The Millennium Challenge Corporation (MCC)—the United States’ international development agency—has received the green light to resume its operations in Nepal, according to a recent announcement by the Ministry of Finance.
In a letter dated July 24, the US government officially informed Nepal about the continuation of MCC-funded projects, effectively lifting the suspension that had been in place since January 20, 2025. The suspension had followed an executive order issued by the US President earlier this year, temporarily halting foreign aid initiatives under the MCC framework.
According to Nepal’s Finance Ministry, the earlier suspension has now been reconsidered and revoked, allowing the infrastructure-focused projects to proceed.
The MCC compact, a $500 million grant agreement signed between Nepal and the US in 2017, is aimed at upgrading transportation infrastructure and enhancing the electricity transmission network—two sectors considered critical for Nepal’s economic growth and development. With the project back on track, the government anticipates accelerated progress in road expansion, electricity transmission line construction, and cross-border energy trade connectivity.
This development also signals a positive shift in diplomatic and development cooperation between Nepal and the United States. The resumption of MCC projects is expected to inject momentum into Nepal’s infrastructure sector while boosting investor confidence in long-term development partnerships.
The Finance Ministry reaffirmed Nepal’s commitment to implement the MCC compact in line with the original agreement, ensuring transparency, accountability, and timely execution of its major infrastructure components.
