Notice of Entering Into a Compact With the Republic of Senegal, 54350-54375 [E9-23328]

Agencies

• Millennium Challenge Corporation

[Federal Register Volume 74, Number 202 (Wednesday, October 21, 2009)]
[Notices]
[Pages 54350-54375]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-23328]



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Part IV





Millennium Challenge Corporation





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Notice of Entering Into a Compact With the Republic of Senegal; Notice

Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / 
Notices

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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 09-18]


Notice of Entering Into a Compact With the Republic of Senegal

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 
Republic of Senegal. Representatives of the United States Government 
and the Republic of Senegal executed the Compact documents on September 
16, 2009.

    Dated: September 23, 2009.
Henry Pitney,
Acting General Counsel, Millennium Challenge Corporation.

Summary of Millennium Challenge Compact With the Republic of Senegal

    The five-year Millennium Challenge Compact with the Republic of 
Senegal (``Compact'') will provide up to $540 million to reduce poverty 
and accelerate economic growth. The Compact aims to enable improved 
agricultural productivity and to expand access to markets and services 
through critical infrastructure investments in roads and irrigation 
sectors (``Program'').

1. Roads Rehabilitation Project ($324 million)

    The Roads Rehabilitation Project seeks to expand access to markets 
and services and reduce transportation time and costs by improving the 
condition of certain strategic roads. Specifically, the project will 
support the rehabilitation and upgrading of portions of National Road 
No. 2 (RN2), the northernmost road in Senegal, which borders the 
Senegal River, and National Road No. 6 (RN6), located in Casamance, the 
poorest region of Senegal, in the south. The government of Senegal has 
prioritized both roads in its Road Sector Master Plan, and their 
rehabilitation is in line with the national policy of increasing growth 
through road creation, renovation, and maintenance. The RN2 serves as 
the primary road to transport and export products from irrigation areas 
along the Senegal River, thereby complementing the Compact's Irrigation 
and Water Resources Management Project (described below). The RN2 is 
also a strategic road, connecting Dakar harbor to Mauritania and Mali, 
and to southern cities in Senegal. The RN6 is the only road available 
to transport local agricultural products from Casamance to the rest of 
Senegal. It is also a strategic road, connecting Senegal with Guinea 
Bissau, Guinea (Conakry), and Mali. The improvement of both roads is 
expected to stimulate domestic and trans-border traffic and commerce. 
The primary activities for the Roads Rehabilitation Project are as 
follows:
     The RN2 activity will rehabilitate and upgrade 
approximately 120 kilometers of road, from Richard Toll to Ndioum (a 
primarily agricultural and agricultural processing area of Senegal), 
and replace or upgrade associated structures, such as bridges and 
culverts, to eliminate flooding, improve road safety, and provide 
reliable, year-round access to markets, schools, and hospitals, 
including during the rainy seasons.
     The RN6 activity will rehabilitate and upgrade 
approximately 256 kilometers of road, from Ziguinchor to the crossroads 
at the town of Kounkane, and will replace or upgrade associated 
structures, resulting in reduced transport costs and time and improved 
access to markets and social services.

2. Irrigation and Water Resources Management Project ($170 million)

    The Irrigation and Water Resources Management Project--comprising 
infrastructure investments in the Senegal River Delta and Department of 
Podor areas--seeks to improve the productivity of the agricultural 
sector by extending and improving the quality of the irrigation system 
in certain agriculture-dependent areas of northern Senegal. The Project 
conforms to Senegal's 1998 Master Plan for poverty reduction and 
agricultural development in the Senegal River Valley and is designed to 
address the following three factors contributing to low agricultural 
yields: (i) Poor quality of the existing irrigation and drainage 
infrastructure; (ii) insufficient delivery of available water to 
agricultural areas; and (iii) lack of an appropriate drainage system, 
which leads to soil salinity. Specifically, the project will support 
investments in the Senegal River Valley intended to: (i) Increase the 
volume of irrigation water in the Senegal River Valley to develop 
approximately 8,500-10,500 hectares of additional irrigated land; (ii) 
eliminate the risk of abandonment of approximately 26,000 hectares of 
existing irrigable land; and (iii) provide additional supply of water 
for human and animal use in the project areas. The project will also 
support a land tenure security activity, to provide for, or maintain, a 
secure land tenure environment for all of the inhabitants of the region 
directly affected by the project. The project may also invest in 
complementary social safeguard measures, such as day care centers and 
multi-purpose livestock centers.

3. Administration

    The Compact also includes program management and oversight costs 
estimated at $42 million over a five-year timeframe, including the 
costs of administration, management, auditing, fiscal and procurement 
agent services, environmental and social oversight, and funding to 
facilitate Compact implementation. In addition, the cost of monitoring 
and evaluation of the Compact is budgeted at approximately $4 million.

4. Intended Beneficiaries and Expected Results

    Compact Program:
     Approximately 138,600 households, or approximately 1.66 
million individuals within those households, are estimated to benefit 
from the Compact Program within twenty years. These estimates assume 
some overlap among beneficiaries in the Senegal River Valley.
     The largest number of beneficiaries--approximately 1.1 
million--would be located in the Casamance. About 75% of the Program 
beneficiaries in the Casamance are expected to come from households 
living on less than 2 dollars per person per day. An estimated 42% of 
total Program beneficiaries in the Casamance live on $1.25 per person 
per day, or less. Although Program activities in the Casamance are 
expected to cast a wider net over beneficiaries, about 38% of total 
benefits generated by the Program would accrue to beneficiaries in that 
region. The Program would be an important preliminary contribution to 
the development of the Casamance and greatly facilitate other future 
investment there.
     Approximately 62% of Program benefits would accrue to 
beneficiaries in the Senegal River Valley. Here, approximately 45% of 
total beneficiaries are expected to be from households subsisting on 
less than $2 per person per day and 25% from households living on 
$1.25, or less. Whereas Program investments in the Senegal River Valley 
will affect the welfare of a smaller number of people than in the 
south, the investments are expected to

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extend significantly and solidify gains in the reduction of poverty in 
the north.
    Roads Rehabilitation Project:
     The RN2 Road Activity is expected to benefit approximately 
21,000 households or 250,000 individuals over the next 20 years. Over 
the life of the investment, total average benefits per beneficiary for 
the RN2 are approximately $870.
     The RN6 Road Activity would benefit some 102,000 
households or approximately 1.1 million people over the next 20 years. 
Over the life of the investment, total average benefits per beneficiary 
for the RN6 are approximately $530.
    Irrigation and Water Resources Management Project:
     Beneficiaries of the Irrigation and Water Resources 
Management Project include households, owners or shareholders of 
farming enterprises, and households that have individuals employed in 
the operation of enterprise farms.
     Over the course of the investment, the Project would 
benefit approximately 22,390 households, or 268,700 individuals, 
through participation in own agricultural production or employment in 
agriculture.
     Assuming that households, on average, are comprised of 
twelve persons cultivating two hectares of irrigated land, the scale of 
net revenue from a holding would have a substantial impact on the 
welfare of poor households. Average future revenues of about purchasing 
power parity (``PPP'') $4,470 per two-hectare farm would increase 
household incomes by more than PPP $1 per person per day. For 
households subsisting with incomes of PPP $1.25 or less per person per 
day, this increment would move households from being extremely poor to 
being near poor (not far below or above PPP $2 per person per day).

Millennium Challenge Compact Between The United States of America 
Acting Through the Millennium Challenge Corporation and the Republic of 
Senegal

Table of Contents

Article 1. Goal and Objectives
    Section 1.1 Compact Goal
    Section 1.2 Program Objective
    Section 1.3 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 of the Use of MCC Funding
    Section 2.8 Taxes
Article 3. Implementation
    Section 3.1 Program Implementation Agreement
    Section 3.2 Government Responsibilities
    Section 3.3 Policy Performance
    Section 3.4 Government Assurances
    Section 3.5 Implementation Letters
    Section 3.6 Procurement
    Section 3.7 Records; Accounting; Covered Providers; Access
    Section 3.8 Audits; Reviews
Article 4. Communications
    Section 4.1 Communications
    Section 4.2 Representatives
    Section 4.3 Signatures
Article 5. Termination; Suspension; Refunds
    Section 5.1 Termination; Suspension
    Section 5.2 Refunds; Violation
    Section 5.3 Survival
Article 6. Compact Annexes; Amendments; Governing Law
    Section 6.1 Annexes
    Section 6.2 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
    Section 6.9 English Language
    Section 6.10 Counterparts; Electronic Delivery
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
Article 8. Additional Government Covenants
    Section 8.1 Additional Government Resources
    Section 8.2 Procurement
Annex I: Program Description
    Schedule 1--Delta Activity Construction Activities
    Schedule 2--Form of MCA-Senegal Decree
Annex II: Multi-Year Financial Plan Summary
Annex III: Description of the Monitoring and Evaluation Plan
Annex IV: Conditions to Disbursement of Compact Implementation 
Funding
Annex V: Definitions
Annex VI: Specific Tax Exemption Mechanisms
    Schedule A--Value Added Tax (VAT)
    Schedule B--Customs Duties
    Schedule C--Corporate Income Tax
    Schedule D--Individual Income Tax
    Schedule E--Fuel Tax
    Schedule F--Registration Tax, Registration Fees and Stamp Duty

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 
Republic of Senegal (``Senegal''), acting through its Government (the 
``Government'') (individually a ``Party'' and collectively, the 
``Parties'').
    Recalling that the Government consulted with the private sector and 
civil society of Senegal to determine the priorities for the use of 
Millennium Challenge Account assistance and developed and submitted to 
MCC a proposal for such assistance focused on poverty reduction; and
    Recognizing that MCC wishes to help Senegal implement a program to 
achieve the goal and objectives described herein (the ``Program'');
    Capitalized terms used herein shall have the meanings specified in 
Annex V hereto.
    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 Senegal through 
economic growth (the ``Compact Goal'').

Section 1.2 Program Objective

    The objective of the Program (as further described in Annex I) (the 
``Program Objective'') is to enable improved agricultural productivity 
and to expand access to markets and services through critical 
infrastructure investments in roads and irrigation sectors.

Section 1.3 Project Objectives

    The objectives of the Projects (as further described in Annex I) 
(each a ``Project Objective'' and collectively, the ``Project 
Objectives'') are as follows:
    (a) The objective of the Roads Rehabilitation Project is to expand 
access to markets and services by improving the condition of certain 
strategic roads and reducing transportation time and costs.
    (b) The objective of the Irrigation and Water Resources Management 
Project is to improve the productivity of the agricultural sector by 
extending and improving the quality of the irrigation system in certain 
agriculture-dependent areas of northern Senegal.

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 Five Hundred Thirty Five Million 
United States Dollars (US$535,000,000) (``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.

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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 Five Million United States Dollars 
(US$5,000,000) (``Compact Implementation Funding'') under Section 
609(g) of the Millennium Challenge Act of 2003, as amended (the ``MCA 
Act''), for use by the Government as agreed by the Parties, which may 
include use for the following purposes:
    (i) financial management and procurement activities;
    (ii) administrative activities including start-up costs such as 
staff salaries and administrative support expenses such as office 
equipment, and computers and other information technology or capital 
equipment; and
    (iii) other Compact implementation activities approved by MCC.
    The allocation of Compact Implementation Funding among uses is 
generally described in Annex II to this Compact.
    (b) Notwithstanding Section 7.3 of this Compact, this Section 2.2 
and any other provisions of this Compact necessary to make use of 
Compact Implementation Funding for the purposes set forth herein, shall 
be effective, for purposes of Compact Implementation Funding only, as 
of the date this Compact is signed by MCC and the Government.
    (c) Each Disbursement of Compact Implementation Funding is subject 
to satisfaction of the conditions to such disbursement as set forth in 
Annex IV.
    (d) If, after the first anniversary of this Compact entering into 
force, 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, 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 its 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 and any relevant supplemental agreement 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 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 
for 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 (whether by directing such payments to a bank 
account outside Senegal 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 (or any refunds or 
reimbursements of MCC Funding paid by the Government in accordance with 
this Compact that MCC permits to be used in connection with the 
Program) 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 https://www.mcc.gov (the ``MCC Web site''), 
including but not limited to the following purposes:
    (a) for assistance to, or training of, the military, police, 
militia, national guard or other quasi-military organization or unit;
    (b) for any activity that is likely to cause a substantial loss of 
United States jobs or a substantial displacement of United States 
production;
    (c) to undertake, fund or otherwise support any activity that is 
likely to cause a significant environmental, health, or safety hazard, 
as further described in MCC's environmental and social guidelines 
posted from time to time on the MCC Web site or otherwise made 
available to the Government by MCC (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, the 
Government will ensure that each of the following is free from the 
payment or imposition of any existing or future taxes, duties, levies, 
contributions, or other similar charges (``Taxes'') of or in Senegal 
(including any such Taxes imposed by a national, regional, local, or 
other governmental or taxing authority of or in Senegal) (i) the 
Program; (ii) MCC Funding; (iii) interest or earnings on MCC Funding; 
(iv) any Project or activity implemented under the Program; (v) MCA-
Senegal (or MFG-

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MCA prior to MCA-Senegal's establishment); (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 ``Taxes'' include, among other things, value 
added and other transfer taxes (including exemption therefrom with 
credit), 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, social 
security and social insurance contributions.
    (b) Without limiting the generality of the definition of Taxes as 
set forth in Section 2.8(a), the Parties hereby agree that the 
following taxes, duties, fees, and similar charges are also 
specifically included in the definition of ``Taxes'' requiring 
exemptions in accordance with this Compact: (i) Customs duties and 
associated fees (including redevances statistiques (RS, currently 1%), 
droits de douanes (DD, currently 0-20%), TVA (VAT, currently 18%), les 
droits des chargeurs (COSEC, currently 0.20%), and les 
pr[eacute]l[egrave]vements communautaires de l'UEMOA ou de la CEDEAO 
(for example, PCS, currently, 1% and CEDEAO, currently 0.5%)); (ii) 
value added taxes (VAT); (iii) taxes on petroleum products, including 
but not limited to the tax speciale sur hydrocarbons; (iv) registration 
and stamp taxes; (v) taxes on the corporate income of professional, 
accounting or consulting firms (``benefices non commerciaux'') derived 
from Compact-related work; (vi) taxes on the corporate income of 
companies or other legal persons (``benefices industriels et 
commerciaux'') derived from Compact-related work; and (vii) taxes on 
the personal income of individuals working under the Compact.
    (c) Unless otherwise agreed by MCC in writing, set forth in Annex 
VI are procedures that the Government will implement to effectuate the 
exemption from Taxes required by Section 2.8(a) and Section 2.8(b) 
above with respect to each of the Taxes addressed therein. To the 
extent that there are Taxes not addressed in Annex VI, whether 
currently in force or established in the future, that MCC determines, 
in its sole discretion, are not being exempted by the Government in 
accordance with this Section 2.8, the Government hereby agrees that it 
will implement appropriate procedures (approved in writing by MCC) to 
ensure that such additional Taxes are exempted in accordance with this 
Section 2.8. For the avoidance of doubt, the identification (or lack of 
identification) of Taxes in Annex VI, or the description (or lack of 
description) of procedures to implement the required exemption from 
such Taxes in Annex VI, shall in no way limit the scope of the tax 
exemption required by this Section 2.8.
    (d) Unless otherwise agreed in writing by the Parties, the 
provisions of Section 2.8(a) and 2.8(b) shall not apply to income Taxes 
on, and contributions with respect to, individuals or legal persons who 
are nationals of Senegal, provided that such Taxes and contributions 
are not discriminatory and are generally applicable to all nationals in 
Senegal.
    (e) In complying with the tax exemption obligations set forth 
herein, the Government will exempt MFG-MCA, MCA-Senegal, the Fiscal 
Agent, the Procurement Agent, and/or any other provider of goods, 
services, or works in connection with the Program from any obligation 
imposed by the laws of Senegal to withhold any Taxes from any payments 
made to any natural persons or legal persons working under the Program 
to the extent that such natural persons or legal persons are not 
nationals of Senegal.
    (f) For the purposes of Section 2.8(d) and 2.8(e), the term 
``national'' means natural persons who are citizens or permanent 
residents of Senegal and legal persons who are formed under the laws of 
Senegal (excluding MCA-Senegal, MFG-MCA and any other entity formed for 
the purpose of implementing the Government's obligations hereunder); 
provided that in determining if a natural person is a permanent 
resident of Senegal or if a legal person has been formed under the laws 
of Senegal, the taxable status of such individual or legal person shall 
be based on its status at the time it is awarded or executes a Compact-
related agreement or contract, and such initial determination shall not 
change regardless of: (i) The type of agreement or contract used to 
employ or engage such individual, company, or other legal person, (ii) 
any laws of Senegal that purport to change such status based on period 
of contract performance or period of time residing and/or working in 
Senegal, and/or (iii) any requirement under the laws of Senegal that a 
company or other legal person must establish a branch office in 
Senegal, or otherwise register or organize itself under the laws of 
Senegal, in order to provide goods, services, or works in Senegal.
    (g) The Government will from time to time execute and deliver, or 
cause to be executed and delivered, such other instructions, 
instruments or documents, and to take or cause to be taken such other 
actions as may be necessary or appropriate in the determination of MCC 
in order to implement this Section 2.8 of the Compact. Such further 
assurances may include, without limitation, (i) passage of an 
``arret[eacute] d'application'' (or such similar document (or 
documents) having the same legal effect), in form and substance 
satisfactory to MCC to provide specific instructions to Government 
agents with respect to their role in the implementation of the 
exemption from Taxes required by this Compact; or (ii) provision of an 
attestation d'exoneration to appropriate beneficiaries of the tax 
exemption described in this Compact.
    (h) If a Tax has been levied and 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 or the currency of Senegal 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, MFG-MCA, or MCA-
Senegal) that such Tax has been paid.
    (i) 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

    Prior to entry into force, the Government and MCC will enter into 
an agreement relating to, among other matters, implementation 
arrangements, fiscal accountability and disbursement, and use of MCC 
Funding (the ``Program Implementation Agreement'' or ``PIA''). The 
Government will implement the Program in accordance with the Compact 
and the PIA.

Section 3.2 Government Responsibilities

    (a) The Government has principal responsibility for overseeing and 
managing the implementation of the Program.
    (b) The Government hereby designates MCA-Senegal, an entity to be 
established through passage of a decree substantially in the form and 
substantially on the terms of the form of decree set forth in Schedule 
2 to Annex

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I, as the accountable entity to implement the Program and to exercise 
and perform the Government's rights and responsibilities with respect 
to the oversight, management, and implementation of the Program, 
including, without limitation, managing the implementation of Projects 
and their Activities, allocating resources, and managing procurements. 
Such entity will be referred to herein as ``MCA-Senegal,'' and will 
have the authority to bind the Government with regard to all Program 
activities. Prior to MCA-Senegal's establishment, the Government hereby 
designates the Mission de Formulation et du Gestion du MCA Senegal 
(``MFG-MCA''), established by Decret N\o\ 2008-53 dated January 29, 
2008, to act on behalf of the Government with respect to the Compact 
and the Program. For the avoidance of doubt, the designation of MCA-
Senegal (and MFG-MCA prior to MCA-Senegal's establishment) as set forth 
in this Section 3.2(b) will not relieve the Government of any of its 
obligations or responsibilities as set forth hereunder, under any 
related agreement (including, upon execution thereof, the PIA), or in 
the Program Guidelines, for which the Government remains fully 
responsible. MCC hereby acknowledges and consents to the designation in 
this Section 3.2(b).
    (c) The Government will ensure that no law or regulation in Senegal 
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 PIA, 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 Program Objective and Project Objectives during the Compact 
Term.
    (f) The Government will fully comply with the Program Guidelines, 
as applicable, in its implementation of the Program.

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, upon its ratification by the Government, does 
not, and will not, conflict with any other international agreement or 
other obligation of the Government or any of the laws of Senegal; 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. 
Without limiting the foregoing, either Party may, through its Principal 
Representative or any Additional Representative, as the case may be, 
initiate discussions that may result in a jointly agreed-upon 
Implementation Letter to confirm and record their mutual understanding 
on aspects related to the implementation of this Compact, the PIA, or 
other related agreements.

Section 3.6 Procurement

    The Government will ensure that the procurement of all goods, 
works, and services by the Government, or any applicable provider 
providing goods, works, and services, 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 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 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 Senegal. 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

[[Page 54355]]

United States person or entity that receives, directly or indirectly, 
US$500,000 or more of MCC Funding from any Provider in such fiscal 
year.
    (d) Access. Upon MCC's request, the Government, at all reasonable 
times, will permit, or cause to be permitted, authorized 
representatives of MCC, an authorized United States inspector general, 
the United States Government Accountability Office, any auditor 
responsible for an audit contemplated herein or otherwise conducted in 
furtherance of this Compact, and any agents or representatives engaged 
by MCC or the Government to conduct any assessment, review, or 
evaluation of the Program, the opportunity to audit, review, evaluate, 
or inspect facilities and activities funded in whole or in part by MCC 
Funding.

Section 3.8 Audits; Reviews

    (a) Government Audits. Except as the Parties may otherwise agree in 
writing, the Government will, on at least a semi-annual basis, conduct, 
or cause to be conducted, financial audits of all disbursements of MCC 
Funding covering the period from signing of this Compact until the 
earlier of the following December 31 or June 30 and covering each six-
month period thereafter ending December 31 and June 30, through the end 
of the Compact Term. In 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 ninety 
(90) days after the first period to be audited and no later than ninety 
(90) days after each June 30 and December 31 thereafter, or such other 
period as the Parties may otherwise agree in writing.
    (b) Audits of United States Entities. The Government will ensure 
that agreements between the Government or any Provider, on the one 
hand, and a United States nonprofit organization, on the other hand, 
that are financed with MCC Funding state that the United States 
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 (i) use its best 
efforts to ensure that Covered Providers take, where necessary, 
appropriate and timely corrective actions in response to audits, (ii) 
consider whether a Covered Provider's audit necessitates adjustment of 
the Government's records, and (iii) 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: 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: VPImplementation@mcc.gov (Vice 
President, Compact Implementation), VPGeneralCounsel@mcc.gov (Vice 
President and General Counsel).
    To the Government:
    Ministry of Economy and Finance, Rue Rene Ndiaye, BP 4017, Dakar, 
Senegal, Tel: +221 (33) 822 2899, Fax: +221 (33) 822 4195.
    with a copy to:
    To MFG-MCA (until MCA-Senegal's establishment), Avenue Bourguiba, 
Immeuble Gamma, 3eme etage, Dakar, Senegal, Tel: +221 (33) 869 1665, 
Fax: +221 (33) 825 0887.
    Upon establishment of MCA-Senegal, MCA-Senegal will notify the 
Parties of its contact details.

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 of Senegal, and MCC will be 
represented by 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 
(each, an ``Additional Representative'') for all purposes other than 
signing amendments to this Compact. The Government hereby irrevocably 
designates the Director General of MFG-MCA as an Additional 
Representative, to be replaced by the Director General of MCA-Senegal, 
upon the establishment of MCA-Senegal. 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 without cause in whole 
by giving the other Party thirty (30) days' written notice. MCC may 
also terminate this Compact without cause in part by giving the 
Government 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 PIA, or any other agreement or arrangement entered into by 
the Government in connection with this Compact or the Program;

[[Page 54356]]

    (ii) an event or series of events has occurred that MCC determines 
makes it probable that the Program Objective or 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 this 
Compact or 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 would render Senegal 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 
Senegal for assistance under the MCA Act; or
    (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 may permit MCC 
Funding to 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 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 one 
hundred twenty (120) days after the expiration, suspension, or 
termination of this Compact, so long as, with respect to (i) and (ii) 
herein, 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 in accordance with the Compact and the PIA will be 
automatically released from any obligation in connection with this 
Compact, and (ii) any amounts of MCC Funding disbursed to the Permitted 
Account by MCC but not expended before the expiration, suspension or 
termination of this Compact, plus accrued interest thereon will be 
returned to MCC within thirty (30) days after the Government receives 
MCC's request for such return; provided, however, that if this Compact 
is suspended or terminated in part, MCC may request a refund for only 
the amount of MCC Funding allocated to the suspended or terminated 
portion.
    (e) MCC may reinstate any suspended or terminated MCC Funding under 
this Compact if MCC determines that the Government or other relevant 
person or entity has committed to correct each condition for which MCC 
Funding was suspended or terminated.

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 or the PIA, including 
but not limited to any violation of the Program Guidelines, then MCC 
may require the Government to repay to MCC in United States Dollars the 
value of the misused MCC Funding, interest, earnings, or asset, plus 
interest within thirty (30) days after the Government's receipt of 
MCC's request for repayment. The Government will not use MCC Funding, 
proceeds thereof or Program assets to make such payment.
    (b) Notwithstanding any other provision in this Compact or any 
other agreement to the contrary, MCC's right under this Section 5.2 for 
a refund will continue during the Compact Term and for a period of (i) 
five years thereafter or (ii) one year after MCC receives actual 
knowledge of such violation, whichever is later.

Section 5.3 Survival

    The Government's responsibilities under Sections 2.4, 2.6, 2.7, 
2.8, 3.7, 3.8, 5.1(c), 5.1(d), 5.2, 5.3, 6.2, 6.4, 6.9, and 8.1 of this 
Compact will survive the expiration, suspension or termination of this 
Compact.

Article 6. Compact Annexes; Amendments; Governing Law

Section 6.1 Annexes

    Each annex to this Compact constitutes an integral part hereof, and 
references to ``Annex'' mean an annex to this Compact unless otherwise 
expressly stated.

Section 6.2 Amendments

    (a) The Parties may amend this Compact only by a written agreement 
signed by the Principal Representatives.
    (b) Without formally amending this Compact, the Government hereby 
acknowledges and agrees that the Parties, may, through the Principal 
Representatives or any Additional Representative, as the case may be, 
in writing, modify any Annex to this Compact to (i) suspend, terminate, 
or modify any project described in Annex I (each, a ``Project'' and 
collectively, the ``Projects'') or to create a new project, (ii) change 
the allocations of funds among the Projects, the Project activities, or 
any activity under Program administration or monitoring and evaluation, 
or between a Project identified as of the signature of this Compact and 
a new project, (iii) modify the terms of Section B.3 of Annex I, or 
(iv) add, delete, or waive any condition precedent described in Annex 
IV, provided that any such modification described in (i) through (iv) 
(1) is consistent in all material respects with the Program Objective, 
(2) does not cause the amount of Program Funding to exceed the 
aggregate amount specified in Section 2.1 of this Compact (as may be 
modified by operation of Section 2.2(e) of this Compact), (3) does not 
cause the amount of Compact Implementation Funding to exceed the 
aggregate amount specified in Section 2.2(a) of this Compact, (4) does 
not cause the Government's responsibilities or contribution of 
resources to be less than specified in this Compact, (5) does not 
extend the Compact Term, and (6) in the case of a modification to 
change allocations of funds among Projects or the creation of a new 
project, does not materially adversely affect any activity under 
Program administration or monitoring and evaluation.
    (c) Any modification of any annex to this Compact executed in 
accordance with Section 6.2(b), or any modification of any other 
provision of this Compact pursuant to Section 6.2(a), shall be binding 
on the Government without the need for further action by the 
Government, any further parliamentary action, or satisfaction of any 
additional domestic requirements of Senegal.

Section 6.3 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 will prevail; or
    (b) this Compact and any other agreement between the Parties 
regarding the Program, this Compact will prevail.

[[Page 54357]]

Section 6.4 Governing Law

    This Compact is an international agreement and as such will be 
governed by the principles of international law.

Section 6.5 Additional Instruments

    Any reference to activities, obligations, or rights undertaken or 
existing under or in furtherance of this Compact or similar language 
will include activities, obligations, and rights undertaken by or 
existing under 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 
will 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 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 (including but not limited to 
the Program Guidelines) will be construed as a reference to such law, 
regulation, policy, guideline, or similar document as it may, from time 
to time, be amended, revised, replaced, or extended and will include 
any law, regulation, policy, guideline, or similar document issued 
under or otherwise applicable or related to such law, regulation, 
policy, guideline, or similar document.

Section 6.8 MCC Status

    MCC is a United States government corporation acting on behalf of 
the United States government in the implementation of this Compact. MCC 
and the United States government have no liability under this Compact, 
the Program Implementation Agreement, or any related agreement, are 
immune from any action or proceeding arising under or relating to any 
of the foregoing documents, and the Government hereby waives and 
releases all claims related to any such liability. In matters arising 
under or relating to this Compact, the Program Implementation 
Agreement, or any related agreement neither MCC nor the United States 
government will be subject to the jurisdiction of the courts of Senegal 
or of any other jurisdiction or of any other body.

Section 6.9 English Language

    This Compact is executed in English and in the event of any 
ambiguity or conflict between this official English version and any 
translation prepared for the convenience of the Parties, this official 
English version will prevail.

Section 6.10 Counterparts; Electronic Delivery

    (a) Counterparts. This Compact, and any amendment or other 
agreements arising out of this Compact, may be executed in one or more 
counterpart signatures, and each counterpart when so executed and 
delivered shall be an original instrument, but such counterparts 
together shall constitute a single agreement.
    (b) Electronic Delivery. A signature to this Compact shall be 
delivered only as an original signature. With respect to all other 
signatures, including for an amendment or any other agreements arising 
out of this Compact, a signature delivered by facsimile or electronic 
mail in accordance with Section 4.1 of this Compact shall be deemed an 
original signature and shall be binding on the Party delivering such 
signature, and the Parties hereby waive any objection to such signature 
or to the validity of the underlying document, certificate, notice, 
instrument, or agreement on the basis of the signature's legal effect, 
validity or enforceability solely because it is in facsimile or 
electronic form.

Article 7. Entry Into Force

Section 7.1 Domestic Requirements

    Before this Compact enters into force, the Government will take all 
necessary steps to ensure that immediately upon this Compact entering 
into force (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 Senegal, (b) this Compact, the PIA and any other 
agreement entered into in connection with this Compact to which the 
Government and MCC are parties are international agreements under 
international law such that the Government may not invoke the 
provisions of its internal law as justification for failure to perform 
its obligations thereunder, and (c) no laws of Senegal (other than the 
constitution of Senegal), 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 to Entry Into Force

    Before this Compact enters into force:
    (a) the PIA must have been executed by the parties thereto;
    (b) The Government must have delivered to MCC:
    (i) a certificate, in form and substance satisfactory to MCC, 
signed and dated by the Principal Representative of the Government, or 
such other duly authorized representative of the Government acceptable 
to MCC, certifying that the Government has satisfied the requirements 
of Section 7.1;
    (ii) a legal opinion from the Secretariat General du Gouvernement 
of Senegal (or such other legal representative of the Government 
acceptable to MCC), in form and substance satisfactory to MCC; and
    (iii) complete, certified copies of all decrees, legislation, 
regulations, or other governmental documents relating to the 
Government's domestic requirements for this Compact to enter into force 
and the satisfaction of Section 7.1, which MCC may post on its Web site 
or otherwise make publicly available; and
    (c) MCC must determine that after signature of this Compact, the 
Government has not engaged in any action or omission that is 
inconsistent with the eligibility criteria for MCC Funding.

Section 7.3 Date of Entry Into Force

    This Compact will enter into force on the later of (a) the date of 
the last letter in an exchange of letters between the Principal 
Representatives confirming that each Party has completed its domestic 
requirements for entry into force of this Compact and (b) the date that 
all conditions set forth in Section 7.2 have been satisfied.

Section 7.4 Compact Term

    This Compact will remain in force for five years after its entry 
into force, unless terminated earlier under Section 5.1 (the ``Compact 
Term'').

Section 7.5 Provisional Application

    Upon signature of this Compact and until this Compact has entered 
into force in accordance with Section 7.3, the Parties will 
provisionally apply the terms of this Compact and the PIA; provided 
that, no Program Funding will be made available or disbursed before 
this Compact enters into force.

Article 8. Additional Government Covenants

Section 8.1 Additional Government Resources

    (a) Without limiting the generality of Section 2.6(a), the 
Government will contribute, through provision in the law containing the 
annual governmental

[[Page 54358]]

budget for Senegal, an amount necessary and adequate to cover all costs 
associated with the following (no MCC Funding, proceeds thereof, or 
Program assets may be applied by the Government in satisfaction of its 
obligations under this Section 8.1(a)):
    (i) The staffing and operations of a ``Cellule d'Appui au MCA-
Senegal'' (as further described in Annex I);
    (ii) consultant services, including but not limited to, any such 
services already contracted by MFG-MCA for the purpose of producing 
detailed designs in connection with the Roads Rehabilitation Project; 
the independent audit required in connection with the Irrigation and 
Water Resources Management Project as described in the PIA; and any 
other consultant services in connection with the Program that will not 
be financed with MCC Funding but are required for the successful 
implementation of the Program, as may be required by MCC from time to 
time;
    (iii) any incurred severance costs or other financial liabilities 
triggered by termination or expiration of the MFG-MCA or MCA-Senegal 
employee contracts, pursuant to the terms of such contracts; and
    (iv) required office space for MFG-MCA, MCA Senegal, the ``Cellule 
d'Appui au MCA-Senegal,'' and the MCC resident country mission.

Section 8.2 Procurement

    The Government, including MCA-Senegal (and MFG-MCA prior to MCA-
Senegal's establishment), will exclusively use the MCC Program 
Procurement Guidelines in connection with Program procurements financed 
with MCC Funding. With respect to Program procurements financed by the 
Government, the Government, including MCA-Senegal (and MFG-MCA prior to 
MCA-Senegal's establishment), will ensure that such procurements are 
consistent with the general principles set forth in Section 3.6 of this 
Compact.
    In Witness Whereof, the undersigned, duly authorized by their 
respective governments, have signed this Compact this 16th day of 
September 2009.
    Done at Washington, DC.
    For Millennium Challenge Corporation, on behalf of the United 
States of America, Name: Darius Mans, Title: Acting Chief Executive 
Officer.
    For the Republic of Senegal, Name: Abdoulaye Diop, Title: Minister 
of Economy and Finance.

Annex I Program Description

    This Annex I describes the Program that MCC Funding will support in 
Senegal during the Compact Term.

A. Program Overview

1. Background and Consultative Process
    With a population of approximately 12 million inhabitants, the west 
African nation of Senegal was originally declared eligible for MCC 
assistance in 2004. Senegal shares borders in the north with 
Mauritania, in the east with Mali and in the south with Guinea and 
Guinea-Bissau, and the Gambia runs through its center, spatially 
separating its Casamance region (the ``Casamance'') from the rest of 
Senegal's territory. Based on national poverty reduction and food 
security priorities contained in the Government's 1998 Master Plan for 
agricultural development in the Senegal River Valley (the ``Valley'') 
and the Government's Road Sector Master Plan, and confirmed in broad-
based Government consultations that occurred from February through July 
2008, the Program focuses on poverty reduction in the Valley in 
northern Senegal, and the Casamance in southern Senegal.
    The Valley has been targeted by the Government, numerous donors, 
and nongovernmental organizations (``NGOs'') for investment, both to 
encourage economic growth in this region and to increase Senegal's food 
security in years to come. The Valley, like the Casamance, is rich in 
agricultural production, especially for rice, the principal staple of 
the Senegalese diet. The Valley benefits from a very favorable 
environment for intensive irrigation; however, low agricultural yields 
have been a persistent problem due to the poor quality of the existing 
irrigation and drainage infrastructure; insufficient delivery of 
available water to agricultural areas; and lack of an appropriate 
drainage system. The Irrigation and Water Resources Management Project 
will address these constraints.
    The Casamance is the poorest region of Senegal, but also has the 
highest potential for economic development after the Valley. The 
Casamance is rich in natural resources and has the potential for 
enormous agricultural productivity, which could contribute 
significantly both to national growth and food security in the entire 
country. The Government identified the Casamance's poor road transport 
network, which leaves few means for goods and services currently 
produced in the region to be exported nationally or regionally, as a 
major constraint to economic development in the region. The Roads 
Rehabilitation Project will address this constraint.
2. Description of Program and Beneficiaries
    The Program Objective is to enable improved agricultural 
productivity and to expand access to markets and services through 
critical infrastructure investments in the roads and irrigation 
sectors. The Program consists of the Roads Rehabilitation Project and 
the Irrigation and Water Resources Management Project as further 
described in this Annex I.
    By 2029, the Program is expected to benefit approximately 1.66 
million individuals, or approximately 138,600 households. The largest 
number of beneficiaries--approximately 1.1 million--would be located in 
the Casamance. About 75% of the Program beneficiaries in the Casamance 
are expected to come from households living on less than 2 dollars per 
person per day. An estimated 42% of total Program beneficiaries in the 
Casamance live on US$1.25 per person per day, or less. Although Program 
activities in the Casamance are expected to cast a wider net over 
beneficiaries, about 38% of total benefits generated by the Program 
would accrue to beneficiaries in that region. Approximately 62% of 
Program benefits would accrue to beneficiaries in the Valley. Here, 
approximately 45% of total beneficiaries are expected to be from 
households subsisting on less than US$2 per person per day and 25% from 
households living on US$1.25, or less. Whereas Program investments in 
the Valley will affect the welfare of a smaller number of people than 
in the south, they together are expected to extend significantly and 
solidify gains in the reduction of poverty in the north. The Program 
would be an important preliminary contribution to the development of 
the Casamance and greatly facilitate other future investment there.
3. Environmental and Social Accountability
    The two Projects, both of which are classified as Category A due to 
potential site-specific environmental and social impacts, will be 
implemented in compliance with the MCC Environmental Guidelines, MCC's 
guidance on the integration of gender in program implementation 
delivered by MCC to the Government or posted on the MCC Web site (the 
``MCC Gender Policy''), and the MCC Guidance on the Implementation of 
Resettlement Activities (or any other MCC policy comparable to the 
World Bank's Operational Policy on Involuntary Resettlement in effect 
as of July 2007 (``OP 4.12'') notified to the Government

[[Page 54359]]

from time to time) (the ``MCC Resettlement Guidance''). The Government 
will also ensure that the Projects comply with all national 
environmental laws an