49169-002: Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project | Asian Development Bank

Mongolia: Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project

Sovereign (Public) Project | 49169-002 Status: Proposed

The project will deliver sustainable and comprehensive solutions to transform the substandard, climate-vulnerable, and heavily polluting ger areas of Ulaanbaatar city into affordable, low carbon, climate-resilient, and livable eco-districts. It will leverage private sector investment to (i) deliver 10,000 affordable green housing units; and (ii) redevelop 100 hectares of ger areas into eco-districts.

The project is aligned with the following impacts: living conditions in Mongolia improved; and Ulaanbaatar is a safe, healthy, and green city that is resilient to climate change, and provides a livable environment for its residents. The project will have the following outcome: access to low-carbon and climate-resilient eco-districts and green affordable housing in Ulaanbaatar ger areas increased. The project is consistent with ADB's country partnership strategy for Mongolia, 2017- 2020, and with the core themes of green, competitive, and inclusive cities of ADB's Urban Operational Plan.

Project Details

Project Officer
Heckmann, Arnaud East Asia Department Request for information
Country
  • Mongolia
Sector
  • Water and other urban infrastructure and services
 
Project Name Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project
Project Number 49169-002
Country Mongolia
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant: Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project
High Level Technology Fund US$ 3.00 million
Green Climate Fund US$ 50.00 million
Loan: Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project
Ordinary capital resources US$ 60.00 million
concessional ordinary capital resources lending / Asian Development Fund US$ 20.00 million
Green Climate Fund US$ 95.00 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

Energy / Energy efficiency and conservation - Renewable energy generation - solar

Finance / Housing finance

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

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The project will deliver sustainable and comprehensive solutions to transform the substandard, climate-vulnerable, and heavily polluting ger areas of Ulaanbaatar city into affordable, low carbon, climate-resilient, and livable eco-districts. It will leverage private sector investment to (i) deliver 10,000 affordable green housing units; and (ii) redevelop 100 hectares of ger areas into eco-districts.

The project is aligned with the following impacts: living conditions in Mongolia improved; and Ulaanbaatar is a safe, healthy, and green city that is resilient to climate change, and provides a livable environment for its residents. The project will have the following outcome: access to low-carbon and climate-resilient eco-districts and green affordable housing in Ulaanbaatar ger areas increased. The project is consistent with ADB's country partnership strategy for Mongolia, 2017- 2020, and with the core themes of green, competitive, and inclusive cities of ADB's Urban Operational Plan.

The project will have three outputs: (i) resilient urban infrastructure, public facilities, and social housing units in ger areas constructed (public sector component); (ii) long-term financing to developers for low-carbon affordable housing, market rate housing, and economic facilities in ger areas and to households for green mortgages increased (financial intermediation loan [FIL] component); and (iii) sector policy reforms implemented and capacity strengthened.

Project Rationale and Linkage to Country/Regional Strategy

Following the transition from a centrally planned to a market-based economy in 1991, Mongolia has experienced rapid rural urban migration, mainly caused by (i) extreme climate events, such as droughts and severe winter conditions (dzud), combined with poor veterinary services and livestock management; and (ii) adoption in 2003 of a policy giving each citizen access to about 700 square meters of urban land. Inadequate infrastructure investments, housing policies, and urban planning regulations to accommodate the migrant population led to the formation of vast peri-urban areas, named ger areas after the Mongolian yurts (gers) around Ulaanbaatar's central districts. In 2017, the population of ger areas was estimated at 850,000 people, that is 60% of the city's population of 1.46 million, and 30% of the country's population.

Ger areas are settlements of low- and middle-income households characterized by loosely aligned plots, with irregular and unpaved pathways. Dwellings in ger areas are unserved detached solid houses and gers, poorly insulated, using inefficient coal and biomass-fired stoves generating large amounts of carbon dioxide emissions and air pollution, especially during winter. Most households have land tenure. Poor sanitation, with most households relying on open pit latrines, coupled with poor solid waste collection create unsanitary living conditions. Residents have limited access to water, which is being supplied via water kiosks, and access to public space and facilities, commercial areas, and economic amenities is lacking. This situation (i) makes ger areas highly vulnerable to climate change impacts and intensifies their carbon emissions; (ii) increases the cost of doing business, discourages investors and developers, and inhibits both economic integration and urban redevelopment processes; and (iii) affects vulnerable groups mostly women, children, elderly, and disadvantaged persons. Incremental growth and migration are increasing the population living in these poor conditions, because affordable housing options for low- and middle-income households are limited. A 2016 survey by the Capital City Housing Corporation estimated housing demand at 150,000 units, while available affordable housing stock is about 4,000 units; with 60% of ger areas residents willing to move to apartment units if acceptable and affordable solutions are proposed.

In 1997, the Government of Mongolia and the Asian Development Bank (ADB) developed a legal and policy framework for the housing sector. Under the National Housing Strategy, housing policies were made demand-driven with new standards and regulations. In 2002, ADB approved the first housing finance project, which introduced long-term mortgage lending to the banking system. In 2006, the Mongolian Mortgage Corporation was set up to create a pool of long-term funds to stimulate a secondary mortgage market. Housing finance expanded from 2013 through the government's 8% mortgage program. However, stringent mortgage access conditions and a lack of housing products for low-income households meant the mortgage program mainly served the upper middle-income households, creating an oversupply of high-end market housing products. The program is currently suspended. Recently, the government and the Municipality of Ulaanbaatar (MUB) initiated a series of programs to increase the supply of affordable housing units, and support ger area redevelopment. The objective is to deliver up to 130,000 housing units through the redevelopment of ger areas and the development of new areas. However, a lack of viable solutions, infrastructure investment, financing support to developers, and sustainable housing financing mechanisms have resulted in these programs not developing into implementable plans. The few residential blocks that were initiated focused on lowering construction costs, to the detriment of community well-being and sustainable urban planning, and lacked energy-efficient and renewable energy features.

Through the ADB-financed Ulaanbaatar Urban Services and Ger Areas Development Investment Program, MUB is extending basic urban and social services to upgrade economic hubs or subcenters in ger areas and provide an enabling environment for urban redevelopment and private and public investments. This provides an opportunity to implement onsite solutions for households to access apartments within their communities by integrating housing solutions into an urban renewal program. In addition, in November 2017 the government issued a resolution ordering the Development Bank of Mongolia (DBM) to establish the first green development fund to promote green urban development and economy, making DBM a key partner to leverage the private sector for green housing finance. International housing projects and Ulaanbaatar housing and redevelopment experience show that a complete solution integrating housing, infrastructure, urban development, and financing support to both the supply and demand sides is the best way to create a paradigm shift to improve access to green affordable housing, and resilient and low-carbon urban development.

Impact

1. Living conditions in Mongolia improved

2. Ulaanbaatar is a safe, healthy, and green city that is resilient to climate change, and provides a livable environment for its residents

Outcome Access to low-carbon and climate-resilient eco-districts and green affordable housing in Ulaanbaatar ger areas increased
Outputs

Resilient urban infrastructure, public facilities, and social housing units in ger areas constructed (public sector component)

Long-term financing to developers for low-carbon affordable housing, market-rate housing, and economic facilities in ger areas and to households for green mortgages increased (financial intermediation loan component)

Sector policy reforms implemented and capacity strengthened

Geographical Location Ulan Bator
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The proposed environmental safeguard category for the project is B as the anticipated impacts from infrastructure components are site-specific and reversible, are not unprecedented in scale subject to the implementation of the environmental management plan mitigation measures. An initial environmental examination will be prepared and disclosed on ADB's website in accordance with ADB's Safeguard Policy Statement (2009). The initial climate risk categorization is _Medium_. A climate risk and vulnerability assessment will be conducted. Resettlement plans for individual subprojects will be prepared.
Involuntary Resettlement Preliminary analysis indicates significant land acquisition and involuntarily resettlement, so the proposed involuntary resettlement category for the project is A. However, demand driven redevelopment mechanisms will be implemented to minimize involuntary resettlement. A framework approach or generic resettlement plan and initial environmental examination will be considered if the full scope of intervention is not defined by the end of the TA.
Indigenous Peoples The proposed categorization for indigenous peoples is C. The initial review of the population in the targeted areas indicates there are no communities that could be treated as indigenous peoples under the ADB's Safeguard Policy Statement (2009). This will be confirmed during the TA.
Stakeholder Communication, Participation, and Consultation
During Project Design

Potential initial stakeholders include ger area residents, private sector , services providers, local government, Ulaanbaatar Municipal Government, public utilities (i.e., USUG and heating companies), and line Ministries.

Extensive consultations will be held during the project design to ensure affordability of the social and affordable housing units and improved services for the poor and vulnerable groups. The PPTA will conduct a poverty and social analysis and address social safeguards. A socioeconomic survey, affordability survey, stakeholder workshops, focus group discussions, and key informant interviews will be conducted during the PPTA.

During Project Implementation

Extensive consultations will be held during the project implementation to ensure affordability of the social and affordable housing units and improved services for the poor and vulnerable groups.

Key documents, such as the social development action plan, gender action plan, community participation plan and stakeholders communication strategy , resettlement plans, and environmental management plan will outline consultation and participation activities for implementation. Loan assurances will address implementation and monitoring of the plans.

Business Opportunities
Consulting Services

Quality- and cost-based selection - 1,350 person-months - $12.53 million

Quality-based selection - 42 person-months - $0.20 million

Responsible ADB Officer Heckmann, Arnaud
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 15 Dec 2015
Fact Finding 16 Nov 2017 to 01 Dec 2017
MRM 30 May 2018
Approval -
Last Review Mission -
Last PDS Update 27 Sep 2017

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Улаанбаатар хотын Иргэдийн төлбөрийн чадварт нийцсэн ногоон орон сууц ба Дасан зохицох чадвар бүхий хотын шинэчлэл төсөл: Улаанбаатар хотын захиргаа Resettlement Frameworks Jul 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project: Resettlement Framework Resettlement Frameworks Jun 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project: Safeguards and Social Dimensions Summary Environmental Assessment and Measures May 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project: Resettlement Framework Resettlement Frameworks May 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project: Environmental Assessment and Review Framework Environmental Assessment and Review Framework May 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewable Project: Initial Environmental Examination Initial Environmental Examination May 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project: Initial Environmental Examination (Addendum) Initial Environmental Examination May 2018
Улаанбаатар хотын орлогод нийцсэн ногоон орон сууц ба дасан зохицох чадвар бүхий хотын шинэчлэл салбарын төсөл : Нүүлгэн шилжүүлэлтийн ерөнхий баримт бичиг Resettlement Frameworks May 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project: Voluntary Land Swapping Plan Resettlement Plans May 2018
Улаанбаатар хотын орлогод нийцсэн ногоон орон сууц ба дасан зохицох чадвар бүхий хотын шинэчлэл төсөл: Байгаль орчны төлөв байдлын үнэлгээ Initial Environmental Examination Jan 2018
Улаанбаатар хотын орлогод нийцсэн ногоон орон сууц ба дасан зохицох чадвар бүхий хотын шинэчлэл төсөл: Байгаль орчны үнэлгээ ба хяналтын хүрээ Environmental Assessment and Review Framework Jan 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewable Project: Draft Voluntary Land Swapping Plan Resettlement Planning Documents Jan 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewable Project: Draft Environmental Assessment and Review Framework Environmental Assessment and Measures Jan 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewable Project: Draft Initial Environmental Examination Environmental Assessment and Measures Jan 2018
Улаанбаатар хотын орлогод нийцсэн ногоон орон сууц ба дасан зохицох чадвар бүхий хотын шинэчлэл төсөл: Сайн дурын үндсэн дээр газар солилцох төлөвлөгөө Resettlement Plans Jan 2018
Ulaanbaatar Green Affordable Housing and Resilient Urban Renewable Project: Draft Resettlement Framework Resettlement Frameworks Dec 2017
Улаанбаатар хотын орлогод нийцсэн ногоон орон сууц ба дасан зохицох чадвар бүхий хотын шинэчлэл төсөл: Газар чөлөөлөлт ба нүүлгэн шилжүүлэлтийн хамрах хүрээ Resettlement Frameworks Dec 2017

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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