Millennium Challenge Corporation's letter to the Ministry of Finance to stop the program to be paid from MCA Nepal's funds for 90 days
After the executive order of President Donald Trump, projects under the Millennium Challenge Corporation (MCC) of the US grant aid have also been suspended. Millennium Challenge Account (MCA) Nepal was formed for the implementation of MCC project. The program of MCA Nepal has been stopped after Trump's order.
Deputy Prime Minister and Finance Minister Bishnu Paudel's secretariat said that the MCA Nepal program has been suspended for 3 months. "In the email sent by MCC on this February 2, it is informed that the activity of payment from MCC funds related to the project being implemented under the agreement between the Government of Nepal and the said body on August 29, 2074 has been stopped according to the executive order of the US President on 90 days of suspension issued on January 20, 2025," the secretariat said.
MCA Nepal is a program under MCC. According to the agreement signed between the Government of Nepal and MCC on August 29, 2007, the project implementation started from August 13, 2008. In the initial agreement, it is mentioned that the American government will spend 500 million dollars and the Nepalese government will spend 197 million dollars in the 697 million dollars (about 92 billion) project. Last December, the US government announced an additional $50 million for the project.
Under this program, there is a plan to expand about 315 km long electricity transmission line and 70 km road within 5 years. According to MCA Nepal, contracts have been signed for three substations. According to which, a contract agreement was signed on 081 Baisakh 27 to build New Butwal (Nawalparasi West) substation for 35.5 million 10 thousand dollars. Similarly, a contract agreement was signed on 081 June 1 to build the Ratamate-Nuwakot substation at a cost of 50.16 million dollars. Construction of new Damauli-Tanahun substation at a cost of 38.8 million 90 thousand dollars is being done after signing the contract on 081 July 16.
Under the power transmission project, the contractor has been selected for the 18 km long cross-border power transmission line in July 081. 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 to use full depth reclamation (FDR) technology from Dhan Khola to Lamahi. Two potential road sections have been identified and approved for periodic maintenance.
road maintenance projects include laboratory upgrading, road testing equipment and technical training. According to MCA Nepal, training has been provided to 270 people through the livelihood restoration program, determination committees have been formed in 9 districts to determine land compensation, land compensation has been determined in 3 districts namely Dhading, Makwanpur and Nawalparasi West and the first phase of tree counting has been completed in 9 districts.
Earlier, the United States Agency for International Assistance (USAID) had written to the Ministry of Finance formally instructing it to suspend its aid programs. USAID Nepal has informed through a letter that among the grant aid received by Nepal through the agreement signed on May 5, 2022 between USAID and Nepal government, four projects of the nature of being paid from the collective fund through the budget system, namely health, agriculture, education and inclusive policy projects, have been immediately suspended for 90 days. USAID has also been mobilizing grants through NGOs/INGOs, non-profit companies, etc.
