Compact Changes

Several months after the Russia-Georgia conflict, the MCG received an additional $100 million in MCC funding as part of an overall United States effort to support Georgia, bringing the compact total to $395.3 million. This increase allowed MCG to complete works in the Roads, Regional Infrastructure Development, and Energy Rehabilitation Activities contemplated by the original compact, as well as covered additional costs resulting from the dramatic, global rise in oil and construction prices. By the end of the compact, $98,199,714 was added to the Regional Infrastructure Rehabilitation Project, $4,540,800 was added to the Enterprise Development Project, and $7,489,381 was removed from Program Administration and $3,372,613 from Monitoring & Evaluation activities.
The RID Activity was originally designed to be an infrastructure project preparation and financing facility, in which compact-funded grants would finance 35 percent, up to $7 million, of a limited number of individual municipal infrastructure investment projects, up to a total of $60 million. The RID Activity’s original design sought to encourage leveraged financing and a limited number and type of municipal infrastructure projects. However, large scale water systems were identified as a priority during the consultative process after entry into force, and the GoG also had feasibility studies for these systems already completed through other donor funding, which was important taking into account MCC’s five-year model. Due to this, sixteen months into the compact, MCC lifted the funding cap to allow for a higher proportion of compact funding, for fewer projects, and focused all RID investment in the water supply and irrigation sectors.