European Investment Bank, Government of Mongolia partners in regional green development and sustainable forestry

The EU Bank provides €54.4 million financing for regional green development across Mongolia.

Minister of Finance of Mongolia Javkhlan Bold, Ambassador of the European Union Axelle Nicaise, EIB Vice-President Teresa Czerwińska signs the first tranche agreement of €54.4 million, including EUR 9.5 million European Union’s investment grant to support the “Aimag and Soum Centres Green and Resilient Regional Development Investment Programme“(ASDIP). The European Union will contribute total of EUR 19.5 grant for the programme.

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.

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.”

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.

Aimag and Soum Centres Green and Resilient Regional Development Investment Programme (ASDIP) is $735 million programme co-financed by the Asian Development Bank, Government of Mongolia and Green Climate Fund.

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.”

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.”

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, establishment of large-scale agro-forestry taking into consideration of agricultural practices, and public-private partnerships in the forestry sector. We are looking forward to our cooperation in developing environmentally friendly subsidies in a mutually beneficial way.”