The US will move ahead with a $500m grant to Nepal to help the South Asian country improve its electricity transmission along with its transportation sector.
In this connection, the board of directors of Millennium Challenge Corporation (MCC) has given their nod to the compact with Nepal.
The Nepalese government will contribute an additional $130m to complement the MCC’s investment which would be the agency’s first compact in the South Asian region.
MCC Acting CEO Jonathan Nash said: “This compact with Nepal focuses on the power and transportation sectors to improve regional connectivity, spur private investment, drive growth, and reduce poverty.
“The contribution of an additional $130 million from the Government of Nepal, which is the single largest up-front country contribution in MCC’s history, enables our investment to have an even greater impact.”
As part of the compact, one of the two projects dubbed as The Electricity Transmission Project will be launched with an objective to transform the power sector in Nepal through expansion and bolstering of the high voltage electricity transmission network to support new investments in power generation.
The Electricity Transmission Project will include setting up of 300km of high voltage power lines, adding a second cross-border transmission line to enable electricity trade with India and activities to boost sector governance to encourage private investment.
According to MCC, the second project will be related to road maintenance in Nepal.
Subject to Congressional review, the compact is likely to be signed by the US and Nepalese governments next month.