The Millennium Challenge Corporation (MCC) has put a hold on payments to the projects ongoing under the Nepal Compact with the US following a 90-day freeze imposed by the US President on January 20, 2025. On February 14, 2025, MCC sent the suspension letter and said it would not lift the suspension unless it received a letter from the Nepal government terminating the agreement.
It said that the suspension of this agreement would have an impact on many projects, including a 315-km transmission line and the upgradation of the roads with a cost of $500 million from MCC and $197 million from the Nepal government. The freeze raises fears of delays in completing those projects, which are expected to finish within five years from August 2023. Nepal is evaluating the situation and looking at measures to mitigate the disruptions.