[Federal Register Volume 73, Number 141 (Tuesday, July 22, 2008)]
[Notices]
[Pages 42601-42626]
From the Federal Register Online via the Government Publishing 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: [email protected] (Vice President, Compact 
Development), [email protected] (Vice President, Compact 
Implementation), [email protected] (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 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, 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 2.5, 2.6, 2.7, 
2.8, 3.7, 3.8, 5.1(c), 5.1(d), 5.2, 5.3 and 6.4 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 the Compact, the Parties may agree in 
writing, signed by the Principal Representatives, to modify any Annex 
to this Compact to, among others (i) suspend, modify or terminate any 
project described in Annex I (each, a ``Project'' and collectively, the 
``Projects'') or to create a new project; (ii) change the designations 
and allocations of funds among the Projects, the Project activities, or 
any activity under Program administration or monitoring and evaluation, 
or between a Project identified as of the entry into force of this 
Compact and a new project; or (iii) add or delete any condition 
precedent described in Annex IV, provided that any such modification 
(A) is consistent in all material respects with the Compact Goal and 
the Project Objectives, (B) 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), (C) does not cause the amount of Compact Implementation 
Funding to exceed the aggregate amount specified in Section 2.2(a) of 
this Compact, (D) does not cause the Government's responsibilities or 
contribution of resources to be less than specified in this Compact, 
(E) does not extend the Compact Term, and (F) in the case of a 
modification to change the designations or allocations of funds among 
Projects, does not materially adversely affect any activity under 
Program administration or monitoring and evaluation.

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 7, such 
Articles 1 through 7 will prevail; or
    (b) This Compact and any other agreement between the Parties 
regarding the Program, this Compact will prevail.

Section 6.4 Governing Law

    This Compact is an international agreement and as such is 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, 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 Program Implementation Agreement 
or any other agreement entered into in connection with this Compact, to 
a document or information available on, or notified by posting on the 
MCC Web site will be deemed a reference to such document or information 
as updated or substituted on the MCC Web site from time to time.

Section 6.7 References to Laws, Regulations, Policies and Guidelines

    Each reference in this Compact, the Program Implementation 
Agreement or any other agreement entered into in connection with this 
Compact, to a law, regulation, policy, guideline or similar document 
will be construed as a reference to such law, regulation, policy, 
guideline or similar document as

[[Page 42611]]

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, 
are immune from any action or proceeding arising under or relating to 
this Compact, and the Government hereby waives and releases all claims 
related to any such liability. In matters arising under or relating to 
this Compact, neither MCC nor the United States Government will be 
subject to the jurisdiction of the courts or any other body of Burkina 
Faso.

Article 7. Entry Into Force

Section 7.1 Domestic Requirements

    The Government shall take all steps necessary to ensure that (a) 
this Compact and the Program Implementation Agreement and all of the 
provisions of this Compact and the Program Implementation Agreement are 
valid and binding and are in full force and effect in Burkina Faso; (b) 
this Compact, the Program Implementation Agreement and any other 
agreement entered into in connection with this Compact to which the 
Government and MCC are parties will be given the status of an 
international agreement if so stipulated therein; and (c) no laws of 
Burkina Faso (other than the constitution of Burkina Faso), whether now 
or hereafter in effect, will take precedence or prevail over the terms 
of this Compact or the Program Implementation Agreement.

Section 7.2 Conditions Precedent to Entry Into Force

    Before this Compact enters into force:
    (a) The Program Implementation Agreement must have been executed by 
the Government and MCC and have become effective;
    (b) The Government must have delivered to MCC:
    (i) A certificate signed and dated by the Principal Representative 
of the Government, or such other duly authorized representative of the 
Government acceptable to MCC, certifying that the Government has 
satisfied the requirements of Section 7.1;
    (ii) A legal opinion from the Minister of Justice of Burkina Faso 
(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 it has entered into force 
in accordance with Section 7.3, the Parties will provisionally apply 
the terms of this Compact; provided, that no MCC Funding, other than 
Compact Implementation Funding, will be made available or disbursed 
before this Compact enters into force.
    In Witness Whereof, the undersigned, duly authorized by their 
respective governments, have signed this Compact this 14th day of 
July, 2008.
    Done at Washington, D.C.

    For Millennium Challenge Corporation, on behalf of the United 
States of America.
    John J. Danilovich,
    Chief Executive Officer.

For the Government of Burkina Faso,
Name: Jean Baptiste Marie Compaor[eacute], Title: Ministre de 
l'Economie et des Finances.

Annex I Program Description

A. Program Overview

    This Annex I describes the Program that MCC Funding will support in 
Burkina Faso during the Compact Term.
1. Background and Consultative Process
    Burkina Faso is a landlocked country in Africa's Sahel region, 
bordering Benin, Cote d'Ivoire, Ghana, Mali, Niger, and Togo and with a 
population of approximately 15.26 million people. Burkina Faso is 
predominantly a rural country, with 95 percent of the poor residing in 
rural areas. It also is one of the poorest countries in the world, 
ranking 176 out of 177 countries 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. Despite these reforms and moderate economic growth, 
Burkina Faso continues to face severe constraints to reducing poverty.
    In connection with the proposal submitted to MCC, the Government 
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 Government also 
engaged the media to inform the public about the proposal for 
Millennium Challenge Account 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 government 
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. The Program is designed specifically to address these 
constraints.
2. Program Description
    The Compact Goal is to reduce poverty through economic growth in 
Burkina Faso. The Program consists of the following Projects: the Rural 
Land Governance Project described in Part B of this Annex I (the 
``Rural Land Governance Project''), the Agriculture Development Project 
described in Part C of this Annex I (the ``Agriculture Development 
Project''), the Roads Project described in Part D of this Annex I (the 
``Roads Project'') and the BRIGHT 2 Schools Project described in Part E 
of this Annex I (the ``BRIGHT 2 Schools Project''). Each activity to be 
funded by MCC as part of a Project is referred to herein, individually, 
as a

[[Page 42612]]

``Project Activity,'' or collectively, as the ``Project Activities''.
3. Environmental and Social Accountability
    All of the Projects 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 World Bank's 
Operational Policy on Involuntary Resettlement in effect as of July 
2007 (``OP 4.12''). The Government also will ensure that the Projects 
comply with all national environmental laws and regulations, licenses 
and permits, except to the extent such compliance would be inconsistent 
with this Compact. The Government will: (a) Undertake and complete any 
environmental impact assessments (``EIA''), environmental assessments 
(``EA''), environmental management plans (``EMP''), resettlement action 
plans (``RAP'') and any other such assessments or plans, in form and 
substance satisfactory to MCC, and as required under the laws of 
Burkina Faso, the MCC Environmental Guidelines, this Compact, the 
Program Implementation Agreement, other supplemental agreements or as 
otherwise required by MCC; (b) implement to MCC's satisfaction 
environmental and social mitigation measures identified in such 
assessments or plans; and (c) commit to fund, or ensure the funding of, 
any environmental mitigation (including costs of resettlement) in 
excess of MCC Funding not specifically provided for in the budget for 
any Project.

B. Rural Land Governance Project

1. Background

    Inclusion of the Rural Land Governance Project in the Program 
reflects an understanding of the importance of sound property rights to 
economic growth and to social stability in Burkina Faso. The Project 
Objective of the Rural Land Governance Project is to increase 
investment in land and rural productivity through improved land tenure 
security and land management. Expected results include greater security 
of land rights and improved access to more efficient land institutions, 
which together contribute to economic growth and poverty reduction in 
rural areas.
    The Government has demonstrated a commitment to adopting improved 
laws, regulations and administrative processes to meet its ambitious 
rural land tenure vision. The Rural Land Governance Project seeks to 
assist the Government in fulfilling this commitment. 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 ``Rural Land Policy''). The Rural Land Governance Project 
also will support the Government's implementation of the 2004 
Decentralization Law (Loi de 2004 portant Code G[eacute]n[eacute]ral 
des Collectivit[eacute]s Territoriales, or the ``Decentralization 
Law''), which authorizes transfer of key aspects of land governance to 
municipal governments.
2. Summary of Project and Activities
    The Rural Land Governance Project consists of the following 
mutually reinforcing Project Activities:
    (a) Legal and Procedural Change and Communication.
    This Project Activity will support the Government's effort to 
develop and implement improved rural land legislation and to develop, 
revise and implement other legal and procedural frameworks. 
Specifically, MCC Funding will support:
    (i) the Government's finalization of the rural land law's 
implementing regulations and revisions of relevant elements of the 
Agrarian and Land Reorganization (R[eacute]organisation Agraire et 
Fonci[egrave]re or ``RAF'') legislation, together with other legal 
reform support, including technical advisory services related to the 
rural land tenure law and support for participatory stakeholder 
processes and validation; and
    (ii) Finalization of communications and outreach tools to ensure 
national awareness and practical applicability of the Government's 
policy and legal reforms, including, but not limited to, the 
implementation of a stakeholder communications strategy and the 
development of manuals for local-level application of new legal 
provisions and tools.
    (b) Institutional Development and Capacity Building.
    This Project Activity, in conjunction with the Legal and Procedural 
Change and Communication Project Activity, will improve institutional 
capacity to deliver land services in rural areas. Specifically, MCC 
Funding will support:
    (i) Improved land registration and mapping services, including 
institutional modernization analyses, training and capacity building, 
the purchase of equipment, imagery products, and surveying technology;
    (ii) Decentralization of land tenure services, including training 
and support for new local land services personnel and the construction 
and basic equipping of up to 47 municipal buildings to provide offices 
for the decentralized municipal land services while also serving as 
offices for other key local government functions; and
    (iii) Capacity building to mediate land conflicts, including (A) 
capacity building within the justice sector through training for judges 
and associated personnel and practicing lawyers; (B) new law school 
curriculum modules focusing on land law and land conflict; (C) training 
of municipal officials, local village councils and local land services 
personnel on land conflict mediation; and (D) support for mobile land 
conflict tribunals.
    MCC Funding also will support implementation of environmental and 
social mitigation measures as identified in the Environmental and 
Social Management Framework, or as otherwise may be appropriate, 
consistent with MCC Environmental Guidelines and OP 4.12.
    (c) Site-Specific Land Tenure Interventions.
    This Project Activity will ensure that both the Legal and 
Procedural Change and Communication Project Activity and the 
Institutional Development and Capacity Building Project Activity yield 
their intended benefits across municipalities and in targeted 
agricultural development zones. The Site-Specific Land Tenure 
Interventions Project Activity employs a cluster approach to project 
design, based around 15 clusters, each containing up to three to four 
municipalities. Specifically, MCC Funding will support:
    (i) Participatory land use management planning in up to 47 rural 
municipalities, including training, mapping, operational costs, and 
necessary assistance by regional and provincial institutions; and
    (ii) Clarifying and securing rights in developed zones, including 
in up to eight existing agricultural schemes subject to the phasing 
approach, in the new MCC-funded irrigation scheme, and associated with 
approximately 14,500 parcels in Ganzourgou province.
    MCC Funding also will support implementation of environmental and 
social mitigation measures as identified in the Environmental and 
Social Management Framework, or as otherwise may be appropriate, 
consistent with MCC Environmental Guidelines and OP 4.12.
    Certain of the activities enumerated in Sections 2(b)(i), (b)(ii), 
(c)(i) and (c)(ii) above will be subject to a phased approach. Unless 
MCC otherwise agrees, phase one includes years one and two of the 
Compact Term. Phase one will target 17 municipalities with a complete 
package of technical assistance and

[[Page 42613]]

infrastructure construction, and also will include a set of up-front 
investments that are not municipality-specific. Phase two will include 
the balance of the Compact Term, and will target up to 30 additional 
municipalities for technical assistance and infrastructure as well as 
expand investment associated with the other sub-activities. MCC's 
decision to initiate phase two investments is subject to satisfaction 
of: (A) The achievement of an economic rate of return target; (B) 
achievement of legal and policy change targets, including (1) passage 
of the rural land law, (2) passage of the implementing regulations for 
the rural land law, (3) passage of relevant revisions as may be 
necessary or appropriate to the RAF legislation and (4) revision of the 
regulations or bylaws for managed agricultural zones (Cahier de Charges 
G[eacute]n[eacute]ral); (C) satisfactory progress on applicable 
performance indicators specified in the M&E Plan; and (D) sufficient 
progress toward milestones set in the Implementation Plan. In the event 
that MCC determines, in its sole discretion, that phase one fails to 
achieve the performance criteria outlined above, the MCC Funding 
associated with phase two may be reallocated to other Project 
Activities, consistent with Section 6.2(b) of the Compact.
3. Beneficiaries
    The Rural Land Governance Project is expected to affect households 
and businesses nationally, primarily through the Legal and Procedural 
Change and Communication Project Activity, creating a better investment 
climate for existing and prospective rural producers.
    The Institutional Development and Capacity Building Project 
Activity and the Site-Specific Land Tenure Interventions Project 
Activity additionally will benefit rural producers located in the 
targeted sites. These direct beneficiaries include producers in up to 
47 of the country's 302 rural municipalities and in the targeted 
agricultural development zones. Targeted sites will be organized in 15 
clusters of contiguous municipalities with the expectation that 
outcomes and impacts achieved by the cluster municipalities eventually 
will extend to other neighboring municipalities that are not targeted 
in this project, particularly as the clusters are allocated across all 
13 administrative regions of the country. Several of the municipalities 
will overlap with the Agricultural Development Project and others will 
be along road segments to be supported under the Roads Project. 
Improved land registration and mapping services at national, regional 
or provincial levels may also benefit other public or private users who 
are not located in target municipalities or managed scheme areas.
4. Sustainability
    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 tools, assuring their support 
in law. Training will target the range of local stakeholders to assure 
buy-in. 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 reflect analysis of appropriate and sustainable capacity 
building and technology choices.
    The sustainability of the municipal buildings investment for each 
beneficiary municipal government in phase one and phase two will be 
supported by the requirement that municipal budgets contain sufficient 
resources for building operation and maintenance, consistent with 
Burkina Faso's current municipal government financing frameworks and 
procedures associated with the decentralization law. All participating 
municipal governments, or the Ministry of Economy and Finance on their 
behalf, will be required to submit for MCA-Burkina Faso and MCC 
approval a plan that details the operational arrangements for the 
finished building as a condition on the launch of the associated works 
procurements. These plans will include identification of the specific 
local services planned to operate out of each building as well as 
specific plans for building operations and maintenance.
5. Environmental and Social Mitigation Measures
    The implementation of environmental management and gender 
integration plans will ensure the sustainability of the Rural Land 
Governance Project by mitigating potential impacts and strengthening 
Project design. An environmental and social management framework 
(``ESMF'') will be used to conduct the required environmental and 
social impact analysis of the municipal buildings. The ESMF will 
identify impacts as well as develop site-specific EMPs for each 
building site. RAPs will also be developed to adequately plan for and 
mitigate the resettlement impacts at building sites.
    In addition, environmental and social safeguards consistent with 
applicable rules, regulations and best practices in Burkina Faso will 
be incorporated into all land use decision-making processes funded 
through the Site-Specific Land Tenure Interventions Project Activity. 
These safeguards will ensure the sustainable implementation of 
interventions in existing protected areas. Furthermore, the ESMF will 
develop a process to ensure community decision-making regarding 
restricting access to natural resources and establish measures to 
mitigate adverse impacts on livelihoods, such as the creation of a 
compensation fund to register and improve land to allow for successful 
realization of livelihood activities outside of protected areas. 
Finally, the implementation of the Rural Land Governance Project will 
be structured to ensure that women can benefit from the MCC-funded 
investments, through the integration of appropriate mechanisms into the 
new land law and into the overall implementation of the Project.
6. Donor Coordination
    The Rural Land Governance Project builds on land tenure, rural 
development and decentralization efforts supported by the World Bank, 
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''), and the United Nations Development 
Program (``UNDP''). MCC funding will co-finance, with the World Bank, 
support for stakeholder consultation, legal drafting, and passage of 
the new land law and application texts, as well as outreach and 
dissemination once the new law is passed.

[[Page 42614]]

7. United States Agency for International Development
    The United States Agency for International Development (``USAID'') 
currently does not focus specifically on the land tenure sector in 
Burkina Faso. However, the Government will work with USAID, as 
appropriate, to identify potential opportunities for coordination with 
respect to the Rural Land Governance Project.

C. Agriculture Development Project

1. Background
    The Project Objective of the Agriculture Development Project is to 
expand the productive use of land in order to increase the volume and 
value of agricultural production in Project zones. In that regard, the 
Agriculture Development Project is designed to increase rural incomes 
and employment and to enhance the competitiveness of the rural 
economies in the Sourou Valley and the Como[eacute] Basin by addressing 
core constraints typical of rural Burkina Faso: poor water resource 
availability and management; weak beneficiary capacity; lack of access 
to information, markets, and inputs; and lack of access to credit. 
Expected results include increased agricultural production and 
productivity in Project zones, increased total area of land under 
irrigation in Di, and increased availability of rural credit in the 
Project's intervention zones.
2. Summary of Project and Activities
    The Agriculture Development Project consists of the following 
mutually reinforcing Project Activities:
    (a) Water Management and Irrigation.
    The Water Management and Irrigation Project Activity is designed to 
ensure adequate water availability, water delivery, flood control, and 
dam safety to support and protect investments in the Sourou Valley and 
Como[eacute] Basin. Specifically, MCC Funding will support:
    (i) Preparation and implementation of Integrated Water Resources 
Management (``IWRM'') plans for the Sourou Valley and Como[eacute] 
Basin in conformity with Burkina Faso's integrated water resources 
management action plan (Plan d'Action de la Gestion 
Int[eacute]gr[eacute]e des Ressources en Eau du Burkina Faso) 
(``PAGIRE'');
    (ii) Rehabilitation of the L[eacute]ry dam and associated 
infrastructure (the ``L[eacute]ry Dam'');
    (iii) Development of the Di irrigation scheme in the Sourou Valley;
    (iv) Development of EIAs, EMPs, and RAPs for the respective 
investments and implementation of mitigation measures as identified in 
these assessments, or as otherwise may be appropriate, to include 
compensation for physical and economic displacement of individuals, 
residences and businesses affected by such rehabilitation and 
construction, consistent with OP 4.12; and
    (v) Provision of capacity building and technical assistance to 
establish the institutional framework and financial capacity for 
sustainable operation and maintenance of the water and irrigation 
infrastructure, including, but not limited to, capacity building and 
technical assistance to the Autorit[eacute] de Mise en Valeur de la 
Vall[eacute]e du Sourou (``AMVS'') consistent with the recommendations 
of the AMVS Management Audit (as defined in sub-section (b) below).
    (b) Diversified Agriculture.
    The Diversified Agriculture Project Activity will build on the 
delivery of water in the Project zones by supporting on-farm production 
and related activities throughout the agricultural value chain. 
Specifically, MCC Funding will support:
    (i) Extension services, demonstration farms and technical 
assistance services, assisting beneficiaries in irrigated and rain-fed 
areas;
    (ii) Business development services, including transaction 
brokering, technology transfer, and links to the Access to Rural 
Finance Activity;
    (iii) Expansion of market information systems and rehabilitation of 
district markets;
    (iv) Improvement of the quality and accessibility of private animal 
health services and increasing the capacity of public agencies to 
provide technical support and professional training to veterinary 
practitioners; and
    (v) Development of EIAs and EMPs for the respective investments and 
implementation of mitigation measures as identified in these 
assessments, or as otherwise may be appropriate.
    A management audit of AMVS (the ``AMVS Management Audit'') will be 
conducted prior to Entry into Force of the Compact to assess the 
efficacy and efficiency of AMVS, including, but not limited to, its 
strategic planning, organization, operating systems, resources, and 
personnel and management systems. Following discussion of the 
recommendations of the AMVS Management Audit with key stakeholders, an 
action plan agreed by the Parties (the ``AMVS Action Plan'') will be 
implemented by AMVS.
    (c) Access to Rural Finance.
    This Project activity will increase medium- and long-term credit in 
the four western regions of Sud-Ouest, Hauts Bassins, Cascades, and 
Boucle du Mouhoun. Specifically, MCC Funding will support:
    (i) An on-lending facility to provide medium-to long-term loans, 
particularly to farmers and small- and medium-sized, rural and 
agricultural enterprises;
    (ii) Improvement of the capacity of participating financial 
institutions to profitably and securely expand rural lending; and
    (iii) Increasing the ability of creditworthy enterprises in the 
region to access credit, including women-owned enterprises.
3. Beneficiaries
    The principal beneficiaries of the irrigation investments will be 
people with some farming experience with dry-land crops who receive 
irrigated land. Many beneficiaries are expected to be those people who 
are earning less than US$2/day and selection criteria for land 
allocation are designed to serve this category of beneficiaries. The 
farmers on the existing irrigation perimeters who will benefit from the 
technical assistance activities more likely fall into a slightly higher 
income category. Beneficiaries of the livestock, L[eacute]ry Dam, and 
market investments are more likely to be like the relatively poor dry 
land farmers. Beneficiaries of the investments in the Water Management 
and Irrigation Project Activity and the Access to Rural Finance Project 
Activity will be widely distributed in Sourou, Hauts Basins, Sud Ouest, 
and Cascades Regions.
4. Sustainability
    The ability of farmers to adapt to new irrigation and agricultural 
methods, and the executing agencies to complete the project within the 
Compact Term, will be crucial for a successful and sustainable outcome. 
Availability of sufficient water resources and fertile soils, and the 
capacity for implementing proper operation and maintenance of 
facilities and infrastructure, are limiting factors to sustainable 
development in Burkina Faso. The Agriculture Development Project is 
designed to address these key constraints in partnership with the 
Government and with the commitment of beneficiaries. To achieve the 
Project's goals, MCC Funding will strengthen the capacity of key 
stakeholders through training and technical assistance, and will create 
the enabling environment that ensures proper levying of water fees and 
adequate operation and maintenance of the infrastructure and 
facilities.
    The overall sustainability of the Project lies with: (a) The 
strengthened capacity of the Direction G[eacute]n[eacute]rale des 
Ressources en Eau (``DGRE'') to better manage and maintain water 
storage in

[[Page 42615]]

the Sourou reservoir; (b) the strengthened capacity of AMVS through its 
operation and maintenance contractors to provide a reliable supply of 
water to farmers as specified in the by-laws of the project (Cahier de 
Charges); (c) the capacity of beneficiaries, through their Water User 
Associations (``WUA'') to pay for operations and maintenance to ensure 
the provision of irrigation water; (d) the establishment of an 
operations and maintenance fund managed and overseen by AMVS and the 
WUAs; and (e) the Government to ensure that the Cahier de Charges is 
respected by the parties to it. Contingent upon full continuing 
execution of the operations and maintenance action plan pursuant to the 
AMVS Management Audit, a deposit of MCC Funding equal to approximately 
1.5 times the estimated cost of operations and maintenance of the Di 
irrigation infrastructure for one year, may be made into the operations 
and maintenance fund, unless otherwise agreed by the Parties. 
Notwithstanding such deposits, MCC anticipates that farmers will, from 
the outset, pay water charges incrementally toward the full cost of 
operations and maintenance within the first two years of operation. 
With respect to the L[eacute]ry Dam, the Government will ensure that a 
plan and adequate resources are in place to cover yearly operation and 
maintenance costs associated with the L[eacute]ry Dam. Land allocation 
and future land management within the scheme area will be supported by 
general and specific by-laws (Cahier de Charges), whose content will be 
approved by MCC. The Rural Land Governance Project will support land 
use planning and management and capacity-building to the municipalities 
overlapping with targeted areas, and will support registration of 
rights in the targeted scheme areas.
    Projects with similar objectives have failed in the past because of 
the failure of public and private entities to consistently deliver on 
their commitments to growers. The focus of this Project is not on 
building a particular service capacity for which external funding will 
always be needed. It rather will foster relationships between producers 
and commercial suppliers of the goods and services they need and 
between AMVS and the WUAs, so that mutual interest is served by each 
continuing to perform his or her part. The objective is to ensure that 
producers acquire the knowledge and the ability to recognize their 
needs for information, and to develop the network and capacity to meet 
that need, through more diverse and direct sources than a conventional, 
pubic sector agent.
5. Environmental and Social Mitigation Measures
    Environmental sustainability of the Agriculture Development Project 
will be promoted through the implementation of site-specific 
interventions to reduce the potential for downstream surface water 
contamination, reforestation actions to address fuel-wood shortages, 
and use of pest management plans. Additionally, training and capacity 
building for the AMVS and Ministry of Environment officials will help 
ensure that environmental and social issues will be adequately managed. 
Social sustainability will be promoted by the integration of completed 
gender analysis into final Project design and terms of reference for 
implementation to ensure women and families benefit from Project 
investments, targeted training and through a transparent parcel 
allocation scheme. Thorough resettlement analysis will also contribute 
to social sustainability through the identification of mitigation and 
compensation measures that will factor into the Resettlement Action 
Plans.
    Detailed assessments and mitigation plans will be developed for the 
Agriculture Development Project as follows: (a) EIAs, EMPs and RAPs for 
the water management and irrigation activities at Di and L[eacute]ry, 
focusing on environmental, social, and resettlement impacts of the 
creation of the Di irrigated perimeter as well as the rehabilitation of 
the L[eacute]ry Dam; (b) in connection with the Diversified Agriculture 
Project Activity, an EIA, EMP, and RAP for the market rehabilitation 
component, focusing on the environmental, social, and resettlement 
impacts of rehabilitating up to eight district markets; (c) an EIA and 
EMP of the diversified agriculture activities, focusing on the 
environmental impacts of agricultural intensification in the region and 
its aquatic ecosystems; (d) a plan to build environmental and social 
capacity for the AMVS to ensure that minimum capacity is present for 
monitoring impacts and monitoring compliance with MCC's Environmental 
Guidelines and the MCC Gender Policy; and (e) appropriate guidelines 
and requirements for the Access to Rural Finance Project Activity to 
ensure that end-borrowers implement projects in compliance with the 
Government's environmental regulations and MCC's Environmental 
Guidelines.
6. Donor Coordination
    The Project design draws extensively on the work of other donors. 
MCC consulted with the EU on the IWRM, and with the World Bank and AfDB 
on irrigation and agriculture. Lessons learned, particularly with 
regard to including supporting technical assistance for farmers, have 
been incorporated to improve the design of this project and foster its 
sustainability. A number of other donors have been active in the target 
rural areas of the Project, including the World Bank, AfDB, USAID, the 
Fonds Europ[eacute]en De D[eacute]veloppement (``FED'') as well as 
Swiss and Belgian bilateral aid agencies. In several cases, the actions 
to be taken under the Project complement other initiatives. For 
example, 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. In addition, the Access 
to Rural Finance Project Activity has been designed in consultation 
with other donor funded micro, small and medium sized rural enterprise 
(``MSME'') activities in Burkina Faso. In particular, synergies will be 
gained in implementation through close coordination with the 
International Finance Corporation's MSME 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. MCC anticipates that 
consultations will continue with these donors and with others who may 
develop interventions within the Project zones.
7. United States Agency for International Development
    USAID currently does not focus specifically on the agriculture 
sector in Burkina Faso. However, the Government will work with USAID, 
as appropriate, to identify potential opportunities for coordination 
with respect to the Agriculture Development Project.
8. Policy, Legal and Regulatory Reforms
    The Government will continue institutional reforms and initiatives 
aimed at sustainable water resource management that would support the 
development of the Integrated Water Resource Management plans prepared 
and financed pursuant to this Compact.
    The Government will exercise its best efforts to ensure compliance 
of all stakeholders with their obligations as set out in the various 
Cahier de Charges relevant to the Di irrigation perimeter. If

[[Page 42616]]

such stakeholders fail to fulfill those obligations with respect to 
operation and maintenance of the irrigation system, the Government 
shall ensure that such operation and maintenance is performed in any 
event.
    The Government will put in place in the Sourou Valley region 
adequate health infrastructure, and will deploy the necessary staff to 
ensure proper functioning of this infrastructure, in conformity with 
the standards of the National Health Service Plan (Plan de 
Developpement Sanitaire) in use in Burkina Faso.
    In addition, the implementation by the Government, to the 
satisfaction of MCC in its discretion, of the policy, legal and 
regulatory reform described below shall be conditions precedent to 
specified Disbursements: the Government will ensure the availability of 
funds and provide a timeline acceptable to MCC for the construction of 
identified agriculture access roads in the vicinity of the Di 
perimeter: (a) Di--Poura--Ourokou--Poro--Dono, and (b) Dono--Niassari--
Bouna.

D. Roads Project

1. Background
    Burkina Faso's Poverty Reduction Strategy Paper identifies 
infrastructure development as a critical priority for increased 
economic growth. For a landlocked country, the road transport network 
is an important asset for economic development. Such a network 
facilitates trade and communications with regional and international 
markets and improves 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 by an adequate transport system.
    The Project Objective of the Roads Project is to enhance access to 
markets through investments in the road network. More specifically, the 
Roads 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 reduce vehicle operating costs; and (c) ensure the sustainability 
of the road network by strengthening road maintenance. Expected results 
include increased volume of freight and passenger traffic on 
rehabilitated roads, reduced travel times and costs, and improved road 
maintenance. The Project includes a set of primary and rural roads 
projects for upgrading to appropriate functional standards and designed 
to carry projected traffic for a 15 to 20 year horizon. 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.
2. Summary of Project and Activities
    The Roads Project consists of the following Project Activities:
    (a) Development of Primary Roads.
    The Development of Primary Roads Project Activity will support the 
improvements of three primary road segments in western Burkina Faso 
currently projected to total 271 kilometers. The segments to be 
financed using MCC Funding include the development of a 145 kilometer 
segment from Dedougou--Nouna--Mali border, the development of a 76 
kilometer segment from Sabou--Koudougou--Didyr, and a 50 kilometer 
segment from Banfora--Sindou (collectively, the ``Primary Roads''). 
Specifically, MCC Funding will support:
    (i) Implementation of construction activities for the opening, 
improvement, or rehabilitation of the Primary Roads;
    (ii) Implementation of environmental and social mitigation measures 
as identified in the EIA and the RAP, or as otherwise may be 
appropriate, to include compensation for physical and economic 
displacement of individuals, residences and businesses affected by such 
rehabilitation and construction, consistent with OP 4.12; and
    (iii) Project management, supervision and auditing of such 
improvements and upgrades.
    (b) Development of Rural Roads.
    The Development of Rural Roads Project Activity will support the 
improvements of rural road segments currently projected to total 151 
kilometers located in three rural areas in the Como[eacute] Basin of 
southwestern Burkina Faso, including the Provinces of Leraba, Comoe, 
and Kenedougou (collectively, the ``Rural Roads''). These roads 
currently exist as rural tracks and improvements will include upgrading 
to a fully engineered rural road standard. Specifically, MCC Funding 
will support:
    (i) Implementation of construction activities for the opening, 
improvement, or rehabilitation of the Rural Roads;
    (ii) Implementation of environmental and social mitigation measures 
as identified in the EIA and the RAP, or as otherwise may be 
appropriate, to include compensation for physical and economic 
displacement of individuals, residences and businesses affected by such 
rehabilitation and construction, consistent with OP 4.12; and
    (iii) Project management, supervision and auditing of such 
improvements and upgrades.
    (c) Capacity Building and Technical Assistance for Road 
Maintenance.
    The Capacity Building and Technical Assistance Project Activity 
will provide capacity building and technical assistance to existing 
government agencies and private sector institutions involved with road 
maintenance activities to improve the planning and implementation of 
road maintenance. Specifically, MCC Funding will support:
    (i) Assistance in developing a five-year road maintenance plan;
    (ii) Training on procurement processes, contract management, and 
financial accounting systems;
    (iii) Support for development of administrative framework of the 
IMFP (as defined below);
    (iv) Support for public outreach programs for improving safety and 
protection of road infrastructure; and
    (v) Any other related activities as may be approved by MCC.
    MCC Funding will also be used for environmental and social capacity 
building of the Ministry of Environment and Ministry of Infrastructure.
    (d) Incentive Matching Fund for Periodic Road Maintenance.
    The Incentive Matching Fund for Periodic Road Maintenance 
(``IMFP'') Project Activity is designed to set the Government on a path 
toward long-term, sustainable funding of periodic maintenance on the 
full road network in Burkina Faso. MCC Funding will be used to finance 
periodic road maintenance works through an incentive matching fund that 
will match annual increases in the Government's dedicated funding for 
periodic maintenance, subject to measurable indicators of performance 
on maintenance planning, capacity, and implementation. MCC and the 
Government envision that the IMFP will be administered by the Road 
Maintenance Fund of Burkina (Fonds d'Entretien Routier du Burkina--FER-
B), an institution established by the Government in cooperation with 
the World Bank (the ``Road Fund''). MCC Funding of the IMFP is subject 
to the fulfillment of the following conditions, as such conditions are 
further specified in the Program Implementation Agreement: (i) The 
preparation and delivery by the Government of a five-year road 
maintenance plan that will be updated annually; (ii) the presentation 
by the Government of evidence, satisfactory to MCC, that Direction 
G[eacute]n[eacute]rale des Routes (``DGR'') and Direction 
G[eacute]n[eacute]rale des Pistes Rurales (``DGPR'') have improved 
procurement,

[[Page 42617]]

contract management and implementation oversight capacities; (iii) the 
presentation by the Government of evidence, satisfactory to MCC, that 
the Road Fund has adopted appropriate financial controls (including 
cash management and accounting controls) and operational systems 
(including with respect to contract management), and such mechanisms 
are formalized, implemented and verified pursuant to technical and 
financial audits conducted in accordance with the by-laws (Cahier de 
Charges) of the Road Fund approved by MCC; and (iv) the establishment 
of the relative contributions of the Government and MCC to the IMFP, as 
agreed upon between MCC and the Government, and the provision by the 
Government of evidence of financing sufficient to meet the Government's 
share of such contributions. In connection with this sub-section (d), 
the Parties shall use their best efforts to consult with other donors 
where appropriate.
3. Beneficiaries
    Key beneficiaries of the Roads Project will include the population 
in the areas serviced by the roads as well as those who transship goods 
through the region using the roads. Anticipated benefits include 
increased production (for both inputs such as fertilizer, and outputs 
such as farm produce) due to improved access to markets resulting from 
reduced travel time and reduced vehicle operating costs. In addition, 
reducing the isolation of these communities may increase access to 
health and education services.
4. Sustainability
    Road maintenance is crucial for the long term function and benefit 
of the Roads Project investment. The continuation of efforts to 
mobilize resources for road maintenance is essential to ensure 
sustainability of the road investments. In support of road maintenance, 
the provision by MCC of matching funds to annual increases in 
Government spending on periodic maintenance is an innovative mechanism 
to ensure roads are adequately maintained and continue to stimulate 
access into the long-term.
5. Environmental and Social Mitigation Measures
    Environmental sustainability of the Roads Project will be promoted 
through the conduct of comprehensive environmental and social impact 
assessments that will build upon the environmental and social work 
already completed. In addition, the Roads Project will include a series 
of training and short-term educational seminars that will include 
coverage of sound environmental and social performance for existing 
contractors active in the road maintenance industry.
    EIAs will be completed for each set of roads to be rehabilitated or 
upgraded, and each EIA will include gender analysis, EMPs and HIV/AIDS 
prevention plans. In addition, RAPs will be developed and implemented 
for each road segment. While environmental and social impacts related 
to the IMFP Project Activity are not expected to be significant, 
requirements will be incorporated into the design of the IMFP. Further, 
annual technical audits will include consideration of environmental and 
social performance.
6. Donor Coordination
    Throughout due diligence, MCC has consulted with major donors 
involved in funding road construction and capacity building/
institutional strengthening projects in Burkina Faso. MCC has been 
particularly active in coordinating its approach to road maintenance, 
an increasingly important collective concern among the major donors. 
Technical assistance under the Capacity Building and Technical 
Assistance for Road Maintenance Project Activity 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 IMFP, in particular, was developed in 
collaboration with the World Bank and the EU.
    The road segments selected for MCC Funding provide connections with 
current road construction activities funded by other donors. The 
Koudougou to Dedougou road segment, funded by the Islamic Development 
Bank (``BID''), Arab Bank for Economic Development in Africa 
(``BADEA''), Arab Development Fund (``FAD''), Kuwait Fund for Arab 
Economic Development, Saudi Fund for Development, OPEC Fund for 
International Development and the Government, lies in between the 
Dedougou-Mali border road and the Sabou-Koudougou-Didyr road. The Sabou 
to Koudougou road segment intersects with the EU-funded periodic 
maintenance on the Sabou to Bobo-Dioulasso road and works on the Sabou 
to Ouagadougou road anticipated to be funded by the World Bank.
7. United States Agency for International Development
    USAID currently does not focus specifically on the roads and 
transport sectors in Burkina Faso. However, the Government will work 
with USAID, as appropriate, to identify potential opportunities for 
coordination with respect to the Roads Project.
8. Policy, Legal and Regulatory Reforms
    The implementation by the Government, to the satisfaction of MCC in 
its discretion, of the policy, legal and regulatory reforms described 
below shall be conditions precedent to the specified Disbursements:
    (a) The Government will ensure that the Road Fund is fully 
operational in accordance with Burkina Faso law with all staff, 
management, and financial systems in place for efficient execution of 
the road maintenance works including contract management, performance 
monitoring and works verification.
    (b) The Government will ensure that DGR and DGPR have improved 
operational processes to conduct procurement, contract management, and 
monitoring of road maintenance works, as measured by mutually agreed 
targets, to facilitate the implementation of the Road Fund.
    (c) The Government will ensure that a transparent method of funding 
periodic maintenance is established to support the Road Fund.
    In addition, the Government will actively pursue participation of 
the private sector in maintenance work through a series of training 
seminars and outreach activities to improve private sector 
understanding of procurement processes, contracting requirements, road 
maintenance methods/best practices, and maintenance standards.

E. Bright 2 Schools Project

1. Background
    The Project Objective of the BRIGHT 2 Schools Project is to 
increase primary school completion rate for girls and builds upon the 
successes of the Burkinab[eacute] Response to Improve Girls' Chances to 
Succeed (``BRIGHT'') funded under the MCC Threshold Program. In 
addition, the BRIGHT 2 Schools Project will further support the efforts 
of the Ministry of Basic Education and Literacy (Minist[egrave]re de 
l'Enseignement de Base et de l'Alphab[eacute]tisation or ``MEBA'') to 
increase girls'' primary education completion rate. The Project focuses 
on maintaining high levels of girls' enrollment and retention as they 
move on to the higher grades (4-6) in

[[Page 42618]]

their new classrooms. Specific objectives of the Project are to: (a) 
Maintain the high enrollment rates; (b) anchor the girls' education 
principles in the respective communities for the benefit of future 
generations of school-aged girls; and (c) start a program for school 
maintenance.
    The BRIGHT 2 Schools Project will consist of two phases. Phase one, 
scheduled from September 2008 to December 2009, will be an interim 
phase to provide temporary classroom solutions and to maintain 
community interest at the respective schools to be supported by Compact 
Implementation Funding. Phase two, scheduled from the date the Compact 
enters into force and for the three consecutive years thereafter, will 
consist of construction work in addition to all other Project 
Activities. Several months of anticipated overlap between phase one and 
phase two will allow for a smooth transition between the two stages.
    The BRIGHT 2 Schools Project will be administered by USAID pursuant 
to an agreement between USAID and MCC (the ``Administration 
Agreement''). Accordingly, the Government will not be responsible for 
Project Activities for which USAID has sole responsibility under the 
Administration Agreement (including with respect to applicable 
Disbursements to USAID). Notwithstanding the foregoing, the Government 
will cooperate with USAID and perform its obligations to achieve the 
BRIGHT 2 Schools Project Objective consistent with this Compact, the 
Program Implementation Agreement and any other Supplemental Agreement.
2. Summary of Project and Activities
    The BRIGHT 2 Schools Project consists of the following mutually 
reinforcing Project Activities:
    (a) Borehole Construction/Rehabilitation and/or Water Catchment 
Systems.
    MCC Funding will support some or all of the following:
    (i) The construction of up to 50 additional boreholes for the 
exclusive use of the school complex;
    (ii) The purchase and installation of pipe and water catchments, 
where technically feasible, in accordance with environmental 
regulations, and budget permitting; and
    (iii) Such other activities as may be determined by MCC in 
consultation with USAID.
    (b) Construction of Schools Complexes.
    MCC Funding will support the identification, in consultation with 
respective communities, of the exact location for expansion of existing 
schools and their construction. It also will support the construction 
of an additional classroom block of three classrooms at each of the 132 
locations, for a total of 396 additional classrooms (including 
equipment), 396 teacher housing units, (including latrine, bathing 
space and kitchen), two blocks of three latrines (for a total of 792 
latrines), sports grounds and sports equipment.
    (c) Bisongos (Kindergartens)
    MCC Funding will support the construction of 122 bisongos, 
including playground and equipment. Such construction will utilize 
existing designs prepared by Catholic Relief Services and made 
available to the Ministry of Social Action and National Solidarity.
    (d) Take-Home Rations.
    This Project Activity will provide food for daily meals (``Take-
Home Rations'') during the nine months of the school year for 
approximately 100 children estimated to be enrolled at each of the 132 
bisongos. The Project also will provide monthly Take-Home Rations for 
girls demonstrating 90 percent monthly attendance in grades 1-4 (CP1-
CE2) during the nine-month school year. Forty-five girls per grade are 
estimated to be able to benefit from Take-Home Rations, which consist 
of approximately eight kilograms of rice or other dry foods. Take-Home 
Rations will be provided based on studies showing that school meals are 
an effective way of ensuring attendance and improving academic 
performance. Implementers will be encouraged to work with teachers and 
parents to create school gardens to enhance participation in canteen 
planning and management for nutritious meals. The initiative supports 
MEBA's strategic plan, and anticipates training sessions for teachers 
in the school garden concept and nutrition.
    (e) Social Mobilization Campaign.
    This Project Activity will build community ownership around the 
school and the value of education through social mobilization, literacy 
training, and other efforts in the 132 rural communities. Specifically, 
MCC Funding will support:
    (i) Well-targeted social mobilization campaigns on topics to serve 
as content for literacy training, school director and teacher training, 
and as the basis for community discussion groups, including messages on 
gender parity, the lifelong value of education and literacy, school 
maintenance, canteen and bisongo management;
    (ii) Assistance to the Associations des M[egrave]res Educatrices 
(``AME'') to mentor girls;
    (iii) Training teachers in sensitivity to gender issues; and
    (iv) An incentive program for female teachers.
    (f) Adult Literacy/Management of Micro-Projects.
    MCC Funding will support the training of trainers, delivery of 
literacy courses, and training in micro-project management for women 
and mothers in the 132 communities. This Project Activity will build on 
existing literacy programs and lead to the development of training 
materials that respond to the needs of the communities and enhance the 
women's understanding of the benefits of their own education as well as 
their role in supporting their daughters' and the school in general. 
Specifically, MCC Funding will support:
    (i) Training in management of micro-projects for income generation 
to help boost community development; and
    (ii) Literacy training for mothers.
    (g) Program Support.
    MCC Funding will be used for direct and indirect costs incurred by 
USAID in the implementation of this Project.
3. Beneficiaries
    Approximately 19,800 children, including approximately 9,900 girls, 
will benefit from the construction of the remaining classrooms for 
BRIGHT schools in 132 communities in 9 provinces. In addition, it is 
estimated that 13,200 children will benefit from the bisongos 
(kindergartens), 39,600 children will benefit from the meals provided 
in schools, and 13,200 girls and their families will benefit from the 
Take-Home Rations.
4. United States Agency for International Development
    USAID will serve as the administrator for the BRIGHT 2 Schools 
Project pursuant to the Administration Agreement.
5. Policy, Legal and Regulatory Reforms
    The Government will implement the policy, legal and regulatory 
reforms described below.
    (a) The Government will ensure the nomination by MEBA of a BRIGHT 2 
Schools Project Coordinator and Coordination Team, and shall ensure 
that a BRIGHT 2 Schools Project Coordinator and Coordination Team are 
in place for the duration of the Project.
    (b) The Government will provide an annual budget allocation, in 
accordance with Section 2.6(c) of the Compact, to MEBA 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).

[[Page 42619]]

F. Implementation Framework

1. Overview
    The implementation framework and the plan for ensuring adequate 
governance, oversight, management, monitoring and evaluation, and 
fiscal accountability for the use of MCC Funding are summarized below. 
MCC and the Government shall enter into the Program Implementation 
Agreement, and any other agreements in furtherance of this Compact, all 
of which, together with this Compact, shall set out certain rights, 
responsibilities, duties and other terms relating to the implementation 
of the Program.
2. MCC
    MCC will take all appropriate actions to carry out its 
responsibilities in connection with this Compact and the Program 
Implementation Agreement, including the exercise of its approval rights 
in connection with the implementation of the Program.
3. MCA-Burkina Faso
    The Government, by Decree No. 2008-185/PRES/PM dated April 18, 
2008, of the Council of Ministers of Burkina Faso (the ``Decree''), 
established MCA-Burkina Faso as an independent legal entity empowered 
to carry out the Government's obligations and to implement the Program 
under this Compact. The Government shall ensure that MCA-Burkina Faso 
takes all appropriate actions to implement the Program, including the 
performance of the rights and responsibilities designated to it by the 
Government pursuant to this Compact and the Program Implementation 
Agreement. The Government also shall ensure that MCA-Burkina Faso has 
full decision-making autonomy, including, inter alia, the ability, 
without consultation with, or the consent or approval of, any other 
party, to (a) enter into contracts in its own name, (b) sue and be 
sued, (c) establish an account in a financial institution in the name 
of MCA-Burkina Faso and hold MCC Funding in that account, (d) expend 
MCC Funding, (e) engage one or more fiscal agents who will act on 
behalf of MCA-Burkina Faso on terms acceptable to MCC, (f) engage one 
or more procurement agents who will act on behalf of MCA-Burkina Faso, 
on terms acceptable to MCC, to manage the acquisition of the goods, 
works and services requested by MCA-Burkina Faso to implement the 
activities funded by this Compact, and (g) competitively engage one or 
more auditors to conduct audits of its accounts.
    MCA-Burkina Faso will be administered and managed by the following 
bodies: (a) Le Comit[eacute] d'Orientation et de Suivi, acting as its 
Board of Directors (the ``Board''); (b) L'Unit[eacute] de Coordination, 
acting as its management unit (the ``Management Unit''); and (c) Le 
Conseil National, acting as its stakeholders committee (the 
``Stakeholders Committee''). The governance of MCA-Burkina Faso will be 
set forth in more detail in the Program Implementation Agreement, the 
constitutive documents and internal regulations of MCA-Burkina Faso 
(``MCA-Burkina Faso Bylaws'') laying out the responsibilities of the 
Board, the Management Unit, and the Stakeholders Committee. The MCA-
Burkina Faso Bylaws will be in accordance with MCC's Guidelines for 
Accountable Entities and Implementation Structures, published on the 
MCC Web site (the ``Governance Guidelines'').
    (a) Board of Directors (Le Comit[eacute] d'Orientation et de 
Suivi).
    (i) Composition. Consistent with the Decree and the Governance 
Guidelines, MCA-Burkina Faso shall be governed by the Board, which 
shall consist of those voting and non-voting members set forth in the 
Decree. Any alteration of the composition of the Board shall be subject 
to MCC approval.
    (ii) Roles and Responsibilities. The Board will be responsible for 
overseeing the implementation of the Program, including making major 
decisions, such as approving annual implementation plans, disbursement 
requests, annual progress reports, key contracts, and reporting on 
policy reforms, as well as other responsibilities defined in the MCA-
Burkina Faso Bylaws. The Board will have final decision-making 
authority over the implementation of the Program. It will meet 
regularly; the frequency of meetings will be set forth in the MCA-
Burkina Faso Bylaws and will be in accordance with the Governance 
Guidelines. The specific roles of the voting and non-voting members 
will be set forth in the MCA-Burkina Faso Bylaws.
    (b) Management Unit (L'Unit[eacute] de Coordination).
    (i) Composition. The Management Unit, which will be led by a 
competitively selected National Coordinator, also will be composed of 
competitively recruited Directors with expertise in the key components 
of the Program, a Legal Counsel, and other key Directors, including 
Directors of Environmental and Social Assessment, Procurement, 
Administration and Finance, and Monitoring and Evaluation, together 
with such other managers and officers as may be agreed by the 
Government and MCC. The Directors will be supported by appropriate 
staff to enable the Management Unit to execute its roles and 
responsibilities.
    (ii) Roles and Responsibilities. The Management Unit will be based 
in Ouagadougou, Burkina Faso, and will be responsible for managing the 
day-to-day implementation of the Program with oversight from the Board. 
It will serve as the principal link between MCC and the Government and 
will be accountable for the successful execution of the Program, each 
Project and each Project Activity. As an administrative structure of 
the Government, MCA-Burkina Faso will be subject to Government audit 
requirements. As a recipient of MCC Funding, it will also be subject to 
MCC audit requirements.
4. Stakeholders Committee (Le Conseil National)
    (a) Composition. The Government has established a strategic 
Stakeholders Committee, in conformity with the Governance Guidelines, 
to ensure the continuation of the consultative process throughout the 
implementation of the Program. The Stakeholders Committee shall consist 
of up to 28 members (or such other number as may be selected by the 
Government and approved by MCC), including deputies, mayors, regional 
government counselors, and representatives from banks in the project 
intervention zone, the private sector, environmental NGOs, women's 
associations, fruits and vegetable exporters, farmers' associations in 
the Sourou and Como[eacute], and religious and customary authorities. 
The Government also will establish, in the project intervention and 
project-affected areas, informal stakeholders' committees whose size 
and composition will reflect the sectors, activities and concerns of 
the Program, and include key NGOs, the private sector, civil society, 
and decentralized regional and local government bodies.
    (b) Location. The strategic Stakeholders Committee and the informal 
stakeholders' committees will convene where appropriate to ensure 
maximum participation in providing feedback on Program and Project 
implementation.
    (c) Roles and Responsibilities. The strategic Stakeholders 
Committee will serve as a feedback and accountability mechanism for 
MCA-Burkina Faso throughout the Program's implementation. It will be 
responsible for continuing the consultative process throughout Program 
implementation and will consult with the informal stakeholders' 
committees on a regular basis or at the request of an informal 
stakeholders' committee as set forth in

[[Page 42620]]

the MCA-Burkina Faso Bylaws. The informal stakeholders' committees will 
not have decision-making authority but, at the request of the strategic 
Stakeholders Committee, will review certain reports, agreements and 
documents, including implementation documents to the extent 
appropriate, and provide advice and feedback regarding the Program's 
implementation.
5. Implementing Entities
    (a) Composition. The Government and MCC have identified the 
principal ministries and public institutions that may or will serve as 
implementing entities (each, an ``Implementing Entity''). Such 
Implementing Entities include, but are not limited to, (i) the AMVS, 
within the Ministry of Agriculture; (ii) the Direction 
G[eacute]n[eacute]rale des Routes, within the Ministry of 
Infrastructure; (iii) the Direction G[eacute]n[eacute]rale des Pistes 
Rurales, within the Ministry of Infrastructure; (iv) the Road Fund; (v) 
the Ministry of Environment (Minist[egrave]re de l'Environnement et du 
Cadre de Vie); and (vi) appropriate Directions of the Ministry of 
Economic and Finance (Minist[egrave]re de l'Economie et des Finances) 
for the Rural Land Governance Project. MCA-Burkina Faso will enter into 
agreements with the Implementing Entities that set forth their roles 
and responsibilities in connection with Program implementation.
    (b) Location. The Implementing Entities will be based where 
appropriate to ensure maximum effectiveness in Program and Project 
implementation. Additional personnel to be based within the 
Implementing Entities may be contracted by MCA-Burkina Faso where 
appropriate.
    (c) Roles and Responsibilities. The Implementing Entities will be 
responsible for the coordination of the Project Activities and of 
various contractors, the achievement of Project Objectives and 
timelines, development of Compact-related requirements (work plans, 
detailed financial plans, and quarterly reports), procurement (where 
MCC has determined that procurement tasks may be performed by the 
Implementing Entity), performance monitoring of contractors and such 
other Program-related activities as may be agreed by MCA-Burkina Faso 
and an Implementing Entity with the prior written approval of MCC.
6. Fiscal Agent
    Through a competitive process approved by MCC, the Government has 
appointed a fiscal agent (the ``Fiscal Agent'') to provide fiscal agent 
services to MCA-Burkina Faso. The Fiscal Agent will provide a broad 
range of financial management services required by MCA-Burkina Faso to 
implement the Program, including funds control, disbursement 
documentation and management, cash management and accounting, as set 
forth in the Fiscal Agent Agreement. The Government shall take all 
appropriate actions to ensure that the Fiscal Agent performs these 
services in accordance with the terms of this Compact, the Program 
Implementation Agreement, and any other agreement to which the Fiscal 
Agent is a party and that all accounting in connection with the Program 
is in accordance with International Accounting Standards (IAS) as 
contemplated by Section 3.7(b)(i) of the Compact.
7. Procurement Agent
    Through a competitive process approved by MCC, the Government has 
appointed a procurement agent (the ``Procurement Agent'') to provide 
procurement agent services to MCA-Burkina Faso. The Procurement Agent 
will administer all Program and administrative procurements, and 
provide specified procurement appropriate activities required by MCA-
Burkina Faso to implement the Program, as set forth in the Procurement 
Agent Agreement; provided, however, that the Procurement Agent shall 
not be responsible for those procurements administered pursuant to the 
Administration Agreement. The Government shall take all appropriate 
actions to ensure that the Procurement Agent performs these services in 
accordance with the terms of this Compact, the Program Implementation 
Agreement, and any other agreement to which the Procurement Agent is a 
party and in accordance with the MCC Program Procurement Guidelines.

Annex II Summary of the Multi-Year Financial Plan

1. General

    This Annex II to this Compact (the ``Financial Plan Annex'') 
summarizes the Multi-Year Financial Plan for the Program. Each 
capitalized term in this Financial Plan Annex shall have the same 
meaning given such term elsewhere in this Compact. Unless otherwise 
expressly stated, each Section reference herein is to the relevant 
Section of the main body of this Compact.
    The Multi-Year Financial Plan Summary below sets forth the 
estimated annual contribution of MCC Funding for Program 
administration, Program monitoring and evaluation, and implementing 
each Project. The Government's contribution of resources will consist 
of in-kind contributions and amounts required effectively to satisfy 
the requirements of Section 2.6(a) of this Compact. In accordance with 
the Program Implementation Agreement, the Government will develop and 
adopt on a quarterly basis a detailed financial plan (as approved by 
MCC) setting forth annual and quarterly funding requirements for the 
Program (including administrative costs) and for each Project, 
projected both on a commitment and cash requirement basis.

2. Modifications

    Consistent with Section 6.2(b) of this Compact, to preserve 
administrative flexibility, the Parties may by written agreement (or as 
otherwise provided in the Program Implementation Agreement), without 
amending this Compact, change the designations and allocations of MCC 
Funding among the Projects, the Project Activities, or any activity 
under Program administration or monitoring and evaluation, or between a 
Project identified as of the entry into force of this Compact and a new 
project.

[[Page 42621]]



                                                         Multi-Year Financial Plan Summary (US$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Project                        CIF           Year 1          Year 2          Year 3          Year 4          Year 5           Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Rural Land Governance Project:
    Legal and Procedural Change and              144,667         943,916         366,792         240,422         240,422          75,592       2,011,811
     Communication......................
    Institutional Development and                 54,667       2,394,586       8,975,304      10,370,277       9,278,614       6,934,211      38,007,659
     Capacity Building..................
    Site-Specific Land Tenure                    906,078       3,871,586       3,654,951       4,992,964       4,560,964       1,928,602      19,915,145
     Interventions......................
                                         ---------------------------------------------------------------------------------------------------------------
        Sub-Total.......................       1,105,412       7,210,088      12,997,047      15,603,663      14,080,000       8,938,405      59,934,615
2. Agriculture Development Project:
    Water Management and Irrigation.....       3,838,844       6,761,835      26,576,645      34,497,680      15,805,924       3,957,941      91,438,869
    Diversified Agriculture.............         932,758       8,349,515      11,599,192       6,685,782       6,936,923       2,001,462      36,505,632
    Access to Rural Finance.............               -       2,798,084       2,773,453       2,845,349       2,539,336       3,009,336      13,965,558
                                         ---------------------------------------------------------------------------------------------------------------
        Sub-Total.......................       4,771,602      17,909,434      40,949,290      44,028,811      25,282,183       8,968,739     141,910,059
3. Roads Project:
    Development of Primary Roads........         300,756       1,516,858      28,241,321      69,106,730      42,638,082         422,561     142,226,308
    Development of Rural Roads..........          37,227          74,452       4,268,032       7,665,973       5,499,910          58,779      17,604,373
    Capacity Building and Technical                    -       1,460,000         460,000         460,000         460,000         460,000       3,300,000
     Assistance for Road Maintenance....
    Incentive Matching Fund for Periodic               -               -               -      16,000,000      10,000,000       5,000,000      31,000,000
     Road Maintenance (IMFP)............
                                         ---------------------------------------------------------------------------------------------------------------
        Sub-Total.......................         337,983       3,051,310      32,969,353      93,232,703      58,597,992       5,941,340     194,130,681
4. BRIGHT 2 Schools Project:
    BRIGHT 2 Schools Activity...........       3,000,000      25,829,669               -               -               -               -      28,829,669
                                         ---------------------------------------------------------------------------------------------------------------
        Sub-Total.......................       3,000,000      25,829,669               -               -               -               -      28,829,669
5. Monitoring & Evaluation (M&E):
    Monitoring & Evaluation.............         450,000       1,720,000       1,210,000       1,460,000       1,360,000       1,680,000       7,880,000
                                         ---------------------------------------------------------------------------------------------------------------
        Sub-Total.......................         450,000       1,720,000       1,210,000       1,460,000       1,360,000       1,680,000       7,880,000
6. Program Administration & Oversight:
    MCA-Burkina Faso Program                   5,827,998       5,122,627       5,337,718       6,035,248       5,615,847       5,549,637      33,489,075
     Administration.....................
    Fiscal Agent / Procurement Agent....         608,070       2,432,280       2,432,280       2,432,280       2,432,280       2,432,280      12,769,470
    Audit...............................               -         400,000         400,000         400,000         400,000         400,000       2,000,000
                                         ---------------------------------------------------------------------------------------------------------------
        Sub-Total.......................       6,436,068       7,954,907       8,169,998       8,867,528       8,448,127       8,381,917      48,258,545
                                         ===============================================================================================================
            Total Estimated MCC               16,101,065      63,675,408      96,295,688     163,192,705     107,768,302      33,910,401     480,943,569
             Contribution...............
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 42622]]

Annex III Description of Monitoring and Evaluation Plan

    This Annex III (the ``M&E Annex'') generally describes the 
components of the Monitoring and Evaluation Plan (``M&E Plan'') for the 
Program.

1. Overview

    MCC and the Government (or a mutually acceptable Government 
affiliate) will formulate, agree to and the Government will implement, 
or cause to be implemented, an M&E Plan that specifies (a) how progress 
toward the Program goal and objectives will be monitored, (``Monitoring 
Component''), (b) process and timeline for the monitoring of planned, 
ongoing, or completed project activities to determine their efficiency 
and effectiveness, and (c) a methodology for assessment and rigorous 
evaluation of the outcomes and impact of the Program (``Evaluation 
Component''). Information regarding the Program's performance, 
including the M&E Plan, and any amendments or modifications thereto, as 
well as progress and other reports, will be made publicly available on 
the Web site of MCA-Burkina Faso and elsewhere.

2. Program Logic

    The M&E Plan will be built on a logic model which illustrates how 
the Program, Projects and Project activities contribute to poverty 
reduction and economic growth in Burkina Faso. The logic model below 
provides a visual representation of each Project's activities and the 
channels through which the activities lead to higher level outcomes and 
objectives. In sum, the goal of the Program is to contribute to rural 
economic growth and poverty reduction among targeted beneficiaries.
[GRAPHIC] [TIFF OMITTED] TN22JY08.003

3. Monitoring Component

    To monitor progress toward the achievement of the impact and 
outcomes, the Monitoring Component of the M&E Plan will identify (a) 
the indicators, (b) the definitions of the indicators, (c) the sources 
and methods for data collection, (d) the frequency for data collection, 
(e) the party or parties responsible, and (f) the timeline for 
reporting on each indicator to MCC.
    (a) Indicators. The M&E Plan will measure the results of the 
Program using quantitative, objective and reliable data 
(``Indicators''). Each indicator will have benchmarks that specify the 
expected value and the expected time by which that result will be 
achieved (``Target''). The M&E Plan will be based on a logical 
framework approach that classifies indicators as goal, objective, 
outcome, and output. The Compact Goal indicators (``Goal Indicators'') 
will measure the poverty reduction goal for each Project. Second, the 
Objective Indicator (``Project Objective Indicators'') will measure the 
final result of each Project. Third, Outcome and Output Indicators 
(``Project Outcome Indicators'') will measure the early and 
intermediate results of the Project activities. For each Project 
Outcome Indicator, Project Objective Indicator, and Goal Indicator, the 
M&E Plan will define a strategy for obtaining and verifying the value 
of such indicator prior to undertaking any activity that affects the 
value of such Indicator (such value, a ``Baseline''). All indicators 
will be disaggregated by gender, income level and age, and beneficiary 
types to the extent practicable. Subject to prior written approval from 
MCC, MCA-Burkina Faso may add indicators or refine the definitions and 
Targets of existing indicators.
    (i) Goal and Project Objectives. The M&E Plan will contain the Goal 
and Objective Indicators listed in the table below specifying the 
definition, unit of measurement, baseline, and end of Compact Target 
for each.
    (ii) Project Outcome Indicators. The M&E Plan will contain Project 
Outcome Indicators which will measure the results for the 4 main 
Projects and are listed below with their definitions, units of 
observation, baseline and end of Compact Target. Prior to the 
disbursement of MCC Funding for any Project activity, the Implementing 
Entity of that Project activity must propose a final set of Activity 
Indicators that is approved in writing by its Project Manager, MCA-
Burkina Faso and MCC. The M&E Plan will be amended to reflect the 
addition of such indicators.

----------------------------------------------------------------------------------------------------------------
Overall goal: reduce poverty through
 economic growth by increasing rural    Unit of  measurement   Baseline value            Year 5 target
               incomes
----------------------------------------------------------------------------------------------------------------
Increased income resulting from       US$/year...............               0  US$12,777,574.
 primary roads rehabilitation.

[[Page 42623]]

 
Increased income resulting from       US$/year...............               0  US$2,750,000.
 irrigation and agricultural
 investments.
----------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
   Rural land governance project          Indicator              Definition          Unit of  measurement        Baseline value         Year 5 target
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Rural Land Governance Project
--------------------------------------------------------------------------------------------------------------------------------------------------------
Project Objective: Increase         Trend in incidence of  Annual rate of         Percent...................  TBD *...............  Annual rate of
 investment in land and rural        conflicts over land    increase of                                                              increase in land
 productivity through improved       rights.                conflicts over land                                                      disputes in Project
 land tenure security and land                              rights.\1\                                                               areas falls by 25%
 management.                                                                                                                         (from the baseline
                                                                                                                                     rate of increase).
                                    Conflicts resolved...  Proportion of all      Percent Prefectures.......  TBD *...............  50.
                                                            reported land         CVDs......................  ....................  ....................
                                                            conflicts resolved                                TBD *...............  60.
                                                            by prefectures and
                                                            Comit[eacute]s
                                                            Villageois de
                                                            Developpement
                                                            (``CVDs'').\2\
                                    ``Chartes              Number of new social   Number....................  0...................  47.
                                     Fonci[egrave]res''     pacts (commune-level
                                     (Social pacts)         land use and land
                                     completed per the      management norms and
                                     new land law.          procedures)
                                                            completed.
                                    Communal land use      Number of new          Number....................  0...................  47.
                                     plans completed.       communal land use
                                                            plans (maps)
                                                            completed.
                                    Land planning and      Total targeted         Hectares..................  Existing              10,000.
                                     registration.          hectares or parcels   ..........................   agricultural         ....................
                                                            registered at the     Hectares..................   development          2037.
                                                            ``Division Fiscale''                               zones.\3\
                                                            (deconcentrated tax                               New zones (targeted
                                                            office).                                           under the
                                                                                                               Agriculture
                                                                                                               Development
                                                                                                               Project).
                                                                                  Parcels...................  Ganzourgou pilot....  14,500 parcels.
Increased confidence in land        Extent of confidence   Percent of survey      Percent...................  TBD *...............  To 50 percent.
 tenure.                             in land tenure         respondents
                                     security.              perceiving their
                                                            land as secure.
                                    Extent of confidence   Percent of survey      Percent...................  TBD *...............  To 50 percent.
                                     in land conflict       respondents
                                     resolution.            perceiving
                                                            confidence in
                                                            conflict resolution
                                                            mechanisms.
Increased efficiency of land        Average time required  Number of days         Days......................  TBD *...............  TBD.**
 institutions.                       to obtain a title to   required to obtain a
                                     land in rural areas.   land title in rural
                                                            areas.
                                    Average cost required  Cost required to       US$.......................  TBD *...............  TBD.**
                                     to register property.  register land as
                                                            property in rural
                                                            areas.
--------------------------------------------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
   Agriculture development                                                                Baseline      Year 5
           project                 Indicator        Definition    Unit of  measurement     value        target
----------------------------------------------------------------------------------------------------------------
                                         Agriculture Development Project
----------------------------------------------------------------------------------------------------------------
Project Objective: To expand       Volume of     Total volume of
 productive use of land in       production of    key             ....................  ...........  ...........
 order to increase the volume       selected      agricultural    ....................  ...........  ...........
 and value of agricultural      products in the   production in   Tons................       15,571       20,000
 production in the Project       Sourou valley    the perimeters  Tons................       56,485      113,000
 zones.                               \4\         in the dry
                               ................   season and
                               Rainfed.........   rainy season.
                               Irrigated \5\...  ...............
                                                 ...............
                               Dry-season        Average yield    Tons/ha.............           15           25
                                productivity in   of selected
                                the Sourou        crops.
                                valley.
                               Onion on newly
                                irrigated
                                perimeters.
                               Tomato and        Average yield    Tons/ha.............           10           25
                                potato on newly   of selected
                                irrigated         crops.
                                perimeters.
                               Rice on newly     Average yield    Tons/ha.............            4            6
                                irrigated         of selected
                                perimeters.       crops.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                                          Baseline      Year 5
           Outcomes                Indicator        Definition    Unit of  measurement     value        target
----------------------------------------------------------------------------------------------------------------
                                         Agriculture Development Project
----------------------------------------------------------------------------------------------------------------
Increased irrigated area.....  New area under    Total new        Hectares............        3,818    \6\ 5,855
                                irrigation.       irrigated area
                                                  productively
                                                  exploited in
                                                  the Sourou
                                                  valley
                                                  (hectares).
Improved water infrastructure  Overall           Ratio of volume  Percent.............          N/A           75
 and management in the Di       conveyance        of water
 perimeter.                     efficiency.       delivered to a
                                                  field as a
                                                  fraction of
                                                  volume taken
                                                  from the
                                                  Sourou river.
                               Water use         Ratio of the     Percent.............          N/A           70
                                efficiency.       volume of crop
                                                  water required
                                                  to the volume
                                                  of water
                                                  delivered to
                                                  the field.

[[Page 42624]]

 
                               Water fee         Percent of       Percent.............          N/A          100
                                recovery rate.    annual
                                                  targeted water
                                                  fees collected
                                                  from
                                                  beneficiaries
                                                  in new
                                                  perimeters.
Improved livestock management  Bovine weight     Average bovine   Kg/head/year........           39           70
 techniques.                    gain .\7\         weight gain/
                                                  head/year in
                                                  participating
                                                  herds.
                               Vaccine coverage  Percent of       Percent.............           29           65
                                against the       bovines
                                contagious        vaccinated
                                bovine            against the
                                p[eacute]ripneu   bovine
                                monia.            p[eacute]ripne
                                                  umonia in
                                                  participating
                                                  herds.
Increased availability of      Loan provision    Total number of  Number..............            0        1,000
 credit in project areas.       by the rural      loans provided
                                finance           by the rural
                                facility.         finance
                                                  facility.
----------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
           Roads project                  Indicator              Definition        Unit of  measurement       Baseline value          Year 5  target
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Roads Project
--------------------------------------------------------------------------------------------------------------------------------------------------------
Project Objective: Enhance access   Average Annual Daily   Traffic Counts         Number................
 to markets through investments in   Traffic.               (numbers of
 the road network.                                          vehicles).
                                    Segment 1............
                                    Sabou--Koudougou.....  .....................  ......................  148...................  230.
                                    Koudougou--Perkoa....  .....................  ......................  212...................  330.
                                    Perkoa--Didyr........  .....................  ......................  164...................  195.\8\
                                    Segment 2............
                                    Dedougou--Nouna......  .....................  ......................  203...................  330.
                                    Nouna--Bomborukuy....  .....................  ......................  118...................  190.
                                    Bomborukuy--Frt. Mali  .....................  ......................  62....................  110.
                                    Segment 3............
                                    Banfora--Sindou......  .....................  ......................  126...................  215.
                                    Volume of goods        Volume of products     Tons..................  TBD \9\...............  Doubling
                                     transported.           transported to and
                                                            from the production
                                                            zones.
--------------------------------------------------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
             Outcomes                     Indicator              Definition        Unit of  measurement       Baseline value          Year 5  target
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Roads Project
--------------------------------------------------------------------------------------------------------------------------------------------------------
Improved road quality and reduced   International          Degree of road         Number................  12-22 for relevant      3.5.
 travel times.                       Roughness Index.       roughness.                                     roads.
                                    Access time (in        Accessibility to the   Minutes...............  TBD \10\..............  Reduced by half.
                                     minutes) to the        markets.
                                     closest market on
                                     paved roads.
Improved access to basic health     Visits to basic        Percent of population  Percent...............  34.08 \11\............  46.10.
 infrastructure via rural roads.     health center          visiting health
                                     infrastructure.        centers (annual).
Improved capacity to manage and     Road Maintenance       Percent of required    Percent...............  100...................  100.
 fund road maintenance.              coverage.              routine maintenance
                                                            completed.
                                                           Percent of required    Percent...............  TBD...................  TBD.\12\
                                                            periodic maintenance
                                                            completed.
--------------------------------------------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                         Unit of         Baseline       Year 5
   BRIGHT 2 schools project         Indicator        Definition        measurement         value        target
----------------------------------------------------------------------------------------------------------------
                                            BRIGHT 2 Schools Project
----------------------------------------------------------------------------------------------------------------
Project Objective: Increase     National girls'   The number of     Percent..........         26.20           60
 primary school completion       primary           female students
 rates for girls.                education         that have
                                 completion.       successfully
                                                   completed their
                                                   last year of
                                                   primary school,
                                                   minus the
                                                   number of
                                                   repeaters in
                                                   that grade,
                                                   divided by the
                                                   total number of
                                                   female children
                                                   of official
                                                   graduation age.
----------------------------------------------------------------------------------------------------------------
                                                    Outcomes
----------------------------------------------------------------------------------------------------------------
Improve access to basic         Girls'            The number of     Number...........          0           9,900
 education for girls.            enrollment rate   girls enrolled
                                 in BRIGHT         in BRIGHT
                                 schools.          schools.
Improve quality of basic        Girls'            Percent of girls  Percent..........          0              97
 education for girls.            attendance        who attend
                                 rates at BRIGHT   BRIGHT school
                                 schools.          90% of the time.
                                (disaggregated    (Numerator:
                                 by school and     girls who
                                 by grade).        regularly
                                                   attend BRIGHT
                                                   schools).
                                                  (Denominator:
                                                   Total number of
                                                   girls enrolled
                                                   in BRIGHT
                                                   schools) x100.
                                Girls' promotion  The percentage    Percent..........          0             90
                                 rates at BRIGHT   of girls
                                 schools           enrolled in one
                                 (disaggregated    grade that
                                 by school and     continue to be
                                 by grade).        enrolled in the
                                                   following grade
                                                   in a BRIGHT
                                                   school.
----------------------------------------------------------------------------------------------------------------
\1\ Targeted Project areas will be compared to non-Project areas.
*Baseline data collection will be conducted during the CIF period.
\2\ This will be disaggregated between conflicts resolved and conflicts reported.
\3\ Existing Zones: (a) irrigated zones: Vall[eacute]e du Kou, Banzon, Savili, Lac Bam, Sourou, Como[eacute];
  (b) pastoral zones: Nouaho and Sondr[eacute] Est.
** Target will be set as result of baseline.
\4\ Rainy season products: rice, corn, banana, papaya; Dry season products: rice, corn, wheat, banana, papaya,
  onion, watermelon, green bean, potato and tomato.
\5\ This will be disaggregated between old and new perimeters.

[[Page 42625]]

 
\6\ 2,037 additional hectares in Di.
\7\ These two livestock indicator baselines are national estimates, which will be updated when participating
  herds are identified.
\8\ The traffic growth target for the Perkoa--Didyr segment includes annual normal traffic growth only and does
  not include generated traffic growth that would be added if this road segment were to be extended.
\9\ Baseline data collection will be conducted in the roads design studies.
\10\ Baseline data collection will be conducted in the roads design studies.
\11\ This baseline represents the national value.
\12\ To be determined based upon results of technical assistance studies.

    (b) Data Collection and Reporting. The M&E Plan will establish 
guidelines for data collection and a reporting framework, including a 
schedule of MCC's Program reporting requirements and an identification 
of responsible parties. Compliance with data collection and reporting 
timelines will be conditions for disbursements for the relevant Project 
activities as set forth in the Program Implementation Agreement. The 
M&E Plan will specify the data collection methodologies, procedures, 
and analysis required for reporting on results at all levels. The M&E 
Plan will also describe any interim MCC approvals for data collection, 
analysis, and reporting plans.
    (c) Data Quality Reviews. As determined in the M&E Plan or as 
otherwise requested by MCC, the quality of the data gathered through 
the M&E Plan will be reviewed to ensure that data reported are as 
valid, reliable, and timely as resources will allow. The objective of 
any data quality review will be to verify the quality and the 
consistency of performance data, across different implementation units 
and reporting institutions. Such data quality reviews also will serve 
to identify where those levels of quality are not possible, given the 
realities of data collection.
    (d) Management Information System. The M&E Plan will describe the 
information system that will be used to collect data, store, process 
and deliver information to relevant stakeholders in such a way that the 
Program information collected and verified pursuant to the M&E Plan is 
at all times accessible and useful to those who wish to use it. The 
system development will take into consideration the requirements and 
data needs of the components of the Program, and will be aligned with 
MCC existing systems, other service providers, and government 
ministries.
    (e) Role of MCA-Burkina Faso. The monitoring and evaluation of this 
Compact spans across 4 discrete Projects and will involve a variety of 
governmental, non-governmental, and private sector institutions. Except 
for that portion of the M&E Plan to be implemented pursuant to the 
Administration Agreement (relating to the BRIGHT 2 Schools Project), 
MCA-Burkina Faso holds full responsibility for implementation of the 
M&E Plan, and MCA-Burkina Faso will oversee all Compact-related 
monitoring and evaluation activities conducted by each of the Projects, 
ensuring that data from all implementing entities is consistent, and 
accurately reported and aggregated into regular Compact performance 
reports as described in the M&E Plan.

4. Evaluation Component

    The Evaluation Component of the M&E Plan will contain two types of 
evaluations: Impact Evaluations, and Project Performance Evaluations. 
Plans for each type of evaluation will be finalized before MCC 
Disbursement for specific Program or Project activities. The Evaluation 
Component of the M&E Plan will describe the purpose of the evaluation, 
methodology, timeline, required MCC approvals, as well as the process 
for collection and analysis of data for each evaluation. The results of 
all evaluations will be made publicly available in accordance with 
MCC's Monitoring & Evaluation Guidelines (``M&E Guidelines'').
    (a) Impact Evaluation. The M&E Plan will include a description of 
the methods to be used for impact evaluations and plans for integrating 
the evaluation method into project design. Based on in-country 
consultation with stakeholders, the following activities outlined below 
were determined as having the strongest potential for rigorous impact 
evaluation. The M&E Plan will further outline in detail these 
methodologies. Final impact evaluation strategies are to be jointly 
determined before the approval of the M&E Plan and before entry into 
force of this Compact. The following are a summary of the potential 
impact evaluations:
    (i) Rural Land Governance Project. A difference in difference 
evaluation will be used to make project scaling decisions. Surveys will 
be conducted in project and control communes on perceptions of 
conflict, before and after implementation of the project's pilot phase. 
In the event that randomized roll-out of some commune-level 
interventions is possible, their impact could be tested over time. An 
evaluation may also test spillover of impacts between communes targeted 
under the project and neighboring communes.
    (ii) Agriculture Development Project. Randomized type and level of 
extension/training support to various groups, and testing spillover 
effects beyond the directly targeted beneficiaries. Evaluations will 
test impacts of combined and isolated interventions, as some producers 
will be receiving credit and/or irrigation as well as the technical 
assistance support.
    (iii) Roads Project. An evaluation will be conducted to test 
whether the improved roads lead to greater and easier access to markets 
for goods and services (both sale and purchase), and whether road 
rehabilitation is associated with an increase in incomes for road users 
and/or communities surrounding rehabilitated roads, in each case 
pursuant to a methodology approved by MCC.
    (iv) BRIGHT 2 Schools Project. A continuation of the current BRIGHT 
impact evaluation, using a regression discontinuity methodology to 
measure the program's effects on the school enrollment, attendance and 
performance of children.

5. Other Components of the M&E Plan

    In addition to the Monitoring and Evaluation Components, the M&E 
Plan will include the following components for the Program, Projects 
and Project Activities, including, where appropriate, roles and 
responsibilities of the relevant parties and providers:
    (a) Costs. A detailed cost estimate for all components of the M&E 
Plan.
    (b) Assumptions and Risks. Any assumptions and risks external to 
the Program that underlie the accomplishment of the Project Objectives 
and Project Activity Outcomes. However, such assumptions and risks will 
not excuse Parties' performance unless otherwise expressly agreed to in 
writing by all Parties.

6. Implementation of the M&E Plan

    (a) Approval and Implementation. The approval and implementation of 
the M&E Plan, as amended from time to time, will be in accordance with 
this M&E Annex, Program Implementation Agreement, and any other 
relevant supplemental agreement.

Annex IV Conditions to CIF Disbursements

1. Applicability

    The satisfaction of the conditions precedent set forth in this 
Annex IV, in form and substance satisfactory to MCC, shall be 
conditions to Disbursements of

[[Page 42626]]

Compact Implementation Funding, provided that the following conditions 
precedent shall not apply to CIF Disbursements made or to be made 
pursuant to the Administration Agreement.

2. Conditions to Initial CIF Disbursement

    (a) Delivery of an Interim Fiscal Accountability Plan acceptable to 
MCC.
    (b) Delivery of a CIF Procurement Plan acceptable to MCC.

3. Conditions to All CIF Disbursements (Including Initial CIF 
Disbursement)

    (a) Delivery of a complete, correct and fully executed CIF 
Disbursement request for the relevant CIF Disbursement period.
    (b) MCC is satisfied, in its sole discretion, that (i) the activity 
being funded by such CIF Disbursement is necessary, advisable or is 
otherwise consistent with the goal of facilitating the implementation 
of the Compact, (ii) there has been no violation of, and the use of 
requested funds for purposes requested will not violate, the 
limitations on use or treatment of Compact Implementation Funding, and 
(iii) the Government will have substantially complied with its 
obligations as set forth in the Compact.
    (c) Each of the Fiscal Agent Agreement, the Procurement Agent 
Agreement, and the applicable Bank Agreement is in full force and 
effect without modification, alteration, rescission or suspension of 
any kind, unless otherwise agreed by MCC, and no material default has 
occurred or is continuing thereunder.
    (d) Prior to any CIF Disbursement for a procurement, MCA-Burkina 
Faso will have established a bid challenge system acceptable to MCC; 
provided, that, this condition shall be deemed satisfied if MCA-Burkina 
Faso has adopted the interim bid challenge system set forth in the MCC 
Program Procurement Guidance on the Bid Challenge System available at 
http://www.mcc.gov/documents/mcc-ppg-bidchallengesystem.pdf.
    (e) Prior to any CIF Disbursement related to the preparation of 
EIAs, EAs or RAPs, MCA-Burkina Faso shall ensure each of a resettlement 
specialist and a project management specialist has been selected and 
remains engaged with expertise and scope of responsibility satisfactory 
to MCC.
    (f) MCA-Burkina shall ensure that each of its key officers, 
including, without limitation, its Environmental and Social Impact 
(ESI) director, has been selected and remains engaged, or is actively 
being recruited.

 [FR Doc. E8-16755 Filed 7-21-08; 8:45 am]
BILLING CODE 9211-03-P