Nepal will receive an additional US$50 million in grant funding from the United States under the Millennium Challenge Corporation (MCC) Nepal Compact, bringing the total value of the programme to US$747 million, officials announced. Of the full amount, the U.S. will provide US$550 million while the Government of Nepal will contribute US$197 million.
According to the U.S. Embassy, the new funding will reinforce the Compact’s central goals—completing priority electricity transmission lines, strengthening the national power system, and expanding regional electricity trade. By improving the reliability of Nepal’s grid and enhancing market access, the initiative is expected to boost international power connectivity while promoting American expertise and best practices in energy infrastructure.
The MCC Board of Directors had earlier approved the US$50 million addition, a process briefly halted after the election of former U.S. President Donald Trump, whose administration launched a review of all foreign assistance programmes, including MCC-supported projects. The review, completed in July, affirmed that MCC’s portfolio would align with the administration’s “America First” foreign policy priorities and continue to support U.S. strategic and economic interests abroad.
Despite the pause, MCC leadership described the new funding as a reaffirmation of both countries’ commitment to ensuring the Compact’s successful rollout. Cameron Alford, MCC’s Vice President of Compact Operations, said the investment underscores shared dedication to strengthening Nepal’s electricity sector and supporting long-term economic growth.
Beyond infrastructure improvements, the Compact is expected to open additional opportunities for U.S. companies and technologies to enter Nepal’s growing energy market, according to the embassy. Officials noted that the initiative supports large-scale infrastructure development, strategic reforms and economic modernisation designed to deliver measurable returns for both nations.
The partnership between Nepal and the United States spans decades, marked by cooperation in economic development, energy security and shared prosperity. Embassy officials emphasised that the MCC Nepal Compact continues this tradition through grant-based assistance that does not add to Nepal’s debt burden while focusing on high-impact infrastructure projects with long-term benefits.
With the latest boost in funding, implementation of the MCC Nepal Compact is positioned to accelerate efforts to modernise Nepal’s power grid, enhance regional energy trade potential, and contribute to broader economic growth initiatives.
