When Nepal became the first South Asian nation to qualify for a Millennium Challenge Corporation (MCC) Compact in 2017, the deal was seen as a breakthrough. However, like much of Nepali politics, it soon became stuck in doubt, rumour, and a struggle between geopolitics and sovereignty.
The MCC Compact appeared to offer Nepal a transformative development opportunity, especially given that development aid is frequently tied to loans and infrastructure deficits significantly hinder economic growth. A $500 million U.S. grant, complemented by Nepal’s $197 million contribution, aimed to finance critical electricity transmission lines and road upgrades.
