<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101124/637209cc9c7e80680e0b5563jpeg.jpg" alt="" width="828" height="936"/><figcaption>Photo: DIWAKAR CHETTRI</figcaption></figure>Historians have pointed out that the reason for Nepal’s political dysfunction is that although it is South Asia’s oldest nation state, it is also the newest to open up to the world.Another upheaval of similar magnitude is now buffeting Nepal with the <a href="https://www.nepalitimes.com/review/nepals-new-digital-landscape/" target="_blank" rel="noopener noreferrer">rapid spread of information technology</a>. This revolution is happening at lightning speed, much faster than changes since 1950.And once again, Nepalis are having to adapt to a hyper-real world of social media platforms, viral videos, disinformation and an alternate universe of premeditated fakery.At the beginning of the pandemic, there were about 8 million Nepalis with <a href="https://www.nepalitimes.com/opinion/face-to-face-to-counter-facebook/" target="_blank" rel="noopener noreferrer">Facebook</a> accounts. Today, the figure is said to be close to 12 million. There are millions more posting videos on <a href="https://www.nepalitimes.com/here-now/huge-uptick-in-tiktok-during-nepal-lockdown/" target="_blank" rel="noopener noreferrer">TikTok</a>. Thousands of YouTube channels with sensational graphics vie for audience and Adsense revenue. Twitter trails, but has a following among opinion-makers and shakers. It is the preferred medium for political influencers and the media, and this amplifies its impact.The content on these platforms rides the <a href="https://www.nepalitimes.com/banner/mobile-nepal-is-hooked-on-youtube/" target="_blank" rel="noopener noreferrer">spread of mobile telephony</a>. Nearly all Nepali households now own at least one handheld device, and 60% of them now are smart-phones. The number of mobile cellular subscribers is now 43 million – more than the country’s total population.As Internet speed increases and cellular towers bring more parts of the country under at least 3G coverage, we can expect to see an even <a href="https://www.nepalitimes.com/here-now/nepalis-are-drifting-to-digital-media/" target="_blank" rel="noopener noreferrer">greater consumption of social media platforms</a> – especially video-based content like YouTube and TikTok.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101124/637209cf9c7e80680e0b5564jpeg.jpg" alt="" width="1092" height="586"><figcaption>Sharecast initiative 2019 Survey</figcaption></figure>The fact that 15% of Nepalis work, study or live abroad means that <a href="https://www.nepalitimes.com/review/nepals-new-digital-landscape/" target="_blank" rel="noopener noreferrer">connectivity</a> has allowed them to stay in close touch – a fact that was of vital importance during the pandemic.Most online content can be classified as ‘entertainment’, but it is also  ‘politics as entertainment’ with Nepal’s parties jostle for power.This migration of eyeballs from the <a href="https://www.nepalitimes.com/banner/how-nepals-media-landscape-is-being-transformed/" target="_blank" rel="noopener noreferrer">'mainstream' to digital media</a> is having a profound impact on how Nepalis connect with each other. The influence of the legacy media in agenda-setting is now replaced by non-journalistic content providers.This has transformed how Nepalis access information, in how they communicate with each other, how society functions, and ultimately in how Nepal is governed.These media trends are not unique to Nepal. The reach of Big Tech globally has transformed the relationship between rulers and the ruled. Journalism has gone from vertical to horizontal.But it has also warped the democratic process as disinformation and the <a href="https://www.nepalitimes.com/latest/post-truth-politics-in-nepal/" target="_blank" rel="noopener noreferrer">propagators of ‘alternative truths’</a> manipulate the medium to stoke populism and intolerance.We have seen increasing evidence of what this means for news consumption. The filtering function of journalism is bypassed so that raw, unverified, deliberate disinformation sways public opinion. Algorithms allow biases to be reinforced in echo chambers with increasingly radical content.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101124/637209d19c7e80680e0b5565jpeg.jpg" alt="" width="1400" height="1017"><figcaption>Sharecast initiative 2019 Survey</figcaption></figure>It is not all negative. <a href="https://www.nepalitimes.com/latest/social-movement-through-social-media/" target="_blank" rel="noopener noreferrer">Internet activism</a> has shown that it is a powerful medium to mobilise support for causes like caste- and gender-based violence, citizenship issues, and for making national heroes out of high achievers like Kulman Ghising, Sanduk Ruit or Mahavir Pun.But, as the organised disinformation campaign against the <a href="https://www.nepalitimes.com/banner/high-tension-in-nepal/" target="_blank" rel="noopener noreferrer">Millennium Challenge Corporation</a> (MCC) shows, it can also be an effective way to interfere in the political process, whip up populist hyper-nationalism, stifle rational voices and undermine economic progress.The preponderance of fake news about the Americans planning to build military bases in Nepal has polarised politics and society, even dividing families, friends and colleagues.With <a href="https://www.nepalitimes.com/latest/the-deal-breaker/" target="_blank" rel="noopener noreferrer">elections around the corner</a>, this phenomenon of demonising political opponents through abuse of social media will have far-reaching consequences for our democracy. If countries with a long history of democracy and free press can have both so easily undermined, we in Nepal need to be on alert against such threats to our hard-won freedoms.Umesh Shrestha, editor of Nepal Fact Check tells us: "Media literacy has not kept pace with the spread of the Internet. People think the falsehoods on YouTube and TikTok videos are legitimate news, and it forms public opinion."Shrestha adds, "This increases responsibility for journalists. Just like when experts and the mass media helped quash rumours about Covid-19."Disillusionment against Nepal’s established parties and distrust of politicians is at an all time high. They deserve it, but we cannot let that translate into disenchantment with the democratic process itself.Nepalis value democracy and harmony. We have pulled back from the brink many times before. It is time for the silent majority to speak up and drown out the fake and phoney in the cybersphere.Read also: <a href="https://www.nepalitimes.com/here-now/the-alchemy-of-angst/">The Alchemy of Angst</a>,  Elif Shafak

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The message is the medium

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101124/637209729c7e80680e0b5541jpeg.jpg" alt="" width="848" height="1106"/><figcaption>PHOTO MONTAGE/NEPAL ENERGY FORUM</figcaption></figure>Like a mirage, the nearer we get to Parliament’s ratification of a <a href="https://www.nepalitimes.com/opinion/to-be-or-not-to-be-on-the-mcc/">$500 million US-backed infrastructure project</a>, the farther it seems to recede. Given the fecklessness of Nepali politics, nothing is over until it is over.After the Maoist parliamentary party on Wednesday morning decided to vote against the ratification of the American grant, a <a href="https://www.nepalitimes.com/latest/nepal-house-sits-for-crucial-mcc-vote/">scheduled House session</a> was postponed till Friday. A Maoist-Unified Socialists vote against the project would have effectively led to the collapse of the ruling coalition led by Prime Minister Sher Bahadur Deuba of the Nepali Congress, who would have got help from the opposition UML to pass the project.The Americans have set a firm 28 February deadline for ratification. The message to top Nepali leaders by US Assistant Secretary of State Donald Lu last week may not have been a threatening ‘take our gift, or else’, but it was certainly a ‘take it or leave it’.Part of the problem is the acronym itself. The <a href="https://www.nepalitimes.com/latest/missing-links-in-nepals-mcc-debate/">Millenniumn Challenge Corporation (MCC)</a> is too awkwardly named, its aims are not clear enough. And many ask: why are the Americans so keen to make us accept their gift anyway if there is no hidden agenda?Read also:  <a href="https://www.nepalitimes.com/here-now/china-lobbying-against-mcc/">China lobbying against MCC</a>, Ramesh KumarYes, geopolitics looms large. Nepal is used to being squeezed between China and India, but this time we are caught in a global <a href="https://www.nepalitimes.com/here-now/china-lobbying-against-mcc/">Sino-US rivalry</a> that has intensified since the rise of Xi Jinping and the Trump years. We are now a yam between three boulders – although the Indians are for once strangely silent.Outsiders are playing on the incompetence and greed of Nepal’s rulers. None other than the country’s <a href="https://www.nepalitimes.com/here-now/maoists-backpedal-on-mcc-letter/">prime minister and his coalition partner write a groveling letter</a> to the project team in Washington DC begging for more time to ‘build a consensus’.All this makes King Mahendra smell like roses. In comparison to these lilliputs, Mahendra was a towering statesman who balanced regional geopolitics, and prevented Nepal from being sucked into the Cold War rivalry between the United States and the Soviet Union.When the Chinese built the Kodari Highway, there was consternation in New Delhi and pressure  on Nepal’s king who had just sent Indian security posts packing from Nepal’s mountains. India and China had just fought a brutal Himalayan war, and Beijing had every reason to consider Nepal an enemy nation since the Indian Army’s Gorkha battalions were on the frontlines in Ladakh and Arunachal.Yet, Mahendra played deft diplomacy between New Delhi-Beijing-Washington-Moscow and got the superpowers to chip in to help with infrastructure and development projects.Read also: <a href="https://www.nepalitimes.com/opinion/to-be-or-not-to-be-on-the-mcc/">To be or not to be on the MCC</a>, Anil Shah<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101124/637209749c7e80680e0b5542jpeg.jpg" alt="" width="422" height="628">What a far cry all that is from what is happening today. By vacillating on a project that they themselves signed, Nepal’s leaders are coming off looking like fools who cannot be trusted. Who is going to take this bunch of clowns seriously anymore?They have used a project that would have <a href="https://www.nepalitimes.com/banner/power-politics/">catalysed the future economic development of Nepal</a> against each other for petty party infighting. Actually, $500 million is not peanuts, and Nepal has already pledged another $130 million to increase the capacity of transmission lines and improve highways in Central Nepal.Borrowing that money would put Nepal deeper in debt. And we just have to see the current situation in Sri Lanka to realise what a real debt trap looks like. Colombo rejected a $480 million MCC two years ago by mishandling geopolitics and is now facing international ostracisation.Read also: <a href="https://www.nepalitimes.com/latest/using-the-delay-in-mcc-to-dissect-it/">Putting the MCC in context</a>, Jeevan R Sharma and David SeddonIt is at a time like this that Nepal needs a leader of Mahendra’s stature and skill. What would he have done? He would have approved both the MCC and the BRI, sent competent emissaries to keep Washington, Beijing and New Delhi happy. We do not even have ambassadors in those capitals.The big powers have bigger fish to fry, Nepal is not as strategic as we imagine ourselves to be. We can convince them that investment in Nepal’s infrastructure will ensure domestic stability and regional energy security.Nepal will soon have surplus electricity supply thanks to Rs215 billion <a href="https://www.nepalitimes.com/opinion/to-be-or-not-to-be-on-the-mcc/">investment by Nepali citizens in private power projects</a>. It now needs help with <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/">distributing</a> that power, for which the MCC project is crucial.Nepal also needs help with connectivity, upgrading the country’s decrepit highways, adding railways and airports, and improving cross-border transit to India and China. That is where China’s Belt Road Initiative (BRI) would help.Why does it have to be one or the other? Geopolitics is so polarised, and Nepal’s domestic politics so fractious that we have lost our ability to balance these forces for the country’s sustainable long-term economic wellbeing.Read also: <a href="https://www.nepalitimes.com/latest/mcc-damned-if-we-do-damned-if-we-dont/">MCC: damned if we do, damned if we don’t</a>, Nepali Times

Using power wisely

<figure><img width="3242" height="1773" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d13979c7e80680e0a992ejpeg.jpg" alt=""/><figcaption>Estimated from various sources</figcaption></figure>A country is being offered its largest ever infrastructure grant, but is torn between <a href="https://www.nepalitimes.com/banner/mcc-ball-in-nepals-court/" target="_blank" rel="noopener noreferrer">accepting it or not</a>. The donor nation appears more eager to give the money than the recipient to take it. That, in a nutshell, is what is happening to the $500 million Millennium Challenge Corporation (MCC) grant from America to upgrade Nepal’s power grid and highways. Political leaders opposed to the MCC have weaponised it to strike at rivals to such an extent that they cannot now backtrack – even though  generated power is already being wasted because of the lack of transmission capacity.The tussle over the MCC in Nepal has geopolitical undercurrents because of growing <a href="https://www.nepalitimes.com/latest/sino-american-impacts-climate-action/" target="_blank" rel="noopener noreferrer">Sino-US tensions</a>.  Frequent visits to Kathmandu by US functionaries are an indication of just how important the project is for Washington – even though its official line is that it is up to Nepal to take it or leave it.  <figure><img width="1200" height="800" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d139a9c7e80680e0a992fjpeg.jpg" alt=""><figcaption> </figcaption></figure>The US Assistant Secretary for South and Central Asian Affairs Donald Lu and his deputy Kelly Keiderling are both in Kathmandu this week to meet Prime Minister Sher Bahadur Deuba and other leaders. These visits follow <a href="https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/" target="_blank" rel="noopener noreferrer">a 4-day trip in September</a> by Fatema Z Sumar, Vice President of Compact Operations at the MCC.The Americans seem <a href="https://www.nepalitimes.com/latest/mcc-row-damages-nepals-credibility/" target="_blank" rel="noopener noreferrer">genuinely mystified</a> about why a country like Nepal that needs all the help it can get to develop its infrastructure, and which stands to lose billions in wasted hydroelectricity in the coming years because of the lack of transmission lines, should be so hesitant about their grant.   Officially, the US Embassy said in a statement this week that Lu and Keiderling were in Kathmandu as part of a regional trip to discuss ‘climate change, Covid-19 response and strengthening democracy’. The MCC was pointedly not mentioned. Read also: <a href="https://www.nepalitimes.com/latest/the-cost-of-no-mcc/">The cost of no MCC</a><a href="https://www.nepalitimes.com/banner/nepals-precious-electricity-going-waste/">Nepal’s precious electricity going waste</a>, Anita Bhetwal<a href="https://www.nepalitimes.com/latest/missing-links-in-nepals-mcc-debate/">Missing links in Nepal’s MCC debate</a>, Jeevan R Sharma and David Seddon <img width="828" height="1446" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d139d9c7e80680e0a9930jpeg.jpg" alt=""><figure><img width="3600" height="3640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d13a09c7e80680e0a9931jpeg.jpg" alt=""><figcaption> </figcaption></figure>Lu has been posted before in New Delhi, and is a South Asia hand. Diplomatic sources say MCC is definitely going to figure prominently in his discussions here, which will be a follow-up to the short interaction Prime Minister Deuba had with US President Joe Biden in <a href="https://www.nepalitimes.com/banner/copout-at-cop26/" target="_blank" rel="noopener noreferrer">Glasgow</a> two weeks ago during <a href="https://www.nepalitimes.com/editorial/good-cop-bad-cop/" target="_blank" rel="noopener noreferrer">COP26</a>. Deuba also met the deputy chief of the MCC Alexia Latortue, and told her that he and the leaders of his five-party coalition supported the MCC moving ahead.On his return from <a href="https://www.nepalitimes.com/latest/nepals-greenwashing-in-glasgow/">Glasgow</a>, Deuba told the press that he and Maoist leader Pushpa Kamal Dahal had written to the Americans assuring them that they would push MCC ratification. Dahal subsequently backtracked, saying he had only agreed to amendments to the contract. One source said Dahal told party insiders he did not want the controversy to weaken the coalition, and <a href="https://www.nepalitimes.com/latest/who-wants-early-elections-and-why/" target="_blank" rel="noopener noreferrer">cost votes in elections</a>.The private sector has warned that Nepal faces huge losses if the five-year compact is not approved.  “We will lose Rs142 billion annually if we do not upgrade our infrastructure for power distribution, the MCC is designed to help us with that,” says Dinesh Shrestha of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). <img width="1200" height="800" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d13a49c7e80680e0a9932jpeg.jpg" alt="">At present, Nepal is generating 2,000MW of energy, but in the next three years this figure will soar to 4,500MW, not taking into account power generation from smaller plants. Peak demand is at 1,500MW which is increasing by 20% every year. Even then, Nepal will have excess of 4,700MW by 2025, which it risks wasting unless there are new transmission lines – with or without the MCC.Most of the $500 million MCC grant is earmarked for the Kathmandu-Hetauda-Butwal 400kVA transmission line to distribute electricity from existing and new hydropower plants in central and eastern Nepal, and also connect to a high-capacity line to Gorakhpur so Nepal can sell surplus monsoon electricity to India. Says <a href="https://www.nepalitimes.com/editorial/manpower-and-hydropower/">hydropower</a> investor Gyanendra Lal Pradhan: “If the Kathmandu-Hetauda-Butwal transmission line is not built under the MCC, investors will have folded, and even banks that have backed the projects will be in deep waters. It will be tragic for a country with such immense hydropower potential.”It has been four years since a coalition government consisting of the Nepali Congress and Maoists signed the MCC contract in Washington, which is awaiting ratification by Nepal’s Parliament. In her last visit, the MCC’s Fatema Sumar said the US was not prepared to wait indefinitely for Nepal to gets its act together. <img width="1200" height="800" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d13a79c7e80680e0a9933jpeg.jpg" alt="">“Countries knock at our doors all the time for capital, as it is getting harder and harder to obtain development funds,” Sumar said in Kathmandu in September. “We are holding $500 million for Nepal. We cannot wait forever. When will it be the right time for Nepal?”The <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/">project was held hostage</a> by prolonged <a href="https://www.nepalitimes.com/editorial/they-fail-we-fall/" target="_blank" rel="noopener noreferrer">political infighting</a> first between Prime Minister Oli and Dahal, and now between radicalised members within the ruling coalition. With the 2023 elections approaching, leaders who were themselves responsible for using the MCC against rivals do not want Parliament ratification to affect their poll prospects. Dahal’s explanation to his party that he wants the MCC pushed to after elections proves this.Read also: <a href="https://www.nepalitimes.com/latest/post-truth-politics-in-nepal/">Post-truth politics in Nepal</a>, Nirnaya Bhatta

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Power politics

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01db9c7e80680e0a364djpeg.jpg" alt="" width="1500" height="1000"/><figcaption></figcaption></figure>“Countries knock at our doors all the time for capital, as it is getting harder and harder to obtain development funds. We are holding $500 million for Nepal. We cannot wait forever. When will it be the right time for Nepal?”Fatema Z Sumar, Vice President of Compact Operations at the Millennium Challenge Corporation (MCC) appeared mystified about why a country like Nepal that needs all the help it can get to develop its infrastructure, should be so hesitant about the grant her government is offering.Sumar was on the final day of her <a href="https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNHAfb7xioCyDtl5OJ53aqyeI5-LuA">four-day visit to Nepal</a> on Sunday, speaking at an engagement with opinion makers. There was a litany of questions from across the table, and Sumar sounded like someone who is getting somewhat jaded answering the same questions over and over again in Kathmandu.“No, the MCC is not part of the <a href="https://www.nepalitimes.com/editorial/between-two-oceans/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/between-two-oceans/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNFfIGiI1YhN4TBrqt-_uVwcnhLEPg">Indo-Pacific Strategy</a> and there is no US Army involvement.”“This is a treaty between two countries and has gone through the Obama, the Trump and now the Biden administrations.”“In order to make this a treaty, the Nepal government wanted to ratify it through Parliament. So, we are waiting for that.”Sumar was a former assistant secretary for South and Central Asia at the US State Department before joining the MCC. Her family is Malaysian Indian, so she understands the region well, but she was hearing in Nepal some of the same political rhetoric that led to the Sri Lankans cancelling the MCC last year for being ‘against the national interest’.MCC makes three types of grants: compacts, threshold programs and concurrent compacts for regional investment. Nepal’s grant is a five-year compact agreement with the MCC that allows an eligible country to fund specific programs targeted at reducing poverty and stimulating economic growth.The concept of the MCC is to make US development assistance ‘smarter’, and to study a country’s bottlenecks so that catalytic investment can allow it to take an economic leap. A panel of Nepali and American experts concluded in 2017 that increasing hydropower transmission capacity and upgrading highways would be most cost-effective, at a time when the country was suffering 12-hour daily power cuts.When a country applies for a grant from the MCC, the board examines its performance based on 20 policy indicators, and selects based on policy performance. The MCC says its grants are given to country-driven and country-led investments and infrastructure priorities for achieving sustainable economic growth and poverty reduction, and Nepal qualified.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01df9c7e80680e0a364ejpeg.jpg" alt="" width="1500" height="998"><figcaption>MCC vice president Fatema Sumar (third from left) with Prime Minister Deuba on Saturday at Baluwatar. Photo: PMO</figcaption></figure>So far MCC has approved $13.7 billion in compacts and $631 million in threshold programs worldwide. After Sri Lanka pulled out, Nepal is the only South Asian country on the list of <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/a-millennium-challenge/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNHcCgQFuOb2-re-ZURkglqZhwDvTg">MCC-approved compacts</a>.“The $500 million we are holding for Nepal is money not given to other countries which need to get out of poverty,” said Sumar’s colleague Jonathan A Brooks at the interaction. Although Brown said he had no idea where the confusion about the MCC having a military component comes from, a <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNHV-jTWUQwTz4eLLTh_R5gdfjVGwQ">comment by US Under Secretary of State David J Ranz</a> in 2019 that the MCC was indeed a part of the US <a href="https://www.nepalitimes.com/editorial/between-two-oceans/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/between-two-oceans/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNFfIGiI1YhN4TBrqt-_uVwcnhLEPg">Indo-Pacific Strategy</a> did a lot of self-inflicted damage.Sumar and Brooks fielded <a href="https://www.nepalitimes.com/latest/post-truth-politics-in-nepal/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/post-truth-politics-in-nepal/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNEL3a5V092kNi8iXts-zWiYBTZWOA">other questions</a> that had become familiar to them during their stay in Kathmandu with answers like: the agreement with Nepal prohibits army involvement, security issues are totally for Nepal government to oversee, the compact has no provisions that contradict Nepal’s laws, the project is not above Nepal’s Constitution, and international law would apply to resolve any disputes.A major chunk of the $500 million MCC grant will go to build the Kathmandu-Hetauda-Butwal 400KV transmission line to distribute 3,000MW which will come on stream in the next three years from new <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/opinion/decentralising-hydropower/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNGKA68VJytSmPpVqeXiamgpi0kCgQ">hydropower plants</a>. The line will also connect to a high-capacity electricity corridor to Gorakhpur so Nepal can <a href="https://www.nepalitimes.com/latest/mcc-row-damages-nepals-credibility/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/mcc-row-damages-nepals-credibility/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNEoVnLVfqbE4et0DScH8cbve0ffag">sell surplus monsoon electricity</a> to India in future.This week, the Nepal Electricity Authority (NEA) signed an agreement with the state-run Power Grid Corporation of India (POWERGRID) for the Butwal-Gorakhpur cross border transmission line extension in anticipation of the MCC project being completed.Sumar has seen several changes in government after she started coming to Nepal for the MCC. Prime Minister Sher Bahadur Deuba and his predecessor K P Oli were both in favour of the MCC, but other Communist partners in the ruling coalition are against it.As a descendant of an immigrant family herself, Sumar says she understands that poverty is not insurmountable, and can be prevented with the right government investment at the right time. She calls herself a “development diplomat”, and feels that economic growth built on better infrastructure would also bring Nepal stability.“The MCC will create many thousands of jobs for Nepalis at a time when the pandemic is creating losses of jobs and livelihoods,” she says, adding that when President John F Kennedy launched a major global drive to help developing countries in the early 1960s, Nepal was one of the first countries to receive the support.The criteria Nepal fulfilled to receive the MCC grant was its democratic polity, guarantees of basic freedoms, and protection of human rights. Sumar underlined the fact that the MCC would also help Nepal put renewable energy infrastructure in place that could be an example for a world coming to terms with climate change.The MCC project has become a victim of <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNHV-jTWUQwTz4eLLTh_R5gdfjVGwQ">extreme political polarisation</a> as opponents to K P Oli used the MCC to unseat him, and now it threatens to split the ruling coalition. The anti-MCC rhetoric had been so effective in convincing the cadre and public that it is anti-national, that even supporters in Deuba’s Nepali Congress, Oli’s UML and other public figures and intellectuals are afraid to speak in favour.Social media is full of posts that say Nepal will become ‘another Afghanistan’ if Parliament ratifies the MCC. But now that Sumar and her MCC team has left, the ball is back in the court of the political class in Kathmandu to ensure that <a href="https://www.nepalitimes.com/here-now/power-politics-delays-mcc-in-nepal/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/power-politics-delays-mcc-in-nepal/&amp;source=gmail&amp;ust=1631579093888000&amp;usg=AFQjCNHlQppZeGXNXQbC5_D2GZNFz2URgw">Nepal has the capacity</a> to distribute the electricity it generates in future.

MCC ball in Nepal’s court

<figure><img width="1198" height="1227" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01b79c7e80680e0a3640jpeg.jpg" alt=""/><figcaption>Photo: BIKRAM RAI/ NEPALI TIMES ARCHIVES</figcaption></figure>In a step that could be a precursor to the US-backed Millenium Challenge Corporation (MCC) project to upgrade Nepal’s power grid, the country this week signed an agreement with India to increase two-way electricity trade.Nepal Electricity Authority (NEA) Managing Director Kulman Ghising on Wednesday signed an MoU with the state-run Power Grid Corporation of India (POWERGRID) for the construction of a second, transnational 400kV transmission line from Butwal to Gorakhpur.This new power line will be connected to the 350km transmission line up to Butwal that will evacuate power from 3,000MW of electricity being generated from new power projects in Nepal in the next three years. However, this domestic power line has been thrown into doubt because politicisation of the $500 million MCC project by Nepal’s bickering parties has blocked its ratification by Parliament.Ghising is in New Delhi to sign off on a joint investment agreement. The project is a key subset of the MCC’s main objective: a 315km transmission line between Hetauda-Damauli-Butwal, which will prove crucial as private projects such as the 456MW Upper Tamakosi come on stream, allowing Nepal to have surplus electricity at least during the monsoon.The transmission line from Butwal in Nepal to Gorakhpur in India will be 120km, with 20km of it in Nepal and will cost Rs6 billion. The project will be financed by loans and 20% of it by equity from a jointly-owned NEA-POWERGRID company. Nepal will build its side of the transmission line by itself, while the joint company will be responsible for building the Indian section. Work is underway to finish the transmission line within three to three-and-half years.“With the agreement, the stage is set to create the joint company and write up transmission service agreements.” Ghising said from the Indian capital.Once the Butwal-Gorakhpur line is completed, Nepal will be able to export up to 2,000MW of electricity, much more than the present Dhalkebar-Muzaffarpur corridor that can handle only 300MW. The new transmission line will not just be able to export electricity to India, but can also be part of new power deals with Bangladesh in future.“This will prove to be a lifeline for energy trade, as it will have more than double the capacity of the currently operational 400kW Dhalkebar-Muzaffarpur transmission line,” explains NEA’s director of the Power Trade Department Prabal Adhikari.  Construction of an India-Nepal transmission line is a prerequisite for the MCC’s implementation, and the NEA’s agreement signals a bold move forward by the Deuba administration despite fierce opposition to the American project from his coalition partners, the Pushpa Kamal Dahal-led Maoist Centre and Madhav Kumar Nepal’s breakaway CPN (United Socialist) faction.In fact, Vice President of the MCC Fatema Z Sumar <a href="https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/&amp;source=gmail&amp;ust=1631417436093000&amp;usg=AFQjCNHc1BZYi3I_-MmKqmtnCKyZXJhesA">jetted into Kathmandu</a> on Monday in a bid to convince politicians opposing the project that the MCC had no military or strategic component, and was purely a catalytic initiative meant to kick-start Nepal’s economic growth.The Maoists and other coalition members have whipped up populist opposition to the MCC project saying it is anti-national, against the Constitution and part of US military strategy to encircle China. The MCC responded to a Finance Ministry query ahead of the Sumar visit saying that the project was not above Nepal’s Constitution, and America had no hidden agenda behind it. Translated by Kaustubh Dhital from the <a href="https://www.himalkhabar.com/news/125779">Nepali language original</a> in Himal Khabar.

India, Nepal sign power exchange deal

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109111140/636b84009c7e80680e06776cjpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Illustration: DIWAKAR CHHETRI</figcaption></figure>Nepal's prolonged political deadlock has not just affected the country’s response to Covid-19, it has also delayed the implementation of an American-aided project to upgrade Nepal’s electricity transmission grid.The <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" target="_blank" rel="noopener noreferrer">controversial</a> Millennium Challenge Corporation (MCC) project is the biggest single bilateral grant for a specific project in Nepal by a foreign country, but <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener noreferrer">has become the focus of an intense power struggle </a>rival parties, and is tangled in regional and global geopolitics.A big part of the $500 million MCC grant is ear-marked for the Kathmandu-Hetauda-Butwal 400KVa transmission line which will eventually evacuate electricity generated from existing and new <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/" target="_blank" rel="noopener noreferrer">hydropower plants</a> on the Budi Gandaki, Trisuli, Kali Gandaki, Marsyangdi, Kosi, and Tamakosi corridors, and link it to Gorakhpur in India. A smaller component of the project will upgrade arterial highways. The Nepal government is putting up another $130 million as a counterpart fund.However, critics in Nepal see the MCC as America’s strategic counter to China’s Belt Road Initiative. The <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" target="_blank" rel="noopener noreferrer">comment by US Under Secretary of State David J Ranz</a> in 2019 that the MCC was indeed a part of the US <a href="https://www.nepalitimes.com/editorial/between-two-oceans/" target="_blank" rel="noopener noreferrer">Indo-Pacific Strategy</a>added fuel to the fire.Sandwiched between India and China, Nepal was already in a strategic tight spot, but a recent flare-up in Sino-Indian tension and US-China rivalry have caught Nepal in the crossfire. In addition, opponents of Prime Minister K P Oli have weaponised the MCC and used the project to weaken his position.But Nepal’s energy planners say that even if the MCC is delayed or cancelled, the country will have to find alternatives to build the transmission lines.“We cannot afford this uncertainty we must have a Plan B in place, otherwise we will face a huge problem. There will be all this electricity being generated in the next few years, but no way to take it to consumers,” says Hitendra Dev Shakya, who heads the Nepal Electricity Authority (NEA). “We have to build the transmission lines with or without American aid.”The reason behind the <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener noreferrer">transmission line being prioritised</a> is to send the electricity produced from throughout Nepal, and any future monsoon surplus can then be exported to India and the same lines can be used to import power in winter if required.New projects with a generation capacity of 330MW are under construction on the Bhote Kosi in Rasuwa and Nuwakot. A further 500MW will be generated from other hydropower schemes whose construction was delayed due to the pandemic.New 220KVa transmission lines are ready to bring that electricity to Kathmandu Valley, but they only have the capacity to carry the new load from projects now under construction. But the NEA has already made Power Purchase Agreements (PPA) to buy about 6,000MW of electricity from private operators, and the distribution of that power will depend on the MCC-funded distribution system. The NEA says it urgently needs another transmission link to bring power from plants on the Tama Kosi to Kathmandu and to eastern Nepal via Hetauda.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109111140/636b84039c7e80680e06776djpeg.jpg" alt="" width="880" height="840"><a href="https://www.mcc.gov/where-we-work/country/nepal" target="_blank" rel="noopener noreferrer">The MCC</a> was set up in 2004 by the US Congress during the George W Bush presidency to help developing nations reduce poverty through financial aid. Since then, as Sino-US tensions grew it has taken on a strategic dimension as the two powers compete for global connectivity. The $500 million MCC grant to Nepal was sanctioned in 2017 to improve Nepal’s energy and road infrastructure.Nepal was suffering 18 hours of power cuts a day when the agreement was signed, and after much deliberation, Nepal’s planners, politicians and bureaucrats decided that <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener noreferrer">transmission lines were the most urgently needed</a> since powerplants were already under construction. The generated electricity need to be taken to load centres, this would increase the renewable component of Nepal’s energy mix by replacing imported petroleum, and finally, to export any surplus to India.Meanwhile, the <a href="https://www.nepalitimes.com/latest/post-truth-politics-in-nepal/" target="_blank" rel="noopener noreferrer">Millennium Challenge Authority Nepal (MCA-Nepal)</a> has been set up and the office has already finalised the design of the 315km transmission line of 400KVa capacity with three new sub-stations. But the delay in Parliament’s ratification of the project means it cannot issue tender bids, and this will put 2,600MW of electricity at risk of being wasted in eh coming two years.<a href="https://archive.nepalitimes.com/news.php?id=17959" target="_blank" rel="noopener noreferrer">Khadga Bahadur Bista</a>, the CEO of MCA-Nepal estimates about it takes up to five months to select a contractor even if the project is ratified by Parliament, and after that, it will take another nine months to start construction.“We are all set to kick start this project and are ready to call for international tender bids, but due to it still pending in the Parliament we have not been able to make progress,” Bista told Nepali Times. Just Do ItThe NEA says that Nepal is now generating 1,400MW of electricity, and this is set to more than triple in the next three years to 5,000MW, with the largest hydropower project so far in Nepal, the 456MW Upper Tama Kosi coming on stream in July, if it is not delayed again by the lockdown.Other hydroelectricity projects totalling 2,500MW are planned are in the financial negotiations stage, they are set to come into operation by 2026.But the more urgent need is power transmission to accommodate the new projects in the next three years as Nepal struggles to keep up with demand. The current peak demand is 1,150MW, which drops to 700MW at night. Generation capacity also fluctuates during the monsoon and dry season between surplus and scarcity because most of the hydro projects are of the run-of-river type without large reservoirs.To avoid electricity from going to waste during the monsoon, Nepal can export the surplus power to India, and import in winter. The agreements are in place with India to facilitate power trade, but current transmission lines cannot bear future load. The MCC-funded transmission lines are also required for domestic distribution and grid management.The present Dhalkebar-Muzaffarpur crossborder transmission line connects India and Nepal but can only handle 1,000MW each way, but practically it can only bear 800MW. This means by late next year, Nepal’s new surplus monsoon electricity is sure to go waste.This will not just be a wasted opportunity for Nepal to reduce its trade imbalance and partly pay for its winter power import from India, but also affect private hydropower investors in Nepal. This scenario can be avoided if the proposed 400KVa Butwal-Gorakhpur transmission line.The catch here is that the NEA has signed an understanding with the private hydropower investors that it will buy electricity they generate only if the surplus can be exported to India. Any delay in building the Butwal-Gorakhpur transmission line to India, therefore would ultimately impact Nepal’s own private power producers. This put their investment at risk, affect the banking sector, and ultimately Nepal’s overall economy.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109111140/636b84069c7e80680e06776ejpeg.jpg" alt="" width="946" height="526"><figcaption>Illustration: BHANU BHATTARAI</figcaption></figure>Critics of the MCC have pointed out that exporting power to India is not a priority, and Nepal should use power from the new projects to foster value-added energy-intensive industries in Nepal itself. However, the MCC transmission lines will be needed even to feed power within the country.In addition, at the rate power demand is rising in Nepal, even if 5,000MW is generated in the monsoon, the capacity of the run-of-river schemes will drop to one-third in the dry season – as it has done during this year’s winter drought. The higher capacity transmission lines are therefore required to import power from India until such time as Nepal’s generation capacity in winter is augmented with storage projects like Budi Gandaki.NEA’s Shakya says the MCC project will form a backbone of Nepal’s electricity grid, and by linking it to the Indian grid it will be more robust and flexible, allowing load sharing and management. The MCC-funded transmission lines are also critical for meeting Kathmandu Valley’s future demand growth, to transfer power generated in eastern Nepal to the western half of the country during the monsoon, and from west to east in the winter.Fortunately, electricity supply and demand in Nepal and India complement each other. In summer, when demand rises in India Nepal has surplus power, and in winter when Nepal’s supply cannot meet demand, it can import from India.The same is true within Nepal. There is a nearly one month lag between the time the monsoon arrives in eastern Nepal in early June, and by the time it starts raining heavily in western Nepal in mid-July. This means projects in eastern Nepal are already operating at full capacity, and the surplus electricity can be sent to western Nepal where it is still dry – if there was the necessary east-west transmission system.“The risk that we will have to face in the coming years if this project does not materialise will be unimaginable,” Shakya warns. “If these transmission lines are not built through the MCC grant, we have to immediately start moving towards an alternative.”Good connectivityNepal signed the MCC Compact Agreement in September 2017 which allowed the MCC Board in Washington to release the grant amount of $500 million (Rs59 billion) for the development of Nepal’s electricity transmission line and road infrastructure. But everything has been stuck for more than a year because a provision in the agreement that required ratification by Parliament.The Americans insisted on this clause so that the project would be valid no matter which government was in power in Nepal, but that is also the reason that the MCC has become a punching bag for those against Prime Minister Oli—even though his predecessors in other parties opposing the project were in government when the agreement was signed. The NC leadership which is now in the opposition, as well as NCP leaders that included the Maoist Centre and UML, who are vehemently getting the MCC scrapped today were involved in approving and planning the project.Foreign affairs experts explain that the MCC has been caught up in domestic oneupmanship between Nepal’s leaders and <a href="https://www.nepalitimes.com/editorial/covid-19-and-the-new-great-game/" target="_blank" rel="noopener noreferrer">international geopolitics</a>. Nepal’s politicians have a tendency to be north-facing or south-facing, or both, and are generally not able to work together for the national interest. This is made worse by the absence of trust, and a lack of dignity.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109111140/636b84089c7e80680e06776fjpeg.jpg" alt="" width="750" height="1000"><figcaption>Photo: KUNDA DIXIT</figcaption></figure>The US side has informed the government that the MCC grant is not open-ended and the deadline is looming. However, the MCC has also suffered collateral damage as Prime Minister Oli dissolved the Lower House on 20 December, and then ended the winter session on 19 April. The Special Session has been called for 10 May as Prime Minister Oli seeks a confidence vote. If he loses, the country will go for early elections in six month’s time. The budget session of the House could pass the MCC, but with the intense political polarisation, it will not be easy.Despite the agreement being signed by both governments, therefore, it is languishing because of Nepal’s internal dynamics. The main objection from the detractors is that it is a part of the Indo-Pacific Strategy of the United States, and that several provisions of the agreement undermine the sovereignty of Nepal.Bhim Rawal, a staunch anti-Oli UML leader, as well as Pushpa Kamal Dahal and other Maoist Centre leaders are against the agreement being ratified by Parliament, more because of their opposition to a project Oli is pushing than other reasons. A committee constituted under the convener of UML leader Jhalanath Khanal and others had recommended last year that the agreement be passed with amendments.Though the project has still not got off the ground, it has already spent about $3 million for preparations, which the US and Nepal government have shared half-half. It was used for the mapping and design of the transmission lines, the pylons, sub-stations, and preparing tender documents.The EIA (Environmental Impact Assessment (EIA) report of the overall project is in the final stages. The task of acquiring the land under the project in Ratmate of Nuwakot, where the sub-station will be constructed is nearing completion. The Nepal government has allocated Rs10.3 billion this fiscal year for MCC, but till mid-December only Rs140 million had been spent.

Power politics delays MCC in Nepal

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110131116/636cec219c7e80680e09ad49jpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Illustration: DIWAKAR CHHETRI</figcaption></figure>Nepal's prolonged political deadlock has not just affected the country’s response to Covid-19, it has also delayed the implementation of an American-aided project to upgrade Nepal’s electricity transmission grid.The <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" target="_blank" rel="noopener noreferrer">controversial</a> Millennium Challenge Corporation (MCC) project is the biggest single bilateral grant for a specific project in Nepal by a foreign country, but <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener noreferrer">has become the focus of an intense power struggle </a>rival parties, and is tangled in regional and global geopolitics.A big part of the $500 million MCC grant is ear-marked for the Kathmandu-Hetauda-Butwal 400KVa transmission line which will eventually evacuate electricity generated from existing and new <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/" target="_blank" rel="noopener noreferrer">hydropower plants</a> on the Budi Gandaki, Trisuli, Kali Gandaki, Marsyangdi, Kosi, and Tamakosi corridors, and link it to Gorakhpur in India. A smaller component of the project will upgrade arterial highways. The Nepal government is putting up another $130 million as a counterpart fund.However, critics in Nepal see the MCC as America’s strategic counter to China’s Belt Road Initiative. The <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" target="_blank" rel="noopener noreferrer">comment by US Under Secretary of State David J Ranz</a> in 2019 that the MCC was indeed a part of the US <a href="https://www.nepalitimes.com/editorial/between-two-oceans/" target="_blank" rel="noopener noreferrer">Indo-Pacific Strategy</a>added fuel to the fire.Sandwiched between India and China, Nepal was already in a strategic tight spot, but a recent flare-up in Sino-Indian tension and US-China rivalry have caught Nepal in the crossfire. In addition, opponents of Prime Minister K P Oli have weaponised the MCC and used the project to weaken his position.But Nepal’s energy planners say that even if the MCC is delayed or cancelled, the country will have to find alternatives to build the transmission lines.“We cannot afford this uncertainty we must have a Plan B in place, otherwise we will face a huge problem. There will be all this electricity being generated in the next few years, but no way to take it to consumers,” says Hitendra Dev Shakya, who heads the Nepal Electricity Authority (NEA). “We have to build the transmission lines with or without American aid.”The reason behind the <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener noreferrer">transmission line being prioritised</a> is to send the electricity produced from throughout Nepal, and any future monsoon surplus can then be exported to India and the same lines can be used to import power in winter if required.New projects with a generation capacity of 330MW are under construction on the Bhote Kosi in Rasuwa and Nuwakot. A further 500MW will be generated from other hydropower schemes whose construction was delayed due to the pandemic.New 220KVa transmission lines are ready to bring that electricity to Kathmandu Valley, but they only have the capacity to carry the new load from projects now under construction. But the NEA has already made Power Purchase Agreements (PPA) to buy about 6,000MW of electricity from private operators, and the distribution of that power will depend on the MCC-funded distribution system. The NEA says it urgently needs another transmission link to bring power from plants on the Tama Kosi to Kathmandu and to eastern Nepal via Hetauda.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110131116/636cec259c7e80680e09ad4ajpeg.jpg" alt="" width="880" height="840"><a href="https://www.mcc.gov/where-we-work/country/nepal" target="_blank" rel="noopener noreferrer">The MCC</a> was set up in 2004 by the US Congress during the George W Bush presidency to help developing nations reduce poverty through financial aid. Since then, as Sino-US tensions grew it has taken on a strategic dimension as the two powers compete for global connectivity. The $500 million MCC grant to Nepal was sanctioned in 2017 to improve Nepal’s energy and road infrastructure.Nepal was suffering 18 hours of power cuts a day when the agreement was signed, and after much deliberation, Nepal’s planners, politicians and bureaucrats decided that <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener noreferrer">transmission lines were the most urgently needed</a> since powerplants were already under construction. The generated electricity need to be taken to load centres, this would increase the renewable component of Nepal’s energy mix by replacing imported petroleum, and finally, to export any surplus to India.Meanwhile, the <a href="https://www.nepalitimes.com/latest/post-truth-politics-in-nepal/" target="_blank" rel="noopener noreferrer">Millennium Challenge Authority Nepal (MCA-Nepal)</a> has been set up and the office has already finalised the design of the 315km transmission line of 400KVa capacity with three new sub-stations. But the delay in Parliament’s ratification of the project means it cannot issue tender bids, and this will put 2,600MW of electricity at risk of being wasted in eh coming two years.<a href="https://archive.nepalitimes.com/news.php?id=17959" target="_blank" rel="noopener noreferrer">Khadga Bahadur Bista</a>, the CEO of MCA-Nepal estimates about it takes up to five months to select a contractor even if the project is ratified by Parliament, and after that, it will take another nine months to start construction.“We are all set to kick start this project and are ready to call for international tender bids, but due to it still pending in the Parliament we have not been able to make progress,” Bista told Nepali Times. Just Do ItThe NEA says that Nepal is now generating 1,400MW of electricity, and this is set to more than triple in the next three years to 5,000MW, with the largest hydropower project so far in Nepal, the 456MW Upper Tama Kosi coming on stream in July, if it is not delayed again by the lockdown.Other hydroelectricity projects totalling 2,500MW are planned are in the financial negotiations stage, they are set to come into operation by 2026.But the more urgent need is power transmission to accommodate the new projects in the next three years as Nepal struggles to keep up with demand. The current peak demand is 1,150MW, which drops to 700MW at night. Generation capacity also fluctuates during the monsoon and dry season between surplus and scarcity because most of the hydro projects are of the run-of-river type without large reservoirs.To avoid electricity from going to waste during the monsoon, Nepal can export the surplus power to India, and import in winter. The agreements are in place with India to facilitate power trade, but current transmission lines cannot bear future load. The MCC-funded transmission lines are also required for domestic distribution and grid management.The present Dhalkebar-Muzaffarpur crossborder transmission line connects India and Nepal but can only handle 1,000MW each way, but practically it can only bear 800MW. This means by late next year, Nepal’s new surplus monsoon electricity is sure to go waste.This will not just be a wasted opportunity for Nepal to reduce its trade imbalance and partly pay for its winter power import from India, but also affect private hydropower investors in Nepal. This scenario can be avoided if the proposed 400KVa Butwal-Gorakhpur transmission line.The catch here is that the NEA has signed an understanding with the private hydropower investors that it will buy electricity they generate only if the surplus can be exported to India. Any delay in building the Butwal-Gorakhpur transmission line to India, therefore would ultimately impact Nepal’s own private power producers. This put their investment at risk, affect the banking sector, and ultimately Nepal’s overall economy.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110131116/636cec279c7e80680e09ad4bjpeg.jpg" alt="" width="946" height="526"><figcaption>Illustration: BHANU BHATTARAI</figcaption></figure>Critics of the MCC have pointed out that exporting power to India is not a priority, and Nepal should use power from the new projects to foster value-added energy-intensive industries in Nepal itself. However, the MCC transmission lines will be needed even to feed power within the country.In addition, at the rate power demand is rising in Nepal, even if 5,000MW is generated in the monsoon, the capacity of the run-of-river schemes will drop to one-third in the dry season – as it has done during this year’s winter drought. The higher capacity transmission lines are therefore required to import power from India until such time as Nepal’s generation capacity in winter is augmented with storage projects like Budi Gandaki.NEA’s Shakya says the MCC project will form a backbone of Nepal’s electricity grid, and by linking it to the Indian grid it will be more robust and flexible, allowing load sharing and management. The MCC-funded transmission lines are also critical for meeting Kathmandu Valley’s future demand growth, to transfer power generated in eastern Nepal to the western half of the country during the monsoon, and from west to east in the winter.Fortunately, electricity supply and demand in Nepal and India complement each other. In summer, when demand rises in India Nepal has surplus power, and in winter when Nepal’s supply cannot meet demand, it can import from India.The same is true within Nepal. There is a nearly one month lag between the time the monsoon arrives in eastern Nepal in early June, and by the time it starts raining heavily in western Nepal in mid-July. This means projects in eastern Nepal are already operating at full capacity, and the surplus electricity can be sent to western Nepal where it is still dry – if there was the necessary east-west transmission system.“The risk that we will have to face in the coming years if this project does not materialise will be unimaginable,” Shakya warns. “If these transmission lines are not built through the MCC grant, we have to immediately start moving towards an alternative.”Good connectivityNepal signed the MCC Compact Agreement in September 2017 which allowed the MCC Board in Washington to release the grant amount of $500 million (Rs59 billion) for the development of Nepal’s electricity transmission line and road infrastructure. But everything has been stuck for more than a year because a provision in the agreement that required ratification by Parliament.The Americans insisted on this clause so that the project would be valid no matter which government was in power in Nepal, but that is also the reason that the MCC has become a punching bag for those against Prime Minister Oli—even though his predecessors in other parties opposing the project were in government when the agreement was signed. The NC leadership which is now in the opposition, as well as NCP leaders that included the Maoist Centre and UML, who are vehemently getting the MCC scrapped today were involved in approving and planning the project.Foreign affairs experts explain that the MCC has been caught up in domestic oneupmanship between Nepal’s leaders and <a href="https://www.nepalitimes.com/editorial/covid-19-and-the-new-great-game/" target="_blank" rel="noopener noreferrer">international geopolitics</a>. Nepal’s politicians have a tendency to be north-facing or south-facing, or both, and are generally not able to work together for the national interest. This is made worse by the absence of trust, and a lack of dignity.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110131116/636cec2a9c7e80680e09ad4cjpeg.jpg" alt="" width="750" height="1000"><figcaption>Photo: KUNDA DIXIT</figcaption></figure>The US side has informed the government that the MCC grant is not open-ended and the deadline is looming. However, the MCC has also suffered collateral damage as Prime Minister Oli dissolved the Lower House on 20 December, and then ended the winter session on 19 April. The Special Session has been called for 10 May as Prime Minister Oli seeks a confidence vote. If he loses, the country will go for early elections in six month’s time. The budget session of the House could pass the MCC, but with the intense political polarisation, it will not be easy.Despite the agreement being signed by both governments, therefore, it is languishing because of Nepal’s internal dynamics. The main objection from the detractors is that it is a part of the Indo-Pacific Strategy of the United States, and that several provisions of the agreement undermine the sovereignty of Nepal.Bhim Rawal, a staunch anti-Oli UML leader, as well as Pushpa Kamal Dahal and other Maoist Centre leaders are against the agreement being ratified by Parliament, more because of their opposition to a project Oli is pushing than other reasons. A committee constituted under the convener of UML leader Jhalanath Khanal and others had recommended last year that the agreement be passed with amendments.Though the project has still not got off the ground, it has already spent about $3 million for preparations, which the US and Nepal government have shared half-half. It was used for the mapping and design of the transmission lines, the pylons, sub-stations, and preparing tender documents.The EIA (Environmental Impact Assessment (EIA) report of the overall project is in the final stages. The task of acquiring the land under the project in Ratmate of Nuwakot, where the sub-station will be constructed is nearing completion. The Nepal government has allocated Rs10.3 billion this fiscal year for MCC, but till mid-December only Rs140 million had been spent.

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101140/636b75829c7e80680e0623f2jpeg.jpg" alt="" width="2048" height="1365"/>Nepal’s Communist Party leaders must take note of two events that unfolded in India this week: <a href="https://www.bbc.com/news/world-south-asia-51638345" target="_blank" rel="noopener">the roaring welcome to US President Donald Trump</a> and the ongoing communal riots in Delhi’s northeastern suburb.That the Narendra Modi government was able to put up a great two-day show to woo Trump, who repeatedly praised Modi and said “America loves India” has been somewhat overshadowed by the violence that has claimed over 20 lives in Delhi.The two events depict contrasting pictures: one of a new emerging India eager to engage with superpowers, even taking lead in issues of international concern. And the other of an India engulfed in violence between some Hindus and Muslims. The ruling BJP and Modi, supported by the right-wing groups like RSS and VHP, find themselves in the vortex of this violence.Trump reached India on Monday and along with Modi addressed the ‘Namaste Trump’ rally in Ahmedabad’s Motera Stadium, the largest cricket stadium in the world, attended by over 100,000 people. The two presented their visions for the next phase of Indo-US strategic partnership.Although the much-awaited trade deal did not happen, the two sides pulled together a $3billion military deal, sought commitments to fight terrorism, narco-terrorism and organised crime and signed three MoUs in the health and oil sectors. Trump even discussed the importance of a secure 5G network in India, ahead of trials involving China’s Huawei which he said must be “a tool for freedom, progress, prosperity, not a conduit for suppression and censorship”.Important for Nepal to note is their dialogue in security cooperation. Besides reiterating that the two countries will work to combat “radical Islamic terrorism” which will dearly affect the functioning of SAARC, Trump praised the military cooperation and said that the US and India, along with Japan and Australia, should work together for security of the Indo-Pacific region as the Quad (Quadrilateral Security Dialogue) grouping.The diplomatic and military arrangements of the Quad are widely viewed as a response to the rapidly increasing economic and military power of China in the region. Sandwiched and landlocked between India and China, Nepal will have to <a href="https://www.nepalitimes.com/here-now/nepal-now-has-to-balance-not-just-india-and-china-but-also-the-west/" target="_blank" rel="noopener">balance its relations between China and a US-backed India</a>.As it is, a $500 million US-funded <a href="https://www.nepalitimes.com/latest/mcc-row-damages-nepals-credibility/" target="_blank" rel="noopener">Millennium Challenge Corporation</a> (MCC) deal to improve Nepal’s connectivity <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener">is in limbo</a> because of opposition from a faction of the ruling Communist Party that sees it as a part of the American Indo-Pacific Strategy. Parliamentary ratification of the project has been delayed.The MCC is viewed with much interest by India’s civil society and academia lately, and is seen as a direct counter to China’s Belt Road Initiative (BRI). Sections of the Nepali establishment views India as an obstructionist power, and are trying to develop closer ties with China.But India is finding more grounds of convergence with the US, which now views South Asia as a vital part of its <a href="https://www.nepalitimes.com/editorial/between-two-oceans/" target="_blank" rel="noopener">Indo-Pacific Strategy</a>. Smaller countries in India’s periphery are bound to be trapped in this rivalry. With pressing domestic concerns at home over opposition to <a href="https://www.nepalitimes.com/latest/indian-nepalis-alarmed-by-citizenship-amendment-bill/" target="_blank" rel="noopener">the Constitution Amendment Act (CAA) India </a>may play silent and quiet diplomacy leaving the US and China to compete for influence in India’s neighborhood.Trump and Modi are said to have discussed developments in South Asia at length during this visit, meaning they will collaborate and closely consult each other on regional matters. Nepal must gear up to deal with a more forceful America in the near future even when it is already grappling with <a href="https://www.nepalitimes.com/banner/what-is-xi-jinpings-big-surprise/" target="_blank" rel="noopener">a dominant China</a>.It is in India’s advantage if the US temporarily fills the vacuum in Nepal, which New Delhi feels is its traditional sphere of influence. So, the <a href="https://www.nepalitimes.com/editorial/a-yam-between-3-boulders/" target="_blank" rel="noopener">foreign policy challenge for Nepal</a> will not be to balance between India and China so much anymore, but getting into meaningful dialogue with China and the US to protect its national interest.India considers the US as its ‘natural ally’. The Modi-Trump equation seen in Gujarat and Delhi this week speaks volumes of their friendship and desire to foster closer ties between the world’s oldest and largest democracies. Even in midst of communal riots in Delhi, Trump stated at a press conference “it is up to India” to deal with the CAA matter, quickly adding that Modi is committed to “religious freedom in India.”Most analysts conclude that if Trump is re-elected in November elections, India’s relations with the United States could be further strengthened.The author is a Nepali journalist and researcher based in New Delhi.

The India, US, Nepal, China quadrangle

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151128/636a67bb9c7e80680e0599f2jpeg.jpg" alt="" width="3000" height="1668"/><figcaption>Illustration: BHANU BHATTARAI</figcaption></figure>It is the biggest amount granted to Nepal for a specific project by a bilateral development partner. But the Millennium Challenge Corporation (MCC) project <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener">has become the centre of a row</a> between two factions of the Nepal Communist Party, and stalled proceedings at the Central Committee meeting of the ruling party last week, raising questions about Nepal’s credibility.The major chunk of the grant is supposed to be spent on the Kathmandu-Hetauda-Butwal 400KVa transmission line which will eventually evacuate electricity generated from <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/" target="_blank" rel="noopener">hydropower plants</a> on the Budi Gandaki, Trisuli, Kali Gandaki, Marsyangdi, Kosi, and Tamakosi corridors. Another component will go for upgrading key highways.Read also: <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener">A millennium challenge</a>, EditorialHitendradev Shakya, a transmission line specialist says this power link will form the backbone of Nepal's national grid. "It is imperative that Nepal starts building this, with or without American aid," he says.Hydropower projects that will produce a total of 330MW power are under construction in Rasuwa and Nuwakot on the Bhote Kosi, and a further 500MW of electricity will come from schemes under construction. Transmission lines for 220KVa have already been built to feed the power to Kathmandu Valley, but these will only serve power plants under construction. More transmission lines will be needed for future power plants, and also for possible export to India. If not, electricity generated, especially during the monsoon, could go waste.The Nepal Electricity Authority (NEA) has already made Power Purchase Agreements (PPA) to buy about 6,000MW of electricity from private operators, but the transmission lines to distribute it are lagging behind. NEA wants another transmission link to bring power from plants on the Tama Kosi to Kathmandu and to eastern Nepal via Hetauda, and export the surplus to India through Butwal.Read also: <a href="https://www.nepalitimes.com/banner/nepal-in-2030/" target="_blank" rel="noopener">Nepal in 2030</a>, Sanghamitra SubbaHowever, at the NCP Central Committee last week there was intense debate between those for and against the MCC. Some prominent leaders like Bhim Rawal, Deb Gurung and Yogesh Bhattarai objected to the MCC on grounds that it was a part of the <a href="https://www.nepalitimes.com/editorial/between-two-oceans/" target="_blank" rel="noopener">US Indo-Pacific Strategy</a> that they see as being directed against China.The meeting could not come to an agreement, and decision on it was passed to the party secretariat. Some said the sabre rattling in the Central Committee was just populist posturing to appear nationalist.<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.mcc.gov/where-we-work/country/nepal" target="_blank" rel="noopener">The MCC</a> was established in 2004 by the US Congress to help developing nations reduce poverty through financial aid. In August 2017, the MCC Board in the US approved a $500 million grant to Nepal to improve Nepal's energy and road infrastructure.Experts say that arguing about a bilateral project already agreed upon could raise questions about Nepal’s credibility in the international arena. Whether or not MCC is a part of America's Indo-Pacific Strategy is an old debate, and Minister for Foreign Affairs Pradeep Gyawali has maintained it is not. He visited Washington DC last year and met Secretary of State Mike Pompeo to push the project forward."Either the leaders should give alternatives, or stop objecting to this grant,” says economist Biswa Poudel.This year several high-profile American officials have visited Nepal, including the Indo-Pacific Commander Philip A Davidson, Deputy Assistant Secretary Joseph Felter, and Deputy Assistant Secretary of State for South Asia David J Ranz. The visits have bolstered the view that the MCC is indeed a US move to counter China’s Belt Road Initiative in Nepal. In fact Ranz actually admitted to the Nepali media that it was.Read also: <a href="https://www.nepalitimes.com/here-now/nepal-now-has-to-balance-not-just-india-and-china-but-also-the-west/" target="_blank" rel="noopener">Nepal now has to balance not just India and China, but also the West</a>, Bhairaja PandayLast June, a report by the American Department of Defence identified the Indo-Pacific Strategy as a military move to project American power in the Pacific and Indian Oceans and a pillar of American foreign policy in the region.However, international relations expert Tika Dhakal believes the MCC should be separated from American military strategy: "It is not beneficial for Nepal to be a part of the military gameplan of a foreign power, and America should not include MCC under its Indo-Pacific strategy."The other sensitivity to Nepal is that the transmission line link to India could make Nepal even more dependent on its southern neighbour. "No aid comes without strings attached. But the Nepal government should be clever enough to use aid like this for its own benefit,” Dhakal says.Another controversy surrounds a clause in the agreement that the project must be ratified by Nepal's Parliament. The Cabinet had planned to table it in the House last year, but ex-Speaker Krishna Bahadur Mahara did not include it in the list of subjects, allegedly on purpose.Khadga Bahadur Bista of Millennium Challenge Nepal Development Committee says that if it is not approved in the ongoing winter session of Parliament, the project may be dropped. "It is due to start end-June 2020. If Parliament does not approve it now, it will be difficult to stick to that date.”Even those in favour of the MCC say Nepal should not have accepted the clause about Parliament ratification. The other sticking point may be to get India’s prior approval for the 400KVa transmission line. The MCC Compact states that if the project is not finished in five years, the money goes back to the US treasury, and the delays could scuttle the project.

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