MCA Indonesia - Compact 2

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MCA Indonesia - Compact 2

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I. Introduction and Background

The Millennium Challenge Corporation (MCC) is a U.S. government corporation established in 2004. Its mission is to provide assistance that will support sustainable and inclusive economic growth and poverty reduction in carefully selected developing countries that demonstrate a commitment to just and democratic governance, economic freedom, and investments in their citizenry.

In December 2018, MCC’s Board of Directors selected Indonesia as eligible to develop a second compact. The selection reflected the strong partnership MCC and Indonesia built during the first compact. Following signature of the Indonesia Infrastructure and Finance Compact on April 13, 2023, the entity charged with implementing the compact activities, Millennium Challenge Account-Indonesia II (MCA), is currently in the pre-implementation preparation stage, prior to “Entry-Into-Force” (EIF) of the compact agreement at which time the five-year implementation period begins.

The Indonesia Infrastructure and Finance Compact consists of three projects:

• The Advancing Transport and Logistics Accessibility (ATLAS) Project will work with five provincial governments – South Sumatra, North Sulawesi, Riau, Riau Islands and Bali – to improve infrastructure planning and preparation at the sub-national level, where transport and logistics are more constrained. The resulting projects will improve access to employment opportunities for Indonesians and the accessibility of transport services for women and disabled passengers.
• The Access to Finance for Women-owned/Micro-, Small and Medium Enterprises Project aims to increase formal lending services to MSMEs, especially those owned by women. The project will also provide business training, including digital and financial literacy trainings, and technical assistance to improve credit worthiness and investment readiness.
• The Financial Markets Development (FMD) Project will provide technical assistance and blended finance grants to increase the participation of private sector or commercially oriented finance in infrastructure investments. This will help the government of Indonesia to form new partnerships and unlock existing money to fund lower-risk, high-quality infrastructure projects.

Detailed information about the MCC Indonesia Compact program is available on the MCC website (refer to Annex I: Program Description of the Compact).

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