MCA-Nepal Launches Major Power Infrastructure Project Under MCC Compact
Millennium Challenge Account Nepal (MCA-Nepal) has formally launched the construction of major electricity infrastructure projects under the Millennium Challenge Corporation (MCC) Nepal Compact, marking a significant step toward strengthening the country’s energy sector. The groundbreaking ceremony for the Ratmate and New Damauli substations and a 297-kilometre transmission line network was held at the Ratmate Substation site in Nuwakot, attended by government officials, MCC representatives, diplomats, contractors, and local stakeholders.
Jointly financed through a US$550 million grant from the United States and a US$197 million contribution from the Government of Nepal, the project aims to enhance electricity transmission capacity, improve energy reliability, and support regional power trade. The transmission network will connect the Ratmate–New Damauli, New Damauli–New Butwal, and Lapsiphedi–Ratmate–New Hetauda corridors, forming a key component of Nepal’s expanding power infrastructure.
Speaking at the event, Finance Ministry Secretary and MCA-Nepal Board Chair Dr. Ghanshyam Upadhyaya described the initiative as a vital investment in Nepal’s energy security, industrial development, and economic growth. US Chargé d’Affaires Scott Urbom said the project would ensure a more reliable electricity supply for households, businesses, and industries while strengthening cross-border energy trade.
MCC Resident Country Director Diane Francisco highlighted the project’s role in unlocking Nepal’s hydropower potential through improved transmission capacity and grid reliability. Officials from the Nepal Electricity Authority and MCA-Nepal noted that the project would reduce transmission bottlenecks, improve connectivity, and position Nepal as an important player in the regional energy market.
Upon completion, the Ratmate and New Damauli substations are expected to become among Nepal’s largest high-voltage facilities, supporting rising electricity demand and long-term economic growth.
