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Mongolia: Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3

Sovereign (Public) Project | 45007-009 Status: Approved

Ulaanbaatar city is home to more than 1.44 million people. The central city core with comprehensive utility services is surrounded by vast, substandard, and unserved ger areas of about 100 square kilometers. Ger areas accommodate about 60% of the city's population (about 840,000 inhabitants) and have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular unpaved pathways. The majority of households living here have land tenure. Lack of basic urban infrastructure and services in ger areas has caused severe pollution that threatens city residents' health. Obsolete household coal stoves for heating, and traffic congestion caused by unplanned road networks have helped generate some of the highest levels of air pollution in the world.

 
Project Name Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
Project Number 45007-009
Country Mongolia
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3946-MON: Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
Ordinary capital resources US$ 25.05 million
Loan 3947-MON: Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
concessional ordinary capital resources lending / Asian Development Fund US$ 18.60 million
Loan: Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
European Investment Bank US$ 18.65 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Education / Education sector development

Transport / Urban roads and traffic management

Water and other urban infrastructure and services / Urban policy, institutional and capacity development - Urban slum development

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

Ulaanbaatar city is home to more than 1.44 million people. The central city core with comprehensive utility services is surrounded by vast, substandard, and unserved ger areas of about 100 square kilometers. Ger areas accommodate about 60% of the city's population (about 840,000 inhabitants) and have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular unpaved pathways. The majority of households living here have land tenure. Lack of basic urban infrastructure and services in ger areas has caused severe pollution that threatens city residents' health. Obsolete household coal stoves for heating, and traffic congestion caused by unplanned road networks have helped generate some of the highest levels of air pollution in the world. Households exclusive reliance on open pit latrines and a poor solid waste collection system has led to poor sanitation, along with limited access to water supplied by water kiosks. There is a lack of basic social and public facilities, such as green spaces, parks, sports centers, kindergartens, and primary health centers. The upgrading of ger areas is constrained by inadequate urban infrastructure, lack of urban planning, poor urban services, and limited public spaces and facilities.

On 12 December 2013, the Asian Development Bank (ADB) approved the Ulaanbaatar Urban Services and Ger Areas Development Investment Program using multitranche financing facility (MFF) modality, comprising three tranches. On 16 April 2020, the President approved the extension of the MFF availability period from 9 years to 10 years (or from 31 December 2022 to 11 December 2023) to ensure the timely implementation of tranche 3. The total program cost is $320.00 million, of which $163.70 million will be financed by ADB; $96.00 million by the Municipality of Ulaanbaatar (MUB); and up to 50.00 million euros ($60.30 million equivalent at the time of approval) parallel cofinancing by the European Investment Bank. This program is the result of a successful policy dialogue between ADB and the MUB that catalyzed the (i) integration of ger areas in the Ulaanbaatar city master plan for the first time in December 2013, and (ii) adoption of a priority service and economic hubs (subcenters) development strategy in ger areas as a catalyst for more polycentric and inclusive city development. Under this program, a road map has been developed to establish a network of well-developed city subcenters to provide jobs, housing, and economic opportunities with reduced soil and air pollution. The program has introduced a paradigm shift and replicable mechanism to systematically extend modern infrastructure and key social facilities to ger area. The framework financing agreement was signed on 9 December 2013 and ratified by the Mongolian Parliament on 23 May 2014.

Tranche 3 of the MFF will align with the program strategic road map to support the redevelopment of two additional subcenters in the eastern and western ger areas (Sharkhad and Tolgoit).

Project Rationale and Linkage to Country/Regional Strategy Ulaanbaatar city is home to over 1.44 million people. The central core of the city largely comprises apartment blocks with comprehensive utility services. Surrounding the central core is a vast, low density, about 100 square kilometers of peri-urban area (so-called ger areas) with poor infrastructure that accommodates about 54.5% of the city's population (approximately 800,000 inhabitants). Ger areas have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular pathways that remain unpaved. The majority of households living here have land tenure. Lack of basic urban services causes severe pollution that threatens the city residents' health because of (i) unimproved individual coal stoves used by most ger area residents during winter which generate high air pollution; (ii) poor sanitation, since households almost exclusively rely on open pit latrines; (iii) poor solid waste collection which creates highly unsanitary living conditions, along with limited access to water supplied by water kiosks; and (iv) traffic congestion caused by unmanaged road network. The upgrading of ger areas is constrained by inadequate urban infrastructure, lack of urban planning, poor urban services and limited public spaces and facilities.
Impact Improved living conditions in Ulaanbaatar (Ulaanbaatar City Master Plan [2030])
Project Outcome
Description of Outcome A network of livable, competitive, and inclusive subcenters in Ulaanbaatar's ger areas
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Roads and urban services expanded within the targeted subcenters and connectivity between subcenters improved

Economic and public services in targeted subcenters improved

Institutional capacity for program management and urban development strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Ulaanbaatar
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Ramasubramanian, Viswanathan
Responsible ADB Department East Asia Department
Responsible ADB Division Urban and Social Sectors Division, EARD
Executing Agencies
Ulaanbaatar Municipal Government
Sukhbaatar Square-11
Ulaanbaatar-46, Mongolia
Timetable
Concept Clearance -
Fact Finding -
MRM 17 Apr 2020
Approval 26 Jun 2020
Last Review Mission -
Last PDS Update 27 Jun 2020

Loan 3946-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Jun 2020 - - 11 Dec 2023 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 95.60 Cumulative Contract Awards
ADB 25.05 26 Jun 2020 0.00 0.00 0%
Counterpart 51.90 Cumulative Disbursements
Cofinancing 18.65 26 Jun 2020 0.00 0.00 0%

Loan 3947-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Jun 2020 - - 11 Dec 2023 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 18.60 Cumulative Contract Awards
ADB 18.60 26 Jun 2020 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 26 Jun 2020 0.00 0.00 0%

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