Nepal has signed an agreement with the US government on Friday to secure a grant of $500 million (approximately Rs51.5 billion) at Washington DC, USA on Thursday.

Finance Minister Gyanendra Bahadur Karki on behalf of the Nepal government and Acting Chief Executive of Millennium Challenge Corporation (MCC), Jonathan Nash signed the MoU to this effect.

The $500-million US grant support is part of the $630-million compact programme designed by the MCC for Nepal. To implement the programme, the Nepal government has expressed commitment to contribute $130 million, which is the single largest up-front country contribution in MCC’s history.

The fund would be mobilised to invest for the integrated plans of roads improvements and energy generation in Nepal.

Likewise, the MoU, also named as MCC Nepal Compact, is expected to lend substantial support to the reduction of poverty and construction of physical infrastructures in Nepal.

US government Deputy Secretary of State, John J Sullivan said that the US government is elated to have assisted Nepal adding that the assistance will pave a new way in the 70-years friendship between Nepal and the US.

All projects under the MCC’s compact programme must be completed exactly after five years of their implementation date. If not, the funds will go back to the US.

Nepal is the only country in the South Asian region to receive the Millennium Challenge Corporation of the US government.