The governments of Sierra Leone and the United States have agreed on strict criteria for the release of a $480 million grant under the Millennium Challenge Compact (MCC), aimed at stimulating economic growth and reducing poverty in Sierra Leone.

This agreement, finalized on September 27, 2024, sets out the specific requirements that Sierra Leone must meet to ensure the transparent and accountable use of these funds.

The grant, valued at $480,669,000, is intended to support economic development in Sierra Leone through initiatives such as infrastructure projects, energy sector improvements, and enhanced access to basic services. To unlock these funds, Sierra Leone must comply with the rigorous terms outlined in the Program Implementation Agreement, which focuses on financial oversight, project benchmarks, and stringent environmental and social safeguards.

The funding process involves a structured approach where Sierra Leone is required to submit periodic Disbursement Requests, providing detailed reports on project progress, financial needs, and adherence to the agreed standards. The main conditions include Governance Compliance, Environmental and Social Safeguards, and Fiscal Accountability and Progress Monitoring.

Core Conditions for Disbursement

Governance Compliance: Sierra Leone must set up a project management team responsible for overseeing MCC initiatives. This includes recruiting essential personnel and developing a financial accountability framework approved by MCC.

Environmental and Social Safeguards: Before any construction funding is approved, Sierra Leone must provide Environmental and Social Impact Assessments (ESIA) and Environmental and Social Management Plans (ESMP) that meet international criteria, such as those established by the IFC Performance Standards.

Fiscal Accountability: The financial resources will be closely monitored through dedicated accounts in both local and U.S. currencies, with anti-money laundering protocols in place. MCC retains the right to conduct audits at its discretion.

Specific Project Requirements

Transmission Backbone Project: Funding will only be provided if technical standards are met and agreements with partners like TRANSCO CLSG for data sharing are established.

Distribution and Access Project: Requires confirmation of adequate infrastructure and management strategies to ensure long-term project viability.

Power Sector Reform: Funds will be released only if electricity bill arrears are cleared and a solid reform strategy is in place.

MCC will conduct regular audits and financial reviews to monitor compliance, with the power to modify or suspend funding if conditions are not met. While the U.S. remains committed to supporting Sierra Leone’s development, the grant’s success hinges on the country’s ability to uphold these rigorous requirements, ensuring proper implementation and a meaningful impact.