US Halts MCC Pact with Nepal Amid Presidential Order

The US has suspended the multi-million dollar Millennium Challenge Corporation (MCC) agreement with Nepal, impacting essential road and electricity projects. The halt follows a US Presidential Executive Order, despite prior progress and expectations to enhance Nepal's infrastructure and economy through this significant bilateral effort.

The United States has abruptly suspended the substantial Millennium Challenge Corporation (MCC) agreement with Nepal, disrupting projects crucial to bolstering the country's road network and electricity transmission infrastructure. This suspension was announced by Nepal's Finance Ministry and implicates a moratorium issued through a US Presidential Executive Order.

The MCC pact formally commenced on August 30, 2023, aiming to enhance connectivity within Nepal by improving road and electricity infrastructure. Initially, this initiative, endorsed in September 2017, solidified bilateral cooperation, with an expected completion within five years following significant preparatory efforts by Nepal as of 2022.

Despite Nepal's status as a pioneering regional participant in the MCC program, the initiative faced political resistance due to misconceptions of its nature. The agreement involves a $500 million grant from the US, complemented by $197 million from Nepal, poised to augment infrastructure reliability, facilitate trade with India, and unlock new economic opportunities.

(With inputs from agencies.)