Kathmandu, Sep 12 (PTI) Vice President of the US foreign aid agency Millennium Challenge Corporation Fatima Sumar on Sunday expressed confidence that Nepal would endorse the USD 500-million MCC agreement which is under consideration in Parliament, saying the grant assistance will serve as a foundation for the development of roads and transmission lines in the Himalayan nation.

Nepal’s political parties continue to be divided over the programme.

Under the MCC programme, the US government will provide USD 500-million grant assistance which will be mainly utilised on strengthening Nepal's transmission line that would facilitate the export of hydro-electricity to India in the near future and also improve the country’s road networks.

Sumar, who arrived here on a four-day visit on Thursday to understand the status of the project which has not yet been approved by the House of Representatives, left for the US on Sunday.

A US team led by her sought the support of Nepal’s politicians to endorse the pact.

During a press meeting on the conclusion of her visit, Sumar said she was optimistic about the Nepal government endorsing the MCC agreement.

"The grant assistance will serve as foundation for the development of roads and transmission lines in Nepal," she said.

The MCC grant will be important for Nepal's economic development at a time when the country's economy is hit by COVID-19, she said.

"Delay in endorsing the pact will obviously slow down Nepal's development. We have furnished a written reply to the questions provided by the Nepal government relating to the MCC.

“I have personally met leaders of various political parties, government officials, lawmakers and civil society leaders and tried to clear doubts surrounding the MCC," Sumar said.

The MCC pact is required to be endorsed by Parliament before it is implemented. However, there is no consensus among the members of the ruling party alliances. The debate on the MCC could be seen not only among the ruling and the Opposition, but also in the streets and social media.

On Friday, Sumar called on Nepal Prime Minister Sher Bahadur Deuba to clear doubts over the endorsement of the MCC agreement.

The MCC Vice Chairperson had also met with CPN-Maoist Centre chairman Pushpakamal Dahal Prachanda, CPN-UML chairman K P Sharma Oli, CPN-Unified Socialist chairman Madhav Kumar Nepal, Finance Minister Janardan Sharma and Energy Minister Pamha Bhushal among others before leaving for the US on Sunday.

Nepal and the US signed the MCC agreement in 2017.

The MCC, however, has become a hotly-debated political issue in this country, with some parties objecting to it on grounds that the US programme is part of the Indo-Pacific Strategy and its parliamentary ratification would be against Nepal's national interest.

In its response, the Washington-based agency made it clear that the MCC pact did not fall under the US government's Indo-Pacific Strategy.

The former Oli government failed to get the MCC endorsed through the House after a section of the CPN-UML leaders and the Maoist Centre objected to it, The Kathmandu Post reported.

Now the current Deuba government is under pressure to ratify it from the House. However, Deuba’s coalition partner is the Maoist Centre, which has not been positive about the American programme from the very beginning.

The US officials have said that America cannot wait indefinitely for Nepal to endorse the agreement through parliament and expedite implementation of the projects both countries agreed upon in the past.

Nepal was the first country in South Asia to qualify for the compact after it met 16 out of the 20 policy indicators. Deuba was prime minister when Nepal signed up to the agreement.

The Millennium Challenge Corporation is a bilateral United States foreign aid agency established by the US Congress in 2004. It is an independent agency separate from the State Department and USAID.