Notice2024-20752
Notice of Entering Into a Compact With the State of Belize
Primary source
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Published
September 13, 2024
Issuing agencies
Millennium Challenge Corporation
Abstract
In accordance with the provisions of the Millennium Challenge Act of 2003, as amended, the Millennium Challenge Corporation (MCC) is publishing a summary of the Millennium Challenge Compact (Compact) between the United States of America and the State of Belize. Representatives of the United States of America and the State of Belize executed the Compact on September 4, 2024. The complete text of the Compact has been posted at: https://www.mcc.gov/resources/doc/compact- belize/.
Full Text
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<title>Federal Register, Volume 89 Issue 178 (Friday, September 13, 2024)</title>
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[Federal Register Volume 89, Number 178 (Friday, September 13, 2024)]
[Notices]
[Pages 74997-74998]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-20752]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 24-05]
Notice of Entering Into a Compact With the State of Belize
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
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SUMMARY: In accordance with the provisions of the Millennium Challenge
Act of 2003, as amended, the Millennium Challenge Corporation (MCC) is
publishing a summary of the Millennium Challenge Compact (Compact)
between the United States of America and the State of Belize.
Representatives of the United States of America and the State of Belize
executed the Compact on September 4, 2024. The complete text of the
Compact has been posted at: <a href="https://www.mcc.gov/resources/doc/compact-belize/">https://www.mcc.gov/resources/doc/compact-belize/</a>.
(Authority: 22 U.S.C. 7709 (b)(3))
Dated: September 9, 2024.
Peter E. Jaffe,
Vice President, General Counsel, and Corporate Secretary.
Summary of Belize Compact
Overview of MCC Belize Compact
MCC has signed a five-year, $125 million compact with the
government of Belize aimed at reducing poverty through economic growth.
The Compact seeks to assist Belize in addressing two binding
constraints to economic growth--low quality of education and high cost
of electricity. The Compact will address these constraints through two
primary projects--the Education Project and the Energy Project.
Background and Context
Belize is a small, diverse, coastal nation with a population of
397,483 (2022). As a stable democracy located at the crossroads of the
Caribbean and Central America, Belize maintains strong commercial and
educational ties to the Caribbean and has increasingly strengthened
ties with Central America.
While Belize's economy has historically relied on the export of
forest products, sugar, and fruit, tourism began to expand rapidly in
the 1990s, contributing to robust real per capita income (``PCI'')
growth averaging 4.3% for the next decade. However, from 2004 to 2019
real PCI growth was near zero. In 2020, Belize experienced a sharp fall
in tourism revenue and real PCI fell by 16%, which caused Belize to be
classified as a lower middle-income country. The economy has since
rebounded. As of 2018, 52% of the population had income below the
Belizean general poverty line, with four socioeconomic groups
disproportionately affected: Maya populations, rural households, women,
and youth.
Country Selection and Ongoing Eligibility
MCC's Board of Directors selected Belize as eligible to develop a
compact in December 2021. In selecting Belize for a compact, MCC's
Board made the decision to partner with a country that has demonstrated
a clear commitment to democratic governance and tackling development
challenges.In the year following its selection, Belize was reclassified
by the World Bank as an upper middle-income country and exited MCC's
candidate country pool. The Board has since repeatedly affirmed its
support for Belize continuing to develop a compact with MCC, and the
country has continued to demonstrate its commitment to the principles
of democratic governance that underpin MCC's eligibility criteria and
scorecard.
Constraints Analysis
In April 2022, the Government of Belize selected two binding
constraints to economic growth for further program development in the
education and energy sectors.
The education sector has a severe shortage of post-primary
graduates as well as skilled workers in key industries. The Belize
education system does not produce a sufficient number of individuals
with the types of competencies needed by the labor market. Shifts in
Belize's economic and employment landscape have increased the demand
for workers with higher levels of qualifications and 21st century
skills. However, over half of Belize's labor force currently does not
have any form of post-primary education resulting in the first binding
constraint for the Compact: low quality of education that leads to a
shortage of trained professionals in all industries.
In the energy sector the cost of wholesale electricity is higher
than it should be compared to a well-functioning competitive
electricity market. The primary driver of high electricity rates is the
elevated cost of purchasing wholesale power, which results in the
second binding constraint for the Compact: high cost of electricity
that drives up input costs for all industries.
The Government of Belize has shown strong country ownership and
commitment to the Compact through their engagement on the technical
design of the projects, their repeated commitment and preliminary
progress on policy reforms, and their commitment of counterpart funding
for the implementation and long-term sustainability of the compact
objectives. MCC successfully concluded compact negotiations with the
Government of Belize in mid-April and secured approval for the $125
million investment from the MCC Board of Directors on June 26, 2024.
The Government of Belize and MCC signed the Compact on September 4,
2024 in Belize City, Belize.
Project Summaries
The projects and activities to be completed are:
The Education Project ($73.8 million) aims to equitably increase
the number of post-primary graduates with the competencies relevant to
labor market demands by pursuing the following activities and outcomes:
[ssquf] Transforming Teaching and Learning in Secondary Education
Activity aims to improve the numeracy, literacy, and 21st century
skills of secondary graduates by improving the capability and
accountability of the Ministry of Education, Culture, Science, and
Technology, managing authorities, educators, and other actors in the
Belizean educational system for providing inclusive, quality education.
[ssquf] Access to and Progression through Secondary Education
Activity aims to increase the percentage of primary graduates that
enroll in and complete secondary school.
[ssquf] Training and Transitioning to Work Activity aims to improve
the capability of Technical and Vocational Education and Training
(TVET) providers to deliver high quality training demanded by the labor
market as well as to provide inclusive access to these training
opportunities.
The project focuses on inclusion and equity by intentionally
creating opportunities across all three activities for members of
groups that have been traditionally excluded in the Belizean
[[Page 74998]]
educational context, particularly students living with trauma, those
with special education needs, immigrant students, and indigenous
students. Additionally, special emphasis will be placed on closing
gender gaps facing male students (in transition, retention, and
graduation) and female students (in participation in workforce
preparation).
The Energy Project ($21.7 million) aims to reduce the wholesale
cost of electricity in real terms through supporting the competitive
procurement of lower cost power purchase agreements using energy
alternatives that would displace higher cost imports by pursuing the
following activity and outcomes:
[ssquf] Facilitating New Lower-Cost Renewable Generation Activity
is designed to support Belize in implementing its utility scale solar-
powered energy expansion plans and maintaining the stability of the
grid.
Policy Reform and the Compact
MCC and Belize jointly identified the following key policy reform
areas to support the sustainability of the proposed compact, the timing
and content of which was negotiated with Belize and is included in the
compact.
Key policy reforms of the Education Project include reforming the
Education Act to require national student assessments to meet minimum
testing requirements, school-level results to be published, and a more
rigorous evaluation process for teacher licensing and certification.
Additional reforms include increasing the compulsory school age to 16
from 14, ensuring access to free secondary education to all primary
graduates by offering free education at all government schools and, to
ensure adequate geographical coverage, select grant-aided schools, and
requiring each secondary school have a dedicated school counselor.
Key policy reforms of the Energy Project include the approval of
regulations governing the process for competitive procurement for
electricity generation, limits on amendments and extensions of power
purchase agreements to improve transparency and protect consumers and
revising the grid code to clarify the interconnection requirements for
variable alternative forms of energy.
Compact Overview and Budget
Below is a summary describing the components of the Compact with
Belize. The anticipated budget for the overall program is $165,650,000,
with up to $125,000,000 under the Compact and $40,650,000 of
contribution from Belize.
Table 1--Belize Compact Program Budget
[Million in US$]
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Amount
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MCC Funding by Compact Components
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1. Education Project:
1.1 Transforming Teaching and Learning in Secondary $41,045,000
Education..........................................
1.2 Access to and Progression through Secondary 16,256,000
Education..........................................
1.3 Training and Transitioning to Work.............. 16,500,000
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Subtotal........................................ 73,801,000
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2. Energy Project:
2.1 Facilitating New Lower-Cost Renewable Generation 21,684,000
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Subtotal........................................ 21,684,000
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3. Monitoring and Evaluation............................ 1,820,000
4. Program Administration and Oversight................. 27,695,000
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Total MCC Compact Funding........................... 125,000,000
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Total Program Funding
------------------------------------------------------------------------
Total MCC Compact Funding............................... 125,000,000
Government of Belize Contribution....................... 40,650,000
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Total Program....................................... 165,650,000
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[FR Doc. 2024-20752 Filed 9-12-24; 8:45 am]
BILLING CODE 9211-03-P
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