The US government’s Millennium Challenge Corporation (MCC) announced the launch of feasibility studies of various power sector projects proposed by the Office of the Millennium Challenge Nepal (OMCN), a government office which coordinates development of the MCC program.
Feasibility studies are the foundation of the MCC compact development process, and provide information on the size, scope and suitability of the overall program that MCC will consider funding, says a statement issued by the US Embassy in Nepal on Monday.
“MCC and the government of Nepal worked together to prioritise critical infrastructure needs in the power and road transport sectors in Nepal, which were identified as key constraints to
economic growth in a joint analysis,” the statement quotes Himesh Dhungel, MCC Country Director for Nepal, as saying.
“The launch of the power project feasibility studies is a key milestone reached by the government of Nepal and MCC enabling them to move toward developing a five-year compact.
With the full support of the government of Nepal and other interested parties, programme development should be completed in time for presentation to the MCC Board of Directors for approval in 2017.”
MCC and the Government of Nepal signed a $10 million compact development funding grant agreement in July 2016 in order to facilitate programme design and preparation, including project feasibility studies.
Nepal government and MCC have conducted extensive analysis and stakeholder consultations on the country’s constraints to economic growth. Based on the findings, the government has
agreed to work with MCC to explore a compact programme that addresses power and transport sector challenges.
Though Nepal and MCC have decided to invest in transport and energy sectors, no projects have been finalised yet. Projects including the upgradation of Pakali-Kakarbhitta section of the East West Highway, Pokhara-Butwal section of Siddhartha Highway, 400KV Hetauda-Naubise-Damauli-Nawalparasi transmission line are under MCC’s consideration, according to the Office of the Millennium Challenge Nepal. Although it had put the Kathmandu-Tarai Fast Track project
among potential projects initially, it has been removed from the list.
Once a compact programme is designed, it is presented to MCC’s board of directors and considered for approval. If approved, Nepal will have a few months to prepare the programme for implementation, and five years to complete.
Nepal will have to buckle up and complete projects undertaken with financial assistance received under MCC Compact Programme within the stipulated five-year period as there won’t be any extension to the deadline.
Fatema Z Sumar, regional deputy vice president for Europe, Asia, the Pacific and Latin America in the MCC’s Development of Compact Operation during her visit to Nepal in March had told the Post the MCC would neither extend the deadline nor add a single dollar of US taxpayers in the event the projects are not completed in time.
Source : The Kathmandu Post