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Millennium Challenge Compact Between The MILLENNIUM CHALLENGE COMPACT BETWEEN THE UNITED STATES OF AMERICA ACTING THROUGH THE MILLENNIUM CHALLENGE CORPORATION AND THE GOVERNMENT OF THE KINGDOM OF LESOTHO MILLENNIUM CHALLENGE COMPACT TABLE OF CONTENTS Page Article 1. Goal and Objectives.......................................................................................... 1 Section 1.1 Compact Goal ............................................................................................. 1 Section 1.2 Program Objectives..................................................................................... 1 Article 2. Funding and Resources..................................................................................... 2 Section 2.1 MCC Funding ............................................................................................. 2 Section 2.2 Compact Implementation Funding ............................................................. 2 Section 2.3 Disbursement .............................................................................................. 3 Section 2.4 Interest......................................................................................................... 3 Section 2.5 Government Resources; Budget ................................................................. 3 Section 2.6 Limitations on the Use of MCC Funding ................................................... 4 Section 2.7 Taxes........................................................................................................... 4 Article 3. Implementation ................................................................................................. 5 Section 3.1 Program Implementation Agreement.......................................................... 5 Section 3.2 Government Responsibilities...................................................................... 5 Section 3.3 Policy Performance..................................................................................... 5 Section 3.4 Government Assurances ............................................................................. 5 Section 3.5 Implementation Letters ............................................................................... 5 Section 3.6 Procurement ................................................................................................ 6 Section 3.7 Records; Accounting; Covered Providers; Access ..................................... 6 Section 3.8 Audits; Reviews.......................................................................................... 7 Article 4. Communications ............................................................................................... 8 Section 4.1 Communications ......................................................................................... 8 Section 4.2 Representatives ........................................................................................... 8 Section 4.3 Signatures.................................................................................................... 9 Article 5. Termination; Suspension; Refunds................................................................... 9 Section 5.1 Termination; Suspension ............................................................................ 9 Section 5.2 Refunds; Violation.................................................................................... 10 Section 5.3 Survival..................................................................................................... 10 Article 6. Compact Annexes; Amendments; Governing Law ........................................ 10 Section 6.1 Annexes..................................................................................................... 10 Section 6.2 Inconsistencies .......................................................................................... 10 Section 6.3 Amendments ............................................................................................. 11 Section 6.4 Governing Law ......................................................................................... 11 Section 6.5 Additional Instruments.............................................................................. 11 Section 6.6 References to MCC Website..................................................................... 11 Section 6.7 References to Laws, Regulations, Policies and Guidelines ...................... 11 Article 7. Entry Into Force .............................................................................................. 11 Section 7.1 Domestic Requirements............................................................................ 11 Section 7.2 Conditions Precedent ................................................................................ 11 Section 7.3 Date of Entry into Force ........................................................................... 12 Section 7.4 Compact Term .......................................................................................... 12 Annex I: Program Description Annex II: Summary of Multi-Year Financial Plan Annex III: Description of the Monitoring and Evaluation Plan TOC - ii MILLENNIUM CHALLENGE COMPACT PREAMBLE This MILLENNIUM CHALLENGE COMPACT (this “Compact”) is between the United States of America, acting through the Millennium Challenge Corporation, a United States government corporation (“MCC”), and the Government of the Kingdom of Lesotho (the “Government”) (individually a “Party” and collectively, the “Parties”). Recalling that the Government consulted with the private sector and civil society of the Kingdom of Lesotho (“Lesotho”) to determine the priorities for the use of Millennium Challenge Account assistance and developed and submitted to MCC a proposal focused on providing water supplies for industrial and domestic use and improving watershed management, improving health outcomes and productivity through strengthening the health system, and removing barriers to foreign and local private sector investment; and Recognizing that MCC wishes to help Lesotho implement a program to achieve the goal and objectives described herein (the “Program”); The Parties hereby agree as follows: ARTICLE 1. GOAL AND OBJECTIVES Section 1.1 Compact Goal. The goal of this Compact is to reduce poverty in Lesotho through economic growth (the “Compact Goal”). Section 1.2 Program Objectives. The objectives of this Program (as further described in Annex I) (the “Objectives”) are to: (a) improve the water supply for industrial and domestic needs and enhance urban and rural livelihoods through improved watershed management; (b) increase access to life-extending anti-retroviral therapy and essential health services by providing a sustainable delivery platform; and (c) stimulate investment by improving access to credit, reducing transaction costs and increasing the participation of women in the economy. The Government will take all the steps necessary or appropriate to achieve the Objectives during the term of this Compact. ARTICLE 2. FUNDING AND RESOURCES Section 2.1 MCC Funding. (a) MCC grants to the Government, under the terms of this Compact, an amount not to exceed Three Hundred Sixty-Two Million, Five Hundred Fifty-One Thousand United States dollars (US$362,551,000) (“MCC Funding”) to help the Government implement the Program. (b) Annex II of this Compact describes the use of MCC Funding. Section 2.2 Compact Implementation Funding. (a) Of the total amount of MCC Funding, MCC will make up to Fifteen Million Six Hundred and Sixty-Nine Thousand United States dollars (US$15,669,000) (“Compact Implementation Funding”) available to the Government under Section 609(g) of the Millennium Challenge Act of 2003, as amended, to support: (i) provision of fiscal and procurement agent services; (ii) start-up costs including staff salaries and administrative support and related goods and services; (iii) baseline surveys for monitoring and evaluation and administrative support for the surveys as appropriate; (iv) initiation of environmental and social assessments and design work in conjunction with certain water and health sector activities; (v) additional gender assessment and input for project design; (vi) additional work with respect to activities to remove forms of discrimination, in laws or policies, affecting the economic rights of women; (vii) additional work with respect to clarifying roles and responsibilities for decentralized health services at the central and district levels, and in developing a training plan for health sector project activities; (viii) technical assistance to support development of terms of reference for consultants, including, without limitation, health system strengthening, capacity building, and medical waste management; (ix) procurement of field monitoring equipment and initiation of environmental baseline studies for the wetlands conservation project; (x) a study of land administration services in Lesotho and recommendations for modernization and improvement of those services; (xi) a review of existing payments and settlements and cross-border financial transactions legislation and related regulations; 2 (xii) a review of existing legislation authorizing credit bureaus and a national identification card and any related regulations; (xiii) a review of data privacy legislation and regulations; (xiv) establishment of Project Implementation Units (as defined in Annex I) and related start-up costs including recruitment of key personnel, staff salaries and administrative support and related goods and services; and (xv) other Compact implementation
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