Millennium Challenge Corporation: Eligible Countries for FY 2026

Content

ACTION:

Notice.

SUMMARY:

This report is provided in accordance with the Millennium Challenge Act of 2003, as amended. The report is set forth in full
below.

SUPPLEMENTARY INFORMATION:

Report on the Selection of Eligible Countries for Fiscal Year 2026.

Summary

This report is provided in accordance with section 608(d)(1) of the Millennium Challenge Act of 2003, as amended (the Act)
(22 U.S.C. 7707(d)(1)).

The Act authorizes the provision of assistance under section 605 of the Act (22 U.S.C. 7704) to countries that enter into
compacts with the United States to support policies and programs that advance the progress of such countries in achieving
lasting economic growth and are in furtherance of the Act. The Act requires the Millennium Challenge Corporation (MCC) to
determine the countries that will be eligible to receive assistance for the fiscal year, based on their demonstrated commitment
to just and democratic governance, economic freedom, and investing in their people, as well as on the opportunity to reduce
poverty through economic growth and invest in shared prosperity. The Act also requires the submission of reports to appropriate
congressional committees and the publication of notices in the
Federal Register
that identify, among other things:

1. The countries that are “candidate countries” for assistance for fiscal year (FY) 2026 based on their per-capita income
   levels and their 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 the Board of Directors of MCC (the Board) used to measure and evaluate the policy performance
   of the “candidate countries” consistent with the requirements of section 607 of the Act 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 with which of the eligible countries the Board will seek to
   enter into compacts (section 608(d) of the Act (22 U.S.C. 7707(d))).

This report fulfills the requirements under the third of the above-described reports by MCC for FY 2026. It identifies countries
determined by the Board to be eligible under section 607 of the Act (22 U.S.C. 7706) for FY 2026 with which MCC will initially
seek to enter into compacts under section 609 of the Act (22 U.S.C. 7708), as well as the justification for such decisions.
This report also identifies countries selected by the Board to receive assistance under MCC's threshold program pursuant to
section 616 of the Act (22 U.S.C. 7715).

Eligible Countries

On December 17, 2025, the Board selected those eligible countries with which the United States, through MCC, will initially
seek to enter into a Millennium Challenge Compact pursuant to section 607 of the Act (22 U.S.C. 7706). The Board selected
Ecuador as eligible for such assistance for FY 2026. Ecuador is invited by MCC to develop a potential compact.

Criteria

In accordance with the Act and the “Selection Criteria and Methodology Report for Fiscal Year 2026” formally submitted to
Congress on October 3, 2025, selection was based on a country's overall performance in three broad policy categories: Ruling Justly, Encouraging Economic Freedom, and Investing in People. The Board relied, to the fullest extent possible, upon transparent and independent indicators to assess countries' policy
performance and demonstrated commitment in these policy areas. The Board compared countries' performance on the indicators
relative to their income-level peers. Those income peer groups in Fiscal Year 2026 are countries with a GNI per capita equal
to or less than $2,155, a GNI per capita between $2,156 and $4,495, or a GNI per capita between $4,496 and $7,855.

The criteria and methodology used to assess countries, including the methodology for the annual scorecards, are outlined in
the “Selection Criteria and Methodology Report for Fiscal Year 2026” available at https://www.mcc.gov/resources/doc/report-selection-criteria-methodology-fy26/. Scorecards reflecting each country's performance on the indicators are available on MCC's website at https://www.mcc.gov/who-we-select/scorecards.

Beyond the scorecard, the Board considered additional quantitative and qualitative supplemental information, including the
investment climate and opportunities to strengthen market fundamentals, countries' commitment to undertake reforms, the ability
to advance U.S. investments and objectives in the country, the likelihood that MCC investments will be maintained and deliver
long-term results, and the opportunity to reduce poverty and advance shared prosperity. The Board also considered the availability
of appropriated funds.

The Board sees selection decisions as an opportunity to determine where MCC funds can be most effectively deployed. The Board
carefully considers the appropriate nature of each country partnership on a case-by-case basis.

MCC's engagement with its partner countries is not open-ended, but rather time-limited and based on a data-driven constraints
analysis, and the Board is deliberate when selecting countries for follow-on partnerships, particularly regarding the higher
bar applicable to subsequent and concurrent compact countries. The Board considered—in addition to the criteria outlined above—a
country's performance implementing any prior programs, including the nature of the country's partnership with MCC, the degree
to which the country has demonstrated a commitment and capacity to achieve program results, and the degree to which the country
implemented a prior program in

  accordance with MCC's core policies and standards.

Country Newly Selected as Eligible for a Compact

Using the criteria described above, Ecuador, a candidate country under section 606(a) of the Act (22 U.S.C. 7705(a)), was
newly selected as eligible for assistance under section 607 of the Act (22 U.S.C. 7706). Ecuador is invited by MCC to develop
a potential compact.

Ecuador: Ecuador has demonstrated a commitment to undertaking significant reforms to make progress toward fiscal stability. The country
has suffered anemic growth and low foreign direct investment in recent years, presenting a key opportunity to leverage MCC's
expertise to address key barriers for the private sector and economic growth. An MCC program can also demonstrate the U.S.
Government's commitment to strengthening partnerships in the Western Hemisphere. With Ecuador's strong performance on the
MCC scorecard and willingness to implement necessary reforms, an MCC program has the potential to make a lasting impact, drive
shared prosperity, and generate clear benefits to both the United States and a key partner in the region.

Countries Newly Selected to Develop Potential Threshold Programs

The Board selected Bolivia and Guatemala to develop potential threshold programs.

Bolivia: The recently elected government of Bolivia faces a daunting task to address an immediate macroeconomic and foreign exchange
crisis and longer-term structural economic challenges. As a country experiencing a significant transition, an MCC threshold
program can provide an agile mechanism for supporting the Bolivian government's efforts to pursue reforms to lay the groundwork
for private sector-led growth. Such a program also offers an opportunity to build the bilateral relationship and generate
shared prosperity for Bolivia and the United States.

Guatemala: A former threshold program partner, Guatemala is an important anchor of the U.S. relationship with Central America and has
demonstrated a clear commitment to shared prosperity while pursuing needed reforms to strengthen its business environment
to attract private investment. An MCC threshold program could support these types of efforts, creating a safer, stronger,
and more prosperous future for both Guatemala and the United States.

Ongoing Review of Partner Countries' Policy Performance

The Board emphasized the need for all partner countries to maintain or improve their policy performance. If it is determined
during program implementation that a country has demonstrated a significant policy reversal, MCC can hold it accountable by
applying MCC's Suspension and Termination Policy available at https://www.mcc.gov/resources/doc/policy-on-suspension-and-termination/.

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

Dated: December 18, 2025. Brian Finklestein, Acting Vice President, General Counsel, and Corporate Secretary. [FR Doc. 2025-23616 Filed 12-19-25; 8:45 am] BILLING CODE 9211-03-P

Download File

Download