Formal implementation of multi-million US Dollar MCC pact begins in Nepal

Kathmandu [Nepal], August 30 : Aiming to enhance the road and power transmission capacity of Nepal, the multimillion-dollar Millennium Challenge Corporation (MCC) pact has started its work formally from Wednesday.
The five-year project which aims to improve road and electricity connectivity started its formal countdown following an agreement between the Government of Nepal and MCC after substantial progress on project preparation has been achieved.
During a ceremony held at the Finance Ministry, Nepal Finance Minister Prakash Sharan Mahat and Vice President- Compact Operations at MCC, Cameron Alford, exchanged a letter on the Entry into Force (EIF) of the Nepal Compact.
The EIF marks the fulfilment of necessary conditions and preparation to ensure the successful completion of Compact projects within a five-year timeline.

“I am glad that two major infrastructure component is covered with the MCC-supported project- road and transmission lines. We need decent roads because all the people need to get engaged in businesses and production activities that they can take (produces) to the market. That’s why roads are important for us. At the same time, the transmission line is important for us. We have good hydropower potential and we are doing good in terms of production but to get that production to market is crucial. That is where the importance of transmission lines comes and the major composition of this project is a transmission line,” Mahat said addressing the occasion.
Nepal and MCC signed the MCC Nepal Compact on September 14, 2017, for two projects, the Electricity Transmission Project and the Road Maintenance Project, which will work to increase the reliability of electricity and lower the cost of transportation in Nepal.

The program is co-funded by the US Government’s Millennium Challenge Corporation (MCC) Compact grant of USD 500 million and the Government of Nepal’s contribution of USD 197 million.
“We have been steadfast partners- MCC and Nepal Government, going back to the earliest days of compact development. It’s really apropos that we are gathered here to turn on that five-year clock. I can say that for MCC, we are going into implementation based on that strong collaboration and preparation that we have undertaken here,” Cameron Alford, the Vice President of Compact operations at MCC said addressing the event.
The MCA- Nepal (Millennium Challenge Account-Nepal) has completed its preparatory works to reach out to the phase of former implementation of the project which has a lifespan of five years.
“This is grant based effort that focuses entirely on the improved and energized economic growth for Nepal at the time it’s very critical for Nepal’s economy to develop opportunities for the workforce that Nepal’s young society with a brilliant future in front of it and this project is going to power that future in a powerful way,” Dean Thompson, the US Ambassador to Nepal said.
The multi-million-dollar pact was ratified by parliament on February 27, 2022 with an “interpretative declaration” as the public in Nepal has been driven by misinformation about the Millennium Challenge Corporation, a US Foreign Assistance Agency that aims to fight poverty, as a military pact.
Despite the fact that Nepal was the first country in the region to qualify for the program and an agreement to this effect was signed in September 2017, some opposition leaders have been claiming otherwise.
The US Government’s MCC signed a USD 500 million compact with the Nepal government in September 2017 aimed at maintaining road quality, increasing the availability and reliability of electricity, and facilitating cross-border electricity trade between Nepal and India—helping to spur investments, accelerate economic growth, and reduce poverty.
This will help support Nepal to better deliver critical services to its people, ease the movement of goods around the country, and open new opportunities for private investment—all to create sustainable development for the people of Nepal.
According to MCC, strengthening the reliability of key infrastructure will put the country’s economy on a firmer growth trajectory, advance stability, support regional security, and reduce poverty.
An additional USD 130 million contribution from the Government of Nepal in support of the compact—the largest up-front partner country contribution in MCC’s history—will enable even greater impact and benefits for the Nepali people.