United States has pledged $500 million to Nepal - an investment deal for electricity and infrastructure. It was $500 million

US aid agency's Millennium Challenge Corporation describes it as "a gift from the American people and a partnership between the two nations that will bring jobs and infrastructure to Nepal and improve the lives of Nepalis".

Section 7.1 of the agreement reads, "The Parties understand that this Compact, upon entry into force, will prevail over the domestic laws of Nepal."

Furthermore, the Compact includes the condition that the auditing of the use of the funds be carried out by US rather than Nepali auditors.

There's a thinking that 'MCC will assume a higher authority than Nepal's domestic law on spending if accepted.' and that in some form or other, it would make Nepal a dependent of the US.


Background

Since the devastating earthquake in Nepal in 2015, Beijing has overtaken India as the main source of foreign investment in the country.

China is constructing a freight railway between Tibet and Kathmandu under the Belt and Road Initiative.