The USA Government has created the Millennium Challenge Corporation (MCC) with the aim to offer support and financial assistance channeled towards economic growth for those countries, which have proved in practice special devotion to development based on democratic principles and good governance. Support is offered by non-reimbursable financing of certain investments, which are identified by the beneficiary country according to efficiency criteria and maximal economic impact, and synthesized within the Program of Full Assistance COMPACT.
On November 8, 2006, the Republic of Moldova became eligible to benefit from the full funds on behalf of the Millennium Challenge Corporation. With the aim of developing the country proposal the Development Team of the Full Plan of Assistance Compact (DT COMPACT) was formed.
For the Republic of Moldova, the COMPACT Program offers a unique possibility of attaining the strategic development objectives with financial support from exterior. The success of the COMPACT Program critically depends on its technical quality, which can be ensured only in fruitful cooperation between the Government, the civil society of Moldova and the development partners.
The Government of Moldova signed on January 22, 2010 with the U.S. Millennium Challenge Corporation (MCC) a five-year economic development Compact agreement granting $262 million to Moldova. The Compact assistance will be used for investment projects in irrigation infrastructure, high-value agricultural production, and road rehabilitation.
The objective of the Compact Program is to increase incomes through increased agricultural productivity and expanded access to markets and services through improved roads.
The Program consists of:
The Transition to High Value Agriculture Project ($101.77 million): The THVA Project is expected to benefit approximately 32,000 households (or approximately 124,000 individuals), over the next 20 year by helping the increase of agricultural incomes of rural Moldovans by stimulating the production and improved marketing of high-value agricultural products, including fruit and vegetables. The project includes plans to provide reliable water for agriculture by repairing up to 11 large irrigation systems servicing 15,500 hectares. Improving access to credit for agricultural projects and a technical assistance package co-financed by the United States Agency for International Development will support related investments by farmers and entrepreneurs in the shift to higher value agriculture production, post-harvest processing, storage, and marketing.
The Road Rehabilitation Project ($132.84 million): The Project is expected to benefit approximately 78,000 households over the next 20 years. It includes repairs to a 93 kilometer section of a major highway in the northeast of the country, which is a key link for passenger travel, and for internal commerce and trade. The repairs will reduce the time and cost to transport goods and services, and will reduce losses to the national economy resulting from deteriorated road conditions.
The Compact also includes program management and oversight costs estimated at $23.85 million over a five-year timeframe, including the costs of administration, management, auditing, fiscal and procurement agent services and environmental and social oversight. In addition, the cost of monitoring and evaluation of the Compact is budgeted at approximately $3.54 million.