September 15, 2017
The United States and Nepal have finally signed the most-awaited deal that is expected to help Nepal in its overall development
The US State Department Spokeswoman Heather Nauert made an official announcement in this regard, yesterday.
The US agency Millennium Challenge Corporation (MCC) Acting CEO Jonathan Nash and the Nepali Minister of Finance Gyanendra Bahadur Karki signed the new USD 500 million compact agreement at Washington DC, informed an official release by the US State Department.
“Today, as we sign this USD 500 million MCC compact with Nepal, we are celebrating a new chapter in the US-Nepal partnership,” said Nash.
“As we celebrate the 70th anniversary of US-Nepal relations, I am grateful we can point to this MCC compact as a clear demonstration of our strong partnership,” said the Deputy Secretary of State John J. Sullivan in his address.
Meanwhile, the Nepali minister affirmed that this deal will surely create a lasting impact on Nepal’s sustainable development for generations to come.
According to the release, this is the first compact for the Trump administration and also in South Asia, and includes the largest upfront contribution by any partner country (in MCC’s history).
“A stable and economically-growing Nepal is in the best interest of not just the people of Nepal, but also the region and the United States,” said the Department in its release.
Apart from MCC funding, the Nepali Government will also be adding an additional USD 130 million to this five-year grant.
Nepali Power Sector to Be Strengthened
This deal with MCC is the biggest-ever grant Nepal is receiving from its single development partner country. The agreement aims at achieving infrastructure development in Nepal.
Besides boosting private investment and economic growth to reduce poverty, this deal is expected to enhance regional energy connectivity in South Asia by strengthening Nepali power sector and facilitating related trade with India.
Development of high-voltage power transmission lines across 300 km and road maintenance covering 300 km distance are among the key projects to be taken up under the agreement.
A joint analysis by Nepal and MCC says that the deal will benefit around 23 million population.
According to Baikuntha Aryal, Head of the International Economic Cooperation Coordination Division, the allotted grant will go back to the US if the projects under the agreement are not implemented within 5 years from the starting date.
MCC is an US agency committed to fight global poverty (in select poor countries) and ensure good governance for the overall economic growth.