The government has inked a program implementation deal with the Millennium Challenge Corporation (MCC) depicting the US Government, considering the implementation of the US$ 500 million MCC Compact a step ahead. The signing of the contract begins in the track of criticisms from some officers of the ruling party atop a plan to approve the Compact agreement in the parliament.
Minister of Finance Yuba Raj Khatiwada and Anthony Welcher, Vice President of the Department of Compact Operations, MCC, confirmed the agreement in a ceremony carried at the Ministry of Finance on Monday.
Below the Compact performance, the US is implementing Nepal with the highest number of the grant which will be used for the implementation of the Electricity Transmission Project and Road Maintenance Project.
As per the Millennium Challenge Account Nepal, the program implementation contract is an essential step via executing the Compact as it besides defines the terms for performing the Compact and its projects in Nepal including aspects of the implementation methods, financial responsibility and payment, and management of MCC funding, among other matters.
MCA Nepal is the reality set by the government to achieve the MCC Compact programs. With its signing, Nepal has reached one of the key circumstances criteria to the June 30, 2020 entry into force (EiF) date following which the five-year clock to implementation of the Compact will begin. The EiF date is important as the projects funded beneath the MCC compact must be achieved within five years, as per an official of the MCA-Nepal.
Other key provisions were the information of the ETP as a national pride project, way of legislation linked to the Electricity Regulatory Commission and formation of the committee and acceptance of the compact agreement from the parliament.
The provision for the acceptance of the compact settlement from the parliament has drawn objections from some leaders and members of parliament from the ruling party Nepal Communist Party, growing firms over the fate of the most generous grant from the US.
Under the agreement, the MCC will give $500 million in grants while the government will chip in $130 million for the implementation of the Electricity Transmission Project (ETP) and Road Maintenance Project (RMP). Entirely 318-kilometer transmission lines of 400kV and three large-capacity substations will be built following the ETP, while the RMP is concentrated principally on the maintenance of 300 kilometers of strategic roads.
In September 2017, the US Government’s Millennium Challenge Corporation approved the Agreement with the Government of Nepal. The Compact strives to improve the availability and security of electricity, enhance the quality of the roads network and facilitate power trade within Nepal and India, as per the MCC.