Kathmandu, January 28
The US government’s decision to halt foreign aid for three months is not expected to affect the Millennium Challenge Corporation (MCC) program.
Under an executive order issued by President Donald Trump, US Secretary of State Marco Rubio directed the suspension of foreign aid provided through the US Department of State and the United States Agency for International Development (USAID) for three months.
The State Department stated that this move aligns with President Trump’s executive order to reassess and realign foreign assistance programs, ensuring their effectiveness and consistency with the “America First” foreign policy agenda.
Although the programs run by the State Department and USAID have been suspended for three months, MCC programs are not included in this decision, meaning its investments worldwide will remain unaffected.
The Ministry of Finance confirmed in a statement that it received an official notice to suspend all USAID programs for three months. However, the letter did not mention MCC, ensuring that projects under MCC remain unaffected.
Established by the US Congress in 2004, MCC provides grants to the world’s poorest countries to promote democratic governance, economic freedom, and public investment. It focuses on projects that foster economic growth and reduce poverty within a specific timeframe.
In Nepal, MCC has committed $500 million to build transmission lines and improve road infrastructure. An additional $50 million grant was recently approved by the US Congress to address budget shortfalls in the transmission line project.
The Nepal government is contributing $195 million (approximately Rs 26.71 billion) to this project. Initiated last year, the project must be completed within four years; otherwise, the unused grant will be returned to the US.
USAID project suspension
The Ministry of Finance also announced that four ongoing USAID-funded projects in health, education, agriculture, and inclusive policies have been temporarily suspended for 90 days.
According to the Ministry, USAID is currently supporting projects worth $695 million (approximately Rs 95 billion) in Nepal. As of the last fiscal year, commitments worth $411 million were made, said Dolindra Sharma, Undersecretary at the International Economic Cooperation Coordination Division of the Ministry.
