Report: $900 million US funding in Nepal signals regime change plot
[image error]By Abhinandan Mishra
September 14, 2025
Nepal Prime Minister K.P. Sharma Oli’s resignation last week, forced by weeks of what have been termed and hailed as “Gen Z”-led protests that left at least 30 dead and government buildings and commercial establishments in flames, has cast that country into a moment of political uncertainty.
What looks like a sudden eruption of youth anger over corruption, unemployment, and social media ban sits against a longer story: a massive, documented American effort to reshape Nepal’s political space.
In March, The Sunday Guardian was shared with internal documents that proved how a plan was afoot to bring in a regime change in the Himalayan nation. The details shared by a top-ranking whistle blower with access to sensitive details, also revealed names of local politicians, who were allegedly financially compromised to become a part of this entire process.
Internal USAID communications accessed by The Sunday Guardian, alongside program outputs published by US democracy organisations, show that since 2020, more than $900 million in US assistance has been committed to Nepal, much of it channelled into governance, media, civic, and electoral activities run by the Washington-based consortium CEPPS—the National Democratic Institute (NDI), International Republican Institute (IRI), and International Foundation for Electoral Systems (IFES).
The scale of this investment is unusual for a country of Nepal’s size. In May 2022, USAID signed a $402.7 million Development Objective Agreement (DOAG) with Nepal’s Ministry of Finance. By February 2025, $158 million had already been disbursed, leaving $244.7 million still unspent.
In parallel, the $500 million Millennium Challenge Corporation (MCC) Compact, signed in 2017 and ratified only in February 2022 after fierce protests and parliamentary battles, remains in play. As of early 2025, only $43.1 million (8.63%) of MCC funds had been disbursed, but the Compact’s implementation period was extended, keeping its infrastructure and governance projects alive.
Taken together, these two packages—USAID and MCC—bring total US commitments to over $900 million.
Within the USAID agreement, internal documents break down specific lines of spending. Project 4150: “Democratic Processes” carries a commitment of $8 million, of which $5,028,238 (62.85%) had been spent by February 2025. Its agreement date is March 2023, with a planned end in March 2028. Implementers: NDI and IFES.
Project 4177: “Democracy Resource Center Nepal (DRCN)” was allocated $500,000, fully disbursed by July 2023. DRCN describes itself as a research and monitoring organization; critics call it a propaganda organ.
Other allocations are still larger. The Civil Society and Media initiative is budgeted at $37 million, of which over $20 million (54%) has been disbursed. Officially aimed at strengthening civic and media organizations, it has been described by observers as a way to influence narratives around corruption, governance, and treaties like the MCC.
The Adolescent Reproductive Health (ARH) project is funded at $35 million, with over $18 million (52%) disbursed. While framed as health programming, critics allege it doubles as political outreach, targeting vulnerable populations whose support is critical in social mobilization.
Two letters from Karen Welch, Acting Mission Director of USAID/Nepal, underline the machinery of this funding. A letter dated 24 May 2023, addressed to Shreekrishna Nepal, a senior Finance Ministry official, listed 58 USAID-funded projects worth $134.5 million for fiscal year 2023/24, including Democratic Processes ($8m), Civil Society and Media ($37m), and ARH ($35m). It requested their inclusion in Nepal’s official Red Book of foreign aid.
A second letter, dated 16 April 2024, sent to Finance Secretary Dr Krishna Hari Pushkar, complained about NGO registration fees imposed by Nepal’s Social Welfare Council and attached a list of over 100 local sub-partners working under USAID grants. These letters reveal not just funding amounts but the extensive sub-grantee network—the local NGOs and civic groups through which influence is exercised.
The money is visible; so are the outputs. NDI’s Policy Review series, released between 2020 and 2022, analysed federalism, youth inclusion, Dalit rights, climate change, and LGBTQI+ issues. Its Internal Political Party Reform booklet (2021) urged Nepal’s established parties to democratize internally.
During the pandemic, NDI published guidance for municipalities on transparent Covid recovery. Its Civic Forum education model and the YALA Youth Facilitator Toolkit gave young activists structured training in leadership, advocacy, and civic engagement. These are the very cohorts that today fill the streets of Kathmandu.
IRI has played the role of researcher and communicator. Its June 2024 National Survey of Nepal, based on 2,400 telephone interviews, showed 59% of Nepalis still support democracy, 62% want new political parties, and 36% cite unemployment as the top issue. Among youth, over one-third said they intended to migrate abroad for work. These findings foreshadowed the grievances driving this year’s protests.
Beyond polling, IRI published a Decentralization Resource Guide (2022) based on fieldwork in Nepal and piloted fiscal transparency tools like digital budget boards in Nepalgunj. It also authored toolkits on counter-disinformation and foreign influence, referencing Nepal directly.
IFES, less prominent in public reports, concentrated on the mechanics of elections. Its work with the Election Commission of Nepal during the 2022 local elections included voter education campaigns, efforts to improve access for women and people with disabilities, and technical assistance to strengthen administrative credibility.
The stated objectives of these projects are explicit: “deepening party democracy,” “empowering youth as agents of change,” “building citizen trust through transparency,” and “credible, inclusive elections.” Critics, however, interpret them as tools of political engineering—embedding US-funded programs in exactly those spaces (parties, youth, civil society, media, and local governance) where Nepal’s politics is now breaking apart.
The parallels are regional. The Sunday Guardian has previously reported on NDI and IRI activities in Bangladesh and Cambodia, where US-funded programs targeted youth politicians, LGBTQI+ groups, and minority inclusion. In Dhaka, these were read as regime-change efforts against Prime Minister Sheikh Hasina; in Phnom Penh, similar programs unsettled the ruling party.
Nepal now shows the same pattern: large allocations, the same implementing partners, emphasis on youth, civil society, and governance—followed by political upheaval.
With Oli gone, the question is unavoidable: how much of Nepal’s democratic turbulence is organic, and how much has been fostered by years of sustained, well-financed external intervention?
What is clear is that the numbers are not abstract. They sit in official agreements, letters, and project codes. $402.7 million from USAID, $500 million from MCC, $37 million for civil society and media, $35 million for adolescent health, $8 million for democratic processes, $500,000 for DRCN. Add them together, and the figure that emerges—over $900 million—represents one of the largest per-capita US democracy investments in the region.
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