Nepal can join MCC: Chinese envoy

Though a section in the country is opposing implementation of Millennium Challenge Corporation (MCC) grant suspecting that it could be tantamount to joining a US-led military alliance, China claimed that it has no problem with Nepal joining MCC Compact Programme.
“Nepal as a least-developed country needs international support and assistance, not only from China, but also from other countries,” Chinese ambassador to Nepal Hou Yanqi said speaking at a press briefing organised at the Embassy this morning.
China welcomes any kind of assistance to Nepal, if it is in the area of economic cooperation,” she said, adding that Nepal can decide on its own without any external intervention. “Economic cooperation should be forged equally and should benefit the Nepali people and promote Nepal’s national interests.”
“Nepal can take its decision on its national interest,” she added.
She however, said that the China-India Plus – or ‘Two plus one’ – concept of cooperation mooted by Beijing essentially meant trilateral cooperation. “The concept did not deem Nepal as a very small country but China and India will play leading roles,” she said, explaining that the trilateral cooperation will be a win-win cooperation. “We have successfully started this cooperation model from Afghanistan," she said.
Though, Nepal is still not comfortable with China-India Plus one – Two plus one – she said that the trilateral cooperation could be forged in the areas of infrastructure, telecommunications and training courses.
Chinese President Xi Jinping and Indian PM Narendra Modi – during Wuhan Summit on April 27-28, 2018 – have proposed the China-India Plus concept. But the leaders of ruling Nepal Communist Party (NCP) – including Prime Minister KP Sharma Oli – are against the China-India Plus concept. Chinese President Xi – during his visit to Nepal last October – also floated the idea to Nepal as China seems interested in further enhancing India-China Plus concept to develop a common strategy for Afghanistan, Nepal, Bhutan and Africa.
Nepal however is suspecting that China and India will have bigger roles and Nepal will have little role under ‘Two plus one’ cooperation model.
Likewise, speaking on recent arrests of more than 120 Chinese nationals in Nepal, the ambassador said that the Chinese authorities had communicated with their Nepali counterparts after they found the individuals’ involvement in cyber crime. Saying that investigations against them are underway in Nepal, the envoy also said it is up to the Nepali side whether to deport them or not. 

US-NPRC demand MCC to be ratified immediately

The US-Nepal Policy Research Center (US-NPRC) has demanded for immediate ratification of the multi-million US dollar Millennium Challenge Corporation (MCC) compact
Saying that a failure could tarnish Nepal's international image, the US-based Center said that it wants to urge the Nepal government, the parliament and political leaders to be serious and honest in implementing the compact. “The failure on timely ratification could tarnish Nepal's international image and trustworthiness.”
The implementation of the project has to be completed within five years beginning June 2020 and the delay could hamper its timely completion," a press note issued by the centre reads.
In September 2017, the US government’s Millennium Challenge Corporation (MCC) signed a $500 million compact with Nepal. The compact aims to increase the availability and reliability of electricity, maintain road quality, and facilitate power trade between Nepal and India, helping to spur investments, accelerate economic growth, and reduce poverty..
The US-NPRC is working in the field of science, technology, education and policy through research, training, professional development programmes, and share knowledge and experience gained from research and analysis through training, seminar, and workshops in the US and Nepal.
The center has over 50 members across the US, mostly academicians.

Nepal, India agree to build New Butwal-Gorakhpur transmission line with equal equity investment

After the two-day talks, Nepal and India today finalised the construction modality of 400 kVA New Butwal-Gorakhpur cross-border transmission line.
Nepal and India agreed to fund – a second high-capacity cross-border transmission line connecting Butwal to Gorakhpur in India – through a commercial entity with 50-50 equity, informed managing director of Nepal Electricity Authority (NEA) Kul Man Ghising, who also took part in the meeting.
 “The 80 per cent of the project cost will be financed through loans, while the Nepali and Indian governments will chip in the remaining 10 per cent each,” he said, adding that both the countries will form a joint company within three months and have a project implementation agreement, within six months. “The agreement – followed by a two-day seventh Joint Steering Committee and Joint Working Group meeting on Nepal-India Cooperation in the Power Sector in the southern Indian city of Bengaluru – also concluded with agreements on implementation and financing modality of the 135-km-long, 400 kV transmission line and formalisation of an energy banking mechanism between Nepal and India.”
The decision came a month after the Nepali and Indian energy ministers expressed optimism over both sides coming to terms on the development modality of the proposed 400 kV New Butwal-Gorakhpur transmission line project.
The detailed project report (DPR) of the cross-border transmission lines has been updated and revised by India in consultation with power utility officials, which has led to a cost reduction of around $18 million on the Indian portion of the transmission line, Ghising said, adding that the cost reduction and decision to evacuate or relay power from the existing substation in Gorakhpur rather than building a new substation for power exchange has added to the commercial viability of the project.
Around 120-km out of the Butwal-Gorakhpur Transmission Line's 135-km length lies in Indian territory. The project is of high strategic importance to both Nepal and India as it will set up a reliable route for energy banking by synchronising Nepal's power grid with India's and allow the power utility to sell large quantum of surplus power, which Nepal is poised to generate in the coming years.
The proposed transmission line is also a major component of the $630 million ‘Nepal Compact’ – an agreement between the government of Nepal and Millennium Challenge Corporation (MCC) of the US to fund electricity and road projects of strategic importance in Nepal.
The delay in finalising the construction of the transmission line project has affected the implementation of the MCC assistance to Nepal. The Millennium Challenge Account Nepal (MCA-Nepal) has already decided the project implementation date from June 30, 2020.
The agreement also paves the way for Nepal, India and Bangladesh to sign an agreement on using the Indian grid to transfer electricity from Nepal to Bangladesh, four months after a secretary-level meeting between Nepali and Bangladeshi energy officials agreed to trade power through India's transmission network. The meeting has decided to hold a tripartite meeting within three months. “The meeting is expected to fix transmission modalities and commercial terms for use of the Indian grid, paving the way for direct power trade between Nepal and Bangladesh through India.
Earlier, officials from both the countries had reached a broader agreement that the portion of the transmission line passing through Indian territory will be built by a commercial entity after India rejected Nepal’s proposal to develop the line under a government to government (G2G) financial model. Following the refusal, Nepal proposed to build the line with an equal equity investment from Nepal Electricity Authority (NEA) and Power Grid Corporation of India (DGCI) and book the use of power lines for seven years to which the Indian energy officials have now agreed, Ghising added.
The agreement between Nepal and India on implementing the transmission line is a ley pre-requisite for the multi-million dollar MCC-Nepal compact – viewed by many in Nepal as a counter-initiative under the Indo-Pacific Strategy of the US against China's Belt and Road Initiative (BRI) – to become effective.
Though the compact, which will prevail over the domestic laws, has been tabled in Parliament, it is yet to be ratified, due to intra-party differences within the ruling party lawmakers and leaders over Nepal’s degree of involvement in the USA's Indo-pacific Strategy and China’s BRI.
The compact is expected to be ratified by the Parliament by the time Millenium Challenge Account-Nepal (MCC-N) – the implementing agency of the project – completes an environmental impact assessment (EIA) of the infrastructure.
Energy secretary Dinesh Kumar Ghimire led the Nepali team, while his counterpart Subhash Chandra Garg had headed the Indian team during the meeting today, where India has also agreed to formalise the terms related to energy banking mechanism, which will allow Nepal and India to exchange power on a need basis, after the multiple requests from Nepali authorities and the surplus power projections.
Currently, energy banking between Nepal and India is done through mutual agreements under the purview of the Nepal-India Power Exchange Committee,” according to the NEA. “Indian energy officials have now agreed to formalise energy banking through cross-border power trade regulations of India.”
“The Bengaluru meeting also decided to permit NEA to trade in Indian Energy Exchange, an automated power trading platform which Nepal is keen on joining,” the state power utility informed, adding that the meeting also approved the DPR of Lumki-Bareilly and Inaruwa-Purnea cross border transmission lines between Nepal and India proposed to be built by 2025.

Nepal signs programme implementation agreement with MCC

Nepal has signed a programme implementation agreement with the Millennium Challenge Corporation (MCC) representing the US Government, taking the implementation of the $500 million MCC Compact a step forward. The signing of the agreement comes in the wake of criticisms from some leaders of the ruling party over a plan to ratify the compact agreement in the parliament.
According to the Millennium Challenge Account Nepal (MCA-Nepal), finance minister Dr Yuba Raj Khatiwada and vice president of the Department of Compact Operations, MCC Anthony Welcher signed the agreement amid a ceremony at the Finance Ministry today.
The signing ceremony witnessed finance secretary Dr Rajan Khanal, joint secretary and head of International Economic Cooperation Coordination Division (IECCD) Shreekrishna Nepal, executive director at the Millennium Challenge Account-Nepal (MCA-Nepal) Khadga Bahadur Bisht and other MCC and MCA-Nepal representatives,
Under the compact programme, the US is providing Nepal the highest amount of grant, which will be spent for the implementation of Electricity Transmission Project (ETP) and Road Maintenance Project (RMP).
The programme implementation agreement is an important step toward implementing the Compact as it further specifies the terms for implementing the compact and its activities in Nepal including details of the implementation arrangements, fiscal accountability and disbursement and use of MCC funding, among other matters, according to the MCA-Nepal that is the entity established by the government to implement the MCC Compact programmes.
With its signing, Nepal has met one of the key conditions precedent to the June 30, 2020 entry into force (EiF) date after which the five-year clock to implementation of the Compact will start. The EiF date is crucial as the projects financed under the MCC compact must be completed within five years, according to the MCA-Nepal. “Other key conditions were the declaration of the ETP as a national pride project, passage of legislation related to the Electricity Regulatory Commission and formation of the commission and ratification of the compact agreement from the parliament.”
The condition for the ratification of the compact agreement from the parliament has drawn criticisms from some leaders and members from the ruling party Nepal Communist Party (NCP), raising concerns over the fate of the largest grant from the US.
Under the compact, the MCC will provide $500 million in grant while the government will chip in $130 million for the implementation of Electricity Transmission Project (ETP) and Road Maintenance Project (RMP). Altogether 318-km transmission lines of 400kV and three large-capacity substations will be built under the ETP, while the RMP is focused primarily on the maintenance of 300 km of strategic roads.
In September 2017, the US Government’s Millennium Challenge Corporation (MCC) signed the compact with Nepal. The compact aims to increase the availability and reliability of electricity, improve the quality of the roads network and facilitate power trade between Nepal and India, helping to spur investments and accelerate economic growth that will benefit all Nepalis, according to the MCC.

MCC-funded transmission line listed under national pride project

The cabinet today declared a $500-million US government grant-Millennium Challenge Corporation (MCC)-funded transmission line project as a national pride project making a total of 22 National Pride Projects.
The national pride projects enjoy some relaxation of legal obligations, and their works can be expedited in fast track. "The status of ‘national pride’ helps it to execute the project in the given time frame and encourages them to take rigorous follow-up actions during project management," according to the Office of the Millennium Challenge Account Nepal (MCA-N). "The MCC project has to be completed within five years after the starting."
The MCA-N has started land acquisition for the 300-km-long transmission line project that will be carried out in three different phases: Lapsiphedi-Ratmate-Damauli, Damauli-Sunawal-India border, and Ratmate-Hetauda.
The transmission line – of 400 KVA capacity and is being built with a total investment of $300 million – will become major electricity supply network of the country connecting major cities with major hubs of electricity production from Marshyangdi and Trishuli river basins. The line will also connect with India and will be used to to trade electricity. 
Besides the transmission line, the MCA-N plans to invest the remaining $200 million in six other road maintenance projects including Chaarali-Phidim (130-km), Dharan-Basantapur (88-km), Kadamaha (of Lahan) to Gaighat (26-km), Hetauda-Bhaise-Bhimphedi (22-km), Amelia-Tulsipur (38-km) and a pilot project of 25-km which is yet to begin, but aims at set the best example with the use of latest technology.