Wednesday, February 27, 2008)]
[Notices]
[Pages 10472-10496]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-3661]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 08-02]


Notice of Entering Into a Compact With the Government of the 
United Republic of Tanzania

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: In accordance with Section 610(b)(2) of the Millennium 
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium 
Challenge Corporation (MCC) is publishing a summary and the complete 
text of the Millennium Challenge Compact between the United States of 
America, acting through the Millennium Challenge Corporation, and the 
Government of the United Republic of Tanzania acting through the 
Ministry of Finance. The President of the United States of America and 
the President of the United Republic of Tanzania executed the Compact 
documents on February 17, 2008.

    Dated: February 21, 2008.
William G. Anderson Jr.,
Vice President & General Counsel, Millennium Challenge Corporation.

Summary of Millennium Challenge Compact With the Government of the 
United Republic of Tanzania

A. Introduction

    The United Republic of Tanzania, comprised of the mainland and 
Zanzibar, is strategically located in East Africa bordering the Indian 
Ocean and eight nations.\1\ Tanzania plays an important role in the 
region as an economic trade partner and stands out

[[Page 10473]]

as a proponent of peace and security. In a region that has historically 
been divided by violent ethnic and religious conflict, Tanzania has 
been a peaceful country with a religiously diverse population, abundant 
natural resources, and a distinct sense of national pride and identity. 
However, this stability has not translated into widespread economic 
prosperity, as nearly 36 percent of the mainland population and 49 
percent of the Zanzibar population live below the national poverty 
line. An inadequate transportation network, an insufficient and 
unreliable supply of energy, and a shortage of potable water are three 
key constraints to economic growth and private investment in Tanzania. 
The program (Program) to be funded under the proposed Millennium 
Challenge Compact (Compact) with the Government of the United Republic 
of Tanzania (GoT) is designed specifically to address each of these 
constraints.
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    \1\ The countries bordering Tanzania are Kenya, Uganda, Rwanda, 
Burundi, Democratic Republic of Congo, Zambia, Malawi, and 
Mozambique.
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B. Program Overview and Budget

    The overall goal of the Program is to stimulate economic growth, 
increase household incomes, and raise the quality of life through 
targeted infrastructure investments in transport, energy, and water. 
The specific objectives of the Program are to increase agricultural 
activity and to increase business investment and spending by visitors 
through activities in the transport sector (Transport Sector Project), 
to increase investment, economic output and household productivity in 
several regions through activities in the energy sector (Energy Sector 
Project), and to increase investment in human and physical capital in 
two large cities through activities in the water sector (Water Sector 
Project) (each, a Project).
    The table below shows the total budget and an estimated investment 
plan for the Program.

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                                                                    Program budget (US$ '000)
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                  Description                   CIF \2\ &
                                                  year 1     Year 2     Year 3     Year 4     Year 5     Total
----------------------------------------------------------------------------------------------------------------
Transport Sector Project......................     21,552     84,406    147,131     82,606     37,081    372,776
Energy Sector Project.........................     16,646     45,501     53,435     59,083     31,806    206,471
Water Sector Project..........................      5,845     16,959     17,786     16,838      8,908     66,336
Monitoring & Evaluation.......................      2,500      1,000      1,000      1,000      4,500     10,000
Program Administration........................     11,202      7,615      7,900      7,868      7,968     42,553
                                               -----------------------------------------------------------------
    Total.....................................     57,745    155,481    227,252    167,395     90,263    698,136
----------------------------------------------------------------------------------------------------------------

     
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    \2\ This refers to the period between the Compact's conclusion 
and its entry into force.
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1. Transport Sector Project ($372.8 Million)
    Transport infrastructure in Tanzania is inadequate to meet the 
needs of the country's widely dispersed population. The Transport 
Sector Project aims to reduce travel times and provide access to basic 
social services by rehabilitating a portfolio of trunk roads on the 
mainland and the airport on Mafia Island, both originating from the 
GoT's Transport Sector Investment Program (TSIP) for mainland Tanzania, 
as well as selected rural roads on Pemba Island in Zanzibar. To ensure 
the sustainability of these investments, the Project will provide 
technical assistance to enhance the maintenance capacity of the GoT in 
both the road and airport sectors.
     Mainland Trunk Roads. The Project includes rehabilitation 
of three trunk roads on the mainland: (i) Tanga--Horohoro, a 68 km 
stretch of highway in northeast Tanzania connecting the seaport of 
Tanga with Horohoro at the Kenyan border whose rehabilitation will ease 
transport of goods between Dar es Salaam and Kenya, (ii) Tunduma--
Sumbawanga, a 224 km stretch of highway in western Tanzania, a very 
fertile agricultural area, constituting the southernmost part of the 
Western Corridor representing the only link between Dar es Salaam and 
Zambia, and (iii) Mtwara Corridor, a 139 km stretch of highway in 
southwestern Tanzania, the westernmost part of the Southern Corridor 
that runs from the Indian Ocean port of Mtwara to Mbamba Bay on Lake 
Nyasa.
     Zanzibar Rural Roads. The Project includes rehabilitation 
of up to five rural roads on Pemba Island, totaling approximately 35 
km.
     Road Maintenance. The Project includes enhancement of 
Tanzania's capacity to maintain its road network. Specifically, this 
activity will support improvements in institutional capacity for 
strategic maintenance planning, and management of routine and periodic 
maintenance contracts of Tanzania National Roads Agency (TANROADS) for 
the mainland and the Ministry of Communications and Transport for 
Zanzibar.
     Mafia Island Airport. The Project includes provision of 
necessary aviation and public safety related facilities at the airport 
on Mafia Island, which is located off the east coast of Tanzania, 
approximately 135 km southeast of Dar es Salaam. Due to the poor 
condition of the airport and lack of feasible alternative 
transportation options, this activity will keep the airport open and 
prevent the island's residents from being cut off from the mainland. 
The activity also includes provision of technical assistance to the 
Tanzania Airports Authority (TAA) for implementation of the activity 
and maintenance planning.
2. Energy Sector Project ($206.5 Million)
    Currently in Tanzania, industry, businesses, and households suffer 
from either a lack of energy services or unreliable service. Where 
electricity is available, the quality of supply is poor, and blackouts 
and other service interruptions are common. The Energy Sector Project 
will improve electricity service and coverage in Tanzania through the 
addition of new power generation, transmission and distribution 
capacity, as well as through much needed reinforcement of the existing 
network. The Project is expected to result in improved reliability and 
quality of electric power, and the extension of service to communities 
and businesses not currently served.
     Zanzibar Interconnector. The Project includes laying an 
approximately 40 km long, 100 MW capacity submarine electric 
transmission cable (including telecom fiber optic shield wire) from the 
mainland to Unguja Island, along the path of the existing submarine 
cable that is reaching its limits in both capacity and lifespan. To 
support the additional transmission capacity, the activity also 
includes the reinforcement of substations at either end of the cable, 
as well as the corresponding installation of roughly 20 km of 
supplementary

[[Page 10474]]

transmission capacity along existing lines. This activity is expected 
to provide a reliable and non-polluting power supply to Unguja Island, 
the largest island in the Zanzibar archipelago with a population of 
approximately 700,000, which is entirely dependent on power supply from 
the mainland. This will allow the island to continue to develop its 
potential as a high-value tourist destination. The increased supply of 
electricity will also improve the productivity and quality of life for 
the island's population.
     Malagarasi Hydropower & Kigoma Distribution. The Project 
includes the construction of a small, 8 MW run-of-river hydropower 
plant on the Malagarasi River at Igamba Falls, and the extension of a 
mini-grid system in the Kigoma region, which suffers from an inadequate 
and unreliable power supply. This lack of access to reliable power has 
been one of the major constraints to investment in commercial and 
industrial operations in the region. This activity seeks to displace 
costly, inefficient, and polluting diesel power generation with 
affordable, reliable, and clean renewable small-scale hydropower. The 
expanded distribution system will also facilitate the electrification 
of rural villages and towns. In addition, this activity will include 
the assessment and design of a public-private partnership for the 
independent operation of the completed mini-grid system. Such 
partnership will provide an opportunity to increase the participation 
of the private sector in the national electricity system.
     Distribution Systems Rehabilitation & Extension. The 
Project includes the rehabilitation of existing distribution 
infrastructure and a number of small distribution line extensions to 
un-served areas in six regions (Mwanza, Tanga, Morogoro, Iringa, 
Dodoma, and Mbeya) that were identified by the GoT as priority areas 
for investment. By complementing similar projects to be funded by the 
World Bank in the regions of Dar es Salaam, Kilimanjaro, and Arusha, 
this activity will address the growing demand and the corresponding 
strain on the network to deliver reliable and quality power to 
industrial and commercial users, as well as to households, in these 
regions.
3. Water Sector Project ($66.3 Million)
    Tanzania faces a serious shortage of access to potable water, 
resulting in a high incidence of water-related disease, decreased 
workforce productivity, and a challenge for business growth. To address 
these issues, the GoT, in coordination with other stakeholders 
(including donors) developed a 20-year program for transforming the 
sector known as the Water Sector Development Program (WSDP). The WSDP 
identifies all activities under the Water Sector Project as priorities. 
The Water Sector Project focuses on improving water supply 
infrastructure in Dar es Salaam and Morogoro, and is designed to 
increase the quantity and reliability of potable water for domestic and 
commercial use. By increasing the volume of water supply, the Water 
Sector Project is expected to reduce the prevalence of water-related 
disease, to increase time available for productive activities such as 
education, and to promote greater investments in physical capital.
     Lower Ruvu Plant Expansion. Dar es Salaam, Tanzania's 
largest city and commercial center, is experiencing a severe water 
crisis due to a shortage of water supply and poor water quality. The 
Project includes expansion of the capacity of the Lower Ruvu water 
treatment plant from about 180 million liters per day (MLD) to 
approximately 270 MLD. In addition, technical assistance for the Dar es 
Salaam Water and Sewerage Authority (DAWASA) will be provided.
     Non-Revenue Water. The Project includes improvement to the 
system efficiencies of DAWASA and Dar es Salaam Water and Sewerage 
Company (DAWASCO) to determine the locations and volumes of physical 
losses through leaks, and commercial losses as a result of deficiencies 
in billing and collection and theft. Currently, approximately 60 
percent of Dar es Salaam water is lost due to physical leakages and 
commercial losses. This activity, to be built on past and ongoing donor 
activities, will substantially reduce water resource waste and the need 
to develop new water sources, and will improve the long-term financial 
viability of DAWASA and DAWASCO. Specifically, the activity includes a 
comprehensive assessment of the Dar es Salaam water supply system, its 
physical and commercial losses, the development of performance 
benchmarks for reduction of these losses, and the implementation of a 
performance-based contract by a private sector firm to achieve those 
benchmarks. The activity also includes technical assistance to DAWASA 
and DAWASCO for implementation of the activity.
     Morogoro Water Supply. The Project includes improvements 
to water supply in Morogoro, a city that, due to a growing population 
coupled with its aging water infrastructure, faces water supply 
deficiencies and increased health risks for its population. 
Specifically, this will be achieved through the rehabilitation of the 
Mambogo water intake and water treatment plant (including the addition 
of a 6 MLD capacity), rehabilitation of the Mafiga water treatment 
plant, and improvement to the existing distribution network (including 
a 1.9 kilometer pressure main). In addition, technical assistance will 
be provided to Morogoro Urban Water and Sewerage Authority (MORUWASA) 
to support its continued progress toward achieving financial 
sustainability, including meeting its operation and maintenance costs 
and capital expenditure requirements.

C. Impact

    The Program's investments in the transport, energy, and water 
sectors are critical to Tanzania's development.
    First, poor transport infrastructure is a constraint to Tanzanian 
economic growth. In Tanzania, roads are essential for commerce 
(especially agricultural commerce), and for trade between Tanzania and 
its neighboring countries, including Kenya, Mozambique and Malawi. The 
rehabilitation of the roads, therefore, will help connect road users 
and communities along the rehabilitated roads with markets, schools and 
health clinics, and promote the expansion of economic opportunities by 
reducing transport costs and thus increasing the economic viability of 
various local products, including cash crops. The rehabilitation of the 
airport on Mafia Island will allow for easier, more efficient, and 
safer access to the island, resulting in increased tourist and business 
travel to and from the mainland, leading to additional income on the 
island.
    Second, an inadequate supply of energy is also a constraint to 
private investment and economic growth in Tanzania. Energy is essential 
for activities in industry, agriculture, transport and water service 
supply, and for the provision of social services such as education and 
health. Moreover, it serves as an important catalyst for private sector 
development. The Energy Sector Project will result in households and 
businesses receiving more reliable and better quality electricity, and 
many currently un-served households and businesses will receive 
electricity for the first time.
    Third, a shortage of access to potable water by both households and 
businesses is another constraint to Tanzanian economic growth addressed 
by the Program. Water is an important input to production in many 
industries, and expanding the supply of water will allow the expansion 
of economic

[[Page 10475]]

activity as well. In addition, lack of access to potable water results 
in a high incidence of water-related disease, burdensome healthcare 
costs, and decreased workforce productivity. By improving the water 
supply, incidence of disease and time spent collecting water will 
decrease, resulting in potential gains in labor productivity. 
Households, businesses and institutions relying on network water will 
benefit from improvements in water supply under the Water Sector 
Project.
    Finally, the Compact development process itself has already 
contributed to encouraging the GoT to undertake important policy 
reforms in the transport, energy, and water sectors, the absence of 
which have constrained economic and private sector growth in Tanzania 
for years. Moreover, the various investments in physical infrastructure 
during the implementation of the Program will be tied to continued 
policy and sector reform.

D. Program Management

    In September 2007, the GoT established MCA-Tanzania, the 
accountable entity for the Program, as a department within the Ministry 
of Finance with budgetary and operational independence. The early 
establishment of MCA-Tanzania allowed for commencement of preparatory 
activities funded under the pre-Compact 609(g) grant agreement, signed 
in October 2007, in order for timely and efficient implementation of 
the Program once the Compact enters into force.
    MCA-Tanzania consists of a governing board (Governing Board), and a 
secretariat (Secretariat). The Governing Board has final decision-
making authority over the implementation of the Program, and consists 
of seven representatives from the GoT (including two representatives 
from Zanzibar) and four representatives from the private sector and the 
civil society. The Secretariat supports the Governing Board in the 
implementation of the Program. A chief executive officer manages the 
day-to-day activities of MCA-Tanzania, and is supported by senior 
directors together with other managers, officers, and administrative 
staff.
    MCA-Tanzania is in the final stages of selecting, through 
competitive processes, a third party, non-government entity to provide 
procurement agent and oversight services for MCA-Tanzania, to include 
acting as procurement agent for MCA-T administrative procurements, the 
Zanzibar Rural Roads Activity, all Water Sector Project Activities, and 
two Energy Sector Project Activities. In its capacity as advisor, the 
firm will provide training and support services to three government 
procurement entities on certain procurements for the transport and 
energy projects. MCA-Tanzania will work with the various ministries, 
departments, and agencies of the GoT to implement the Projects with one 
exception: Due to capacity limitations, the rehabilitation of the rural 
roads in Zanzibar will be implemented by a competitively procured 
project management firm.
    The Office of the Accountant General in Tanzania's Ministry of 
Finance has established a Fiscal Agent Unit within the Office, staffed 
from existing office resources, for the Program. Under the direction of 
MCA-T's Director of Finance and Administration, this Unit will provide 
all financial reports under the Compact and relevant supplementary 
agreements; perform coordination efforts related to fiscal management 
including operating procedure development; provide information 
technology support including Web site development and maintenance; 
monitor and perform the necessary input interface with the U.S. 
Treasury International Treasury System (``ITS''); manage asset control 
and accountability; and respond to all MCA-T management requests.

E. Assessment

1. Economic Analysis
    The estimated sector-level economic rates of return (ERRs) \3\ for 
the mainland are: (i) For the transport sector, 16%, (ii) for the water 
sector, 20%, and (iii) for the energy sector, 27%. The overall ERR for 
the activities in Zanzibar is 18%.
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    \3\ These sector-level ERRs include administrative costs.
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    The estimated Project Activity-level ERRs for the Program are 
presented in the table below.

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                                                                 ERR
             Project                      Description         (percent)
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Transport Sector.................  Mainland Trunk Roads....  ...........
                                   Tanga-Horohoro..........           15
                                   Tunduma-Sumbawanga......           20
                                   Mtwara Corridor.........           14
                                   Zanzibar Rural Roads....           12
                                   Mafia Island Airport....           17
Energy Sector....................  Zanzibar Interconnector.           21
                                   Malagarasi Hydropower &            20
                                    Kigoma Distribution.
                                   Distribution Systems      ...........
                                    Rehabilitation &
                                    Extension.
                                   Mwanza..................           31
                                   Tanga...................           42
                                   Morogoro................           24
                                   Iringa..................           52
                                   Dodoma..................           16
                                   Mbeya...................           53
Water Sector.....................  Lower Ruvu Plant                   27
                                    Expansion.
                                   Non-Revenue Water.......           21
                                   Morogoro Water Supply...            5
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2. Consultative Process
    The consultative process for the Program was anchored in the 
ongoing consultative process for Tanzania's National Strategy for 
Growth and Reduction of Poverty (commonly referred to by its Swahili 
acronyms, MKUKUTA/MKUZA, for the mainland and Zanzibar, respectively). 
The MKUKUTA/MKUZA process yielded broadly endorsed national sector 
strategies, and Projects were developed

[[Page 10476]]

on the basis of these strategies. Building on the success of and 
lessons learned from the MKUKUTA/MKUZA consultative process, the GoT 
designed and followed a comprehensive outreach strategy.
    Specifically, national outreach activities were conducted by the 
GoT's core team, including visits to all of the sites for the proposed 
Projects on the mainland and Zanzibar. Discussions were held with key 
stakeholders including representatives from regional, district, and 
local council government offices, members of parliament, the World 
Wildlife Fund, the Tanzania National Business Council, the Tanzanian 
Chamber of Commerce, Industry, and Agriculture, the Tanzania 
Association of NGOs, the Association of NGOs in Zanzibar, and women's 
groups such as the Tanzania Gender Networking Programme.
    In addition, the GoT will utilize regional development committees 
in Project-affected areas to continue the consultative process 
throughout the implementation of the Program. These committees will 
include stakeholders from various non-governmental organizations, the 
private sector, and local and regional governments. These committees 
will not have decision-making authority, but will serve as a mechanism 
for ongoing consultations between the GoT and the public.
3. GoT Commitment and Effectiveness
    The GoT's commitment is demonstrated in the allocation of 
significant human and financial resources to the Compact development 
process and in the GoT's receptiveness to substantive policy reforms. 
The GoT's core team has been led by a national coordinator with 30 
years of experience in public service who has recruited an impressive 
team. The GoT also constituted a high-level steering committee to 
oversee the Compact development process, led by the Permanent Secretary 
of the Ministry of Finance. In addition to representation by the 
Permanent Secretaries from various relevant ministries, the steering 
committee included a number of leaders from the private and non-
governmental sectors.
    Additional commitment by the GoT has been demonstrated by a 
willingness to undertake various reforms that are critical to the 
sustainability of the Program. For instance, the GoT has shown openness 
and commitment in the transport sector by its agreement to adhere to 
the improvement of prioritized corridors through the upgrade of trunk 
roads identified in the TSIP. The energy sector also has shown signs of 
movement toward commercialization, demonstrated by the restructuring of 
Tanzania Electric Supply Company Limited (TANESCO) and the emergence of 
an independent regulator for the energy and water sectors. Moreover, 
the GoT committed to passing a new act governing the electricity sector 
to bring up-to-date the current law (dating from 1931). Finally, the 
GoT contributed significant time and resources toward the preparation 
of environmental and social studies for many of the components of the 
Projects during the Compact development process. These contributions 
not only enhance the environmental sustainability of the Projects but 
also allow the improved designs and timely implementation of the 
Program.
4. Sustainability
    The sustainability of the investments in roads on both the mainland 
and Zanzibar is dependent upon adequate road maintenance. A significant 
policy reform towards mainland roads sustainability was demonstrated in 
July 2007 when the GoT nearly doubled its funding of road maintenance, 
an increase adequate to meet the maintenance costs of the mainland's 
road network. To encourage the GoT to take additional steps for 
improvement of the sustainability of the roads in Zanzibar, MCC will 
condition its investment in the rural roads on a significant increase 
in the current fuel levy in Zanzibar. Moreover, since adequate funding 
for maintenance of roads does not by itself ensure sustainability of 
the investments in roads, MCC will provide technical assistance to 
enhance the GoT's road maintenance capacity.
    The Energy Sector Project includes capacity building and technical 
support for both TANESCO and Zanzibar Electricity Corporation (ZECO). 
In addition, the implementation of the new Electricity Act, continued 
progress on tariff reform, and TANESCO Board reforms to increase its 
independence from the GoT, all required under the Compact, are 
significant safeguards that will contribute to sustainability.
    Under the Water Sector Project, the GoT has agreed to pursue 
financial recovery measures for DAWASA, DAWASCO and MORUWASA, and to 
include the implementation of tariffs that will fully recover 
operations and maintenance costs, and demonstrate a sustainable trend 
to recover capital costs within the term of the Compact.
    In addition, the Program includes provision of technical assistance 
to the National Environmental Management Council and the Zanzibar 
Department of the Environment, development and implementation of a 
gender integration plan, and support for environmental and social 
oversight of the Program. These activities will safeguard Tanzania's 
natural resources and enhance the sustainability of the Program as a 
whole. They will also contribute to long-term sustainable development 
of Tanzania by building capacity and systems to improve environmental 
management associated with the planning, design and implementation of 
infrastructure projects.
5. Environment and Social Impacts
    MCC will require that all Projects comply with the Tanzanian 
National Environmental Management Act and regulations, MCC's 
environmental guidelines and gender policy, and World Bank's 
Operational Policy on Involuntary Resettlement (OP 4.12).
    None of the Projects is likely to generate significant adverse 
environmental, health, or safety impacts, and all expected impacts can 
be mitigated. Several activities under the Transport Sector Project 
(``Category A'' according to MCC's environmental guidelines) have the 
potential for construction-related impacts such as erosion, drainage 
and run-off, and impacts to wildlife migration that will be mitigated 
through, among other measures, promotion of community-based natural 
resource management. Additional potential secondary and cumulative 
impacts such as increased deforestation due to logging and prolific 
charcoal manufacturing may have adverse environmental and social 
impacts and will be mitigated through sustainable community development 
initiatives. Similarly, potential negative environmental and social 
impacts of the Energy Sector Project (``Category A'') and the Water 
Sector Project (``Category B'') include health and safety risks, as 
well as construction-related impacts on communities including increased 
HIV/AIDS transmission and economic and physical resettlement. With 
proper planning and oversight by MCA-Tanzania and environmental and 
social oversight consultants, all negative impacts and risks identified 
through these assessments will be mitigated.
    In addition, the Program is expected to yield the following 
positive environmental and social impacts: (i) Increased opportunities 
for community-based natural resource management in the proximity of the 
southern sections of the mainland's trunk roads, (ii) reduction in time 
spent accessing cultural and natural resources through the provisioning 
of renewable energies

[[Page 10477]]

and improved infrastructure, (iii) increased access and participation 
of civil society and women through public consultation and a Program-
wide gender integration action strategy, (iv) reduction in the need to 
develop new water sources and reduce water resource wastage, and (v) 
improved environmental management capacity to support further 
sustainable development.
6. Donor Coordination
    The mainland trunk roads activity under the Transport Sector 
Project was developed in consultation with the principal donors in the 
transport sector in Tanzania, including the European Union, World Bank, 
African Development Bank (AfDB), the Danish International Development 
Agency (DANIDA), and the governments of Norway and Japan. The plan to 
upgrade Zanzibar's rural roads was developed in consultation with other 
donors working in Zanzibar, primarily the World Bank, DANIDA, and the 
Government of Norway. The airport on Mafia Island represents one of 
eleven airports identified in the TSIP, and is included in the TAA's 
ongoing feasibility, environmental and social impact assessment, and 
detailed design study funded by the World Bank. Finally, a measure to 
support environmental sustainability of the upgrades to the various 
roads through the community-based natural resource management builds 
upon efforts of United States Agency for International Development 
(USAID), and will be implemented in collaboration with USAID.
    Donors, including the governments of Sweden, Norway, and Japan, the 
World Bank, and the AfDB, among others, play an active role in 
improving Tanzania's energy sector through support for policy reform, 
technical assistance and infrastructure investments. The Energy Sector 
Project has benefited significantly from these donors' activities while 
MCC has provided important additional leverage for needed policy and 
regulatory reform including the passage of new legislation governing 
the electricity sector, tariff reform, and financial sustainability of 
TANESCO and ZECO. Moreover, the Malagarasi hydropower plant benefited 
from a pre-feasibility study financed by the AfDB and the World Bank. 
Finally, MCC's review of the proposal to upgrade the distribution 
systems in Mwanza, Tanga, Morogoro, Iringa, Dodoma and Mbeya benefited 
from active intervention and support by the Swedish International 
Development Cooperation Agency and the World Bank.
    All components of the Water Sector Project are priority projects 
identified under the WSDP. The donors participating in the WSDP include 
the World Bank, the governments of Germany, the Netherlands, France, 
and Japan as well as the United Nations Development Programme, the 
United Nations Children's Fund, Food and Agriculture Organization, and 
the AfDB. MCC coordinated with these organizations throughout the 
review and development of the Water Sector Project, and continues to 
engage with them.

Millennium Challenge Compact Between the United States of America 
Acting Through the Millennium Challenge Corporation and the Government 
of the United Republic of Tanzania Acting Through the Ministry of 
Finance

Table of Contents

Article 1. Goal and Objectives
    Section 1.1 Compact Goal
    Section 1.2 Project 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; Compact Status
    Section 6.1 Annexes
    Section 6.2 Inconsistencies
    Section 6.3 Amendments
    Section 6.4 Compact Status
    Section 6.5 Additional Instruments
    Section 6.6 References to MCC Web site
    Section 6.7 Exclusion Clause
    Section 6.8 References to Laws, 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
Article 8. Consultations
    Section 8.1 Consultation
Annex I: Program Description
Annex II: Program Budget
Annex III: Summary of 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 United Republic of Tanzania (the ``Government''), 
acting through the Ministry of Finance (individually, each of the MCC 
and the Government, a ``Party'' and collectively, the ``Parties'').
    Recalling that the Government consulted with the private sector and 
civil society of Tanzania to determine the priorities for the use of 
Millennium Challenge Account assistance and developed and submitted to 
the MCC a proposal for such assistance; and
    Recognizing that the MCC wishes to help Tanzania 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 advance economic growth and poverty 
reduction in Tanzania through strategic investments in transportation, 
energy, and water infrastructure (the ``Compact Goal'').

Section 1.2 Project Objectives.

    The objectives of the Projects (each, a ``Project Objective'') are:
    (a) To increase cash crop revenue and aggregate visitor spending 
through the Transport Sector Project;
    (b) To increase value added of businesses through the Energy Sector 
Project; and
    (c) To increase investment in human and physical capital and reduce 
the prevalence of water-related diseases through the Water Sector 
Project.
    The Government shall take all necessary steps to achieve the 
Compact Goal and Project Objectives during the Compact Term.

Article 2. Funding and Resources

Section 2.1 MCC Funding.

    The MCC hereby grants to the Government, under the terms of this 
Compact, an amount not to exceed Six Hundred Ninety-Eight Million One 
Hundred and Thirty-Six Thousand United States Dollars (US$698,136,000) 
(``MCC Funding'') for use by the Government in the implementation of

[[Page 10478]]

the Program, as more specifically described in Annex II to this 
Compact.

Section 2.2 Compact Implementation Funding.

    (a) Of the total amount of MCC Funding, the MCC shall make up to 
Eleven Million Eight Hundred and Ninety-Six Thousand United States 
Dollars (US$11,896,000) (``Compact Implementation Funding'') available 
to the Government under Section 609(g) of the Millennium Challenge Act 
of 2003 for:
    (i) Administrative activities for MCA-Tanzania (as defined below), 
including start-up costs such as staff salaries, rent, cost of 
purchasing computers and other information technology or capital 
equipment and other similar expenses; and
    (ii) Any other activities relating to the implementation of the 
Compact, approved by the MCC.
    (b) The Parties shall provisionally apply this Section 2.2, and 
Sections 2.6, 2.7 and 3.5 below, after the MCC and the Government sign 
this Compact until this Compact enters into force under Section 7.3. 
Compact Implementation Funding also shall be subject to the 
requirements, restrictions and procedures set out in writing by the 
MCC.

Section 2.3 Disbursement

    In accordance with this Compact and the Program Implementation 
Agreement (as defined below), the MCC shall disburse MCC Funding for 
expenditures incurred in connection with the implementation of the 
Program (each, a ``Disbursement''). The proceeds of such Disbursements 
shall be made available to the Government either (a) by deposit to a 
bank account established by the Government and acceptable to the MCC (a 
``Permitted Account'') or (b) through direct payment to the relevant 
provider of goods, works or services in furtherance of this Compact, as 
appropriate. MCC Funding shall be expended solely to cover expenditures 
in connection with the implementation of the Program as provided in 
this Compact and the Program Implementation Agreement.

Section 2.4 Interest

    The Government shall pay to the MCC any interest and other earnings 
that accrue on MCC Funding in accordance with the Program 
Implementation Agreement (whether by directing such payments to the 
bank account outside Tanzania designated by the MCC or otherwise).

Section 2.5 Government Resources; Budget

    (a) The Government shall provide all funds and other resources, and 
shall take all actions, that are necessary to carry out the 
Government's responsibilities and obligations under this Compact.
    (b) The Government shall use its best efforts to ensure that all 
MCC Funding it receives, or is projected to receive, in each of its 
fiscal years is fully accounted for in its annual budget on a multi-
year basis.
    (c) The Government shall not reduce the normal and expected 
resources that it would otherwise receive, or budget, from sources 
other than the MCC for the activities contemplated under this Compact 
and the Program.

Section 2.6 Limitations on the Use of MCC Funding

    The Government shall ensure that MCC Funding shall 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 by the MCC, or by posting at www.mcc.gov (``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 
as further described in MCC environmental guidelines posted on the MCC 
Web site (``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) The Government shall ensure that the assistance provided by the 
MCC to the Government under this Compact is exempt from any existing or 
future taxes, duties, levies, contributions or other similar charges 
(``Taxes'') by the Government (including any such Taxes of a national, 
regional, local or other governmental or taxing authority) in 
accordance with the terms of the ``Agreement Providing For the 
Furnishing of Economic, Technical, and Related Assistance'' between the 
United States and the Government, entered into force on February 8, 
1968.
    (b) If any Tax has been levied and paid to the Government contrary 
to the requirements of Section 2.7(a) above, the Government shall 
refund promptly to the MCC the amount of such Tax out of its national 
funds, and no MCC Funding, proceeds thereof, or Program asset may be 
applied by the Government in satisfaction of its obligations under this 
Section 2.7(b).

Article 3. Implementation

Section 3.1 Program Implementation Agreement

    The Government shall implement the Program in accordance with this 
Compact and as further specified in an agreement to be entered into by 
the MCC and the Government, which agreement will address, among other 
matters, implementation arrangements, fiscal accountability, 
disbursement and use of MCC Funding, procurement and applicable tax 
exemptions (the ``Program Implementation Agreement'' or ``PIA'').

Section 3.2 Government Responsibilities

    (a) The Government shall have the principal responsibility of 
overseeing and managing the implementation of the Program.
    (b) The Government shall 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.
    (c) The Government shall ensure that no law or regulation in 
Tanzania now or hereinafter in effect makes, or will make unlawful, or 
otherwise prevent or hinder the performance of any of its obligations 
under this Compact, the PIA or any other agreement related thereto or 
any transaction contemplated thereunder.
    (d) The Government shall fund all costs in excess of those budgeted 
for the Program, as set forth in Annex II (as such may be modified in 
accordance with the terms thereof), in order to ensure the full and 
complete implementation of the Program.

Section 3.3 Policy Performance

    In addition to the specific policy, legal and regulatory reform

[[Page 10479]]

commitments identified in Annex I to this Compact, the Government shall 
commit to maintain and improve its level of performance under the 
policy criteria (relating to just governance, economic freedom and 
investments in people) identified in Section 607 of the Millennium 
Challenge Act of 2003, and the selection criteria and methodology used 
by the MCC.

Section 3.4 Government Assurances

    The Government assures the MCC that:
    (a) As of the date this Compact is signed by the Government, the 
information provided to the MCC by or on behalf of the Government in 
the course of reaching agreement with the MCC on this Compact is, taken 
as a whole, 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 Tanzania; and
    (c) The Government shall 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, the MCC may provide guidance to the Government 
in writing on all matters relating to MCC Funding, this Compact or 
implementation of the Program (each, an ``Implementation Letter''). The 
Government shall apply such guidance in implementing the Program.

Section 3.6 Procurement

    Under the exception set forth in Section 4 of the Public 
Procurement Act No. 21 of 2004, the Government shall ensure that the 
procurement of all goods, works and services by the Government or any 
Provider in furtherance of this Compact will be consistent with and 
conducted in accordance with the procurement guidelines notified by the 
MCC to the Government in writing or by posting on the MCC Web site, or 
otherwise made publicly available (``MCC Program Procurement 
Guidelines''). The MCC Program Procurement Guidelines include, among 
others, the following requirements:
    (a) Open, fair, and competitive procedures must be used in a 
transparent manner to solicit, award and administer contracts and to 
procure goods, works and services;
    (b) Solicitations for goods, works, and services must be based upon 
a clear and accurate description of the goods, works and services to be 
acquired;
    (c) Contracts must be awarded only to qualified contractors that 
have the capability and willingness to perform the contracts in 
accordance with their terms on a cost effective and timely basis; and
    (d) No more than a commercially reasonable price, as determined, 
for example, by a comparison of price quotations and market prices, 
will be paid to procure goods, works and services.

Section 3.7 Records; Accounting; Covered Providers; Access

    (a) Government Books and Records. The Government shall maintain, 
and shall use its best efforts to ensure that all Covered Providers 
maintain, accounting books, records, documents, and other evidence 
relating to this Compact adequate to show, to the MCC's satisfaction, 
the use of all MCC Funding (``Compact Records''). In addition, the 
Government shall furnish or cause to be furnished all Compact Records 
to the MCC when the MCC so requests.
    (b) Accounting. The Government shall maintain, and shall use its 
best efforts to ensure that all Covered Providers maintain, Compact 
Records in accordance with accounting principles prescribed by the 
International Accounting Standards Committee. Compact Records must be 
maintained for at least five (5) years after the end of the Compact 
Term or for such longer period, if any, required to resolve any 
litigation, claims or audit findings or any statutory requirements.
    (c) Provider; Covered Provider. Unless the Parties otherwise agree 
in writing, a ``Provider'' is (i) any entity of the Government that 
receives or uses MCC Funding or any other Program asset in carrying out 
activities in furtherance of this Compact or (ii) any third party that 
receives at least US$50,000 in the aggregate of MCC Funding (other than 
as salary or compensation as an employee of an entity of the 
Government) during the Compact Term. A ``Covered Provider'' is (i) a 
non-United States Provider that receives (other than pursuant to a 
direct contract or agreement with the MCC) US$300,000 or more of MCC 
Funding in any Government fiscal year or any other non-United States 
person or entity that receives, directly or indirectly, US$300,000 or 
more of MCC Funding from any Provider in such fiscal year or (ii) any 
United States Provider that receives (other than pursuant to a direct 
contract or agreement with the 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 the MCC's request, the Government, at all 
reasonable times, shall permit, or cause to be permitted, authorized 
representatives of the 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 the 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 shall, on at least a semi-annual basis, 
conduct, or cause to be conducted, financial audits of all 
disbursements of MCC Funding in accordance with this Section 3.8(a). 
The initial financial audit shall cover the period from signing of this 
Compact until the earlier of the following December 31 and June 30, and 
all subsequent financial audits shall cover each six-month period 
thereafter ending December 31 and June 30 through the end of the 
Compact Term, in each case in accordance with the terms of the PIA. 
Upon the MCC's request, to conduct such audits, the Government shall 
use, or cause to be used, an auditor approved by the 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. Each audit shall be performed in accordance 
with the Audit Guidelines and be subject to quality assurance oversight 
by the Inspector General. Each audit shall be completed and the audit 
report delivered to the MCC no later than 90 days after the first 
period to be audited and no later than 90 days after each June 30 and 
December 31 thereafter, unless the Parties otherwise agree in writing.
    (b) Audits of United States Entities. The Government shall ensure 
that agreements between the Government or any Provider, on the one 
hand, and a United States nonprofit organization, on

[[Page 10480]]

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 shall 
ensure that agreements between the Government or any Provider, on the 
one hand, and a United States for-profit Covered Provider, on the other 
hand, that are financed with MCC Funding state that the United States 
for-profit Covered Provider is subject to audit by the cognizant United 
States Government agency, unless the Government and the MCC agree 
otherwise in writing.
    (c) Corrective Actions. The Government shall 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 the MCC. The MCC shall have the right to arrange for 
and conduct 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 to this Compact.

Article 4. Communications

Section 4.1 Communications

    Any document or communication required or submitted by either Party 
to the other under this Compact shall be in writing and, except as 
otherwise agreed between the Parties, in English. For this purpose, the 
address of each Party is set forth below.
To the MCC
    Millennium Challenge Corporation, Attention: Vice President for 
Compact Implementation, (with a copy to the Vice President and General 
Counsel), 875 Fifteenth Street, NW., Washington, DC 20005, United 
States of America, Facsimile: (202) 521-3700, Telephone: (202) 521-
3600, E-mail: VPImplementation@mcc.gov (Vice President for Compact 
Implementation), VPGeneralCounsel@mcc.gov (Vice President and General 
Counsel).
To the Government
    The Government of the United Republic of Tanzania, Attention: The 
Permanent Secretary, Ministry of Finance, Madaraka Avenue, P.O. Box 
9111, Dar es Salaam, Tanzania, Facsimile: 255 22 2110326, Telephone: 
255 22 2111174, E-mail: ps@mof.go.tz.
With a Copy to MCA-Tanzania
    Millennium Challenge Account--Tanzania, Attention: Chief Executive 
Officer, Kivukoni Front/Ohio Street, P.O. Box 8327, Dar es Salaam, 
Tanzania, Facsimile: 255 22 2124644, Telephone: 255 22 2124634, E-mail: 
To be designated in writing to the MCC by MCA-Tanzania.

Section 4.2 Representatives

    For all purposes of this Compact, the Government shall be 
represented by the individual holding the position of, or acting as, 
the Permanent Secretary to the Treasury, and the MCC shall be 
represented by the individual holding the position of, or acting as, 
Vice President for Compact Implementation (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 shall 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) Either Party may terminate this Compact in its entirety by 
giving the other Party thirty (30) days' written notice.
    (b) The MCC may, immediately upon written notice to the Government, 
suspend or terminate this Compact or MCC Funding under this Compact, in 
whole or in part, if the MCC determines that any circumstance 
identified by the MCC as a basis for suspension or termination (whether 
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 PIA 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, in the MCC's determination, makes 
achievement of any Project Objective improbable during the term of this 
Compact or makes it improbable that the Government will be able to 
perform its obligations under this Compact;
    (iii) Any use of MCC Funding or continued implementation of this 
Compact that 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 Tanzania ineligible to receive United States 
economic assistance under Part I of the Foreign Assistance Act of 1961 
(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 
Tanzania for assistance under the Millennium Challenge Act of 2003; and
    (vii) A 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 shall cease upon the expiration, suspension, 
or termination of this Compact; provided, however, that MCC Funding may 
be used, in compliance with this Compact and the PIA, to pay for (i) 
reasonable expenditures for goods, works or services that are properly 
incurred under or in furtherance of this Compact before such 
expiration, suspension or termination of this Compact, and (ii) 
reasonable expenditures (including administrative expenses) that are 
properly incurred in connection with the winding up of the Program 
within 120 days after the expiration, suspension or termination of this 
Compact, so long as the request for payment of such expenditures is 
submitted within ninety (90) days after such expiration, suspension or 
termination.
    (d) Subject to subsection (c) of this Section 5.1, upon the 
expiration, suspension or termination of this Compact, (i) any amounts 
of MCC Funding not disbursed by the MCC shall

[[Page 10481]]

be released from any obligation in connection with this Compact without 
any action from the Government or the MCC, and (ii) any amounts of MCC 
Funding disbursed by MCC but not expended under Section 2.3 before such 
expiration, suspension or termination, plus accrued interest thereon, 
shall be returned to the MCC within thirty (30) days after the 
Government receives the MCC's request for such return.
    (e) The MCC may reinstate any suspended or terminated MCC Funding 
under this Compact if the MCC determines that the Government or other 
relevant person or entity has committed to correct each condition for 
which MCC Funding was suspended or terminated.

Section 5.2 Refunds; Violation

    (a) If any MCC Funding, any interest or earnings thereon, or any 
asset acquired in whole or in part with MCC Funding is used for any 
purpose in violation of the terms of this Compact, the MCC shall have 
the right to require that the Government repay to the MCC, in United 
States Dollars, the value of such misused MCC Funding, interest, 
earnings, or asset, plus interest, within thirty (30) days after the 
Government's receipt of the MCC's request for repayment. The Government 
shall use national funds (and no MCC Funding or assets of the Program) 
to make such payment.
    (b) Notwithstanding any other provision in this Compact or any 
other agreement to the contrary, the MCC's right under this Section 5.2 
for a refund shall continue during the term of this Compact and for a 
period of (i) five years thereafter or (ii) one year after the MCC 
receives actual knowledge of such violation, whichever is later.

Section 5.3 Survival

    The Government's responsibilities under Sections 2.4, 2.6, 2.7, 
3.7, 3.8, 5.1(c), 5.1(d), 5.2, 5.3 and 6.4 of this Compact shall 
survive the expiration, suspension or termination of this Compact.

Article 6. Compact Annexes; Amendments; Compact Status

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 8, such 
Articles 1 through 8 shall prevail; or
    (b) This Compact and any other agreement between the Parties 
regarding the Program, this Compact shall prevail.

Section 6.3 Amendments

    The Parties may amend this Compact only by a written agreement 
signed by the Principal Representatives of both Parties and subject to 
the respective domestic approval requirements to which this Compact was 
subject.

Section 6.4 Compact Status

    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 
shall include activities, obligations and rights undertaken by, 
existing under or in furtherance of any agreement, document or 
instrument related to this Compact and the Program.

Section 6.6 References to MCC Web site

    Any reference in this Compact, the PIA or any other agreement 
entered into in connection with this Compact, to a document or 
information available on, or notified by posting on the MCC Web site 
shall be deemed a reference to such document or information as updated 
or substituted on the MCC Web site from time to time.

Section 6.7 Exclusion Clause

    This Compact and the other Compact Documents (as defined below) and 
the performance by the Government of any of its obligations under this 
Compact or the other Compact Documents shall not be made unlawful or 
otherwise prevented, hindered or adversely affected by any laws of 
Tanzania that come into effect after the MCC and the Government sign 
this Compact.

Section 6.8 References to Laws, Regulations, Policies and Guidelines

    Each reference in this Compact, the PIA or any other agreement 
entered into in connection with this Compact, to a law, regulation, 
policy, guideline or similar document will, unless expressly set forth 
herein or therein, 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 will 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 shall take all steps necessary to ensure that (a) 
this Compact and the PIA and all of the provisions of this Compact and 
the PIA are valid and binding and are in full force and effect in 
Tanzania, and (b) no laws of Tanzania (other than the constitution of 
Tanzania), whether now or hereafter in effect, will take precedence or 
prevail over the terms of this Compact or the PIA.

Section 7.2 Conditions Precedent

    Before this Compact enters into force:
    (a) The Government and the MCC shall execute the PIA;
    (b) The Government shall deliver to the 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 the MCC) certifying that the Government has 
taken all steps required under Section 7.1;
    (ii) An opinion from the Attorney General of Tanzania, in form and 
substance satisfactory to the MCC, that states, among other things, (1) 
each of the Compact, the PIA and any other agreement entered into in 
connection with this Compact to which the Government and the MCC are 
parties (the ``Compact Documents'') have been duly authorized, executed 
and delivered by the Government, (2) each Compact Document and all of 
the provisions of each Compact Document are valid and binding and are 
in full force and effect in Tanzania, (3) each Compact Document has the 
status, if stipulated in such agreement, of an international agreement, 
(4) each Compact Document (and the execution, delivery and performance 
by the Government of each) does not and will not conflict with any 
other international agreement or obligation of the Government or any of