The Government of Nepal and the U.S. Millennium Challenge Corporation (MCC) have announced an increase in funding for the MCC Nepal Compact, with an additional US$50 million in grant financing from the United States. The total value of the Compact now stands at US$747 million, comprising US$550 million from the United States and US$197 million contributed by Nepal.
The new funds will be used to complete key electricity transmission projects, strengthen Nepal's power system, and facilitate more regional power trade. These efforts are aimed at improving grid reliability and access to energy markets, supporting international connectivity, and promoting American expertise in energy infrastructure.
According to officials, these investments are expected to create more opportunities for U.S. companies and technology providers within Nepal’s energy sector.
"This funding reflects the enduring partnership between the United States and Nepal. For decades, our countries have worked together to advance economic growth, energy security, and mutual prosperity. The MCC Nepal Compact continues that record through no-debt, grant-based assistance focused on high-impact infrastructure," according to a statement issued about the announcement.
The MCC Nepal Compact is structured as a grant program rather than a loan initiative. Its primary focus is on supporting infrastructure development without increasing Nepal’s debt burden.