John Wingle, deputy vice president who oversees the Millennium Challenge Corporation’s operations in Europe, Asia, the Pacific and Latin America, arrived in Kathmandu on Monday. This marks the first high-level visit from MCC headquarters after resumption of US aid that had been paused by the Donald Trump administration for several months.

During his stay in Kathmandu, Wingle will meet senior government officials including Deputy Prime Minister and Finance Minister Bishnu Poudel, senior officials of the Millennium Challenge Nepal Compact-Nepal (MCA-Nepal), and others. He will also witness the contract-signing ceremony for two transmission lines jointly funded by the government of Nepal and MCC, officials at MCA-Nepal told the Post.

Wingle is the first senior MCC official to visit Nepal since the Trump administration decided to review foreign assistance programmes such as USAID, MCC, and others through an executive order on January 20 and announced a 90-day pause. The Trump administration effectively dismantled USAID, a key US foreign aid agency, but the status of MCC remains unclear.

The first MCC board of directors meeting on August 21 in Washington is likely to outline the future of the MCC. The agenda of the meeting includes leadership updates, foreign assistance review, and reports on candidate country selection criteria and methodology for fiscal year 2026, according to the MCC. The US Secretary of State Marco Rubio chairs the MCC board of directors.

“The Foreign Assistance Review for MCC’s portfolio is complete. MCC’s resulting portfolio will clearly align with the Trump Administration’s America First foreign policy and ensure that the agency continues to make America safer, stronger, and more prosperous. Additional details will be conveyed in the coming weeks following the MCC Board process as well as engagement with Congress and our partner countries,” MCC said in a press statement on July 25.

Following this, the Trump administration in July-end announced that it had decided to give continuity to the Millennium Challenge Nepal Compact, a package of development projects that has been in the spotlight in Nepal for over half a decade. With the decision, the MCA Nepal will have three more years to complete the two strategic projects in Nepal which came into force on August 30, 2023. This marked the start of the five year implementation of the MCC projects in Nepal.

To witness the signing ceremony for the construction of two segments of the proposed 297-kilometer transmission line under the MCC Nepal Compact, funded by both the government of Nepal and the US government, MCA-Nepal has sent an invitation to the media.

The $77.48 million contract for Ratmate-New Damauli Transmission Line with M/s Angelique-Skipper JV and the $77.03 million contract for the New Damauli-New Butwal Transmission Line with WAIBA-SALASAR JV are the two lots of the 297km transmission line to be executed immediately following the signing of the contract, MCA-Nepal said.

In late April, the US Department of Government Efficiency (DOGE), a cost-cutting initiative of the Donald Trump administration and then led by billionaire Elon Musk, had decided to shut down the MCC, followed by the shuttering of USAID. But with the recent press statement issued by the MCC headquarters, the MCC will remain intact though in which form remains unclear. The upcoming board of directors meeting scheduled to take place on August 21 is expected to clarify the future of the MCC, which was embroiled in deep political controversy in Nepal since 2020, until the MCC Compact’s ratification by parliament in February, 2022.

During the review by DOGE and the US State Department, the status of the MCC Compact in Nepal was uncertain, until a decision was reached in July end. But the US Embassy in Kathmandu recently communicated to the government of Nepal that the State Department decided to resume MCC operations in Nepal. The decision ended the uncertainty, but put MCA-Nepal under a tight three-year deadline to complete the projects.

If construction of the transmission lines and the road upgrade projects are not completed within the next three years, the remaining MCC aid will be returned to the US Treasury. MCA-Nepal faces a challenging deadline, said officials from both sides.

Land acquisition and clearance to fell trees along the transmission line routes remain difficult tasks, said officials at the finance ministry and MCA–Nepal.

Khadga Bahadur Bisht, the executive director at MCA Nepal, and representatives of the two contractor firms that had won the bids for the construction of the two transmission lines will sign the agreement at MCA-Nepal office.

MCA invited bids from interested companies on November 27, giving them until January 30 to submit their proposals. Out of three lots, contracts for the construction of the Ratmate-New Damauli and New Damauli-New Butwal transmission line will be awarded on Thursday. The remaining Lapsephedi-Ratmate-New Hetauda transmission line contract is still under review.

Three new 400 kV indoor gas-insulated substations (GIS) will be constructed under the electricity transmission project. These include the Ratmate substation at the Ratmate of Belkotgadhi Municipality in Nuwakot district; the New Damauli substation in Tanahun district; and the New Butwal substation at Bhumahi in Nawalparasi West district. The transmission lines will also connect with existing Nepal Electricity Authority substations at Lapsephedi in Kathmandu district, and Hetauda in Makawanpur district.

After awarding the transmission line contracts, MCA-Nepal plans to call tenders for road upgrade, said the official at MCA-Nepal.

Nepal and the MCC signed an agreement in September 2017 to execute energy and road upgrade projects, whereby the US would pump in $500 million in aid. And Nepal’s contribution was initially $150 million, but it was later jacked up to $197 million. The total investment in road upgrade and transmission line projects under the MCC has reached $697 million. The total could have gone up to $749 million as the MCC board had decided to pour another $50 million into the project to fill the funding gap.

Source: Kathmandu Post