The deadline for the MCC endorsement is set on June 30, 2020.
Given the repeated delays in parliamentary ratification of the MCC Compact, the Millennium Challenge Account Nepal (MCA-Nepal) is striving to reassess the Entry into Force (EiF) date for the agreement.
MCA-Nepal, the government agency formed to manage the grant, is working with all the concerned authorities to complete the preconditions required before starting the EiF date officially.
The agency also considered the global coronavirus pandemic as a reason impeding the process of the compact.
According to the MCA-Nepal, June 30, 2020 is the EiF date. However, the intra-party disputes simmering inside the main ruling Nepal Communist Party (NCP) over the much-talked US grant has led to persistent delays in tabling the legislation to ratify the MCC Compact agreement.
The deferral of the meeting of the HoR until July 1 has further made it impossible to reach the target to start the EiF date.
Under the compact, the US Government will provide USD 500 million in grant while Nepal will invest USD 130 million to implement the Electricity Transmission Project (ETP) and the Road Maintenance Project (RMP).
However, the unutilized funds of the compact will return to the US if the projects are not finished within five years of the EiF date.
Availability of MCC Is Not Open-ended: US
Due to the delays in parliamentary ratification of the MCC, the US Government has clarified that it cannot indefinitely wait for Nepal to make the final decision on the 500 million grants.
“Accepting this grant is Nepal’s choice, but the availability of the funding is not open-ended. Tangible, near-term steps in Nepal are necessary to ensure the continued viability of the program,” said the US Embassy in Kathmandu on Monday.
The statement comes amid the growing speculations that the US Government is exerting pressure on Nepal to accept the grant.
The US embassy further clarified that delay in ratification would delay the benefits of employment opportunities and improved economic growth for nearly 23 million Nepalis.
It also brushed aside the speculations that the MCC has a hidden agenda.
“MCC’s transparency as a development partner is also recognized globally. This year, MCC was once again ranked as the top bilateral donor in the Aid Transparency Index,” said the US Embassy.