The executive order of US President Donald Trump has not affected the Millennium Challenge Account (MCA) Nepal program operated in Nepal.

Although the American Assistance Mission (USAID) wrote to the Ministry of Finance, non-governmental organizations and non-profit companies and informed them that all the programs run with grants have been suspended for the time being, they did not say anything about the MCA, said the spokesperson of the Ministry of Finance, Mahesh Bhattarai. 

There is no mention of MCA Nepal in the letter received by USAID to the Ministry of Finance. Programs in four sectors related to health, agriculture, education and inclusive policy have been addressed. Based on this, it is our understanding that MCA Nepal's programs under MCC will not be affected by President Trump's order," said spokesperson Bhattarai, "The projects under MCA have already been contracted, the liability has been created. That's why the program has not been postponed.' Spokesman Bhattarai said that since MCA Nepal is a program run through an agreement between the American government and the Nepal government (JTUG), they are not affected.

On Monday, the Ministry of Finance has instructed stakeholders to suspend the programs run with American grants. In a statement issued by the ministry, spokesperson Bhattarai requested the suspension of the USAID-funded program in four areas, namely health, education, agriculture and inclusive policy.

'From the grant aid received by Nepal through the agreement signed on May 5, 2022 between USAID and the Government of Nepal, four projects of the nature of being paid from the accumulated fund through the budget system, respectively, the grant aid received in the projects of health, agriculture, education and inclusive policy have been immediately suspended for 90 days by USAID Nepal through a letter. Informed,' the statement of the Ministry of Finance said, 'Informed all related agencies not to create any liability towards USAID resources under the projects that have been postponed during this period.

MCA Nepal is a separate program under MCC. Although an agreement was signed between the government and MCC on August 29, 2007, the project was implemented from August 13, 2008.

In the initial agreement, it is mentioned that the US government will pay 500 million dollars and the Nepal government will pay 197 million dollars for the 697 million dollars (about 92 billion) project. Last December, the US government announced an additional $50 million for the project.

Under this program, about 315 km long electricity transmission lines and 70 km roads are planned to be renovated within 5 years. According to MCA Nepal, contracts have been signed for three substations. According to which, the new Butwal, Nawalparasi West Substation 081 contract of 35.5 million 10 thousand dollars has been signed on Baisakh 27. Similarly, Ratamate Nuwakot Substation worth $5.6 million was signed on June 1 and New Damauli Tanahun Substation worth $38.8 million was signed on July 16.

  Under the power transmission project, a contractor has been selected for the 18 km long cross-border power transmission line. Tenders will be invited again this year for the 297 km transmission line,' MCA Nepal's progress report states, 'Tenders will be invited this year for the 40 km long road section from Dhankhola to Lamahi to use the Full Debris Reclamation (FDR) technology. Two possible road sections have been identified and approved for periodic maintenance.' 

Similarly, under the road maintenance project, there is assistance including laboratory upgrading, road testing equipment and technical training. Under construction site access and livelihood restoration, training was provided to 270 people through a two-year livelihood restoration program, compensation determination committee was formed in 9 districts to determine land compensation, land compensation was determined in 3 districts namely Dhading, Makwanpur and Nawalparasi West and first phase trees were planted in 9 districts. MCA Nepal has informed that the calculation work has been completed. 

In Nepal, USAID has been mobilizing grants through NGOs/INGOs, non-profit companies, etc. According to NGO Federation of Nepal, the umbrella organization of non-governmental organizations, USAID has already sent a formal correspondence regarding the suspension of grant assistance for the time being. In the letter, it is asked not to do any program within 90 days, not to spend on transportation and other topics, not to contract even if the supplier company is chosen. This will affect the programs for at least 3 months, said Ram Prasad Subedi, Chairman of the Federation of Non-Governmental Organizations. Subedi informed that the letter also mentioned that after 3 months, a decision will be made regarding the grant/not grant based on the effectiveness.