During the first year of implementing the Millennium Challenge Corporation (MCC) Nepal Compact, significant strides have been made, as shared during a press conference on Wednesday. The event marked the one-year milestone, highlighting progress across various key components of the project.
Khadga Bahadur Bisht, Executive Director of Millennium Challenge Account (MCA) Nepal, announced the selection of a contractor for an 18-km cross-border transmission line segment, with the contract set to be awarded by the end of August 2024. He also emphasized the substantial progress made in preparing sites for contractor access.
MCA-Nepal plans to retender this year for constructing a 297-kilometer transmission line. Between May and July 2024, contracts worth approximately $126 million were awarded for the construction of three 400 kV GIS substations in Nawalparasi West, Nuwakot, and Tanahu. The New Damauli and Ratmate substations, each with a capacity of 1000 MVA, will be the largest in Nepal.
Additionally, a $1.2 million contract was signed on July 22, 2024, to provide advisory support to the Electricity Regulatory Commission, while a $2.4 million contract signed on July 15, 2024, will enhance electricity use through Municipal Energy Plans and capacity building under the MCA Partnership Program.
The MCC also reported that the Initial Environmental Examination (IEE) for a 40-km segment of road maintenance on the East-West Highway has been approved, with plans to begin procurement using Full Depth Reclamation (FDR) technology later this year.
Moreover, a two-year, $1 million Livelihood Restoration Program for 270 people affected by the Ratmate Substation concluded on May 30, 2024, paving the way for new business opportunities and economic growth. Compensation Fixation Committees have been established in nine districts, with land compensation already determined in Dhading, Makawanpur, and Nawalparasi West. Forest census work is nearly complete in nine out of ten project-affected districts.
Diane Francisco, Resident Country Director of MCC in Nepal, expressed optimism about completing the project on time, commending the Nepalese government’s efforts to facilitate progress. US Ambassador to Nepal, Dean Thompson, also praised the cooperation of all stakeholders, underscoring the project’s importance in addressing poverty and other challenges in Nepal.
The Millennium Challenge Account Nepal (MCA-Nepal) project has made significant headway in its implementation over the past year. According to MCA-Nepal, major contract procurements have been completed, and substantial progress has been made in preparing sites for contractors.
Khadga Bahadur Bisht highlighted that contracts worth approximately $126 million have been awarded and signed for the construction of three 400 kV GIS substations in Nawalparasi West, Nuwakot, and Tanahun between May and July 2024. He noted that the New Damauli and Ratmate Substations, each with a capacity of 1000 MVA, will be the largest in the country.
He also pointed out that a two-year, $1 million Livelihood Restoration Program for 270 people affected by the Ratmate Substation project concluded on May 30, 2024.
“The success of the MCC Compact is ultimately for the benefit of the Nepali people,” Francisco stated, emphasizing that the MCC Nepal Compact is part of the United States’ long-standing support for Nepal’s development. This program supported new business ventures and prosperity through training in high-value agriculture, vocational skills, and financial literacy.
MCA-Nepal has acquired around 400 Ropanis of land for the substation, and the contractor for an 18 km cross-border transmission line segment has been selected, with the contract expected to be awarded by August 2024. Consultants are overseeing construction and preparing to re-launch procurement for a 297 km transmission line later this year.
Compensation Fixation Committees are working on land rates for 856 transmission line tower pads across nine districts, with rates in Dhading, Makwanpur, and Nawalparasi West set as of July 2024. Financial literacy training has been provided for compensation recipients, with similar work planned for Kathmandu district. Forest census work is completed in nine out of ten project-affected districts, with verification underway for forest permits.
Bisht mentioned that MCA-Nepal plans to start and complete work in Kathmandu district this fiscal year. A $1.2 million contract signed on July 22, 2024, will provide advisory support to the Electricity Regulatory Commission to enhance transparency, efficiency, and competition in Nepal’s power sector. Another contract worth $2.4 million, signed on July 15, 2024, will provide consultancy services to develop Municipal Energy Plans and enhance productive electricity use within affected wards under the MCA Partnership Program.
For the Road Maintenance Project, the Initial Environmental Examination (IEE) Report for a 40 km segment of the East-West Highway has been approved. MCA-Nepal plans to procure road maintenance works using Full Depth Reclamation (FDR) technology this year.
Looking ahead, MCA-Nepal intends to sign the contract for the remaining 297 km of transmission line, continue construction, finalize land rates in all affected districts, distribute compensation, and select a contractor for road maintenance in the second year. Bisht acknowledged that while these goals are achievable, working with communities affected by land acquisition can be time-consuming in Nepal.
Diane L. Francisco praised the accomplishments, including the signing of contracts for three substations, providing technical support to the Electricity Regulatory Authority, launching the MCA Partnership Program, and making significant progress in obtaining environmental permits and land acquisition.
“The success of the MCC Compact is ultimately for the benefit of the Nepali people,” she stated, underscoring that the MCC Nepal Compact is part of the United States’ long-standing support for Nepal’s development. “These projects will help Nepal meet its domestic power goals while unlocking the potential for cross-border power trade,” she added.
Francisco expressed optimism that the MCC project would be completed within the planned timeframe, praising the Nepalese government for its efforts to expedite the project. She emphasized that the project is intended not only to reduce poverty in Nepal but also to address various other challenges.
US Ambassador to Nepal, Dean R. Thompson, assured that the United States would continue to support Nepal despite any changes in government and noted that MCA-Nepal has advanced smoothly compared to other countries. He acknowledged the cooperation of all stakeholders in ensuring the project’s timely completion and appreciated the Nepalese government’s support in advancing the MCC initiative.
