Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The U.S. Embassy in Nepal announced a significant development in its ongoing partnership with Nepal, revealing that in February 2025, the U.S. Secretary of State approved a specific exception to the 90-day pause on U.S. foreign assistance.
This exception allows the Millennium Challenge Corporation (MCC) Nepal Compact, a critical development initiative, to proceed with its implementation while the U.S. government continues a comprehensive review of its foreign assistance programs. The decision underscores the United States’ commitment to fostering economic growth and resilience in Nepal, a key partner in South Asia.
The MCC Nepal Compact, a $500 million grant agreement signed in 2017, aims to bolster Nepal’s infrastructure, particularly in the energy and transportation sectors, to drive economic development and reduce poverty.
The compact’s projects include upgrading electricity transmission lines and improving road networks, which are expected to enhance connectivity and access to markets for Nepali communities. Despite the temporary pause on U.S. foreign assistance, the exception ensures that these vital projects can move forward without interruption.
The MCC and the U.S. Mission in Nepal are actively engaging with a wide range of stakeholders, including government officials, civil society, and local communities, to support a constructive outcome of the ongoing review.
The MCC is collaborating closely with Nepal’s Ministry of Finance and the Millennium Challenge Account-Nepal (MCA-Nepal), the local entity overseeing the compact’s implementation.
These partnerships focus on ensuring that all activities, including potential new financial obligations, align with the shared priorities of the U.S. and Nepali governments. Emphasis is placed on maintaining transparency, upholding sound governance, ensuring effective project delivery, and managing risks prudently.
The U.S. Embassy reiterated the United States’ unwavering commitment to its bilateral relationship with Nepal, emphasizing its dedication to supporting the Nepali people.
Through initiatives like the MCC Nepal Compact, the U.S. aims to promote long-term economic resilience, create opportunities for prosperity, and strengthen the foundation for sustainable development in Nepal. As the review of U.S. foreign assistance continues, the exception for the MCC Nepal Compact signals a continued prioritization of this strategic partnership.
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