bne IntelliNews – EBRD celebrates 15 years in Mongolia
As the European Bank for Reconstruction and Development (EBRD) celebrates 15 years of operations in Mongolia, Hannes Takacs, Director of the Development Bank in Mongolia, spoke with bne IntelliNews about current and future projects.
The EBRD began its operations in Mongolia by sponsoring banks and other financial entities, such as XacBank, Khanbank and Transcapital, which became involved in its trade facilitation programme. Today, the EBRD is present in many sectors of the country’s economy. To date, around 190,000 loans, totaling more than $535 million, have been issued by the lender to Mongolian micro and small businesses. In total, the EBRD has invested a total of $2.1 billion in Mongolia over the 15 years.
For the foreseeable future, the EBRD’s goal in the country of 3.4 million (nominal GDP of about $14 billion) is to invest more in infrastructure and projects to create a greener economy.
“The EBRD is happy to have contributed to the development of so many important projects in Mongolia,” said Takacs. “The country is in a unique situation in terms of expanding its economy, largely through mining. And the EBRD has worked with local mining companies to integrate sustainability into their operations. But for a country to succeed it needs to have a diversified economy, and over the past 15 years the EBRD is pleased to have worked with local SMEs providing them with loans as well as business advice,” he said. -he adds.
Since 2017, Mongolian agribusinesses have benefited from the bank’s initiatives to boost non-extractive industries. Companies that have been supported by the initiative include juice maker Vitafit, beverage producers APU and MCS, food producer Teso Group and the country’s largest dairy company, Suu Milk. In 2021, Suu Milk, Mongolia’s leading milk and dairy producer, received a $4.8 million loan from XacBank with the help of the EBRD.
The loan will be used to modernize Suu Milk’s transport fleet and serve more than 2,500 nomadic herders.
“We are currently working on our next strategic plan for the country. This will not only boost the non-extractive sector, but we also aim to make Mongolia’s economy greener, more diverse, sustainable, inclusive and digital. We are happy that Ulaanbaatar becomes the first municipality in Asia to join the EBRD Green Cities,” said Takacs.
EBRD Green Cities is a program designed to address pressing ecological and infrastructural challenges. As part of the Green City Strategic Action Plan (GCAP), the EBRD and the municipality have started to develop priority investment projects. In 2018, the EBRD provided a $9.7 million loan to improve Ulaanbaatar’s waste management, and in 2020 provided a $10 million loan to the Ulaanbaatar District Heating Company. Ulaanbaatar to rehabilitate existing utility networks and extend new district heating pipelines.
Currently, the bank and Ulaanbaatar are discussing a new project under GCAP. The EBRD can finance the construction of more than 700 low-carbon and climate-resilient housing units and related infrastructure. It is planned that new housing will be offered to groups of low-income residents of the yurt zone (yurt district), who do not have access to modern public services, on rental and rental conditions with the option of purchase.
Most recently, on October 20, the EBRD’s Managing Director for Central Asia, Zsuzsanna Hargitai, met with the Mayor of Ulaanbaatar Sumiyabazar Dolgorsuren. They discussed new municipal projects such as affordable green housing and electric public transport, which lend themselves to EBRD support.
There will be enough to sustain the development bank’s commitment to Mongolia for the next 15 years, and beyond.