[Federal Register Volume 86, Number 154 (Friday, August 13, 2021)]
[Notices]
[Pages 44754-44757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17361]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 21-06]


Notice of First Amendment to Compact With the Republic of Benin

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: In accordance with the Millennium Challenge Act of 2003, as 
amended, the Millennium Challenge Corporation is publishing a summary, 
justification, and full text of the proposed First Amendment to 
Millennium Challenge Compact between the United States of America, 
acting through the Millennium Challenge Corporation, and the Republic 
of Benin. Representatives of the United States Government and the 
Government of Benin plan to conclude the Amendment in August 2021.

(Authority: 22 U.S.C. 7708(i)(2))

    Dated: August 3, 2021.
Thomas G. Hohenthaner,
Acting VP/General Counsel and Corporate Secretary.

Summary of First Amendment to Millennium Challenge Compact With the 
Republic of Benin

    The Board of Directors of the Millennium Challenge Corporation

[[Page 44755]]

(``MCC'') has approved an amendment (the ``Amendment'') to the existing 
US$375,000,000, five-year Millennium Challenge Compact between the 
United States of America, acting through MCC, and the Republic of Benin 
(the ``Compact'').

Background

    The Compact was signed September 9, 2015 and entered into force on 
June 22, 2017. The Compact aims to strengthen Benin's national power 
utility, attract private sector investment into solar power generation, 
and fund infrastructure investments in electricity distribution as well 
as off-grid electrification for poor and unserved households. The 
Compact comprises four projects: The Policy Reform and Institutional 
Strengthening Project, the Electricity Generation Project, the 
Electricity Distribution Project, and the Off-Grid Electricity Access 
Project.

Scope of the Amendment

    MCC proposes to extend the term of the Compact for an additional 
twelve months to June 22, 2023, and to provide additional funding up to 
$16,000,000. The term extension is necessary to mitigate implementation 
delays due to the COVID-19 pandemic and to complete infrastructure 
projects as originally contemplated. The proposed additional funding 
will be used to cover additional program administration and related 
oversight costs associated with extending the Compact's term.

Justification for the Amendment

    In March 2020, Benin registered its first COVID-19 case, and within 
a week, the Government of Benin imposed compulsory 14-day quarantine 
requirements for air travelers, closed land borders to all but 
emergency travel, restricted visa issuance, and limited movement 
outside of the major population centers in southern Benin, cutting off 
access to the economic and political capitals from the rest of the 
country.
    Contractors for the six major works packages that comprise nearly 
half of the compact budget rapidly imposed telework requirements and 
restrictions on staff travel, and shortly thereafter commercial 
airlines stopped servicing Benin. While contractors attempted to 
mitigate the impact of international travel restrictions by using local 
hires and consultants, domestic travel restrictions effectively 
prevented travel to 97% of the Benin's territory. The net effect of 
these developments was to hinder mobilization of contractor key staff 
to Benin and deployment of field staff to work sites, resulting in 
delays in field surveys, equipment imports, hiring of sub-contractors, 
and setting up offices and construction material warehouses. These 
mobilization delays in turn had a knock-on effect on the completion of 
final construction designs, field surveys, drawings, and management 
plans, and subsequent start of civil works. Outside of Benin, 
imposition of COVID-19 mitigation measures led to equipment 
manufacturing and shipping delays, thereby slowing contractor 
procurements, factory testing and acceptance of key substation 
components, the delivery of materials to site, and equipment 
installation at project work sites.
    Extending the Compact's term will maximize long-term results and 
the return on investment by enabling MCC and the accountable entity in 
Benin to complete and hand over all ongoing projects to the beneficiary 
institutions without compromising health, safety, or environmental 
standards, and will reduce sustainability risks through the necessary 
attention to testing, commissioning, training of utility operators and 
technicians, and additional oversight. The additional MCC funding is 
necessary for and will be used to support oversight and other 
administrative functions during the additional twelve months of the 
compact term.

First Amendment to Millennium Challenge Compact Between the United 
States of America, Acting Through the Millennium Challenge Corporation 
and the Republic of Benin

First Amendment to Millennium Challenge Compact

    This First Amendment to Millennium Challenge Compact (this 
``Amendment''), is made by and between the United States of America, 
acting through the Millennium Challenge Corporation, a United States 
government corporation (``MCC''), and the Republic of Benin, acting 
through its government (the ``Government'') (each referred to herein 
individually as a ``Party'' and collectively, as the ``Parties''). All 
capitalized terms used in this Amendment that are not otherwise defined 
herein have the meanings given to such terms in the Compact (as defined 
below).
Recitals
    Whereas, the Parties signed that certain Millennium Challenge 
Compact by and between the United States of America, acting through 
MCC, and the Republic of Benin, on September 9, 2015 (as modified, the 
``Compact'');
    Whereas, Section 7.4 of the Compact provides for a Compact Term of 
five (5) years after its entry into force;
    Whereas, the Compact entered into force on June 22, 2017;
    Whereas, implementation of the Program has been adversely affected 
and delayed by the coronavirus pandemic;
    Whereas, the Parties now desire to extend the Compact Term by an 
additional twelve (12) months (the ``Extension''), and to increase 
MCC's assistance under the Compact for related administrative and 
oversight costs, to allow the Government more time to implement and 
complete the Projects in order to fully achieve the Compact Goal, 
Program Objective and Project Objectives; and
    Whereas, pursuant to Section 6.2(a) of the Compact, the Parties 
desire to amend the Compact as more fully described herein to 
memorialize the Extension.
    Now, therefore, the Parties hereby agree as follows:
Amendments
1. Amendment to Section 2.1
    Section 2.1 (Program Funding) of the Compact is amended and 
restated to read as follows:
    ``Section 2.1 Program Funding. Upon entry into force of this 
Compact in accordance with Section 7.3, MCC will grant to the 
Government, under the terms of this Compact, an amount not to exceed 
Three Hundred Seventy-Three Million, Five Hundred Nine Thousand, Eight 
Hundred Fourteen United States Dollars (US$373,509,814) (``Program 
Funding'') consisting of Two Hundred Seventy-Three Million, Five 
Hundred Nine Thousand, Eight Hundred Fourteen United States Dollars 
(US$273,509,814) (``Tranche I Funding''), Eighty Million United States 
Dollars (US$80,000,000) (``On-Grid Tranche Funding''), and Twenty 
Million United States Dollars (US$20,000,000) (``Off-Grid Tranche 
Funding''), for use by the Government to implement the Program. The 
allocation of Program Funding is generally described in Annex II.''
2. Amendment to Section 2.2
    Section 2.2(a) (Compact Implementation Funding) of the Compact is 
amended and restated to read as follows:
    ``(a) Upon the signing of this Compact, MCC will grant to the 
Government, under the terms of this Compact and in addition to the 
Program Funding described in Section 2.1, an amount not to exceed 
Seventeen Million, Four Hundred Ninety Thousand, One

[[Page 44756]]

Hundred Eighty-Six United States Dollars (US$17,490,186) (``Compact 
Implementation Funding'') under Section 609(g) of the Millennium 
Challenge Act of 2003, as amended (the ``MCA Act''), for use by the 
Government to facilitate implementation of this Compact, including for 
the following purposes:
    (i) Financial management and procurement activities;
    (ii) administrative activities (including start-up costs such as 
staff salaries) and administrative support expenses such as rent, 
computers and other information technology or capital equipment;
    (iii) monitoring and evaluation activities;
    (iv) feasibility, design and other project preparatory studies; and
    (v) other activities to facilitate Compact implementation as 
approved by MCC.
    The allocation of Compact Implementation Funding is generally 
described in Annex II.''
3. Amendment to Section 7.4
    Section 7.4 (Compact Term) of the Compact is amended and restated 
to read as follows:
    ``Section 7.4 Compact Term. This Compact will remain in force for 
six (6) years after its entry into force, unless terminated earlier 
under Section 5.1 (the ``Compact Term'').''
4. Amendments to Annex II (Multi-Year Financial Plan Summary)
    (a) Section 2 of Annex II (Multi-Year Financial Plan Summary) to 
the Compact is amended and restated to read as follows:
    ``2. Government Contribution. During the Compact Term, the 
Government will make contributions, relative to its national budget and 
taking into account prevailing economic conditions, as are necessary to 
carry out the Government's responsibilities under Section 2.6(a) of 
this Compact. These contributions may include in-kind and financial 
contributions (including obligations of Benin on any debt incurred 
toward meeting these contribution obligations). In connection with this 
obligation the Government has developed a budget over the Compact Term 
to complement MCC Funding through budget allocations to each of the 
Projects and Program Administration. The Government will make a 
contribution of at least 7.5 percent of the amount of MCC Funding 
provided under this Compact over the Compact Term. The Government will 
allocate such contribution in the national budget according to a multi-
year plan. The Government will provide evidence of the approval thereof 
to MCC prior to entry into force. In the event that deobligation of the 
On-Grid Tranche Funding or the Off-Grid Tranche Funding occurs in 
accordance with Section 8.3(a) of this Compact, the obligation for the 
corresponding Government contribution will cease to apply. Such 
contribution will be in addition to the Government's spending toward 
such Project Objectives in its budget for the year immediately 
preceding the establishment of this Compact. The Government's 
contribution will be subject to any legal requirements in Benin for the 
budgeting and appropriation of such contribution, including approval of 
the Government's budget by its legislature. The Parties may set forth 
in the Program Implementation Agreement or other appropriate 
Supplemental Agreements certain requirements regarding this Government 
contribution, which requirements may be conditions precedent to the 
Disbursement of MCC Funding. During implementation of the Program, the 
Government's contributions may be modified or new contributions added 
with MCC approval, provided that the modified or new contributions 
continue to advance the Project Objectives.''
    (b) Exhibit A to Annex II (Multi-Year Financial Plan Summary) to 
the Compact is deleted in its entirety and replaced by revised Exhibit 
A set forth in Annex I to this Amendment.
General Provisions
1. Further Assurances
    Each Party hereby covenants and agrees, without necessity of any 
further consideration, to execute and deliver any and all such further 
documents and take any and all such other action as may be reasonably 
necessary or appropriate to carry out the intent and purpose of this 
Amendment.
2. Effect of this Amendment
    From and after the date this Amendment enters into force, the 
Compact and this Amendment will be read together and construed as one 
document, and each reference in the Compact to the ``Compact,'' 
``hereunder,'' ``hereof'' or words of like import referring to the 
Compact, and each reference to the ``Compact,'' ``thereunder,'' 
``thereof'' or words of like import in any Supplemental Agreement or in 
any other document or instrument delivered pursuant to the Compact or 
any Supplemental Agreement, will mean and be construed as a reference 
to the Compact, as amended by this Amendment.
3. Limitations
    Except as expressly amended by this Amendment, all of the 
provisions of the Compact remain unchanged and in full force and 
effect.
4. Governing Law
    The Parties acknowledge and agree that this Amendment is an 
international agreement entered into for the purpose of amending the 
Compact and as such will be interpreted in a manner consistent with the 
Compact and is governed by international law.

Annex I

                                     Revised Exhibit A to Annex II to the Compact Multi-Year Financial Plan Summary
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                                                      CIF         Year 1       Year 2       Year 3       Year 4       Year 5       Year 6       Total
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                                                            Compact Program Tranche I and CIF
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1. Policy Reform & Institutional Strengthening
 Project:
    1.1 Policy, Regulation, and Institutional       3,501,904      729,664    2,578,737      760,008    4,051,526      360,072       54,000   12,035,911
     Support Activity...........................
    1.2 Utility Strengthening Activity..........    1,105,247        9,204       65,153   14,123,285      699,852  ...........  ...........   16,002,741
    1.3 Public Information & Education Activity.  ...........  ...........       62,708      281,859        4,493  ...........  ...........      349,060
                                                 -------------------------------------------------------------------------------------------------------
        Sub-total...............................    4,607,151      738,868    2,706,598   15,165,152    4,755,871      360,072       54,000   28,387,711
2. Electricity Generation Project--Tranche I:
    2.1 Photovoltaic Generation Activity            3,046,236  ...........      666,202      700,000    7,672,432  ...........  ...........   12,084,870
     (Tranche I)................................
    2.2 Thermal Generation Activity.............      583,270  ...........  ...........  ...........  ...........  ...........  ...........      583,270

[[Page 44757]]

 
    2.3 Hydroelectric Generation Activity.......  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........
                                                 -------------------------------------------------------------------------------------------------------
        Sub-total...............................    3,629,507  ...........      666,202      700,000    7,672,432  ...........  ...........   12,668,141
3. Electricity Distribution Project:
    3.1 Regional Grid Strengthening Activity....  ...........  ...........  ...........   52,454,956       19,110    6,858,827    1,295,892   60,628,785
    3.2 Cotonou Grid Strengthening Activity.....  ...........      155,142   19,618,504   47,289,387      409,032   17,089,928    4,138,162   88,700,154
    3.3 National Electricity Dispatch Activity..  ...........        8,533   22,668,572    1,550,680  ...........    4,131,171      647,946   29,006,902
                                                 -------------------------------------------------------------------------------------------------------
        Sub-total...............................  ...........      163,675   42,287,076  101,295,023      428,142   28,079,926    6,082,000  178,335,841
4. Off-Grid Electricity Access Project--Tranche
 I:
    4.1 Off-Grid Clean Energy Facility Activity       488,594      250,000    1,561,226   15,563,602    1,778,142  ...........    2,500,000   22,141,563
     (Tranche I)................................
    4.2 Enabling Environment for Off-Grid           1,347,439  ...........      591,547      439,105      134,587  ...........  ...........    2,512,678
     Electricity Activity.......................
                                                 -------------------------------------------------------------------------------------------------------
        Sub-total...............................    1,836,033      250,000    2,152,773   16,002,707    1,912,729  ...........    2,500,000   24,654,241
5. Monitoring and Evaluation:
    5.1 Monitoring and Evaluation...............      107,674  ...........      414,377    1,343,748      600,000      574,478      850,000    3,890,277
                                                 -------------------------------------------------------------------------------------------------------
        Sub-total...............................      107,674  ...........      414,377    1,343,748      600,000      574,478      850,000    3,890,277
6. Program Administration and Oversight:
    6.1 MCA-Benin II............................    5,608,216    1,534,203    2,839,077    4,365,037    4,516,182    5,970,679    4,514,000   29,347,393
    6.2 Fiscal Agent............................      888,785      922,815      933,279      937,243    2,044,348      295,000    1,020,000    7,041,470
    6.3 Procurement Agent.......................      753,071      822,710      928,459      803,130    1,405,806      222,000      780,000    5,715,175
    6.4 Audit...................................       59,750  ...........      121,500      578,500  ...........  ...........      200,000      959,750
                                                 -------------------------------------------------------------------------------------------------------
        Sub-total...............................    7,309,822    3,279,728    4,822,315    6,683,910    7,966,335    6,487,679    6,514,000   43,063,789
                                                 -------------------------------------------------------------------------------------------------------
            Total MCC Funding--Tranche I &CIF...   17,490,186    4,432,271   53,049,341  141,190,539   23,335,509   35,502,154   16,000,000  291,000,000
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                                                             Compact Program On-Grid Tranche
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2. Electricity Generation Project--On-Grid
 Tranche:
    3.1 Regional Grid Strengthening Activity (On- ...........  ...........  ...........   20,000,000  ...........  ...........  ...........   20,000,000
     Grid Tranche)..............................
    3.2 Cotonou Grid Strengthening Activity (On-  ...........  ...........  ...........   60,000,000  ...........  ...........  ...........   60,000,000
     Grid Tranche)..............................
                                                 -------------------------------------------------------------------------------------------------------
        Total MCC Funding--On-Grid Tranche......  ...........  ...........  ...........   80,000,000  ...........  ...........  ...........   80,000,000
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                                                        Compact Program Tranche Off-Grid Tranche
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4. Off-Grid Electricity Access Project--Off-Grid
 Tranche:
    4.1 Off-Grid Clean Energy Facility Activity   ...........  ...........  ...........   20,000,000  ...........  ...........  ...........   20,000,000
     (Off-Grid Tranche).........................
        Total MCC Funding--Off-Grid Tranche.....  ...........  ...........  ...........   20,000,000  ...........  ...........  ...........   20,000,000
                                                 -------------------------------------------------------------------------------------------------------
            Total MCC Funds.....................   17,490,186    4,432,271   53,049,341  241,190,539   23,335,509   35,502,154   16,000,000  391,000,000
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[FR Doc. 2021-17361 Filed 8-12-21; 8:45 am]
BILLING CODE 9211-03-P