The Millennium Challenge Corporation (MCC) has notified the Nepal government that payments related to activities funded under the Nepal Compact have been halted, in compliance with a 90-day freeze imposed by an executive order of the US President on January 20, 2025.

According to the Ministry of Finance, MCC, in an email dated February 14, 2025, informed Nepal that ongoing projects under the compact agreement would be affected by payment suspension. Nepal signed the MCC compact on September 15, 2017, which was ratified by Parliament in February 2022.

The MCC Nepal Compact, which includes the construction of a 315-km, 400kV transmission line and road infrastructure upgrades, received $500 million in funding from the MCC, while the Nepal government committed an additional $197 million.

The funding freeze has raised concerns about project delays as Nepal aims to complete all MCC-funded projects within the stipulated five-year timeframe, which began in August 2023. Officials said they are assessing the implications of the suspension and discussing possible measures to mitigate disruptions.

The MCC is a US government agency focused on reducing global poverty through economic growth. It remains to be seen how the suspension will impact Nepal’s long-term infrastructure goals and economic progress.