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4 August 2007
[Federal Register: August 3, 2007 (Volume 72, Number 149)]
[Notices]
[Page 43379-43410]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03au07-129]
[[Page 43379]]
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Part III
Millennium Challenge Corporation
-----------------------------------------------------------------------
Notice of Entering Into a Compact With the Government of the Kingdom
of Lesotho; Notice
[[Page 43380]]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 07-07]
Notice of Entering Into a Compact With the Government of the
Kingdom of Lesotho
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: In accordance with Section 610(b)(2) of the Millennium
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium
Challenge Corporation (MCC) is publishing a summary and the complete
text of the Millennium Challenge Compact between the United States of
America, acting through the Millennium Challenge Corporation, and the
Government of the Kingdom of Lesotho. Representatives of the United
States Government and the Government of the Kingdom of Lesotho executed
the Compact documents on July 23, 2007.
Dated: July 26, 2007.
William G. Anderson Jr.,
Vice President & General Counsel, Millennium Challenge Corporation.
Summary of Millennium Challenge Compact With the Government of the
Kingdom of Lesotho
A. Introduction
Lesotho is strategically located within the rapidly growing
Southern African Development Community which will become a common
market in 2008. It could benefit greatly from the expected economic
upsurge in the region led by the private sector, but it will miss this
opportunity if it is unable to unlock the potential of its two greatest
resources--its water and its people. Without immediate and sustainable
interventions to harness its abundant water resources and to improve
the health of the productive workforce, Lesotho has limited prospects
of achieving economic growth. Another critical element to Lesotho's
future economic growth is a dynamic private sector. In recent years,
the Government of Lesotho (``GoL'') has embarked on a major reform
program developed jointly with the World Bank and other bilateral
donors, to remove legal and regulatory impediments to private sector
growth, improve access to credit and increase the participation of
women in the economy.
B. Program
1. Goal and Objectives
The $362.6 million Compact focuses on water, health and private
sector development (the ``Program''), as summarized in the table below.
The Program is focused on improving the provision of water supplies for
industrial and domestic use, improving health outcomes and productivity
through strengthening the health infrastructure, and removing barriers
to foreign and local private sector investment. The Compact is designed
to have a high economic growth impact, and its potential impact on
poverty reduction is significant and widespread due to its broad
geographical scope.
----------------------------------------------------------------------------------------------------------------
Totals including contingencies (in millions USD)
Multi-year financial plan (by ----------------------------------------------------------------------------
project) CIF Year 1 Year 2 Year 3 Year 4 Year 5 Total
----------------------------------------------------------------------------------------------------------------
1. Water Sector Project............ 4.913 21.092 24.233 49.074 47.878 16.838 164.028
2. Health Sector Project........... 4.436 17.961 27.927 37.616 24.846 9.612 122.398
3. Private Sector Development 0.710 7.142 10.906 8.525 5.47 3.352 36.105
Project...........................
4. Monitoring & Evaluation......... 0.5 2.605 0.684 0.755 0.664 2.6 7.808
5. Program Management and Oversight 5.109 4.173 5.395 6.196 6.926 4.413 32.212
----------------------------------------------------------------------------
Total MCC Contribution......... 15.668 52.973 69.145 102.166 85.784 36.815 362.551
----------------------------------------------------------------------------------------------------------------
C. Program Description
1. Water Sector Project ($164 million)
The Water Sector Project is aimed at improving water supply for
industrial and domestic needs. With respect to the industrial sector,
the Project will provide infrastructure to deliver water to garment and
textile operations. Domestic users in selected urban and rural areas
will benefit from water system upgrades and expansion to achieve better
sanitation and a reliable supply of water. Finally, the Project is
designed to enhance rural livelihoods through improved watershed
management.
The Water Sector Project activities include: (a) Construction of a
bulk water conveyance system and establishment of a program management
unit for the Metolong Dam construction activity; (b) extension and
rehabilitation of the urban and peri-urban water network; (c) provision
of improved sanitation services to rural households through
construction of ventilated improved pit latrines and water systems; and
(d) restoration of degraded wetlands at three areas in the highland
pastures and preparation of a strategic environmental assessment to
support development of a national watershed management and wetlands
conservation plan.
2. Health Sector Project ($122 million)
Approximately 24 percent of adults ages 15-49 in Lesotho are Human
Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (``HIV/
AIDS'') positive, the third highest prevalence rate in the world. The
Health Sector Project is designed to mitigate the negative economic
impacts of poor maternal health, HIV/AIDS, tuberculosis (``TB'') and
other diseases by substantially strengthening the country's health care
infrastructure. MCC funding will support the GoL's efforts to
significantly increase access to life-extending anti-retroviral therapy
(``ART'') by providing a sustainable platform to deliver this and other
essential health services throughout the country. This has the
potential to result in a measurable extension of productive life-years
for people living with HIV/AIDS, TB and other debilitating diseases.
A major issue in Lesotho, as in the rest of southern Africa, is the
crisis in human health resources. The country has difficulty retaining
nurses and clinicians due to opportunities outside the country and poor
working conditions in Lesotho. Extensive studies have been conducted on
improving the retention of health care workers. Top concerns are salary
levels, physical working conditions and supervision and career
management structures. Together with the GoL, the President's Emergency
Plan for AIDS Relief (``PEPFAR''), and other donor efforts, the Health
Sector Project is designed to address these issues. Currently the GoL
is proposing salary reforms and PEPFAR is providing assistance to
improve training curricula and programs, reduce red tape in hiring new
graduates, and rationalize Ministry of Health and Social Welfare
[[Page 43381]]
(``MoHSW'') staff positions. The Project is designed to improve health
sector infrastructure, including residences for rural health staff,
improve supervision and management of staff, increase the number of
nurses and allied health professionals trained, and provide
opportunities for staff to build skills and competencies through
continuing education. These efforts are designed to increase production
and retention of health workers for delivery of essential health
services.
The Health Sector Project activities include: (a) Renovation of up
to 150 health centers in order to establish a national stock of health
centers that achieve a common standard; (b) establishment of ART
clinics in and improved management of up to 14 hospital out-patient
departments (``OPDs''); (c) construction and equipping of a new central
laboratory and training laboratory staff; (d) construction of a
dedicated, central facility for collecting and processing blood and
provision of mobile blood collection and storage equipment; (e) an
increase in the number of dormitories and staff residences at Lesotho's
National Health Training College (``NHTC''); (f) strengthened health
systems through increased capacity for pre-service and in-service nurse
training and improved district-level public human health care resources
management; and (g) improved occupational health and safety and medical
waste management practices.
3. Private Sector Development (``PSD'') Project ($36 million)
The PSD Project is designed to increase private sector economic
activity in Lesotho by improving access to credit, reducing transaction
costs and increasing the participation of women in the economy. The
activities within the PSD Project represent an essential component of
the GoL's major policy reform program and are designed to contribute to
the broader efforts to attract foreign investment and stimulate growth
of Basotho-owned companies.
The PSD Project activities include: (a) Reform of the civil legal
system through the development of the Commercial Court, including
creation of case management systems for courts, and promotion of
alternative dispute resolution; (b) support for the production and
issuance costs of national identification cards as well as
establishment of the necessary legal and regulatory reforms for data
privacy and establishment and operations of a cross-border credit
bureau; (c) support for implementation of a new payments and settlement
system in Lesotho; (d) technical assistance to the GoL in the
development of land policy in Lesotho, and funding for the
implementation of a systematic land regularization program for urban
and peri-urban areas and development of a new land administration
authority; and (e) implementation of a training and public awareness
program dedicated to implementing gender equality in economic rights
and building of local capacity to continue advocacy.
D. Impacts
The Program, if successfully implemented, could nearly double GDP
growth by the end of the Compact implementation period (using a
baseline of 2.6 percent). The acceleration of GDP growth is expected to
continue beyond Compact completion, propelling growth towards seven
percent per annum within five years after Compact completion. This
acceleration is required to reduce poverty significantly in line with
the objectives of the GoL's Poverty Reduction Strategy Papers
(``PRSP'').
The Water Sector Project is expected to benefit urban and rural
communities through each of the four activities: (1) The Metolong Dam--
Bulk Water Conveyance System activity is expected to preserve existing
industrial production and 28,000 jobs and create an additional 6,000
jobs by the end of the Compact; (2) The Urban and Peri-Urban Water
Network activity has the potential to benefit approximately 304,000
people or 50,700 households by Compact end; (3) The Rural Water Supply
and Sanitation activity has the potential to directly benefit
approximately 150,000 people or 25,000 households; and (4) The Wetlands
Restoration and Conservation activity has the potential to improve
rangeland productivity and benefit rural livelihoods for an estimated
55,000 people who live within a 16 kilometer radius of the three target
wetland sites.
The Health Sector Project is designed to directly improve delivery
of health care services to the entire population. The health center
activity is designed to improve service quality and availability for
health center clients, including: Most of the 90 percent of pregnant
women who seek prenatal care; the more than 90 percent of infants and
young children who are immunized against childhood infectious diseases;
the approximately 9,000 TB patients treated at the health center level
each year; and the 34,000 persons expected to have ART services follow
up at the health center during the life of the Project. The ART clinic
activity is designed to reduce waiting times and TB co-infection of
clients seeking care at an OPD, particularly the predicted additional
17,000 new clients seeking ART services during the Compact, the 80
percent of those clients expected to be co-infected with TB, and the
clients of other OPD services in these 14 hospitals. This activity is
designed to complete national coverage of ART services at the hospital
level. The central laboratory and blood transfusion activities are
designed to benefit all Basotho by expanding the capacity of the MoHSW
to conduct needed laboratory tests and assuring access to safe blood.
The NHTC activity is designed to expand the number of graduates in the
health field, filling some of the numerous vacancies in rural areas for
community nurses and allied health professionals. As a result, more
than 1.3 million individuals in the rural areas are more likely to have
an adequate level of service provision at the local health center
level. The health systems strengthening and medical waste management
activities are designed to impact the quality and level of services
provided, particularly at the health center level and improve
environmental health and safety conditions throughout the health
sector. All activities focus on improving physical working conditions
and safety for health workers and on human resources management.
The Private Sector Development Project has the potential to benefit
approximately 2,000 persons and companies operating in the formal
sector through more efficient commercial court procedures. Through the
Land Administration Reform activity, potentially up to 55,000 urban
households may benefit from having formally recognized titles. The
National ID activity has the potential to directly benefit the entire
national population by providing an identification card and/or unique
identification number to every citizen within the country, improving
the availability of credit and other financial services to a wider
cross-section of the population. Finally, the Payments and Settlements
system has the potential to directly benefit more than 86,000
government pensioners and more than 98,000 employed outside Lesotho by
lowering the costs of receiving and sending money.
E. Program Management
1. Governance Structure
The GoL will establish an autonomous body within the Ministry of
Finance and Development Planning known as MCA-Lesotho that will serve
as the accountable entity responsible for
[[Page 43382]]
the implementation of the Program. The MCA-Lesotho board of directors
will be made up of government officials representing each of the GoL
ministries associated with the Program as well as private sector and
civil society members representing constituencies impacted by the
Program. This board will have independent decision making authority and
will be the final authority with respect to implementation of the
Compact. It will provide oversight and be responsible for the success
or failure of the Program.
A management unit will support the board of directors in
implementing the Program and will be responsible for the day-to-day
management and operations of MCA-Lesotho. A stakeholders committee will
inform the various constituent groups about Program implementation,
provide advice and input to MCA-Lesotho concerning the Program, and
select the private sector members of the board of directors.
External procurement and fiscal agents will be used during Compact
implementation. A procurement process is currently underway with a
target date of August 2007 to sign contracts for these services.
2. Implementation Arrangements
Line ministries, project implementation units and the Central Bank
of Lesotho will serve as implementing entities (``IEs'') and service
providers for the various projects related to the Compact under
contractual relationships with MCA-Lesotho. IEs will be responsible for
developing the operational requirements for the Projects and
performance monitoring of contractors. Teams will be located within the
IEs to ensure institutional strengthening and close collaboration and
communication. To help ensure Program success, the Compact has budgeted
nearly $75 million for technical assistance, capacity building, and
institutional strengthening. In addition, competitively selected
external service providers will perform the Procurement and Fiscal
Agent functions. MCA-Lesotho will remain ultimately responsible for the
successful implementation of the Program.
F. Other Highlights
1. Transformational Change
The Program has the potential for significant transformational
change to help unlock the economic potential of the country by
providing additional water supplies for industrial and domestic use,
improving health outcomes and productivity and by removing barriers to
foreign and domestic investment. Overall the Program is expected to
impact a broad cross-section of the country through its various
activities. In additional, the Compact is designed to have a
substantive impact on extending full economic rights to women in
Lesotho.
2. Consultative Process
The Program builds upon the GoL's PRSP and the Lesotho Vision 2020.
The consultative processes associated with these two initiatives
identified the following as top priorities for poverty reduction and
economic growth: (a) Private sector development; (b) provision of
infrastructure; (c) natural resource management; and (d) improved
access to health care.
Shortly after Lesotho was selected as an MCC-eligible country in
2004, the GoL established a consultative proposal development process
that included the private sector, non-governmental organizations
(``NGOs'') and civil society organizations. Recognizing that
consultations are ongoing and must be meaningful, timely and
participatory, the MCA-Lesotho Core Team within the Ministry of Finance
and Development Planning was proactive in developing an outreach and
consultative process strategy in early 2007 to plan for consultations
and outreach activities beyond Compact signing and into implementation.
3. Government Commitment and Effectiveness
The 2006 enactment of the Legal Capacity of Married Persons Act was
a strong signal of the GoL's commitment to remove barriers to married
women's full participation in the economy, thereby enhancing the
Program's prospects of successful implementation and sustainability.
This significant commitment to gender equality was recently
acknowledged by resolutions adopted by both the U.S. Senate and the
U.S. House of Representatives. Prior to first disbursement of Compact
funds, the GoL will submit to its Parliament legal reforms designed to
assure that economic rights achieved in the Legal Capacity of Married
Persons Act are not contradicted in other laws.
The GoL has agreed with the World Bank on a comprehensive water
sector reform program. In the rural water and sanitation sub-sectors,
the GoL--consistent with its policy on decentralization--is divesting
financial management, project planning, supervisory services and asset
ownership to locally elected water committees.
In 2000, the GoL embarked on a ten year plan to improve health
service delivery. The GoL has successfully piloted decentralized health
services in three districts and is expanding decentralized management
to the remaining seven districts. New financial management and
procurement systems have been put in place, and a new human resources
system is being developed. The Health Sector Project is designed to
complement other donor funded activities. Despite the HIV/AIDS
epidemic, Lesotho has met both MCC eligibility indicators on
immunization and health expenditure which signals the GoL's commitment
to good performance in the health sector.
The GoL, as chair of the Southern Africa Development Community, has
committed to regional integration of financial systems. They also have
initiated the process of implementing policy reforms to improve the
business and investment climate with the support of donors such as the
World Bank. In order to realize the maximum economic benefits for the
PSD Project activities, the GoL must continue this policy reform
momentum and harmonize its legislation with other Common Monetary Area
countries, especially South Africa.
G. Sustainability
The Program is designed to enhance the sustainability of its
benefits by: (a) Supporting policy reforms in relevant sectors; (b)
ensuring adequate funding will be allocated to fully cover additional
recurrent costs; (c) requiring adherence to environmental and social
standards; (d) building capacity within the GoL to facilitate
implementation of the Program and to develop long-term management
capabilities of GoL institutions; (e) assuring improved maintenance
programs to maintain the economic life of assets; and (f) promoting
participation of a large cross section of Basotho, especially women and
the poor.
1. Water Sector
The sustainability of the Water Sector Project activities depends
on the GoL's pace of implementation of sector policy reforms and its
commitment to ensure that tariff levels provide for cost recovery of
operations and maintenance costs. Disbursements of Compact funding will
be tied to agreed progress on implementing water sector reforms.
2. Health Sector
The sustainability of health services is a critical issue,
particularly given the increase of donor-supported provision of ART. In
partnership with donors, the
[[Page 43383]]
GoL is developing a national health financing strategy to identify the
costs of the essential health services package, including ART, and gaps
and potential sources of funds. This strategy will be jointly monitored
by MCC and other health donors.
3. Private Sector Development
The sustainability of several PSD Project activities is expected to
be enhanced because they will be carried out with the assistance of
established private sector entities with a successful track record in
the Southern African region. Compact funding also is designed to help
establish sustainable improvements in land administration through an
active capacity building, training, and public education effort.
4. Environmental and Social Impacts
The assessment, management, and monitoring of potential
environmental and social impacts is an integral part of the Compact.
The Compact will fund several measures to: (a) Mitigate the adverse
effects of infrastructure construction or rehabilitation; (b) promote
natural resource management and environmental conservation consistent
with the priorities of the GoL's PRSP; (c) assure women's participation
in the economy and as beneficiaries in the Compact; and (d) integrate
HIV/AIDS awareness programs into all construction contracts. The
Compact will also support measures to strengthen the regulatory
framework and build institutional capacity required to improve
occupational health and safety and waste management practices in the
health sector.
The Metolong Dam activity is a Category A project under MCC's
Environmental Guidelines due primarily to the potential environmental
and social risks associated with the project, which include loss of
communal resources, loss of traditional access routes across the river,
inundation of cultural resources and alteration of downstream surface
water hydrology. The entities funding the dam have agreed that the
entire project, including advanced infrastructure, the dam and
reservoir and downstream bulk water conveyance system, will be designed
and constructed according to common standards that meet MCC's
Environmental Guidelines, the MCC Gender Policy, GoL law, and World
Bank Operational Policy 4.12 on Involuntary Resettlement. Compact
funding for the bulk water conveyance system will be conditioned on
strict adherence with the larger project's environmental management
plan (``EMP'') and resettlement action plan (``RAP''), completed
earlier this year with World Bank funding. The urban, peri-urban and
rural water activities are considered Category B and Category C
projects under MCC's Environmental Guidelines and do not pose
significant adverse environmental and social impacts. Standard EMPs
will be developed for each activity to assure compliance with MCC's
Environmental Guidelines and GoL laws. The wetlands restoration and
conservation activity is expected to result in mostly positive
environmental and socioeconomic impacts by rehabilitating three
severely degraded wetland areas which support livestock grazing and
other rural livelihood benefits.
The Health Sector Project consists of both Category A and Category
B projects under MCC's Environmental Guidelines due to greenfield
construction and concerns regarding current medical waste management
practices in Lesotho. To make long-term improvements to the current
situation and assure that MCC-funded facilities comply with MCC's
Environmental Guidelines, Compact funds will be used to update
Lesotho's 2005 National Health Care Waste Management Plan, develop
medical waste management regulations and standards, prepare a financial
plan and provide technical assistance to the relevant GoL agencies.
Additionally, all proposed health infrastructure activities must comply
with MCC's Environmental Guidelines and applicable GoL environmental
permitting requirements.
The PSD Project, a Category C project, is not likely to have
adverse environmental or social impacts. The MCA-Lesotho social-gender
specialist will work to ensure that social safeguards are integrated
into project design, implementation and monitoring to ensure that the
activities do not, unnecessarily or unlawfully, infringe upon rights or
privacy.
H. Donor Coordination
The design and technical aspects of many of the Compact Program
activities have benefited significantly from the experiences of other
donors working in Lesotho. The MCA-Lesotho Core Team has engaged the
donor community frequently in all phases of the consultative process
and has coordinated with donors to refine Compact activities,
collaborate on shared objectives to prevent duplication of efforts, and
ensure complementary activities throughout Compact implementation.
In the various Health Sector Project activities, including those
associated with HIV/AIDS, MCC has maintained regular communications and
participated in joint donor reviews. These donors include: PEPFAR;
Irish Aid; World Bank; African Development Bank; United Nations
agencies; and the Global Fund for AIDS, Tuberculosis and Malaria. These
and other donors provided design support to the MoHSW and assisted MCC
in the due diligence process. The Compact's Health Sector Project is
designed to support the GoL's reform efforts and fits within the
combined donor strategy for the health sector. In particular, the MCC
Health Sector Project and planned PEPFAR activities are mutually
reinforcing. As MCC has moved forward with the proposed Health Sector
Project, PEPFAR has provided encouragement and support at central and
country level. In-country PEPFAR staff has grown from one person in
2006 to a staff of seven professionals by end of 2007, with an expected
concomitant increase in resources. Together, MCC and PEPFAR inputs are
expected to result in a major increase in the quality and quantity of
ART services and in the production and retention of human resources for
health.
The Metolong Dam activity is being developed in coordination with
several donors, including the OPEC Fund for International Development,
the Kuwait Fund for Arab Economic Development, the Arab Bank for
Economic Development in Africa and the Saudi Fund for Development. The
European Union also has a sustained presence in Lesotho's water sector
and is currently funding detailed designs for components of the
Metolong Dam bulk water conveyance system, as well as components of the
larger lowlands water supply system. Irish Aid is also a significant
donor in the water sector.
MCC has also been actively collaborating with other donors on the
PSD Project. These donors include: the World Bank with respect to the
national identification card; the United Kingdom's Department for
International Development on matters concerning civil legal reform and
land administration reform; the German development agency Deutsche
Gesellschaft fu Technische Zusammenarbeit (GTZ) on land administration
reform; and USAID through its Women's Legal Rights Initiative project.
Millennium Challenge Compact Between The United States of America
Acting Through the Millennium Challenge Corporation And The Government
of The Kingdom of Lesotho
Table of Contents
Article 1. Goal and Objectives
Section 1.1 Compact Goal
[[Page 43384]]
Section 1.2 Program Objectives
Article 2. Funding and Resources
Section 2.1 MCC Funding
Section 2.2 Compact Implementation Funding
Section 2.3 Disbursement
Section 2.4 Interest
Section 2.5 Government Resources; Budget
Section 2.6 Limitations on the Use of MCC Funding
Section 2.7 Taxes
Article 3. Implementation
Section 3.1 Program Implementation Agreement
Section 3.2 Government Responsibilities
Section 3.3 Policy Performance
Section 3.4 Government Assurances
Section 3.5 Implementation Letters
Section 3.6 Procurement
Section 3.7 Records; Accounting; Covered Providers; Access
Section 3.8 Audits; Reviews
Article 4. Communications
Section 4.1 Communications
Section 4.2 Representatives
Section 4.3 Signatures
Article 5. Termination; Suspension; Refunds
Section 5.1 Termination; Suspension
Section 5.2 Refunds; Violation
Section 5.3 Survival
Article 6. Compact Annexes; Amendments; Governing Law
Section 6.1 Annexes
Section 6.2 Inconsistencies
Section 6.3 Amendments
Section 6.4 Governing Law
Section 6.5 Additional Instruments
Section 6.6 References to MCC Web site
Section 6.7 References to Law, Regulations, Policies and
Guidelines
Article 7. Entry Into Force
Section 7.1 Domestic Requirements
Section 7.2 Conditions Precedent
Section 7.3 Date of Entry into Force
Section 7.4 Compact Term
Annex I: Program Description
Annex II: Summary of Multi-Year Financial Plan
Annex III: Description of the Monitoring and Evaluation Plan
Millennium Challenge Compact
Preamble
This Millennium Challenge Compact (this ``Compact'') is between the
United States of America, acting through the Millennium Challenge
Corporation, a United States government corporation (``MCC''), and the
Government of the Kingdom of Lesotho (the ``Government'') (individually
a ``Party'' and collectively, the ``Parties'').
Recalling that the Government consulted with the private sector and
civil society of the Kingdom of Lesotho (``Lesotho'') to determine the
priorities for the use of Millennium Challenge Account assistance and
developed and submitted to MCC a proposal focused on providing water
supplies for industrial and domestic use and improving watershed
management, improving health outcomes and productivity through
strengthening the health system, and removing barriers to foreign and
local private sector investment; and
Recognizing that MCC wishes to help Lesotho implement a program to
achieve the goal and objectives described herein (the ``Program'');
The Parties hereby agree as follows:
Article 1. Goal and Objectives
Section 1.1 Compact Goal.
The goal of this Compact is to reduce poverty in Lesotho through
economic growth (the ``Compact Goal'').
Section 1.2 Program Objectives.
The objectives of this Program (as further described in Annex I)
(the ``Objectives'') are to:
(a) Improve the water supply for industrial and domestic needs and
enhance urban and rural livelihoods through improved watershed
management;
(b) Increase access to life-extending anti-retroviral therapy and
essential health services by providing a sustainable delivery platform;
and
(c) Stimulate investment by improving access to credit, reducing
transaction costs and increasing the participation of women in the
economy.
The Government will take all the steps necessary or appropriate to
achieve the Objectives during the term of this Compact.
Article 2. Funding and Resources
Section 2.1 MCC Funding.
(a) MCC grants to the Government, under the terms of this Compact,
an amount not to exceed Three Hundred Sixty-Two Million, Five Hundred
Fifty-One Thousand United States dollars (US$362,551,000) (``MCC
Funding'') to help the Government implement the Program.
(b) Annex II of this Compact describes the use of MCC Funding.
Section 2.2 Compact Implementation Funding
(a) Of the total amount of MCC Funding, MCC will make up to Fifteen
Million Six Hundred and Sixty-Nine Thousand United States dollars
(US$15,669,000) (``Compact Implementation Funding'') available to the
Government under Section 609(g) of the Millennium Challenge Act of
2003, as amended, to support:
(i) provision of fiscal and procurement agent services;
(ii) start-up costs including staff salaries and administrative
support and related goods and services;
(iii) baseline surveys for monitoring and evaluation and
administrative support for the surveys as appropriate;
(iv) initiation of environmental and social assessments and design
work in conjunction with certain water and health sector activities;
(v) additional gender assessment and input for project design;
(vi) additional work with respect to activities to remove forms of
discrimination, in laws or policies, affecting the economic rights of
women;
(vii) additional work with respect to clarifying roles and
responsibilities for decentralized health services at the central and
district levels, and in developing a training plan for health sector
project activities;
(viii) technical assistance to support development of terms of
reference for consultants, including, without limitation, health system
strengthening, capacity building, and medical waste management;
(ix) procurement of field monitoring equipment and initiation of
environmental baseline studies for the wetlands conservation project;
(x) a study of land administration services in Lesotho and
recommendations for modernization and improvement of those services;
(xi) a review of existing payments and settlements and cross-border
financial transactions legislation and related regulations;
(xii) a review of existing legislation authorizing credit bureaus
and a national identification card and any related regulations;
(xiii) a review of data privacy legislation and regulations;
(xiv) establishment of Project Implementation Units (as defined in
Annex I) and related start-up costs including recruitment of key
personnel, staff salaries and administrative support and related goods
and services; and
(xv) other Compact implementation expenses approved by MCC.
(b) Notwithstanding anything to the contrary in this Compact, this
Section 2.2 will provisionally apply, after MCC and the Government sign
this Compact, without regard to whether this Compact has entered into
force under Section 7.3.
(c) Compact Implementation Funding is subject to: (i) The
limitations on the use or treatment of MCC Funding set forth in
Sections 2.6 and 2.7 as if such provisions were in full force and
effect, and (ii) any other requirements and limitations as may be
required by MCC in writing.
Section 2.3 Disbursement
In accordance with this Compact and the Program Implementation
Agreement
[[Page 43385]]
(as defined in Section 3.1), MCC will disburse MCC Funding for
expenditures incurred in furtherance of the Program (each instance, a
``Disbursement''). The proceeds of such Disbursements will be made
available to the Government, at MCC's sole election, (a) by deposit to
a bank account established by the Government and acceptable to MCC (a
``Permitted Account'') or (b) through direct payment to a provider of
goods, works or services under this Compact. MCC Funding may be
expended only to cover Program expenditures as provided in this Compact
and the Program Implementation Agreement.
Section 2.4 Interest
The Government will pay to MCC any interest or other earnings that
accrue on MCC Funding in accordance with the Program Implementation
Agreement.
Section 2.5 Government Resources; Budget
(a) The Government will provide all funds and other resources, and
will take all actions, that are necessary to carry out the Government's
responsibilities and obligations under this Compact.
(b) The Government will use its best efforts during each year it
receives MCC Funding to ensure that all MCC Funding it receives or is
projected to receive in such year is fully accounted for in the annual
budget of Lesotho. To the extent feasible under the budgeting processes
of Lesotho, MCC Funding will be accounted for on a multi-year basis.
(c) The Government will not reduce the normal and expected
resources that it would otherwise receive or budget from sources other
than MCC for the activities contemplated under this Compact.
(d) Unless the Government discloses otherwise to MCC in writing,
MCC Funding will be in addition to the resources that the Government
would otherwise receive or budget for the activities contemplated for
the Program.
Section 2.6 Limitations on the Use of MCC Funding
The Government will ensure that MCC Funding will not be used for
any purpose that would violate United States law or policy, as
specified in this Compact or as further notified to the Government in
writing or by posting on the MCC Web site (http://www.mcc.gov) (the
``MCC Web site''), including but not limited to the following purposes:
(a) For assistance to, or training of, the military, police,
militia, national guard or other quasi-military organization or unit;
(b) For any activity that is likely to cause a substantial loss of
United States jobs or a substantial displacement of United States
production;
(c) To undertake, fund or otherwise support any activity that is
likely to cause a significant environmental, health, or safety hazard,
where the phrase ``likely to cause a significant environmental, health,
or safety hazard'' has the meaning set forth in environmental
guidelines delivered by MCC to the Government or posted by MCC on the
MCC Web site or otherwise publicly made available, as the guidelines
may be amended from time to time (the ``MCC Environmental
Guidelines''); or
(d) To pay for the performance of abortions as a method of family
planning or to motivate or coerce any person to practice abortions, to
pay for the performance of involuntary sterilizations as a method of
family planning or to coerce or provide any financial incentive to any
person to undergo sterilizations or to pay for any biomedical research
which relates, in whole or in part, to methods of, or the performance
of, abortions or involuntary sterilization as a means of family
planning.
Section 2.7 Taxes
(a) Unless the Parties otherwise specifically agree in writing, the
Government will not impose, and will not permit any other governmental
or taxing authority to impose any taxes, duties, levies, contributions
or other charges (``Taxes'') in Lesotho on the Program, MCC Funding,
interest or earnings on MCC Funding, any Project or activity
implemented under the Program, goods, works, services and other assets
and activities related to the Program or any Project, persons and
entities that provide such goods, works, services and assets or perform
such activities, and income, profits and payments with respect thereto.
The Government will exempt from Taxes, inter alia, value added and
other transfers (including exemption therefrom with credit), property
and ad valorem items, import and export of goods (including exemptions
for goods imported and re-exported for personal use of expatriate
employees and their family members) and income and profit.
(b) Before the initial Disbursement is made, the Government and MCC
may, at MCC's discretion, enter into one or more agreements setting
forth the mechanisms for implementing this Section 2.7, including
exemptions from filing and compliance requirements relating to Taxes.
If entered into, it is expected that such agreement(s) will provide
that the Government may impose: (i) Taxes on certain individuals who
are nationals or permanent residents of Lesotho; (ii) Taxes other than
transfer Taxes and import and export Taxes on certain entities that are
organized in Lesotho; and (iii) fees or charges for services that are
generally applicable in Lesotho, reasonable in amount and imposed on a
non-discriminatory basis.
Article 3. Implementation
Section 3.1 Program Implementation Agreement
The Government will implement the Program in accordance with this
Compact and as further specified in an agreement to be entered into by
MCC and the Government and dealing with, among other matters,
implementation arrangements, fiscal accountability, disbursement and
use of MCC Funding, procurement and applicable tax exemptions (the
``Program Implementation Agreement'').
Section 3.2 Government Responsibilities
(a) The Government has principal responsibility to oversee and
manage the implementation of the Program.
(b) With the prior written consent of MCC, the Government may
designate an entity to implement some or all of the Government's
obligations or to exercise any rights of the Government under this
Compact or the Program Implementation Agreement. Such a designation
will not relieve the Government of any designated obligations and
rights, for which the Government will retain full responsibility.
(c) The Government will ensure that no law or regulation in Lesotho
now or hereinafter in effect makes or will make unlawful or otherwise
prevent or hinder the performance of any obligation under this Compact,
the Program Implementation Agreement or any other agreement related
thereto or any transaction contemplated thereunder.
(d) The Government will ensure that any assets or services funded
in whole or in part (directly or indirectly) by MCC Funding will be
used solely in furtherance of this Compact and the Program unless
otherwise agreed by MCC in writing.
Section 3.3 Policy Performance
In addition to the specific policy and legal reform commitments
identified in Annex I, the Government will seek to maintain and to
improve its level of performance under the policy criteria identified
in Section 607 of the Millennium Challenge Act of 2003, as amended, and
the selection criteria and methodology used by MCC.
[[Page 43386]]
Section 3.4 Government Assurances
The Government assures MCC that:
(a) As of the date this Compact is signed by the Government, the
information provided to MCC by or on behalf of the Government in the
course of reaching agreement with MCC on this Compact is true, correct
and complete in all material respects;
(b) This Compact does not, and will not, conflict with any other
international agreement or obligation of the Government or any of the
laws of Lesotho; and
(c) The Government will not invoke any of the provisions of its
internal law to justify or excuse a failure to perform its duties or
responsibilities under this Compact.
Section 3.5 Implementation Letters
From time to time, MCC may provide guidance to the Government
through implementation letters on the frequency, form or content of
requests for Disbursements or on any other matter relating to MCC
Funding, this Compact or implementation of the Program (each, an
``Implementation Letter''). The Government will apply such guidance in
implementing this Compact.
Section 3.6 Procurement
The Government will ensure that the procurement of all goods, works
and services by the Government or any Provider (as defined in Section
3.7(c)) in furtherance of this Compact will be consistent with the
program procurement guidelines of which MCC will inform the Government
in writing or by posting on the MCC Web site or otherwise make publicly
available, as the guidelines may be amended from time to time (the
``MCC Program Procurement Guidelines''), which MCC Program Procurement
Guidelines will include but will not be limited to the following
requirements:
(a) open, fair and competitive procedures must be used in a
transparent manner to solicit, award and administer contracts and to
procure goods, works and services;
(b) solicitations for goods, works and services must be based upon
a clear and accurate description of the goods, works and services to be
acquired;
(c) contracts must be awarded only to qualified contractors that
have the capability to perform the contracts in accordance with their
terms on a cost effective and timely basis; and
(d) no more than a commercially reasonable price, as determined,
for example, by a comparison of price quotations and market prices,
will be paid to procure goods, works and services.
Section 3.7 Records; Accounting; Covered Providers; Access.
(a) Government Books and Records. The Government will maintain, and
will use its best efforts to ensure that all Covered Providers (as
defined in clause (c) below) maintain, accounting books, records,
documents and other evidence relating to this Compact adequate to show
to MCC's satisfaction the use of all MCC Funding (``Compact Records'').
In addition, the Government will furnish or cause to be furnished to
MCC upon its request all Compact Records.
(b) Accounting. The Government will maintain, and will use its best
efforts to ensure that all Covered Providers maintain, Compact Records
in accordance with generally accepted accounting principles prevailing
in the United States, or at the Government's option and with MCC's
prior written approval, other accounting principles, such as those (i)
prescribed by the International Accounting Standards Committee (an
affiliate of the International Federation of Accountants) or (ii) then
prevailing in Lesotho. Compact Records must be maintained for at least
five (5) years after the end of the Compact Term (as defined in Section
7.4) or for such longer period, if any, required to resolve any
litigation, claims or audit findings or any statutory requirements.
(c) Covered Provider. Unless the Parties agree otherwise in
writing, a ``Provider'' is (i) any entity of the Government that
receives or uses MCC Funding or any other Program asset in carrying out
activities in furtherance of this Compact or (ii) any third party that
receives at least US$50,000 in the aggregate of MCC Funding (other than
as salary or compensation as an employee of an entity of the
Government) during the Compact Term. A ``Covered Provider'' is (1) a
non-United States Provider that receives (other than pursuant to a
direct contract or agreement with MCC) US$300,000 or more of MCC
Funding in any Government fiscal year or any other non-United States
person or entity that receives, directly or indirectly, US$300,000 or
more of MCC Funding from any Provider in such fiscal year or (2) any
United States Provider that receives (other than pursuant to a direct
contract or agreement with MCC) US$500,000 or more of MCC Funding in
any Government fiscal year or any other United States person or entity
that receives, directly or indirectly, US$500,000 or more of MCC
Funding from any Provider in such fiscal year.
(d) Access. Upon MCC's request, the Government, at all reasonable
times, will permit, or cause to be permitted, authorized
representatives of MCC, an authorized United States inspector general,
the United States Government Accountability Office, any auditor
responsible for an audit contemplated herein or otherwise conducted in
furtherance of this Compact, and any agents or representatives engaged
by MCC or the Government to conduct any assessment, review or
evaluation of the Program, the opportunity to audit, review, evaluate
or inspect facilities and activities funded in whole or in part by MCC
Funding.
Section 3.8 Audits; Reviews.
(a) Government Audits. Except as the Parties may otherwise agree in
writing, the Government will, on at least a semi-annual basis, conduct,
or cause to be conducted, financial audits of all disbursements of MCC
Funding covering the period from signing of this Compact until the
earlier of the following December 31 or June 30 and covering each six-
month period thereafter ending December 31 and June 30, through the end
of the Compact Term, in accordance with the terms of the Program
Implementation Agreement. As requested by MCC in writing, the
Government will use, or cause to be used, to conduct such audits an
auditor approved by MCC and named on the list of local auditors
approved by the Inspector General of the Millennium Challenge
Corporation (the ``Inspector General'') or a United States-based
Certified Public Accounting firm selected in accordance with the
``Guidelines for Financial Audits Contracted by MCA'' (the ``Audit
Guidelines'') issued and revised from time to time by the Inspector
General. Audits will be performed in accordance with the Audit
Guidelines and be subject to quality assurance oversight by the
Inspector General. An audit must be completed and the audit report
delivered to MCC no later than ninety (90) days after the first period
to be audited and no later than ninety (90) days after each June 30 and
December 31 thereafter, or such other period as the Parties may
otherwise agree in writing.
(b) Audits of United States Entities. The Government will ensure
that agreements between the Government or any Provider, on the one
hand, and a United States nonprofit organization, on the other hand,
that are financed with MCC Funding state that the United States
organization is subject to the applicable audit requirements contained
in OMB Circular A-133. The Government will ensure that agreements
[[Page 43387]]
between the Government or any Provider, on the one hand, and a United
States for-profit Covered Provider, on the other hand, that are
financed with MCC Funding state that the United States organization is
subject to audit by the cognizant United States Government agency,
unless the Government and MCC agree otherwise in writing.
(c) Corrective Actions. The Government will use its best efforts to
ensure that Covered Providers take, where necessary, appropriate and
timely corrective actions in response to audits, consider whether a
Covered Provider's audit necessitates adjustment of the Government's
records, and require each such Covered Provider to permit independent
auditors to have access to its records and financial statements as
necessary.
(d) Audit by MCC. MCC will have the right to arrange for audits of
the Government's use of MCC Funding.
(e) Cost of Audits, Reviews or Evaluations. MCC Funding may be used
to fund the costs of any audits, reviews or evaluations required under
this Compact, including as reflected on Annex II.
Article 4. Communications
Section 4.1 Communications.
Any document or communication required or submitted by either Party
to the other under this Compact must be in writing and, except as
otherwise agreed with MCC, in English. For this purpose, the address of
each Party is set forth below.
To MCC
Millennium Challenge Corporation, Attention: Vice President for
Operations (with a copy to the Vice President and General Counsel), 875
Fifteenth Street, N.W., Washington, D.C. 20005, United States of
America, Facsimile: +1 (202) 521-3700, Phone:+1 (202) 521-3600, E-mail:
VPOperations@mcc.gov (Vice President for Operations),
VPGeneralCounsel@mcc.gov (Vice President and General Counsel)
To the Government
Government of the Kingdom of Lesotho, Attention: Minister of
Finance and Development Planning, (with a copy to the Principal
Secretary), Address: P.O. Box 395, Maseru--100, The Kingdom of Lesotho,
Facsimile: +266 223 10622/223 10157, Phone: +266 223 23703/223 16304/
223 11101, E-mail: ps@finance.gov.ls.
Section 4.2 Representatives
For all purposes of this Compact, the Government will be
represented by the individual holding the position of, or acting as,
the Minister of Finance and Development Planning of the Kingdom of
Lesotho, and MCC will be represented by the individual holding the
position of, or acting as, Vice President for Operations (each, a
``Principal Representative''), each of whom, by written notice to the
other Party, may designate one or more additional representatives for
all purposes other than signing amendments to this Compact. A Party may
change its Principal Representative to a new representative that holds
a position of equal or higher rank upon written notice to the other
Party.
Section 4.3 Signatures
With respect to all documents other than this Compact or an
amendment to this Compact, a signature delivered by facsimile or
electronic mail will be binding on the Party delivering such signature
to the same extent as an original signature would be.
Article 5. Termination; Suspension; Refunds
Section 5.1 Termination; Suspension
(a) Subject to Section 5.2, either Party may terminate this Compact
in its entirety by giving the other Party thirty (30) days written
notice.
(b) MCC may, upon written notice to the Government, suspend or
terminate this Compact or MCC Funding, in whole or in part, and any
obligation related thereto, if MCC determines that any circumstance
identified by MCC as a basis for suspension or termination (whether
such circumstance is notified in writing to the Government or by
posting on the MCC Web site) has occurred, which circumstances include
but are not limited to the following:
(i) The Government fails to comply with its obligations under this
Compact, the Program Implementation Agreement or any other agreement or
arrangement entered into by the Government in connection with this
Compact or the Program;
(ii) An event has occurred that MCC determines makes it improbable
that the Objectives will be achieved during the term of this Compact or
that the Government will be able to perform its obligations under this
Compact;
(iii) A use of MCC Funding or continued implementation of this
Compact would violate applicable law or United States Government
policy, whether now or hereafter in effect;
(iv) The Government or any other person or entity receiving MCC
Funding or using assets acquired in whole or in part with MCC Funding
is engaged in activities that are contrary to the national security
interests of the United States;
(v) An act has been committed or an omission or an event has
occurred that would render Lesotho ineligible to receive United States
economic assistance under Part I of the Foreign Assistance Act of 1961,
as amended (22 U.S.C. 2151 et seq.), by reason of the application of
any provision of the Foreign Assistance Act of 1961 or any other
provision of law;
(vi) The Government has engaged in a pattern of actions
inconsistent with the criteria used to determine the eligibility of
Lesotho for assistance under the Millennium Challenge Act of 2003, as
amended; and
(vii) The Government or another person or entity receiving MCC
Funding or using assets acquired in whole or in part with MCC Funding
is found to have been convicted of a narcotics offense or to have been
engaged in drug trafficking.
(c) All Disbursements will cease upon expiration, suspension, or
termination of this Compact; provided, however, that MCC Funding may be
used, in compliance with the Program Implementation Agreement, to pay
for (i) reasonable expenditures for goods, works and services that are
properly incurred under or in furtherance of this Compact before
expiration, suspension or termination of this Compact, and (ii)
reasonable expenditures (including administrative expenses) properly
incurred in connection with the winding up of the Program within 120
days after the expiration, suspension or termination of this Compact.
(d) Subject to clause (c) of this Section 5.1, upon the expiration,
suspension or termination of this Compact, (i) any amounts of MCC
Funding not disbursed by MCC to the Government will be automatically
released from any obligation in connection with this Compact, and (ii)
any amounts of MCC Funding disbursed by MCC but not expended under
Section 2.3 before the expiration, suspension or termination of this
Compact, plus accrued interest thereon will be returned to MCC within
thirty (30) days after the Government receives MCC's request for such
return; provided, however, that if this Compact is suspended or
terminated in part, MCC may request a refund for only the amount of MCC
Funding allocated to the suspended or terminated portion.
(e) MCC may reinstate any suspended or terminated MCC Funding under
this Compact if MCC determines that the Government or other relevant
person or entity has committed to correct each condition for which MCC
Funding was suspended or terminated.
[[Page 43388]]
Section 5.2 Refunds; Violation
(a) If any MCC Funding, any interest or earnings thereon, or any
asset acquired in whole or in part with MCC Funding is used for any
purpose in violation of the terms of this Compact, then MCC may require
the Government to repay to MCC in United States Dollars the value of
the misused MCC Funding, interest, earnings or asset, plus interest
within thirty (30) days after the Government's receipt of MCC's request
for repayment. The Government must use national funds (and no assets of
the Program) to make such payment.
(b) Notwithstanding any other provision in this Compact or any
other agreement to the contrary, MCC's right under this Section 5.2 for
a refund will continue during the term of this Compact and for a period
of (i) five years thereafter or (ii) one year after MCC receives actual
knowledge of such violation, whichever is later.
Section 5.3 Survival
The Government's responsibilities under Sections 2.4, 2.5, 2.6,
2.7, 3.2, 3.4(a), 3.5, 3.7, 3.8, 4.1, 4.2, 4.3, 5.1, 5.2, 5.3, 6.1,
6.2, 6.3, 6.4 and 6.5 of this Compact will survive the expiration,
suspension or termination of this Compact.
Article 6. Compact Annexes; Amendments; Governing Law
Section 6.1 Annexes
Each annex attached hereto constitutes an integral part of this
Compact.
Section 6.2 Inconsistencies
In the event of any conflict or inconsistency between:
(a) Any annex to this Compact and any of Articles 1 through 7, such
Articles 1 through 7 will prevail; or
(b) This Compact and any other agreement between the Parties
regarding the Program, this Compact will prevail.
Section 6.3 Amendments
The Parties may amend this Compact only by a written agreement
signed by the Principal Representatives and subject to the respective
domestic approval requirements to which this Compact was subject.
Section 6.4 Governing Law
This Compact is an international agreement and as such will be
governed by the principles of international law.
Section 6.5 Additional Instruments
Any reference to activities, obligations or rights undertaken or
existing under or in furtherance of this Compact or similar language
will include activities, obligations and rights undertaken by or
existing under any agreement, document or instrument related to this
Compact and the Program.
Section 6.6 References to MCC Web site
Each reference in this Compact, the Program Implementation
Agreement, or any other agreement entered into in connection with this
Compact, to a document or information available on, or notified by
posting on, the MCC Web site will be deemed a reference to such
document or information as updated or substituted on the MCC Web site
by MCC from time to time, and will be deemed to be incorporated by
reference into, and to constitute an integral part of, this Compact,
the Program Implementation Agreement or such other agreement entered
into in connection with this Compact.
Section 6.7 References to Laws, Regulations, Policies and Guidelines
Each reference in this Compact, the Program Implementation
Agreement, or any other agreement entered into in connection with this
Compact, to a law, regulation, policy, guidelines or similar document
shall be construed as a reference to such law, regulation, policy,
guidelines or similar document as it may, from time to time, be
amended, revised, replaced or extended and shall include any law,
regulation, policy, guidelines or similar document issued under or
otherwise applicable or related to such law, regulation, policy,
guidelines or similar document.
Article 7. Entry Into Force
Section 7.1 Domestic Requirements
The Government will take all steps necessary to ensure that: (a)
This Compact and the Program Implementation Agreement and all of the
provisions of this Compact and the Program Implementation Agreement are
valid and binding and are in full force and effect under the laws of
Lesotho; (b) this Compact, the Program Implementation Agreement and any
other agreement entered into in connection with this Compact to which
the Government and MCC are parties will be given the status of an
international agreement; and (c) no laws of Lesotho, other than the
Constitution of Lesotho, whether now or hereafter in effect, will take
precedence or prevail over the terms of this Compact or the Program
Implementation Agreement.
Section 7.2 Conditions Precedent
Before this Compact enters into force:
(a) The Government and MCC must have executed the Program
Implementation Agreement and it must be effective;
(b) The Government will have delivered to MCC:
(i) A certificate signed and dated by the Principal Representative
of the Government, or such other duly authorized representative of the
Government acceptable to MCC, certifying that the Government has
completed all of its domestic requirements in order that the
requirements of Section 7.1 have been satisfied;
(ii) A legal opinion from the Attorney General of Lesotho (or other
legal opinion acceptable to MCC), in form and substance satisfactory to
MCC; and
(iii) Complete, certified copies of all decrees, legislation,
regulations or other governmental documents relating to its domestic
requirements for this Compact to enter into force and the satisfaction
of Section 7.1, which MCC may post on its Web site or otherwise make
publicly available; and
(c) MCC must determine that after signature of this Compact, the
Government has not engaged in any action or omission that is
inconsistent with the eligibility criteria for MCC Funding.
Section 7.3 Date of Entry into Force
This Compact will enter into force on the later of (a) the date of
the last letter in an exchange of letters between the Principal
Representatives confirming that each Party has completed its domestic
requirements for entry into force of this Compact and (b) the date that
all conditions set forth in Section 7.2 have been satisfied.
Section 7.4 Compact Term
This Compact will remain in force for five years after its entry
into force, unless terminated earlier under Section 5.1 (the ``Compact
Term'').
In Witness Whereof, the undersigned, duly authorized by their
respective governments, have signed this Compact this 23rd day of July,
2007.
Done at Washington, D.C.
For Millennium Challenge Corporation, on behalf of the United
States of America,
Name: John J. Danilovich,
Title: Chief Executive Officer.
For the Government of the Kingdom of Lesotho,
Name: Mohlabi Kenneth Tsekoa,
Title: Minister of Foreign Affairs and International Relations.
[[Page 43389]]
Annex I Program Description
A. Overview
This Annex I describes the Program that MCC Funding will support in
Lesotho during the term of this Compact and the results to be achieved
using MCC Funding. In all cases, an activity described herein will be
carried out subject to any relevant approvals on the part of MCC and to
the extent funds are made available under this Compact for purposes of
that activity.
1. The Program and Its Projects
The Program will include the Water Sector Project, the Health
Sector Project, and the Private Sector Development Project as further
described in this Annex I (the ``Projects'').
The Parties may agree to modify, amend, terminate or suspend these
Projects or to create a new project by written agreement signed by the
Principal Representative of each Party without amending this Compact;
provided, however, that any such modification or amendment of a Project
or creation of a new project does not (a) cause the amount of MCC
Funding to exceed the aggregate amount specified in Section 2.1(a) of
this Compact, (b) cause the Government's responsibilities or
contribution of resources to be less than specified in this Compact, or
(c) extend the term of this Compact.
2. Program Implementation
The implementation framework for the use of MCC Funding is
summarized in this Annex I.
(a) MCC and the Government will sign the Program Implementation
Agreement, and may sign other agreements contemplated by this Compact,
all of which, together with this Compact, will set out certain rights,
responsibilities, duties and other terms relating to the implementation
of this Compact and the Program.
(b) The Government will:
(i) Enact or cause to be enacted an act of Parliament to form the
entity empowered to implement some or all of the Government's
obligations or to exercise any rights of the Government as provided
under the terms of this Compact and the Program Implementation
Agreement (``MCA-Lesotho''); and
(ii) Take all necessary and appropriate actions to carry out each
of the other Government responsibilities in connection with this
Compact and the Program Implementation Agreement, including, but not
limited to, the actions necessary to ensure (1) this Compact, the
Program Implementation Agreement and any other agreement entered into
in connection with this Compact to which the Government and MCC are
parties will be given the status of an international agreement and (2)
no laws of Lesotho, other than the Constitution of Lesotho, whether now
or hereafter in effect, will take precedence or prevail over the terms
of this Compact, the Program Implementation Agreement or such other
agreement.
(c) MCC will take all necessary and appropriate actions to carry
out each of its responsibilities in connection with this Compact and
the Program Implementation Agreement, including the exercise of its
various approval rights in connection with the implementation of this
Compact and the Program.
(d) MCA-Lesotho will take all necessary and appropriate actions to
implement this Compact and the Program, including the performance of
the rights and responsibilities designated to it by the Government
pursuant to the Program Implementation Agreement.
3. Fiscal Accountability
(a) Fiscal Agent. The Government will ensure that a fiscal agent
(``Fiscal Agent'') is appointed in accordance with the terms of this
Compact and the Program Implementation Agreement. The Fiscal Agent will
provide a broad range of financial management services required by MCA-
Lesotho to implement this Compact and the Program. The Government and
MCA-Lesotho will take all necessary and appropriate actions to ensure
the Fiscal Agent performs these services in accordance with the terms
of this Compact, the Program Implementation Agreement and any
agreements to which the Fiscal Agent is a party and in accordance with
internationally accepted standards of accounting and financial
management. This will include, but not be limited to, the Fiscal
Agent's responsibilities to collect and report information useful to
the governing board and senior management of MCA-Lesotho, managers
charged with supervision of the Projects, MCC and certain other
entities responsible for the verification of the manner in which MCC
Funding is used. The roles and responsibilities of the Fiscal Agent
will be set out in a Fiscal Agent Agreement to be entered into between
MCA-Lesotho and the Fiscal Agent (the ``Fiscal Agent Agreement''). The
role of the Fiscal Agent and the terms of the Fiscal Agent Agreement
are more fully described in the Program Implementation Agreement.
(b) Permitted Accounts. The Government will ensure that the
Permitted Accounts are established, and banking services provided, in
accordance with the terms of this Compact, the Program Implementation
Agreement and any other agreements related to the Permitted Accounts.
The Central Bank of Lesotho will not provide banking services to MCA-
Lesotho or otherwise in connection with MCC Funding.
(c) Procurement Agent. The Government will ensure that a
procurement agent (the ``Procurement Agent'') is appointed in
accordance with the terms of this Compact and the Program
Implementation Agreement. The Procurement Agent will act on behalf of
MCA-Lesotho to provide specified procurement activities required by
MCA-Lesotho to implement this Compact and the Program. The Government
and MCA-Lesotho will take all necessary and appropriate actions to
ensure the Procurement Agent performs these services in accordance with
the terms of this Compact, the Program Implementation Agreement, the
MCC Program Procurement Guidelines and any agreements to which the
Procurement Agent is a party. The roles and responsibilities of the
Procurement Agent will be set out in a Procurement Agent Agreement to
be entered into between MCA-Lesotho and the Procurement Agent.
(d) Proposals for Goods, Works and Services. Public solicitations
for proposals are anticipated to procure goods, works and services, as
appropriate, to implement the Program and its Projects. All such
procurements will be conducted in accordance with Section 3.6 of this
Compact. MCA-Lesotho may also consider, using a process approved by MCC
in writing, any unsolicited proposals it might receive.
4. Management and Consultation Arrangements of MCA-Lesotho
(a) Board of Directors. MCA-Lesotho will be governed by a board of
directors that will have independent decision making authority and will
be the final authority with respect to implementation of this Compact.
It will make strategic decisions, provide oversight and be responsible
for the success or failure of the Program. The initial board of
directors will be comprised of 11 voting members, representing: (i) The
Ministry of Finance and Development Planning; (ii) the Ministry of
Foreign Affairs; (iii) the Ministry of Health and Social Welfare; (iv)
the Ministry of Local Government; (v) the Ministry of Natural
Resources; (vi) the Ministry of Justice, Human Rights and
Rehabilitation; (vii) three members from the private sector; and
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(viii) two members from the Lesotho Council of Non-Governmental
Organizations (``LCNGO''). The members of the board of directors
representing the private sector will be selected by the stakeholders
committee (described in clause (c) below) and the members of the board
of directors representing the LCNGO will be selected by the LCNGO
through the stakeholders committee, in each case in accordance with a
process agreed upon by the Government and MCC. A representative of MCC
and the chief executive officer of MCA-Lesotho will serve as non-voting
members of the MCA-Lesotho board of directors.
(b) Management Unit. A management unit will support the board of
directors in implementing the Program. A chief executive officer will
manage the day-to-day activities of MCA-Lesotho and will be supported
by key officers, to include a: (i) Chief financial officer; (ii) head
of administration; (iii) head of procurement; (iv) head of
infrastructure; (v) head of environment and social assessment; (vi)
head of monitoring and evaluation; (vii) head of operations; (viii)
legal officer; (ix) communications and public outreach specialist; and
(x) such other key officers as may be agreed upon by the Government and
MCC. The key officers will be supported by appropriate administrative
and other personnel deemed to be necessary for implementing the
Program. The CEO will be selected and hired by the board of directors
following an open and competitive recruitment and selection process.
The other key officers and staff will be selected and hired by the CEO
following an open and competitive recruitment and selection process.
The appointment of the CEO and all other MCA-Lesotho management unit
personnel will be subject to MCC's prior approval.
(c) Stakeholders Committee. A stakeholders committee, in form
satisfactory to MCC, will be created to represent the constituencies of
the various Projects. MCA-Lesotho will use the stakeholders committee
to continue the consultative process throughout Compact implementation.
The stakeholders committee will be used primarily to inform the various
constituent groups about Program implementation, provide advice and
input to MCA-Lesotho concerning the Program, and select the private
sector members and civil society members of the board of directors.
5. Gender Integration Plan
MCA-Lesotho will draft, implement and monitor a Program-wide gender
integration plan (``Gender Integration Plan'') to ensure compliance,
optimum program design and maximum beneficiary impact across all
Compact Project activities. This Gender Integration Plan will include,
as appropriate, recommendations for meaningful and inclusive
consultations with women and other vulnerable and underrepresented
groups; project-specific gender analyses; and strategies for
incorporating findings of the gender analyses into final Project
designs.
MCA-Lesotho will also hire a full-time, dedicated social/gender
specialist for the entire term of this Compact to ensure that social
safeguards are fully integrated into the design, terms of references,
work plans and monitoring and evaluation plans, and to ensure that all
Project activities in every aspect of the Program are compliant with
the gender policy delivered by MCC to the Government or posted by MCC
on its Web site or otherwise publicly made available, as the policy may
be amended from time to time (the ``MCC Gender Policy''), and with the
rights afforded to married women in the 2006 Legal Capacity of Married
Persons Act.
6. HIV/AIDS Risk Mitigation Plans
MCA-Lesotho will assure that all construction contractors develop,
implement and monitor an HIV/AIDS awareness program acceptable to MCC
that includes, but is not limited to, the following elements:
(a) Activities directed to construction laborers and all associated
formal and informal sector workers engaged in building and supporting
construction works, including components for those who provide food,
laundry and any other services providers and sub-contractors;
(b) Activities directed to the communities affected by the
construction works;
(c) Activities designed to be gender and age-appropriate in content
and delivery, reflecting an analysis of gender differences and
inequalities to ensure the most effective program to reach various
stakeholders;
(d) A component for independent monitoring of contractor
compliance;
(e) Testing made available on or near construction sites; and
(f) Components necessary to ensure the contractor's program is
coordinated with other HIV/AIDS awareness and prevention programs being
implemented in Lesotho during the time of construction works.
B. Water Sector Project
1. Summary of Project and Related Activities
This Project is designed to provide additional access to improved
water supplies and sanitation facilities for rural and urban domestic,
commercial and industrial users. In its design, funding under the Water
Sector Project will be used to (a) construct a conveyance system from
the Metolong Dam and establish a project management unit to manage the
implementation, (b) rehabilitate existing infrastructure returning it
to a functional state and expand the reticulated network to unconnected
urban and peri-urban areas, (c) provide additional access to improved
water supply and sanitation facilities in remote, rural areas through
the rehabilitation and/or construction of up to 250 water supply points
and up to 10,000 ventilated improved pit (``VIP'') latrines and (d)
execute a pilot-scale wetlands restoration and conservation program at
three project areas in the Lesotho highlands.
In the industrial sector, the Project will provide the critical
infrastructure necessary to provide additional water to support the
growth of garment and textile operations--the country's principal
engine of economic growth and poverty reduction. Currently, Lesotho's
textile sector accounts for approximately 40 percent of the country's
gross domestic product and employs nearly 50,000 individuals, many of
whom support extended families.
Expansion and rehabilitation of rural water supply and sanitation
facilities, coupled with public health and hygiene awareness training
for rural communities, supports the goals of Lesotho's 2004 Poverty
Reduction Strategy Paper (``PRSP''), which highlights the need for
investment in rural infrastructure to help foster conditions for
economic growth and poverty reduction. The wetlands restoration
activity also supports the goals of the PRSP by helping Lesotho
conserve and manage natural resources that are vital to sustainable
development and directly contribute to the livelihoods and well-being
of Lesotho's poorest people.
In connection with the Water Sector Project activities, MCA-Lesotho
will assist and take all necessary steps to ensure that, where and when
required by MCC Environmental Guidelines, MCC Gender Policy and/or
Lesotho laws, an environmental impact assessment (each, an ``EIA'') or,
as applicable, environmental assessment
[[Page 43391]]
(each, an ``EA''), an environmental management plan (each, an ``EMP''),
an HIV/AIDS awareness plan, and a resettlement action plan (each, a
``RAP'') or resettlement policy framework (each, a ``RPF'') (consistent
with World Bank Operational Policy 4.12 on Involuntary Resettlement)
are prepared to the satisfaction of MCC and in accordance with the
Lesotho National Environment Act of 2001 and Lesotho Guidelines for
Environmental Impact Assessment, in each case as the same may be
amended from time to time. MCA-Lesotho shall also ensure that, for each
activity requiring an environmental license under the Lesotho National
Environment Act of 2001, a ``Project Brief'' (as defined in the Lesotho
National Environment Act of 2001) and any necessary supporting studies
will be submitted to, and approved by, the Government's environmental
authorities prior to the initiation of construction activities, and
that such environmental license will be maintained in good standing
throughout the Compact Term. MCC Funding will support implementation of
the environmental and social mitigation measures identified in the
EIA(s) and/or EA(s), EMP(s), and RAP/RPF(s). The following summarizes
each Project activity under the Water Sector Project:
(a) Metolong Dam--Bulk Water Conveyance System and Metolong Program
Management Unit.
The Metolong Dam bulk water conveyance system activity involves the
construction of downstream works for the supply of water to Maseru and
the neighboring towns of Mazenod, Roma and Morija.
Furthermore, MCC Funding will support the establishment of an
independent project management unit, the Metolong Program Management
Unit (the ``Metolong Program Management Unit'' or ``MPMU''), which will
act as a dedicated project management unit for the Metolong Dam
activity, as well as a portion of the estimated costs for environmental
and social mitigation associated with the Metolong Dam project.
The construction of downstream works relating to the Metolong Dam
project includes the following:
(i) An 800m, 700mm diameter raw water transmission main from the
dam to a downstream water treatment facility;
(ii) A 75 ML/day water treatment plant with a peak capacity of 93.8
ML/day;
(iii) A transmission system to Maseru that includes:
(1) A pump station (Ha Seeiso PS) at the WTP with an average
pumping capacity of 859 l/s (74.25 ML/day) and a peak discharge
capacity of 1,088 L/S (94 ML/day),
(2) A break pressure tank on a high ground near the Village of Ha
Nchela with a capacity of 4ML or 4,000m \3\,
(3) A 7.54km-700mm transmission main from Ha Seeiso PS (at WTP) to
the Ha Nchela break pressure tank,
(4) A 23.5km-800mm gravity main from Ha Nchela break pressure tank
to the High South Reservoir (``HSR'') outside of Maseru, and
(5) Expansion of the HSR with two additional storage units, each
with a capacity of 27ML or 27,000m\3\;
(iv) Bulk water supply components for Roma and Mazenod, which
include:
(1) A 29 l/s booster pump station at Roma,
(2) A 300mm diameter transmission main toward Roma & Mazenod,
(3) A 13.5 km, 160mm diameter transmission line for Roma,
(4) An 8.8 km, 250mm diameter transmission line for Mazenod, and
(5) 3 ML reservoirs for each town;
(v) Bulk water supply components for Morija, which include:
(1) A 25 km, 160mm diameter transmission main between Mazenod &
Morija,
(2) A 19 l/s Booster Pump Station at Morija, and
(3) A 0.5 to 1.0 ML reservoir at Morija;
(vi) Detailed designs for the Teyateyaneng (``TY'') conveyance
system, pending successful completion of feasibility studies for TY
water supply from Metolong (funded by the European Union ); and
(vii) Implementation of environmental and social mitigation
measures, including preparation of supplemental studies and management
plans pertaining to the construction and operation of the bulk water
conveyance system funded under this Compact, in accordance with the
requirements of the Metolong Dam Environmental and Social Impact
Assessment (``ESIA''), EMP, RAP and the MCC Environmental Guidelines.
(b) Urban and Peri-Urban Water Network Activity.
The Urban and Peri-Urban Water Network activity involves
reticulation extensions and infrastructure rehabilitation of the urban
and peri-urban water network, including reticulation extension to the
towns of Semonkong and augmented supply to the town of Mazenod.
This activity includes the following components:
(i) Infrastructure rehabilitation including the following:
(1) Reservoir rehabilitation; including repair and replacement of
existing reservoirs,
(2) Pipeline rehabilitation; including repair and replacement of
existing pipelines,
(3) Water treatment works rehabilitation; including rehabilitation
and/or replacement of sand filters, pre-settlement tanks and water
treatment facilities, and
(4) Other rehabilitation works; including rehabilitation of a
limited number of boreholes, pump houses and sewer pipes;
(ii) Reticulation extensions including the following:
(1) Extensions in Maseru, Mohales' Hoek, Mafeteng, Maputsoe,
Mokhotlong and Butha-Buthe, and
(2) Rising main extensions in Mafeteng-Thabaneng;
(iii) The Semonkong water supply system including the following:
(1) Rehabilitation of the existing distribution system,
(2) 15.75 km of transmission pipelines diameter 90 mm PVC,
(3) 18.4 km of distribution network diameter 32 mm-90 mm PVC,
(4) Two reservoirs of 990 m \3\ and 424 m \3\ storage capacity,
(5) Water kiosks,
(6) One office building and three staff houses,
(7) Chlorination and nitrates treatment facility,
(8) Service roads,
(9) Nine borehole pumps,
(10) Nine spring pumps,
(11) 604 house connections, and
(12) Allowance for additional abstraction with boreholes;
(iv) Mazenod Reticulation:
(1) Extension of the existing distribution 250mm pipeline from the
existing 5ML High South Reservoir that is serving the Maseru southeast
reticulation system, to a 1ML reservoir in Mazenod for approximately
5.8km,
(2) Connection of the airport pump station to an extended pipeline,
(3) Connection of the Mazenod Reservoir to the existing pipeline
between the airport pump station and the airport reservoir, and
(4) Construction of the reticulation system for Mazenod.
MCC Funding will also support the following preparation activities
for the urban water supply components:
(v) Development of detailed design, and specifications that can be
procured through tendering; and
(vi) Preparation of environmental ``Project Briefs'' and any
supporting EA/EIA, EMP, and/or RAP/RPF required to meet MCC
Environmental Guidelines and environmental licensing requirements under
the Lesotho National Environment Act of 2001.
The activity will also support the following components:
[[Page 43392]]
(vii) Implementation of environmental and social mitigation
measures pertaining to the construction and operation of urban water
supply projects funded under this Compact per the requirements of the
EA/EIA(s), EMP(s), and RAP/RPF(s) referenced above; and
(viii) Establishment of a small, dedicated project implementation
unit for the activity (the ``WASA PIU'') within the Lesotho Water and
Sewerage Authority (``WASA'').
(c) Rural Water Supply and Sanitation Activity.
MCC Funding will assist the Government in meeting its goal of
providing improved water and sanitary services to the entire rural
population. The total target population impacted by this project is
150,000 persons. The VIP latrine construction approach is based on
training and employing local artisans in latrine construction, and then
providing materials and support to construct latrines with input, both
in kind and financial, on an individual basis. The activity will be
managed by an existing project implementation unit, and MCC will
provide funding for the enhancement of capacity and capability of that
project implementation unit.
Specifically, MCC Funding will support the following:
(i) Construction, rehabilitation, and/or expansion of up to 250
water systems;
(ii) Construction of up to 10,000 VIP latrines; and
(iii) Public health and hygiene awareness training and support.
MCC Funding will support the following preparation activities for
the rural water supply and sanitation projects:
(iv) Preparation of feasibility studies, detailed design, and
tender documents; and
(v) Preparation of environmental ``Project Briefs'' and any
supporting EA/EIA, EMP, and/or RAP/RPF required to meet MCC
Environmental Guidelines and environmental licensing requirements under
the Lesotho National Environment Act of 2001.
Additionally, MCC Funding will support the following:
(vi) Implementation of environmental and social mitigation measures
pertaining to the construction and operation of rural water supply and
sanitation projects funded under this Compact, per the requirements of
the EA/EIA(s), EMP(s), and RAP/RPF(s) referenced above; and
(vii) Strengthening of the existing project implementation unit for
the activity (the ``DRWS PIU'') within the Department of Rural Water
Supply (``DRWS'') and appointing project coordinators to manage the
public health and hygiene programs.
(d) Wetlands Restoration and Conservation Activity.
The wetlands restoration and conservation activity will help
Lesotho address widespread overgrazing and degradation of alpine
wetlands, which are prevalent throughout the highlands of Lesotho and
are an important ecological and economic resource that naturally
regulates flow in the Senqu/Orange River Basin and provides livestock
pasture, medicinal plants, thatch, and other rural livelihood benefits.
Using MCC Funding, a pilot-scale project will be implemented to design
and apply restoration measures and examine alternative land management
prescriptions at three target study areas, including wetlands at
Khalong-la-Lithunya (Oxbow area), Kotisephola (Sani Pass area), and
Letseng-la-Letsie (an internationally protected Ramsar site near
Quithing). In conjunction with the pilot studies, a broad-based
assessment of Lesotho's wetlands will be undertaken to characterize the
environmental, social, and economic implications of current management
practices and to identify potential economic opportunities beyond
herding. Based on the results of the pilot studies and environmental
and socio-economic assessment, a strategic action plan will be
developed that outlines requirements for establishing a national
watershed management and wetlands conservation program, focusing on
specific measures to restore degraded wetlands, protect water
resources, improve and maintain the productivity of highland pastures,
and promote expanded economic development through community-based
resource management and conservation programs.
Specifically, MCC Funding will support the following tasks:
(i) Establishment of a project implementation unit within the
Lesotho Department of Water Affairs (i.e., the DWA PIU referred to in
Section B.2(d) of this Annex I) that will be responsible for executing
the MCC wetlands restoration and conservation activity;
(ii) Environmental and social baseline data collection and
monitoring at each of the three target wetland areas, including
purchase and installation of field monitoring equipment;
(iii) Restoration of degraded wetlands and assessment of
alternative long-term management prescriptions at each of the three
target wetland areas; and
(iv) Preparation of a strategic environmental and socio-economic
assessment (``SEA'') of Lesotho's wetlands that will, as part of its
primary objectives, provide a basis for establishing a national
watershed management and wetlands conservation program.
2. Project Implementation
(a) Metolong Dam--Bulk Water Conveyance Activity.
The preferred institutional arrangement for delivering the Metolong
Dam project is within the MPMU with the appropriate staffing, structure
and business processes to deliver the entire project within the costs
and schedule objectives of the Government. The MPMU chief executive
will report through a responsible Government agency project director to
a Metolong project advisory board representing other donors and key
stakeholders. The Government's project director will obtain independent
input from expert panels on dam safety and environmental and social
responsibility, and report on compliance with donor covenants to the
funding agencies. The MPMU will house the capability and responsibility
for delivering both the ancillary bulk water supply components and the
Metolong Dam itself. In the interest of time and resource
effectiveness, the MPMU function will be outsourced to a private
program management or construction management firm, with prior
successful experience in Africa. An international competitive bidding
process, using a qualifications and cost-based selection protocol will
be employed to select this firm.
(b) Urban and Peri-Urban Water Network Activity.
WASA will have primary responsibility for the implementation of
this activity. WASA is a parastatal public corporation which reports to
the Lesotho Commissioner of Water under the Ministry of Natural
Resources. The primary responsibility of WASA is to provide potable
water supplies and sewerage treatment and disposal facilities to the
urban areas in both the lowlands and the highlands. The WASA PIU will
be responsible for implementation of this activity.
(c) Rural Water Supply and Sanitation Activity.
The DRWS will be responsible for the implementation of this
activity. Water system design, construction and operation is built
around the DRWS ``project life cycle'' which is a revolving and
continuous implementation methodology by which rural water system
designs are continuously developed at the district level through the
coordinated efforts of the target community, through their water
committee and chief and from the DRWS village affairs coordinator,
[[Page 43393]]
district project officer and district engineer. Historically, the
Ministry of Health and Social Welfare has had the primary
responsibility for implementing sanitation initiatives, including the
provision of VIP latrines. However, in line with the Government's
policy on decentralization, the DRWS will retain responsibility for
this activity as well.
(d) Wetlands Restoration and Conservation Activity.
The wetlands restoration and conservation activity will be
implemented by the Department of Water Affairs (``DWA''). Compact funds
will be allocated to staffing a dedicated project implementation unit
(the ``DWA PIU'') that will work on behalf of, and report to, the head
of the wetlands management unit within the DWA. The DWA PIU will be
responsible for managing procurements, coordinating work activities,
and assuring the work meets the cost, schedule and technical objectives
of the project. The DWA PIU will work closely with DWA district project
officers to execute project activities at each of the three target
wetland sites and will assist the DWA, as necessary, with inter-agency
coordination, stakeholder engagement, and performance monitoring and
reporting. International consultants working with local partners will
be procured to carry out the wetlands restoration and SEA activities.
The National Wetlands Committee (``NWC''), which consists of
representatives from various Government agencies, will play an advisory
role in the implementation of the wetlands restoration and conservation
activity.
3. Beneficiaries
The Metolong Dam and Urban Water project activities will include a
reduction in unaccounted-for-water, increased connections to the urban
water supply system, and expanded employment in industries that depend
on a reliable water supply. At the household level, results are
expected to include a reduction in water-borne diseases through
increased availability of clean water and sanitation facilities for
domestic use. The project also will contribute to time savings, which
could allow time to be used more productively than for collecting
water. The wetlands restoration activity is expected to improve
livestock productivity and benefit rural livelihoods in communities in
the vicinity of the three target wetland areas, while also providing a
basis for implementation of a national watershed management plan that
would have much broader environmental, social and economic benefits to
the country as a whole over the long-term.
4. Donor Coordination; Role of Private Sector and Civil Society
The Metolong Dam project is being developed in coordination with
several donors, including the OPEC Fund for International Development,
the Kuwait Fund for Arab Economic Development, the Arab Bank for
Economic Development in Africa (BADEA), the Saudi Fund for Development,
and the World Bank. The European Union has a sustained presence in
Lesotho's water sector. The European Union is currently funding
detailed designs for components of the Metolong bulk water conveyance
system, as well as components of the larger lowlands water supply
system. The European Investment Bank is currently funding the Greater
Maseru wastewater improvement project.
The World Bank has been an active development partner in Lesotho's
water sector, primarily through the 2004 Lesotho Water Sector
Improvement Project. Performance benchmarks, as defined in the Water
Sector Improvement Project, will be monitored against, and in some
cases will be linked to, Disbursements for this activity.
Irish Aid has been the only active donor in Lesotho's rural water
supply and sanitation sub-sectors. Through Irish Aid, a total of
[euro]2.35 million was disbursed during 2005 for continued
implementation of the DRWS five-year strategic plan. Outputs included
the maintenance of 626 hand pumps and over 15 villages were provided
with new tapped water sources. Fifty-five more sources were designed
and are now under construction. Finally, the DRWS's new maintenance
strategy was implemented over the course of the year with the
inspection of 1,786 existing waster systems.
5. USAID
USAID currently has no water sector projects within Lesotho.
6. Sustainability
Sustainability of the Water Sector Project activities is dependent
upon the Government's pace of implementation of water sector policy
reforms. Institutional reform and establishment of a regulatory regime,
both of which are critical to sustainability, are expected to be
completed in the second year of the Compact Term. Disbursements of MCC
Funding will be tied to agreed progress on specific salient components
of the water sector reforms.
The estimated additional annual budget requirement to meet the
increase in operations and maintenance cost is: US$2,850,000 for the
Metolong Dam Project activity and US$820,000 for the Urban and Peri-
Urban Water Network activity. Financial sustainability, at a minimum,
will depend on the ability of WASA to independently cover the
incremental budget requirement for the additional operations and
maintenance. With an effective annual tariff increase of five percent,
revenues generated by WASA are expected to fully cover operations and
maintenance cost and the assumed costs of Metolong raw water within the
period of this Compact.
This Compact provides funding for capacity building and technical
assistance to WASA, DRWS and the DWA to facilitate the implementation
and long-term management capabilities of these institutions.
The most critical component of environmental and social
sustainability of the Water Sector Project is implementation of long-
term environmental management and monitoring plans, including on-going
public outreach and other social impact mitigation measures, in
accordance with project-specific EIAs, EMPs, and, where necessary, RAPs
or RPFs. Disbursements of MCC Funding will be conditioned on the
Government completing each of these studies to the satisfaction of MCC
prior to construction and then demonstrating continued compliance with
applicable EMPs and RAPs throughout the life of the Project.
Environmental sustainability also depends on WASA maintaining an
environmental management unit which will be responsible for
environmental compliance of the urban water supply and Metolong bulk
water conveyance systems. The DWA, which will (a) implement the
wetlands restoration activity, (b) in conjunction with the DRWS,
monitor performance of rural water supply systems and (c) in
conjunction with the Ministry of Health and Social Welfare (``MoHSW''),
monitor performance of rural sanitation systems, must continue to
expand field staff in its district offices to strengthen its monitoring
and oversight capabilities. Technical assistance will be provided to
the DWA through the course of this Compact to assure sufficient
resources to implement Compact activities.
C. Health Sector Project
1. Summary of Project and Related Activities
The latest demographic and health survey estimated that 24 percent
of adults ages 15-49 in Lesotho are HIV/AIDS positive; the third
highest prevalence rate in the world. This has
[[Page 43394]]
the potential to severely hamper the country's efforts to reduce
poverty and promote economic growth.
This Project is designed to mitigate the negative economic impacts
of poor maternal health, HIV/AIDS, tuberculosis (``TB'') and other
diseases by strengthening the country's health care system. The primary
Project activities include: rehabilitating health centers,
rehabilitating and constructing anti-retroviral therapy (``ART'')
clinics in selected hospital out-patient departments, constructing a
central laboratory and blood transfusion center and strengthening key
complementary inputs to the health care system (including training,
medical waste management, health management information systems and
decentralized management). MCC Funding will support the Government's
efforts to significantly increase access to life-extending ART by
providing a sustainable platform to deliver this and other essential
health services throughout the country. This has the potential to
result in a measurable extension of productive life-years for people
living with HIV/AIDS, TB and other debilitating diseases. In-country
staff of the President's Emergency Plan for AIDS Relief (``PEPFAR'')
and other donors have worked with the Government and MCC staff in the
design and assessment of this Project activity.
In connection with the Health Sector Project activities, MCA-
Lesotho will assist and take all necessary steps to ensure that where
and when required by the MCC Environmental Guidelines, the MCC Gender
Policy or the laws of Lesotho, an EIA or EA, an EMP, an HIV/AIDS
awareness plan, and, if necessary, a RAP or RPF (consistent with World
Bank Operational Policy 4.12 on Involuntary Resettlement) are prepared
to the satisfaction of MCC and in accordance with the Lesotho National
Environment Act of 2001 and Lesotho Guidelines for Environmental Impact
Assessment, in each case as the same may be amended from time to time.
MCA-Lesotho also will ensure that, for each activity requiring an
environmental license under the Lesotho National Environment Act of
2001, a ``Project Brief'' (as defined in the Lesotho National
Environment Act of 2001) and any necessary supporting studies will be
submitted to, and approved by, the Government's environmental
authorities prior to the initiation of construction activities, and
that such environmental license will be maintained in good standing
throughout the Compact Term. MCC Funding will support implementation of
the environmental and social mitigation measures identified in the
EIA(s) or EA(s), EMP(s), and RAP/RPF(s).
The following summarizes each Project activity under the Health
Sector Project:
(a) Health Centers Activity.
This Project activity focuses on renovation and rehabilitation of
up to 150 health centers, to bring the national stock of health centers
up to a common standard. These centers play a primary role in the
provision of HIV/AIDS prevention, TB treatment and maternal and child
health services. Renovations are timely given the devolution of
responsibility for these centers to districts and communities. The
MoHSW and the Ministry of Local Government can use this visible
opportunity of renovated health services to empower local leaders with
revitalizing community health services. The renovation of associated
staff housing and improvement of water, power and communications will
also improve retention of nurses and health personnel at these
facilities.
The 150 health centers are owned by MoHSW, the Christian Health
Association of Lesotho (``CHAL''), and the Red Cross of Lesotho.
Eighteen of these facilities will be enlarged due to current and
projected patient loads and facility conditions, and six health centers
will be relocated.
Construction and rehabilitation contracts will include capital
project maintenance for the life of this Compact. In addition, during
years two and three of the term of this Compact, MCC Funding will
support technical assistance to work with the MoHSW in developing
maintenance systems options for decentralized services.
Specifically, MCC Funding will support the following:
(i) The design and construction supervision for up to 150 health
centers;
(ii) The rehabilitation and/or construction of these health
centers, including, but not limited to, the rehabilitation of related
staff housing where appropriate;
(iii) Preparation of environmental ``Project Briefs'' and any
supporting EA or EIA, EMP, and/or RAP or RPF required to meet MCC
Environmental Guidelines and environmental licensing requirements under
the Lesotho National Environment Act of 2001, as the same may be
amended from time to time;
(iv) Implementation of environmental and social mitigation measures
pertaining to the rehabilitation and/or construction of health centers
funded under this Compact per the requirements of the EA/EIA(s),
EMP(s), and RAP/RPF(s) referred to in clause (iii) above;
(v) Power, water, telecommunications equipment as needed to reach
MoHSW standards for these health centers; and
(vi) Medical equipment and instruments and clinical furniture as
required to meet MoHSW clinic standards.
(b) ART Clinics Activity.
This Project activity will improve infrastructure in up to 14
hospital out-patient departments (``OPDs'') and provide management
training to support extension of ART. This will complete national
coverage of ART at the hospital level. Designs for reconfiguring the
current OPD to include adequate space and appropriate patient flow for
incorporating ART services will be tailored to each hospital. The
status of OPD facilities for managing TB co-infection will also be
addressed in the design.
Specifically, MCC funding will support the following:
(i) The design and construction supervision to incorporate ART
services for up to 14 hospital out-patient departments;
(ii) The rehabilitation and/or construction of up to 14 expanded
hospital out-patient departments;
(iii) Preparation of environmental ``Project Briefs'' and any
supporting EA or EIA, EMP, and/or RAP or RPF required to meet MCC
Environmental Guidelines and environmental licensing requirements under
the Lesotho National Environment Act of 2001, as the same may be
amended from time to time;
(iv) Implementation of environmental and social mitigation measures
pertaining to the rehabilitation and/or construction of ART clinics
funded under this Compact per the requirements of the EA/EIA(s),
EMP(s), and RAP/RPF(s) referred to in clause (iii) above;
(v) Power, water and telecommunications equipment as needed to
reach MoHSW standards for hospital OPDs;
(vi) Medical equipment and instruments, clinical furniture, and
office equipment and furniture as required to meet MoHSW ART standards;
and
(vii) Training for medical and administrative personnel on OPD
management.
(c) Central Laboratory Activity.
The central laboratory to be constructed with MCC Funding is
critical to the national HIV/AIDS prevention, ART and TB programs. The
current laboratory is too small to house the current level of testing,
and has no
[[Page 43395]]
room for expansion. It is also slated for decommissioning when the new
National Reference Hospital is developed. In-country and short-term
external training for laboratory staff also will be supported through
this Project activity.
Specifically, MCC Funding will support the following:
(i) design and construction of the new central laboratory;
(ii) equipping of the new central laboratory;
(iii) preparation of environmental ``Project Briefs'' and any
supporting EA or EIA, EMP, and/or RAP or RPF required to meet MCC
Environmental Guidelines and environmental licensing requirements under
the Lesotho National Environment Act of 2001, as the same may be
amended from time to time;
(iv) implementation of environmental and social mitigation measures
pertaining to the rehabilitation and/or construction of the central
laboratory funded under this Compact per the requirements of the EA/
EIA(s), EMP(s), and RAP/RPF(s) referred to in clause (iii) above; and
(v) training for new equipment, service expansion and quality
assurance associated with the new central laboratory.
(d) Blood Transfusion Service Activity.
Safe blood for transfusions is an important element of a health
system. A more formal system of blood supplies is needed. Countries
that have expanded ART services have also seen the need for
transfusions increase, as severely anemic patients are able to recover
when on medication. A dedicated, central facility for collecting and
processing blood, two mobile collection units, and blood storage
equipment for two Government-owned and operated regional centers will
be funded by this Project activity. The central blood collection and
processing facility will be developed at Botsabelo, in Maseru.
Specifically, MCC Funding will support the following:
(i) the design and construction of the new central blood collection
and processing facility;
(ii) equipping of the new central blood collection and processing
facility;
(iii) preparation of environmental ``Project Briefs'' and any
supporting EA or EIA, EMP, and/or RAP or RPF required to meet MCC
Environmental Guidelines and environmental licensing requirements under
the Lesotho National Environment Act of 2001, as the same may be
amended from time to time;
(iv) implementation of environmental and social mitigation measures
pertaining to the rehabilitation and/or construction of the blood
transfusion service activity funded under this Compact per the
requirements of the EA/EIA(s), EMP(s), and RAP/RPF(s) referred to in
clause (iii) above;
(v) training for new equipment, service expansion and quality
assurance;
(vi) two mobile blood collection vehicles;
(vii) one blood transportation vehicle; and
(viii) refrigeration equipment for blood storage and limited blood
collection furniture for two Government owned collection sites operated
by the Blood Transfusion Service at Leribe and Mohales' Hoek.
(e) National Health Training College Activity.
The human resources situation has deteriorated over the past decade
in all the countries of Southern Africa. Lesotho has undertaken a
number of initiatives to reverse this trend. This Program activity will
support efforts to increase the number of graduates from nursing and
allied health (for example, pharmacy and lab technicians) programs by
developing additional dormitories and staff residences at Lesotho's
National Health Training College (``NHTC''). Other inputs, discussed in
the Health Systems Strengthening Activity section below, will
strengthen tutor and mentoring capacities.
Specifically, MCC Funding will support the following:
(i) the design and construction of 120 dormitory spaces and 6
apartment residences at the NHTC, which apartments will be initially
allocated for use on a priority basis by tutors and international
technical staff working in connection with the Project;
(ii) preparation of environmental ``Project Briefs'' and any
supporting EA or EIA, EMP, and/or RAP or RPF required to meet MCC
Environmental Guidelines and environmental licensing requirements under
the Lesotho National Environment Act of 2001, as the same may be
amended from time to time;
(iii) implementation of environmental and social mitigation
measures pertaining to the rehabilitation and/or construction of NHTC
dormitories and staff residences funded under this Compact per the
requirements of the EA/EIA(s), EMP(s), and RAP/RPF(s) referred to in
clause (ii) above; and
(iv) furniture, appliances, and furnishings for these new
dormitories and staff residences.
(f) Health Systems Strengthening Activity.
The overall success of this Project hinges upon improved delivery
of the national essential health services package, including HIV/AIDS
prevention and treatment. In the context of Lesotho, the poor quality
of infrastructure was identified by the Government as a constraint to
improved and expanded service delivery. In addition, key health systems
areas have been identified for Program support. These key interventions
are necessary to ensure that improved, vital services are cost-
effectively provided at the community level.
Training
This Project activity will strengthen pre-service and in-service
training capacities. Currently, a large number of qualified applicants
are rejected by the training institutions due to a lack of tutors for
the program; this, in turn, results in too few graduates to fill MoHSW
and CHAL vacancies resulting from retirement, death, and out-migration.
This Project activity will assist in developing qualified tutors,
mentoring programs, and improved curricula for preparing a consistently
larger cadre of nurses to provide health services at the community
level.
In-service training is a vital element of job satisfaction,
professional growth, and quality assurance. Currently, there is no plan
for continuing education of MoHSW and CHAL professionals. The Project
will assist the Government in developing an in-service training plan
within the context of devolved services, and assist in implementing the
most critical elements of the plan. This is likely to include health
center level training of health center staff, local administrations,
and communities regarding the new roles and responsibilities of each.
Decentralization
The Government is in the process of devolving service delivery to
the district level. The MoHSW is one of the first ministries to
implement the new plan. To date, three districts have piloted
decentralized health services. Between 2007 and 2010, this is to be
expanded to the remaining seven districts. In Lesotho, as well as in
other countries, there is evidence that the process of
decentralization--particularly if not well-managed--can disrupt health
services delivery. This is a critical point for health status and
health services in Lesotho. This Project activity will provide
additional support, in collaboration with the World Bank, to ensure
that decentralization is rapidly and sustainably effected in the health
sector. Areas of particular attention
[[Page 43396]]
include health information systems, district health management, TB
surveillance and infection control, health services quality, health
facility maintenance, communications and public outreach.
Research and Development Unit within MoHSW
Medicine is strongly evidence-based and research plays a vital role
in developing interventions and assessing practices. The MoHSW has a
two person health research unit with a mandate to provide oversight to
research activities in the health sector. This team will be supported
through MCC Funding to increase their capacity to coordinate research
activities and to share vital lessons learned from Lesotho-specific
health research.
Specifically, MCC Funding will support the following:
(i) expatriate tutors and mentors;
(ii) in-service, in-country and limited short-term external
training of nurse and allied professional tutors;
(iii) incentives for current tutors to increase the number of
students trained;
(iv) consulting services in continuing education and
decentralization;
(v) in-service training on health center management,
decentralization, research and infection control;
(vi) office equipment and computers for program management,
district health information offices and the research unit; and
(vii) limited funding for external travel for Program related
activities.
(g) Medical Waste Management Activity.
MCC funding will be used to help the Government improve
occupational health and safety and medical waste management practices,
which at present pose significant environmental, health, and safety
hazards and do not comply with MCC Environmental Guidelines. In 2005,
in conjunction with a World Bank health sector reform project, the
Government conducted a comprehensive assessment of its medical waste
management practices and prepared a National Health Care Waste
Management Plan (``WMP''), though little progress has been made in its
implementation. The primary objective of this activity will be to
update and implement the WMP, provide institutional strengthening of
Government agencies that will be responsible for implementing,
monitoring, and enforcing the policies and standards established under
the new WMP, and support public outreach and awareness campaigns. All
work conducted under this activity will be closely coordinated with the
World Bank and other donors involved in health sector reform.
This activity is critical to ensuring that health sector
interventions under this Compact comply with MCC Environmental
Guidelines. Moreover, meaningful improvements in medical waste
management and occupational health and safety are considered an
important factor in the environmental and social sustainability of the
health sector overall.
Specifically, MCC Funding will support the following activities:
(i) supplement previous studies (including the 2005 WMP) with new
field investigations and literature reviews in order to characterize
baseline conditions and identify the environmental, health, and safety
risks of current occupational health and safety and medical waste
management practices;
(ii) based on the results of supplemental studies, update the 2005
WMP and the estimated capital and recurrent costs for implementing the
plan;
(iii) develop a comprehensive finance plan for funding capital and
recurrent costs;
(iv) develop new hazardous waste management policies, regulations,
standards, and operating procedures, per the recommendations in the
updated WMP;
(v) develop an environmental management and monitoring system, per
the recommendations in the updated WMP;
(vi) develop occupational health and safety and waste management
licensing and accreditation procedures, per the recommendations of the
updated WMP;
(vii) provide technical assistance and capacity building to
Government agencies pertinent to the implementation and sustainability
of the updated WMP; and
(viii) support and/or conduct public awareness and training
programs.
2. Project Implementation.
The Government and the donor community have collaborated to build
capacity to undertake donor-financed programs in the health sector.
Currently, a large portion of the total health resources are provided
through bilateral and multilateral donors. The Health Sector Project's
implementation structure has been developed in an effort to take
advantage of and build on current capacities and structures, while
being careful not to overwhelm them.
Specifically, the major elements of the Health Sector Project's
implementation structure consist of:
(a) MCA-Lesotho.
MCA-Lesotho will include a full-time health sector project manager
who reports to the director of operations. This person will be
responsible for overseeing smooth Project implementation across all
activities. He or she will ensure that critical milestones are met and
activities progress as planned. This program manager will be
responsible for ensuring that implementation problems are resolved and
alerting the Government of any constraints. The manager will ensure
that Procurement Agent actions for the Health Sector Project are
prioritized based on the Project's implementation plan. This person
will also serve as MCA-Lesotho's liaison to the Health Sector PIU (as
defined below) and to health donors' forums.
(b) MoHSW.
The MoHSW has overall responsibility for oversight of
implementation of the Health Sector Project. The MoHSW also will be
responsible for technical quality, timeliness of implementation, and
integration into MoHSW of Project activities. The MoHSW will coordinate
activities in relation to the Ministry of Local Government, and with
CHAL and the Lesotho Red Cross Society.
A dedicated Health Sector Project Implementation Unit (``Health
Sector PIU'') will be established within the MoHSW to administer the
Project. The establishment of the Health Sector PIU will be the
responsibility of the MoHSW with assistance from MCA-Lesotho. The MoHSW
will be responsible for integrating Project activities within the
framework of the MoHSW as appropriate. For purposes of this Compact,
the Health Sector PIU, the MPMU, the DRWS PIU, the DWA PIU and the WASA
PIU, may each be referred to as a ``Project Implementation Unit'' and,
collectively as the ``Project Implementation Units.''
The Health Sector PIU will draft technical specifications and terms
of reference for the following:
(i) design and construction supervision of health clinics and
related staff accommodation including the supply of equipment and
furniture for renovation, relocation or rebuild of up to 150 health
centers;
(ii) design and construction supervision of the Botsabelo complex
activities, including the Blood Transfusion Services center, the
Central Laboratory, and NHTC dormitories and residences, including
laboratory equipment, furnishings, furniture and IT equipment;
(iii) design and construction supervision of ART centers in 14
[[Page 43397]]
hospitals including the supply of equipment, instruments and furniture
per region;
(iv) preparation of EA(s) or EIA(s), EMP(s), and if necessary
RAP(s) or RPF(s) for the above infrastructure activities in accordance
with MCC Environmental Guidelines and the National Environment Act of
2001;
(v) engagement of technical assistance contracts/contractors for
capacity building in human resources, decentralization and waste
management; and
(vi) Project-related training activities.
The Health Sector PIU will be responsible for the above-listed
activities which include, but are not limited to, design reviews,
tender document reviews, environmental management and compliance, and
public outreach and stakeholder engagement.
Rehabilitation of the health centers will require participation of
the local government structures, CHAL and the Lesotho Red Cross
Society. The MoHSW is responsible for developing formal agreements with
CHAL and the Lesotho Red Cross Society with respect to MCA-funded
infrastructure improvements.
The Ministry of Local Government, CHAL and the Lesotho Red Cross
Society will each identify a main counterpart to represent the
organization on Compact activities. These individuals will have
responsibility and authority for coordination and implementation of
Program activities within their respective organizations.
In addition, consultations will be conducted with affected parties
and other stakeholders in support of preparation of any EA (or EIA as
applicable), EMP, and, if necessary, RAP (or RPF as applicable) for the
Health Sector Project activities in accordance with MCC Environmental
Guidelines and Government environmental regulations.
3. Beneficiaries
The immediate primary beneficiaries of the Health Sector Project
are the 17,000 HIV positive persons in need of ART that are not
currently receiving it, who will be able to access these expanded
clinic and laboratory services from the Government, CHAL and the
Lesotho Red Cross Society. Additionally, many of the 17,000 persons
already enrolled in ART services will be able to access medication and
follow-up from a local health center, rather than having to wait hours
in line at a hospital-based center, with much higher risk of exposure
to TB and other co-infectious diseases. Services will also benefit the
additional 38,000 Basotho who are estimated to need ART services in the
coming ten years. The majority of these beneficiaries are adults, aged
15-49. Currently, more women than men seek services, as expected given
that HIV rates are higher for women than for men. Program statistics
will be periodically reviewed to ensure that age, gender, income, or
geographic biases are not reflected in client statistics. Mitigation
efforts will be instituted if needed.
Other primary beneficiaries of this Project include poor urban and
rural citizens who seek and receive improved health services from the
nearest Government, CHAL, or Lesotho Red Cross Society health centers.
These persons will have the opportunity to learn of life-saving
programs; locally obtain referrals, medical follow-up and medications;
and have a resource to protect the health of mothers and newborns. More
than one million visits are made to health facilities per year--with
Project success, this number will increase, especially at lower levels
of facilities. This will result in cost-savings, time-savings, and
improved health status and longevity, and ultimately in improved
productivity and incomes. In particular, services that reduce co-
infection with TB and improve maternal health and safe delivery will
benefit the poor.
Secondary beneficiaries include those who, because of the Project
activities, are less exposed to infectious TB, particularly multi-drug
and extreme drug resistant TB, from other patients and from the
population at large due to improved facility design and management, and
better disease management.
Secondary beneficiaries also include nurses and medical workers who
will have the skills and materials to lower their risk of infection
from hazardous wastes in the workplace. Communities will also benefit
with reduced risks of infection from improper disposal of hazardous
wastes by health personnel.
4. Donor Coordination; Role of Private Sector and Civil Society.
Other donors and health partners are working together on health
systems issues. MCC inputs in these areas are coordinated with these
donors and with Government programs.
In 2000, the Government embarked on a 10-year reform of the health
sector with donor assistance, particularly Irish Aid and the World
Bank. The reform program is oriented to improving health services
delivery, financial management and accountability, monitoring and
evaluation, and donor coordination. Key features include
decentralization of public and primary health services to the district
level, greater involvement of local administrations and communities in
health decision making, new financial management systems, improved
medical waste management, increased partnerships for health delivery,
and better planning and management of infrastructure and human
resources. The Project activities are also in concordance with broader
public administration and financial reforms being undertaken across
ministries and sectors by the Government.
As part of this reform process, a sector-wide approach (SWAP)
mechanism for health is being developed, with the World Bank and others
likely to contribute to basket funding by 2009. Participating donors
have already agreed to common health sector indicators based on the 10-
year reform program and participate in annual joint reviews.
This Project's activities have been designed within this
coordinated context. The Project will strengthen the infrastructure for
integrated delivery of services and will provide HR strengthening.
Major donors of particular relevance to the Health Sector Project
include the United States government (through PEPFAR), Irish Aid, the
World Bank, the African Development Bank, United Nations agencies and
the Global Fund for AIDS, Tuberculosis and Malaria (``GFATM'').
Multiple consultations have been undertaken by MCC with each of these
parties.
In addition, donor relations in the health sector are coordinated
by the MoHSW and through two consortia: the Health Partners who provide
assistance more broadly to the health sector, and the UN Expanded Theme
Group on HIV/AIDS. Both fora meet monthly, and there is overlap between
the groups. There is also an AIDS Country Coordinating Mechanism for
the GFATM, currently chaired by the Principal Secretary of MoHSW, that
meets monthly, or as needed, and includes national organizations
involved in AIDS prevention and outreach, and major donors in these
efforts. The United States government also has monthly meetings of all
US-based partners working on HIV/AIDS. MCA-Lesotho is expected to
become an active participant in these fora as appropriate.
In Lesotho, the major non-government providers of health services
are the mission and church-related providers under the umbrella
organization, CHAL.
[[Page 43398]]
CHAL provides roughly half of the health services in Lesotho, with the
MoHSW the main provider of the remaining fifty percent. CHAL operates
health centers and hospitals, and for the past decade, has received
subvention from the Government for providing basic services. The
relationship between the public and non-government sectors has recently
been strengthened by signing of a formal Memorandum of Understanding
between the MoHSW and CHAL. Under this Project, MCA funding will be
made available for renovation of health infrastructure under CHAL
auspices.
Civil society organizations that will influence and participate in
Project activities include the Lesotho Red Cross Society, the Lesotho
Nurses Association, the Lesotho Association of People Living with AIDS,
and community-based organizations with interests in community health.
International NGOs, including Medecins Sans Frontiers, Partners In
Health, and others have been consulted in program development and
assessment.
An extensive consultative process was undertaken in designing this
activity.
The World Bank has taken the lead in providing funding for the
initial waste management assessment for the health sector in 2005. As
the World Bank's program has been defined for the next five years, MCC
and MCA-Lesotho have and will continue to collaborate with the World
Bank team to ensure that our respective interventions in waste
management have complementary short and long-term objectives and a
mutually agreed upon strategy for action.
MCC has closely coordinated with other donors in the health sector
to ensure that the Project supports national health priorities and does
not duplicate other donor efforts. MCC has maintained regular
communications and participated in joint reviews with the donors most
involved in HIV/AIDS and health. These and other donors provided design
support to the MoHSW, and assisted MCC in the due diligence process. In
addition, MCC periodically met with and briefed the donor coordinating
groups for the health sector: the Health Partners, chaired jointly by
the World Health Organization Representative and Irish Aid, the UN
Expanded Theme Group on HIV/AIDS and US-based partners working on HIV/
AIDS with the support of PEPFAR funding. The proposed project
strengthens the infrastructure for integrated delivery of services and
would provide support to augment human resources. It supports the
Government's reform efforts and fits within the combined donor strategy
for the health sector.
The U.S. Government does not have a large bi-lateral program with
Lesotho. The only agency which has a significant program with a
presence in Lesotho is PEPFAR, focused on HIV/AIDS. The U.S.
Government's HIV/AIDS Coordinator based in Lesotho has provided
guidance to MCC in undertaking due diligence on the health sector
project since May 2006. The Project has been designed partially with
support from PEPFAR Regional HIV/AIDS Program partners, including the
Centers for Disease Control and Prevention, Southern Africa Regional
Office, the Capacity Project, and Safe Blood for Africa. In addition,
the Clinton Foundation, Partners in Health, the African Development
Bank, and other MoHSW health partners have contributed.
5. USAID
Current USAID involvement in health in Lesotho is through support
for and oversight of PEPFAR activities. The Health Sector Project was
designed and will be implemented in close coordination with United
States government efforts relating to HIV/AIDS, including PEPFAR
interventions. Formal mechanisms, including joint meetings, for in-
country coordination already exist and will be utilized.
6. Sustainability
Sustainability of health services is a critical issue, particularly
given the rapid increase of donor-supported ART. In partnership with
the World Bank and other donors, the Government is developing a
national health financing strategy to identify the costs of the
essential health services package, including ART, and to identify gaps
and potential sources of funds. This strategy will include means of
regular dialogue with health donors in order to ensure continued
financing and identify potential commitment gaps early. Implementation
of the critical elements of this strategy will be jointly monitored by
MCC and other health donors.
In other areas, the relationship between CHAL and the MoHSW has
been formalized through a January 2007 Memorandum of Understanding in
an effort to improve the quality of service delivery throughout the
country. The Government is working with the International Finance
Corporation to replace the current national referral hospital through a
public-private partnership arrangement, hoping to free up a portion of
the 26 percent of the health budget utilized for that hospital.
The Health Sector Project was designed with an eye toward
containing incremental recurrent costs. Facilities were slated for
rehabilitation or development where the use of incremental staff and
financial resources could provide the most impact and only where staff
and budget increments were deemed manageable and within the framework
of the Government's ``Medium Term Expenditure Framework'' for health.
Architectural and engineering briefs for all facilities aim to reduce
long-term maintenance and utility costs. Decentralization of health
services management to the district level will increase the local voice
in assuring that quality health services are delivered. Training
activities will largely be undertaken in Lesotho, to reduce potential
staff migration. Capacity building activities in the areas of district
health management, outpatient department management, laboratory quality
assurance, and in-service training of district health providers will
increase program sustainability.
The environmental and social sustainability of the Health Sector
Project is dependent on the implementation of a national medical waste
management plan. This activity is both an immediate safeguard against
infection and environmental risk with MCC investments in the heath
sector and also an opportunity for MCC to contribute to a sustainable
regulatory structure that will last beyond MCC's five-year Compact
schedule. MCC will also require political and financial assurances that
the plan be institutionalized within the regulatory framework, funded
by the recurrent budget and overseen by a qualified government entity
by the completion of the five-year program.
In addition, long-term environmental management and monitoring
plans, including on-going public outreach and other social impact
mitigation measures, will be implemented in accordance with project-
specific EIAs, EMPs, and, where necessary, RAPs or RPFs. Disbursements
of MCC Funding will be conditioned on the Government completing each of
these studies to the satisfaction of MCC prior to construction and then
demonstrating continued compliance with applicable EMPs and RAPs
throughout the life of the Project.
Special efforts will be undertaken to attract male rural health
care workers through the human resources nurse outreach training
program. This should encourage more men in the rural areas to seek out
medical assistance, to discuss sexual histories and to address
[[Page 43399]]
ongoing risky behavior which puts all Basotho at risk.
D. Private Sector Development Project
1. Summary of Project and Related Activities
This Project is designed to increase private sector activity in
Lesotho by improving access to credit, reducing transaction costs and
increasing the participation of women in the economy. The activities
include improving land administration, modernizing the commercial legal
system, strengthening payment and settlement systems, supporting the
provision of credit bureau services, including assisting the roll-out
of a national ID scheme, and training and outreach to support gender
equality in economic rights. These Project activities are an essential
component of the Government's major policy reform program and will
contribute to the broader efforts to attract foreign investment and
stimulate growth of Basotho-owned companies. The Government has already
obtained funding for several components related to the Private Sector
Development Project from the World Bank, which recently approved a
private sector competitiveness and economic diversification credit.
The following summarizes each Project activity under the Private
Sector Development Project:
(a) Credit Bureau and National Identification Card Activity.
The main objective of the credit bureau activity is to establish a
register that facilitates the exchange of information and the screening
of prospective debtors. Establishing a credit bureau has been cited by
credit grantors as a prerequisite to expanding access to financial
services, especially credit, to poor and rural populations.
The Government has opted to link with one or more private credit
bureaus now operating outside of Lesotho. Several South African credit
bureau operators have expressed an interest in extending existing
infrastructure and expertise into Lesotho to support its credit bureau
needs. The cross-border solution selected is less expensive and more
comprehensive than a ``Lesotho only'' credit bureau. In addition to
cost savings, linking with a South African credit bureau will allow
members to track the heavy volume of cross-border borrowing. In order
to implement a cross-border credit bureau, the Government will have to
undertake a legal and regulatory review and update its legislation and
regulations as needed to ensure harmonization with South African
privacy and information protection principles and relevant provisions
of the South African National Credit Act.
Development of a national identification card (``NIDC'') is a
necessary step in the process of establishing a credit bureau. The NIDC
will restrict all citizens and lawful residents to a single unique
identity number that can be used to recognize individuals in multiple
information technology (``IT'') systems. MCC will collaborate with the
World Bank, which has approved the engagement of an international
consultant to conduct a feasibility study that will determine the most
effective and cost efficient approach to launch the NIDC, in the final
design of this activity. The NIDC will be implemented by a third party
and managed by the Lesotho Ministry of Home Affairs (``MoHA''), with
oversight provided by the Public-Private Steering Committee, an
existing ministerial committee chaired by the Deputy Prime Minister.
MCC Funding will support training and capacity building for MoHA
employees to assure sustainability.
The social/gender specialist employed by MCA-Lesotho will review
the World Bank's feasibility study and provide inputs to assure that
the NIDC program is safeguarded against human rights abuses and is
compliant with the MCC Gender Policy. This system should help protect
against gender, HIV and marital status discrimination in banking and
credit schemes by providing lenders accurate and objective information
on an individual's credit history regardless of gender or HIV/AIDS
status. In addition, human rights groups will be consulted during the
course of the development and implementation of the scheme to prevent
potential human rights abuses or infringements on individuals' private
lives.
Specifically, MCC Funding will support the following:
(i) Production and issuance costs for NIDC cards, including
hardware, software, data capture, staff training and development for
the MoHA;
(ii) Consultation in respect of necessary legal and regulatory
reforms; and
(iii) Development and execution of a public awareness campaign with
respect to the NIDC.
(b) Payments and Settlement Systems Activity.
The main objectives of the payment system modernization Project
activity are the introduction of automated clearing and alternative
payment options that will reduce payment and settlement times and
lessen the use of cash and checks. Automated clearing and additional
payment options should facilitate trade and improve clearing times for
all payment streams, decrease costs associated with funds transfer,
reduce fraud, widen access to financial services and reduce poverty by
increasing economic growth. Another objective is to strengthen
Lesotho's financial infrastructure and promote further integration of
its payment and settlement systems with those of its neighbor, South
Africa.
A large percentage of the population of Lesotho is ``unbanked,''
including an estimated 85 percent of businesses. In many parts of the
country, people travel up to 120 kilometers to access banking services.
One of the primary focuses of this activity is to expand the reach of,
and institutional participation in, the payments system by, among other
things, adding functionality for telephone and other smart card
transactions. Another focus is to include the Post Bank in the payments
system, which will greatly expand its reach and will provide benefits
to rural populations relatively quickly. Adding payment options and
channels, such as payments through remote, battery or crank operated
point-of-sale terminals will make access more convenient and economical
for much of the unbanked population.
Specifically, MCC funding will support the following:
(i) Reviewing the legal and regulatory structure governing domestic
and cross-border payments;
(ii) Harmonizing laws regarding cross-border payments and currency
controls;
(iii) Paying for the initial year of the Automated Clearing House
(``ACH'') provider's fee for implementation, consultation, training and
contract execution in connection with making multiple payment streams
available in Lesotho;
(iv) Paying for the costs associated with two imaging machines and
ancillary hardware, software and training for operations at the Central
Bank of Lesotho if the Central Bank of Lesotho and financial
institutions agree to a system for delivering checks directly to the
Central Bank of Lesotho from all bank branches for imaging and
subsequent forwarding to the ACH provider;
(v) Paying for the costs associated with the distribution of
payment options and channels, such as point of sales terminals; and
(vi) Implementing a public awareness campaign for banks and
consumers with respect to this Project activity.
(c) Land Administration Reform Activity.
[[Page 43400]]
Policy and Legal Reform
Under this Project activity, MCC Funding will support technical
assistance to the Government to revise land reform legislation
currently in draft form and to develop its land policy, thereby
promoting the use of land as an economic asset. Gender analysis will
ensure that revisions to the draft Land Bill are congruent with the
Legal Capacity of Married Persons Act and other gender equality reforms
and principles. MCC Funding will permit the Government to obtain
technical assistance to draft laws and related implementing regulations
as needed to realize land policy reforms. Finally, MCC Funding will
support the education and training of land administration officials,
community councils and the public on land administration issues and the
formalization of rights to land. The expected outcomes of this Project
activity include adopting a new land policy reinforced by the passage
of a new Land Act and the promulgation of its implementing regulations
and spreading a wider understanding and awareness of the new land
policy among officials and citizens.
Systematic Regularization of Land in Urban Areas and Improvement of
Rural Land Allocation Processes
This Project activity will fund the systematic regularization and
upgrading of informal settlements in urban and peri-urban areas,
beginning in Maseru and extending to other cities and towns to the
extent MCC Funding is available. As part of systematic regularization,
local adjudication teams and surveyors will work with occupants to
define the boundaries of parcels and establish cadastral plans, design
access roads and utility rights of way as needed, and issue leases to
the legally recognized title holders. Registration of existing land
occupants will be based on inclusive adjudication provisions enacted as
part of the legal and regulatory framework. Activities related to
systematic regularization of land and improvement of the land
allocation process will be designed to increase gender equity through
mandatory joint titling of rights to married couples.
A public outreach and training program will support the activity by
informing occupants of regularization activities and encouraging their
cooperation with adjudication teams. Special efforts will be made to
ensure that training, public awareness and access to information is
available to women and socially vulnerable individuals. MCC Funding
will also assist community councils to improve their records of rural
land allocations and to support the Government's efforts to train
community councils and traditional authorities on the land allocation
process. This Project will help train district land teams to complete
an inventory of existing land allocations and establish improved record
keeping procedures. MCC Funding will also support the Government's (and
other donors') ongoing efforts to train community councils and
traditional authorities on their roles in land allocation and land
management. The expected outcomes of these activities include the
formalization and registration of the rights to over 55,000 parcels of
informally occupied land in Maseru and other cities of Lesotho; the
improvement of records on rural land allocations maintained by
community councils; and the training of community councils, traditional
authorities, and rural citizens on land allocation and management
procedures.
Modernization and Improvement of Land Administration Services
This Project activity will fund the simplification of land
administration procedures and the development of a new land
administration authority (``LAA'') that will be:
(i) Professionally managed and operated;
(ii) Operated in a largely autonomous manner in accordance with its
objectives;
(iii) Capable of providing cost-effective and efficient services to
the public and land information users (including the poor);
(iv) Able to hire and retain qualified managerial and technical
staff; and
(v) Self-sustaining.
The LAA will be modeled after the Lesotho Revenue Authority, an
autonomous parastatal body that collects taxes for the Government. MCC
Funding will support the establishment of the technical platform for
operation of the LAA, support hiring and training of managerial and
technical staff, and provide material resources for the initial
operation of the LAA. The expected outcomes of this Project activity
include the adoption of a legal basis for the LAA; establishment of the
LAA with qualified managerial and technical staff; and development of
an appropriate technical platform (e.g., the appropriate land
information systems and internal culture) for delivery of streamlined,
cost effective and efficient land administration services to the
public.
Public Outreach and Training
This Project activity will fund public outreach and awareness
activities in support of all of the land administration reform
activities. MCC Funding will support training of land administration
staff, community councils and traditional authorities as needed to
implement land administration reform in Lesotho. The expected outcomes
for this activity are greater public awareness of land matters and the
benefits of formal title to land (i.e., a lease) and well-trained land
administration staff and community councils.
Gender analysis to ensure that revisions of the new Land Act are
congruent with the Legal Capacity of Married Persons Act and other
gender equality reforms and gender-responsive methodologies and
approaches for training, such as separate meetings and training
sessions, will be undertaken to ensure that women are included in all
education and training for public officials and the public.
(d) Civil Legal Reform Activity.
This Project activity is an element of a broader Government program
of legal reform and will provide faster, fairer and less expensive
resolution of commercial disputes, whether large or small. According to
the World Bank ``Doing Business'' survey, it takes nearly 700 days to
resolve a dispute in the courts. This Project activity aims to cut the
time and cost required to resolve a commercial dispute in half. This
activity will promote an improved investment environment for businesses
of all sizes, and will afford ordinary citizens better access to courts
for economic disputes.
Specifically, MCC funding will support the following:
(i) The development of the Commercial Court, including the drafting
and promulgation of procedures, capacity building, and--eventually--
reconstruction of a currently unused court building to house the
Commercial Court. The court's focus will be on larger commercial
disputes;
(ii) The creation of modern case management procedures. All the
courts of Lesotho suffer from a lack of modern case management
procedures and technology. Modern case management will be introduced to
the High Court, the new Commercial Court, and the Magistrate Court of
Maseru;
(iii) Promotion of alternative dispute resolution (``ADR''). The
focus of this sub-activity will be a program of court-annexed mediation
for commercial disputes. Increased use of private ADR will also be
promoted; and
[[Page 43401]]
(iv) The development of a simplified and expedited small claims
process. Smaller commercial claims may have limited recourse to the
judicial system. Introduction of a small claims process seeks to
provide inexpensive and rapid resolution of the smallest commercial
disputes.
Any potential gender-based constraints to participation in the
Project will be explored during the development of the Program-wide
Gender Integration Plan. This Plan will include, as appropriate,
recommendations for meaningful and inclusive consultations with women
and other vulnerable/underrepresented groups, project-specific gender
analyses and strategies for incorporating findings of the gender
analyses into final Project designs.
(e) Training and Public Awareness to Support Gender Equality in
Economic Rights.
MCC and the Government of Lesotho recognize that gender inequality
can be a significant constraint to economic growth and poverty
reduction. In December 2006, the Government passed into law the Legal
Capacity of Married Persons Act which removes the minority status of
married women. With assistance from MCC, the Government has already
contracted for two related activities: A gender review of laws and
policies with recommendations for reform, and the development of a
training and public outreach program to realize in practice gender
equality in economic rights.
The gender review of laws and policies and additional due diligence
on the effects of the Legal Capacity of Married Persons Act have
revealed contradictions in Lesotho law. Removing these contradictions
is important to assure the application of rights in the judiciary and
also because poor, rural women do not usually have the resources to
initiate an appeal if the conflicting law is the basis for a legal
decision.
Prior to the first Disbursement, the Government will undertake
additional legal reform efforts to assure that the following economic
rights are not contradicted by laws enacted prior to the Legal Capacity
of Married Persons Act, including the right to:
(i) Enter into a contract, including incurring indebtedness;
(ii) Sue or be sued;
(iii) Register immovable property in her name;
(iv) Act as an executor of a decedent's estate;
(v) Act as a director of a company;
(vi) Act as a trustee of an estate;
(vii) Bind oneself as a surety; and
(viii) Buy, sell and use property as collateral for loans.
The PSD Project includes a training and public awareness activity
designed to realize gender equality in economic rights and promote
enhanced access to credit for women.
The first sub-activity is a training program to promulgate the
Legal Capacity of Married Persons Act and other reforms aimed at gender
equality in the economy. Specifically, MCC Funding will support:
(ix) training the legal community, including judges, magistrates,
lawyers, prosecutors, and police, and inclusive of the local and
central courts that handle most of the matrimonial disputes;
(x) training and training-of-trainers for relevant government
ministries; and
(xi) sector-specific training with special attention to the banking
industry, potential women borrowers and those Government entities
responsible for regulation and oversight.
The second sub-activity is a public awareness and outreach program
designed to develop knowledge, awareness and practices in support of
these economic rights. This sub-activity will involve traditional
authorities, religious leadership, civil society organizations, local
government, churches, NGOs, and community-based organizations,
including support groups, as stakeholders, and it will be implemented
in all ten districts of Lesotho. Specifically, MCC funding will support
the following:
(xii) a five-year public awareness campaign dedicated to
implementing gender equality in economic rights;
(xiii) activities designed to be appropriate for specific
stakeholder groups; and
(xiv) The building of local capacity to continue advocacy for
equality in economic rights following the MCC interventions.
2. Project Implementation
(a) Credit Bureau and National Identification Card Activity.
Implementation of the credit bureau activity will be managed by the
Central Bank of Lesotho with oversight provided by the Public-Private
Steering Committee, an existing ministerial committee chaired by the
Deputy Prime Minister. The Public-Private Steering Committee's
membership will include representation from the Central Bank of
Lesotho, which will also have regulatory responsibility for the credit
bureau, and the MoHA, which will have regulatory responsibility for the
National Identification Card. MCC Funding will pay for the related
legal and regulatory review and the consultation needed to ensure
harmonization with South African privacy and information protection
principles (as well as other relevant provisions of the South African
National Credit Act) and will support training for the Central Bank as
the credit bureau regulator. The credit bureau will be privately owned
and funded and the private credit bureau operator will be responsible
for soliciting credit bureau membership and gathering the information
needed to populate the credit bureau data base.
MCC Funding will assist the roll-out of the NIDC in support of the
launching and operation of the credit bureau. MoHA will manage the NIDC
implementation with oversight provided by the Public-Private Steering
Committee. It is expected that the World Bank will engage the services
of an international consultant to determine the most effective and cost
efficient approach to launch the NIDC. Recommendations will include
card design and implementation processes, as well as the appropriate ID
card production system and long-term support systems best suited for
Lesotho. Additionally, the consultant will design an advertisement and
a public awareness campaign and detail final development processes and
costs.
(b) Payments and Settlement Systems Activity.
The Government, as the current chair of the South African
Development Community, has committed to regional integration of
financial systems. In line with that commitment, the Government has
opted to implement its payment system improvement by linking with a
South African payment system provider rather than developing a
standalone, proprietary system with the Central Bank of Lesotho.
Implementation of the payments and settlement systems activity will
be managed by the Central Bank of Lesotho with oversight by the Public-
Private Steering Committee referenced in subsection (a) above.
Representation from the Central Bank of Lesotho, which will have
regulatory responsibility for the credit bureau, will be added to this
committee to address issues related to both the Credit Bureau activity
and the Payments and Settlement System Improvement activity. MCC
Funding will pay for the related legal and regulatory review and the
consultation needed to ensure harmonization with other countries in the
region.
(c) Land Administration Reform Activity.
Implementation of the land administration reform activity will
require that a project implementation unit (``Land Administration
Reform
[[Page 43402]]
PIU'') be established. The Land Administration Reform PIU will provide
technical assistance to the Department of Lands, Surveys, and Physical
Planning (``LSPP'') and the new LAA during the course of the Project,
but will be more specifically focused on supporting the land
administration bodies to meet Compact-related requirements for
documentation (for example, project work plans, budgets and quarterly
reports), procurements (drafting terms of reference for private sector
providers) and performance monitoring and coordination of the
activities of various implementers as necessary to achieve component
objectives. The LSPP and the new LAA are expected to concentrate on
day-to-day business and implementation of the changes in land policy
expected during the term of this Compact. The Land Administration
Reform PIU, although a separate entity, will be located within the LSPP
offices or nearby to ensure close collaboration and communication on
subjects related to project implementation. The four sub-activities
under this Project activity and the implementing arrangement for each
are as follows.
Policy and Legal Reform
The main implementer of this sub-activity is to be a legal
consulting team made up of a legal specialist familiar with
international best practices and lawyers with knowledge of legal
practices in Lesotho. The legal consulting team will support the LSPP/
LAA in the formation of new land policy, drafting laws and regulations
implementing the policy, advocating in support of the adoption and
broad acceptance of the new land policy, and implementing the land
administration reforms (including, for example, training and public
outreach, procedural analysis and reform). The legal team will interact
and cooperate with other implementers selected to work on land
administration reform, supporting their efforts to implement new land
policy and assisting in problem resolution.
Systematic Regularization and Registration of Urban Land and
Improvement of Rural Land Allocation Procedures
This sub-activity will be implemented jointly by the LSPP/LAA and a
land registration consulting firm that will support the efforts to
conduct systematic regularization and registration of urban land rights
(focusing on rights to land in informal settlements). The land
registration consultant will provide the LSPP/LAA with technical
assistance and material resources support (for example, temporary human
resource and financial assistance) necessary to complete the systematic
regularization and registration task in a timely manner. The LSPP/LAA
will also develop and implement improvements in the procedures for
recording rural land allocations and the maintenance of such records
with technical assistance from the land registration consultant. The
consultant, in cooperation with the public outreach consultant and
other donor projects, will support the Ministry of Local Government's
program for training of community councils and traditional authorities
on land allocation procedures under the Law on Local Government of 1997
and new procedures established as part of this activity.
Modernize and Improve Land Administration Procedures
The main implementer of this sub-activity will be a land
information systems consulting firm (``LIS Consultant''), which will
work with the current land administration authorities and the Director
of the new LAA to establish the LAA. Based on a study of land
administration services and needs in Lesotho carried out with MCC
Funding, the LIS Consultant will develop appropriate business
processes, implement necessary software and hardware solutions, train
LAA staff and management on new systems, and monitor the implementation
of the new procedures and systems to ensure their efficiency and
effectiveness in providing land administration services to private and
public users. The LIS Consultant will cooperate closely with the land
registration consultant and the legal consulting team to ensure that
new processes meet the needs of public and private users and are
properly established in the regulatory framework.
Public Outreach and Training
The main implementer of this sub-activity will be an outreach and
training consultant (an NGO), supported by a public education
consultant. The consultants will be responsible for organizing all
public outreach activities in support of the various activity
implementers, including community councils and the LSPP/LAA. The
consultants will draft an outreach and training strategy that meets the
needs of the LAA and the implementers of each activity. For example,
the consultants will cooperate with the LSPP/LAA to form a strategy for
raising public awareness of the new LAA, the new simplified procedures
and reduced costs for formalizing one's rights to land, and the
benefits of formalizing land rights.
(d) Civil Legal Reform Activity.
The High Court will be the primary implementer of the civil legal
reform Project activity, and will coordinate with the Ministry of
Justice as appropriate. A consulting firm will be hired to provide a
resident advisor for the first two years of the Project, and other
short-term experts and support as required. The High Court will also
involve other courts, the Law Society of Lesotho, representatives of
the private sector and NGOs--in each case, in an advisory capacity--in
planning and implementing all aspects of the Project. Compact
Implementation Funding will be used to hire a consultant to develop a
detailed implementation plan and to draft a scope of work for the
consulting firm.
(e) Training and Public Awareness to Support Gender Equality in
Economic Rights.
The training and public awareness to support gender equality in
economic rights Project activities will be coordinated by the Ministry
of Gender, Youth, Sports and Recreation as appropriate. Implementation
will be carried out by one or two firms, with partners who have deep
knowledge and experience of the context. This firm, or firms, will be
selected after an international competition managed by MCA-Lesotho and
tendered with the approval of MCC. The social/gender specialist
employed by MCA-Lesotho will be charged with providing oversight and
general guidance throughout the life of the contract. The social/gender
specialist employed by MCA-Lesotho will meet regularly with the
representative of the Ministry of Gender, Youth, Sports and Recreation
to ensure that benchmarks are being met, the work plan is being
followed and that results of the training and public awareness
activities are being monitored.
3. Beneficiaries
(a) Credit Bureau, National Identification Card and Payment and
Settlement Systems Activity.
All economically active (formal sector and informal sector)
citizens and legal residents, including married women, are potential
beneficiaries of these Project activities. The activities combine to
improve the availability of credit and other financial services. There
will be a significant reduction in transaction costs for financial
institutions both in gathering the information needed to evaluate
credit decisions and the cost of payments and settlement, which should
result in a reduction in fees for these
[[Page 43403]]
services to clients. The payment and settlement system will likely put
competitive pressures on the bank and non-bank service providers since
many of the transactions for which they are now charging high fees
(such as remittances) can eventually be provided by other parties
unless they remain competitive in pricing and service provision.
(b) Land Administration Reform Activity.
The targeted beneficiaries of these Project activities are informal
land occupants who now lack formalized rights to land and the security
and economic benefits that derive from registered rights in land. All
land occupants and right holders will benefit from the adoption of a
new land policy that improves access to land and security of land
rights. Improvements in land allocation and land record keeping
procedures will also benefit all rural land occupants. These
improvements will lead to the increased marketability of land,
incentives to invest in land and the ability of land to be used to
obtain credit. Private business will also benefit from these
improvements by generating jobs and increased economic activity in
sectors such as mortgage lending, construction, and real property
related services (for example, estate agents, property valuers, and
land surveyors).
(c) Civil Legal Reform Activity.
All active participants in the formal economy of Lesotho are
intended beneficiaries of the civil legal reform Project activity.
Initially, those economic actors most greatly impacted by the current
backlog of High Court cases, such as banks, will benefit most directly.
In addition, those individual citizens who now suffer from limited
recourse to courts to settle their economic disputes will also be
direct beneficiaries. With increasing access to formal justice, it is
hoped that fewer individuals will simply accept unfair results from
economic transactions or ``take the law into their own hands'' to
settle disputes. Individual Basotho will also benefit by increased
access to credit when banks are able to offer increased access to
credit, as a result of easier processes developed to collect unpaid
debts.
(d) Training and Public Awareness to Support Gender Equality in
Economic Rights.
Because gender inequality can be a significant constraint to growth
and poverty reduction, reducing the barriers to women's full
participation as economic actors will benefit all members of Basotho
society.
4. Donor Coordination; Role of Private Sector and Civil Society
MCC has been actively collaborating with other donors on the NIDC
system and the legal reform activities. MCC will work with the World
Bank in the roll-out of the NIDC sub-activity. The World Bank has
approved the engagement of an international consultant to determine the
most effective and cost efficient approach to launch the NIDC. MCC
will, upon approval of design and cost elements, assist with funding
the roll-out.
The development of the private sector development project relied on
stakeholder steering committees and consultations with chambers of
commerce, textile, and garment industry associations to provide
feedback on the impediments to private sector growth and proposed
solutions to improving the business and investment climate. In
particular, there has been extensive consultation with the banking
sector at all stages in establishing the need for and in designing the
NIDC, credit bureau and payments and settlement systems sub-activities.
The land administration reform activity has been discussed and
continues to be discussed with the United Kingdom's Department for
International Development (``DfID'') and the German development agency,
Deutsche Gesellschaft fr Technische Zusammenarbeit (``GTZ''). These
donors are currently active in Lesotho and have experience addressing
land administration reform activities and related activities. In
particular, project activities on improvement of land allocation
practices in rural areas will be coordinated with GTZ and the
establishment of the new LAA will be done in consultation with DfID.
The land administration reform activities also include a significant
role for the private sector and civil society. Private land surveyors
will conduct land surveys as part of mass regularization and
registration or urban land and public education and outreach activities
will largely be implemented by an NGO.
5. USAID
USAID does not currently have any financial and private sector
development initiatives that focus specifically on the areas identified
by MCC for funding in this Project.
6. Sustainability
The credit bureau will be privately owned and private sector
funded. Formation of a credit bureau has been consistently identified
by credit grantors as a prerequisite to granting credit and the cross-
border solution selected is less expensive and more comprehensive than
a ``Lesotho only'' credit bureau. The banks have indicated that they
will become paying members of the credit bureau. The NIDC activity will
be implemented by a third party and managed by the MoHA. A significant
portion of the cost will be allocated to hiring experienced (third
party) consulting experts to manage the implementation, providing
technical expertise (hardware and software) and for training and
capacity building for MoHA employees in an effort to assure
sustainability.
Sustainability is dependent largely on the participation of the
four largest banks in Lesotho, three of which have South African
parents and already send much of their clearing information to the
South African ACH that would likely provide services to Lesotho. The
fourth bank is the Post Bank, which is owned by the Government. As a
result of the Government's choice to link with a regional payments
provider and the consequential reduction in cost and broadening of
payment options, the Central Bank of Lesotho has received assurances
from each of the banks that they will be a participating (and paying)
member of the ACH over the long term. It is also the Central Bank of
Lesotho's intent to allow participation of indigenous financial
institutions as they become credit worthy and have the capacity to
become contributing members.
A primary focus to ensure sustainability in the private sector
development Project activities will be to fully realize the rights
afforded to women under the Legal Capacity of Married Persons Act in
each private sector development component. This will be done by
integrating women and other individuals with no formal financial
history or access to credit, land or litigation experience into each of
the activities through targeted outreach and training. In addition,
MCA-Lesotho will ensure that all activities are compliant with The
Labor Code of 1992 which establishes the minimum age for employment at
15.
MCC funding will help establish sustainable improvements in land
administration reform through an active capacity building, training,
and public education effort. Each activity helps improve local capacity
by training local stakeholders on all aspects of land administration
and educating the public on processes involved in formalizing land
rights and transferring rights to land using formal mechanisms.
Establishment of a new land administration authority, with the
[[Page 43404]]
characteristics described in paragraph D1(c) of this Annex I, will
raise capacity in land administration, ensuring that the LAA is capable
of serving both private and public users of land information
efficiently and cost effectively.
Social safeguards and gender integration will be reviewed and
monitored by the Social/Gender specialist in coordination with the MCA-
Lesotho officer responsible for environmental and social impact
assessment (the ``ESI Officer'').
The private sector development Project activity is not expected to
result in adverse environmental impacts. However, the MCA-Lesotho ESI
Officer will review terms of reference and work plans for all projects
and activities to verify that potential environmental impacts are not
anticipated. If necessary, the ESI Officer will act in accordance with
the MCC Environmental Guidelines and applicable environmental laws and
requirements in Lesotho to assess potential impacts, acquire the
necessary environmental license and ensure the adequate mitigation is
completed during implementation. The Government will be responsible for
any environmental mitigation cost not included in the activity budgets.
Annex II Summary of Multi-Year Financial Plan
1. General
The Multi-Year Financial Plan Summary below sets forth the
estimated annual contribution of MCC Funding for Program
administration, Program monitoring and evaluation, and implementing
each Project. The Government's contribution of resources will consist
of ``in-kind'' and other contributions or amounts required effectively
to satisfy the requirements of Section 2.5(a) of this Compact. In
accordance with the Program Implementation Agreement, the Government
will develop and adopt on a quarterly basis a detailed financial plan
(as approved by MCC) setting forth annual and quarterly funding
requirements for the Program (including administrative costs) and for
each project, projected both on a commitment and cash requirement
basis.
2. Modifications
To preserve administrative flexibility, the Parties may by written
agreement (or as otherwise provided in the Program Implementation
Agreement), without amending this Compact, change the designations and
allocations of funds among the Projects, the Project activities, or any
activity under Program administration or monitoring and evaluation, or
between a Project identified as of Entry into Force and a new project;
provided, however, that any such change (a) is consistent with the
Objectives and the Program Implementation Agreement, (b) does not
materially adversely affect the applicable Project or any activity
under Program administration or monitoring and evaluation, (c) does not
cause the amount of MCC Funding to exceed the aggregate amount
specified in Section 2.1(a) of this Compact and (d) does not cause the
Government's obligations or responsibilities or overall contribution of
resources to be less than that specified in Section 2.5(a) of this
Compact.
MULTI-YEAR FINANCIAL PLAN SUMMARY
[Totals including Contingencies (US$)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Project CIF funding Year 1 Year 2 Year 3 Year 4 Year 5 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Water Sector Project
A. Metolong Dam Bulk Water 1,490,000 5,840,000 5,700,000 21,540,000 32,300,000 5,590,000 72,460,000
Conveyance System..................
B. Metolong Dam Program Management 1,390,000 1,590,000 1,590,000 3,160,000 3,250,000 3,330,000 14,310,000
Unit Activity......................
C. Urban and Peri-Urban Water 1,250,000 6,520,000 6,450,000 16,690,000 5,540,000 1,010,000 37,460,000
Infrastructure Activity............
D. WASA Project Implementation Unit. 459,000 459,000 918,000 918,000 918,000 918,000 4,590,000
E. Rural Water Supply and Sanitation .............. 5,900,000 7,550,000 5,740,000 5,330,000 5,720,000 30,240,000
Infrastructure Activity............
F. Wetlands Restoration and 324,000 783,000 2,025,000 1,026,000 540,000 270,000 4,968,000
Conservation Activity..............
---------------------------------------------------------------------------------------------------------------
Subtotal........................ 4,913,000 21,092,000 24,233,000 49,074,000 47,878,000 16,838,000 164,028,000
2. Health Sector Project
A. Health Care Centers 1,023,000 10,770,000 16,008,000 24,688,000 16,155,000 4,290,000 72,934,000
Infrastructure Activity............
B. ART Clinic Infrastructure 238,000 922,000 1,393,000 1,393,000 696,000 .............. 4,642,000
Activity...........................
C. Central Lab Infrastructure....... .............. .............. 305,000 1,221,000 1,221,000 305,000 3,052,000
D. Blood Transfusion Center......... .............. 538,000 672,000 1,076,000 403,000 .............. 2,689,000
[[Page 43405]]
E. National Health Training College .............. 741,000 3,336,000 2,966,000 371,000 .............. 7,414,000
Dormitory Infrastructure Activity..
F. Health System Interventions 500,000 2,650,000 3,100,000 3,000,000 3,000,000 2,750,000 15,000,000
Activity...........................
G. Medical Waste Management......... 87,000 1,046,000 1,172,000 684,000 412,000 326,000 3,727,000
H. Health PIU....................... 2,588,000 1,294,000 1,941,000 2,588,000 2,588,000 1,941,000 12,940,000
---------------------------------------------------------------------------------------------------------------
Subtotal........................ 4,436,000 17,961,000 27,927,000 37,616,000 24,846,000 9,612,000 122,398,000
3. Private Sector Development Project
A. Civil Legal Reform Activity...... 70,000 600,000 775,000 925,000 315,000 185,000 2,870,000
B. National ID/Credit Bureau........ 95,000 2,977,000 2,481,000 1,900,000 1,455,000 1,092,000 10,000,000
C. Land Administration Reform 510,000 2,415,000 6,800,000 5,200,000 3,600,000 1,975,000 20,500,000
Activity...........................
D. Payment and Settlement System .............. 800,000 600,000 300,000 .............. .............. 1,700,000
Activity...........................
E. Gender Equality in Economic 35,000 350,000 250,000 200,000 100,000 100,000 1,035,000
Rights Activity....................
---------------------------------------------------------------------------------------------------------------
Subtotal........................ 710,000 7,142,000 10,906,000 8,525,000 5,470,000 3,352,000 36,105,000
4. Monitoring and Evaluation
Monitoring and Evaluation........... 500,000 2,605,000 684,000 755,000 664,000 2,600,000 7,808,000
---------------------------------------------------------------------------------------------------------------
Subtotal........................ 500,000 2,605,000 684,000 755,000 664,000 2,600,000 7,808,000
5. Program Management and Oversight
A. MCA Lesotho...................... 1,981,000 1,905,000 2,142,000 2,323,000 3,423,000 2,660,000 14,434,000
B. Fiscal Agent \1\................. 1,250,000 740,000 1,250,000 1,570,000 1,375,000 475,000 6,660,000
C. Procurement Agent \2\............ 1,250,000 700,000 1,175,000 1,475,000 1,300,000 450,000 6,350,000
D. Bank Contract.................... 5,000 5,000 5,000 5,000 5,000 5,000 30,000
E. Auditing......................... 623,000 623,000 623,000 623,000 623,000 623,000 3,738,000
F. Environmental/Social Oversight .............. 200,000 200,000 200,000 200,000 200,000 1,000,000
(consultants)......................
---------------------------------------------------------------------------------------------------------------
Subtotal........................ 5,109,000 4,173,000 5,395,000 6,196,000 6,926,000 4,413,000 32,212,000
---------------------------------------------------------------------------------------------------------------
Total Estimated MCC 15,668,000 52,973,000 69,145,000 102,166,000 85,784,000 36,815,000 362,551,000
Contribution...............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Health and Water Sector infrastructure costs include estimated costs for environmental/social studies and mitigation.
Annex III. Description of the Monitoring and Evaluation Plan
This Annex III to this Compact (the ``M&E Annex'') generally
describes the components of the plan to measure and evaluate progress
toward achievement of the Compact Goal and the Objectives (the ``M&E
Plan''). Except as defined in this M&E Annex, each capitalized term in
this M&E Annex will have the same meaning given such term elsewhere in
this Compact.
1. Overview
MCC and the Government (or a mutually acceptable Government
affiliate or a permitted designee of the Government) will formulate,
agree to and the Government will implement, or cause to be implemented,
an M&E Plan that specifies (a) how progress toward the Compact Goal,
Objectives, and the intermediate results of each Project and Project
activity set forth in this M&E Annex (the ``Outcomes'') will be
monitored (the ``Monitoring Component''); (b) a methodology, process
and timeline for the evaluation of planned, ongoing, or completed
Projects and Project activities to determine their efficiency,
effectiveness,
[[Page 43406]]
impact and sustainability (the ``Evaluation Component''); and (c) other
components of the M&E Plan described below.
Information regarding the Program's performance, including the M&E
Plan, and any amendments or modifications thereto, as well as
periodically generated reports, will be made publicly available on the
MCA-Lesotho Web site and elsewhere. The Compact Goal, Objectives, and
Outcomes of the Program can be summarized as follows:
[GRAPHIC] [TIFF OMITTED] TN03AU07.041
2. Monitoring Component
To monitor progress toward the achievement of the Compact Goal,
Objectives, and Outcomes, the Monitoring Component of the M&E Plan will
identify (a) the Indicators (as defined below); (b) the party or
parties responsible, the timeline, and the instrument for collecting
data and reporting on each Indicator to MCA-Lesotho; and (c) the method
by which the reported data will be validated.
(a) Indicators. The M&E Plan will measure the impacts of the
Program using objective and reliable information (``Indicators''). Each
Indicator will have one or more expected values that specify the
expected results and expected time for the impacts to be achieved
(``Target''). The M&E Plan will measure and report on Indicators at
four levels. First, the Indicator(s) at the Compact Goal level (``Goal
Indicator'') will measure the impact of the overall Program and each
Project. Second, the Indicators at the Objective level (``Objective
Indicator'') will measure the final results of each of the Projects,
including impacts on the intended beneficiaries identified in Annex I
(collectively, the ``Beneficiaries''). Third, Indicators at the
intermediate level (``Outcome Indicator'') will measure the results
achieved under each of the Project activities and will provide an early
measure of the likely impact under each of the Projects. A fourth level
of Indicators (``Output Indicator'') will be included in the M&E Plan
to measure the direct outputs of Project activities. Indicators will be
disaggregated by sex, income level and age, to the extent practicable.
Subject to prior written approval from MCC, MCA-Lesotho may add
Indicators or modify the Targets of existing Indicators.
Compact Goal Indicators, Baselines and Targets \3\
----------------------------------------------------------------------------------------------------------------
Indicator Baseline Year 5 Year 10
----------------------------------------------------------------------------------------------------------------
GDP growth (annual percent)..................................... 1.4 5.1 6.75
GDP per capita (US$)............................................ 688 788 1040
----------------------------------------------------------------------------------------------------------------
\3\ November 2006 International Monetary Fund Article IV Consultation Paper.
[[Page 43407]]
Water Project Indicators and Definitions \4\
------------------------------------------------------------------------
Objective: ``Improve water supply for industrial and domestic needs, and
enhance rural livelihoods through improved watershed management''
-------------------------------------------------------------------------
Definition of
Objective-level result Indicator Indicator
------------------------------------------------------------------------
Morbidity due to water borne Incidence of water Cases of diarrhea
diseases is decreased. and sanitation reported to
related diseases, health
nationally facilities.\5\
(number).
Jobs in garment industry are Employment (in Total factory
retained/expanded. water related workers employed
industries) in Thetsane and
(number). Tikoe industrial
parks.
Outcome-level Result
Urban domestic water supply is Urban access to Proportion of
improved. potable water urban customers
supply (percent). within 150 meters
from a water
supply.\6\
Bulk water supply to lowlands is Flow delivered The m\3\/year of
increased. after treatment water after
at Metolong site treatment at
(m\3\/year). Metolong site.
WASA operations are improved.... Unaccounted for The percentage of
urban water urban water that
(percent). is not accounted
for (non-revenue
losses plus
physical
losses).\7\
Rural water supply is expanded.. Number of people New people covered
covered with MCC per year in rural
rural water areas. Covered:
supply (number). within 150m
walking distance,
30l/person/day.
Rural sanitation is improved.... Number of new VIP Total number of
latrines provided new VIP latrines
to households provided to
(number). households.\8\
------------------------------------------------------------------------
\4\ Note: the wetlands project will be monitored at the output level.
\5\ Diarrhea will serve as a proxy for all water borne diseases. This
information will be disaggregated by urban and rural communities
receiving intervention from MCC.
\6\ This will be disaggregated by WASA center.
\7\ Ibid.
\8\ This information will be disaggregated by District.
Water Project Indicators and Targets
------------------------------------------------------------------------
Objective: ``Improve water supply for industrial and domestic needs, and
enhance rural livelihoods through improved watershed management''
-------------------------------------------------------------------------
Objective-level indicator Baseline Year 5
------------------------------------------------------------------------
Incidence of water and 55,045............ 40,000.
sanitation related diseases
(number).
Employment (in water related 22,700............ 40,000.
industries) (number).
Outcome-level Indicator......... Baseline.......... Year 5.
Urban access to potable water 55%............... 70%.
supply (percent).
Flow delivered after treatment 0................. 7,640.
at Metolong site (m\3\/year).
Unaccounted for urban water 27%............... 22%.
(percent).
Number of people covered with 0................. 100,000.
MCC rural water supply (number).
Number of new VIP latrines 0................. 10,000.
provided to households (number).
------------------------------------------------------------------------
Health Project Indicators and Definitions
------------------------------------------------------------------------
Objective: Increase access to life-extending ART and essential health
services by providing a sustainable delivery platform
-------------------------------------------------------------------------
Indicator Definition of
-------------------- Indicator
Objective-level result -------------------
Mortality rate Number of deaths
(per 1000) per 1000.\9\
------------------------------------------------------------------------
Lives are extended.............. People with HIV Numerator: Number
still alive 12 of individuals
months after still alive and
initiation of on therapy after
treatment initiating
(percent). treatment after
12 months.
Denominator:
Number of
individuals
initiating
treatment at the
same time.
Prevalence of TB Annual
(per 100,000). notification of
all forms of TB
per 100,000
population.\10\
Outcome-level result
Quality of health service Essential health Percentage of
delivery is improved. services facilities
available providing full
(percent). package of
standard services
for level of
center
disaggregated by
ownership.\11\
TB treatment Numerator: Number
success rate of patients smear
(percent). positive declared
cured + Number of
smear positive
patients who
completed
treatment.
Denominator:
Total number of
TB positive smear
cases (national
figures).
Facilities staffed Percentage of
with standard facilities
number and type staffed with
of qualified standard number
staff (percent). and type of
qualified staff
according to
level of facility
standard.\12\
Usage of health services is Total patient Total number of
increased. visits (number). patients treated
in health centers
in Lesotho.
[[Page 43408]]
Immunization rate Percent of
(percent). children under
one year of age
receiving measles
antigen
nationwide.
Health centers TBD.\13\
deliveries.
Total number of Total number with
people receiving advanced HIV/AIDS
ARV treatment receiving ARV
(number). treatment per
year. \14\
Health centers are equipped and Utility Percent of health
maintained at standards. availability facilities with
(percent). functioning
utilities. \15\
Health professionals are trained Total annual Number of students
and retained. enrollment at enrolled. \16\
NHTC (number).
Laboratory services are improved Referred tests Average referred
performed per tests performed
quarter (number). at the central
laboratory per
quarter during
the past
year.\17\
Blood transfusion services are Blood units Average number of
improved. collected per blood units
quarter (number). collected per
quarter during
the past year.
------------------------------------------------------------------------
\9\ This information will be disaggregated by age and gender.
\10\ This information will be disaggregated by district, age and gender.
\11\ This information will be disaggregated by type of facility-MOHSW
and CHAL. The summary statistic is the simple average.
\12\ Ibid.
\13\ This indicator definition still requires confirmation.
\14\ This information will be disaggregated by age and gender and health
facility (health centers and hospitals).
\15\ This information will be disaggregated by electricity, water and
communications.
\16\ This information will be disaggregated by gender and by area of
study (e.g., general nursing, lab science, pharmacy technology, and
midwifery).
\17\ This information will be disaggregated by test type: clinical
chemistry, cytologty, histology (summary statistic is sum of types).
Health Project Indicators and Targets
------------------------------------------------------------------------
Objective: Increase access to life-extending ART and essential health
services by providing a sustainable delivery platform
-------------------------------------------------------------------------
Objective-level result Baseline Year 5
------------------------------------------------------------------------
Mortality rate (per 1000)....... Under 5 = 113..... Same as
F:15-49 = 9.9..... baseline.\18\
M:15-49 = 12.3....
People with HIV still alive 12 82%............... 90%.
months after initiation of
treatment (percent).
Prevalence of TB (per 100,000).. 592............... 400.
Outcome-level result
Essential health services TBD \19\.......... 80%.
available (percent).
TB treatment success rate 64%............... 85%.
(percent).
Facilities staffed with standard 5%................ 60%.
number and type of qualified
staff (percent).
Total patient visits (number)... 800,000........... 1,000,000.
Immunization rate (percent)..... 78%............... 90%.
Number of people receiving ARV 17,966............ 35,000.
treatment (number).
Health centers deliveries....... TBD............... TBD.
Utility availability (percent).. TBD \20\.......... 90%.
Total annual enrollment at NHTC 350............... 938.
(number).
Referred tests performed per 885............... 1,800.
quarter (number).
Blood units collected per 700............... 1,500.
quarter (number).
------------------------------------------------------------------------
\18\ Mortality rates would increase in the absence of MCC's
intervention.
\19\ Baseline should be available with the results of the accreditation
exercise--expected to be completed by August 2007.
\20\ Ibid.
PSD Project Indicators and Definitions
------------------------------------------------------------------------
Objective: ``Stimulate investment by improving access to credit,
reducing transaction costs and increasing the participation of women in
the economy''
-------------------------------------------------------------------------
Definition of
Objective-level result Indicator Indicator \21\
------------------------------------------------------------------------
Increased private sector Value of ..................
economic activity. investment
(million maluti).
Value of credit ..................
extended (million
maluti).
Outcome-level Results
Access to credit is expanded.... Private credit The percentage of
bureau coverage the adult
(percent). population listed
by a private
credit bureau
with current
information on
repayment
history, unpaid
debts or credit
outstanding.
[[Page 43409]]
Utilization of electronic funds Domestic Total number of
transfer is increased. electronic funds payments
transfers associated with
(number). salaries and
pensions made
through EFT per
year. \22\
Use of land as collateral is Land used as Total annual
increased. collateral number of
(number). mortgage bonds
registered.
Land transactions Official costs
costs (percent of required by law
property value). for businesses to
purchase land and
a building to
transfer the
property title
from the seller
to the buyer so
that the buyer
can use the
property for
expanding its
business, as
collateral in
taking new loans
or, if necessary,
to sell to
another business.
Use of land as collateral is Land transactions The median
increased. times (days). duration that
property lawyers
or registry
officials
indicate is
necessary to
complete a
procedure.
Commercial dispute resolution is Pending civil Total number of
increased. cases (number). pending civil
cases in the High
Court.
Knowledge, attitudes, and Gender equality Percent change in
practices of women's economic index. index of
rights are improved. knowledge,
attitudes, and
practices for
supporting gender
equality in
economic rights.
------------------------------------------------------------------------
\21\ These indicator definitions still require confirmation.
\22\ This number will be disaggregated by salaries and pensions paid by
government agencies.
PSD Project Indicators and Targets
------------------------------------------------------------------------
Objective: ``Stimulate investment by improving access to credit,
reducing transaction costs and increasing the participation of women in
the economy''
-------------------------------------------------------------------------
Objective level indicators Baseline \23\ Year 5
------------------------------------------------------------------------
Value of investment (million TBD................ TBD.
maluti).
Value of credit extended TBD................ TBD.
(million maluti).
Outcome Level Indicators
Private credit bureau coverage 0%................. 13%.
(percent).
Domestic electronic funds 0.................. 200,000.
transfers (number).
Land used as collateral 108................ 430.
(number).
Land transactions costs 8.40%.............. 4.20%.
(percent of property value).
Land transactions times (days). 101\24\............ 30.
Pending civil cases (number)... 1031............... 600.
Gender equality index.......... TBD\25\............ TBD.
------------------------------------------------------------------------
\23\ These indicator baselines and targets still require confirmation.
\24\ This baseline figure is based on the World Bank's ``Doing
Business'' report. As the deeds registry improves its data management,
the baseline will be revised according to deeds registry figures.
\25\ A baseline survey is planned before the end of Year 1.
(b) Data Collection and Reporting. The M&E Plan will establish
guidelines for data collection and a reporting framework, including a
schedule of Program reporting and responsible parties. The management
of MCA-Lesotho will conduct regular assessments of Program performance
to inform the MCA-Lesotho board of directors and MCC of progress under
the Program and to alert these parties to any problems. These
assessments will report the actual results compared to the Targets on
the Indicators referenced in the Monitoring Component, explain
deviations between these actual results and Targets, and in general,
serve as a management tool for implementation of the Program. With
respect to any data or reports received by MCA-Lesotho, MCA-Lesotho
will promptly deliver such reports to MCC along with any other related
documents, as specified in the M&E Plan or as may be requested from
time to time by MCC.
(c) Data Quality Reviews. As determined in the M&E Plan or as
otherwise requested by MCC, the quality of the data gathered through
the M&E Plan will be reviewed to ensure that data reported are as
reliable, timely and valid as resources will allow. The objective of
any data quality review will be to verify the quality and the
consistency of performance data, across different implementation units
and reporting institutions. Such data quality reviews also will serve
to identify where consistent levels of quality are not possible, given
in-country capacity or other constraints. MCA-Lesotho will enter into
an agreement (in a form acceptable to MCC) with the Reviewer to fulfill
the provisions set forth in Section 1 of this Annex III and this clause
(c).
3. Evaluation Component
The Program will be evaluated on the extent to which the
interventions contribute to the Compact Goal. The Evaluation Component
of the M&E Plan will contain a methodology, process and timeline for
collecting and analyzing data in order to assess planned, ongoing, or
completed Project activities to determine their efficiency,
effectiveness, impact and sustainability. The evaluations should use
state-of-the-art methods for addressing selection bias.
[[Page 43410]]
The Government will implement, or cause to be implemented, surveys to
collect longitudinal data on both Beneficiary and non-Beneficiary
households. The Evaluation Component will contain two types of reports:
Final Evaluations and Ad Hoc Evaluations (each as defined below), and
will be finalized before any Disbursement for specific Project
activities or the Program.
(a) Final Evaluation. MCA-Lesotho will engage an independent
evaluator to conduct a program evaluation at the expiration or
termination of the Program (``Final Evaluation''). The evaluation
methodology, timeline, data collection, and analysis requirements will
be finalized and detailed in the M&E Plan. The Final Evaluations must
at a minimum (i) estimate quantitatively and in a statistically valid
way, the causal relationship between the Compact Goals (to the extent
possible), the Objectives and Outcomes; (ii) determine if and analyze
the reasons why the Compact Goals, Objectives and Outcomes were or were
not achieved; and (iii) assess the overlapping benefits of the
Projects.
(b) Ad Hoc Evaluations or Special Studies. Either MCC or MCA-
Lesotho may request ad hoc or interim evaluations or special studies of
Projects, Project activities, or the Program as a whole prior to the
expiration of the Compact Term (each, an ``Ad Hoc Evaluation''). If
MCA-Lesotho engages an evaluator for an Ad Hoc Evaluation, the
evaluator will be an externally contracted independent source selected
by MCA-Lesotho, subject to the prior written approval of MCC, following
a tender in accordance with the MCC Program Procurement Guidelines, and
otherwise in accordance with any relevant Implementation Letter, the
Program Implementation Agreement or any other agreement or arrangement
entered into by the Government in connection with this Compact or the
Program. If MCA-Lesotho requires an ad hoc independent evaluation or
special study at the request of the Government for any reason,
including for the purpose of contesting an MCC determination with
respect to a Project or Project activity or seeking funding from other
donors, no MCC Funding or MCA-Lesotho resources may be applied to such
evaluation or special study without MCC's prior written approval.
4. Other Components of the M&E Plan
In addition to the Monitoring Components and the Evaluation
Components, the M&E Plan will include the following components for the
Program, Projects and Project activities, including, where appropriate,
roles and responsibilities of the relevant parties and Providers:
(a) Costs. A detailed annual budget estimate for all components of
the M&E Plan.
(b) Assumptions and Risks. Any assumptions and risks external to
the Program that underlie the accomplishment of the Objectives and
Outcomes; provided such assumptions and risks will not excuse
performance of the Parties, unless otherwise expressly agreed to in
writing by the Parties.
5. Implementation of the M&E Plan
(a) Approval and Implementation. The approval and implementation of
the M&E Plan, as amended from time to time, will be in accordance with
this M&E Annex, the Program Implementation Agreement or any other
agreement or arrangement entered into by the Government in connection
with this Compact or the Program.
(b) Stakeholders Committee. The completed portions of the M&E Plan
will be presented to the stakeholders committee formed in accordance
with the Guidelines for Accountable Entities and Implementation
Structures provided on the MCC Web site at such stakeholders
committee's initial meeting, and any amendments or modifications to and
any additional components of the M&E Plan will be presented to such
stakeholders committee at appropriate subsequent meetings of such
committee. Such stakeholders committee will have the opportunity to
present its suggestions to the M&E Plan, which the board of directors
of MCA-Lesotho will take into consideration in its review of any
amendments to the M&E Plan during the Compact Term.
(c) Disbursement for a Project Activity. As a condition to each
Disbursement there will be satisfactory progress on the M&E Plan for
the relevant Project or Project activity, and substantial compliance
with the M&E Plan, including any reporting requirements. In addition,
for certain activities, collection of baseline data may be a condition
precedent for specified Disbursements.
(d) Modifications. Notwithstanding anything to the contrary
contained in this Compact, including the requirements of this M&E
Annex, the Parties may modify or amend the M&E Plan or any component
thereof, including those elements described herein, without amending
this Compact; provided, however, that any such modification or
amendment of the M&E Plan is reviewed by the stakeholders committee
referenced in clause (b) above and has been approved by MCC in writing
and is otherwise consistent with the requirements of this Compact and
its Objectives, the Program Implementation Agreement and any other
relevant agreement or arrangement entered into by the Government in
connection with this Compact or the Program.
[FR Doc. E7-14812 Filed 8-2-07; 8:45 am]
BILLING CODE 9211-03-P