May 9: The impact of the US-funded project Millennium Challenge Corporation (MCC) has been felt as soon as the House of Representatives endorsed it amid differences among political parties. 

The agreement to provide US$500 million (approx Rs 60 billion) in grants to Nepal under the MCC project was approved by the Parliament of Nepal on February 27. According to Shalikram Pokharel, advisor to the Ministry of Finance, aid agreements worth more than Rs 100 billion have been signed with the United States and other donor agencies since then. 

“The MCC has been instrumental in bringing in foreign aid. Other donors are excited after the MCC was approved,” he said. 

An agreement between the United States Agency for International Development (USAID) and the Ministry of Finance on a grant of about Rs 80 billion was signed on May 5, 2022. USAID is providing a grant of US$ 659 million (approx Rs 79.71 billion) to Nepal to be spent within five years. 

The US is providing this assistance to help Nepal in its efforts to become a middle-income country. This assistance will be mobilized in collaboration with the Government of Nepal, civil society and the private sector to achieve the Sustainable Development Goals of Nepal and for democratic governance as well as enterprise-focused economic growth. 

The World Bank on May 4 agreed to provide a loan of US$150 million (approximately Rs 18 billion) to strengthen the financial sector of Nepal. 

This loan is in the process of implementation after finance secretary Madhu Kumar Marasini and Faris Hadad-Zervos, the World Bank’s country director for the Maldives, Nepal and Sri Lanka, signed the ‘Finance for Growth’ Development Policy to strengthen financial sector stability, diversify financial solutions and increase access to financial services in Nepal. 

According to the MoF, the support will help open up capital, insurance and disaster risk financial markets and promote the new financial services. 

Similarly, the government is taking a concessional loan of Rs 18 billion from the International Development Association of World Bank Group.