March 1: Although the MCC agreement has been passed by the parliament, it will take some time for the project to move ahead.

"The Millennium Challenge Account (MCA) Development Committee will begin construction of the proposed transmission line and strategic roads within a year and a half after completing all the pre-requisites for construction and issuing global tender," said Khadga Bahadur Bista, chief executive officer (CEO) of the MCA.

He said that the acquisition of land, forest, and environment-related works should be completed first to start the construction. "These works will be completed within a year. After that, the date of commencement of construction will be fixed," said Bista.

He said that even the global tender for the construction of road and transmission line would take up to a year and a half. He said that the budget of the project was estimated five years ago and it will be reviewed. According to the agreement signed with the US, the entire work of the project has to be completed within five years. If the grant is not spent within five years, the project will be terminated.

As per the current agreement, the US-backed MCC will invest USD 500 million or about Rs 55 billion from the MCC and the Government of Nepal will invest USD 130 million or about Rs 15 billion in the project. The target of the MCC project is to build a 315 km long transmission line of 400 Kv capacity and 77 km long strategic road.

The transmission line to be constructed with the grant of MCC is expected to strengthen the proposed 7,000 MW capacity hydropower projects financially. The project will ensure security of large investments made by banks and hydropower developers. The private sector expects Nepal to make a drastic leap in power generation as more investment will be made in Nepal's energy sector after the endorsement of MCC grant.

The United States has responded by saying that the project has now moved towards the implementation phase.

The decision on whether to ratify the MCC agreement has always been in the hands of the Nepalese government as a sovereign democracy, the US Embassy in Kathmandu said in a statement on Monday. According to the embassy, the project will improve the supply of electricity and decrease transportation costs.

The United States noted that this year marks the 75th anniversary of the establishment of diplomatic relations between Nepal and the United States.

The United States has said that MCC compacts have helped alleviate poverty worldwide since its inception about 20 years ago.

The latest US statement comes after the House of Representatives ratified the MCC agreement on Sunday with a 12-point explanatory announcement.