KATHMANDU: The United States has granted a special exception to its 90-day global pause on foreign aid, allowing the full implementation of the $500 million Millennium Challenge Corporation (MCC) Nepal Compact to move forward.

This exemption, approved by Secretary of State in February 2025, comes as the U.S. government continues a comprehensive review of its foreign assistance programs worldwide. The decision permits Nepal to proceed with MCC-funded projects, primarily focused on electricity transmission infrastructure and road maintenance.

According to the U.S. Mission in Nepal, the MCC Compact is being carried out in collaboration with Nepal’s Ministry of Finance and the Millennium Challenge Account Nepal (MCA-Nepal), the implementing body for the project. Officials noted that both existing and potential new obligations under the compact are being aligned with the priorities of both governments.

The U.S. has emphasized the importance of transparency, sound governance, efficient project delivery, and prudent risk management in the ongoing execution of the compact. The embassy further stated that MCC and the U.S. Mission are actively engaging Nepali stakeholders to ensure a constructive outcome from the ongoing aid policy review.

Despite political debate surrounding the compact in Nepal, it remains a central component of American economic assistance and signals continued U.S. commitment to Nepal’s development and long-term economic resilience.