31.08.2012 financing infrastructure in mongolia, development bank of mongolia
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DEVELOPMENT BANK OF MONGOLIA
August 29, 2012
Financing Infrastructure in Mongolia
Development Bank of Mongolia
The Development Bank of Mongolia
Inaugurated on May 12, 2011 as the development policy bank to provide long-term financing for projects consistent with the Government Development Strategy.
100% state-owned bank under the Development Bank of Mongolia Law.
Key instrument for implementation of the State Policy.
DBM shall be for profit and state owned legal entity
DBM shall provide loans to finance large scale development projects and programs approved by Parliament on annual basis.
Board of Directors of the DBM shall approve the list of projects financed from other sources apart from those for which the GoM issued guarantee.
Total Equity 49.76bln MNT as of 2nd quarter of 2012.
Successfully issued USD 600 million international bond during 2011~2012.
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Highlights of Development Bank of Mongolia
Development Bank of Mongolia
The Development Bank of Mongolia
Primary focus on infrastructure and industrial development
Quadrupling its rail network will allow Mongolia to fully capitalize in its commodity endowment
Strengthen Mongolia’s bargaining power for its resources
Access to currently untapped metal deposits in Mongolia
Creation of downstream industries would enable Mongolia to achieve a more diversified and balanced economic growth
Located in southern Mongolia with intersecting rail access on Tavan Tolgoi-Choibalsan railway
The industrial complex could include copper smelter, coking coal plant and water supply network and other plants
Current infrastructure capacities no longer meet increasing demand of quality basic public services
Improvements to current infrastructure would include:
Energy
Transportation
Telecommunications
Infrastructure for housing projects
Integrated Mining & Railway Strategy Infrastructure & Urban Development Sainshand Industrial Park
Projects and Programs
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Development Bank of Mongolia
The Development Bank of Mongolia
Road Development Projects
DBM is mandated to provide its funds for the road projects which totals USD 749 million by Government Resolution #105 and 336 issued in 2011, #47 and 106 in 2012. Projects are expected to boost its regional socio-economic developments.
Projects consist of 17 road construction works in Ulaanbaatar city and 16 in the rural area, that connects regional centers together and to the border ports, and designing of 36 roads in Ulaanbaatar and rural areas.
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Length (km)
Amount (USD million)
Ulaanbaatar city road construction projects 48.7 95.6
Rural road construction projects 1590.0 646.8
Road designing in Ulaanbaatar city - 1.2
Road designing in the rural area - 7.7
749.4
Existing road Currently under construction DBM funded project
Shaamar – Tsagaannuur 135 km
Murun – Tarialan 79 km
Altai – Darwi 80 km
Bayankhongor – Baidrag bridge 129.5 км
Baidrag bridge – Altai 127 km
Dalanzadgad – Mandalgovi 83 km
Ulaanbaatar – Mandalgovi 104 km
Munkkhaan – Baruun Urt 132.6 km
Undurkhaan – Choibalsan 94 km
Altai – Darwi 85 km
Altai – Darwi 90 km
Uliastai – Tosontsengel 67km
Uliastai – Tosontsengel 114 km
Tsahir – Tosontsengel 127.1 km
Undurkhaan – Munkhkhaan – Baruun Urt 45.3 km
Ulaangom – Naranbulag 90 km
[Appendix] ROAD CONSTRUCTION PROJECTS
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Existing road Currently under construction DBM funded project
[Appendix] ROAD DESIGNING PROJECTS 4200 km
To be designed by DBM
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10 11
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19 20 23
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24 25
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Project Length (km)
1 Dalanzadgad – Mandalgovi 83.0
2 Baruun Urt – Munkkhaan 132.6
3 Khowd – Ulaangom 190.0
4 Dashinchilen - Bulgan 121.0
5 Ulaangom – Naranbulag 51.0
6 Songino – Khyargas 172.0
7 Numrug –Songino 167.0
8 Ugii lake – Battsengel – Ikh Tamir 113.0
9 Bayankhongor – Bayanbulag 237.0
10 Uliastai – Altai 139.0
11 Bayanbulag – Uliastai 233.0
12 Uliastai – Durwuljin 104.0
13 Durwuljin - Sarkhairkhan 159.0
Project Length (km)
14 Sarkhairkhan – Myangad bridge 158.0
15 Bayankhongor – Bayanlig 212.0
16 Bayanlig – Gurwantes 293.0
17 Undurkhaan – Norowlin 200.0
18 Baruun Urt – Erdenetsagaan - Bichigdt 290.0
19 Choibalsan – Ereentsaw 242.0
20 Norowlin – Bayan Uul- Ulikhan 100.0
21 Altai – Bugat 143.0
22 Bugat – Burgastai 166.0
23 Numrug- Bayantes – Artssuuri 199.0
24 Khutag undur – Teshig – Baga ilenkh 135.0
25 Dulaankhaan – Yeruu – Khuder 113.0
26 Bayangol - Mandal 48.0
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Development Bank of Mongolia
The Development Bank of Mongolia
New Railway Project 1
In June, 2010 the State Great Khural (Parliament of Mongolia) has approved Mongolian State Policy on Railway by its Resolution No. 32. This resolution designates routes for the railway in 3 phases.
The new railway is important for the economic development of Mongolia. It will serve economic and industrial growth through connecting strategic coal and copper mines to the international market with competitive cost of logistic.
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1st PHASE – 1100 km Dalanzadgad – Tavan tolgoi – Zuunbayan (Sainshand) Sainshand – Baruun Urt Baruun Urt – Khuut Khuut – Choibalsan
2nd PHASE – 900 km Nariin Sukhait – Shivee Khuren Ukhaa Khudag – Gashuun Sukhait Khuut – Tamsagbulag - Numrug Khuut - Bichigt
3rd PHASE – 3600 km Western Railroad Network
Timeline of the Railway policy
Transportation of commodities from Strategic mines
Stimulating domestic industrial development such as Sainshand Industrial Park
Establishing domestic railway network
Incentive of the Railway policy
Development Bank of Mongolia
The Development Bank of Mongolia
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New Railway Project 2
Development Bank of Mongolia
The Development Bank of Mongolia
New Railway Project 3
According to New Government Resolution #93 dated on March 27, 2012 and #161 dated on May 9, 2012 Government of Mongolia approved New scheme.
New shareholding company with prevailing Government shares will be established to own railway base structure
At present, GoM gave concession right to three companies to implement railway
Sainshand – Tavantolgoi (225km) : Eastern Railway LLC, Mongolian Trans Line LLC
Ukhaa Kuhdag - Tavantolgoi – Sainshand(225km) : Infrastructre Development LLC
Ukhaa Khudag – Gashuun Sukhait (260km) : Energy Resource LLC, ER Rail LLC
SPC will take measures to incorporate Erdenes Tavantolgoi(“ETT”) in implementation of Railway Project in the direction of Sainshand-Tavantolgoi-Ukhaa Khudag-Gashuuin Sukhait to have state participation and monitoring
DBM provide MNT399billion to ETT
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Development Bank of Mongolia
The Development Bank of Mongolia
[Appendix] Route of New Railway
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Ulgii
Khowd
Ulaangom
Uliastai
Altai
Bayanhongor Arvaiheer
Tsetserleg
Bulgan
Murun
Erdenet
Darhan
Zuunmod
Ulaanbaatar
Choir
Mandalgovi
Dalanzadgad
Undurkhaan Baruun Urt
Choibalsan
Ulaanbaishint
Khandgait
Arts suuri
Hanh
Altanbulag
Ulihan
Bichigt
Zamiin Ude
Burgastai
Yarantai
Dayan
Kharhorin
Sainshand
Ereentsaw
Tosontsengel
Khuut
Tavan tolgoi
Numrug
Gants Mod
Nariin Sukhait
Shivee khuren
Existing Route
1st Phase Route
2nd Phase Route
Oyu tolgoi
The policy states, after construction of 1st phase, the route will be connected to the borders by constructing 2nd phase.
The Railway Policy is intended to create eastward flow of coal and commodity freight. Making routes available through Russia and North-Eastern China.
Development Bank of Mongolia
The Development Bank of Mongolia
Sainshand Industrial Park(“SIP”)
DBM role in SIP
• GoM designated DBM as the FA of the project by resolution #216
• Parliament Resolution #15 of 2011, has designated DBM to provide fund for the Sainshand Industrial Park
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Importance of SIP
• The complex is planned to support and diversify Mongolia’s export-oriented industry of value added products with state of the art technological solutions
• creates about 2.500 new permanent jobs for Mongolians at different levels including management, special expertise and daily operations
Development Bank of Mongolia
The Development Bank of Mongolia
-P.M.U -F.A -L.A -C.A
Industrial Park
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Understanding of the SIP
Planned Factories: $ 5,873 M Coke Plant - $ 2,265 M Copper smelter - $ 1,775 M Iron Ore pelletizing plant - $ 379 M Iron plant - $ 576 M Cement plant - $ 315 M Coal Gasification - $ 563 M
Public/PPP facilities: $ 3,987 M
Power plant -$ 1,137 M
Public facilities -$ 2,850 M
(Logistic facility, Inter park rail, roads, utility etc)
Potential Project Structure
Project Overview
“SIP” LLC
Public Facility
PPPs
Private Facility
GoM
DBM
Private
Strategic Investor
Financial Investor
MLA, ECA, DBM
Commercial Lenders
State Budget, DBM, Donor organizations
Ad
viso
rs
Development Bank of Mongolia
The Development Bank of Mongolia
List of concession items in the infrastructure
* Source: Government Resolution No 198. dated on July 21, 2010.
Role of DBM in PPP
Provide feasibility study fund in collaboration with donor financing institute and SPC
Provide Financial Advisory Service
Provide co-financing and/or syndicated loan with International financial institute on those project
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PPP (Public Private Partnership)
Concession item Type
245km road from UK-GS BOT
53km UB-Khusigt airport highway BOT
367km Altanbulag-UB highway BOT
630km UB-Zamiin uud highway BOT
Development Bank of Mongolia
The Development Bank of Mongolia
Thank you for your attention…
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For further information please contact to:
Development Bank of Mongolia Government Building II, United Nations Street 5-1, Ulaanbaatar Mongolia
Phone. Fax. Web. Email.
(976) 7013 0513 (976) 7013 0602 www.dbm.mn [email protected]