The US government has suspended all financial aid to Nepal through two major channels: the Millennium Challenge Corporation (MCC) and the United States Agency for International Development (USAID).
The MCC suspended its $500 million grant for the construction of a 400 kV power transmission line from Ratamate in Nuwakot to Bardaghat in Nawalparasi on February 14. The suspension was due to the US President's 90-day hold on all international aid, which was issued on January 20, 2025.
USAID has also suspended all of its programs in Nepal, which include projects in health, agriculture, education, and other sectors. The suspension was also due to the US President's 90-day hold on all international aid.
The suspensions are a major blow to Nepal, which relies heavily on foreign aid for its development. The MCC grant was one of the largest grants ever given to Nepal, and it was expected to make a significant contribution to the country's energy sector. The USAID programs have also been instrumental in improving the lives of millions of Nepali people.
It is unclear how long the suspensions will last. The US President's 90-day hold on all international aid could be extended, or it could be lifted sooner than expected. In the meantime, Nepal will have to find other ways to fund its development projects.
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