Partnership for Global Infrastructure and Investment (PGI)
For 20 years, MCC has made investments in high-quality and sustainable infrastructure projects that meet the growing needs of partner countries without adding to their debt burdens. MCC’s large, multi-year grants enable the agency to drive policy and institutional reforms to promote sustainability while also pursuing core physical infrastructure investments that catalyze economic growth and private investment. MCC has funded $4.7 billion in infrastructure projects under compact and threshold programs signed since fiscal year 2013. The FY 2025 budget request supports PGI investments of $810 million.
MCC’s approach embraces country ownership and locally led development while leveraging key policy and institutional reforms to broaden the impact of investments and create an environment for additional investment by others. Given the size of MCC’s infrastructure portfolio and MCC’s track record of managing large infrastructure projects, MCC is well-positioned to contribute to the goals of PGI. MCC’s experience financing and building infrastructure has allowed MCC to produce systemic, impactful, and long-lasting results. For example, MCC’s $350 million compact with Mongolia supports economic growth by addressing the water shortage in Mongolia’s capital, Ulaanbaatar. The compact supports infrastructure investments in wells and advanced purification and wastewater recycling plants, alongside critical legal, regulatory, and institutional reforms. Once operational, the infrastructure and systems supported by MCC will increase the water supply to the city by 80 percent.
There are several other programs within MCC’s existing portfolio that align closely with PGI including: MCC’s $300 million compact with Lesotho, $420 million compact with Timor-Leste, $649 million compact with Indonesia, $202 million compact with Kosovo, and the $500 million compact with Mozambique. MCC is also developing several programs across PGI’s thematic areas, including programs in Sierra Leone, Togo, The Gambia, Senegal, and Zambia.
Although MCC is a small proportion of USG foreign assistance spending, MCC has a global reputation for delivering results, keeping projects on time and in budget, collaborating with partner countries, and leveraging data. This makes MCC’s grants some of the most visible and often largest USG investments in the countries where we work and aligns well with the economic growth mission that is central to PGI’s mission.
Outcompete China
MCC follows its reliable model for country selection, project development and implementation. Unlike some donors that provide predatory financing, MCC provides grant assistance for country-led development projects, transparently and without creating additional debt burden, while focused on results and investment outcomes driven by data. Among MCC’s diverse portfolio of investments, infrastructure is one of the most visible signs of MCC’s evidenced-based approach to development. Throughout Africa, Asia, the Middle East, Europe, and Latin America, MCC’s partners have directed the majority of their MCC-funded programs to closing the infrastructure gap and creating the means for communities and citizens to meet local market opportunities and compete in a global economy. Reliable roads, airports, seaports, irrigation canals, water and sanitation networks, electrical systems, schools, and health centers are the very foundation for economic growth. MCC’s support for such projects, its emphasis on democratic governance and transparency, and how MCC works collaboratively with partner governments, are emblematic of an MCC model and an approach to development that stands in contrast to China’s approach to development investments. The budget request includes discretionary funding to support MCC’s compact and threshold investments; it also includes a mandatory International Investment Fund as part of a broader outcompete China package, which would provide additional support for infrastructure funding if enacted. At least $200 million of this fund would be available to MCC to bolster its sustainable infrastructure investment efforts.
MCC is also currently working with seven country partners in the Asia-Pacific region, including the recently signed threshold programs with Solomon Islands and Kiribati. With growing Chinese interest in the Pacific islands, MCC’s partnerships strengthen relations with these island nations and represent the most substantial U.S. Government presence in these two countries.
Climate
MCC continues to work with partner countries to develop innovative climate-resilient solutions to combat poverty and help build climate-resilient economies that promote sustainable and inclusive growth, enhance resilience to future crises, reduce GHG emissions, and adapt to new climate realities. From promoting conservation activities in Mozambique or delivering low-carbon economic development models in Kosovo, to supporting countries’ efficient energy transition by expanding renewable energy in Indonesia, MCC helps many of the world’s most vulnerable communities address the impacts of climate change. Climate-resilient and otherwise sustainable investments have been a core MCC competency for years. MCC has a strong track record of integrating climate change resilience, adaptation, and mitigation considerations throughout its investment cycle. MCC has made significant progress advancing all six of the stated objectives in MCC’s climate strategy launched in 2021 and MCC’s FY 2025 budget request supports the agency’s ability to address holistically the self-determined needs of partner countries.
Inclusion and Gender
MCC launched a new Inclusion and Gender Strategy in October 2022, which aims to significantly deepen MCC’s commitment to inclusion and gender equity and equality, by routinely and systematically prioritizing and measuring the ability of poor people, women, and other marginalized groups to access, participate in or derive benefits from its investments.
In FY 2025, MCC will be increasing its ambition on inclusion and gender in an updated policy. To support the strategy, MCC has developed an Inclusion and Gender Guidance Tool, which will be applied to newly selected partners in FY 2025. These tools will support teams in efforts to proactively consider inclusion and gender at every stage of compact development.
MCC is deepening and expanding learning on how to enhance inclusion and gender in sector-specific approaches. MCC has undertaken focused work in transportation and workforce development sectors, collecting best practices and experiences, and developing new tools for teams to comprehensively address these issues in program design. In FY 2025, a suite of these tools will be finalized, and training and capacity building will be provided to teams to apply them in their sector work.
MCC has also updated its approach toward procurements to integrate a more comprehensive inclusion and gender lens. All Millennium Challenge Account (MCA) contracts already include specific requirements to meet the MCC Gender Policy, Counter-Trafficking in Persons Policy, as well as prohibitions on sexual harassment. The program guidelines for procurements have been revised to encourage female employment in non-traditional sectors, source goods from women-owned businesses, and attempt to prohibit sexual exploitation and abuse. These updates will be applied to all new procurements in FY 2025.
Programmatically, MCC continues its work to increase the number of investments that address exclusion in various sectors and focus on inclusion and addressing gender inequalities in their program logic. For example, in Belize, MCC and the government are developing an education project that will improve access to and the quality of secondary education and technical and vocation education. The project is expected to improve the quality of instruction and school direction; increase access, transition, retention, and graduation of at-risk students; address training and transitioning to work; and strengthen institutions, data, and management information systems to monitor and manage the education sector. MCC expects to sign the compact in FY 2024.
Consistent with E.O. 14035 requirements for advancing diversity, equity, inclusion, and accessibility (DEIA) in the federal workforce, MCC has also been taking actions to further elevate DEIA within the agency. In May 2022, MCC publicly released its DEIA Strategic Plan. The plan outlines an integrated approach to advancing DEIA by embedding it into the agency’s mission, human capital strategy, corporate goals, and workstreams. To implement this plan, in FY 2024, MCC’s corporate and department goals include efforts to mitigate biases and reduce barriers to DEIA. One example includes the agency’s focus to expand MCC’s recruiting outreach to diverse professional networks via the MCC Roadshow program, HR recruitment and career fairs, and leveraging various federal government sponsored fellowship programs.
Transparent, Evidence-Led Investments
Since its inception in 2004, MCC has invested nearly $17 billion through more than 78 compact and threshold grants, including substantial investments in core infrastructure and policy and institutional reforms. The agency will build on its 20-year track record of working with partner countries to deliver complex, high-quality infrastructure on time, on budget, and with transparency and accountability to ensure that taxpayer funds are well-spent.
MCC’s focus on transparency and accountability for results is consistently recognized. In 2022 the Aid Transparency Index ranked MCC as the world’s most transparent bilateral donor and as fifth in the world among major development agencies. In Results for America’s 2022 Invest in What Works Federal Standard of Excellence Report, an annual scorecard of how federal agencies use evidence and data to achieve better results, MCC received the highest score of all federal agencies for the seventh consecutive year. This distinction reflects MCC having built the infrastructure necessary to efficiently and effectively use data, evidence, and evaluation in budget, policy, and management decisions. Looking ahead, the agency is poised to expand its evidence-based, cost-effective, and values-driven model to help lead U.S. government efforts on using large scale infrastructure investments and public-private partnerships to tackle the climate crisis, reverse democratic backsliding, promote inclusion and gender equity, and, ultimately, reduce poverty globally.