Notice2024-31066
Notice of First Amendment to Compact With the Federal Democratic Republic of Nepal
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 2, 2025
Issuing agencies
Millennium Challenge Corporation
Abstract
In accordance with the Millennium Challenge Act of 2003, as amended, the Millennium Challenge Corporation is publishing a summary, justification, and full text of the proposed First Amendment to Millennium Challenge Compact between the United States of America, acting through the Millennium Challenge Corporation, and the Federal Democratic Republic of Nepal. Representatives of the United States Government and the Government of the Federal Democratic Republic of Nepal plan to conclude the Amendment in January 2025.
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 1 (Thursday, January 2, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 1 (Thursday, January 2, 2025)]
[Notices]
[Pages 117-119]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-31066]
=======================================================================
-----------------------------------------------------------------------
MILLENNIUM CHALLENGE CORPORATION
[MCC FR 24-13]
Notice of First Amendment to Compact With the Federal Democratic
Republic of Nepal
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: In accordance with the Millennium Challenge Act of 2003, as
amended, the Millennium Challenge Corporation is publishing a summary,
justification, and full text of the proposed First Amendment to
Millennium Challenge Compact between the United States of America,
acting through the Millennium Challenge Corporation, and the Federal
Democratic Republic of Nepal. Representatives of the United States
Government and the Government of the Federal Democratic Republic of
Nepal plan to conclude the Amendment in January 2025.
(Authority: 22 U.S.C. 7708(i)(2))
Dated: December 20, 2024.
Peter E. Jaffe,
Vice President, General Counsel, and Corporate Secretary.
Summary of First Amendment to Millennium Challenge Compact With the
Federal Democratic Republic of Nepal
The Board of Directors of the Millennium Challenge Corporation
(``MCC'') has approved an amendment (the ``Amendment'') to the existing
$500 million, five-year Millennium Challenge Compact between the United
States of America, acting through MCC, and the Federal Democratic
Republic of Nepal (the ``Compact'').
Background
The Compact was signed September 14, 2017, and entered into force
on August 30, 2023. The Compact aims to increase domestic electricity
consumption through the Electricity Transmission Project by improving
the availability and reliability of electricity in Nepal's electricity
grid, expanding and strengthening Nepal's high voltage electricity
transmission network to support new investments in generation that
unlock Nepal's hydropower potential, and facilitating increased power
trade between India and Nepal. The Compact also aims to maintain road
quality across Nepal's strategic road network through the Road
Maintenance Project.
Scope of the Amendment
MCC proposes to provide additional funding up to $50 million under
the Compact. The proposed additional funding will be used to cover
additional costs associated with the Compact's Electricity Transmission
Project, thus enabling successful implementation of the project.
Justification for the Amendment
The Compact was signed in September 2017 but did not enter into
force until August 2023. The protracted delay between signing and entry
into force, as well as the global inflationary pressures of the COVID-
19 pandemic, resulted in an increase in costs for the Electricity
Transmission Project. Further, procurement for construction of the
project's electricity transmission line was not initiated until
September 2023 and the bids received reflected costs that were
substantially higher than the original cost estimate, resulting in a
failed procurement. Despite identifying significant potential
reductions of cost drivers for a re-procurement of the transmission
line work, MCC anticipates that the cost of the transmission line work
will continue to exceed the projected compact budget.
Providing additional assistance under the Compact to support the
Electricity Transmission Project will enable successful implementation
of the Compact's objectives with respect to electricity reform.
Specifically, the additional MCC funding is necessary for and will
enable the accountable entity to sign contracts for the transmission
line work once re-procurement is complete in a timely manner and
maximize the remaining implementation period without further delays.
The additional funding will also preserve adequate contingency across
the Compact to facilitate operational adjustments that may become
necessary during construction. The economic rate of return for the
Electricity Transmission Project remains above 10 percent, which
indicates that, even with cost escalations, this remains a highly
viable and impactful project. Therefore, additional MCC funding for
this Compact would constitute a high return investment.
First Amendment to Millennium Challenge Compact Between the United
States of America Acting Through the Millennium Challenge Corporation
and the Federal Democratic Republic of Nepal Acting Through the
Ministry of Finance
First Amendment to Millennium Challenge Compact
This First Amendment to Millennium Challenge Compact (this
``Amendment''), is made by and between the United States of America,
acting through the Millennium Challenge Corporation, a United States
government corporation (``MCC''), and the Federal Democratic Republic
of Nepal (``Nepal''), acting through the Ministry of Finance (the
``Government'') (individually, a ``Party'' and collectively, the
``Parties''). All capitalized terms used in this Amendment that are not
otherwise defined herein have the meanings given to such terms in the
Compact (as defined below).
Recitals
Whereas, the United States of America and Nepal signed the
Millennium Challenge Compact between the United States of America,
acting through the Millennium Challenge Corporation, and the Federal
Democratic Republic of Nepal, acting through the Ministry of Finance,
on September 14, 2017 (as modified, the ``Compact'');
Whereas, Section 2.1 of the Compact provides for MCC to grant to
the Government, under the terms of the Compact, an amount not to exceed
Four Hundred Fifty-Nine Million Five Hundred Thousand United States
Dollars (US$459,500,000) (``Program Funding'') for use by the
Government to implement the Program;
Whereas, Section 2.2 of the Compact further provides for MCC to
grant to the Government, under the terms of the Compact and in addition
to the Program Funding described in Section 2.1 of the Compact, an
amount not to exceed Forty Million Five Hundred Thousand United States
Dollars (US$40,500,000) (``Compact CDF'') under Section 609(g) of the
Millennium Challenge Act of 2003, as amended (the ``MCA Act''), for use
by the Government to facilitate implementation of the Compact;
[[Page 118]]
Whereas, in accordance with Section 2.2(e) of the Compact, MCC
notified the Government on June 28, 2024, that the Excess Compact CDF
Amount of US$16,477,559.41 has been reallocated to Program Funding,
thereby increasing the total amount of Program Funding to
475,977,559.41;
Whereas, the Program involves a project to increase electricity
consumption by facilitating power trade and by improving the
availability and reliability of electricity supply in Nepal's
electricity grid (``the Electricity Transmission Project'' or ``ETP'');
Whereas, the cost to complete the Electricity Transmission Project
is now estimated to exceed the associated budget for the project; and
Whereas, pursuant to Section 6.2(a) of the Compact, the Parties
desire to amend the Compact to increase Program Funding by 50,000,000,
Now, therefore, the Parties hereby agree as follows:
Article 1
Amendments
Amendment to Section 2.1 of the Compact
Section 2.1 (Program Funding) of the Compact is amended and
restated to read as follows:
``Section 2.1 Program Funding. Following entry into force of this
Compact in accordance with Section 7.3, MCC will grant to the
Government, under the terms of this Compact, an amount not to exceed
525,977,559.41 (``Program Funding'') for use by the Government to
implement the Program. The allocation of Program Funding is generally
described in Annex II.''
Amendments to Exhibit A to Annex II to the Compact
Exhibit A to Annex II to the Compact (Multi-Year Financial Plan
Summary) is deleted in its entirety and replaced by the revised Exhibit
A as set forth in Annex I to this Amendment.
Article 2
General Provisions
2.1 Entry Into Force of This Amendment
This Amendment shall enter into force on the date of the last
signature of the Parties. Nepal represents that the Council of
Ministers of the Government of Nepal has approved Nepal's signature of
this Amendment.
2.2 Scope of This Amendment
Except as expressly amended by this Amendment, all of the
provisions of the Compact remain unchanged and in full force and
effect.
Done in [duplicate] in the English language.
------------------------------------------------------------------------
For the Federal Democratic
For the United States of America Republic of Nepal
------------------------------------------------------------------------
[name]................................. [name]
[title]................................ [title]
Date:.................................. Date:
Place:................................. Place:
------------------------------------------------------------------------
Annex I
Exhibit A to Annex II
Multi-Year Financial Plan Summary
[[Page 119]]
[GRAPHIC] [TIFF OMITTED] TN02JA25.001
[FR Doc. 2024-31066 Filed 12-31-24; 8:45 am]
BILLING CODE 9211-03-P
</pre></body>
</html>Indexed from Federal Register on January 2, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.