Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Rural water supply services

Declining water security risks becoming a serious constraint on economic development, and pollution of the Tuul River is already a public health concern. The Tuul River, and its tributaries, such as Selbe, are the largest surface water resources in Ulaanbaatar, and replenish the groundwater resources in the region. Flow rates have declined substantially in these rivers, mainly as a result of decade-long logging and to recent climate change impacts, and adequate annual groundwater recharge has become less reliable. Ulaanbaatar obtains about 98% of its water supply from groundwater, abstracting 330,000 m3 per day which is close to the estimated maximum sustainable yield. Further increase in groundwater use would likely lead to falling water tables, increased abstraction costs, and potential water shortages within a few years.

The Government of Mongolia (GOM) has taken major steps forward in improving the legal framework for the management and environmental protection of river basins in Mongolia. In 2010, the GOM divided the country into 29 river basins to improve water resources management. Principal laws on water resources have been revised and consolidated, and new laws have been adopted. The 2004 Law of Mongolia on Water has been replaced with the Water Law 2012. Also, a new and consolidated Natural Resources Use Fee Law and Water Pollution Fees Law were approved in 2012. The new Water Law formally established the TRBA, under the Ministry of Environment and Green Development (MEGD), to coordinate water management and environmental protection in the TRB.

With the new institutional and regulatory framework formally established, the GOM is determined to initiate a quick response to the increasing threats in the TRB. In 2012, the GOM approved a detailed Integrated Water Management Plan for the Tuul River Basin (IWMPTRB). TRBA, as a newly established organization, still lacks the institutional capacity to effectively coordinate with other stakeholders in the basin and regulate development activities, which is a major constraint for the implementation of the IWMPTRB.

The GOM has requested ADB to support the TRBA with the implementation of priority activities of the IWMPTRB to strengthen the management and protection of the TRB. These include: (i) the strengthening of institutional capacity of the TRBA, including the development and implementation of regulatory and economic instruments and incentive schemes for environmental compliance; (ii) .improvement of water availability through ecological measures, with a focus on groundwater resources; and (iii) improvement of riverbanks environment in Ulaanbaatar. As such, the TRBA will establish its operational effectiveness through cooperation and coordination with other government agencies and water users, mobilizing financing for improved water resources management, and supervision of the construction and operation of environmental protection infrastructure.

The proposed project will compliment other ongoing and planned initiatives by ADB and development partners to improve the urban environment and wastewater collection and treatment in Ulaanbaatar. The proposed project also builds on ADB's cooperation with Mongolia in the agriculture, natural resources management, and environmental sector since 1996. Under JFPR 9125-MON: Poverty Reduction through Community-Based Natural Resource Management, the MEGD prepared the Integrated River Basin Management Plan of the Onon River Basin, which was ratified by parliaments in two project aimags and approved by the executing agency in December 2011. ADB also supported the MEGD to strengthen its environmental impact assessment regulatory framework. ADB is providing similar support for other developing member countries to strengthen the institutional capacity of watershed and lake management agencies. The lessons learned from these projects will be integrated in the proposed project design.

The proposed project is consistent with the policies of the GOM, and specifically contributes to the implementation of the IWMPTRB. It is also in line with ADB's country partnership strategy for Mongolia, 2012 2016 to support inclusive and environmentally sustainable growth. The project scope also follows several key aspects of ADB's Water Operational Plan 2011 2020, including (i) water demand-supply gaps and unregulated groundwater abstraction, (ii) water quality and river clean-ups, (iii) water governance, and (iv) climate change adaptation. The project is proposed for ADB's lending pipeline for 2015. Project loan is proposed as financing modality of the project.