Nepal on Tuesday launched the upgrading of a 40-kilometer stretch of the East-West Highway from Dhan Khola to Lamahi in Dang district, marking a major milestone under the Millennium Challenge Corporation (MCC) Nepal Compact.
The groundbreaking ceremony was attended by the U.S. Embassy in Nepal, Millennium Challenge Account Nepal (MCA-Nepal) and government officials, highlighting what officials described as renewed momentum in one of Nepal’s largest infrastructure efforts.
The project will introduce modern road construction techniques — Full Depth Reclamation and Superpave — for the first time in Nepal. These methods are expected to improve durability, reduce environmental impact and lower long-term maintenance costs by reusing existing asphalt materials.
The upgraded road will be widened to 12 meters, including a 7-meter carriageway and 2.5-meter shoulders on both sides.
Lumbini Province Chief Minister Chet Narayan Acharya said the project would improve road safety and expand economic opportunities for local communities.
“This is a major step forward for our province and the people who rely on this highway every day,” Acharya said.
The project is part of the $747 million MCC Nepal Compact, a joint investment that includes $550 million from the U.S. Millennium Challenge Corporation and $197 million from the Government of Nepal.
The MCC Nepal Compact, originally signed in 2017 for $500 million, was later increased to $550 million, with additional funding allocated to electricity transmission projects.
U.S. Chargé d’Affaires ad interim Scott Urbom said the initiative reflects the strength of bilateral ties.
“This project represents much more than a single investment,” Urbom said. “It reflects the strength of our bilateral relationship and our shared commitment to delivering tangible results for the people of Nepal and American businesses working here.”
Urbom added that the launch marks an important step in strengthening transport infrastructure, lowering costs and connecting communities to markets.
Sushil Babu Dhakal, joint secretary at the Ministry of Physical Infrastructure and Transportation and an MCA-Nepal board member, said the project aligns with Nepal’s broader infrastructure plans and aims to expand economic opportunities.
MCC Deputy Resident Country Director Sanjay Poudyal said the project underscores a commitment to building resilient, cost-effective infrastructure using advanced technologies.
MCA-Nepal Executive Director Khadga Bahadur Bisht said the road upgrade is a key component of the Road Maintenance Project under the MCC Nepal Compact and pledged timely and transparent implementation.
Beyond roads, the MCC Compact also includes an Electricity Transmission Project aimed at improving power reliability and supporting cross-border electricity trade, officials said.
The Millennium Challenge Corporation is a U.S. government agency that provides grants to countries meeting standards for good governance, anti-corruption and democratic rights. MCA-Nepal was established in 2018 to implement MCC-funded projects.
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.
