Notice of Entering Into a Compact With the Government of Burkina Faso, 42601-42626 [E8-16755]

Agencies

• Millennium Challenge Corporation

[Federal Register Volume 73, Number 141 (Tuesday, July 22, 2008)]
[Notices]
[Pages 42601-42626]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16755]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 08-07]


Notice of Entering Into a Compact With the Government of Burkina 
Faso

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 Burkina Faso. Representatives of the United States 
Government and the Government of Burkina Faso executed the Compact 
documents on July 14, 2008.

    Dated: July 17, 2008.
William G. Anderson Jr.,
Vice President & General Counsel, Millennium Challenge Corporation.

Summary of Millennium Challenge Compact With the Government of Burkina 
Faso

A. Introduction

    Burkina Faso is a landlocked country in Africa's Sahel region, 
bordering Benin, Cote d'Ivoire, Ghana, Mali, Niger, and Togo, with a 
population of approximately 15.26 million people. It is one of the 
poorest countries in the world, ranking 176 out of 177 countries as 
surveyed by the United Nations Development Program's 2007 Human 
Development Index. In an effort to address constraints to investment, 
Burkina Faso has undertaken several broad macroeconomic reforms since 
the mid-1990s, including market-oriented reforms, decentralization of 
power from the central government to local governments, adoption of a 
new labor code, and business climate improvements. In light of these 
efforts, in 2007, the International Finance Corporation named Burkina 
Faso one of the top reformers in West Africa. In January 2008, Burkina 
Faso began a two-year term on the United Nations Security Council. 
Despite these reforms, recognitions, and moderate economic gains, 
Burkina Faso continues to face severe constraints to growth and poverty 
reduction.

B. Program Overview, Budget, and Impact

    Constraints are particularly acute in rural areas. Agricultural 
activities involve 85 percent of the country's active population and 
contribute to approximately 36 percent of GDP and 88 percent of export 
earnings. Rural populations in Burkina Faso currently lack access to 
basic inputs needed to improve agricultural and livestock productivity, 
including secure land, skilled labor, adequate water resources, 
sufficient volumes of credit, and adequate access to markets. To 
address these constraints, the government of Burkina Faso (``GoBF'') 
has proposed a US$480,943,569, five-year Millennium Challenge Compact 
(``Compact'') that will consist of four interdependent projects:
     Rural Land Governance Project--designed to increase 
investment in land and rural productivity through improved land tenure 
security and land management;
     Agriculture Development Project--designed to expand the 
productive use of land in order to increase the volume

[[Page 42602]]

and value of agricultural production in project zones;
     Roads Project--designed to enhance access to markets 
through investments in the road network; and
     BRIGHT 2 Schools Project--designed to increase primary 
school completion rates for girls (each of the four projects is 
referred to herein as a ``Project'').
    Table 1 below sets forth the Compact program (``Program'') budget 
at the Project level.

                                                           Table 1.--Program Budget by Project
                                                                     [US$ millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          Component                               CIF\*\       Year 1       Year 2       Year 3       Year 4       Year 5       Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rural Land Governance Project................................         1.10         7.21        13.00        15.60        14.08         8.94        59.93
Agriculture Development Project..............................         4.77        17.91        40.95        44.03        25.28         8.97       141.91
Roads Project................................................         0.34         3.05        32.97        93.23        58.60         5.94       194.13
Bright 2 Schools Project.....................................         3.00        25.83  ...........  ...........  ...........  ...........        28.83
Monitoring & Evaluation......................................         0.45         1.72         1.21         1.46         1.36         1.68         7.88
Program Administration and Oversight.........................         6.44         7.95         8.17         8.87         8.45         8.38        48.26
                                                              ------------------------------------------------------------------------------------------
    Total MCC Funding........................................       $16.10       $63.67       $96.30      $163.19      $107.77       $33.91     $480.94
--------------------------------------------------------------------------------------------------------------------------------------------------------
\*\ Compact Implementation Funds (CIF) refer to funding available before the entry-into-force of the Compact.

    Important synergies exist among the four Projects. The Agriculture 
Development Project will alleviate the constraint of poor water 
availability with investments in irrigation infrastructure and water 
management. This Project also will increase the availability of rural 
credit and provide technical assistance to farmers' groups and 
individual households, improving their ability to produce higher-value 
agricultural and livestock products. Complementary Rural Land 
Governance activities will secure land in the Agricultural Development 
Project areas and other areas, reducing economic losses due to land 
conflict or risk of conflict and encouraging productive investment in 
land. The Roads Project will rehabilitate rural and primary roads near 
the production zones, increasing opportunities for farmers to sell 
agricultural products and livestock, as well as to buy the necessary 
inputs. Finally, the BRIGHT 2 Schools Project will improve girls' 
literacy and numeracy skills, which will improve capacity for 
productive employment opportunities in the longer term.
1. Rural Land Governance Project ($59.93 million)
    The Rural Land Governance Project will assist the GoBF to fulfill 
its commitment to achieve a new rural land tenure framework by 
addressing the three constraints to rural economic activity, as 
identified by the GoBF through a consultative process: (a) Difficult 
access to formal land use rights; (b) unclear land rights leading to 
endemic and sometimes violent conflict; and (c) poor use of land 
resources resulting in land degradation.
    A new rural land law is expected to be adopted prior to entry into 
force of the Compact, and will be based on the existing, stakeholder-
driven 2007 rural land policy. The Project also will support the GoBF's 
implementation of the 2004 decentralization law that authorizes 
transfer of key aspects of land governance to municipal governments. 
The Project consists of the following three mutually reinforcing 
activities:
    (a) Legal and Procedural Change and Communication to support the 
GoBF's effort to develop and implement improved rural land legislation 
and to develop, revise and implement other legal and procedural 
frameworks;
    (b) Institutional Development and Capacity Building which, in 
conjunction with the previous activity, is expected to improve 
institutional capacity to deliver land services in rural areas; and
    (c) Site-Specific Land Tenure Interventions to ensure that the 
previous two activities yield their intended benefits across 
municipalities and in targeted agricultural development zones.
    Most of the Project's site specific interventions will be scalable 
through a phased approach, thus enabling the expected returns on an 
initial share of the investments to be tested before the Project is 
expanded. Phase one will target 17 municipalities with a complete 
package of technical assistance and infrastructure construction, and a 
set of up-front investments that are not municipality-specific. The 
decision to move forward with phase two will be subject to the 
Project's satisfactory performance on specific economic, legal and 
policy indicators. Phase two will include the balance of the Compact's 
term and target up to 30 additional municipalities for technical 
assistance and infrastructure, and expand investments associated with 
other sub-activities.
2. Agriculture Development Project ($141.91 million)
    The Agriculture Development Project is designed to address core 
constraints typical of rural Burkina Faso: (a) Poor water resource 
availability and management; (b) weak beneficiary capacity; (c) lack of 
access to pricing information, markets, and inputs; and (d) lack of 
access to credit. This Project has synergies with MCC's other 
investments in rural land governance and roads infrastructure. 
Improvements in the road network will reduce constraints that producers 
face in terms of isolation from markets and high transport costs, while 
investments in land tenure security will be an important factor in 
motivating producers to invest time and capital in their operations. 
The Project consists of the following three activities:
    (a) Water Management and Irrigation to ensure adequate water 
availability, water delivery, flood control, and dam safety to support 
and protect investments in the Sourou Valley and to ensure better water 
resource management in the Como[eacute] Basin;
    (b) Diversified Agriculture to build on the delivery of water in 
the Project zones by supporting on-farm production and related 
activities throughout the agricultural value chain; and
    (c) Access to Rural Finance to increase medium- and long-term 
credit in the four western regions of Sud-Ouest, Hauts Bassins, 
Cascades, and Boucle du Mouhoun.
3. Roads Project ($194.13 million)
    Burkina Faso's Poverty Reduction Strategy Paper identifies 
infrastructure development as a critical priority for increased 
economic growth. For a

[[Page 42603]]

landlocked country, the road transport network is an important asset 
for economic development to facilitate trade and communications with 
regional and international markets and to improve local connectivity of 
farms to markets. Road network investments also improve access to 
social services in rural communities, such as those in western Burkina 
Faso, which currently are underserved due to an inadequate transport 
system.
    The Project is designed to (a) improve access to agricultural 
markets by upgrading primary and rural road segments serving the Sourou 
Valley and the Como[eacute] Basin; (b) reduce travel time to markets 
and vehicle operating costs; and (c) ensure sustainability of the road 
network by strengthening road maintenance. Benefits are expected to 
result primarily from increasing the year-round accessibility to 
markets of agriculturally productive regions that are typically cut off 
during the rainy season.
    The Project consists of the following four activities:
    (a) Development of Primary Roads to support the improvements of 
three primary road segments in western Burkina Faso currently projected 
to total 271 kilometers;
    (b) Development of Rural Roads to support the improvement of 151 
kilometers of road segments located in three rural areas in the 
Como[eacute] Basin of southwestern Burkina Faso. These roads currently 
exist as rural tracks and improvements will include upgrading to a 
fully engineered rural road standard;
    (c) Capacity Building and Technical Assistance to reinforce the 
effectiveness of existing government agencies and private sector 
institutions involved in road maintenance planning and implementation; 
and
    (d) Incentive Matching Fund for Periodic Road Maintenance to set 
the GoBF on a path toward long-term, sustainable funding of periodic, 
or major, maintenance on the full road network in Burkina Faso.
4. Bright 2 Schools Project ($28.83 million)
    The BRIGHT 2 Schools Project extends the successful threshold 
program that focused on improving primary school completion rates for 
girls. The Project will consist of two phases. Phase one, scheduled for 
September 2008 to December 2009, will be an interim phase to provide 
temporary classroom solutions, maintain community interest at the 
Project schools, and prepare for the construction phase. Phase two, 
scheduled from the date the Compact enters into force and for the three 
consecutive years thereafter, will consist of construction work and 
other activities. The Project includes the construction of: (a) Up to 
50 additional boreholes; (b) an additional classroom block of three 
classrooms for grades 4-6 at each of the 132 locations (for a total of 
396 additional classrooms); and (c) of 122 bisongos (kindergartens), 
including playground and equipment. The Project will also provide daily 
meals (take-home rations) during all nine months of the school year for 
the approximately 100 children estimated to be enrolled at each of the 
132 bisongos (including ten bisongos financed under the threshold 
program), and will fund a social mobilization campaign and an adult 
literacy/management of micro-projects activity.
    The BRIGHT 2 Schools Project will be administered by the United 
States Agency for International Development (USAID) pursuant to an 
interagency agreement under Section 632(b) of the Foreign Assistance 
Act of 1961, as amended. MCC funds will cover direct and indirect costs 
incurred by USAID for the implementation of this Project.

C. Program Management

    The GoBF, by a decree of the Council of Ministers dated April 18, 
2008, established MCA-Burkina Faso to serve as the accountable entity 
for implementation of the Compact. MCA-Burkina Faso will be 
administered and managed by an independent board of directors 
(``Board'') that will make strategic decisions and provide oversight. 
The Board will be comprised of eleven voting members, including six 
government officials. The Board also will benefit from the 
participation of a stakeholders committee consisting of up to 28 
members including government officials, and representatives from the 
private sector and civil society. In addition to the Board, a 
management unit, led by a national coordinator, will manage the day-to-
day activities of MCA-Burkina Faso and will be supported by key 
officers, technical staff, and administrative personnel.
    MCA-Burkina Faso will engage line ministries and public 
institutions to serve as implementing entities. However, as the 
accountable entity, MCA-Burkina Faso will remain responsible for the 
successful implementation of the Compact. In addition, the GoBF has 
appointed, through competitive processes approved by MCC, third-party 
fiscal and procurement agents. As a government entity, MCA-Burkina Faso 
will be subject to GoBF audit requirements as well as audits required 
by the Compact.

D. Assessment

1. Economic and Beneficiary Analysis
    Many of the Compact investments are focused in the Boucle de 
Mouhoun region, the third poorest of Burkina Faso's 13 regions. 
Approximately 80 percent of the region's 1.4 million people live on 
less than $1 per day. A smaller number of investments will be made in 
the Como[eacute] region with an estimated population of 490,000. The 
table below summarizes the economic and beneficiary analysis for each 
Project.

                         Table 2.--Projected Beneficiaries and Economic Rates of Return
----------------------------------------------------------------------------------------------------------------
             Project                     Beneficiaries                  ERR                    Description
----------------------------------------------------------------------------------------------------------------
Rural Land Governance............  Up to 415,200             TBD (based on assessment   The project is
                                    households, comprising    of pilot investment).      predicated on the
                                    up to 2,490,000                                      benefits of reducing
                                    individuals, from 47 of                              land conflict. This
                                    Burkina Faso's 302                                   assumption will be
                                    rural communes will                                  tested during a pilot
                                    have access to local                                 phase and will inform
                                    land registration and                                an ERR-based decision
                                    titling services,                                    on scaling up the
                                    including up to 138,000                              project.
                                    individuals who will
                                    benefit from up to
                                    23,000 land titles
                                    expected to be
                                    delivered.
Agricultural Development.........  Up to 150,000 farmers,    7%.......................  ERRs for the irrigation
                                    herders, members of                                  works are especially
                                    producers groups and                                 sensitive to crop
                                    other traders, many of                               prices. To be
                                    whom currently live on                               conservative, MCC used
                                    less than $2 per day,                                a composite of
                                    will benefit from                                    historical averages for
                                    improved agricultural                                key crops instead of
                                    and livestock                                        current prices. Today's
                                    production conditions,                               prices would result in
                                    better water                                         a higher overall
                                    managements, and                                     Project ERR.
                                    improved access to
                                    credit.

[[Page 42604]]

 
Roads............................  A portion of the 2.4      2%.......................  In spite of low ERRs for
                                    million inhabitants of                               the three primary
                                    the nine provinces                                   roads, these are
                                    surrounding the primary                              critical links to MCC-
                                    roads and up to 65,000                               funded agricultural
                                    inhabitants of the 30                                zones, allowing
                                    villages serviced by                                 producers better access
                                    rural roads. Many of                                 to markets, health and
                                    these beneficiaries are                              education facilities,
                                    likely to be farmers                                 and facilitating trade
                                    buying and selling                                   with neighboring
                                    agricultural produce.                                countries.
BRIGHT 2 Schools.................  Up to 19,800 children,    Not applicable...........  This project is an
                                    including 9,900 girls.                               extension of a
                                                                                         successful threshold
                                                                                         program and will be
                                                                                         administered by USAID.
                                                                                         As such, it was not
                                                                                         subjected to MCC due
                                                                                         diligence standards,
                                                                                         including ERR
                                                                                         calculations.
----------------------------------------------------------------------------------------------------------------

    In addition to the beneficiaries identified above, national-level 
benefits are expected to result from the new land law associated with 
the Rural Land Governance Project and from the Roads Project's support 
of systemic improvements in the GoBF's long-term road maintenance 
strategy. Because the Projects are overlapping and there are synergies 
among projects, numerous individuals will benefit from more than one 
project. Drawing on lessons learned from previous Compacts, the cost 
estimates for Burkina Faso's large-scale infrastructure projects are 
conservative. For the Roads Project, base costs were derived from full 
feasibility-level studies and then doubled during due diligence, as MCC 
accounted for contingencies, environmental and social costs, and the 
higher costs of construction in a landlocked West Africa country. On 
the benefit side, MCC has generally not included benefits that cannot 
be quantified, a particular problem in a data-poor environment like 
Burkina Faso. In evaluating the Roads Project investment, MCC took into 
account the linkages between MCC-funded agricultural investments and 
markets, both national and regional. In particular, one road segment in 
the Boucle de Mouhoun region provides a critical link to the Mali 
border and is likely to reduce travel times and costs between Bamako 
and Ouagadougou. Another road segment in the Como[eacute] Region 
provides an important link to Banfora, a regional market town that is 
frequented by traders from Ivory Coast and Ghana, which is likely to 
facilitate trade opportunities for local farmers.
2. Consultative Process
    In connection with the proposal submitted to MCC, the GoBF 
conducted a robust consultative process in May and June of 2006, 
building on the success and lessons learned from the process used to 
prepare its Poverty Reduction Strategy Paper. The GoBF also engaged the 
media to inform the public about the proposal for MCA assistance with a 
series of press releases, television interviews and press conferences. 
Consultations took place in all thirteen regions of the country and 
included representatives of civil society, the private sector, 
traditional authorities, farmers' and women's groups and local GoBF 
officials. Of the 3,115 participants, 87 percent came from civil 
society, and 18 percent were women. Overwhelmingly, input focused on 
improving the rural economy including ways to secure land tenure, 
intensify and modernize agricultural production, and improve the road 
network. Following the consultations, the GoBF distributed a summary 
document to partners in civil society and the donor community that 
resulted, after further revisions, in the proposal for funding 
submitted to MCC in October 2006. The Compact is designed specifically 
to address the core constraints to economic growth identified during 
the consultative process.
3. GoBF Commitment and Contribution to Development of the Compact
    The GoBF has demonstrated substantial commitment to the Compact 
development process since becoming eligible for MCA assistance in 
November 2005. In February 2006, the GoBF carefully followed MCC 
guidance and established a full-time compact development unit at an 
operational cost of $3.11 million. It financed an extensive 
consultation process throughout the country's 13 regions, at a total 
cost of $0.33 million, and commissioned a $2.36 million set of 
feasibility studies for the Roads Project. In setting up the 
accountable entity, the GoBF hired a recruitment firm to undertake the 
recruitment process for the key directors, at a cost of $64,000. The 
estimated monetary value of these contributions together is $5.86 
million. For a country with a 2006 GNI per capita of $460, this 
contribution demonstrates the high national priority placed on the 
successful negotiation and implementation of this Compact. GoBF also 
has demonstrated its commitment through its effort to maintain 
eligibility on MCC indicators, and through its decision to establish 
the accountable entity under the auspices of the Office of the Prime 
Minister. In addition, the GoBF has committed to funding access roads 
and health infrastructure in the Sourou Valley agricultural zone as a 
complementary investment to MCC-financed activities.
4. Sustainability
    (a) Rural Land Governance Project. The foundation of this Project 
is a reformed legal, policy and procedural framework for land tenure, 
which will ensure an enabling environment for sustainability of the MCC 
investment. All site-specific sub-activities will be based on new legal 
frameworks, ensuring their support in law. Most of the Project's site-
specific interventions will be scalable through the phased approach, 
thus enabling the expected returns on an initial share of the 
investment to be tested before the Project is expanded. By requiring 
that phase two be based on demonstrated performance, the Project design 
stands as an innovative approach to ensuring results and investment 
sustainability. All training and equipment investments, particularly 
those associated with strengthening regional and provincial 
registration and mapping services, will be designed specifically for 
the Burkina Faso context.
    (b) Agriculture Development Project. The overall sustainability of 
the Project lies with: (i) The strengthened capacity of the Direction 
G[eacute]n[eacute]rale des Ressources en Eau (``DGRE'') to better 
manage and maintain water storage in the Sourou reservoir; (ii) the 
strengthened capacity of the Autorit[eacute] de Mise en Valeur du 
Sourou (``AMVS'') within the Ministry of Agriculture, through its 
operation and maintenance contractors to provide a

[[Page 42605]]

reliable supply of water to farmers as specified in the by-laws of the 
project (Cahier de Charges); (iii) the capacity of beneficiaries, 
through their water user associations (``WUA'') to pay for operations 
and maintenance to ensure the provision of irrigation water; (iv) the 
establishment of an operations and maintenance fund managed and 
overseen by AMVS and the WUAs; and (v) the GoBF to ensure that the 
Cahier de Charges is respected by the parties to it. Disbursement of 
MCC funding will depend on the GoBF strengthening capacity to MCC's 
satisfaction.
    (c) Roads Project. Road maintenance is crucial for the long-term 
functioning of the Roads Project investment. The continuation of 
efforts to mobilize resources for road maintenance is essential to 
ensure sustainability of the road investments. The provision by MCC of 
matching funds to annual increases in GoBF spending on periodic (major) 
maintenance is an innovative mechanism to ensure roads are adequately 
maintained and an adequate long-term road maintenance system is in 
place.
    (d) BRIGHT 2 Schools Project. The sustainability of MCC investments 
in this Project is contingent upon the GoBF providing trained teachers 
and school books for 396 classrooms. The GoBF has committed to 
providing these teachers and books and met similar requirements during 
the threshold phase. In addition, the GoBF will be obligated to 
nominate a BRIGHT 2 Schools Project coordinator and coordination team, 
and to provide an annual budget allocation to the Ministry of Basic 
Education and Literacy for teacher salaries and other recurrent costs 
for the existing 132 BRIGHT schools (including classrooms and other 
facilities funded under the BRIGHT 2 Schools Project).
5. Environment and Social Impacts
    MCC will require that all Projects comply with national laws and 
regulations, MCC's environmental guidelines and gender policy, and the 
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. The environmental and social sustainability of the 
Compact will be enhanced through oversight, ongoing public 
consultation, and institutional capacity building.
    The Rural Land Governance Project is classified as Category B under 
MCC's environmental guidelines due to potential site-specific 
environmental and social impacts anticipated to result from the 
construction of municipal buildings and field-level activities 
clarifying local land uses and land rights. While these impacts are not 
anticipated to be significant in nature, they will require mitigation 
through implementation of measures identified in an Environmental and 
Social Management Framework. Resettlement Action Plans (``RAPs'') also 
will be developed to adequately plan for and mitigate the resettlement 
impacts at building sites.
    The Agriculture Development Project is classified as Category A 
under MCC's environmental guidelines due to large-scale agriculture 
development activities involving intensification or conversion of 
natural habitats, with potential for significant impacts on sensitive 
locations as well as the potential for increased use of pesticides and 
increased surface water pollution. Given the potential for these 
significant social and environmental impacts, detailed assessments and 
mitigation plans will be required, including an environmental impact 
assessment (``EIA'') and RAP for the water management and irrigation 
activities, and EIAs for the agricultural activities.
    The Roads Project is classified as Category B under MCC's 
environmental guidelines as the potential environmental and social 
impacts related to upgrading and rehabilitating existing roads and 
supporting road maintenance are likely to be site-specific and 
mitigable. As a result, EIAs will be completed for each set of roads to 
be rehabilitated or upgraded, and each EIA will include gender 
analysis, environmental management plans and HIV/AIDS prevention plans.
    For the BRIGHT 2 Schools Project, MCC and USAID have agreed that 
USAID Regulation 216 will be followed in lieu of MCC's Environmental 
Guidelines and Gender Policy.
6. Donor, Multilateral, and Interagency Coordination
    MCC has consulted extensively on each of the proposed Projects with 
the major donors in Burkina Faso, including, the World Bank, the 
European Union (``EU''), the French Development Agency (Agence 
Fran[ccedil]aise de D[eacute]veloppement, or ``AFD''), the Danish 
International Development Agency (``DANIDA''), the German Agency for 
Technical Cooperation (Deutsche Gesellschaft f[uuml]r Technische 
Zusammenarbeit GmbH, or ``GTZ''), the Austrian Development Corporation, 
the Luxembourg Agency for Development Cooperation, the International 
Fund for Agricultural Development (``IFAD''), the International Finance 
Corporation (``IFC''), the African Development Bank (``AfDB''), the 
United Nations Food and Agriculture Organization (``FAO''), the Swedish 
International Development Agency (``SIDA''), the United Nations 
Development Program (``UNDP''), and USAID.
    In several cases, MCC-funded activities complement or directly 
build on initiatives by other donors. For example, as part of the 
Agriculture Development Project, the market information system will 
continue work begun under a USAID project, and the improvements to 
district markets will draw on the experience of the Swiss Development 
Agency. Synergies will also be gained in the implementation of the 
Access to Rural Finance activity through close coordination with the 
IFC's micro-, small- and medium-sized enterprise credit program, the 
World Bank's Projet d'Appui aux Fili[egrave]res Agro-Sylvo-Pastoral 
Project (``PAFASP''), and the World Bank and EU-funded Maison de 
l'Enterprise which provides business support services.
    In addition, technical assistance under the Roads Project has been 
structured to complement ongoing technical assistance programs, to 
build on the World Bank's assistance that resulted in the establishment 
of the Road Fund, and to strengthen work initiated by the AfDB and the 
EU on road maintenance. Design of the Incentive Matching Fund for 
Periodic Maintenance (``IMFP''), in particular, was developed in 
collaboration with the World Bank and the EU.
    Finally, the BRIGHT 2 Schools Project, to be administered by USAID, 
is a model of interagency coordination and the first time MCC and USAID 
have partnered directly in connection with the implementation of a 
compact-funded project.

Millennium Challenge Compact Between the United States of America 
Acting Through the Millennium Challenge Corporation and the Government 
of Burkina Faso

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 Program Funding
    Section 2.2 Compact Implementation Funding
    Section 2.3 MCC Funding
    Section 2.4 Disbursement
    Section 2.5 Interest
    Section 2.6 Government Resources; Budget
    Section 2.7 Limitations on the Use of MCC Funding
    Section 2.8 Taxes
Article 3. Implementation

[[Page 42606]]

    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 Amendments
    Section 6.3 Inconsistencies
    Section 6.4 Governing Law
    Section 6.5 Additional Instruments
    Section 6.6 References to MCC Web site
    Section 6.7 References to Laws, Regulations, Policies and 
Guidelines
    Section 6.8 MCC Status
Article 7. Entry Into Force
    Section 7.1 Domestic Requirements
    Section 7.2 Conditions Precedent to Entry into Force
    Section 7.3 Date of Entry into Force
    Section 7.4 Compact Term
    Section 7.5 Provisional Application
Annex I: Program Description
Annex II: Summary of the Multi-Year Financial Plan
Annex III: Description of the Monitoring and Evaluation Plan
Annex IV: Conditions to CIF Disbursement

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 Burkina Faso (the ``Government'') (individually, each of 
MCC and the Government, a ``Party,'' and collectively, the 
``Parties'').
    Recalling that the Government consulted with the private sector and 
civil society of Burkina Faso to determine the priorities for the use 
of Millennium Challenge Account assistance and developed and submitted 
to MCC a proposal for such assistance; and
    Recognizing that MCC wishes to help Burkina Faso implement a 
program to achieve the Compact Goal and Project 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 Burkina Faso 
through economic growth (the ``Compact Goal'').

Section 1.2 Project Objective

    The objectives of the Projects (as further described in Annex I) 
(each, a ``Project Objective'') are:
    (a) To increase investment in land and rural productivity through 
improved land tenure security and land management;
    (b) To expand the productive use of land in order to increase the 
volume and value of agricultural production in Project zones;
    (c) To enhance access to markets through investments in the road 
network; and
    (d) To increase primary school completion rates for girls.

Article 2. Funding and Resources

Section 2.1 Program Funding

    MCC hereby grants to the Government, under the terms of this 
Compact, an amount not to exceed Four Hundred Sixty-Four Million Eight 
Hundred Forty-Two Thousand Five Hundred and Four United States Dollars 
(US$464,842,504) (``Program Funding'') for use by the Government to 
implement the Program. The allocation of Program Funding uses is 
generally described in Annex II to this Compact.

Section 2.2 Compact Implementation Funding

    (a) MCC hereby grants to the Government, under the terms of this 
Compact, in addition to the Program Funding described in Section 2.1, 
an amount not to exceed Sixteen Million One Hundred One Thousand and 
Sixty-Five United States Dollars (US$16,101,065) (``Compact 
Implementation Funding'' or ``CIF'') under Section 609(g) of the 
Millennium Challenge Act of 2003, as amended (the ``MCA Act''), for use 
by the Government for the following purposes:
    (i) Feasibility and design studies, strategic environmental (and 
social) assessments, environmental impact assessments, environmental 
assessments, environmental management plans and resettlement action 
plans for projects and activities included in the Program;
    (ii) Financial management and procurement activities;
    (iii) Monitoring and evaluation activities;
    (iv) Administration activities, including salaries, benefits, and 
administrative support expenses such as rent, information technology, 
and other capital expenditures; and
    (v) Other Compact implementation activities approved by MCC.
    The allocation of Compact Implementation Funding uses is generally 
described in Annex II to this Compact.
    (b) Notwithstanding the provisions of Section 7.3 of this Compact, 
this Section 2.2, together with any other provisions of this Compact 
applicable to Compact Implementation Funding, shall be effective as of 
the date this Compact is signed by MCC and the Government.
    (c) Each Disbursement of Compact Implementation Funding shall be 
subject to satisfaction of the conditions to such Disbursement as set 
forth in Annex IV.
    (d) If MCC determines that the full amount of Compact 
Implementation Funding under Section 2.2(a) of this Compact exceeds the 
amount which reasonably can be utilized for the purposes and uses set 
forth in Section 2.2(a) of this Compact within one year after this 
Compact enters into force, MCC, by written notice to the Government, 
may withdraw the excess amount, thereby reducing the amount of the 
Compact Implementation Funding as set forth in Section 2.2(a) (such 
excess, the ``Excess CIF Amount''). In such event, the amount of 
Compact Implementation Funding granted to the Government under Section 
2.2(a) will be reduced by the Excess CIF Amount, and MCC will have no 
further obligations with respect to such Excess CIF Amount.
    (e) MCC, at MCC's option by written notice to the Government, may 
elect to grant to the Government an amount equal to all or a portion of 
such Excess CIF Amount as an increase in the Program Funding, and such 
additional Program Funding will be subject to the terms and conditions 
of this Compact applicable to Program Funding.

Section 2.3 MCC Funding

    Program Funding and Compact Implementation Funding are collectively 
referred to in this Compact as ``MCC Funding.''

Section 2.4 Disbursement

    In accordance with this Compact and the Program Implementation 
Agreement, MCC will disburse MCC Funding for expenditures incurred in 
furtherance of the Program (each instance, a ``Disbursement''). Subject 
to the satisfaction of all applicable conditions, the proceeds of such 
Disbursements will be made available to the Government, at MCC's sole 
election, by (a) deposit to one or more bank

[[Page 42607]]

accounts established by the Government and acceptable to MCC (each, a 
``Permitted Account''), or (b) direct payment to the relevant provider 
of goods, works or services in connection with the implementation of 
the Program. MCC Funding may be expended only to cover Program 
expenditures as provided in this Compact and the Program Implementation 
Agreement.

Section 2.5 Interest

    The Government will pay to MCC any interest or other earnings that 
accrue on MCC Funding in accordance with the Program Implementation 
Agreement (whether by directing such payments to a bank account outside 
Burkina Faso that MCC may from time to time indicate or as otherwise 
directed by MCC).

Section 2.6 Government Resources; Budget

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

Section 2.7 Limitations on the Use of MCC Funding

    The Government will ensure that MCC Funding will not be used for 
any purpose that would violate United States law or policy, as 
specified in this Compact or as further notified to the Government in 
writing or by posting from time to time on the MCC Web site at 
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, 
as further described in MCC's Environmental Guidelines posted from time 
to time on the MCC Web site (the ``MCC Environmental Guidelines''); or
    (d) To pay for the performance of abortions as a method of family 
planning or to motivate or coerce any person to practice abortions, to 
pay for the performance of involuntary sterilizations as a method of 
family planning or to coerce or provide any financial incentive to any 
person to undergo sterilizations or to pay for any biomedical research 
which relates, in whole or in part, to methods of, or the performance 
of, abortions or involuntary sterilization as a means of family 
planning.

Section 2.8 Taxes

    (a) Unless the Parties otherwise specifically agree in writing, and 
subject to the provisions of Sections 2.8(b)(ii) and (iii) and 2.8(c), 
the Government will ensure that each of the following is free from the 
payment of any existing or future taxes, duties, levies, contributions 
or other similar charges (``Taxes'') of or in Burkina Faso (including 
any such Taxes imposed by a national, regional, local or other 
governmental or taxing authority of or in Burkina Faso): (i) The 
Program; (ii) MCC Funding; (iii) interest or earnings on MCC Funding; 
(iv) any Project or activity implemented under the Program; (v) the 
Accountable Entity (as defined below); (vi) goods, works, services, 
technology and other assets and activities under the Program or any 
Project; (vii) persons and entities that provide such goods, works, 
services, technology and assets or perform such activities; and (viii) 
income, profits and payments with respect thereto. The Parties 
acknowledge and agree that the foregoing includes, inter alia, value 
added and other transfer taxes, profit and income taxes, property and 
ad valorem taxes, import and export duties and taxes (including for 
goods imported and re-exported for personal use), withholding taxes, 
payroll taxes, and social security and social insurance contributions.
    (b) The Government and MCC may, at MCC's discretion, enter into one 
or more agreements setting forth the mechanisms for implementing this 
Section 2.8, including, but not limited to (i) waivers of certain 
filing and compliance requirements relating to Taxes; (ii) an agreement 
on exceptions to Section 2.8(a) above for fees or charges for services 
that are generally applicable in Burkina Faso, reasonable in amount and 
imposed on a non-discriminatory basis; and (iii) one or more mechanisms 
to implement the provisions of Section 2.8(a) with respect to all or 
any of the Taxes that would otherwise be applicable, which may include 
exemptions from payment of such Taxes that have been granted in 
accordance with applicable law, refund or reimbursement of such Taxes 
by the Government to MCC or to the taxpayer, or payment by the 
Government to the Accountable Entity or MCC, for the benefit of the 
Program, an agreed amount in respect of any Taxes collected on the 
items described in Section 2.8(a).
    (c) Unless otherwise specified in an agreement entered into 
pursuant to Section 2.8(b), the provisions of Section 2.8(a) shall not 
apply to income Taxes on and contributions with respect to individuals 
who are nationals of Burkina Faso; provided, that such Taxes and 
contributions are not discriminatory and are generally applicable to 
all nationals in Burkina Faso; and provided, further, that in any event 
Section 2.8(a) shall apply to Millennium Challenge Account--Burkina 
Faso, an independent entity established under the office of the Prime 
Minister by Decree No. 2008-185/PRES/PM dated April 18, 2008 (``MCA--
Burkina Faso''), or any other entity established by the Government 
solely for purposes of managing or overseeing implementation of the 
Program (MCA--Burkina Faso and any such other entity, each, an 
``Accountable Entity'').
    (d) If a Tax has been paid contrary to the requirements of this 
Section 2.8 or any agreement entered into pursuant to this Section 2.8, 
the Government will refund promptly to MCC (or to another party as 
designated by MCC) the amount of such Tax in United States Dollars 
(``US$'') or CFA Francs (as elected by MCC) within thirty (30) days (or 
such other period as may be agreed in writing by the Parties) after the 
Government is notified in writing (whether by MCC or otherwise) that 
such Tax has been paid.
    (e) No MCC Funding, proceeds thereof or Program assets may be 
applied by the Government in satisfaction of its obligations under this 
Section 2.8.

Article 3. Implementation

Section 3.1 Program Implementation Agreement

    The Government will implement the Program in accordance with this 
Compact and as further specified in an agreement to be entered into by 
MCC,

[[Page 42608]]

the Government and the Accountable Entity and relating to, among other 
matters, implementation arrangements, fiscal accountability and 
disbursement and use of MCC Funding (the ``Program Implementation 
Agreement'' or ``PIA'').

Section 3.2 Government Responsibilities

    (a) The Government has principal responsibility for overseeing and 
managing 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 Burkina 
Faso now or hereinafter in effect makes or will make unlawful or 
otherwise prevent or hinder the performance of any of the Government's 
obligations under this Compact, the Program Implementation Agreement or 
any other related agreement or any transaction contemplated hereby or 
thereby.
    (d) The Government will ensure that any assets or services funded 
in whole or in part (directly or indirectly) by MCC Funding will be 
used solely in furtherance of this Compact and the Program unless 
otherwise agreed by MCC in writing.
    (e) The Government will take all necessary or appropriate steps to 
achieve the Compact Goal and the Project Objectives during the Compact 
Term (as defined in Section 7.4).

Section 3.3 Policy Performance

    In addition to undertaking the specific policy, legal and 
regulatory reform commitments identified in Annex I (if any), the 
Government will seek to maintain and to improve its level of 
performance under the policy criteria identified in Section 607 of the 
MCA Act, and the selection criteria and methodology used by MCC.

Section 3.4 Government Assurances

    The Government assures MCC that:
    (a) As of the date this Compact is signed by the Government, the 
information provided to MCC by or on behalf of the Government in the 
course of reaching agreement with MCC on this Compact is true, correct 
and complete in all material respects;
    (b) This Compact does not, and will not, conflict with any other 
international agreement or obligation of the Government or any of the 
laws of Burkina Faso; and
    (c) The Government will not invoke any of the provisions of its 
internal law to justify or excuse a failure to perform its duties or 
responsibilities under this Compact.

Section 3.5 Implementation Letters

    From time to time, MCC may provide guidance to the Government in 
writing on any matters relating to this Compact, MCC Funding, or 
implementation of the Program (each, an ``Implementation Letter''). The 
Government will apply such guidance in implementing the Program.

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)) to implement the Program will be consistent with the program 
procurement guidelines posted from time to time on the MCC Web site 
(the ``MCC Program Procurement Guidelines''). The MCC Program 
Procurement Guidelines will include, among others, the following 
requirements:
    (a) Open, fair, and competitive procedures must be used in a 
transparent manner to solicit, award and administer contracts and to 
procure goods, works and services;
    (b) Solicitations for goods, works and services must be based upon 
a clear and accurate description of the goods, works and services to be 
acquired;
    (c) Contracts must be awarded only to qualified contractors that 
have the capability and willingness to perform the contracts in 
accordance with their terms on a cost effective and timely basis; and
    (d) No more than a commercially reasonable price, as determined, 
for example, by a comparison of price quotations and market prices, 
will be paid to procure goods, works and services.

Section 3.7 Records; Accounting; Covered Providers; Access

    (a) Government Books and Records. The Government will maintain, and 
will use its best efforts to ensure that all Covered Providers (as 
defined in Section 3.7(c)) maintain, accounting books, records, 
documents and other evidence relating to the Program adequate to show 
to MCC's satisfaction the use of all MCC Funding (``Compact Records''). 
In addition, the Government will furnish or cause to be furnished to 
MCC, upon its request, all such Compact Records.
    (b) Accounting. The Government will maintain, and will use its best 
efforts to ensure that all Covered Providers maintain, Compact Records 
in accordance with generally accepted accounting principles prevailing 
in the United States, or at the Government's option and with MCC's 
prior written approval, other accounting principles, such as those (i) 
prescribed by the International Accounting Standards Board, or (ii) 
then prevailing in Burkina Faso. Compact Records must be maintained for 
at least five (5) years after the end of the Compact Term or for such 
longer period, if any, required to resolve any litigation, claims or 
audit findings or any statutory requirements.
    (c) Providers and Covered Providers. Unless the Parties agree 
otherwise in writing, a ``Provider'' is (i) any entity of the 
Government that receives or uses MCC Funding or any other Program asset 
in carrying out activities in furtherance of this Compact, or (ii) any 
third party that receives at least US$50,000 in the aggregate of MCC 
Funding (other than as salary or compensation as an employee of an 
entity of the Government) during the Compact Term. A ``Covered 
Provider'' is (i) a non-United States Provider that receives (other 
than pursuant to a direct contract or agreement with MCC) US$300,000 or 
more of MCC Funding in any Government fiscal year or any other non-
United States person or entity that receives, directly or indirectly, 
US$300,000 or more of MCC Funding from any Provider in such fiscal 
year, or (ii) any United States Provider that receives (other than 
pursuant to a direct contract or agreement with MCC) US$500,000 or more 
of MCC Funding in any Government fiscal year or any other United States 
person or entity that receives, directly or indirectly, US$500,000 or 
more of MCC Funding from any Provider in such fiscal year.
    (d) Access. Upon MCC's request, the Government, at all reasonable 
times, will permit, or cause to be permitted, authorized 
representatives of MCC, an authorized United States inspector general, 
the United States Government Accountability Office, any auditor 
responsible for an audit contemplated herein or otherwise conducted in 
furtherance of this Compact, and any agents or representatives engaged 
by MCC or the Government to conduct any assessment, review or 
evaluation of the Program, the opportunity to audit, review, evaluate 
or inspect facilities and activities funded in whole or in part by MCC 
Funding.

[[Page 42609]]

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. In addition, upon MCC's request, the 
Government will ensure that such audits are conducted by an independent 
auditor approved by MCC and named on the list of local auditors 
approved by the Inspector General of MCC (the ``Inspector General'') or 
a United States-based certified public accounting firm selected in 
accordance with the Guidelines for Financial Audits Contracted by MCA 
(the ``Audit Guidelines'') issued and revised from time to time by the 
Inspector General, which are posted on the MCC Web site. Audits will be 
performed in accordance with the Audit Guidelines and be subject to 
quality assurance oversight by the Inspector General. Each audit must 
be completed and the audit report delivered to MCC no later than 90 
days after the first period to be audited and no later than 90 days 
after each June 30 and December 31 thereafter, or such other period as 
the Parties may otherwise agree in writing.
    (b) Audits of United States Entities. The Government will ensure 
that agreements between the Government or any Provider, on the one 
hand, and a United States nonprofit organization, on the other hand, 
that are financed with MCC Funding state that the United States 
nonprofit organization is subject to the applicable audit requirements 
contained in OMB Circular A-133 issued by the United States Government 
Office of Management and Budget (``OMB''). The Government will ensure 
that agreements between the Government or any Provider, on the one 
hand, and a United States for-profit Covered Provider, on the other 
hand, that are financed with MCC Funding state that the United States 
for-profit organization is subject to audit by the applicable United 
States Government agency, unless the Government and MCC agree otherwise 
in writing.
    (c) Corrective Actions. The Government will 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.

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: (a) Before this 
Compact enters into force, Vice President, Compact Development; and (b) 
after this Compact enters into force, Vice President, Compact 
Implementation, (in each case, 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: VPDevelopment@mcc.gov (Vice President, Compact 
Development), VPImplementation@mcc.gov (Vice President, Compact 
Implementation), VPGeneralCounsel@mcc.gov (Vice President and General 
Counsel).
    To the Government:
    Minist[egrave]re de l'Economie et des Finances, Attention: Minister 
of Economy and Finance, Ministre de l'Economie et des Finances, Avenue 
du G[eacute]n[eacute]ral Bila Jean G[eacute]rard ZAGRE, 01 BP: 7012 
Ouagadougou 01, Burkina Faso, Facsimile: +226 50 31 27 15, Telephone: 
226 50 32 42 11.

Section 4.2 Representatives

    For all purposes of this Compact, the Government will be 
represented by the individual holding the position of, or acting as, 
the Minister of Economy and Finance, and MCC will be represented by (a) 
before this Compact enters into force, the individual holding the 
position of, or acting as, Vice President, Compact Development, and (b) 
after this Compact enters into force, the individual holding the 
position of, or acting as, Vice President, Compact Implementation (each 
of the foregoing, a ``Principal Representative''). Each Party, by 
written notice to the other Party, may designate one or more additional 
representatives 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) Either Party may terminate this Compact in its entirety by 
giving the other Party thirty (30) days' written notice.
    (b) MCC may, immediately, upon written notice to the Government, 
suspend or terminate this Compact or MCC Funding, in whole or in part, 
and any obligation related thereto, if MCC determines that any 
circumstance identified by MCC as a basis for suspension or termination 
(whether in writing to the Government or by posting on the MCC 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 or series of events has occurred that MCC determines 
makes it probable that any of the Project Objectives will not be 
achieved during the Compact Term or that the Government will not be 
able to perform its obligations under this Compact;
    (iii) A use of MCC Funding or continued implementation of the 
Program violates or would violate applicable law or United States 
Government policy, whether now or hereafter in effect;
    (iv) The Government or any other person or entity receiving MCC 
Funding or using assets acquired in whole or in part with MCC Funding 
is engaged in activities that are contrary to the national security 
interests of the United States;
    (v) An act has been committed or an omission or an event has 
occurred that

[[Page 42610]]

would render Burkina Faso 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 
Burkina Faso for assistance under the MCA Act; 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, MCC Funding may be 
used, in compliance with this Compact and the Program Implementation 
Agreement, to pay for (i) reasonable expenditures for goods, works or 
services that are properly incurred under or in furtherance of the 
Program before expiration, suspension or termination of this Compact, 
and (ii) reasonable expenditures (including administrative expenses) 
properly incurred in connection with the winding up of the Program 
within 120 days after the expiration, suspension or termination of this 
Compact, so long as the request for such expenditures is submitted 
within ninety (90) days after such expiration, suspension or 
termination.
    (d) Subject to Section 5.1(c), upon the expiration, suspension or 
termination of this Compact, (i) any amounts of MCC Funding not 
disbursed by MCC 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 2.4 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 re