MCA Nepal hails project continuation

BY A STAFF REPORTER,Kathmandu, July 4: Millennium Challenge Account-Nepal (MCA-Nepal) has welcomed the decision of the United States Government to allow continued implementation of the MCC Nepal Compact, under a previously approved specific exception to the broader pause on US foreign assistance.

After Donald Trump’s election as the US President and his decision to pause US foreign assistance funded by the State Department and USAID, the fate of MCC implemented in Nepal and elsewhere has been uncertain. 

Issuing a press statement on Wednesday, MCA-Nepal informed that the decision enables MCA-Nepal to move forward with key components of the Compact, including the completion of pending procurements for the construction of a 297-kilometre transmission line and major road maintenance projects.

According to the MCA-Nepal, the transmission lines component will focus on the design and construction of approximately 315 km of a double-circuit 400 kV transmission line (including some quad-circuit towers) to provide a vital missing link of different river basins to the existing high voltage grid in Nepal.

Earlier, on November 27, 2024, the MCA-Nepal had relaunched the call for bids to construct a 297-km power transmission line. The transmission line to be built under the Millennium Challenge Corporation (MCC) Nepal Compact is divided into three lots: Lapsiphedi-Ratmate-New Hetauda, Ratmate-New Damauli, and New Damauli-New Butwal.

MCA-Nepal, in coordination with the Millennium Challenge Corporation (MCC), is also continuing work on three power substations and an 18-kilometre cross-border transmission line, projects that were already underway before the US foreign aid review.

On August 30, 2024, MCA-Nepal successfully awarded a USD 12.36 million contract to Transrail Lighting Ltd. to construct the 18 km Nepal portion of the Butwal-Gorakhpur transmission line, which is expected to be completed within 21 months.

Reaffirming its commitment, MCA-Nepal stated it remains dedicated to delivering these high-impact infrastructure initiatives aimed at strengthening Nepal's energy and transportation sectors. The agency expressed appreciation for MCC’s continued partnership and support in realizing the Compact’s development goals.

MCA-Nepal is a Government of Nepal agency, formed under the Development Board Act 1956 AD in order to manage a USD 697 million infrastructure programme. 

The Nepal Compact agreement was signed between Nepal and the MCC on 14 September 2017, with an expectation to attract investment, accelerate economic growth and reduce poverty by increasing the availability and quality of electricity and lowering transportation costs.  (Logo= MCA)