Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal and the United States have confirmed an additional US$50 million in grant assistance for the Millennium Challenge Corporation (MCC) Nepal Compact, pushing the Compact’s total value to US$747 million—one of the largest single U.S. grant investments in Nepal’s infrastructure history.
With the new funding, the United States’ total contribution reaches US$550 million, while Nepal’s government share remains US$197 million.
Funds to Accelerate Power Transmission, Grid Strengthening, and Regional Trade
According to officials from both governments, the additional U.S. financing will help ensure timely completion of the Compact’s core components:
Construction of the 315-km, 400 kV transmission backbone, including key substations.
Strengthening of Nepal’s domestic power grid, reducing outages and improving system reliability.
Expanding cross-border electricity trade, enabling Nepal to sell surplus hydropower to India and Bangladesh.
The supplemental grant aims to address rising construction and material costs, ensuring that the flagship energy project is completed without compromise.
MCC officials stated the new funds will support “international connectivity” and bring “American excellence and best practices in energy infrastructure” to Nepal, while creating additional entry points for U.S. firms, technology, and expertise in Nepal’s energy market.
A Signal of Long-Term U.S.–Nepal Partnership
The U.S. Embassy noted that the decision underscores Washington’s continued commitment to Nepal’s economic transformation.
For decades, the U.S. and Nepal have cooperated in areas of energy, economic growth, governance reforms, and development finance. The MCC Compact, operating entirely on no-debt, grant-based assistance, remains a pillar of that partnership.
Nepali officials welcomed the funding announcement, saying it reinforces Nepal’s goal of becoming a major regional electricity exporter and strengthens confidence among international development partners.
With work progressing on multiple transmission segments and substations, the additional US$50 million is expected to help maintain operational timelines and reduce the risk of project delays—ensuring Nepal’s largest-ever bilateral energy grant moves steadily toward completion.
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