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Press Releases

March 12, 2012

Signing of Japanese ODA Loan with Mongolia
–Assistance for new social welfare measures–

PhotoSigning ceremony

1. Today, the Japan International Cooperation Agency (JICA) signed a Japanese ODA loan agreement with the Government of Mongolia, with Prime Minister Batbold in attendance, to provide a loan of up to 1.55 billion yen for assistance for the Social Sectors Support Program (II). The loan will be co-financed by the Asian Development Bank (ADB).

2. The Mongolian economy suffered extensive damage in the wake of the rapid drop in copper prices–a major export product–the advance of inflation and a large expansion in the fiscal deficit caused by the global financial crisis of 2008. In response, the International Monetary Fund (IMF) provided emergency assistance, and the government of Mongolia formulated, with assistance from donors, including the World Bank, the Asian Development Bank (ADB) and JICA, a joint policy matrix addressing policy issues for reforms in four areas: financial administration, the mining industry, finance and social protection.

3. Of those four areas, this loan provides assistance in achieving the policies in social protection. It is a development policy loan provided based on the achievement of policy actions established with the assistance of JICA and ADB in the social welfare, health care, education and urban development sectors. This loan is a continuation of the Social Sector Support Program (I) whose loan agreement was signed in June 2009, and will be implemented since all of the policy actions established as conditions for phase II have been achieved.

4. The policy actions confirmed as accomplished as terms for the loan for phase II include revisions to the social welfare laws of Mongolia: introducing new social benefit targeting for the lower income family. Such measures boost protection for the poor, and are considered extremely important in improving Pro-cyclical fiscal framework, which is easily impacted by natural resource prices.

5. Even after this Program is complete, JICA plans to work closely with the ADB and others to implement cooperative monitoring and evaluation of the Mongolian government's implementation and the effects of the aid, and plans to provide continued assistance to the government of Mongolia for its measures.

6. In addition to this loan, on the same day, a grant agreement was signed for two grant aid projects for a total of 0.886 billion yen. The grant aid for the Project for Improvement of Capacity of Fire Fighting Techniques and Equipment in Ulaanbaatar (0.839 billion yen) will provide fire trucks and other equipment for use in Ulaanbaatar, where rapid urbanization has resulted in a rise in the population, and this is expected to strengthen the city's functions, including fire prevention. The cultural grant aid for the Project for the Improvement of Diagnostic Equipment of Center for Cultural Heritage (0.0047 billion yen) is financial cooperation to provide diagnostic and analysis equipment along with equipment to make digital recordings essential for restoration to a cultural heritage center. It is expected that this will improve the capacity to analyze cultural treasures as well as strengthen the capacity to preserve and restore them.

Reference

1. Terms and Amounts of Loan

Project titleAmount (million yen) Annual interest rate (%)Repayment (years)Grace Period (years)Procurement
ProjectConsulting services
Social Sector Support Program (II)1,55070.8-206General untied

Note: Because this is financial assistance, consulting services are not included.

2. Project Summaries

Social Sector Support Program (II)

Executing Agency

Ministry of Finance, Mongolia
Address: Government Building 2, United Nation's Street 5/1, Ulaanbaatar 15160, Mongolia
Phone: +976 (11) 262-272

Planned Implementation Schedule

  • (i) Completion of Program: May 2012 – with completion of the loan procedure
  • (ii) Issuing of letters of invitation for consulting services: No hiring of consultants is planned for this program.
  • (iii) Tender announcement of initial procurement package for international competitive bidding on project construction: Not applicable

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