MCC projects to continue in Nepal despite US spending cuts

KATHMANDU: Despite the recent decision by the United States Government Efficiency Department to cut costs by halting some Millennium Challenge Corporation (MCC) projects, development initiatives in Nepal and three other countries—Mongolia, Senegal, and Ivory Coast—will continue as planned.

The confusion began after an internal email was circulated to MCC staff by the newly formed “Department of Government Efficiency,” headed by former President Donald Trump’s advisor Elon Musk.

The email hinted at potential suspension of ongoing MCC projects in several countries, leading to widespread uncertainty.

However, according to international news agency Reuters, which quoted an MCC official, the projects in Nepal, Mongolia, Senegal, and Ivory Coast will not be affected.

In Nepal, the MCC project is being implemented as part of a long-term infrastructure development strategy. Under the $500 million US grant, Nepal aims to construct a cross-country electricity transmission line and upgrade sections of the East-West Highway.

Of the total grant, $398 million will be invested in expanding Nepal’s electricity transmission network, which is expected to significantly strengthen the country’s energy system.

The remaining $52 million will go toward upgrading the road segment from Dhankhola in Doti to Shivkhola via Bhaluwang and Lamahi.

The MCC has confirmed that the tendering process for these works is already underway.

The continuation of MCC projects is not limited to Nepal. In Mongolia, an advanced water treatment plant is under construction with an investment equivalent to Rs 35 billion.

This project aims to resolve the long-standing water supply issues in the capital city.

In Senegal, a transmission line project worth Rs 55 billion is being developed to expand electricity access in rural areas, improving energy access in remote regions. Meanwhile, in Ivory Coast, the MCC is supporting the education sector through school construction initiatives.

Earlier, President Trump had signed an executive order to review all foreign aid programs at the start of his second term, placing the MCC under a 90-day evaluation period.

While many MCC-funded projects were expected to be suspended during this period, the US government has now officially clarified that work will continue in the four countries mentioned, including Nepal.

In Nepal, the Millennium Challenge Account Nepal (MCA-Nepal), which is implementing the MCC program, had already issued a statement on March 21 confirming that operations would proceed as usual.

The decision was based on a formal letter received from the United States, allowing the agency to move forward with ongoing works without disruption.