GOH Approves MCC Compact and Creates MCA-Honduras

UNCLAS TEGUCIGALPA 001841

SIPDIS

STATE FOR WHA/CEN, WHA/EPSC AND EB/EPPD
TREASURY FOR DDOUGLASS
COMMERCE FOR MSIEGELMAN AND AVANVUREN
STATE PASS USAID FOR LAC/CAM

E.O. 12958: N/A
TAGS: ECON EAID EAGR KMCA HO
SUBJECT: GOH Approves MCC Compact and Creates MCA-Honduras



1. On August 26, the Honduran National Assembly approved the
MCC Compact and on August 30 approved the law creating MCA-
Honduras, which is the GOH legal entity that will be
responsible for implementing the MCC Program.


2. MCC staff will be working with GOH to complete the
remaining steps so that the Compact can enter into force and
the $215 million can be obligated. Under the terms of the
Compact, the Disbursement Agreement, the Procurement
Agreement and the Term Sheet (this includes terms for the
Fiscal Agent Agreement, Procurement Supervisor Agreement,
Bank Agreement, and Governance Regulations) must be
concluded prior to entry into force.


3. COMMENT: MCC expects that the Compact will enter in
force within the next month but is somewhat concerned that
the GOH is becoming increasing distracted by the election
and debt relief. Post will continue to work closely with the
GOH to ensure that this important program remains a top
priority and is implemented promptly, transparently, and
with all necessary accountability measures in place. END
COMMENT.

Williard