MCC Agreement Set to Take Effect on August 30

In a significant development for Nepal’s infrastructure and economic advancement, the long-awaited Millennium Challenge Compact (MCC) is poised to enter its active phase from August 30. The MCC, an agreement inked between the Ministry of Finance and the Millennium Challenge Corporation (MCC) six years ago, is now set to move forward with full-scale implementation.

The crucial decision was reached during a recent meeting of the Board of Directors of the Millennium Challenge Account Nepal Development Committee (MCA-Nepal) held on August 16. According to the MCA Nepal, August 30 has been earmarked as the Entry into Force (EIF) date for the MCC.

Under the terms of the agreement, a comprehensive timeline has been established, requiring the completion of power transmission line and road development projects within five years of the EIF commencement. Despite significant progress, the MCA Nepal has identified remaining tasks pertaining to land acquisition and the equitable distribution of compensation.

The MCC agreement, originally signed between the Finance Ministry and MCC on September 14, 2017, received parliamentary ratification with an interpretative declaration eighteen months ago. Of the total six preconditions that must be met prior to the EIF, all have been successfully fulfilled except for the intricate issue of land acquisition.

For the realization of the ambitious power transmission project under the aegis of MCA Nepal, a substantial land parcel measuring 1,471 hectares is required. Additionally, approximately 20 hectares of land are earmarked for the development of the Ratmate substation in Nuwakot.

It is noteworthy that Nepal’s financial obligations have experienced an upward revision compared to the initial agreement. While the original pact stipulated 130 million US Dollars, the nation’s contribution has risen to 197 million US Dollars. Consequently, the total cost of the MCC projects within Nepal has expanded from 630 million to 697 million US Dollars.

As Nepal stands on the cusp of this transformative endeavor, the MCC’s impending implementation marks a pivotal juncture in the country’s journey towards enhanced infrastructure, economic growth, and sustainable development.