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The Korea International Cooperation Agency (KOICA) marked its 30th anniversary of development partnership in Nepal by hosting a ceremony in Kathmandu under the theme “30 Years Together: A Journey of Trust and Cooperation.”

The highlight of the program was the signing of agreements for three major projects worth a total of USD 29m, reflecting KOICA’s strategic priorities for the coming years.

The first Memorandum of Understanding (MoU) was signed between Finance Secretary Ghanshyam Upadhyaya and South Korean Ambassador to Nepal Park Tae-young for the establishment of the Gandaki Technical Institute, a five-year project (2025–2030) with a budget of USD 9m.

In addition, two Records of Discussion (RoDs) were signed:

• Value Chain Development for Fruits and Vegetables Project in Nepal (Phase II) with a budget of USD 10 million, to run from 2025 to 2031. The agreement was signed by Dr. Hari Bahadur KC., Joint Secretary at the Ministry of Agriculture and Livestock Development, and KOICA Nepal Country Director Moon Han Kong.

• Establishment of Sudurpaschim Polytechnic Institute Project with a budget of USD 10m, to be implemented from 2025 to 2030. This was signed by Joint Secretary Shiv Kumar Sapkota from the Ministry of Education, Science and Technology and KOICA Nepal Country Director Kong.

Speaking at the event, KOICA Country Director Moon Han Kong reaffirmed KOICA’s strong commitment to inclusive and sustainable development in Nepal, emphasizing priority areas such as education, health, agriculture, and governance.

Foreign Ministry Joint Secretary Bhrigu Dhungana highlighted KOICA’s significant contributions over the years, thanking Korea for supporting Nepal’s progress in education, health, agriculture, and capacity building. He stressed that deepening bilateral cooperation would help Nepal achieve its sustainable development goals.

Ambassador Park Tae-young said KOICA’s 30-year journey symbolizes the deep friendship and mutual trust between Nepal and Korea, calling the new projects symbols of shared progress.

Pokhara Metropolitan City Mayor and chief guest Ghanshyam Upadhyaya congratulated KOICA on the milestone and praised its contributions across Nepal. He expressed the government’s readiness to expand future programs with KOICA to ensure broader outreach and sustainability.

KOICA also reviewed its three-decade-long journey in Nepal, pledging to continue working with the government and communities for an inclusive, sustainable, and prosperous future.

Since 1991, Korea through KOICA has supported Nepal in health, education, agriculture, technical training, rural development, information technology, and tourism. So far, 2,921 Korean volunteers have served in government institutions across Nepal, while 2,230 Nepali civil servants have participated in KOICA’s capacity-building programs. KOICA has also partnered with civil society, universities, and international organizations to help Nepal achieve its Sustainable Development Goals (SDGs).

Following Nepal’s designation as a priority country for KOICA in 2010, Korea’s support has significantly expanded. By 2025, KOICA’s total assistance to Nepal has exceeded USD 200 million. A framework agreement on development cooperation is also being prepared to further strengthen Nepal–Korea friendship.

The fifth edition of the joint military exercise between the Nepali Army and the People’s Liberation Army (PLA) of China is scheduled to take place in Nepal from the first week of September.

The exercise, named Sagarmatha Friendship, will focus on counter-terrorism operations, combat tactics and disaster management, according to Nepali Army sources. The two sides have already agreed to begin the 10-day training from Sept 6.

The fourth edition of the joint drill was held last year in Chongqing, near Sichuan province, China. This time, officials from both armies are holding intensive discussions to finalize the modality, number of participants and observers for the exercise.

Defense Ministry Spokesperson Manoj Kumar Acharya described the joint exercise as part of a regular military cooperation program. “Nepal regularly conducts such exercises with India, the US, and China, mainly to enhance capacity and exchange experiences. These drills are not targeted at any particular country,” Acharya told ApEx.

A high-level Nepali Army team led by Major General Prem Dhoj Adhikari, including Brigadier General Dipendra Gurung, Colonel Mani Ram Thapa, Major Pawan Katwal and Captain Mahesh Dhakal, recently returned from Chengdu after attending the Final Planning Conference (FPC) with Chinese defense officials. Preparations are underway also in coordination with the Chinese Embassy in Kathmandu.

The first Nepal-China joint military exercise was held in Kathmandu in April 2017, followed by the second in Chengdu in 2018 and the third in Nepal in 2019. The drills were suspended for several years due to the Covid-19 pandemic before their resumption in China last year.

Meanwhile, Western countries including the US, India, Japan, South Korea and some European nations have expressed reservations over Nepal’s growing military engagement with China, especially at a time when Beijing has been pushing to implement Belt and Road Initiative (BRI) projects in Nepal. Nepal, however, has maintained that such exercises are routine. Alongside China, Nepal also conducts annual Surya Kiran exercises with the Indian Army and regular joint drills with the US military.

India has launched a new project in Nepal to strengthen rice fortification and supply chain management, in collaboration with the UN World Food Program. The initiative falls under the India-UN Global Capacity Building Initiative, officially launched on 1 August 2025 by India’s Ministry of External Affairs.

According to press release issued by an Indian Embassy, the project aims to address key gaps in Nepal’s fortified rice supply chain—particularly in procurement, data systems, and workforce capacity—by sharing best practices from India’s Public Distribution System. Areas of focus include beneficiary management, storage and distribution, monitoring systems, and grievance redress mechanisms.

The 12-month project will roll out in three phases: assessment and stakeholder engagement, a study visit to India, and formulation of a national action plan. Training will be delivered through India’s ITEC Program, which has previously trained over 3,000 Nepali officials, the statement says.

This initiative is one of four pilot projects identified under the India-UN partnership to promote South-South cooperation and support the Sustainable Development Goals. It highlights the strong development ties between India and Nepal, and their joint commitment to building resilient food systems, the statement reads.

The United States has completed a review of foreign aid for the Millennium Challenge Corporation (MCC) portfolio as part of alignment with the Trump administration’s ‘America First’ foreign policy. The new strategy, MCC explained in a press statement, will make the US ‘safer, stronger and more prosperous’. Further details are to follow after the MCC Board decision-making process and other consultations with the US Congress and partner countries.

The $500m MCC Compact is being implemented in collaboration with the government. The government has agreed to add another $197m, making the project’s total cost stand at $747m. The compact will develop Nepal’s transmission network for electricity and highways, promoting national prosperity and regional energy integration.

Earlier, Millennium Challenge Account Nepal (MCA-Nepal) appreciated the US government’s decision to allow continuation of the project under a special exception with the ongoing suspension of larger foreign aid programs.

On Jan 20, US President Donald Trump issued an executive order directing a review of all US foreign aid in accordance with the ‘America First’ policy. This led to a halt in the disbursement of aid from organizations like USAID and MCC for 90 days. Although MCC was exempted at first, its funding was eventually included in the suspension.

However, in March, MCC granted permission for Nepal to continue with essential procurement and office operations. Since then, project implementation has resumed. The MCC Board has already approved an additional $50m in Jan 2025 to address cost overruns in the transmission line component, although both the Nepal cabinet and US Congress are yet to confirm the release of these funds.

Contracts for three substations of Tanahun (Damauli), Nuwakot (Ratmate) and Nawalparasi, as well as for an 18-kilometer transmission line between the New Butwal substation and the Indian border, have been issued. Physical work has already begun in most places.

MCA-Nepal has also tendered for the remaining 297 km of transmission lines and bid evaluations are in the final phase. An earlier tender for 315 km had to be cancelled after bids received were over 60 percent higher than estimated costs.

Implementation of the five-year compact began on 30 Aug 2023. Any unspent money at the close date will be returned to the US government. To date, during fiscal years 2023 and 2024, $471.3m in obligations have been incurred under the MCC Nepal Compact, states ForeignAssistance.gov.

Signed in Sept 2017, the MCC-Nepal Compact took years of politicking, parliamentary ratification finally happening on 27 Feb 2022. At last, after a six-year break since the signing of the agreement, the project was launched officially in Aug 2023.

Though Nepal has already increased its share from the originally agreed $130m to $197m, the additional $50m MCC aid remains uncertain. Whether or not the Trump administration will approve the additional funds and whether or not Nepal’s cabinet will endorse it remains unknown.

Millennium Challenge Corporation (MCC) is a US government agency established by the Congress in 2004 as an independent entity to reduce global poverty through granting time-limited programs of economic growth, poverty reduction and institution building. While the agency’s top priority is development in partner countries, its mission is also designed to promote American interests abroad.

Nepal was eligible for MCC assistance in 2014 and obtained the $500m grant following persistent dialogue. The compact is one of the biggest bundles of US assistance to Nepal ever and is being implemented under MCA-Nepal, an office established under Development Board Act, 2013.