31 October 2008
[Federal Register: October 31, 2008 (Volume 73, Number 212)]
[Notices]
[Page 64987-64990]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31oc08-104]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 09-01]
Notice of First Amendment to Compact With the Government of
Georgia
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
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SUMMARY: In accordance with Section 609(i)(2) of the Millennium
Challenge Act of 2003, as amended (Pub. L. 108-199, Division D), the
Millennium Challenge Corporation is publishing a summary, justification
and the proposed text of the First Amendment to Millennium Challenge
Compact between the United States of America, acting through the
Millennium Challenge Corporation, and the Government of Georgia.
Representatives of the United States Government and the Government of
Georgia plan to execute this draft text in 2008.
Dated: October 28, 2008.
Henry C. Pitney,
Deputy General Counsel, Millennium Challenge Corporation.
Summary of First Amendment to Millennium Challenge Compact With the
Government of Georgia
The Board of Directors of the Millennium Challenge Corporation
(``MCC'') has approved an amendment (the ``Amendment'') to the existing
approximately US$295.3 million, five-year Millennium Challenge Compact
between the United States of America, acting through MCC, and the
Government of Georgia (the ``Compact'').
Background
The Compact was signed September 12, 2005 and entered into force on
April 7, 2006. Compact projects focused on
[[Page 64988]]
rehabilitating infrastructure for transportation, energy, and municipal
water services and investing in small and medium enterprises outside of
Tbilisi. Currently, all Compact activities are in implementation. The
Millennium Challenge Georgia Fund (``MCG'') has disbursed over US$70
million and committed over US$200 million through signed contracts.
Scope of the Amendment
MCC proposes to make up to US$100 million in additional funding
available under the Compact. The proposed additional funding is
necessary to complete works contemplated by the original Compact in the
Roads, Regional Infrastructure Development and Energy Activities. Due
to cost overruns and a declining dollar, MCC cannot fully fund these
projects as originally contemplated by the Compact.
Reasons for the Amendment
The Compact Amendment will allow for the completion of the Road
Rehabilitation Activity as set forth in the Compact. The Amendment will
also permit the expansion of the Regional Infrastructure Development
(``RID'') Activity and the Energy Activity in ways consistent with the
original Compact. Additionally, furthering MCC's investment in Georgia
can boost investor confidence and contribute to economic stability.
Such effects, together with the direct impacts of the original Compact,
promote Georgia's economic growth and assist the millions of Georgians
who live in poverty.
A. Road Rehabilitation Activity
Approximately US$60 million of the additional funding would be used
to build three sections of road that, although originally contemplated
by the Compact, could not be constructed because of cost overruns and a
shortage of funds. Those sections will fully connect the Samtskhe-
Javakheti region to Turkey and Central Georgia and will upgrade a road
to the principal tourist attraction in the region.
B. Regional Infrastructure Development Activity
The RID is an investment facility authorized to fund improvements
to municipal infrastructure. Approximately US$26 million will be made
available to the RID to make up for funds that were previously
reallocated to the Road Rehabilitation Activity and adjust for the
decline of the dollar. Approximately US$18.5 million will be used to
complete the Borjomi and Kobuleti water systems by building waste water
networks. A municipal water system is made up of several components: A
water supply, a potable water network, a waste water treatment plant
and a waste water network. MCC had already committed to rehabilitate
the water supplies and potable water networks. The European Bank for
Reconstruction and Development and other donors have agreed to finance
the waste water treatment plants. The additional funding will permit
MCC to finish these water projects in their entirety. Approximately
US$5 million will be used to further complete rehabilitation of the
Kutaisi potable water system. MCC has already committed to rehabilitate
the pumps, the pipeline transmitting water to Kutaisi and the water
distribution network in a portion of the city. The additional funds
will permit rehabilitation of the distribution network in more of the
city. The remaining funds will be used to fund feasibility studies and
designs for future funding by donors.
C. Energy Activity
The Compact provided US$5 million to ``support the Ministry of
Energy to further develop and implement its energy sector strategy,
including * * * providing technical and feasibility studies.'' An
initial feasibility study has already begun focusing on underground gas
storage--a critical element to Georgia's energy security and strategy
to reduce seasonal fluctuations in gas prices. The additional US$13
million permits MCC to finish a full economic, geological and
environmental study, technical design and public/private financing plan
for the gas storage facility and associated infrastructure.
First Amendment to Millennium Challenge Compact Between the United
States of America Acting Through the Millennium Challenge Corporation
and the Government of Georgia; First Amendment to Millennium Challenge
Compact
This First Amendment To Millennium Challenge Compact (this
``Amendment''), dated as of [--------], 2008 is made by and between the
United States of America, acting through the Millennium Challenge
Corporation, a United States government corporation (``MCC''), and the
Government of Georgia (the ``Government'') (each referred to herein
individually as a ``Party'' and collectively, as the ``Parties''). All
capitalized terms used in this Amendment that are not otherwise defined
herein have the meanings given to such terms in the Compact (as defined
below).
Recitals
Whereas, the Parties entered into that certain Millennium Challenge
Compact by and between the United States of America, acting through
MCC, and the Government, on September 12, 2005 (the ``Compact''),
pursuant to which MCC granted to the Government, subject to the terms
and conditions of the Compact, an amount not to exceed Two Hundred
Ninety-Five Million Three Hundred Thousand United States Dollars
(US$295,300,000) for a program to reduce poverty through economic
growth in Georgia;
Whereas, MCC now desires to grant additional funding to the
Government in an amount not to exceed One Hundred Million United States
Dollars (US$100,000,000) to cover shortfalls in the original budget for
the Projects and allow completion of the Projects as originally
contemplated by the Compact (the ``Additional Funding''); and
Whereas, the Parties desire to amend certain parts of the Compact
as more fully described herein to memorialize the Additional Funding;
Now, Therefore, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Compact, the
Parties hereby agree as follows:
Amendments
1. Amendment to Section 2.1(a)
Section 2.1(a) (MCC's Contribution) of the Compact is amended and
restated to read as follows:
``(a) MCC's Contribution. MCC hereby grants to the Government,
subject to the terms and conditions of this Compact, an amount not to
exceed Three Hundred Ninety-Five Million, Three Hundred Thousand United
States Dollars (US$395,300,000) (``MCC Funding'') during the Compact
Term to enable the Government to implement the Program and achieve the
Objectives.''
2. Amendment to Section 5.1
Section 5.1 (Communications) of the Compact is amended by (i)
deleting the text that reads ``E-mail: lashanidze@mcg.ge'' from the
notice information for Millennium Challenge Georgia Fund (``MCG'') and
(ii) replacing the notice information for MCC with the following:
``To MCC: Millennium Challenge Corporation, Attention: Vice
President, Compact Implementation, (with a copy to the Vice President
and General Counsel), 875 15th Street, NW., Washington, DC 20005,
United States of America, Telephone: +1 (202) 521-3600, Facsimile: +1
(202) 521-3700, E-mail: VPImplementation@mcc.gov (Vice
[[Page 64989]]
President, Compact Implementation); VPGeneralCounsel@mcc.gov (Vice
President and General Counsel)''.
3. Amendment to Section 5.2
Section 5.2 (Representatives) of the Compact is amended by deleting
the phrase ``Vice President for Country Programs'' from the first
sentence thereof and replacing it with ``Vice President, Compact
Implementation.''
4. Amendment to Section 5.11
Section 5.11 (Signatures) of the Compact is amended by deleting the
phrase ``or an amendment to this Compact pursuant to Section 5.3'' from
the first sentence thereof.
5. Amendment to Exhibit A
Exhibit A (Definitions) of the Compact is amended by amending and
restating the definitions of ``Compact,'' ``MCA'' and ``Principal
Representative'' appearing therein to read as follows:
``Compact means the Millennium Challenge Compact made between the
United States of America, acting through the Millennium Challenge
Corporation and the Government of Georgia, as amended or otherwise
modified from time to time.''
``MCA means the Millennium Challenge Account.''
``Principal Representative shall have has the meaning set forth in
Section 5.2.''
6. Amendment to Schedule 1 to Annex I
Schedule 1 to Annex I (Regional Infrastructure Rehabilitation
Project) of the Compact is amended by amending and restating Section
2(a)(i) thereof to read as follows:
``(i) Sub-Activities. MCC Funding will be used to rehabilitate or
construct, as applicable, the road sections set out below (the
``Project Road''), as well as (1) rehabilitate and improve existing
bridges along the Project Road alignment, (2) improve existing drainage
facilities along the road alignment, (3) provide road safety features,
and (4) provide local access and ancillary structures:
(A) Teleti-Koda-Tsalka;
(B) Tsalka-Ninotsminda;
(C) Ninotsminda--the Armenian border;
(D) Akhalkalaki--the Turkish border; and
(E) Khertvisi to Vardzia.''
7. Amendment to Exhibit A to Annex II
Exhibit A to Annex II (Multi-Year Financial Plan) of the Compact is
amended by inserting a new table at the end thereof to read as set
forth in Attachment I to this Amendment, which table sets forth the
allocation of the Additional Funding and supplements the information
contained in Exhibit A to Annex II.
General Provisions
8. Further Assurances
Each Party hereby covenants and agrees, without necessity of any
further consideration, to execute and deliver any and all such further
documents and take any and all such other action as may be reasonably
necessary or appropriate to carry out the intent and purpose of this
Amendment.
9. Effect of This Amendment
From and after the Amendment Effective Date (as defined below), the
Compact and this Amendment shall be read together and construed as one
document, and each reference in the Compact to the ``Compact,''
``hereunder,'' ``hereof'' or words of like import referring to the
Compact, and each reference to the ``Compact,'' ``thereunder,''
``thereof'' or words of like import in any Supplemental Agreement or in
any other document or instrument delivered pursuant to the Compact or
any Supplemental Agreement, shall mean and be construed as a reference
to the Compact, as amended by this Amendment.
10. Limitations
Except as expressly amended by this Amendment, all of the
provisions of the Compact remain unchanged and in full force and
effect.
11. Amendment Effective Date
This Amendment shall enter into force on the date of the last
letter in an exchange of letters between the Principal Representatives
of each Party confirming that each Party has completed its domestic
requirements for entry into force of this Amendment (including as set
forth in Paragraph 12) and that all conditions set forth in Paragraph
13 have been satisfied by the Government and MCC (the ``Amendment
Effective Date'').
12. Domestic Requirements
Promptly after the conclusion of this Amendment, the Government
shall proceed in a timely manner to seek domestic ratification of this
Amendment as necessary or required by the laws of Georgia, or similar
domestic requirement, in order that: (a) This Amendment shall be
considered an international agreement under Georgian law, (b) each of
the provisions of this Amendment is valid, binding and in full force
and effect under the laws of Georgia and (c) the Compact, as amended
hereby, continues to be an international agreement and valid, binding
and in full force and effect under the laws of Georgia. Notwithstanding
anything to the contrary in this Amendment, this Paragraph 12 shall
provisionally apply prior to the Amendment Effective Date.
13. Condition Precedent to Amendment Effective Date
As conditions precedent to this Amendment entering into force, the
Government shall deliver:
(a) A certificate signed and dated by the Principal Representative
of the Government, or such other duly authorized representative of the
Government acceptable to MCC, that:
(i) Certifies that the Government has completed all of its domestic
requirements for this Amendment to be fully enforceable under Georgian
law; and
(ii) Attaches thereto, and certifies that such attachments are,
true, correct and complete, copies of all decrees, legislation,
regulations or other governmental documents relating to its domestic
requirements for this Amendment to enter into force and the
satisfaction of Paragraph 12, which MCC may post on its Web site or
otherwise make publicly available.
(b) A written statement as to the incumbency and specimen signature
of the Principal Representative executing this Amendment, such written
statement to be signed by a duly authorized official of the Government
other than the Principal Representative.
14. English Language
This Amendment is prepared and executed in English and, in the
event of any ambiguity or conflict between this official English
version and any translation into any language made for the convenience
of the Parties, this official English version shall prevail.
15. Governing Law
The Parties acknowledge and agree that this Amendment is an
international agreement entered into for the purpose of amending the
Compact and as such will be interpreted in a manner consistent with the
Compact and will be governed by the principles of international law.
16. Counterparts
This Amendment may be executed in counterparts, each of which shall
constitute an original, but when taken together, shall constitute one
instrument.
[[Page 64990]]
17. Provisional Application
Upon signature of this Amendment, the Parties will provisionally
apply this Amendment until the Amendment Effective Date.
In Witness Whereof, the undersigned, duly authorized by their
respective governments, have signed this Amendment as of the date first
written above and this Amendment shall enter into force in accordance
with the terms hereof.
Attachment I Supplement to Exhibit A to Annex II of the Compact
Additional Funding
[USD $ million]
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Component Year 1 Year 2 Year 3 Year 4 Year 5 Total
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1. Regional Infrastructure
Rehabilitation Project:
(a) Road Rehabilitation N/A............ N/A............ 3.00 18.00 39.00 60.00
Project Activity.
(b) Regional Infrastructure N/A............ N/A............ 1.30 7.80 16.90 26.00
Development Project Activity.
(c) Energy Rehabilitation N/A............ N/A............ 0.65 3.90 8.45 13.00
Project Activity.
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Sub-Total................. N/A............ N/A............ 4.95 29.70 64.35 99.00
4. Program Administration and
Control:
(c) Fiscal and Procurement N/A............ N/A............ 0.20 0.40 0.40 1.00
Management.
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Total Estimated MCC N/A............ N/A............ 5.15 30.10 64.75 100.00
Contribution.
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[FR Doc. E8-26090 Filed 10-30-08; 8:45 am]
BILLING CODE 9211-03-P
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