Kathmandu, February 18 – The Government of Nepal has announced the suspension of the payment process under the Millennium Challenge Corporation (MCC) agreement for 90 days. This development comes in the wake of a decision by U.S. President Donald Trump to temporarily halt MCC funding.
The Ministry of Finance confirmed on Tuesday that the MCC’s payment process has been put on hold. In a statement, the ministry revealed it received an official communication on February 14 (Falgun 2) via email, notifying that payments under the MCC Compact are suspended for the next three months.
The suspension is attributed to an executive order issued by President Trump on January 20, which has directly impacted the disbursement of MCC funds. The MCC Compact, a grant agreement signed between Nepal and the United States, aims to support critical infrastructure development projects, including electricity transmission lines and road upgrades in Nepal.
This unexpected suspension raises questions about the future of ongoing projects under the MCC framework. The Nepali government and concerned stakeholders are now exploring ways to manage the potential impact of this decision on the country’s developmental priorities.
The MCC, established by the U.S. government to assist developing countries in reducing poverty through sustainable growth, had approved a $500 million grant to Nepal in 2017. However, its implementation has faced delays and controversies, primarily due to political debates and public skepticism regarding its terms and implications.
The Ministry of Finance has assured that it is in constant communication with U.S. authorities and MCC representatives to address the issue and seek clarity on the way forward.
This 90-day suspension comes at a critical juncture when Nepal is striving to accelerate its infrastructure development and economic recovery. As the situation unfolds, the future of Nepal's partnership with MCC and its potential benefits for the country's development remains uncertain.
Ecosphere News will continue to provide updates on this developing story.
