Official Minutes from the October 31, 2024 MCC Advisory Council Meeting

October 31, 2024
9:00 am-12:25 pm ET
via Webex and In-Person

Call to Order and Roll Call

Alex Dixon called the meeting to order. His team handles private sector interface and advisory in the compacts and manages the Advisory Council. He welcomed the 12 new members and 13 returning members. The Advisory Council meets twice a year. These are typically around the two-week window around the World Bank’s Fall and Spring meetings. There are also two subcommittees: the Blended Finance Subcommittee and the Climate and Energy Subcommittee. The Advisory Council usually has 2 co-chairs who each serve 2-year terms. Currently, it has one co-chair (Thierry Tanoh) and is looking for a second co-chair. This is a federal advisory council, so everything is on the public record, including all comments. The meeting minutes are anonymous and will be sent out after the meeting.

Overview of Agenda

Thierry Tanoh welcomed everyone and reviewed the agenda.

Welcome Remarks to 2024-2026 Advisory Council

Cameron Alford was grateful for the new members. The Advisory Council makes the MCC more inclusive and impactful in achieving its goals. He then introduced the highlights of 2024.

In fiscal year 2024, MCC obligated $1.7 billion and 5 programs entered into force in 2024: one Threshold program in Kenya, and 4 compact programs in Lesotho, Malawi, Kosovo, and Indonesia. The program in Indonesia’s goal is to provide access to finance for MSMEs and address the infrastructure gap. The $649 million compact can’t completely address the $1.5 trillion gap. Instead, MCC must approach the problem differently, with the ultimate goal of changing the ecosystem for funding in Indonesia.

MCC signed a Memorandum of Understanding with NORAD to increase collaboration on the use of evidence in the development space.

MCC, Power Africa, and Bank of America cohosted an official sideline event at the UN General Assembly titled ‘U.S.-Africa: emPOWERing West African Energy Solutions’. It covered how to use regional-level investments to further the impact on country-level investments.

Alice Albright, CEO of MCC, joined and said a few words. She stressed how important the Private Sector Advisory Council is to MCC. She was just at The World Food Prize with all the AG folks in the world and was reminded of how important how we work with the private sector is. It is not just technology, it is financing, growth, so having the council’s perspective is really important. While MCC is a small part of the US government, MCC makes a big difference in other countries. MCC has the privilege of working with countries to really make a difference, but also work with heads of state. It is common for MCC to be working at that level of government in the countries where they work. The Advisory Council is a critical part of that process.

Cameron continued. MCC had an open public consultation on country ownership and received 100+ inputs. MCC will communicate how that impacts MCC’s approach to Country Ownership.

December is the culmination of the Selection Season when the board selects new partner countries to develop programs with. The Advisory Council will be able to see the Development Process from the beginning with our new partners.

Lastly, the election took place on November 5th, 2024. There will be a new administration in January that will have its own priorities for MCC. MCC is a part of the transition process at the federal government. MCC’s programs often span multiple administrations, so continuity is a foundational element. The staff will be here regardless and will continue to interact with the Advisory Council. Whatever change may be ahead, Cameron looks forward to the MCC being a pivotal part of the USG’s overall toolkit and thanked the Advisory Council for their help.

Advisory Council 101

Cheryl and her colleague Morgan from the Office of the General Council provided a legal perspective on how FACA affects the council members.

The Federal Advisory Committee Act (FACA) of 1972 (Public Law 92-463) is a procedural law that governs advisory committees by which federal agencies may seek advice from council members that is relevant, objective, and open to the public. It is a way for the public to have confidence in how agencies make their decisions.

All members of the MCC Private Sector Advisory Committee are representative members selected to represent the point of view of a group that has an interest in matters before the committee. They are not government employees and are not subject to any conflict-of-interest rules. MCC is interested in their point of view and expects bias. Council members are not eligible for compensation or reimbursement (except for travel or per-diem).

The Advisory Committee is not a decisional body and will only be asked to provide advice for consideration. MCC is asking council members to push them to think outside the box; flag any issues for consideration; inform them of innovative approaches; and point them to lessons learned and any contacts with sector expertise.

If there are questions, please reach out to Sheena or Alex for Cheryl’s contact information, or reach out to Sheena Cooper at mccadvisorycouncil@mcc.gov, Lorelei Kowalski at lorelei.kowalski@gsa.gov, or Mackenzie Robertson at mackenzie.robertson@gsa.gov.

The floor was open for questions, but there were none.

Alex Dixon elaborated. Representative members can do business with MCC. However, MCC encourages the council members to use their best judgment. Optically, a council member may prefer to have someone else from their team come in however their membership on the council is specific to them and cannot just be reassigned. This is not a position for their company, this is a position for each council member.

The Advisory Council is a group of global experts. MCC wants the council members’ advice and may ask them questions outside the meetings to take advantage of the members’ expertise and networks. MCC is guided by a board of directors, and the private sector advisory council focuses on improving compacts. MCC moves slowly, so it requires patience and understanding. MCC has government partners and can’t do things on their own. But it does get done.

For the main meeting, MCC presents a case study or country, states the problem, and gets perspectives. This helps MCC build a better compact.

Subcommittees cover topics that aren’t directly related to the content of the main meetings. There are two subcommittees, Blended Finance, and Energy and Climate. The subcommittees meet twice year 2-3 weeks before the main meeting.

Council members are welcome to call Alex as much as they want. MCC has a variety of different programs, which is why they have such a diverse board.

The floor was then open for questions.

Speaker 1 asked if the agenda was shared some days before the meeting.

Sheena explained that the subcommittee meetings are typically 2-3 weeks before the main meeting. The goal is to send out read-ahead materials two weeks ahead of the meeting, but it may be one week, depending on the moving pieces. The read-ahead materials might be a short brief on the content, presentations, and guided questions. Members can come ready with questions.

Alex asked for members' patience. This is done by him and his team. He acknowledges Jon Richart, who is the VP of IEPS, the Infrastructure, Environment, and Private Sector group. He is Alex’s boss and was invited to say a few words on anything he may have missed.

Jon Richart echoed what had been said. MCC encourages frank conversations. It has been a good council. Don’t hesitate to reach out to the co-chairs, or Alex and the others at MCC.

New Member Introductions/ Ice Breaker

Each member of the Private Sector Advisory Committee was assigned another member, and they interviewed each other and introduced the other person during the meeting.

Speaker 1 and Speaker 5 introduced each other.

Speaker 1 worked for Accenture, GE Capital, and the AFC. Her expertise is in investment and portfolio management, power, energy, transport, and logistics. She worked in the US, Nigeria, and Brazil. Her best advice is “Emphasize the importance of education to uplift yourself.”

Speaker 5 worked at IFC as VP of Sub-Saharan Africa, Western Europe, Latin America, and the Caribbean. He was the CEO of Ecobank and the chief of staff in Côte D'Ivoire, working with the MCC. He lived in the US, Brazil, and South Africa. His expertise is in finance, the public sector, and international institutions. His best advice is “Work hard, and at some point, it will pay off.”

Speaker 14 and Speaker 3 introduced each other.

Speaker14 is the President of Prosperity Strategies and a Senior Advisor at the Aspen Institute. He was the CEO of the Cynthia and George Mitchell Foundation and VP of the Aspen Network for Development Entrepreneurs. His expertise is in sustainability and encouraging entrepreneurship.

Speaker 3 is an investor in the private sector and the World Bank. He lived in Congo-Brazzaville, Europe, the US, and Africa. His expertise is in SME investment in francophone Africa.

Speaker 2 and Speaker 15 introduced each other.

Speaker 2 has lived in Kenya, South Africa, Germany, and the US. She has been at Bread For The World, MSH, and the Gates Foundation. Her expertise is in policy, development, funding reform, health system strengthening, climate, finance, AG, and conflict in arid and semi-arid lands.

Speaker 15 is the President and CEO of Counterpart International and has worked with DAI, Plan International USA, USAID, and the State Department. Her expertise is in strengthening local networks, local ownership, democracy, governance, human rights, and labor.

Speaker 6 and Speaker 16 introduced each other.

Speaker 6 worked at the IFC in many roles, including Country Manager of Brazil. He then worked for DARBY and founded BroadBranch Capital. He lived in Brazil and the US. His expertise is in infrastructure development, renewable energy investment, and private equity.

Speaker 16 works for Chemonics. He was with the Gates Foundation and designed a compact with MCC. He lived in Rwanda and Kenya. His expertise is in Agrobusiness, water, and education.

Speaker 17 and Speaker 4 introduced each other.

Speaker 17 is the President and CEO of Sheladia. He has led ACEC. He has worked across Africa and Central Asia. His expertise is in civil engineering, specifically transportation and bridges.

Speaker 4 has managed programs worth over $4 billion. His expertise is in engineering, biology, public health, business, government contracts, water, and giving back to communities.

Speaker 9 and Speaker 13 introduced each other.

Speaker 9 worked for AIG, PineBridge Investments, and is now at Jasper Ridge Partners. His expertise is in asset management in private markets, restructuring, emerging markets, developing economies, and working through turmoil. His best advice is “Run to the dislocation”.

Speaker 13 spent time at the IFC, the DFC, and The Global Environment Fund, and is now the CEO of Convergence. She also serves on many advisory boards. Her best advice is “Words matter”, particularly in leadership or advisory capacities. It can go wrong if the wrong words are used.

Speaker 18 and Speaker 12 introduced each other.

Speaker 18 works at the Skoll Foundation. He worked at The Shell Foundation, the IFC, and is the Co-founder and COO of Frontier Markets. He worked in sub-Saharan Africa, South and Southeast Asia, Latin America, and the US. His expertise is in public-private partnerships, resource access, last-mile distribution, renewables, and maximizing networks. His best advice is “Never forget to pay attention to your breathing.”

There are $850 billion in US assets sitting idle, with 5% of foundations doing impact investing. It is an untapped market for impactful global projects.

Speaker 12 spearheaded GIST and is working at ACDI/VOCA and AV Ventures. He is an expert in entrepreneurial ecosystems, impact investing, SME development, AG, Healthcare, IT, communications, and innovation finance. He worked in Eastern Europe, North and Sub-Saharan Africa, and Asia. His advice is “If you’re going in the wrong direction, more speed won’t help.”

Speaker 19 and Speaker 10 introduced each other.

Speaker 19 is the Executive Director of the Standford Seed Program. He was at MCC 12 years ago. His expertise is in agricultural development, food security, and breakout in small businesses. His best advice is “Fall in love with the problem, not your solution”

Speaker 10 is with the Soros Economic Development Fund. He has worked in Latin America, Eastern Europe, West Africa, Kenya, and The Philippines. His expertise is in last-mile investments and international development. His best advice is “Business moves at the speed of trust.”

Speaker 20 and Speaker 21 introduced each other.

Speaker 20 now serves as a Partner at Adenia. She has lived in Nigeria, the US, and Ghana. Her expertise is in consulting, investing, and controlling interests in private equity.

Speaker 21 is at Open Capital and was the CEO of the African Private Equity and Venture Capital Association. He lived in Kenya, the UK, Jacar, Nairobi, and other places in Africa. His expertise is in intellectual property, technology transfer, investment, business development, and risk capital. His best advice is “Two rules of thumb. One, life is serious. Two, it’s never that serious.”

Speaker 22 and Speaker 8 introduced each other.

Speaker 22 has worked for Palladium and is now the Executive Director for Habitat for Humanity International’s Terwilliger Center for Innovation in Shelter. His expertise is in finance, systemic banking, community problem-solving, sustainable social and economic development, and mentorship. His best advice is to “pay it forward”.

Speaker 8 had an eclectic career path and is now at PYXERA Global. His expertise is in circularity, urban development, sustainability challenges, and more.

Alex Dixon checked if anyone was missing.

Alex Dixon released everyone for a 15-minute break.

MCC Portfolio Overview – Kyeh Kim on MCC in the Africa Region

Alex Dixon introduced Kyeh Kim, the Principle Deputy Vice President and Head of the Africa Region, and Jonathan Brooks, the Deputy Vice President of Europe, Asia, the Pacific, and Latin America, who will be providing an overview of the MCC Portfolio.

Kyeh Kim showed a map of MCC’s programs across the world, historically. (See Slide 3 of “AFR Overview October 2024.pptx”). About 2/3 of MCC’s portfolio is in Africa, and over $11 billion in investment since 2004. Currently, they have $3.5 billion in their active programs, with $3.3 billion in compacts and $200 million in threshold programs.

MCC is working in 15 countries. In 2018, legislation was passed that allows “regional compacts” for the benefit of regional integration and trade. Currently, the only active regional compact is in Benin, facilitating transport between the port of Cotonou and Niamey. MCC approved a $300 million compact to create an export hub for electricity in Côte D'Ivoire tied to the West African Power Pool. They are also developing regional programs in Senegal and Cabo Verde.

Kyeh showed a snapshot of MCC has signed compacts. (See Slide 6 of “AFR Overview October 2024.pptx”). The compacts average around $400 million.

Kyeh showed the compacts currently in development. (See Slide 7 of “AFR Overview October 2024.pptx”). The Regional Côte D'Ivoire compact is expected to be signed in early 2025. MCC is also developing Regional Cabo Verde (focused on transport & the Digital Economy), Regional Senegal (focused on Blue Economy), and The Gambia (focused on Education & Transport). The project in Togo (focused on Digital & Energy) has been slowed due to democratic backsliding.

Kyeh showed two pie charts of the MCC programs by sector. (See Slide 8 of “AFR Overview October 2024.pptx”). MCC has had many compacts in Energy, Agriculture, Water and Sanitation, and others. There is a shift in the current portfolio. There are not any projects in the Water and Sanitation sector but there are more in the Energy and Transport sectors.

Kyeh opened the floor for questions.

Speaker 2 asked how many compacts have been approved in 2024, and if that number was unusual.

Kyeh said yes. 2024 has been a banner year for the MCC, driven by the selection cycle and rapid compact development. Teams worked intensely to complete programs, which absorbed all available funding. As a result, MCC currently lacks a budget buffer and is awaiting FY25 appropriations to sign the Regional Côte D'Ivoire program.

Speaker 3 highlighted that there were no compacts in Central African countries. Is this because there has been no attempt, or that any that have been attempted have failed, or did they not qualify?

Kyeh agreed. Those countries have not performed well on the MCC scorecard, specifically with control of corruption and other democracy indicators. The DRC has been working to qualify. MCC has threshold programs in Kenya and Tanzania, though there is some backsliding there. The scorecard for this year should be released in about 2 weeks. Countries that pass more than half the indicators including the control of corruption are eligible.

Speaker 3 if each country involved in regional compacts has to meet the scorecard, or if there is a different metric for regional compacts.

Kyeh said that it is the same scorecard for regional compacts.

Speaker 4 asked how MCC decides whether to go with a country or regional compact. Is regional compacts a particular strategy?

Kyeh said that countries prefer bilateral compacts focused on their domestic economy. But once a country has already had 2 bilateral compacts, they must enter a regional compact to have a 3rd compact. The regional compacts were initially cross-border infrastructure projects between two contiguous countries but now MCC looks at individual countries' ability to affect regional trade.

Speaker 5 encouraged MCC to do more regional compacts. Could the timeline be expanded by 2+ years for the regional compacts? It is unreasonable to have the same timeline.

Kyeh acknowledged that large-scale infrastructure has been a challenge with this program.

Speaker 6 would like clarification on how MCC determines which sectors to act in in a particular country. Is there a set of criteria? Is it an MCC decision or a country decision?

Kyeh said that they start with an economic analysis, which is basically a growth diagnostic: the constraints to economic growth. It was originally based on the World Bank’s HRV model. When we identify what the constraints are, then we have discussions with the country. Essentially, the country prioritizes one or two sectors, and then we go down the path of digging into the problems and identifying particular projects. Then, all our projects go through the Economic Rate of Return, which is essentially a cost-benefit analysis to ensure that we are getting the biggest bang for our buck. It is what makes MCC unique since we are always looking through an investor lens, like a business in terms of where we are going to invest our funding.

Speaker 7 noticed that there are fewer agricultural compacts in the current portfolio. Climate change affects agriculture heavily, especially in Africa. Is there a pattern in the countries’ priorities that limits agriculture compacts?

Kyeh said that agriculture often appears as a constraint (water shortages or a need to diversify), but MCC also looks at growth paths. Zambia wanted a sector with inclusive economic growth, so they chose agriculture. Also, these pie charts are based on cost, but agriculture involves many lower-cost interventions, so the dollar amounts don’t reflect what MCC is doing in the agriculture sector. Zambia, Senegal Regional, and other recent compacts focus on agriculture.

Speaker 8 asked if MCC is looking at Africa in the context of thinking through more of the regenerative business models that are emerging around, for example, urban mining instead of extractive mining, with China controlling 95% of the critical minerals on the continent? Is there a different type of platform measurement emerging, not just linked to Gross Domestic Product (GDP), but something else that’s more reflective of climate mitigation and adaptation? Looking at specific energy sectors around not just extractive but renewables. And then, when you are looking at job creation and employment and entrepreneurship opportunities, the nexus of profitable degrowth. And seeing if there is anything emerging, not just in Africa but broadly across to help us arrive at a destination within the planetary boundaries.

Kyeh answered that climate change is a big focus for MCC, particularly in infrastructure projects. With mining, MCC is in competition with China in Africa. China is also doing large-scale infrastructure in many of the same countries. Governments sometimes choose China because they may be faster and don’t have the environmental and social safeguards that MCC has. Kyeh cedes the floor to Jonathan Richard.

Jonathan Richard started by coming back to the point that Kyeh made about the early analysis in the countries. We start with the constraints to growth, we look at constraints to private sector investment, and that’s what drives the sectors of our programs and where MCC invests. When it comes to climate, we are looking at it as a cross-cutting issue across everything we do. If we are going into the transport sector, if we are going into the AG sector, if we are going into Water, we want to make sure that the infrastructure they support is resilient and contributes to the adaptation piece. We would weave it into any AG program, looking at water conservation, looking at climate-smart AG. It is more of a cross-cutting piece that they weave into everything they do as opposed to a single program. They are not seeking to pursue a compacts on rare-earth mining. He is happy to have a broader conversation and speak more on the climate side. There has been a big push across the last several years. They made a very clear commitment about Climate strategy starting 3 years ago, and they have had some great outputs on that.

Speaker 5 chimed in to say that he was a part of the team that ran the MCC in Cote D’Ivoire. It is important to mention is that it is not the MCC’s decision. It’s a collegial decision between the MCC and the government. The process that goes into the result is very interesting. From his experience in developmental institutions and from what he has seen, MCC is the best program in terms of zooming in to critical areas. He was fighting to get energy into this thing, and he tried to convince the MCC but he was unsuccessful, just because the model was not giving this. Realistically, they were also saying that if you were to compare the electricity sector in Cote D’Ivoire to their neighboring countries in Africa it would have been difficult to go through the board. The relationship between the two teams, and how you are zooming in to a collegial decision, makes a huge difference in his view.

Speaker 9 wanted material about the evaluation materials or framework used for compacts/thresholds. How does MCC think about private sector capital flows and crowding?

Kyeh said that yes, those materials can be provided. She cedes the floor to Alex Dixon.

Alex Dixon said part of his team’s focus is on where they can crowd in capital. MCC’s goal is to be a catalyst rather than a monetary fund. MCC uses its capital to cover the gaps that the private sector is uncomfortable investing in and ensure there is a sustainable platform after the compact is over. In the American Catalyst Facility for Development (ACFD) initiative, MCC sets aside grant capital to help DFC close deals that normally may not. The idea is to get the deal to financial close, knowing the project would take place after the compact is finished. MCC avoids crowding out private capital by complementing investments. For example, funding the distribution network rather than the power producers themselves. MCC also uses domestic sources for its projects.

Jonathan could share information about blended finance and the private sector later.

Speaker 1 asked about what happens when the compact closes. How does MCC make sure that the objectives of the compact are continuously met even after it has closed?

Kyeh said there is a strict 5-year timeline, unlike other developmental agencies with no-cost extensions, the timeline is very real for the MCC. Even in the design of a compact, MCC is looking at sustainability. For example, if MCC is looking at an Energy project, we look at various institutions and make sure that we are building up the capacity, and that they have the capacity, the financial resources, human resources to actually operate and maintain the assets and capital investment that MCC is providing in these programs. We continuously reinforce that through implementation as we are closing out. As an example, in our transport projects, we don’t only build roads. We also make sure there is a functional road maintenance fund for the entire road network. We build in sustainability and accountability mechanisms into the design and implementation of the program, because we are shovels down at the end of those 5 years.

Speaker 10 asked for examples of successful compacts and the ingredients of that. How much of it is the repetition of doing the same sector over again verses counterparty and country? Conversely, were there any compacts that were particular failures, if you feel comfortable sharing any of those?

Kyeh said that it depends on who you ask, but two of the compacts that she really likes are ones that leverage private sectors, so you are not just writing a check for that particular infrastructure investment. We are investing in a particular sector that is going to benefit further, and the private sector is going to invest more in that sector.

One of them is the port of Cotonou in Benin. We not only invested in Increasing the capacity of the port through various infrastructure investments, but we also work closely with the IFC to leverage private sector to come in and invest a considerable amount of funding and continue in terms of concessions with operations and maintenance of that port. As a result of MCC’s investment, the throughput increased by threefold.

The other one that Kyeh likes to talk about is Malawi energy. We invested about 350 million dollars in transmission and distribution, and a little bit on the generation side in terms of a hydro facility. There we spent a lot of time building capacity with the utility and the regulator and trying to create this enabling environment for the private sector to come in on the generation side. As a result of increasing throughput, will the transmission distribution network as well as a lot of the capacity building, trying to help with the accounting, with the utility. There were a number of private sector companies that came in and invested on the generation side. Now Malawi is having a lot of problems macroeconomically, so MCC hopes that these investments are sustained through that.

Speaker 11 was in Mozambique during the first compact. Is there a limit to how many compacts MCC is allowed to create? Is there an issue with there being many in one country, but there are countries in Central Africa that haven’t been reached yet, especially in terms of relationships and distributing capital.

Kyeh answered that there are no statutory limitations as to how many compacts we can invest in, in a particular country. However, when the organization was established in 2004, there was an understanding that we would only enter into 2 compacts per country. MCC would act as a shot into the arm of the country to spur economic growth and that two shots would be sufficient. MCC was supposed to be differentiated from USDAD who stays in a country for decades and decades. It’s a fallacy since these countries don’t develop overnight and it takes more than 2 compacts to do that. That is where the regional compact came in. This needs to be tested further and explored, especially with a new administration and Congress coming in.

As for the issue of distribution, we do have legislation on the hill right now that would expand the country candidate pool to increase the limit of the income-per-capita income cap that we have on the countries where we work. This would increase the pool of countries that MCC can work with, particularly in Europe, Asia, and Latin America. Also, we have a concentration of countries in Africa, however there is a vacuum in the middle. Again, that is determined by scorecard performance, and it is up to the countries to improve their performance in that regard.

Speaker 12 asked about the increased vulnerability in the Sahel region and the direct implications on the compacts. Has MCC looked at implications of this volatility. If the Sahel conflict exports into other countries and negatively impacts compacts in Africa. What happens if a country does not qualify for the “Democracy Delivers” part but is working to make substantive efforts on the democracy side of things. If you are looking at the pool of potential countries for future compacts in two years from now, if some of the countries no longer apply or qualify, are you looking elsewhere?

Jonathan Brooks said that MCC fundamentally prioritizes progress in governance/democracy. MCC encourages countries who are trying, but effort alone will not make them eligible.

Kyeh agreed that this is an issue. Partner countries bring up security, especially in the northern parts of Côte D'Ivoire, Ghana, Togo, Benin, etc. With governance and democracy as factors for eligibility, countries often cite security as a reason to tamp down on journalists and peaceful protests because they are worried about inciting violence. Also, countries’ security budgets have increased, leaving less money for counterpart contributions. MCC has had to pull out of countries after coups, so it is watching the upcoming elections closely.

MCC Portfolio Overview: Jonathan Brooks on MCC in Europe, Asia, the Pacific, and Latin America

Jonathan shared that MCC has $2.2 billion under “active management”. Slide 3 of “EAPLA Portfolio 10.2024.pptx” has a breakdown of the dollar amounts per region. MCC has had a larger presence in Europe and Central America but has recently moved towards Asia.

MCC programs have 3 stages: in development, signed/ pre-implementation, and implementation. Currently, 6 countries are in the portfolio, all either in pre-implementation or implementation.

The compact in Timor-Leste is signed and will start in March 2025. It is focused on Water Supply, Sanitation, & Education to reduce the spread of fecal pathogens in pipes and stored water. Timor-Leste is contributing $64 million in addition to the $420 million from the MCC.

The compact in Belize is signed. It has a $40 million counterpart contribution, in addition to the $125 million from the MCC. It is focused on Education & Electricity to help Belize transition to renewable energy and have a more transparent and clear use of its electricity energy.

In Kosovo, there is a $35 million counterpart contribution in addition to MCC’s $202 million contribution. The compact is focused on Energy to provide a reliable supply of electricity and encourage female participation in the energy sector of the economy.

In Indonesia, MCC has a Financial Services & Transportation compact, focused on financial intermediation in transport and the importance of women-owned MSMEs to the economy. MCC contributed $649 million in addition to the $50 million from the government of Indonesia.

The compact in Mongolia is a $350 million program coupled with the $112 million from the government of Mongolia, focused entirely on Water to combat an imminent water shortage due to climate change by raising the water supply by 80%.

The compact in Nepal is a $500 million program with a ~$200 million counterpart contribution on Energy & Transportation to leverage the hydro-power potential of the Himalayas via 300 km of high-powered transmission lines, serve cross-border trade, and improve road maintenance.

MCC also has threshold programs in Kiribati and the Solomon Islands and a developing program in the Philippines.

Jonathan opened the floor for any questions.

Speaker 2 said that one of the best experiences to see what MCC does in a country was in Ghana several years ago when they rode on the bush motorway. It had just been completed, and they were with a group of farmers who spoke very highly of what that meant for them when moving their products from the farm to the market. One gentleman was commenting that he didn’t know how much of the project was funded by the government of Ghana and how much was funded by the MCC. Is the cost-sharing aspect public so that citizens can see it?

Jonathan appreciated that. MCC’s transparency is a distinguishing factor when compared to China or other donors. Counterpart contribution is about the ownership that the partner countries have over the project and is important. He agrees that sharing that with the citizens of the countries is important.

Speaker 7, noted that MCC is doing another large Indonesia compact. The first one was ambitious and challenging. She noticed that there is a big focus on financial services, so that would seem to be an area where private sector involvement would be critical. Can you describe how you are approaching building access to financial services in Indonesia?

Jonathan said that the constraint identified was “financial intermediation”, which is how the capital has the most productive use in the economy. Jonathan invites Stephen Gaull, who has worked extensively on private sector participation along with the Indonesian compact, to respond to the question.

Stephen stated that MCC is doing two things in Indonesia. Firstly, for MSME finance MCC is creating an “on-lending window” to provide zero cost of capital to Financial Service Providers (FSP) who match it with their own capital to lend to MSMEs. The allocation auction favors FSPs who are willing to lend without real property collateral, reducing a barrier for women. MCC provides credit insurance to help with this change.

Secondly, for infrastructure, MCC has a $96 million financial markets development project to bring structured and project finance, capital markets, green finance, and other financing structures to Indonesia, which relies on inefficient and risky corporate finance. MCC assists in capacity building to shift from corporate to more structured finance with the goal of diversification and creating infrastructure as an asset class. Through this, MCC has The Blended Finance Delivery Mechanism (BFDM) which provides blended finance to projects that apply. PT Indonesia Infrastructure Finance receives and vets the applications according to their procedures. MCC has asked for three extra steps: economic rates of return analysis, gender and social inclusion types of analysis, and a blended finance justification. MCC aims to create something similar to the DFI Enhanced Commercial Principles.

Speaker 7 asked if the subsidy goes to the financial institution or the borrower in the first case.

Jonathan answered that it is a blending. The subsidy goes to the financial institution, but they can only access it if they put their own capital up. It will blend into a lower average cost for the consumer and incentivize the institution to cover it.

Speaker 7 clarified that it is getting capital to the targeted borrowers and Jonathan agreed.

Speaker 13 stated that counterpart contributions are important in the US as well. The impact on the economy shows up 5+ years after the compact ends. Given the political environment here in the US always mention the host country’s contribution. It is not a handout. It is both of us writing checks. She suggests that MCC should have the advisory council consider how to measure and communicate MCC’s long-term effectiveness.

Jonathan agreed. MCC’s ERR calculations are based on a 20-year impact horizon. MCC uses 3rd party impact evaluations after the compact ends for ex-post assessments of the impact.

Speaker 18 wondered how MCC handles compacts with multiple sectors.

Jonathan replied that sectors are chosen based on the constraints, a conversation with the government, and where there are opportunities to make a difference. The size of the program's investments may differ per sector, reflecting the complexity of the conversation, not the sector.

Speaker 12 noted that MCC has a partnership with NORAD. Is MCC looking at other governments to work closer with in different specific geographies?

Jonathan replied that MCC tends to collaborate with other donors on a country-to-country basis.

Public Comment/ Closing Remarks / Housekeeping

Alex thanked Jonathan, Kyeh, and everyone who asked questions. Members will receive a survey to plan the next meeting date. MCC can reimburse 1-2 hotel night stays for any members who traveled in. He acknowledges Sheena and Mike Sehzue who organized the meeting. MCC will also follow up on the co-chair position and joining subcommittees, though there is no obligation. A copy of the slides will be provided. Metrics, scorecards, and everything else are available online.

Alex asked for any public comments. There were none.

The meeting adjourned at 12:25 pm ET.

MCC Advisory Council Members Present

• Bowale Odumade Adeoye
• Thierry Tanoh
• Randall Kempner
• Hervé Assah
• Faustine Wabwire
• Dr. Ann Hudock
• Andrew Gunter
• Garron Hansen
• Manish D. Kothari
• Jeff G. Montera
• Rajesh Swaminathan
• Joan Larrea
• Daniel Tomlinson
• Ovidiu Bujorean
• Darius Teter
• Ben Matranga
• Kathyrn Karol
• Ambassador Stuart Holliday
• Nnennia Ejebe
• Milton Lore
• Roland Pearson
• John Holm
• Tracy Washington
• Nancy Lee

MCC Participants

• Alex Dixon
• Cameron Alford
• Alice Albright
• Kyeh Kim
• Jonathan Brooks
• Sheena Cooper
• Jon Richart
• Laura L Cornwell
• Stephen B Gaull
• Michael T Hamilton
• Brian A Moy
• Arif A Mamum
• Cheryl S Mpande
• Katerina S Ntep
• Rukmini Roy
• Flor K Ruiz
• Mike F Sehzue
• Morgan V Williams

Minutes prepared by: TransPacific Communications