Remarks at the Nepal Millennium Challenge Corporation Signing Ceremony

John J. Sullivan
Deputy Secretary of State
Millennium Challenge Corporation Acting CEO Jonathan Nash and Nepali Minister of Finance Gyanendra Bahadur Karki
Treaty Room
Washington, DC
September 14, 2017

MR NASH: Good afternoon and thank you all for joining us today to celebrate this partnership with Nepal. I’m Jonathan Nash, Acting CEO of the Millennium Challenge Corporation. I’d like to extend our sincere gratitude to Deputy Secretary Sullivan for hosting us today. We are honored today to be joined by Minister of Finance, Mr. Gyanendra Bahadur Karki; Nepal’s Ambassador to the United States, Dr. Arjun Karki; as well as a number of distinguished members of the Nepali Government. I also want to welcome U.S. Ambassador to Nepal Alaina Teplitz.

On this 70th anniversary of Nepal-U.S. relationships, we are here to celebrate a brand new partnership – a brand new chapter in this partnership. At MCC, our mission is to reduce global poverty through economic growth. We take a business-like approach with commitment to data, accountability and evidence-based decision making. And we focus on creating the right circumstances for private investment in our partner countries. Our time-limited grant investments promote growth and opportunity, and help create stable and secure countries. Today we mark a very important milestone for MCC: the signing of a $500 million compact agreement between the U.S. and Nepali Governments. This is MCC’s first compact with South Asia.

The program will tackle two of Nepal’s most binding constraints to economic growth: low energy supply and high transportation cost. This includes the construction of high-voltage power lines the equivalent length of one-third the length of Nepal. It will also facilitate increased electricity trade with India, a strategic partner, and activities that will strengthen sector governance, increasing transparency, efficiency and competition in Nepal’s power sector. In the transportation sector, the compact includes investments that will strengthen the road maintenance regime, which is particularly important to the movement of goods and people in a landlocked mountainous country such as Nepal.

These projects are all designed to spur private investment, increase regional connectivity, drive growth and fight poverty. This compact is a recognition of the progress Nepal has made in establishing the rule of law, democratic institutions, and investments in its people. It’s an opportunity to help the country build its own capacity to deliver critical services to its people to benefit the economy, regional security, and the broader global community.

In support of this compact, the Nepali Government has committed to contribute an additional $130 million of its own funding, making this the single-largest upfront country contribution in MCC’s history, and I believe a real testament to Nepal’s commitment to this partnership. This additional investment will allow our compact to have an even greater impact on growth and poverty reduction for the people of Nepal. And we could not have made it to this point without all the hard work both here in D.C. and in Nepal, particularly the compact development team that was led by Mr. Tulasi Sitaula, as well as various Nepali Government institutions, and most notably, the ministry of finance. So, thank you.

And of course, I have to commend the hardworking MCC country team, many of whom are here today, led by our very capable leader, Himesh Dhungel, and our regional leadership including Fatema Sumar. The work of both teams exemplifies the values we hold dear at MCC. I’d also like to recognize our strong partnership with the Nepali Embassy led by Ambassador Karki, and the U.S. Embassy led by Ambassador Teplitz, along with our colleagues at USAID. We’re so pleased you all could join us here today for this momentous occasion, and we look forward to all working together with you to make this compact a real success for the people of Nepal.

Now, it’s my honor to introduce Deputy Secretary of State John Sullivan to share a few remarks.


DEPUTY SECRETARY SULLIVAN: Thank you, Jonathan, and thank you for your leadership of the Millennium Challenge Corporation. Together with Jonathan and Ambassador Teplitz, I’m thrilled to welcome you to the State Department. I’d also like to recognize our friends from the Federal Republic of Nepal, including Foreign Minister Karki and Ambassador Karki. Thank you all for joining us on this important and, as Jonathan has made clear, historic day.

The signing of an MCC grant agreement is not only a milestone for development, but also serves as a mark of great distinction for Nepal. The compact recognizes Nepal’s vast progress and ongoing efforts to establish the rule of law and implement democratic institutions. The Board of Directors of the Millennium Challenge Corporation first selected Nepal for a compact in December of 2014.

It formally voted to approve the compact last month. Nepal’s progress over the past few years, both politically and economically, represents a vital turning point for the country. By holding its first elections under a new constitution, Nepal has signaled the beginning of a new democratic age, and for that, we congratulate you. This compact will enable support for Nepal’s greater economic security and help to transform lives for the better. As Acting CEO Nash mentioned, with the signing of this $500 million compact, we are committing to tackle the greatest constraints to growth in Nepal’s energy and transportation sectors.

But this is more than just a grant. It’s a plan for investment jointly developed to address the inadequate supply of electricity in Nepal and the high cost of transportation in that country. Together, we will work to improve the availability of electricity and make road transportation safer and more affordable. The work that lies ahead will not only include infrastructure, but also policy and institutional reforms that will help build the capacity of our Nepali counterparts and lay the groundwork for private investment in the years to come.

In addition to the $500 million provided by the United States under this compact, the Nepali Government will contribute $130 million to support MCC’s investment. This commitment, as Jonathan mentioned, is unique for a first-time compact country. The people of Nepal should be proud of this accomplishment and in their investment for the future.

As we celebrate the 70th anniversary of U.S.-Nepal relations, I’m grateful we can point to this MCC compact as a clear demonstration of our strong partnership. With the signing of this compact, we look forward to a productive partnership, one that will create opportunity, build a stronger foundation for new investment, and help the people of Nepal lift themselves out of poverty. This is a priority for the United States. A politically stable and prosperous Nepal serves not only the Nepali people, but the broader region and the United States as well.

I’m honored to be here on this historic day and at the start of this important work, and look forward to following the compact’s progress in the years ahead. Thank you, all of us, for joining. (Applause.)

FINANCE MINISTER KARKI: His Excellency John Sullivan, Deputy Secretary of State; Mr. Jonathan Nash, Acting CEO of Millennium Challenge Corporation; His Excellency Dr. Arjun Karki, Ambassador of Nepal to the United States of America; Our Excellency Alaina Teplitz, Ambassador of the United States of America to Nepal; distinguished participants, excellencies, ladies and gentlemen, it is my distinct honor and pleasure to be amongst you this afternoon as we celebrate this historic milestone in the Nepal-USA bilateral relationship. On behalf of the people of Nepal, I bring with me messages of greetings and a gratitude for the kind and generous support that the United States has continued to show to us, Nepal, for almost 70 years now.

I take this time to thank the Government of the United States for selecting Nepal as your partner in the Millennium Challenge Corporation compact program. This compact of 500 million U.S. dollars, combined with the Government of Nepal’s commitment of 130 million U.S. dollars, will surely create a lasting impact on Nepal’s sustainable development for generations to come.

Excellencies, ladies and gentlemen, I would like to recognize the United States’ several decades of cooperation of Nepal, to Nepal, in a vast area of socioeconomic development programs. Over the years, the United States has supported Nepal in building peaceful, prosperous, and a democratic society. Today’s signing ceremony is the epitome of the United States’ continued encouragement towards democratic development and a lasting peace in Nepal.

Excellencies, needless to say, I’m delighted to be one of the signatories of this historic compact being signed today. I’m pleased to let you know that the Government of Nepal will take full ownership over this compact and will invest the funds in power and transport sector projects, as these projects are identified on the basis of growth diagnostic studies by both countries. They are unique and vital in ensuring the timely implementation of this compact.

Excellencies, ladies and gentlemen, I’m pleased to note that Nepal qualified as the first recipient of compact in South Asia. This is clearly evidence that Nepal has a level of various indicators of democratic governance. Although this five-year, hard deadline compact will be a challenge for a country like Nepal, I believe in the leadership, the competence, and the commitment of the people that are in this room right now. I’m certain that once Nepal successfully completes this project, it will create a spillover effect on the implementation of other development projects in Nepal.

Excellencies, as I conclude my remarks, I would like to thank the United States Congress and the entire team of Millennium Challenge Corporation for your invaluable support. I would also like to recognize the efforts of my ministry’s officials, U.S. Ambassador to Nepal, Our Excellency Alaina Teplitz, and our Ambassador, His Excellency Dr. Arjun Karki, for your efforts in making this compact a success. I’m confident that your assistance, combined with our own efforts, will leave a lasting impact not only on infrastructure development of Nepal but also in addressing various development challenges, including eradicating poverty and institutionalization of peace and a democratic development in Nepal.

Excellencies, ladies and gentlemen, on behalf of the people and the Government of Nepal, once again, thank you very much. The Government of Nepal is looking forward to working with the MCC team to ensure the successful implementation of this compact. Thank you very much for your attention. (Applause.)