The Millennium Challenge Corporation (MCC) programs in Nepal, funded by U.S. grants, will continue as planned, according to a recent announcement from Nepal’s Ministry of Finance. This decision comes despite a review of U.S. foreign aid programs initiated under an executive order by President Donald Trump.
The Ministry of Finance stated that a letter received from the MCC on July 23, 2025, confirmed the continuation of the programs. The MCC-Nepal Compact, a $500 million agreement signed between the Government of Nepal and the MCC on September 14, 2017, was temporarily suspended for review following Trump’s executive order on January 20, 2025.
The review process has now concluded, with the MCC recommending the continuation of the Nepal Compact, as conveyed in the July 23 letter. The U.S. Embassy in Nepal also confirmed that the U.S. government’s review of foreign aid programs has endorsed the continuation of the MCC-Nepal Compact.
“The U.S. government review of foreign assistance has recommended continuing implementation of the Millennium Challenge Corporation Nepal Compact, and we have notified the Government of Nepal of this decision,” the U.S. Embassy stated. “The $500 million MCC Compact, along with the Government of Nepal’s additional $197 million contribution, supports prosperity and regional energy security by building electricity transmission infrastructure and improving the road network.”
The MCC-Nepal Compact is designed to address key infrastructure bottlenecks in Nepal, focusing on the energy and transportation sectors to drive economic growth and regional connectivity under the Millennium Challenge Account (MCA) Nepal.
The Millennium Challenge Corporation (MCC) had recently increased the funding for Nepal’s compact from $500 million to $550 million. The additional $50 million in funding was allocated to the Electricity Transmission Project under the compact. The compact officially entered into force on August 30, 2023, but rising costs necessitated additional funding.
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Suraj Ghimire
View More PostsSuraj Ghimire is a Nepali journalist based in Kathmandu. He focuses on political, social, migration, and international issues. He has also worked with various national television networks in Nepal.
