EBRD adopts first strategy for Mongolia
Private business development to be main pillar
London, United Kingdom – Mongolia became a country of operations of the EBRD on 15 October 2006 to benefit from the Bank’s experience and knowledge in promoting and supporting transition. In its first strategy for the country, now available on www.ebrd.com, the EBRD identifies the development of private businesses as its main pillar.
The strategy defines the following priorities for the Bank’s future operations in Mongolia:
- Enterprise Sector: The Bank will explore possibilities of direct financing in a number of key sectors, including agribusiness, hotel and tourism, infrastructure, property, services and natural resources. The Bank will also look for opportunities to support the remaining large privatisations. The Bank will put a special focus and priority on micro businesses, especially in the more remote regions.
- Financial Sector: Support for the financial sector will be a key priority for the EBRD to overcome the current limited access to finance. The Bank will finance micro and small enterprises through credit lines to commercial banks and micro-lending institutions and will roll out its Trade Facilitation Programme to local banks. The EBRD will pursue opportunities for equity participation to strengthen the capital base and improve corporate governance of local partners. The Bank will also seek to promote development of the non-banking financial sector, such as insurance and pensions, and products like leasing and mortgage finance.
- Natural Resources Sector: Mongolia’s wealth in mineral resources represents a significant potential for the country’s development and poverty alleviation. The Bank intends to support the sustainable development of this sector with a focus on transparency, governance, environment and regulation working closely with the authorities and the private sector.
- Infrastructure Sector: Mongolia has significant investment needs which so far have been constrained by limited public resources. The EBRD will explore opportunities for financing non-sovereign projects in areas such as aviation, telecommunications and selected utilities. The Bank will also explore the potential for renewable energy projects. In cooperation with the World Bank, the Asian Development Bank and key bilateral donors the EBRD will consider participation in airport, road, railways and power transmission projects.
Even before becoming a country of operations, Mongolia had worked with the EBRD on various technical cooperation projects. These have covered a wide range of sectors and activities reaching from support for legal reforms to training programmes for bankers and the provision of experts for privatisation projects. The EBRD’s first investment in Mongolia was a $5 million loan and a $1 million trade finance limit to XacBank, the country’s second largest microfinance institution.