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US restores $350 million MCC aid to Malawi

22 June 2012 AFP

The United States restores aid worth $350 million to Malawi's energy sector following reforms under new President Joyce Banda, according to a statement Friday.

The Millennium Challenge Corporation (MCC) last year suspended funds for Malawi's crumbling energy sector due to concerns about hardline governance and rights issues under late president Bingu wa Mutharika.

Banda took over when Mutharika died from a heart attack in April, swiftly restoring relations with donors.

The MCC said its board of directors voted Thursday to lift the suspension of the "compact".

"In lifting the compact suspension, the MCC board recognises that the Government of Malawi has taken decisive action to restore democratic accountability, to demonstrate respect for the rights of individuals, and to implement sound economic management," MCC head Daniel Yohannes said in the statement.

The US-government body assists developing countries that commit to standards on democracy and basic rights and claims to be Malawi's largest donor.

In May, the US commended Banda's "bold actions" to reform the government.

The $350 million (278 million euros) will go towards upgrading the country's energy grid and will provide benefits to five million people, according to the MCC.