Kathmandu- The United States Agency for International Development (USAID) has officially informed the Government of Nepal about the suspension of funding for 90 days. This decision follows President Donald Trump's directive to halt all aid initiatives temporarily for a comprehensive review of  aid policies.

The U.S. government’s recent communication mentioned the 90-day review but did not reference the Millennium Challenge Corporation (MCC) program.

'We have not received any official information regarding the MCC. While external reports suggest the suspension of all grants, we have no internal confirmation of this,' a Finance Ministry source stated.

Even if MCC funding is suspended, administrative and operational activities are unlikely to be immediately affected. The  government also contributes to the project, ensuring its continuity despite potential disruptions in U.S. funding.

Officials at the Ministry of Finance remain confident that MCC operations will proceed as planned.

The Millennium Challenge Account (MCA) Nepal, established to implement the MCC projects, manages the salaries and benefits of Nepali officials through the Nepalese government’s resources. Meanwhile, MCC employees’ compensation continues to be paid by the United States.

Although no final decision has been made regarding the MCC grant, a potential suspension is not expected to have a significant impact.

Nepal has been a key beneficiary of USAID  for decades, with  contributing to numerous development initiatives. As per Ministry of Finance data, 66 ongoing projects worth $1.1 billion are currently active under U.S. assistance. However, the recent directive has temporarily interrupted further disbursements.

It is worth noting that USAID in Nepal is often allocated off-budget, primarily through non-governmental organizations. As such, the government may not have precise data on the actual scale of U.S. assistance.

The recent directive does not impact the ongoing MCC project. The MCC initially committed $500 million to Nepal, later increasing the amount to $550 million by adding $50 million.