The projects to be financed under the recently signed Millennium Challenge Corporation (MCC) Compact agreement have been disclosed.

The agreement with Tanzania, approved last September and signed in Dar es Salaam on February 17, 2008 during Presidents George W. Bush’s historic state visit to the country, is valued at $698.1 million covering a 5 year period. This is the largest Compact ever issued by the United States through its MCC agency. The money will help Tanzania “reduce poverty and stimulate economic growth by increasing household incomes through targeted investments in transportation, energy, and water”.

Most of the money will go to transport projects ($373 million), to energy projects ($206 million), to water projects ($66 million) while $53 will be used for program administration.

The identified projects are:

a) Construction of Mainland Trunk roads:

(i) Tanga-Horohoro (68 km)

(ii) Tunduma-Sumbawanga (224 km)

(iii) Songea-Namtumbo (61 km)

(iv) Peramiho-Mbinga (78 km)

b) Improving of up to 35 km in five rural roads in Pemba Island as part of Zanzibar Rural roads component.

c) Improving aviation and public safety facilities at Mafia Island Airport.

d) Laying a new submarine electric transmission cable from the mainland to Unguja island, Zanzibar, to improve and support the existing cable that is reaching its limits in both capacity and lifespan.

e) Construction of a small hydro-power plant on the Malagarasi river and the extension of a mini-grid system in Kigoma Region.

f) Rehabilitation and extension of electricity distribution system to unserved areas in six regions identified as priority areas.

g) Improving water supply infrastructure in two cities of Dar es Salaam and Morogoro. This will involve expanding the Lower Ruvu water treatment plant capacity from 180 million liters to 270 million liters per day; and improving efficiencies in order to reduce physical leakages and commercial losses (biling, collection and theft) that cause about 60% of Dar es Salaam water to be lost before it reaches customers.

Each county signing a Compact is required to establish an entity to coordinate the implementation of the selected projects. In October of 2007 President Kikwete consequently appointed Bernard Mchomvu, a long serving Permanent Secretary and technocrat, to serve as CEO of Millennium Challenge Account-Tanzania (MCA-T). Tanzania qualified for the Compact after two years of implementing the Threshold Program that was valued at $11.15 million.