US withdraws MCC grant from Sri Lanka | Daily News

US withdraws MCC grant from Sri Lanka

The United States (US) Embassy in Colombo yesterday announced that the Millennium Challenge Corporation (MCC) has withdrawn the proposed Rs. 89 billion (USD 480 million) grant assistance to Sri Lanka.

The decision was reached during the quarterly meeting of MCC’s Board of Directors on December 15. The Sri Lankan Government previously stressed that it would not sign the MCC pact in its current shape as it contained several problematic clauses.

“The United States remains a friend and partner to Sri Lanka and will continue to assist Sri Lanka in responding to COVID and building its economy,” the US Embassy’s statement said.

“On December 15, the Millennium Challenge Corporation (MCC) board decided to discontinue the proposed Rs. 89 billion MCC development assistance grant to Sri Lanka due to lack of partner country engagement.

The Rs. 89 billion approved for Sri Lanka will be made available to other eligible partner countries in need of grant funding to pursue their economic development priorities, reduce poverty and grow their economies.

“Country ownership, transparency, and accountability for grant results are fundamental to MCC’s development model. MCC has successfully partnered with nearly 30 countries worldwide on 38 grant agreements, totalling nearly $13.5 billion.These grants have lifted millions of people from poverty by catalysing local and domestic investment,” the Embassy said.

The MCC Board of Directors has selected new countries for the programme. The MCC in a press release said ‘Sierra Leone’ has been selected for a new compact for a five-year grant programme and ‘Kiribati’ has been selected for an MCC threshold programme.

The Board has also approved a USD 23 million threshold programme with the Solomon Islands.

“The MCC’s Board of Directors has re-selected Benin, Burkina Faso, Côte d’Ivoire and Niger as eligible for concurrent compact programs for regional integration; Malawi, Mozambique, Timor-Leste, and Tunisia for compact development; and Ethiopia, Kenya and Gambia for threshold programme development. The Board also reaffirmed its support for continuing compact development in Indonesia, Kosovo, and Lesotho. The Board discontinued the proposed compact with Sri Lanka,” the MCC said in its release.