MCA Nepal to Spend Rs 8.5 Billion on MCC Project this Year

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MCA Nepal to Spend Rs 8.5 Billion on MCC Project this Year

August 16: The Millennium Challenge Account (MCA) Nepal is preparing to spend more than Rs 8.5 billion on electricity and road infrastructures under the Millennium Challenge Corporation (MCC) funded by the US government in the current fiscal year (FY 2022/23).

According to MCA Nepal, Rs 7.57 billion will be spent on the road maintenance project and Rs 1.7 billion on the power transmission line project. The budget allocated for the projects under the MCC for the current year is Rs 9.27 billion. Out of the allocated budget, Rs 8.91 billion will be in the form of US grant.

According to the Ministry of Finance, the Government of Nepal will contribute Rs 365.6 million from its own sources for those project this year. Most of the amount allocated for this project will be spent for capital expenditure.

The MCC's goal is to construct a 315 km long 400 kV power transmission line and three 400 kV substations and to repair and expand 77 km of roads using new technology. To achieve this goal, the project is being implemented this year after it was endorsed by the parliament during the last fiscal year.

According to MCA Nepal, it will build a high voltage grid which is currently lacking in Nepal. The transmission line will pass through 18 rural municipalities, 11 municipalities and one sub-metropolitan city in Kathmandu, Sindhupalchok, Nuwakot, Dhading, Chitwan, Makwanpur, Tanahun, Palpa, Nawalpur and Parasi in three provinces - Bagmati, Gandaki and Lumbini.

Three new 400 kV indoor gas substations are being built for the power transmission line project. Ratmate substation will be constructed in Belkotgarhi Municipality of Nuwakot district, Damauli substation in Damauli of Tanahun district and Butwal substation in Bhumhi of Parasi district. In addition to these three substations, the transmission line under MCC will also be connected to Lapsiphedi and Nepal Electricity Authority's new Hetauda substation.

MCA Nepal’s Executive Director Khadga Bahadur Bista said that the process of land acquisition, approval for cutting down trees, environmental impact assessment (EIA), preparation for tender documents, and the tender process are currently underway in order to start the construction of these projects.


According to Bista, the MCC will be spending money on the road maintenance project to improve the quality of Nepal's strategic road network. The project will serve as an example to allocate budget for periodic maintenance of the country's strategic road network. For that purpose, a matching fund of USD 52.22 million has been allocated.

According to MCA Nepal, under the road maintenance project, around 77 kilometres of road will be upgraded using state-of-the-art technology.

Under the project, 40 kilometres from Dhankhola to Lamhi and 37 kilometres from Lamhi to Shivkhola will be renovated.


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