Kathmandu: The high-profile Millennium Challenge Corporation (MCC) project has begun implementation from today.

Finance Minister Dr. Prakash Sharan Mahat and Cameron Alford, Deputy Vice President for Compact Implementation at MCC, exchanged letters related to the Entry Into Force (EIF) of the MCC Nepal Compact during a meeting of top officials at the Ministry of Finance on Wednesday. This marks the commencement of the MCC project’s implementation, which was scheduled to take place over a period of five years.

After a six-year agreement, the project has entered the implementation phase. The agreement to advance the MCC project was signed between Nepal and the United States on September 12, 2017.

As per the provisions of the agreement between the Government of Nepal and the American assistance organization MCC, as mentioned in Article 7, once the necessary prerequisites are met, MCC is satisfied with the situation, and the agreement is applied after being sent to the Nepali government. This provision will take effect from the date of the agreement’s application as per the date mentioned in Article 7.4 of the agreement. The project, which was signed into agreement on August 30, 2023, must be completed by August 29, 2028. If not, the remaining amount will be returned by MCC. Due to this, there is pressure to complete this project on time.

In the preparation phase of MCC, it has been mentioned that site clearance and contract negotiation need to be completed at the place where the project will be implemented. Although the process for the contracts of the projects has begun, land acquisition has not been completed yet.

Between Nepal and the US government, a grant assistance of 500 million US dollars for the MCC project was agreed upon in 2017. Nepal is required to invest around 130 million dollars (approximately 83 billion rupees) in the project.

In May 2022, Jonathan Brooks, Deputy Assistant Administrator at MCC, and former Secretary at the Ministry of Finance, and then Chairman of the MCC-Nepal, Madhukumar Marasini, signed the compact agreement effective from August 2023. Although some preliminary work remains to be done, implementation has started as per the same understanding from Wednesday.

In the MCC project, the construction of transmission lines will take place from the Indian border to New Butwal, New Butwal to New Damauli, New Damauli to Ratamate (Nuwakot), Ratamate to Hetuada, and Ratamate to Lapsiphedi (Kathmandu). The capacity of this transmission line will be 400 kV. Similarly, three large substations of 400 kV will be constructed in Ratamate, Damauli, and Butwal. Around 58.24 million US dollars will be spent on the projects under the transmission line project.

Under MCC, a road improvement plan will also be implemented. This includes a plan to improve a 77-kilometer road from Bhalwali in Dang to the Shiv Khola border.