Notice2021-17361
Notice of First Amendment to Compact With the Republic of Benin
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Published
August 13, 2021
Issuing agencies
Millennium Challenge Corporation
Abstract
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.
Full Text
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<title>Federal Register, Volume 86 Issue 154 (Friday, August 13, 2021)</title>
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[Federal Register Volume 86, Number 154 (Friday, August 13, 2021)]
[Notices]
[Pages 44754-44757]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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
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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....... ........... ........... ........... ........... ........... ........... ........... ...........
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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
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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.......................
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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
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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
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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
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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)..............................
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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
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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
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</html>Indexed from Federal Register on August 13, 2021.
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