Mozambique: Government and MCC to sign US$500 million compact in Washington this month

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Mozambique: Government and MCC to sign US$500 million compact in Washington this month

10:03 CAT | 11 Sep 2023

FILE - Alice Albright, Chief Executive Officer of the Millennium Challenge Corporation. [File photo: Lusa]

The Mozambican government will, on 21 September, sign a second financing compact, worth US$500 million, with the Millennium Challenge Corporation (MCC) in Washington DC, in the presence of President Filipe Nyusi, according to the US agency.

According to information from the MCC seen today by Lusa, the signing ceremony of the Mozambique Connectivity and Coastal Resilience Compact is scheduled to take place in the North American capital on September 21 and will also be attended by the president of the US government external support agency, Alice Albright, and the Minister of Economy and Finance of Mozambique, Ernesto Max Tonela.

“The Mozambique Connectivity and Coastal Resilience Compact is an ambitious and innovative attempt to address the multifaceted risks of climate change to MCC’s Compact investments. Unique to the design of the Compact is the focus on climate-resilient infrastructure, climate finance, and coastal development that aims to strengthen local economies reliant upon agriculture and fisheries yet limited by connectivity and reliable access,” the note also reads.

It adds that this financing compact will “showcase three interrelated projects that all meet the MCC’s comprehensive investment criteria”, promoting “strong gender/youth and social inclusion” in addition to leveraging private investment.

The board of directors of the MCC, an independent U.S. government foreign aid agency, on June 28 approved a new financing compact worth US$500 million (€465.7 million) for the Mozambique Connectivity and Coastal Resilience Compact.

The approval follows the memorandum signed with the Mozambican government in January and “reaffirms MCC’s commitment to directly addressing restrictions on economic growth through innovative solutions”, the organisation announced at the time.

The program will focus on development in the province of Zambézia, in the centre of the country.

“In Mozambique, we’re implementing MCC’s most climate-forward compact – a combination of resilient transport infrastructure, green and blue economy opportunities and policy and institutional reforms to enable more effective and long-term growth,” the agency details.

This is MCC’s second compact with the Government of Mozambique, after a first, worth US$506.9 million (€472.9 million), concluded in 2013, which focused on water supply and sanitation, property, land tenure, transport and agriculture.

This time, the focus is on improving transport networks in rural areas, encouraging commercial agriculture through political and tax reforms and improving coastal livelihoods through climate resilience initiatives.

The MCC agency is funded by the Government of the United States of America and provides subsidies to developing countries for a specified period.

Source: Lusa