- The World Bank’s Board of Executive Directors approved a $110 million loan for the Transport Connectivity Improvement Project and the International Development Association (IDA).
- The project will support the Mongolian Government’s vision of unlocking manufacturing sectors and diversifying the economy.
Strategic vision with hundreds of millions of dollars
On May 26, a $110 million loan for the the Mongolia Transport Connectivity and Logistics Improvement Project was approved by the World Bank’s Board of Directors. “This project is an important part of the government’s New Economic Recovery Policy, which underscores the need for strategic transport infrastructure and drastic improvement in logistics for critical sectors”, said Khaltar Luvsan, Minister of Road & Transport Development of Mongolia. “We are delighted to be partnering with the World Bank and look forward to the great success of the project in the future.”
Mongolia’s economy is heavily dependent on mining. Therefore, this new project was implemented in the hope of diversifying the economy of this country. Most of the poor in Mongolia depend on about 70 million herds of livestock for their sustenance and livelihood, so the meat industry in Mongolia promises to bring economic growth and promote prosperity to the country. However, poor physical connectivity, lack of strategically located and efficient logistics hubs, and uneven information access among actors in the supply chain have proved to be major constraints to realizing the full potential of the sector.
“Improving logistics and investing in infrastructure while supporting economic reforms will lay the foundation for sustainable growth,” said Andrei Mikhnev, “World Bank Country Director for Mongolia. Investment in infrastructure can also help Mongolia create jobs and increase its resilience to the effects of climate change.”
The project will propose methods to improve facilities through the management of street facilities, rehabilitation of 51 km of the last mile connectivity road and maintenance of 311 km of the national road, which has the highest density of livestock and freight. In addition, to improve logistics services, it is necessary to develop a model regional Logistics center under public-private partnership (PPP), and establish a logistics and supply chain platform.
The World Bank’s Mongolian InfraSAP Report and the Mongolian Country Partnership Framework 2021-2025 provided guiding frameworks for the project. The project will also support the Mongolian Government’s vision of unlocking manufacturing sectors and diversifying the economy through investment in critical infrastructure, improved logistics services and reform of the regulatory framework for national logistics.
Khanh Huyen Nguyen