Visiting Assistant Secretary of State for South and Central Asian Affairs of the United States Department of State Donald Lu called on Prime Minister Sher Bahadur Deuba on Thursday and discussed the Millennium Challenge Corporation (MCC) Nepal compact, climate crisis, Covid vaccine support, and post-Covid recovery, among other issues.

As the ruling alliance of five political parties is sharply divided over whether to ratify the MCC compact from Parliament, the Deuba government is increasingly under pressure to endorse the $500 million grant assistance meant for two infrastructure projects.

Various matters concerning Nepal-US relations, cooperation in the context of the Covid-19 pandemic, post-pandemic recovery and other matters of mutual interest featured during the meeting, according to a statement issued by the Ministry of Foreign Affairs.

They also discussed various areas of Nepal’s development priorities as well as the United States’ cooperation, including the MCC compact.

Both sides expressed satisfaction at the overall state of Nepal-US relations, the statement added.

During the meeting, Lu urged Prime Minister Deuba for an early ratification of the MCC compact saying that early approval of the projects means maximum utilisation and benefit from the MCC projects.

Lu also urged the prime minister for early execution of the projects, a senior government official who was in the meeting told the Post.

Prime Minister Deuba replied that Nepal is committed to ratifying the compact and talks are going on among the parties in the ruling alliance on how and when to ratify the compact.

The future of the MCC has been hanging in the balance since 2017 after successive governments failed to ratify the projects from parliament. The grant is to be used for building transmission lines and upgrading highways. Time and again the MCC headquarters has been urging Nepal to ratify the grant saying it will help Nepal achieve the sustainable development goals and reduce poverty.

Before his meeting with the US delegation, Prime Minister Deuba held a meeting with Nepal Communist Party (Maoist Center) Chairman Pushpa Kamal Dahal on Thursday afternoon in an attempt to forge a common position on the MCC compact, a senior Nepal government official told the Post.

Since Dahal did not offer any concrete solution and commitment, Prime Minister Deuba, like his earlier communications with US officials, made a similar kind of commitment with Lu, the official added.

“The Americans are quite aware about the status of the MCC so there is no need to brief them much,” a leader close to the Prime Minister said, adding, “We are also waiting and seeing what the MCC headquarters will do in its review by the end of December.”

The MCC Board is likely to take a decision by the end of December on what to do with the MCC Nepal compact. Earlier it had reviewed the progress made in Nepal in September-end after the visit of MCC Vice President of Compact Operations, Fatima Z Sumar in early September.

During his meeting with Deuba, Lu also handed over the invitation of US President Joe Biden to Deuba to participate in the Democracy Summit in December.

“The event will be virtual this year,” a Foreign Ministry official said. “Next year, the US government is planning to hold the event in person.”

Prime Minister Deuba, while accepting the invitation, assured that he will participate in the summit where the US government is trying to strengthen democracy around the world.

Deuba and Lu also discussed the recently concluded UN Climate Conference in Glasgow and the adverse impact of climate change on the economy of Nepal.

As per the vision of “green and clean development” outlined by Deuba in Glasgow, he sought US financial and technical support for the execution of the commitment, according to Foreign Secretary Bharat Raj Poudyal.

Lu also assured support for Nepal in its bid to reduce carbon gas emissions, said Poudyal.

At the meeting, Deuba also highlighted Nepal’s democratic credentials and its commitment to human rights and the rule of law, according to the statement of the Foreign Ministry.

“The Assistant Secretary of State appreciated the progress made by Nepal in consolidating democracy and thanked the Prime Minister for confirming participation in the forthcoming Summit for Democracy to be convened by the President of the United States,” the statement added.