Nepal government to mobilize grant worth $500 million

The Nepal government has signed a five-year agreement with US’ Millennium Challenge Corporation (MCC) of the US to mobilise a grant worth $500 million for the development of the energy and road transport sectors, which are considered to impede economic growth in Nepal. The grant aims to improve the availability of electricity and control transportation costs in Nepal. MCC will invest $500 million as grant, while the Nepal government will have to contribute $130 million in MCC investment projects in the aforementioned two sectors. MCC will invest the bulk amount of the grant in an electricity transmission project (ETP), while only a limited grant will be invested in a road maintenance project. Under the ETP, MCC will construct up to 300 km of high voltage power lines for Nepal’s east-west high voltage transmission backbone, which will evacuate electricity equivalent to five times the current installed generating capacity of the country.

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