| (in millions of $) | FY 2023 Enacted | FY 2024 Annualized CR | FY 2025 Request |
|---|---|---|---|
| Total Appropriation/Request | 930.0 | 930.0 | 937.0 |
Threshold Programs |
31.0 | 51.0 | 31.0 |
MCC is requesting $31 million for threshold program assistance in FY 2025 to provide for new country selections to be made in December 2024.
Threshold programs have proven to be an effective tool to incentivize improved performance on MCC’s eligibility criteria in candidate countries and to support positive policy and institutional reforms to address binding constraints to economic growth in selected partner countries. MCC’s Board of Directors may transition developing threshold programs to compact assistance which would shift the funding need to compact assistance. Developing thresholds, including Mauritania, Philippines, and Tanzania, and new threshold selections may have opportunities to be funded through reprogramming of funds from suspended compacts that may be terminated.
Background
MCC’s threshold programs are a powerful tool to support policy and institutional reforms that address binding constraints to economic growth and advance MCC’s core mission. By focusing on policy reforms and strengthening institutions in critical sectors, threshold programs complement the “MCC Effect” created by MCC’s scorecard and allow partner countries to demonstrate, and MCC to assess, the opportunity for an impactful and cost-effective partnership. Because MCC uses the same rigorous, evidence-based approach in threshold programs as it does in compacts, these programs are designed to maximize potential systemic impact and lay the foundation for larger investments. While countries selected for threshold program assistance are not guaranteed compact eligibility, successful engagement in the development and implementation of a threshold program can yield significant advantages for a potential future compact. If a country does not become compact eligible, a threshold program can help create the conditions for additional investment from the private sector or by other donors.
Implementing Threshold Programs
In FY 2024, MCC will be implementing five threshold programs:
- The Gambia threshold program ($25 million) is supporting efforts to achieve universal energy access by 2025 through reduced frequency and duration of outages and improved governance and operational management of the national electricity utility.
- The Kenya threshold program ($60 million) aims to improve integrated transport planning, first and last mile connections to public transport, and urban planning and land use throughout the Nairobi metropolitan area. The program also contains funding to catalyze private financing for the acquisition of electric (or other low emission) buses to operate one or more lines of the bus rapid transit system.
- The Kiribati threshold program ($29 million) aims to facilitate decent and inclusive employment by building the capabilities of the Kiribati Ministry of Employment and Human Resource, strengthening worker protections and family resilience, and establishing skills camps and academic scholarships for high school youth.
- The Solomon Islands threshold program ($20 million) will promote sustainable economic development by strengthening the government’s capacity to manage inclusive tourism projects and potentially lead to entrepreneurship opportunities for women, as well as provide communities with economically viable alternatives to logging.
- The Togo threshold program ($35 million) is designed to improve citizens’ access to high quality and affordable information and communications technology (ICT) services—both mobile phone services and internet—by encouraging private sector investment, developing an independent regulatory regime, expanding service to underserved areas, and increasing the use of ICT among women and small businesses. This threshold program will also seek to expand access to formalized land through the recognition and protection of legitimate land rights in five pilot areas across the country and to develop a regulatory framework to implement the proposed new land code.
New and Developing Threshold Programs
Mauritania
Mauritania was selected in December 2022 to develop a threshold program. In consultation with civil society and the private sector, MCC and the Government of Mauritania conducted an analysis of the constraints to inclusive economic growth, and selected energy and climate change as areas for deeper analysis. The Government of Mauritania has submitted project concepts to address the root causes of both constraints. MCC expects to submit a program for the Board’s consideration by the end of 2024.
Philippines and Tanzania
Exercising MCC’s restored authority to provide threshold program assistance to countries that previously implemented a compact, the MCC Board selected two new threshold programs, the Philippines and Tanzania, in December 2023. In recent years, both the Philippines and Tanzania have demonstrated renewed commitments to advancing critical reforms to strengthen democratic governance, protect human rights, and fight corruption. MCC is working with the government of each country to identify its constraints to economic growth and poverty reduction to determine the focus of the programs.
Future Programs
The FY 2025 funding request will support programs with countries that may be selected by MCC’s Board of Directors in December 2024. The average program size for threshold programs since 2012 is approximately $31 million, and the requested funding will support threshold programs with new countries should promising candidates emerge in the annual selection process.