The Millennium Challenge Corporation (MCC) has allowed Nepal to restart some of its stalled projects. According to Millennium Challenge Account Nepal (MCA Nepal), the US government has given approval to resume certain projects, but it is still unclear whether this permission will be long-term.
The MCC project is currently under a 90-day review period, leaving its future uncertain. Earlier, under the directive of former US President Donald Trump, MCC had informed the Nepal government about the suspension of payments. However, MCA Nepal has now confirmed that some halted projects have been permitted to resume.
Nepal and MCC signed an agreement on September 14, 2017, and the project was officially implemented on August 30, 2022. According to the agreement, the total project cost is $697 million, with the US contributing $500 million and Nepal covering the remaining $197 million.
The MCC project includes the construction of a 315-kilometer-long 400kV transmission line, three substations, and the upgrading of 77 kilometers of roads. Currently, the process of appointing consultants for the supervision of the Dhankhola-Lamahi road has begun.
MCC faced strong opposition in Nepal before its approval, which was eventually granted with a 12-point interpretative declaration. The suspension of MCC funds created financial difficulties for the government. To address budget constraints for the upcoming fiscal year, the National Planning Commission has suggested increasing foreign grants by 22% and foreign loans by 30% to meet the projected budget ceiling of NPR 1.9 trillion.
