Managing Director of Nepal Electricity Authority Kulman Ghising signed an MOU with India’s state-run Power Grid Corporation on September 8 to build a transnational 400kV transmission line from Butwal to Gorakhpur. The agreement was signed to augment the two-way electricity trade. The new transmission line will be linked to a 350 KM power line that will transport power from 3000 MW of electricity from new power plants in Nepal over the next three years. However, the domestic transmission line is in a precarious position since Nepal’s political factions politicized the 500 million USD MCC project, preventing it from being ratified by Parliament. The MCC requires the installation of an India-Nepal transmission network and the NEA’s agreement indicates a deliberate effort forth by the Deuba government, even after vehement resistance from his coalition members.
In response to 11 major concerns raised by the Finance Ministry of Nepal, the US-based Millennium Challenge Corporation provided clarifications thereof on September 8. MCC clarified that the MCC compact is an agreement between the MCC and the Nepal government. It does not override the Constitution of Nepal and it does not fall under Indo-Pacific Strategy and hence no link between the compact and the military alliance or defense strategy. Further, it explained that the Nepal Government will have ownership over all the intellectual property developed regarding the compact. Lastly, the compact cannot be amended.
A meeting was held between the MCC Vice President and Finance Minister of Nepal on September 11. The MCC official requested the finance minister to have MCC endorsed in the parliament expeditiously.
MCC Vice President’s official visit to Nepal focused on meeting various political leaders. The first meeting was held with KP Sharma Oli, Chair of the CPN-UML on September 9, followed by meetings with Madhav Kumar Nepal and Baburam Bhattarai, and Upendra Yadav. As per the Head of UML’s Foreign Affairs Department, the officials discussed the party’s position on the Compact. The UML responded that they tried to endorse the MCC when they were in power, but the speakers of the parliament showed reluctance in this regard. Now as the opposition party they have not formed any position regarding MCC. They will form a position after the ruling alliance forms their position. However, the MCC officials requested the political leaders to expedite the parliamentary ratification of the compact. The official emphasized that MCC is not part of the Indo-Pacific strategy. It was further clarified that the object of their visit is not to exert pressure on Nepal. MCC grant was sought by the political leaders of Nepal. The five-year project was designed by Nepal. Further, the officials stated that if Nepal declines the compact, the grant amount will be given to another country. Thus, the decision must be made promptly regarding MCC.
The Ministry of Home Affairs has formed a team encompassing representatives from Nepal Police, Armed Police Force, and the Survey Department, which is led by Jaya Narayan Acharya, a joint secretary at the Home Ministry to study border issues with China. The team will be conducting a study in Namkha Municipality of Humla district. Both the country’s technical teams are developing updated information on the border area.