The United States has agreed to provide an additional $50 million to the Millennium Challenge Corporation (MCC) project in Nepal, the Nepal government and MCC announced.
With this contribution, the total funding available under the MCC Nepal compact will reach $747 million, including $550 million from the US and $197 million from the Nepal government.
The additional funding is expected to help complete priority electricity transmission infrastructure, strengthen Nepal’s energy system, and facilitate regional energy trade, key objectives of the MCC agreement.
The project aims to improve grid reliability and market access, support international connectivity, and promote US best practices and excellence in energy infrastructure development.
In late April, the US Department of Government Efficiency (DOGE), a cost-cutting initiative of the Donald Trump administration and then led by billionaire Elon Musk, had decided to shut down the MCC, followed by the shuttering of USAID, another powerful US external aid agency working across the globe.
After two major US aid agencies were told to pack up, the State Department started reviewing foreign assistance projects and programmes undertaken by various aid agencies, including the MCC and USAID. Nepal and the MCC signed an agreement in September 2017 to execute energy and road upgrade projects, whereby the US would pump in $500 million in aid. Nepal, from its side, would inject $150 million, an amount which was later jacked up to $197 million.
The total investment in road upgrade and transmission line projects under the MCC has reached $697 million. The total could have gone up to $749 million as the MCC board had decided to pour another $50 million into the project to fill the funding gap.
The Millennium Challenge Corporation (MCC) is a bilateral UNITED States foreign aid agency established by the US Congress in 2004. It is an independent agency separate from the State Department and USAID.
