Mongolia: Global Gateway - EIB Global supports urban development and sustainable forestry

• Sustainable grassland and urban development scheme to benefit millions of people, tackle overgrazing challenges and cut carbon emissions.
• EU bank provides €54.4 million for urban development across Mongolia.
• EIB Global agrees to work with Mongolian partners to reverse deforestation, increase climate action, protect biodiversity and expand sustainable forest management.

EIB Global has signed its largest ever financing agreement for investment in Mongolia. It will support a pioneering initiative to address the degradation and overgrazing of grasslands across Mongolia by backing investment in climate-resilient and low-carbon cities and local agribusiness. The scheme will help to better protect fragile grasslands threatened by unsustainable livestock overgrazing, more frequent extreme weather and less frequent rains, and an average temperature increase of 2.1°C over the past 70 years.

Under the first tranche, the EIB will provide €54.4 million, including a €9.5 million European Commission investment grant to support the $735 million Aimag and Soum Centres Green and Resilient Regional Development Investment Programme (ASDIP), which is co-financed by the Asian Development Bank, Government of Mongolia and Green Climate Fund.

The new EIB loan and grant financing for ASDIP will be used to upgrade basic infrastructure in Mongolia’s regional cities, including the construction of wastewater treatment plants and affordable housing, and energy efficiency renovations and improvements in public buildings, schools and hospitals. The programme will also improve flood protection and rainwater drainage and expand the use of solar power on public buildings.

The scheme will increase financing for sustainable private sector investment by local agriculture and agribusiness and include dedicated support for herder groups to better manage grasslands by reducing overgrazing and adopting more sustainable livestock practices.

The wide-ranging scope of ASDIP is expected to create more than 160 000 direct and indirect jobs and protect more than 29 million hectares of regenerated grassland over the long term.

It is estimated that the programme will save more than 126 million tonnes of CO₂ equivalent over 40 years and that more than 369 000 people will benefit from it.

ASDIP will contribute to economic diversification with the help of better infrastructure, trade, and links between agricultural manufacturing and processing, which will lead to higher incomes in the provinces of Mongolia.

Forestry Memorandum of Understanding (MoU) signed

The new MoU will enable the EIB to support the EU-Mongolia Forest Partnership. It will help the country to better preserve existing forests and facilitate the development of a sustainable and inclusive economy and society under sound forest management that takes into account the needs of the local communities.

The EU-Mongolia Forest Partnership supports tree planting in the framework of the “One Billion Trees” initiative by the Mongolian President Ukhnaagin Khurelsukh.

EIB Vice-President Teresa Czerwińska said: “The EIB is jointly financing a project with the Asian Development Bank that will help to improve the quality of life for people in Mongolia through environmental improvements in the provinces. This project demonstrates a unique and innovative integrated approach for better urban and rural links, sustainable urban development and rangeland management in Mongolia. It will upgrade the country’s infrastructure, benefiting the economic and social development and the competitiveness of the country’s main urban centres. The memorandum of understanding on forestry that we have also signed today will provide a platform for cooperation to reduce deforestation and forest degradation, which will have a positive impact on Mongolia’s climate action efforts and economic development in terms of the production and trade of forest products.”

Ambassador of the European Union to Mongolia, H.E. Axelle Nicaise stated: “As Mongolia and the EU celebrate this year the 35th anniversary of their diplomatic relations, the strong engagement of the European Investment Bank in Mongolia is another demonstration of the EU’s commitment to work more closely with our Mongolian partners. The dramatic situation Mongolia is experiencing with the dzud this year confirms the urgency to put in place new schemes prioritising sustainable development in aimags and soums, foster regional development and take decisive actions to fight the effects of climate change. This is exactly what the projects signed today are about.”

Minister of Finance of Mongolia Javkhlan Bold emphasized: "The regional green development investment program is closely aligned with the Food Revolution National Movement initiated by the President of Mongolia, Paris Agreement, and the New Revival Policy of Mongolia and its development goals of rural recovery and Green Development, which are the country's long term development policy document. The implementation of the program will create a favourable environment for people to live in rural areas, improve urban-rural coordination, transport and infrastructure connections, meet the needs of domestic necessity food products, and become the basis for the development of green agricultural business that can replace imports. Thank you for making a valuable contribution to the development of Mongolia, and I am very confident that our future cooperation will expand even more.”

Vice - Minister of Environment and Tourism of Mongolia Myagmarjav Ganbaatar added: “Within the framework of the MOU, we will strengthen afforestation based on natural solutions, ecosystem restoration and taking into consideration of agricultural practices, establishing large-scale agro-forestry, and public-private partnerships in the forestry sector. We are looking forward to cooperation in developing environmentally friendly subsidies in a mutually beneficial way.”

Background information

About the European Investment Bank

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

About EIB Global       

EIB Global is the EIB Group’s specialised arm for operations outside the European Union, and a key partner of the European Union’s Global Gateway strategy. We aim to support at least €100 billion of investment by the end of 2027, around one-third of the overall target of Global Gateway. Within Team Europe, EIB Global fosters strong, focused partnerships alongside fellow development finance institutions and civil society. EIB Global brings the Group closer to local communities, companies and institutions through our offices across the world.

About EIB Global in Mongolia

Since the start of EIB operations in Mongolia in 2014, the EU bank has provided financing amounting to €144 million. Projects financed by the EU bank include support for the Municipality of Ulaanbaatar’s water, wastewater and sanitation investment programme, the Sainshand wind farm renewable energy project and the investment signed today to upgrade Mongolia’s urban centres.

About the EU Global Gateway initiative

EIB Global is a key partner in the implementation of the European Union’s Global Gateway initiative, supporting sound projects that improve global and regional connectivity in the digital, climate, transport, health, energy and education sectors. Investing in connectivity is at the very heart of what EIB Global does, building on the Bank’s 65 years of experience in this domain. Alongside its partners, fellow EU institutions and Member States, the EIB aims to support investment of €100 billion (around a third of the initiative’s target) by the end of 2027, including in Asia.