KATHMANDU, AUGUST 30

Nepal entered the implementation phase of the Millennium Challenge Corporation-Nepal compact from this afternoon. All the projects must be completed within five years.

"We have been able to turn on the five-year clock and drive towards its implementation," said MCC Vice-president of Compact Operations Cameron Alford, who arrived here yesterday to mark the compact's entry into force. "We are proud to be partners with a country as vibrant as Nepal."

According to the agreement reached between the Nepal government and the MCC - an independent US government foreign aid agency - this period is crucial because if the work cannot be completed within the time frame of five years, called 'entry into force', the funds promised under it will be stopped.

The countdown started after Nepal's Finance Minister Prakash Sharan Mahat and Alford formally exchanged a memorandum of understanding at the Ministry of Finance at Singha Durbar today.

"Today the clock starts, the five-year clock starts today. We are very glad that this is happening," said the Finance Minister."

"We have been through so many ups and downs, but finally we are satisfied, and those who were doubting are also satisfied."

The $500 million grant under the MCC will mostly go into the construction of power transmission lines and highway reconstruction. The Nepal government has a commitment of about $197 million to the compact.

Mahat said that he was delighted that two major infrastructures components, namely roads and transmission lines, were covered under the MCC-backed projects.

We need decent roads not only to connect people but also to engage and enhance business, including production, he said. Similarly, transmission lines are important to take power to the market, he added. "That is why these two projects will contribute to the economic growth of the nation."

According to details provided by Millennium Challenge Account Nepal, 856 towers will be constructed for the transmission lines in about 50 localities.

According to officials, the contractors will start construction of the transmission lines in a phased manner from July 2024. A total of 1,471 hectares of land have been acquired for the construction of the towers. Hence, there is no issue with the implementation of this project, said Mahat.

According to MCA-Nepal, 20.27 hectares of land have been acquired for the construction of the Ratmate substation. MCA-Nepal will be constructing the Ratmate sub-station as part of its Electricity Transmission Project, which will help Nepal build 318 kms of 400 kV transmission lines.

Meanwhile, Nepal Electricity Authority has provided land for the new Butwal and Damauli substations.

Nepal was selected as an eligible country for the MCC Compact back in 2012 after it met the required conditions. An agreement was signed in 2017 between the MCC and officials from the Nepal government. The agreement was then ratified in the Parliament in 2022 as required by law.

"I am confident that we will be able to complete these projects within the stipulated time frame of five years," Finance Minister Mahat said.

A version of this article appears in the print on August 31, 2023, of The Himalayan Times.