The Millennium Challenge Account Nepal Development Board (MCA-Nepal) is a Government of Nepal (GoN) agency under the Ministry of Finance, formed by the Development Board Act 2013 B.S. (1956) in order to manage a Compact of USD 630 million co-funded by the GoN and the US Government’s Millennium Challenge Corporation (MCC). MCC’s contribution to the Compact is USD 500 million and the GoN is providing USD 130 million. The Compact aims to increase availability and reliability of electricity, enhance road quality and facilitate power trade between Nepal and the region to encourage investments for accelerating economic growth. The projects to be supported are the Electricity Transmission Project (ETP), a national pride project, and the Road Maintenance Project (RMP).
After several years of preparation Nepal and the MCC signed the Nepal Compact agreement on 14 September 2017. The agreement was signed by the then Minister of Finance Gyanendra Bahadur Karki and MCC’s Acting CEO Jonathan Nash at the U.S. State Department in Washington, D.C. The MCC Nepal Compact is expected to attract investment, accelerate economic growth and reduce poverty by increasing the availability and quality of electricity and lowering transportation costs. The two projects – Electricity Transmission and Road Maintenance – are priorities identified through extensive consultation with members of Nepali civil society, private sector and numerous other stakeholders. The MCC is not just another bilateral grant – Nepal had to qualify and compete with other countries to be eligible and eventually selected for the MCC Compact after successfully meeting MCC’s conditions on good governance, economic freedom, and investing in citizens, and the associated indicators. The MCC Nepal Compact projects are being led and implemented by Nepalis, including the 60+ employees of Millennium Challenge Account Nepal (MCA-Nepal).