The Millennium Challenge Account Nepal Development Committee today formally launched the construction of the Ratmate Substation and the New Damauli Substation and a 297-kilometer transmission line under the Millennium Challenge Corporation (MCC) Nepal Compact Power Transmission Project.

This historic partnership, funded by a $550 million grant from the United States and a $197 million investment from the Government of Nepal, is building world-class power transmission infrastructure and upgrading a critical road network.

The groundbreaking ceremony was held at the Ratmate Substation construction site in Nuwakot with the participation of senior Nepali government officials, MCC and US Embassy representatives, development partners, construction contractors, local stakeholders, media, and community leaders.

The MCC Nepal Compact Power Transmission Project, a joint investment of Nepal and the United States, is constructing three high-capacity 400 kV substations and a 315-kilometer transmission line. This infrastructure will strengthen Nepal's national electricity grid, reduce transmission disruptions, improve the reliability of electricity supply for households and businesses, and help Nepal participate more fully in the regional electricity market, the MCA said in a statement.

The 297-km transmission line network, whose foundation stone was laid on Wednesday, includes the Lapsiphedi-Ratmate-New Hetauda transmission line section, the Ratmate-New Damauli transmission line section, and the New Damauli-New Butwal transmission line section.

“The Government of Nepal has embraced this project as a significant investment in the country’s economic future,” said Ghanshyam Upadhyay, Finance Secretary to the Government and Chairman of the MCA-Nepal Board of Directors. “Strengthening the power transmission infrastructure is essential to ensure energy security, promote investment and industrial expansion, and maximize the benefits of Nepal’s energy potential.”

U.S. Charge d’Affaires to Nepal Scott Arbum reaffirmed the United States’ longstanding partnership with Nepal and its commitment to the MCC Nepal Compact. “Through this Compact, we are building the backbone of Nepal’s energy future. Reliable electricity will flow to every corner of the country and across borders,” he said. “For households, this will mean uninterrupted power, while for factories and agriculture, it will mean uninterrupted availability of energy to boost production.” This will open up new horizons for Nepali businesses to expand.’

Diane Francisco, MCC Resident National Director, emphasized the long-term importance of Nepal’s economic growth and regional energy integration. ‘These investments will help unlock the full potential of Nepal’s energy sector by strengthening the transmission system needed to provide reliable electricity to households, businesses and industries,’ she said. ‘MCC is proud to partner with Nepal on this transformative infrastructure initiative.’

Dirghayu Kumar Shrestha, Acting Executive Director of Nepal Electricity Authority, said that the infrastructure being built under the MCC Nepal Compact is not a separate system but a significant extension of Nepal’s national transmission network.

Khadga Bahadur Bista, Executive Director of MCA-Nepal, claimed that today will be established as a milestone in the development of Nepal’s energy infrastructure. “The construction of a stronger, more reliable and innovative electricity transmission network will benefit Nepalis in the long term and establish Nepal as a major player in the regional energy market,” he said. “This project will reduce electricity transmission bottlenecks and increase connectivity between Nepal and the region.”