Amendment 0020 to MCC APS NOFO No. 95332419N0001 Conformed Copy_v20_01.31.25.pdf

MILLENNIUM CHALLENGE CORPORATION (MCC)

ANNUAL PROGRAM STATEMENT (APS)

NOTICE OF FUNDING OPPORTUNITY (NOFO) NO.: 95332419N0001

PARTNERSHIPS with MCC Program

VERSION 20 / Amendment 00201

Amendment Issued: January 31, 2025

NOFO Issue Date: March 26, 2019

NOFO Closing Date: March 31, 2027

CFDA #: 85.002 MCC Foreign Assistance for Overseas Programs

Pursuant to the Foreign Assistance Act of 1961 and the authority contained in the Millennium Challenge Act of 2003, as amended, the United States Government (USG), as represented by the Millennium Challenge Corporation (hereinafter referred to as "MCC"), is pleased to launch this Annual Program Statement (APS) No. 95332419N0001 for opportunities to support MCC in advancing our mission via partnership.

The APS facilitates a co-creative process to scope, design, and launch partnerships that leverage the unique capabilities of MCC and external entities. Partnerships enable MCC and external organizations to achieve outcomes that either party working alone could not realize. Through partnership, MCC seeks to increase the impact, scale, innovation, and sustainability of programs that advance our mission of poverty reduction through economic growth.

The purpose of this APS is to disseminate information to prospective applicants so they may develop and submit applications for MCC funding. Through this APS, MCC and external organizations can discuss their respective objectives and goals, determine how those interests align, and jointly identify ways to leverage and combine resources via partnership. This APS: (A) describes the types of activities for which applications will be considered; (B) describes the funding available and the process and requirements for submitting applications; (C) explains the criteria for evaluating applications; and (D) refers prospective applicants to relevant documentation available on the internet.

MCC is seeking concept papers for the following partnership opportunities (see Section A.6. for details related to each opportunity):

1. Empowering African Women through Data Skills – Due Date: Closed

2. Environmental Economics Partnership – Due Date: Closed

3. Women’s Entrepreneurship Partnerships – Due Date: Closed

4. Collaborative for Data Science in Africa – Due Date: Closed

5. Geospatial and Earth-Observation Analyses for Africa – Due Date: Closed

1 Any amendments that change the terms of this NOFO or the associated Partnership Opportunity Statements will be highlighted in an updated copy of the NOFO as part of the amendment package in grants.gov. It is MCC’s intent to ensure that the version of the NOFO posted on Grants.gov at any point in time captures all changes and updates made to date.

UNCLASSIFIED

6. Strengthening Evidence and Economic Modeling Partnership – Due Date: Closed

7. Fiscal Analysis Partnership – Due Date: Closed

8. Community Engagement to Achieve Social License Agreements with Tourism Investors in the

Solomon Islands – Due Date: Closed

9. Increasing Access to Rural Infrastructure – Due Date: Closed

10. Women’s Data Lab and Network (WDLN) project in Côte d’Ivoire – Due Date: Closed

11. Partnership on Integrated Environmental-Economic Modeling – Due Date: Closed

12. Shared learning agenda and multistakeholder collaboration in the areas of financial inclusion for

MSMEs and transportation infrastructure in Indonesia – Due Date: Closed

13. Nature-based Solutions Manual of Practice Partnership – Due Date: Closed

14. Tanzania Trade Facilitation Partnership – Due Date: February 3, 2025 at 12:00pm ET Closed

15. Urbanization and Growth Constraints Partnership – Due Date: February 19, 2025 at 12:00pm ET

To be eligible for award, the applicant must provide all information and be fully responsive to all directions as required under this APS and meet eligibility standards in Section C. Eligibility Information.

This funding opportunity is posted on www.grants.gov, and may be amended. Interested applicants should check the website regularly to ensure they have the latest information pertaining to this Annual Program Statement.

Issuance of this NOFO neither constitutes a binding commitment on the part of the Government to issue an award nor commits the Government to pay for costs incurred in the preparation and submission of any concept papers, engagement, collaboration, co-creation, or full applications. MCC solely reserves the right to fund any or none of the applications submitted under this APS.

We hope you will consider responding to the partnership opportunity statements contained in this APS.

Sincerely, Jacqueline H. Naranjo Agreement Officer http://www.grants.gov/

Table of Contents

ACRONYMS

A. PROGRAM DESCRIPTION

A.1. AUTHORIZING LEGISLATION

A.2. OVERVIEW OF THE MILLENNIUM CHALLENGE CORPORATION (MCC)

A.3. INTRODUCTION

A.4. ANNUAL PROGRAM STATEMENT DESCRIPTION

A.5. OVERVIEW OF THE APS PROCESS

A.6. PARTNERSHIP OPPORTUNITY STATEMENTS

B. FEDERAL AWARD INFORMATION

B.1. ANTICIPATED NUMBER AND TYPE OF AWARDS

B.2 ANTICIPATED PERIOD OF PERFORMANCE FOR NEW AWARDS

B.3. SUBSTANTIAL INVOLVEMENT

B.4. ANTICIPATED AWARD BUDGETS

C. ELIGIBILITY INFORMATION

C.1. ELIGIBLE APPLICANTS

C.2. COST SHARE OR MATCHING

C.3. LEVERAGE FUNDING

C.4. PROFIT OR FEE UNDER ASSISTANCE AWARDS

D. APPLICATION AND SUBMISSION INFORMATION

D.1. APS DOCUMENT INFORMATION

D.2. APPLICATION SUBMISSION REQUIREMENTS

D.3. STAGE I – CONCEPT PAPER PRE-APPLICATION SUBMISSION

D.4. STAGE III – TECHNICAL APPLICATION SUBMISSION FORMAT AND CONTENT

D.5. STAGE III – BUSINESS/COST APPLICATION AND OTHER RELEVANT INFORMATION

D.6. UNIQUE ENTITY IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT (SAM)

D.7. FUNDING RESTRICTIONS

E. APPLICATION REVIEW INFORMATION

E.1. APPLICATION EVALUATION REVIEW PROCESS

E.2. MERIT REVIEW CRITERIA

E.3. COST EVALUATION (STAGE III ONLY)

E.4. ADDITIONAL CONSIDERATIONS FOR AWARD (STAGES I AND III)

F. FEDERAL AWARD ADMINISTRATION INFORMATION

F.1. AWARD NOTICES

F.2. QUESTION SUBMISSIONS

F.3. PRE-AWARD RESPONSIBILITY DETERMINATION AND RISK ASSESSMENT

F.4. AWARD ADMINISTRATION

F.5. PROGRAM INCOME

F.6. BRANDING AND MARKING

F.7. REPORTING

G. FEDERAL AGENCY POINTS OF CONTACT

G.1. EMAIL ADDRESS FOR QUESTIONS AND APPLICATION SUBMISSIONS

G.2. MCC APS POINTS OF CONTACT (POCs)

H. OTHER INFORMATION

H.1. BACKGROUND INFORMATION REGARDING ANNUAL PROGRAM STATEMENTS AT MCC .

H.2. KEY WEBSITES, APPLICABLE REFERENCES AND REGULATIONS

H.3. REVIEW OF APPLICATION MATERIALS BY EXTERNAL PARTIES

H.4. DISCLAIMERS TO APPLICANTS

H.5. CLOSED PARTNERSHIP OPPORTUNITY STATEMENTS (not currently open for applications)

H.6. LIST OF ANNUAL PROGRAM STATEMENT ANNEXES

ACRONYMS

AO Agreement Officer APS Annual Program Statement CFR Code of Federal Regulations CGM Contracts and Grants Management DCO Department of Compact Operations DPE Department of Policy and Evaluation MCA Millennium Challenge Account MCC Millennium Challenge Corporation NOFO Notice of Funding Opportunity SAM System for Award Management UEI Unique Entity Identifier USG U.S. Government

A. PROGRAM DESCRIPTION

A.1. AUTHORIZING LEGISLATION

The authorizing legislation is the Millennium Challenge Act of 2003, as amended. The award will be subject to 2 CFR §200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and MCC’s Standard Provisions for Assistance Awards (see Annex A).

A.2. OVERVIEW OF THE MILLENNIUM CHALLENGE CORPORATION (MCC)

The Millennium Challenge Corporation (MCC) is a government corporation as defined in section 103 of title 5, United States Code, established by the U.S. Congress in the Millennium Challenge Act of 2003, 22 U.S.C. §7701, et seq. MCC’s mission is to provide assistance that will support economic growth and poverty reduction in carefully selected countries that demonstrate a commitment to just and democratic governance, economic freedom, and investments in their citizens.

Eligible countries develop, in coordination with MCC, a program agreement (Compact) that is then implemented in five years. MCC also supports programs to assist countries seeking to attain eligibility for Compacts by supporting targeted policy and institutional reforms (“Threshold Programs”). Our model is defined by core principles of selectivity, country ownership, transparency, and a focus on results.

MCC provides selected well-performing countries with large-scale grants, in the form of compacts, to fund country-led solutions for reducing poverty through sustainable economic growth. MCC compact and threshold programs complement other U.S. and international development programs. Countries that receive MCC assistance are referred to as “MCC Partner Countries.”

The accountable entity designated by each country to oversee implementation of its MCC-funded program is often referred to as a Millennium Challenge Account (or “MCA”). During implementation of the MCC-funded program, MCC maintains an oversight role, including a rigorous and transparent program of funds control and monitoring and evaluation. For more information on MCC, please visit www.mcc.gov.

A.3. INTRODUCTION

Partnering is widely recognized as a powerful multiplier of development impact. MCC pursues a variety of co-created and co-funded partnerships at the global and country levels that align public, private, and civil sector resources and acumen to reduce poverty and drive economic growth. Partnerships with the private sector enable businesses and institutional investors to align public and private sector funding, value chains, ecosystems, activities, and innovations with MCC and country counterpart programs.

Partnerships with academic and research institutions enable technological advancement in how MCC designs, monitors, and measures the effectiveness of programs. Partnerships with foundations enable MCC to leverage the financial investments and networks of like-minded funders to reduce risk or extend the impact of programs. Partnerships with non-governmental organizations enable MCC to align efforts to promote inclusive economic growth and strengthen national systems. MCC seeks to partner with organizations that share our goal of achieving poverty reduction through economic growth.

https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=c3a348de5af0be1685ea7424cab2c58e&mc=true&n=pt2.1.200&r=PART&ty=HTML https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=c3a348de5af0be1685ea7424cab2c58e&mc=true&n=pt2.1.200&r=PART&ty=HTML http://www.mcc.gov/

MCC is issuing this APS in order to develop partnerships2 with organizations that share compact and threshold program and MCC institutional goals and align with the needs of MCC’s current portfolio. MCC partnerships take many forms and benefit both MCC and our partner organizations by increasing our respective access to cutting-edge research, knowledge, data, technologies, networks and expertise, as well as co-funding. Partnerships can help open new markets, scale programs, drive innovation, and transform the lives of people around the world. Successful partnerships are expected to involve collaboration between MCC and partner staff and support MCC’s ability to achieve its mission and programmatic goals.

Partnerships must concentrate on priority development activities which fall within MCC’s mission of poverty reduction through economic growth and align with its core principles of results, good policies, and accountability. MCC funds activities in the public sector where the government role is clear and preeminent, but through partnership hopes to draw more broadly on non-governmental partners to stimulate additional investment and innovative development practices.

MCC recognizes that partnerships offer the possibility of promoting greater effectiveness and sustainability in programming, and thus offer an opportunity to substantially increase the impact of MCC programs. Partnerships may support program priorities and objectives through every stage of the compact and threshold cycle – selection, development, implementation, and closeout – and the organizational effectiveness of the agency.

A.4. ANNUAL PROGRAM STATEMENT DESCRIPTION

This Annual Program Statement (APS) is issued to enable MCC to advertise, receive, and consider partnership opportunities and ideas for collaboration; and to make grant and/or cooperative agreement awards in an open, fair and competitive manner for the partnership opportunity statements detailed in this announcement. The APS enables MCC and select prospective partners to co-create partnerships around shared objectives and to align effort, resources, and risk.

With this APS, MCC is soliciting interest in innovative, co-funded partnership opportunities. In determining whether to provide such funding MCC will consider the nature of the concept paper and application, available funding, and the appropriate funding mechanism.

This APS will focus on co-funded partnerships in situations where partners would require funding from MCC to engage in partnership activities. MCC aims to create partnerships via this APS that are co-created during partnership formation and highly collaborative between MCC and partner teams in their implementation. MCC encourages applicants to consider what non-financial contributions (e.g., expertise, innovations, technologies, data, networks, etc.) they would bring to a prospective partnership; as well as what forms of engagement or non-financial contributions they would need from MCC in order to make the partnership successful. Additionally, prospective partners are asked to provide cost share or matching in line with 2 CFR §200.306 as part of their application. Additional details regarding cost share requirements are found in Section C.2. Applicants are also encouraged to consider additional sources of leverage in addition to the required cost share.

2 MCC’s Policy Regarding MCC Partnerships defines a partnership as “A collaborative relationship between two or more entities -- governmental or nongovernmental – in which the partners work together to achieve a common purpose or undertake a specific task and to share risks, responsibilities, resources, competencies, and benefits, and mutually determine the goals, structure, governance, roles, and responsibilities of their collaboration.” As used in this APS, the term “partnership” is not intended to mean or be construed as a partnership as defined by law.

https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=ce2eacfce6539472b87fc6cd876f3b93&mc=true&r=SECTION&n=se2.1.200_1306

It is important to note that MCC is committed to country ownership, and some partnerships will be subject to concurrence by or engagement with MCC Country Partners. Where appropriate, MCC will support and facilitate this relationship to achieve effective and meaningful partnerships based on mutual interests and objectives. Therefore, applicants are hereby notified that concept papers and complete applications may potentially be shared with MCC Partner Countries during the co-creation and evaluation process.

This APS is designed to facilitate partnerships between MCC and external entities. MCC Partner Countries may also choose to utilize partnerships to facilitate the design or implementation of compact and threshold programs. Partner Country-led partnerships are facilitated via a separate MCA Funded Program Partnership Solicitation (PPS) process and not via this APS. Additional information about MCC and MCA partnering opportunities can be found on the “Partner With Us” page of MCC’s website (www.mcc.gov/work-with-us/partnerships).

The anticipated period for submissions under this annual program statement is 96 months. At its discretion, MCC may issue addenda or updates to this APS, such as when new partnership opportunities arise, and when existing partnership opportunities close.

A.5. OVERVIEW OF THE APS PROCESS

The APS uses a four-stage, competitive application process for partnership formation that fits within the parameters of USG assistance awards:

• Stage I: Concept

• Stage II: Co-Creation

• Stage III: Application

• Stage IV: Award

A.5.1. STAGE I: CONCEPT

Organizations are invited to review the Partnership Opportunity Statements in Section A.6 and to submit a Concept Paper in response to any/all opportunities where your organization’s capabilities and resources would align to or advance MCC’s partnership goals.

Each Partnership Opportunity Statement has a unique and defined time window for response, and MCC will review all concept papers received by the respective partnership opportunity statement due date.

Concept papers are reviewed by MCC technical teams, which are comprised of subject matter experts from MCC, and potentially other entities, including MCC Partner Country Counterparts. The technical teams will review the concept papers on a pass/fail basis and recommend to the Agreement Officer which applicant(s) should be considered for co-creation discussions (Stage II). Applicants who submit a successful Stage I – Concept Paper and who fall within the criteria set forth in this APS may be invited to participate in the next stage of the APS process. MCC may choose to advance one or more applicants (or no applicants) to co-creation for a given partnership opportunity. Details about the required format and content of the concept paper can be found under D.3. STAGE I – CONCEPT PAPER PRE-APPLICATION

SUBMISSION.

MCC will publish the name of all organizations that submit a Concept Paper on https://www.mcc.gov/work-with-us/partnerships/annual-program-statement/. MCC will not publish the http://www.mcc.gov/work-with-us/partnerships https://www.mcc.gov/work-with-us/partnerships/annual-program-statement/ actual Concept Papers. Best efforts will be made to notify applicants of the MCC’s decision regarding their Concept Paper within 90 days of receipt.

A.5.2. STAGE II: CO-CREATION

Successful applicants who pass the Concept stage will receive a notification letter inviting them to participate in the next stage of the process, Co-Creation. Co-Creation is a creative and deliberative stage where relevant teams from MCC and the prospective partner organization(s) work together to mutually shape a partnership project that could meet the objectives outlined in the Partnership Opportunity Statement.

MCC conducts separate partnership co-creation discussions with each organization that successfully moves from the Concept to Co-Creation stage, and may eventually award zero, one, or more than one awards for a given Partnership Opportunity Statement.

During Concept Paper review, MCC may determine that several concepts are worth a co-creation discussion and may contemplate combining multiple concepts. In such case, MCC may request those applicants to form a teaming arrangement (one prime and one or more subrecipients). This is not an obligatory requirement and any of the applicants may opt out of such arrangement at any time before award, at which point MCC will reassess how and whether to proceed with the next steps. Once the team has been formed, MCC will invite the collective team for co-creation. If during the co-creation process, an agreeable project is not reached with the team, MCC may request a re-arrangement of the team and/or may hold individual co-creation sessions with the applicant(s) who individually meet the criteria per subsection E.2. Merit Review Criteria. At any time in the process, MCC may also decide to not move forward with either the team arrangement or the individual applicant(s).

During co-creation, MCC and the prospective partner(s) explore the “why,” “what,” “where,” “when,” and “how” aspects of the prospective partnership to gain a clear understanding of the shared goals and resources each party will provide or facilitate. Co-creation provides an open space for brainstorming, idea sharing, innovation, dialogue, and feedback. During the co-creation session(s), MCC and invited prospective partner(s) will map prospective approaches and challenges to addressing the needs outlined in the Partnership Opportunity Statements detailed under Section A.6. MCC and invited prospective partner(s) will discuss scope and implementation strategies, potential capabilities and contributions each partner might bring to a partnership; risks and challenges to successful implementation; funding and cost sharing expectations, and the envisioned benefits of and approaches to a potential partnership.

The co-creation process may be completed in a single, day-long (or multiple days-long) workshop; or progress over a series of shorter technical conversations between MCC and the prospective partner(s).

MCC prefers that co-creation include at least one in-person design session at the MCC Headquarters in Washington, DC, though co-creation may also be conducted at a prospective partner’s location, an alternate location, or virtually, as mutually agreeable to the parties.

Following Co-Creation, MCC will decide whether to invite one or more organizations to submit a full technical application as well as a cost application in Stage III: Application. If a mutually agreeable, compelling vision is not arrived at during the Co-Creation stage, MCC will notify the applicant accordingly and the process will end for that applicant.

MCC will publish the name, point of contact, and point of contact email address for all organizations that are invited to Co-Creation on https://www.mcc.gov/work-with-us/partnerships/annual-program-statement/. MCC will not publish a summary of, nor information shared during co-creation discussions.

A.5.3. STAGE III: APPLICATION

Successful applicants who pass the Co-Creation stage will be invited to submit a technical and cost application as part of Stage III. When the Agreement Officer notifies the prospective partner that they are invited to Stage III, if applicable, MCC will clarify pre-award requirements and any additional instructions and criteria for full application submissions, beyond those detailed under SECTION D.

APPLICATION AND SUBMISSION INFORMATION below. After receipt of the full application package, additional clarifications/negotiations regarding the technical and cost application and/or the terms of the award may be necessary.

Applications are reviewed by MCC technical teams, which are comprised of subject matter experts from MCC, and potentially other entities including MCC Partner Country Counterparts. The technical teams will review the applications and recommend to the Agreement Officer which applicant(s) should be considered for award. The Selection Committee can recommend all, some, or no applications for award.

MCC can eventually issue more than one award if funds are available and partnership objectives align;

there does not need to be only one winner.

Though co-creation should provide ample insight for both MCC and the prospective partner(s) about the goals, governance, milestones, funding, and implementation plan for a given partnership, MCC reserves the right to invite Applicants to make pre-award oral presentations and teleconferences in support of their applications, and also may request to interview the Applicant’s proposed key personnel.

A.5.4. STAGE IV: AWARD

Once MCC has decided to proceed with the award of a cooperative agreement or grant to an external organization based on the results of the Application stage, MCC will work with counterparts from the prospective partner organization to negotiate any unique terms and conditions, finalize and sign the award agreement, and announce the partnership.

MCC will publish the name, point of contact, and point of contact email address for all organizations that receive awards via the APS process on https://www.mcc.gov/work-with-us/partnerships/annual-program-statement/. MCC will not publish the actual applications received from prospective partners.

MCC and the awardee(s) may also choose to announce or promote the partnership in other forums besides mcc.gov (e.g., via press releases, events/convening, etc.).

MCC will not reimburse prospective partners for any costs associated with developing concept papers, participating in co-creation, or submitting technical/cost applications.

A.6. PARTNERSHIP OPPORTUNITY STATEMENTS

MCC is currently inviting Concept Papers for the following Partnership Opportunity Statements.

Additional partnership opportunities may be added over the course of the APS announcement period and partnership opportunities will be closed and removed as MCC’s partnering interests are met.

A.6.1. PARTNERSHIP OPPORTUNITY STATEMENT #1

Empowering African Women through Data Skills

Concept Paper Due Date: CLOSED

A.6.2. PARTNERSHIP OPPORTUNITY STATEMENT #2

Environmental Economics Partnership

A.6.3. PARTNERSHIP OPPORTUNITY STATEMENT #3

Women’s Entrepreneurship Partnerships

A.6.4. PARTNERSHIP OPPORTUNITY STATEMENT #4

Collaborative for Data Science in Africa

A.6.5. PARTNERSHIP OPPORTUNITY STATEMENT #5

Geospatial and Earth-Observation Analyses for Africa

A.6.6. PARTNERSHIP OPPORTUNITY STATEMENT #6

Strengthening Evidence and Economic Modeling Partnership

A.6.7 PARTNERSHIP OPPORTUNITY STATEMENT #7

Fiscal Analysis Partnership

A.6.8 PARTNERSHIP OPPORTUNITY STATEMENT #8

Community Engagement to Achieve Social License Agreements with

Tourism Investors in the Solomon Islands

A.6.9 PARTNERSHIP OPPORTUNITY STATEMENT #9

Increasing Access to Rural Infrastructure

A.6.10 PARTNERSHIP OPPORTUNITY STATEMENT #10

Women’s Data Lab and Network (WDLN) Project in Côte d’Ivoire

A.6.11 PARTNERSHIP OPPORTUNITY STATEMENT #11

Partnership on Integrated Environmental-Economic Modeling

A.6.12 PARTNERSHIP OPPORTUNITY STATEMENT #12

Shared Learning Agenda and Multistakeholder Collaboration in the Areas of Financial Inclusion for

MSMEs and Transportation Infrastructure in Indonesia

A.6.13 PARTNERSHIP OPPORTUNITY STATEMENT #13

Nature-Based Solutions Manual of Practice Partnership

A.6.14 PARTNERSHIP OPPORTUNITY STATEMENT #14

Tanzania Trade Facilitation Partnership

Estimated Budget: $16 million Concept Paper Due Date: February 3, 2025, 12:00pm ET CLOSED

A.6.15 PARTNERSHIP OPPORTUNITY STATEMENT #15

Urbanization and Growth Constraints Partnership

Estimated Federal Budget: $200,000 Concept Paper Due Date: February 19, 2025, 12:00pm ET

Primary Goal: The goal of this partnership is to develop practical applications and data to strengthen the capacity of development agencies to assess constraints to economic growth in urban and subnational economic settings in low- and middle-income countries. Growth diagnostics and specifically constraints analyses are central to MCC’s approach. After a country is selected for either a Compact or smaller Threshold program, MCC conducts a detailed analysis to assess which factors are acting as binding constraints to economic growth and poverty reduction, hence where MCC investments would have the largest potential impacts on these outcomes. The main diagnostic tool used by MCC for the constraints analysis is the ‘HRV’ model developed by Hausmann, Rodrik and Velasco (HRV).3 Following the identification of and selection of binding constraints and subsequent root cause analysis to uncover the reasons for the constraints, projects in the relevant sectors or areas (e.g., roads, power, finance, regulation, etc.) are developed to address the constraints.

Need: Currently, there is a gap in understanding how to incorporate the urbanization process in the constraints to growth diagnostic used by MCC. Filling this gap is important given that the urban population of the developing world is expected to increase by some 2 billion people over the next 40 years.

3 https://growthlab.hks.harvard.edu/publications/growth-diagnostics-0 https://growthlab.hks.harvard.edu/publications/growth-diagnostics-0

In general, cities are thought to be fundamental to structural change and economic growth. They allow for clustering of firms and workers, leading to important agglomeration benefits and economies of scale which raise productivity and employment in manufacturing and increasingly, services as well. Except for some resource-rich countries, no economy has developed without productive urban growth.

However, many developing countries have experienced rapid urban growth without the expected gains in productivity and incomes, suggesting that agglomeration benefits are not being realized. Indeed, many cities in the developing world have been described as ‘consumption cities’ as distinguished from ‘production cities’ that capture these benefits and hence can drive economic growth. While a large body of research has improved our understanding of these processes, there remain significant gaps regarding how development agencies can diagnose whether urbanization is failing to promote development—and to assess the constraints that prevent it from doing so. These gaps encompass both analytical methodologies and data. There are two broad questions of relevance to MCC (and to other development funders and researchers):

I. When is urbanization ‘failing’ and, because of that, acting as a leading constraint on a country’s economic growth and poverty reduction (as opposed to say, a situation where unproductive agriculture is the main brake on growth)?

II. Where it is determined that unproductive urbanization is acting as a key barrier to a country’s growth and poverty reduction, what are the causes of this unproductive urbanization? Are the key constraints related to barriers to urban agglomeration benefits (e.g. involving land use, congestion, markets, etc.)? Or is productive, growth-driving urbanization being constrained by more general, i.e., national-level, factors that impinge on both the major cities and other areas (e.g., relating to electrical power, access to credit, or the regulatory environment)? How can the relative importance of these two broad classes of constraints be assessed? (And as well, how can the relative importance of individual factors within each class be assessed?)

As the above implies, there are two main steps to the diagnostic: first, assessing the fundamental question of whether unproductive urbanization is the main (or one of the main) constraints to growth;

and second, the question of what is constraining the desired productive urban growth. In both steps what is needed is the identification of appropriate tests, data, and indicators, and the provision of the identified data and indicators. Expanding MCC’s analysis of constraints to include those relevant to urban settings, this activity will help us to understand the factors that limit the development of growth-enhancing cities and the key investments that can address these constraints.

Opportunity: MCC’s analytical approach uses the unified growth diagnostic framework and methodology that was developed by Ricardo Hausmann, Dani Rodrik and Andrès Velasco at Harvard’s Growth Lab. This framework identifies the binding constraints to growth, which is key to formulating growth enhancing strategies and to implementing critical investments that promote development.4 For 20 years, MCC has successfully delivered targeted, data-driven investments to expand economic growth and reduce poverty.

At the same time, there are relatively few examples of growth diagnostic studies which assessed both national and urban level specific constraints. In this context, there is an opportunity to more fully

4 For a description of MCC’s growth diagnostics approach and links to country examples, see https://www.mcc.gov/our-impact/constraints-analysis. An urban-focused example of constraints analysis is https://assets.mcc.gov/content/uploads/constraints-analysis-kenya-2021.pdf.

https://www.mcc.gov/our-impact/constraints-analysis https://www.mcc.gov/our-impact/constraints-analysis https://assets.mcc.gov/content/uploads/constraints-analysis-kenya-2021.pdf develop appropriate growth diagnostics that are both flexible (to allow for country specific contexts) and fit well within MCC’s established growth diagnostics processes and timelines.

Against this background, the partnership provides an opportunity to expand the analysis of constraints unique to urban settings and to understand the factors that constrain the development of growth-enhancing cities and the investments that are needed to address these constraints.

The partnership would be able to capitalize on MCC’s experience in funding Compacts and Threshold programs in urban areas and assist MCC in refining its strategies and economic analysis tools and techniques. It would also be an opportunity to generate the data to apply them.

Finally, by publishing both data and analytical work, the partnership will benefit development agencies and practitioners more generally by providing tools and data for urban growth analysis and related investments that can be readily applied to many developing country settings.

Potential Scope: The partnership will be funded by MCC up to $200,000 over two (2) years, with partner(s) contributing financially in accordance with the Partner Contribution section below and through their expertise and authorship toward the following:

• Develop analytical approaches that are compatible with MCC’s established processes. It is envisioned that the methodological approach would take the form of an elaboration or extension of our current diagnostic approach, to address the two basic questions posed above.

In particular, the partner would examine how to include these urban-related diagnostics and tests of these constraints within MCC’s model framework. The work could build on analysis of urban growth constraints developed by the Brooking’s Africa Growth Initiative and Harvard’s Center for International Development, among others.

• Carry out specialized data collection and/or data compilation activities to generate cities-level data for selected MCC partner (or potential partner) low and lower-middle income countries.

Also, as needed, partner(s) would develop and deploy advanced tools using data science and analytic techniques. Regarding data, potential partner organizations may already have compiled cross-country data relevant for urban analysis as part of their core business. In other cases, potential partners may instead develop a plan to obtain the necessary data. The data will help identify issues and constraints related to economic growth as it relates to cities.

• Create city/subnational-level economic dashboard for a sample of up to three (3) MCC partner countries, which could serve as a model for future MCC country work. In addition to informing the initial diagnostics of urbanization-related growth constraints, it will, through repeated collection, also facilitate assessment of the impacts of urban-focused MCC investments.

• Publish the analysis and dashboards produced under the partnership as a global public good on the internet. Findings of the pilot country analyses using the new databases and analytical approaches will be presented as joint products of the partnership in knowledge-sharing events and disseminated through seminars, blog posts, and papers (potentially including journal articles) to a global audience.

Award Timeline:

The following table reflects milestones and anticipated timeframes for the award process related to this opportunity (timeframes are subject to change):

Milestone Estimated Timeframe

MCC issues Opportunity Statement #15 December 13, 2024

Pre-application conference call January 17, 2025

Questions or clarifications deadline January 24, 2025

Issuance of responses to questions or clarifications February 5, 2025

Concept note submission deadline February 19, 2025

Notification to applicants following MCC review of applications March 14, 2025

Co-creation April/May 2025

Request for full technical and financial application May 2025

Technical and financial application deadline June 2025

Application clarifications/negotiations July/August 2025

Selection notification August 2025

Award notification and signing August 2025

Notional Programmatic Timeline:

The following table shows expected milestones and timeframes for the programmatic activities over the two-year period of the partnership:

Milestone Estimated Timeframe

Develop analytical diagnostics approaches that are compatible with MCC’s established processes.

6 months

Carry out specialized data collection and compilation activities to generate cities-level data for the selected (2-3) low and lower-middle income countries, as well as to develop advanced tools using data science and analytic techniques.

6 months

Apply the approaches and data to selected countries (pilot studies). 6 months

Create city/subnational-level economic dashboard for a sample of MCC partner countries, which could serve as a model for future MCC country work.

3 months

Publish a methodological/framework paper, the country studies and dashboards produced under the partnership as a global public good on the web.

3 months

In addition to the activities and outputs above, it is expected that the partner will present methods and findings in one or more workshops at MCC.

Likely Locations/Countries of Operation or Application: The analytical techniques and data will be applied in an estimated two, or possibly three, country cases. Countries are selected for Compact or Threshold programs in December of each year by MCC’s Board, with three countries typically selected.

Through application of selection criteria, MCC forms Compact or Threshold agreements with developing countries that are committed to good governance, economic freedom and investing in their citizens.

MCC will work with the partner(s) on the Urbanization and Growth Constraints Project to assess the suitability of the selected countries for the urban focused analysis. (Note: MCC does not anticipate travel to these countries by the partner(s)). Regarding location, while in absolute population terms most of the increase in urbanization will take place in Asia, the largest proportionate increases will be in Africa. In fact, the UN Department of Economic and Social Affairs (2018) projects that, between 2018 and 2050, seven of the world’s 10 fastest urbanizing areas will be in Africa.

Africa’s urban population will nearly triple by 2050, adding 800 million people, the current urban population of Europe and North America combined. While cities offer the promise of high productivity and job creation, they can fail to deliver these benefits. The recent experiences of East Asia and Africa, for example, feature very different patterns of urban development. East Asian cities have largely succeeded in generating higher productivity, more jobs, and the housing and services that make cities livable, while African cities have left a large majority of their populations without formal sector jobs or adequate housing. African cities have grown more because of population growth and migration due to rural stagnation, rather than pulled by the dynamism of the urban economy. This heightens the urgency of finding the best ways to identify, and address, constraints to productive, growth-enhancing urbanization. These considerations together suggest that the focus of the partnership will be Africa, though it is possible that one of the pilot countries will be from a different region.

Ways That MCC’s Involvement Could Help Partners Achieve Public Benefits: MCC’s contributions and involvement in the urbanization partnership can significantly contribute to achieving public benefits in several ways:

• Knowledge Dissemination: MCC’s participation involves sharing insights, lessons learned, and technical expertise garnered through years of implementing development projects. This information, when incorporated into MCC programs, becomes publicly accessible knowledge.

• Capacity Building and Awareness: The partnership will allow for the incorporation of case studies and practical examples from MCC threshold and compact programs and elsewhere.

These real-world examples can serve as educational tools, raising awareness and building the capacity of stakeholders.

• Open Access to the Data and Analysis: The data, dashboard, and case studies will be publicly available through online platforms and the MCC website. This open access to methodologies, case studies and data, will benefit a wider audience interested in urbanization and constraints to growth.

• Influence on Policy and Practice: MCC compacts and threshold programs have an influence on economic policies and practices in developing countries and in the wider development community. Knowledge of how urbanization-related constraints to growth can be addressed and thus positively impact city, national, and regional prospects—and the development of tools for carrying out such an analysis—will both be utilized in MCC programs and widely shared in the development community.

Parameters for How MCC’s Funding Could Be Used: Given that the work under this partnership has both analytical and data components, it is possible for different organizations to combine in this effort, for example with one focusing on data and the other bringing deep analytical expertise.

Partner Contribution Requirement: The total amount available through the partnership from MCC is $200,000, spread over two years. Non-profit partners are expected to contribute a minimum of 25 percent ($50,000) in cost share (and for-profit partners are expected to commit a minimum 1:1 match ratio ($200,000)), as described in Section C.2 of the NOFO, “Cost Share or Matching.” The cost share requirement ensures a collaborative and shared commitment towards achieving the partnership's objectives, leveraging the strengths and resources of both parties to create impactful and sustainable outcomes.

Pre-Application Clarifications: A Pre-Application conference call will be held on January 17, 2025 from 2:00pm – 3:30pm Eastern Time. Interested parties should register for the conference call no later than January 15, 2025 by emailing Aster Mekonnen, Agreement Specialist (mekonnena@mcc.gov), mailto:mekonnena@mcc.gov

Jacqueline Naranjo, Agreement Officer (naranjoj@mcc.gov), and the Office of Strategic Partnerships (colewp1@mcc.gov) with the following information:

(1) Entity name;

(2) Attendee name(s) and title(s);

(3) Attendee email address(es); and

(4) Any questions you’d like MCC to address during the conference call.

MCC will send a meeting invite to all registrants containing a link to connect to the virtual conference.

In addition to the conference call, applicants may request clarifications on this opportunity statement by submitting their questions via email to Aster Mekonnen (mekonnena@mcc.gov) and Jacqueline Naranjo (naranjoj@mcc.gov) by January 24, 2025. MCC will respond to all questions and clarification requests by means of a Q&A amendment issued on grants.gov.

mailto:naranjoj@mcc.gov mailto:colewp1@mcc.gov mailto:mekonnena@mcc.gov mailto:naranjoj@mcc.gov

B. FEDERAL AWARD INFORMATION

B.1. ANTICIPATED NUMBER AND TYPE OF AWARDS

MCC expects that it will primarily issue cooperative agreements as a result of this NOFO; however, MCC reserves the right to issue grants if appropriate to the specific partnership opportunity. The actual number of assistance awards, if any, issued under this NOFO is subject to the number of partnership opportunities, the availability of funds, as well as the viability of full applications received. There is no predefined minimum or maximum number of awards MCC will issue via this APS. MCC reserves the right to not award any cooperative agreements or grants if that is determined to be in the best interest of the

USG.

B.2. ANTICIPATED PERIOD OF PERFORMANCE FOR NEW AWARDS

It is expected that awards resulting from this APS will have a period of performance from 12 to 60+ months. Concept papers must be submitted by the established due date indicated in Section A.6.

Complete applications must be submitted by the mutually agreed upon due date identified in Stage III of the APS process.

When feasible, it is MCC’s goal to make awards within the same fiscal year an opportunity statement is advertised. Concept papers and/or applications received under this APS, but unable to be negotiated and awarded prior to the end of the fiscal year in which they are received, may be considered for award within the following fiscal year, subject to continued availability of funds.

B.3. SUBSTANTIAL INVOLVEMENT

Should a cooperative agreement be selected as the appropriate mechanism, MCC’s involvement during the implementation of the award will be mutually-defined during the co-creation process. In general, however, MCC’s role will be to assist the recipient in achieving the supported objectives of the agreement.

B.4. ANTICIPATED AWARD BUDGETS

The budget for each award issued under this NOFO will be discussed and negotiated during the co-creation phase based on the nature and scope of the proposed partnership opportunity. During the FY18 APS cycle, MCC made seven (7) awards ranging from approximately $30,000 to $1,500,000 in Federal funding (i.e., not including cost share); the average amount of Federal funding was approximately $600,000. See Section H.1 for additional background information on MCC’s FY18 APS. MCC may share our initial federal budget for some, but not all, programs. See Section A.6.

C. ELIGIBILITY INFORMATION

C.1. ELIGIBLE APPLICANTS

Eligible applicants that may participate in this NOFO include but are not limited to:

• U.S.-based organizations

• Non-U.S.-based organizations

• For-profit entities

• Non-profit entities

An individual cannot apply as an applicant for MCC funding under this APS.

U.S. Government agencies (Federal, state and local) and host country government entities are not eligible to apply for MCC funding under this APS, neither as a prime nor as a consortium member.

Furthermore, cost applications may not contain level of effort or other related costs for host country government staff.

All applicants must be legally recognized organizational entities under applicable law. In order to be eligible to receive U.S. Government funding, organizations must meet certain requirements. While these requirements do not have to be met in order to submit a concept paper under the APS, they will need to be met if the applicant is requested to submit a full application. Details of these requirements can be found under Section D. APPLICATION AND SUBMISSION INFORMATION below.

Public or government entities of current MCC partner countries, including Millennium Challenge Accounts (MCAs), are not eligible for award consideration under this APS. However, government entities of MCC partner countries may become eligible after their Compact/Threshold Program has been formally closed for at least one year before the Phase I Concept Papers are due.

There is no limitation to the number of concept papers an applicant may submit under this APS.

C.2. COST SHARE OR MATCHING

Cost sharing or matching refers to the resources a recipient contributes to the total cost of an agreement, the portion of project or program costs not borne by the U.S. Government. Cost share may either be cash or in-kind contributions. Once committed to providing cost share and incorporation into an agreement's approved budget, the recipient is required to provide documentation showing that this obligation is met successfully. Cost Share/Matching funds proposed under this APS are pursuant to the uniform guidance under 2 CFR §200.306 – Cost sharing.

Proposed cost sharing shall be used for the accomplishment of program objectives and shall consist of allowable costs under the applicable USG cost principles. Applicants invited to submit a cost application under Stage III – Application must identify in the budget submission, a separate budget category supported by detailed line items for the cost share. Information regarding the proposed cost share should be included in the SF-424 and the Budget and Budget Notes in compliance with the cost application instructions specified under Section D. APPLICATION AND SUBMISSION INFORMATION.

https://www.ecfr.gov/cgi-bin/text-idx?SID=c16296aecfef71d582e0634cf6658cf1&node=2:1.1.2.2.1.4.29.7&rgn=div8

Cost share contributions will be reviewed as part of the cost review in Stage III – Application. Although technical criteria are paramount, cost considerations may also be a factor for award and applicants that can demonstrate a more significant cost-share contribution above the stated minimum cost share required may be considered more competitive. Applicants are reminded that committed cost share becomes a binding requirement of the award.

In case of a consortium, where two or more applicants come together to form a team, the cost share requirement (non-profit vs. for-profit) will be based on the entity status of the prime recipient, one who shall primarily manage and oversee the project.

MCC typically requires those non-profit entities applying under this NOFO to commit a minimum cost share of 25% of the Federal funding amount proposed in the cost application budget.

MCC typically requires those for-profit entities applying under this NOFO to commit a minimum 1:1 match ratio based on the Federal funding amount proposed in the cost application budget (e.g., the for-profit entity must match or exceed the Federal funding amount on a dollar-for-dollar basis).

Despite MCC’s typical requirements as noted above, the cost share or matching requirement may vary for each Partnership Opportunity Statement. In such event, the specific cost share or matching requirement will be detailed separately in the opportunity statement itself (See Section A.6).

Below are illustrative examples of the cost share and matching eligibility requirements under this APS:

Non-Profit Applicants requesting $100,000 in federal funding must propose a minimum 25% cost share contribution of $25,000 to meet the eligibility requirement for non-profit entities – resulting in a total Federal and Non-Federal award cost of $125,000:

Non-Profit APS Applicants Cost Share Requirement 25%

Federal Share: $100,000

Non-Federal Cost Share: $25,000

Total Assistance Award Amount: $125,000

For-Profit Applicants requesting $100,000 in federal funding must propose a minimum 1:1 matching contribution of $100,000 to meet the eligibility requirement for for-profit applicants – resulting in a total Federal and Non-Federal award cost of $200,000:

For-Profit APS Applicants 1:1 Matching Requirement 1:1

Federal Share: $100,000

Non-Federal Cost…