US Assistant Secretary of State for South and Central Asia Affairs, Donald Lu, is arriving in Kathmandu on Thursday, according to diplomatic and government sources.

This is his second visit to Nepal since November last year and first since Nepal’s Parliament ratified the Millenium Challenge Corporation after months-long controversy.

Lu is set to hold talks with Prime Minister Sher Bahadur Deuba and Foreing Minister Naryana Khadka.

Officials have not divulged further details.

Lu made headlines in Nepal in February after he held separate talks with Prime Minister Deuba, CPN (Maoist Centre) chair Pushpa Kamal Dahal and CPN-UML chair KP Sharma Oli with regards to MCC.

According to officials and politicians familiar with the conversations, the message from Washington was it would be forced to review its Nepal policy should MCC fail parliamentary ratification.

Nepal ratified MCC on February 27 after attaching an interpretative declaration.

The US official’s visit comes at a time when another American programme—State Partnership Program—has become a highly debated issue in Nepal, with parties from across the political spectrum calling for ending Nepal’s partnership in SPP.

The government on June 21 decided not to be part of SPP, but the Foreign Ministry is yet to write a letter to the US to that effect.

On Wednesday, the International Relations Committee of the Parliament instructed the government to apprise it of the status of SPP and why it has not written to the US yet seeking to terminate Nepal’s partnership in the programme.

According to the US embassy in Kathmandu, Nepal was accepted in SPP in 2019 following two requests in 2015 and 2017. After it became a politically debated issue, the embassy said it’s Nepal’s sovereign decision to be part of SPP or not and that any country can simply write a letter if it wishes to terminate the participation.

The controversy over SPP arose weeks before Prime Minister Deuba’s proposed visit to the US.

Deuba was initially supposed to travel to Washington in mid-July in the first official visit by a sitting prime minister in two decades. But the visit became uncertain after the SPP row. 

Earlier this month, the Foreign Ministry said the prime minister’s visit “is expected” but last week it said the visit “is yet to be confirmed.”

Upendra Yadav, a former foreign minister and chair of the Janata Samajbadi Party, a coalition partner in the government, said last week at an interaction that the coalition partners advised the prime minister to put the visit on hold in view of various reasons including internal situation of the country.

A few days ago, Madhav Nepal, chair of the CPN (Unified Socialist), also a coalition partner, said that the prime minister’s visit was “cancelled” because Nepal refused to “pass SPP.”

SPP, however, is not something that needs to be “passed”, as the US embassy maintains, saying to be part of it or not is a particular country’s own decision.