Countries and Regions

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p. 4 of 4 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Level

Country Strategy and Program Update 2004-2006: Mongolia

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IV. Country Performance and Assistance Level

A. Lending Level Proposed

27. Based on cross-country performance assessment under the policy of performance-based allocation of Asian Development Fund (ADF) resources and overall ADF resources availability, the annual indicative lending level is proposed to be in the range of $24 million to 6 $30 million as the base case for 2004–2006, with a high-case scenario of up to $35 million, subject to the country’s performance, which is to be evaluated against the country-specific performance targets (triggers) agreed with the Government. An additional amount of $20 million from ADF has been set aside for the regional road development project for 2004, given its strong subregional character.⁷ The updated pipelines for the indicative lending programs for 2004–2006 are in Appendix 1, Tables A1.10–1.11.

28. An annual TA program of $2 million is proposed, which will be strengthened with proactive exploration of cofinancing. The updated nonlending assistance programs for 2004–2006 are in Appendix 1, Table A1.11.

29. Depending on ADF resource availability in 2004, the indicative lending program for 2004 will need to be reviewed, revised, and confirmed during the Country Program Confirmation Mission. The indicative lending programs for 2005 and 2006 will depend on the outcome of the discussions regarding ADF replenishment, as well as the conclusions and recommendations of the planned CSP process. Furthermore, the lending level for 2005 will be determined, among others, based on an evaluation against performance triggers as set out in Appendix 1, Table A1.12.

30. Project concept papers are in Appendix 2 for proposed lending assistance and Appendix 3 for proposed nonlending assistance.

B. Summary of Changes to Lending and Nonlending Programs

31. Both the indicative lending and nonlending programs have been reprioritized, based on current resource projections and processing readiness. The major changes in the lending program are (i) the crop production project has been rescheduled from 2003 to 2004; (ii) the road development project has been redesigned as a regional cooperation project with potential cofinancing, and an additional allocation of $20 million has been made from ADF subregional allocation to ensure its speedy implementation; (iii) the third financial sector development program has been reclassified as a standby project for 2004, and a firm project for 2005; and (iv) the third urban development project has been rescheduled from 2005 to 2006. While detailed justifications for rescheduling of the crop production are provided in para. 21, the rescheduling of the other two projects is largely due to the combined effects of rescheduling of the crop production project and the program downsizing in view of the projected resource constraints. New projects for governance reforms and agriculture are included in the indicative lending program for 2006 in line with discussions in paragraphs. 16, 20, and 21. TA lending programs are adjusted accordingly.

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