KATHMANDU, April 24: The Millennium Challenge Corporation (MCC), a US foreign aid agency that funds infrastructure and development in partner countries, is being effectively shut down as part of a broader push by the Department of Government Efficiency (DOGE), CNN reported.
Citing sources familiar with the matter, CNN said the move is part of DOGE’s efforts, led by White House Senior Advisor Elon Musk, to slash federal spending. The agency’s staff were informed this week of a “significant reduction” in workforce and programs, just days after DOGE officials began working from the MCC’s offices.
CNN reports said all employees except the acting CEO are expected to be dismissed, with some facing administrative leave as early as May 5. MCC is required by law to retain a CEO even if all other operations are suspended.
Nepal’s climate targets woefully failing implementation test
Employees have been given until Tuesday to choose between early retirement or a deferred resignation plan, which allows them to remain on administrative leave and receive pay until September 30, CNN reported further.
Established by Congress in 2004, the MCC has provided time-limited grants to more than 40 developing countries including Nepal, El Salvador and Ukraine, supporting infrastructure and policy reforms. It has often been viewed as a counter to China’s Belt and Road Initiative.
The shutdown of MCC is part of a wider pattern under the Trump administration and DOGE, which have also targeted other U.S. foreign aid agencies like USAID, the U.S. Institute of Peace, and the African Development Foundation. Many of these efforts have triggered legal challenges.
The MCC has committed significant financial support to Nepal through the MCC Nepal Compact. Initially signed in September 2017, the compact provided a $500 million grant aimed at enhancing Nepal's electricity transmission infrastructure and road maintenance systems. The Government of Nepal pledged an additional $197 million, bringing the total program value to $697 million.
In January 2025, the MCC Board of Directors approved an additional $50 million in funding to address rising project costs and implementation delays. This increased the total MCC grant to approximately $550 million, with the overall compact value reaching $747 million.
The MCC Nepal Compact represents one of the largest single grants Nepal has ever received, focusing on critical infrastructure improvements to support the count. The completion of the transmission and road upgrade projects in Nepal, funded by a US grant, now faces uncertainty with the shutdown of the MCC.
