MCC Selection Criteria and Methodology Report FY2026

Content

ACTION:

Notice.

SUMMARY:

The Millennium Challenge Act of 2003, as amended, requires the Millennium Challenge Corporation to publish a report that identifies
the criteria and methodology that MCC intends to use to determine which candidate countries may be eligible to be considered
for assistance under the Millennium Challenge Act for fiscal year 2026. The report is set forth in full below.

(Authority: 22 U.S.C. 7707(b)(2))

Dated: October 7, 2025. Brian Finkelstein, Acting Vice President, General Counsel, and Corporate Secretary.

Millennium Challenge Corporation

Selection Criteria and Methodology Report for Fiscal Year 2026

This document explains how the Board of Directors (the Board) of the Millennium Challenge Corporation (MCC) will identify,
evaluate, and select eligible countries for fiscal year (FY) 2026. The document discusses the following:

(I) Which countries MCC will evaluate

(II) How the Board evaluates those countries

A. Overall evaluation

B. For selection of a country for a first compact

C. For selection of a country for a subsequent compact

D. For selection of a country for a concurrent compact

E. For threshold program assistance

F. A note on potential transition out of MCC's candidate pool after initial selection

This report is provided in accordance with section 608(b) of the Millennium Challenge Act of 2003, as amended (the Act), as
more fully described in Appendix A.

(I) Which countries are evaluated?

MCC evaluates the policy performance of all candidate countries and statutorily-prohibited countries by dividing them into
separate income categories for the purposes of creating “scorecards”, which utilize objective and quantitative data to measure
countries' policy performance on statutorily mandated criteria. These scorecard categories are used to account for the income
bias that occurs when countries with more per capita resources perform better than countries with fewer. Appendix B lists
all candidate countries and statutorily-prohibited countries for scorecard evaluation purposes and their income category.
In FY 2026, those scorecard evaluation income categories (1) are:

• Countries with gross national income (GNI) per capita of $2,155 or less;
• Countries with GNI per capita between $2,156 and $4,495; and
• Countries with GNI per capita between $4,496 and $7,855.

(II) How does the Board evaluate these countries?

A. Overall Evaluation

By statute, when evaluating candidate countries for compact eligibility, the Board assesses (1) performance on a set of statutorily
mandated eligibility criteria, (2) the opportunity to invest in shared prosperity and promote economic growth, and (3) the
availability of MCC funds.

(1) Policy Performance on Statutorily Mandated Eligibility Criteria

By statute, the Board relies, to the maximum extent possible, upon the best-available objective and quantifiable policy performance
indicators. These indicators evaluate country policy performance in a comparable, cross-country fashion. Comprised of 22 third-party
indicators in the statutory categories of ruling justly, encouraging economic freedom, and investing in people, MCC scorecards
are created for all candidate countries and statutorily-prohibited countries. Appendix C lists the 22 indicators that comprise
the MCC scorecards and their relationship to the statutory criteria. MCC also routinely conducts reviews of its indicators
to ensure that current indicators remain relevant, effective, and transparent in measuring the statutorily mandated eligibility
criteria. This includes the conduct of rigorous reviews to ensure MCC is employing the best data available. MCC is committed
to continue updating and revising data annually to ensure continued alignment with statutory principles and administration
priorities. To “pass” most indicators on the scorecard, a country's score on each indicator must be above the median score in its income group (as defined above for scorecard evaluation purposes). For the inflation, government accountability, and personal freedom indicators,
however, MCC has established minimum or maximum scores for “passing.” In particular, the Board considers whether a country:

• passes at least 11 of the 22 indicators,
• passes the Personal Freedom indicator; and

• passes either the Control of Corruption indicator or Government Accountability indicator.
  While satisfaction of all three aspects means a country is termed to have “passed” the scorecard, the Board also considers
  whether the country performs “substantially worse” in any one policy

  category than it does on the scorecard overall.

The mandatory passing of the Personal Freedom indicator is called the Personal Freedom “hard hurdle” on the scorecard, while
the mandatory passing of either the Control of Corruption or Government Accountability indicator is called the Control of
Corruption and Accountability “hard hurdle.” Not passing either “hard hurdle” results in not passing the scorecard overall, regardless of whether at least 11 of the 22 total indicators are
passed.

• Personal Freedom “hard hurdle:” This hurdle sets a minimum bar for personal freedom below which the Board will not consider a country for compact eligibility.
This indicator creates an incentive for countries to undertake reform, recognizes the relationship between freedom and prosperity,
and holds MCC to the high standard of working with the best governed countries.

• Control of Corruption and Accountability “hard hurdle:” Corruption in any country is an unacceptable tax on economic growth and an obstacle to private sector investment. The Control
of Corruption and Accountability “hard hurdle” helps ensure that MCC works with countries committed to combatting corruption
and strengthening transparent and accountable governance. When a candidate country only passes one of the two indicators comprising
the hurdle (instead of both), the Board closely examines the reason it is not passing one of the indicators to understand
the broader governance environment and trajectory of the country. This includes consultation with U.S. Embassy officials,
interagency partners, and other experts.

A country's scorecard performance is a key factor the Board uses to select countries for an MCC program. The Board, however,
also recognizes that even the best-available data have inherent challenges. Data gaps, real-time events versus data lags,
the absence of narratives and nuanced detail, and other data features affect each indicator. As a result, the Board uses its
judgment to interpret policy performance as measured by the scorecards. The Board also consults other sources of information
to enhance its understanding of country context (e.g., specific policy issues related to trade, U.S. business opportunities, other U.S. engagement with the country, financial sector
performance, and security/foreign policy concerns). The Board uses its judgement on how best to weigh such information in
assessing overall policy performance and making a final determination.

(2) The Opportunity To Advance America First Priorities and Invest in Shared Prosperity

Beyond the scorecards, the Board considers a range of information sources depending on the country. Examples include sources
that provide a better understanding of:

• a country's economy and business enabling environment;
• market fundamentals, trade dynamics, critical supply chains, and opportunities to facilitate U.S. business investments;
• the potential for the private sector to lead investment and growth; and
• the control of corruption and rule of law. Where applicable, the Board also considers MCC's own experience and ability to work with a country to promote investments that advance our shared prosperity, including by considering MCC's core areas of expertise and skills versus a country's needs, and MCC's capacity to work with a country.

This information provides greater clarity regarding the opportunity for MCC investments to make America safer, stronger, and
more prosperous.

(3) The Availability of MCC Funds

The Board considers the availability of funds when evaluating countries. This includes consideration of MCC's pipeline of
countries in program development, implementation, and closure. Consequently, the Board factors in MCC's overall portfolio
when making its selection decisions given current and projected funding availability.

---

The following subsections describe how the Board applies each of these three statutorily-mandated factors to: selection of
countries for compacts, selection of countries for subsequent compacts, selection of countries for the threshold program,
and selection of countries for concurrent compacts. A note follows on considerations for countries that might transition out
of MCC's candidate pool after initial selection.

B. Evaluation for Selection of a Country for a First Compact

When selecting countries for a compact, the Board looks at the statutorily-mandated aspects described in the previous section,
including a country's performance on the MCC scorecard, evidence of a country's commitment to ensuring a positive enabling
environment for economic growth and private sector investment, including for U.S. businesses, and the availability of funding.

At a minimum, the Board considers whether a country passes its scorecard. The Board also examines supporting evidence that
a country's commitment to good governance, economic freedom, and investing in its people is on a sound footing and performance
is on a positive trajectory (especially on the “hard hurdles” of Personal Freedom and Control of Corruption and Accountability),
and that MCC will have the funds to support a meaningful compact with that country. Where applicable, previous threshold program
information is also considered. For those countries currently developing or implementing a threshold program, the Board examines
the progress the country has made toward substantial implementation.

C. Evaluation for Selection of a Country for a Subsequent Compact

Section 609(l) of the Act authorizes MCC to enter into “one or more subsequent Compacts.” MCC does not consider the eligibility
of a country for a subsequent compact before the country has completed its compact or is within 18 months of compact end date.
Selection for a subsequent compact is not automatic and is intended for countries that (1) exhibit successful performance
on their previous compact(s); (2) exhibit improved policy performance on the eligibility criteria assessed by the scorecard
during the partnership; and (3) exhibit a commitment to further sector reform.

(1) Successful Implementation of the Previous Compact(s)

To evaluate any previous compact's success, the Board examines whether the compact succeeded within its budget and time limits,
in particular by looking at three aspects of each compact program:

• The degree to which there is evidence of strong political will and management capacity;

• The degree to which the country has exhibited commitment and capacity to achieve program result s; and

• The degree to which the country has implemented the compact in accordance with MCC's core policies and standards.

Appendix D provides details regarding the information types examined and sources used.

(2) Improved Policy Performance

The Board also expects the country to improve its overall policy performance on the eligibility criteria assessed by the

  scorecard during the partnership and to pass the scorecard in the year of selection for the subsequent compact. The Board
  considers the trajectory of a country's overall policy performance on key indicators over time.

While the Board expects the country to be passing its scorecard, the Board also examines other sources of information to understand
the nuance and reasons behind scorecard performance over time. The Board also consults other information sources to look at
policy performance over time in areas not covered by the scorecard, but that the Board deems to be important (such as trade,
U.S. business opportunities, critical supply chains, and foreign policy concerns).

(3) A Commitment To Further Sector Reform

The Board expects subsequent compacts to endeavor to tackle policy reforms necessary to unlock an identified constraint to
economic growth. Consequently, the Board considers MCC's own experience during the previous compact in considering how committed
the country is to advancing investments in shared prosperity and economic growth. This includes assessing:

• The country's delivery of policy reform during the previous compact (as described above);
• Expectations of the country's ability and willingness to continue sector policy reform in a subsequent compact;
• The opportunity to invest in shared prosperity and advance America First priorities (as outlined in A.2 above);
• The prior compact's relative success overall (as discussed above), and how well future funding can be leveraged for impact, given the country's experience in the previous compact.

D. Evaluation for Concurrent Compacts

Section 609(k) of the Act authorizes MCC to enter into one additional concurrent compact with a country if one or both of
the compacts with the country is for the purpose of regional economic integration, increased regional trade, or cross-border
collaborations.

The fundamental criteria and process for the selection of countries for such compacts remains the same as those for the selection
of countries for non-concurrent compacts: countries continue to be evaluated and selected individually, as described in sections
II.A, II.B, II.C, and II.F.

Section 609(k) also requires as a precondition for a concurrent compact that the Board determine that the country is making
“considerable and demonstrable progress in implementing the terms of the existing Compact and supplementary agreements thereto.”
This statutory requirement is consistent with prior Board practice regarding the selection of a country for a non-concurrent
compact. For a country where a concurrent compact is contemplated, the Board will take into account whether there is clear
evidence of success, as relevant to the phase of the current compact. Among other information, the Board will examine the
evaluation criteria described in Section II.C.1 above.

In addition to providing information to the Board so it can make its determination regarding the country's progress in implementing
its current compact, MCC provides the Board with additional information relating to the potential for regional economic integration,
increased regional trade, or cross-border collaborations for any country being considered for a concurrent compact. This information
may include items such as:

• The current state of a country's regional integration, such as common financial and political dialogue frameworks, integration of productive value chains, and cross-border flows of people, goods, and services.
• The current and potential level of trade between a country and its neighbors, including analysis of trade flows and unexploited potential for trade, and an assessment of the extent and significance of tariff and non-tariff barriers, including information regarding the patterns of trade.
• The potential gains from cross-border cooperation between a country and its neighbors to alleviate bilateral and regional bottlenecks to economic growth and poverty reduction, such as through physical infrastructure or coordinated policy and institutional reforms.

E. Evaluation for Threshold Program Assistance

The Board also evaluates countries for participation in the threshold program. Threshold programs provide assistance to candidate
countries exhibiting a significant commitment to meeting the criteria described in the previous subsections but failing to
meet such requirements. Specifically, in examining a candidate country's policy performance, the opportunity to advance shared
prosperity and generate economic growth, and available funds, the Board will consider whether a country appears to be on a
trajectory to becoming viable for compact eligibility in the medium or short term.

F. A Note on Potential Transition Out of MCC's Candidate Pool After Initial Selection

Some candidate countries may have a high per capita income or a high growth rate that implies there is a chance they could
transition out of MCC's candidate pool during the life of an MCC partnership. It is not possible to accurately predict if
or when such a transition may occur.

Nonetheless, such countries may have more resources at their disposal for funding their own growth. As a result, in addition
to using the regular selection criteria described in the previous sections, the Board will use its discretion to assess both
the need and the opportunity presented by partnering with such a country, in order to ensure that MCC's scarce grant funds
are directed appropriately.

Accordingly, if a candidate country with a high probability of transitioning out of MCC's candidate pool is under consideration
for selection, the Board will examine additional data and information related to:

• Whether the country faces significant challenges accessing other sources of development financing (such as international capital, domestic resources, and other donor assistance) and, if so, whether MCC grant financing would be an appropriate tool;
• Whether there is a clear and strategic opportunity for MCC to assist the country through investments that spur economic growth and shared prosperity;
• Whether the country demonstrates particularly strong policy performance; and
• Whether MCC can reasonably expect that the country would contribute a significant amount of funding to the compact. Should a country eventually transition out of MCC's candidate pool during compact development, continuing compact development beyond that point would then be at the Board's discretion.

Appendix A: Statutory Basis for This Report

This report to Congress is provided in accordance with section 608(b) of the Millennium Challenge Act of 2003, as amended
(the Act), 22 U.S.C. 7707(b).

Section 605 (22 U.S.C. 7704) of the Act authorizes the provision of assistance to countries that enter into a Millennium Challenge
Compact with the United States to support policies and programs that advance the progress of such countries in achieving lasting
economic growth and poverty reduction. The Act requires MCC to take a number of steps in selecting countries for compact assistance
for FY 2026 based on the

  countries' demonstrated commitment to just and democratic governance, economic freedom, and investing in their people, MCC's
  opportunity to reduce poverty and generate economic growth in the country, and the availability of funds. These steps include
  the submission of reports to the congressional committees specified in the Act and publication of information in the 
  Federal Register
  that identify:

(1) The countries that are “candidate countries” for assistance for FY 2026 based on per capita income levels and eligibility
to receive assistance under U.S. law and countries that would be candidate countries but for specified legal prohibitions
on assistance (section 608(a) of the Act; 22 U.S.C. 7707(a));

(2) The criteria and methodology that MCC's Board of Directors (Board) will use to measure and evaluate policy performance
of the candidate countries consistent with the requirements of subsections (a) and (b) of section 607 of the Act (22 U.S.C.
7706) in order to determine “eligible countries” from among the “candidate countries” (section 608(b) of the Act; 22 U.S.C.
7707(b)); and

(3) The list of countries determined by the Board to be “eligible countries” for FY 2026, with justification for eligibility
determination and selection for compact negotiation, including those eligible countries with which MCC will seek to enter
into compacts (section 608(d) of the Act; 22 U.S.C. 7707(d)).

This report satisfies item 2 above.

Appendix B: Lists of All Candidate Countries and Statutorily-Prohibited Countries for Evaluation Purposes

Income Groups for Scorecards

Since MCC was created, it has relied on the World Bank's gross national income (GNI) per capita income data (Atlas method) and the historical ceiling for eligibility as set by the World Bank's International Development Association
(IDA) to divide countries into separate income categories for purposes of creating scorecards. These categories are used to
account for the income bias that occurs when countries with more per capita resources perform better than countries with fewer.
Using the historical IDA eligibility ceiling for the scorecard evaluation groups ensures that the poorest countries compete
with their income level peers and are not compared against countries with more resources to mobilize. Following the passage
of the Millennium Challenge Corporation Candidate Country Reform Act in FY 2025, MCC began grouping the countries newly added
into the income pool by this legislation (countries with GNI per capita above the World Bank's lower middle income/upper middle
income country threshold but below the threshold for initiating the International Bank for Reconstruction and Development
(IBRD) graduation process) in a third group to maintain this principle of countries competing with their income peers.

In FY 2026, MCC will continue to use the historical IDA classifications for eligibility and the lower middle income/upper
middle income country threshold to categorize countries in groups for purposes of FY 2026 scorecard comparisons:

• Countries with GNI per capita equal to or less than IDA's historical ceiling for eligibility (i.e., $2,155 for FY 2026);

• Countries with GNI per capita above IDA's historical ceiling for eligibility but below the World Bank's lower middle income/upper
middle income country threshold (i.e., $2,156 and $4,495 for FY 2026); and

• Countries with GNI per capita above the World Bank's lower middle income/upper middle income country threshold but below
the threshold for initiating the IBRD graduation process (i.e., $4,496 and $7,855 for FY 2026).

The list of countries for FY 2026 scorecard assessments is set forth below:

Countries With GNI per Capita of $2,155 or Less

1. Afghanistan

2. Benin

3. Burkina Faso

4. Burundi

5. Cameroon

6. Central African Republic

7. Chad

8. Comoros

9. Congo, Dem. Rep.

10. Eritrea

11. Ethiopia

12. Gambia, The

13. Guinea

14. Guinea-Bissau

15. Haiti

16. Kenya

17. Kyrgyz Republic

18. Lao PDR

19. Lesotho

20. Liberia

21. Madagascar

22. Malawi

23. Mali

24. Mauritania

25. Mozambique

26. Myanmar

27. Nepal

28. Niger

29. Nigeria

30. North Korea

31. Pakistan

32. Rwanda

33. Senegal

34. Sierra Leone

35. Solomon Islands

36. Somalia

37. South Sudan

38. Sudan

39. Syrian Arab Republic

40. Tajikistan

41. Tanzania

42. Timor-Leste

43. Togo

44. Uganda

45. Yemen, Rep.

46. Zambia

Countries With GNI per Capita Between $2,156 and $4,495

1. Angola

2. Bangladesh

3. Bhutan

4. Bolivia

5. Cambodia

6. Congo, Rep.

7. Cote d'Ivoire

8. Djibouti

9. Egypt, Arab Rep.

10. Eswatini

11. Ghana

12. Honduras

13. India

14. Jordan

15. Kiribati

16. Lebanon

17. Micronesia, Fed. States

18. Morocco

19. Namibia

20. Nicaragua

21. Papua New Guinea

22. Philippines

23. Sao Tome and Principe

24. Sri Lanka

25. Tunisia

26. Uzbekistan

27. Vanuatu

28. Venezuela

29. Vietnam

30. Zimbabwe

Countries With GNI per Capita Between $4,495 and $7,855

1. Algeria

2. Armenia

3. Azerbaijan (2)

4. Belize

5. Botswana

6. Cabo Verde

7. Colombia

8. Ecuador

9. El Salvador

10. Equatorial Guinea

11. Fiji

12. Gabon

13. Guatemala

14. Indonesia

15. Iran, Islamic Rep.

16. Iraq

17. Jamaica

18. Kosovo

19. Libya

20. Moldova

21. Mongolia

22. Paraguay

23. Peru

24. Samoa

25. South Africa

26. Suriname

27. Thailand

28. Tonga

29. Ukraine

Statutorily-Prohibited Countries

1. Burkina Faso

2. Burma

3. Eritrea

4. Ghana

5. Guinea

6. Haiti

7. Iran

8. Mali

9. Nicaragua

10. Niger

11. North Korea

12. South Sudan

13. Sri Lanka

14. Sudan

15. Syria

16. Venezuela

17. Zimbabwe

Appendix C: Indicator Definitions

The following indicators will be used to measure candidate countries' demonstrated commitment to the criteria found in section
607(b) of the Act. The indicators are intended to assess the degree to which the political and economic conditions in a country
serve to promote broad-based sustainable economic growth and reduction of poverty and thus provide a sound environment for
the use of MCC funds. The indicators are not goals in themselves; rather, they are proxy measures of policies that are linked
to broad-based sustainable economic growth. The indicators were selected based on (i) their relationship to economic growth
and poverty reduction; (ii) the number of countries they cover; (iii) transparency and availability; and (iv) relative soundness
and objectivity. Where possible, the indicators are developed by independent sources.

Ruling Justly

1. Control of Corruption: An index of surveys and expert assessments that rate countries on: “grand corruption” in the political arena; the frequency
of petty corruption; the effects of corruption on the business environment; and the tendency of elites to engage in “state
capture,” among other things. Pass: Score must be above the median score for the income group.

2. Government Accountability: Independent experts rate countries on the prevalence of free and fair electoral processes; political pluralism and participation
of all stakeholders; government accountability and transparency; freedom from domination by the military, foreign powers,
totalitarian parties, religious hierarchies and economic oligarchies; and the political rights of all groups, among other
things. Pass: Score must be above the minimum score of 17 out of 40.

3. Personal Freedom: Independent experts rate countries on their freedom of expression and belief; association and organizational rights; rule
of law and human rights; and personal autonomy and economic rights, among other things. Pass: Score must be above the minimum
score of 25 out of 60.

4. Freedom of Information: Measures the legal and practical steps taken by a government to enable or allow information to move freely through society;
this includes measures of press freedom, national freedom of information laws, and freedom of speech as measured by the extent
to which a county is shutting down social media or the internet. Pass: Score must be above the median score for the income
group.

5. Government Effectiveness: An index of surveys and expert assessments that rate countries on the quality of public service provision; civil servants'
competency and independence from political pressures; and the government's ability to plan and implement sound policies, among
other things. Pass: Score must be above the median score for the income group.

6. Rule of Law: An index of surveys and expert assessments that rate countries on the extent to which the public has confidence in and abides
by the rules of society; the incidence and impact of violent and nonviolent crime; the effectiveness, independence, and predictability
of the judiciary; the protection of property rights; and the enforceability of contracts, among other things. Pass: Score
must be above the median score for the income group.

Encouraging Economic Freedom

1. Business Start-Up: An index that rates countries on the time and cost of complying with all procedures officially required for an entrepreneur
to start up and formally operate an industrial or commercial business as well as the overall business environment in a country.
Pass: Score must be above the median score for the income group.

2. Inflation: The most recent average annual change in consumer prices. Pass: Score must be 15 percent or less.

3. Regulatory Quality: An index of surveys and expert assessments that rate countries on the burden of regulations on business; price controls; the
government's role in the economy; and foreign investment regulation, among other areas. Pass: Score must be above the median
score for the income group.

4. Trade Policy: A measure of a country's openness to international trade based on weighted average tariff rates and non-tariff barriers to
trade. Pass: Score must be above the median score for the income group.

5. Women in the Economy: An index that measures the extent to which laws provide men and women equal capacity to generate income or participate in
the economy, including factors such as the capacity to access institutions, get a job, register a business, sign a contract,
open a bank account, choose where to live, to travel freely, property rights protections, and protections against domestic
violence, among others. Pass: Score must be above the median score for the income group.

6. Property and Land Rights: An index that rates countries on the extent to which the institutional, legal, and market framework provides secure land tenure
and access to land in rural areas and the extent to which all individuals have the right to private property in practice and
in law, including measures of intellectual property rights, risk of expropriation, and the quality of contract enforcement.
Pass: Score must be above the median score for the income group.

7. Access to Credit: An index that ranks countries based on access and use of formal and informal financial services as measured by the number
of bank branches and ATMs per 100,000 adults and the share of adults that have an account at a formal or informal financial
institution. Pass: Score must be above the median score for the income group.

8. Employment Opportunity: Measures the rights of people to work. Pass: Score must be above the median score for the income group.

9. International Market Access: Measures a country government's commitment to the free movement of capital, citizen access to international capital markets,
and the barriers to global market access through import or export controls. Pass: Score must be above the median score for
the income group.

10. Market Competitiveness: Measures a country government's commitment to strengthening market forces in the economy by promoting a business environment
that allows for innovation and open competition while limiting expropriation, and monopolies. Pass: Score must be above the
median score for the income group.

Investing in People

1. Health Expenditures: Total current expenditures on health by government (excluding funding sourced from external donors) at all levels divided
by GDP. Pass: Score must be above the median score for the income group.

2. Chronic Disease: An indicator measuring the prevalence of chronic diseases. Measures the likelihood of dying between ages 30 and 70 due to
cardiovascular disease, cancer, diabetes, or chronic respiratory disease. Pass: Score must be above the median score for the
income group.

3. Child Health: An index made up of three indicators: (i) access to improved water, (ii) access to improved sanitation, and (iii) child (ages
1-4) mortality. Pass: Score must be above the median score for the income group.

4. Natural Resource Protection: Assesses a country government's commitment to preserving biodiversity and natural habitats, responsibly managing ecosystems
and fisheries, and engaging in sustainable agriculture. Pass: Score must be above the median score for the income group.

5. Workforce Development: An indicator measuring education within the workforce. This indicator measures the proportion of youth and adults enrolled
in training, non-formal education, and formal education in the last 12 months. Pass: Score must be above the median score
for the income group.

6. Girls' Education:

a. Girls' Primary Completion Rate: The number of female students enrolled in the last grade of primary education minus repeaters divided by the population in
the relevant age cohort (gross intake ratio in the last grade of primary). Countries with a GNI/capita of $2,155 or less are
assessed on this indicator. Pass: Score must be above the median score for the income group.

b. Girls' Lower Secondary Completion Rate: Countries with a GNI/capita between $2,156 and $4,495 are assessed on the number of female pupils that have completed the
last grade of lower secondary education divided by the population within three to five years of the intended age of completion,
expressed as a percentage of the total population of females in the same age group. Pass: Score must be above the median score
for the income group.

c. Girls' Upper Secondary Completion Rate: Countries with a GNI/capita of between $4,496 and $7,895 are assessed on the number of female pupils that have completed the
last grade of upper secondary education divided by the population within three to five years of the intended age of completion,
expressed as a percentage of the total population of females in the same age group. Pass: Score must be above the median score
for the income group.

Relationship to Statutory Criteria

Within each policy category, the Act sets out a number of specific selection criteria. A

  set of objective and quantifiable policy indicators is used to inform eligibility decisions for assistance and to measure
  the relative performance by candidate countries against these criteria. Performance against each of these criteria is assessed
  by at least one of the objective indicators. Most are addressed by multiple indicators. The specific indicators appear in
  parentheses next to the corresponding criterion set out in the Act.

Section 607(b)(1): Just and democratic governance, including a demonstrated commitment to—

(A) promote political pluralism, equality and the rule of law (Government Accountability, Personal Freedom, Rule of Law, and Women in the Economy);

(B) respect human and civil rights, including the rights of people with disabilities (Government Accountability, Personal Freedom, Employment Opportunity, and Freedom of Information);

(C) protect private property rights (Personal Freedom, Regulatory Quality, Rule of Law, and Property and Land Rights);

(D) encourage transparency and accountability of government (Government Accountability, Personal Freedom, Freedom of Information, Control of Corruption, Rule of Law, Government Effectiveness,
and Employment Opportunity);

(E) combat corruption (Control of Corruption, Government Accountability, Personal Freedom, Rule of Law, and Freedom of Information); and

(F) the quality of civil society enabling environment (Personal Freedom, Freedom of Information, Employment Opportunity, and Rule of Law).

Section 607(b)(2): Economic freedom, including a demonstrated commitment to economic policies that—

(A) encourage citizens and firms to participate in global trade and international capital markets (International Market Access, Inflation, Trade Policy, and Regulatory Quality);

(B) promote private sector growth (Market Competitiveness, Inflation, Business Start-Up, Property and Land Rights, Access to Credit, Women in the Economy, and
Regulatory Quality);

(C) strengthen market forces in the economy (Market Competitiveness, Business Start-Up, Inflation, Trade Policy, Property and Land Rights, Access to Credit, and Regulatory
Quality); and

(D) respect worker rights, including the right to form labor unions (Employment Opportunity, Personal Freedom, and Women in the Economy).

Section 607(b)(3): Investments in the people of such country, particularly women and children, including programs that—

(A) promote broad-based primary education (Girls' Primary Education Completion Rate, Girls' Lower Secondary Education Completion Rate, Workforce Development, and Employment
Opportunity);

(B) strengthen and build capacity to provide quality public health and reduce child mortality (Chronic Disease, Health Expenditures, and Child Health); and

(C) promote the protection of biodiversity and the transparent and sustainable management and use of natural resources (Natural Resource Protection).

Appendix D: Subsequent and Concurrent Compact Considerations

MCC reporting and data in the following chart are used to assess threshold program performance, compact performance of MCC
compact countries nearing the end of compact implementation (i.e., within 18 months of compact end date), or for current MCC compact countries under consideration for a concurrent compact,
where appropriate. Some reporting used for assessment may contain sensitive information and adversely affect implementation
or MCC-partner country relations. This information is for MCC's internal use and is not made public. However, key implementation
information is summarized in compact status and results reports that are published quarterly on MCC's website under MCC country
programs (www.mcc.gov/where-we-work) and monitoring and evaluation (www.mcc.gov/our-impact/m-and-e) web pages.

For completed compacts, additional information is used to assess compact performance and is found in a country's “Star Report.”
The Star Report captures key information to provide a framework for results and improve the ability to disseminate learning
and evidence throughout the lifecycle of an MCC investment from selection to final evaluation. For each compact and threshold
program, evidence is collected on performance indicators, evaluation results, partnerships, sustainability efforts, and learning,
among other elements.

In addition to the Star Reports, MCC also surveys staff on topics related to the quality of the partnership during design
and implementation of programs, progress toward program results, a partner country's commitment to undertaking policy and
institutional reforms, and compliance with MCC standards. Additional information on the survey can be found in the Guide to
the Program Surveys: https://www.mcc.gov/resources/doc/guide-to-the-program-surveys/.

| Topic | MCC reporting/data source | Published documents |
| --- | --- | --- |
| Country Partnership | | |
| Political Will: | | |
| • Status of major conditions precedent.
• Program oversight/implementation.○ project restructures.○ partner response to accountable entity capacity issues. | • Quarterly implementation reporting.

           • *Quarterly results reporting*.

           • *MCC Star Reports*. | • *Quarterly results published as “Table of Key Performance Indicators” (available by country): https://www.mcc.gov/itt*.

           • *Star Reports (available by country): https://www.mcc.gov/starreport/*. |

| • Political independence of the accountable entity. | | |
| Management Capacity: | | |
| • Project management capacity. | | |
| • Project performance. | | |
| • Level of MCC intervention/oversight. | | |
| • Relative level of resources required. | | |
| Program Results | | |
| Financial Results:
• Commitments—including contributions to compact and threshold funding.• Disbursements.Project Results:• Output, outcome, objective targets.• Accountable entity commitment to `focus on results'.• Accountable entity cooperation on impact evaluation.• Percent complete for process/outputs.• Relevant outcome data.• Details behind target delays.Target Achievements. | • Indicator tracking tables.

           • *Quarterly financial reporting*.

           • *Quarterly implementation reporting*.

           • *Quarterly results reporting*.

           • *Impact evaluations*.

           • *MCC Star Reports*. | • *Monitoring and Evaluation Plans (available by country): https://www.mcc.gov/meplan/*.

           • *Quarterly results published as “Table of Key Performance Indicators”* (available by country): *https://www.mcc.gov/itt*.

           • *Star Reports (available by country): https://www.mcc.gov/starreport/*. |

| Adherence to Standards | | |
| • Fraud and corruption.
• Procurement.• Program closure.• IFC Performance Standards.• Monitoring and evaluation.• All other legal provisions. | • Audits (GAO and OIG).

           • *Quarterly implementation reporting*.

           • *MCC Star Reports*. | • *Published OIG and GAO audits*.

           • *Star Reports (available by country): https://www.mcc.gov/starreport/*. |

| Country Specific | | |
| Sustainability:
• Implementation entity.• MCC investments.Role of private sector or other donors:• Trajectory of private sector involvement going forward.• Other relevant investors/investments.• Other donors/programming.• Status of related reforms. | • Quarterly implementation reporting.

           • *Quarterly results reporting*.

           • *MCC Star Reports*. | • *Quarterly results published as “Table of Key Performance Indicators” (available by country): https://www.mcc.gov/itt*.

           • *Star Reports (available by country): https://www.mcc.gov/starreport/*. |

[FR Doc. 2025-19507 Filed 10-7-25; 4:15 pm] BILLING CODE 9211-03-P

Footnotes

(1) The first two income groups align with the definition of low income and lower middle countries using the historical International
Development Association (IDA) threshold published by the World Bank. The third category was added in FY 2025 by the passage
of the Millennium Challenge Corporation Candidate Country Reform Act and includes a subset of upper middle income countries.

(2) Following the issuance of the FY 2026 Candidate Country Report, President Trump waived the United States Freedom Support
Act Section 907 restriction on Azerbaijan so it is no longer prohibited from receiving foreign assistance and is an MCC candidate
country in FY 2026.

Download File

Download