US Assistant Secretary of State for South and Central Asia Affairs Donald Lu arrived in Kathmandu on Thursday on a two-day visit.

This is his second visit to Nepal since November last year and first since Nepal’s Parliament ratified the US$ 500 million Millennium Challenge Corporation compact after months-long controversy.

Nepal ratified the compact on February 27 after appending an interpretative declaration, days after Lu spoke with Prime Minister Sher Bahadur Deuba, CPN (Maoist Centre) chair Pushpa Kamal Dahal and CPN-UML chair KP Sharma Oli, conveying a message that Washington would be forced to review its Nepal policy should MCC fail parliamentary ratification.

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

After controversy over the SPP, the government on June 21 decided not to be part of it, 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 the SPP and why it has not written to the US yet seeking to terminate Nepal’s partnership with the programme.

According to the US embassy in Kathmandu, Nepal was inducted to the 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 the SPP or not and that any country can simply write a letter if it wishes to terminate the participation.

The controversy over the 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.”

Lu is scheduled to hold talks with Prime Minister Sher Bahadur Deuba and Foreign Minister Narayan Khadka, according to sources. The Foreign Ministry has not provided any details about the US official’s meetings in Kathmandu.

According to the US embassy in Kathmandu, he is scheduled to hold some meetings in Kathmandu.

“Assistant Secretary Lu will meet with business, civil society, and government leaders,” said the embassy in a statement. ​​“He is on a two-day trip as part of a regularly scheduled visit to the region.”