US govt authorises continuity of activities under MCC

By A Staff Reporter,Kathmandu, Mar. 24: The United States government has authorised the continuation of certain activities under the Millennium Challenge Corporation (MCC) Nepal Compact, despite an ongoing review of foreign aid policies. 

However, this authorisation does not indicate any predetermined outcome of the review, the Millennium Challenge Account Nepal Development Board (MCA-Nepal) informed in a statement on Friday. 

The permitted activities include crucial procurement processes and operational tasks necessary for office functions. 

"The MCA-Nepal is managing the resumption of activities while reaffirming its commitment to transparency. It continues to coordinate closely with the Government of Nepal and the MCC, ensuring compliance with the ongoing review and awaiting further updates on the situation," read the statement. 

Earlier, on 14 February, the MCC had officially informed the GoN that disbursements under the MCC Compact have been suspended in accordance with a 90-day funding freeze issued by US President Donald Trump on 20 January 2025. 

In a letter sent to Nepal’s Ministry of Finance (MoF), the MCC stated that all financial disbursements related to ongoing projects in Nepal would be halted as per the executive order.

The Nepal Government and the MCC had signed the Compact on 15 September 2017, primarily aimed at funding infrastructure development, including electricity transmission and road maintenance projects.

Earlier, on 28 January, USAID had also informed the MoF that grant assistance for four projects had been suspended. These included the Health Direct Financing Project, Agricultural Direct Financing Project, Education Direct Financing Project, and the Inclusive Policy Direct Financing Project.