ADB, Mongolia Sign Loans to Modernize Vegetable Production, Irrigation

News Release | 5 May 2020

ULAANBAATAR, MONGOLIA (5 May 2020) — The Asian Development Bank (ADB) and the Government of Mongolia today signed $40 million in loans and a $2 million Japan Fund for Poverty Reduction (JFPR) grant to support the modernization of government-owned irrigation networks and vegetable production in Mongolia.

Signing for ADB was the Country Director for Mongolia, Pavit Ramachandran, while Mongolian Finance Minister Khurelbaatar Chimed signed for the Government of Mongolia. Minister of Food, Agriculture, and Light Industry Ulaan Chultem also attended the signing ceremony.           

“Diversifying traditional low-value grain crops into high-value vegetables will promote income and jobs in rural areas,” said Mr. Ramachandran.

Agriculture is the main source of livelihood in rural areas, but is not sufficiently diversified and relies heavily on imports for vegetables and fodder. Meanwhile, the country’s irrigation systems are recognized as having low water productivity and lacking resilience to severe droughts and floods.

The project aims to install efficient and climate-resilient irrigation infrastructure and management systems, improve sustainability of agriculture production systems, and strengthen technical, institutional, and management capacity and coordination.

Specifically, the project will upgrade, modernize, and climate-proof 12 selected schemes along with directly associated infrastructure to provide irrigation services for over 8,000 hectares of land. A total of 3,458 households are expected to benefit, including 1,041 poor households.

The project design introduces innovative features such as high-efficiency irrigation technology in cold regions, summer and winter greenhouses, and an easy-to-use asset management system with remote-sensing technology.

The total cost of the project is $46.25 million, of which ADB is providing a concessional loan of $25.3 million and a regular loan of $14.7 million. The government will provide $4.25 million towards the project cost.

ADB will administer the $2 million cofinancing grant from JFPR, which has supported projects in Mongolia in poverty alleviation, improving livelihoods, and safeguarding the environment over the past 20 years. JPFR is funded by the Government of Japan.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.