Kathmandu [Nepal] : Nepal Prime Minister Sher Bahadur Deuba has decided to accept the biggest foreign grant amount in its history of Rs 51.38 billion from the United States‘ Millennium Challenge Corporation for road and electricity transmission line in Nepal.
A cabinet meeting held at Office of the Prime Minister and Council of Ministers in Singha Durbar on Thursday took the decision to accept the financial grant under the “compact programme” pledged by the Millennium Challenge Corporation (MCC) of the US government, Kathmandu Post has reported.
The fund will be used to extend electricity transmission network by around 300-km and maintain up to 300-km of roads over the next five years.
The Millennium Challenge Corporation (MCC) is an independent US government agency working to reduce global poverty through economic development.
Under the compact programme, MCC will invest USD 500 million in grant funding and the Nepali government will contribute an additional USD 130 million, bringing the total investment amount to USD 630 million. The final grant agreement is likely to be penned before the US fiscal year ends in September. Once the final deal is sealed, the government and the MCC will fix a date to roll out the projects.
It is learnt that if all projects are not completed exactly after five years of their implementation date, the funds will go back to the US.
MCC’s planned compact with Nepal would finance the Nepal portion of the second high voltage cross-border transmission line, the construction of 300 km of high voltage power lines-the equivalent of one-third of Nepal’s length-and the construction of three large substations.
MCC would also invest in improvements to power sector governance to promote private sector investments as well as a road maintenance regime in Nepal.
In January 2017, MCC and the MEA released a joint statement announcing their intent to share information and knowledge to promote economic growth and reduce global poverty. Through their collaboration, MCC and MEA seek to strengthen regional integration, particularly in the areas of energy, trade and investment.