MCC Project to Continue in Nepal, MCA-Nepal Welcomes U.S. Decision

Millennium Challenge Account Nepal Development Committee (MCA-Nepal) has welcomed the U.S. government's decision to continue the implementation of the Millennium Challenge Corporation (MCC) projects in Nepal despite the temporary suspension on foreign aid programs.

In a statement released Wednesday, MCA-Nepal stated that the MCC Nepal Compact has been granted a special exemption, allowing ongoing activities such as the construction of a 297-kilometer transmission line, three substations, and an 18-kilometer cross-border transmission segment to proceed without interruption.

This comes after former U.S. President Donald Trump signed an executive order suspending several foreign aid projects at the start of his second term. As a result, MCC operations were placed under a 90-day review period. However, on March 21, the U.S. government issued a formal letter stating that MCC-funded projects in Nepal would not be subject to the halt.

The MCC Compact involves a $500 million grant from the U.S. government, of which $398 million is allocated for the construction of electricity transmission infrastructure and $52 million for the upgradation of a section of the East-West Highway—particularly the Bhalubang-Lamahi-Shivkhola segment. Procurement processes under the project are already underway, MCA-Nepal confirmed.