Nepal Awaits Clarity on MCC Projects Amid U.S. Policy Shift
Nepal has appealed to the U.S. to continue assistance in health and education if broader aid is discontinued.
Nepal is in a state of uncertainty as the future of the $697 million Millennium Challenge Corporation (MCC) projects hangs in the balance following a decision by the U.S. Department of Government Efficiency (DOGE), led by Elon Musk, to shut down the MCC’s global operations in late April.
The MCC had pledged $500 million for key energy and road infrastructure projects in Nepal, with Nepal contributing an additional $197 million. However, after a 90-day payment freeze imposed by a U.S. executive order, concerns have grown about the continuation of these projects.
Despite reports of MCC’s shutdown, Nepal’s embassy in Washington has been actively engaging with multiple U.S. agencies, including the State Department, to ensure the projects continue. Ambassador Lokdarshan Regmi remains optimistic about a favorable outcome.
In Kathmandu, officials at Millennium Challenge Account-Nepal (MCA-Nepal), the body overseeing the project, say operations are continuing normally, including regular salaries and procurement. A crucial MCC board meeting, expected to clarify the situation, was delayed but is now likely to happen soon.
If MCC funding stops, Nepal may have to either finance the projects independently or halt them altogether. The Nepal Electricity Authority (NEA) has signaled willingness to take over parts of the projects if needed.
The MCC, created in 2004 under President George W. Bush, was designed to reduce poverty through infrastructure investment in developing nations. The U.S. has also reportedly shut down USAID programs worth over Rs46 billion in Nepal, raising further concerns about the future of American development support.
Nepal has appealed to the U.S. to continue assistance in health and education if broader aid is discontinued. An official decision on the MCC\\\