ULAANBAATAR, MONGOLIA (17 December 2014) – The Asian Development Bank (ADB) has approved loan assistance of $18.5 million to support environmentally sustainable urban development and better living standards in Darkhan, Mongolia, by improving the city’s wastewater infrastructure and services.
“The project will help reduce poverty and contribute to a more balanced national urban system and stronger urban–rural relationships by supporting urban and industrial development of a second tier city in Mongolia,” said Stefan Rau, an ADB Urban Development Specialist.
The growing population and expanding industries are increasing the demand for urban services, including water and wastewater, requiring investment in infrastructure to meet present and future demand. The current wastewater management and sewer system and pumping stations are outdated and in urgent need of repair or replacement. About 40% of Darkhan’s urban population lives in ger (traditional tent) areas, where sanitation consists of pit latrines, which cause soil and groundwater pollution.
The assistance package comprises two loans—one concessional for $9.05 million and one from ADB’s ordinary capital resources of $9.45 million—and a technical assistance grant of $400,000. The loans will finance a modern wastewater treatment plant in Darkhan with a base operating capacity of 16,000 cubic meters per day. The project will also replace 1,800 meters of dilapidated sewer pipes and rehabilitate two existing pumping stations. The technical assistance grant will be used to strengthen the institutional, managerial, and operational capacity of Darkhan’s water and wastewater services, contributing to the sustainability of the project.
More than 45,000 residents or around 60% of the urban population, currently connected to the sewer system will directly benefit from the improved facilities. Once the new facilities and upgrades have been completed, a further 17,000 more residents are expected to be connected to the system by 2020.
The project, which is due for completion by the end of 2018, is expected to improve the environment of the Kharaa River and public health through improved water quality and reduced risks from waterborne diseases. It will also support the local economy by strengthening wastewater management to aid urban and industrial expansion.
The $9.45 million loan carries an interest rate determined in accordance with ADB's London Interbank offered rate (LIBOR)-lending facility. The $9.05 million loan comes from ADB's Asian Development Fund and carries an interest rate of 2.0% a year. Both loans will have a 25-year term, including a grace period of 5 years.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2013, ADB assistance totaled $21.0 billion, including cofinancing of $6.6 billion.
