Japanese ODA Loan for Mongolia --Supporting Construction of New Airport in Ulaanbaatar--
1. Japan Bank for International Cooperation (JBIC; Governor: Koji Tanami) signed on May 1 a Japanese ODA loan agreement totaling up to 28,807 million yen for the New Ulaanbaatar International Airport Construction Project with the Government of Mongolia.
2. The project aims to contribute to sustainable economic growth in Mongolia through the construction of an international airport at a different location from the present international airport in the capital city of Ulaanbaatar, the site of the country's only international airport. The proceeds of the loan will be used for construction and consulting service. Special Terms for Economic Partnership (STEP) are applied to this loan, as it utilizes Japanese technology and knowhow to improve the safety, reliability and convenience of the airport.
3. Mongolia has registered strong economic growth, with progress being made toward a market-oriented economy since 1990 and, more recently, development of the manufacturing and mining industries. Especially, there has been a sharp rise in foreign travelers visiting the country in recent years against the backdrop of growth in the service industry and growing investment for developing abundant underground mineral resources and livestock farming. Amidst these developments, international passengers in the present international airport in Ulaanbaatar almost doubled from approximately 200,000 in 2003 to approximately 400,000 in 2006. Demand for air transport, especially international flights, is thus forecast to increase further in the years to come. Despite this prospect, the present airport has geographical constraints, with mountains lying on its southern and eastern sides. As a result, winds and other climatic conditions are hampering landings and takeoffs, frequently causing delayed and cancelled flights. There is thus an urgent need to increase its reliability and safety. The project will resolve this problem by constructing a new airport and also meet increasing needs for air transport.
4. Since the first half of the 1990s when Mongolia made progress towards a democratic system, JBIC has been supporting the development of its key infrastructure, including rail and energy sectors. These projects have broadly utilized Japanese technologies and knowhow from the construction stage to the operation and maintenance stage, thereby achieving effective assistance. JBIC is committed to helping Mongolia's sustainable economic growth, as it supports economic infrastructure development, which is essential for industrial development, by utilizing Japanese advanced technologies and knowhow and by developing human resource through technology transfer, and in the process promoting "assistance with a distinct Japanese profile."
 Two years after completion, annual international passenger traffic is projected to reach 1.19 million people. For reference, Haneda Airport, the fifth largest international airport in Japan, currently handles 1.16 million international passengers per year.