US approves 500 million compact with Nepal for road and power sectors

September 10, 2017 12:48 PM Hom Lamsal


KATHMANDU, September 10: The U.S. Government’s Millennium Challenge Corporation (MCC) Board of Directors approved a $500 million compact with Nepal last August. The pending Congressional review for the compact was signed by both governments in September.

The Government of Nepal has committed to contributing an additional $130 million to support MCC’s investment. “I am pleased to announce the Millennium Challenge Corporation Board of Directors’ approval of the Nepal Compact,” Acting MCC CEO Jonathan Nash said. “This compact with Nepal focuses on the power and transportation sectors to improve regional connectivity, spur private investment, drive growth, and reduce poverty. The contribution of an additional $130 million from the Government of Nepal, which is the single largest up-front country contribution in MCC’s history, enables our investment to have an even greater impact.”

This is the first compact to be approved by MCC’s Board of Directors under the Trump Administration. Nepal's finance minister Gyanendra Bahadur Karki is set to travel the USA to sign the compact according to Nepal's ambassador to the USA Dr Arjun Karki. According to the official website of MCC, Himesh Dhungel has been named as representative of Nepal's planning commission.

The compact includes two projects. The Electricity Transmission Project is designed to transform Nepal’s power sector by expanding and strengthening the high voltage electricity transmission network to support new investments in generation. The project includes the construction of approximately 300 km of high voltage power lines, equivalent to one-third the length of Nepal; the addition of a second cross-border transmission line to facilitate electricity trade with India, and activities to improve sector governance to promote private investment. The Road Maintenance Project is designed to improve the maintenance regime in Nepal and will complement existing efforts by others to build new roads.

The Millennium Challenge Corporation is an independent U.S. Government agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants and assistance to poor countries that meet rigorous standards for good governance, from fighting corruption to respecting democratic rights.


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