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The EBRD in Mongolia

The European Bank for Reconstruction and Development was established in 1991 when communism was crumbling in central and eastern Europe and ex-soviet countries needed support to nurture a new private sector in a democratic environment. Today the EBRD uses the tools of investment to help build market economies and democracies in countries from central Europe to central Asia.

The EBRD is the largest single investor in the region and mobilises significant foreign direct investment beyond its own financing. It is owned by 61 countries and two intergovernmental institutions. But despite its public sector shareholders, it invests mainly in private enterprises, usually together with commercial partners.

It provides project financing for banks, industries and businesses, both new ventures and investments in existing companies. It also works with publicly owned companies, to support privatisation, restructuring state-owned firms and improvement of municipal services. The Bank uses its close relationship with governments in the region to promote policies that will bolster the business environment.

The mandate of the EBRD stipulates that it must only work in countries that are committed to democratic principles. Respect for the environment is part of the strong corporate governance attached to all EBRD investments.In July 2006, Mongolia was accepted as an EBRD country of operations. The admission allows the EBRD to start financing projects in the country by October 2006. The EBRD plans to work with the Mongolian government and the business community, specifically with the aim of helping to finance the development of private enterprise and the process of privatisation.

As in other Early Transition Countries countries, SMEs and microfinance will be a priority. Another key goal will be to strengthen the financial sector. The Bank will also seek ways to help finance the improvement of Mongolia’s infrastructure. Dialogue with the government will aim to continue the process of reform and liberalisation and to maintain progress in improvements to the investment climate in Mongolia.

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