MCC's Clarification to Nepal

US clarifies that MCC Compact is not part of any military strategy (With document)

Published On: September 9, 2021 08:01 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, September 9: The Millennium Challenge Corporation (MCC) has responded to the request of Nepal government to clarify some of the provisions of the MCC Nepal Compact. 

The MCC Vice President Fatema Z. Sumar on Wednesday wrote to Finace Minister Sharma along with Prime Minister Sher Bahadur Deuba, Finance Secretary Madhu Kumar Marasini, clarifying that the MCC Nepal Compact is not part of any Indo-Pacific military strategy as claimed by a section of people in Nepal. 

"...The US law that governs MCC prohibits MCC from using the funding for any military purpose; the compact is explicit about this legal prohibition. Therefore, there is no connection between MCC Nepal Compact and any military alliance or defense strategy," reads the clarification letter sent by the MCC Nepal. "Second, the MCC process for selecting partners as compact is eligible based on statutorily prescribed criteria that specifically does not include military factors."

In the 27-page long clarifications letter, the MCC has also clarified that the MCC has no role to select the projects to be executed as a part of the MCC grant.  "All the projects funded by the MCC Nepal Compact were selected by the Government of Nepal, in consultation with Nepal's private sector and civil society, as projects that are important for Nepal's own economic growth," the clarification letter reads further.

The MCC has said that the transmission lines included in the MCC Nepal Compact were identified as needs in Nepal's Transmission Masterplan 2015 and later reconfirmed in the updated 2017 Master Plan. "Recognizing the importance of the project to Nepal's development, the Government of Nepal designed the Electricity Transmission Project in the MCC Nepal Compact as a Project of National Pride," it has said. 

The clarification from the MCC comes amid MCC Vice President Fatema Z. Sumar visiting Nepal to hold consultation on the project. She is expected to hold discussion with all top leaders including Prime Minister Sher Bahadur Deuba and the main opposition party, CPN-UML Chairman K P Oli, among others, during her stay in Nepal. 

Amid criticisms over some of the provisions of the Millennium Challenge Corporation (MCC) agreement, Finance Minister Janardan sharma on September 3 had sent a letter to MCC  requesting clarification on various controversial provisions. 

Please follow the link for the complete response both in English and Nepali



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