U.S. GOVERNMENT PROVIDES FUNDING TO DEVELOP SECOND MCC COMPACT FOCUSED ON THE POWER SECTOR

The United States Government, through the Millennium Challenge Corporation (MCC), agreed on November 14, 2014, to provide up to $9.78 million for the development of high-impact investment projects in Tanzania’s energy sector. United States Ambassador Mark B. Childress presided over the signing of the grant agreement at the Ministry of Finance in Dar es Salaam. The agreement was signed by MCC’s Vice President of Compact Operations, Kamran Khan, and Tanzania’s Minister of Finance, Saada Mkuya Salum.

The grant agreement builds on a strong partnership between the United States and Tanzania. Between 2008 and 2013, MCC implemented a compact of investment projects in water, roads, and electric power throughout Tanzania totaling $698 million. That compact program led to the construction of over 3,000 km of power lines, 450 km of trunk roads, two water treatment plants, and an airport runway.

Given its successful implementation of the first compact program – the largest in MCC’s history – MCC designated Tanzania eligible to develop a second compact program with a focus on the power sector, including investments in infrastructure as well as policy, regulatory and institutional reforms. Through the grant agreement signed today, Tanzania will mobilize consultants to undertake detailed feasibility studies and other preparatory work on project ideas that are most likely to stimulate long-term economic growth.

The studies will allow Tanzania to fully develop projects to reform the power sector; improve the technical, financial, and operational performance of the Tanzania Electricity Supply Company Ltd. (TANESCO) and the Zanzibar Electricity Corporation (ZECO); and expand access to electric power in rural areas. These proposed projects are expected to form the basis of a second MCC compact of investments between the United States and Tanzania.

This project development grant marks an important milestone in the development of the second compact program. The grant also marks a significant commitment toward the goals of Power Africa, the U.S. Government initiative to double the number of people with access to power in Africa through collaboration with African governments, the private sector, and other The Millennium Challenge Corporation (MCC) is a United States Government agency that provides assistance to developing countries. MCC is based on the principle that aid is most effective when it reinforces good governance, economic freedom and investments in people that promote economic growth and the elimination of poverty.

U.S. Ambassador Mark Childress (center) presiding over the signing of a grant agreement between the U.S. Government’s Millennium Challenge Corporation (MCC) and the Ministry of Finance in Dar es Salaam, while Vice President of MCC (Compact Operations), Mr. Kamran Khan (left) exchanges the grant agreement documents with the Minister of Finance, Ms. Saada Salum Mkuya. The grants total $9.78 million for the development of high-impact investment projects in Tanzania’s energy sector. (Photo by courtesy of U.S. Embassy).