Kathmandu, Feb. 18
The Millennium Challenge Corporation (MCC) has
informed the Government of Nepal that fund payments for activities under the
MCC Compact have been suspended in compliance with a 90-day funding freeze
issued by US President Donald Trump on 20 January 2025.
The MCC has written a letter on Friday, February 14
to the Ministry of Finance (MoF) of Nepal to notify the disbursements linked to
ongoing projects in Nepal will be halted in line with the executive order.
The Nepal government and MCC had signed the Compact
on 15 September 2017 (Bhadra 29, 2074), which primarily funds infrastructure
development, including electricity transmission and road maintenance projects.
President Trum had issued an executive order to
halt aid release with an objective for Reevaluating and Realigning United
States Foreign Aid for the next 90 days.
This follows a previous decision by the United
States Agency for International Development (USAID) to pause certain funds for
Nepal. The suspension of MCC funds is expected to impact the implementation
timeline of key development projects. However, the MoF didn't inform further
details about the project activities under the MCC Nepal Compact.
Earlier on January 28, the USAID had written to the
MoF that grant assistance for four projects was suspended. They included Health
Direct Financing Project, Agricultural Direct Financing Project, Education
Direct Financing Project and Inclusive Policy Direct Financing Project.
The MoF had
directed all concerned agencies not to create any liabilities towards USAID
resources under the suspended projects for the said 90-day period.
Published in The Rising Nepal daily on 19 February 2025.
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