Millennium Challenge Corporation withdraws its US$ 480 million grant to Sri Lanka

Millennium Challenge Corporation withdraws its US$ 480 million grant to Sri Lanka

Board of Directors of the Millennium Challenge Corporation (MCC) has withdrawn the five-year US$ 480 million grant offered to the government of Sri Lanka in April 2019.

Official Press Statement

December 16, 2020

WASHINGTON, D.C., December 16, 2020 – At its quarterly meeting on December 15, the Millennium Challenge Corporation (MCC) Board of Directors selected new countries as eligible for U.S. Government grant assistance. The Board unanimously selected Sierra Leone for a new compact—MCC’s five-year grant program—to reduce poverty through targeted investments that increase economic growth. The Board also unanimously selected Kiribati for an MCC threshold program—the agency’s smaller grant program focused on policy and institutional reform. 

“I am pleased to announce MCC’s new compact partnership with Sierra Leone and new threshold partnership with Kiribati,”  MCC Chief Executive Officer Sean Cairncross  said. “Sierra Leone has been a strong threshold program partner; Kiribati has demonstrated a commitment to MCC’s eligibility criteria. We look forward to working with all of our government partners to achieve sustainable economic growth supported by country ownership and accountability to improve the lives of their citizens.”

Sierra Leone will complete its current MCC threshold program in 2021 and has demonstrated encouraging policy improvement on MCC’s scorecard. A compact will build on Sierra Leone’s continued commitment to sector reform and strong relationship with MCC.

Selecting Kiribati for a threshold program initiates MCC’s engagement with the country—Kiribati has been an important partner to the United States in the central Pacific since a treaty of friendship was signed in 1979, and this project will build upon that relationship.

In addition, the Board unanimously approved a $23 million threshold program with the Solomon Islands. This MCC threshold program aims to assist the Solomon Islands Government in addressing the country’s biggest constraints to economic growth: management of natural resources in the logging sector and insecure access to land which limits tourism investment. This program takes an innovative approach tailored to the unique landscape in the region and integrates components of MCC’s strategic priorities, such as women’s economic empowerment and blended finance.

As part of the annual selection process, MCC’s Board of Directors reselected Benin, Burkina Faso, Côte d’Ivoire, and Niger as eligible for concurrent compact programs for regional integration; Malawi, Mozambique, Timor-Leste, and Tunisia for compact development; and Ethiopia, Kenya, and The Gambia for threshold program development. The Board also reaffirmed its support for continuing compact development in Indonesia, Kosovo, and Lesotho. The Board discontinued the proposed compact with Sri Lanka.

MCC provides time-limited grants to developing countries that meet rigorous standards for good governance, from fighting corruption to respecting democratic rights, as evaluated by MCC’s scorecard. MCC takes a business-like approach, with bedrock commitments to data, accountability, and evidence-based decision making.