51082-001: Establishing Sovereign Wealth Fund Management Institution | Asian Development Bank

Mongolia: Establishing Sovereign Wealth Fund Management Institution

Sovereign (Public) Project | 51082-001 Status: Active

The proposed knowledge and support technical assistance (TA) will support the Government of Mongolia to (i) establish a sovereign wealth fund (SWF) management institution with proper governance and accountability mechanism, and (ii) provide a capacity development program for required skills and staff. During the country programming mission in November 2016, the government requested the Asian Development Bank (ADB) to provide TA to establish a SWF management institution.

The TA will help the government (i) institutionalize effective SWF management mechanism based on transparent governance structure and proper accountability mechanisms, (ii) develop and implement the capacity development plans for required skill sets and human resources, and (iii) produce policy recommendations and guidelines for establishing and supervising the FHF based on research and international good practices.

Project Details

Project Officer
Lee, Seung Min East Asia Department Request for information
Country
  • Mongolia
Modality
  • Technical Assistance
Sector
  • Finance
 
Project Name Establishing Sovereign Wealth Fund Management Institution
Project Number 51082-001
Country Mongolia
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9338-MON: Establishing Sovereign Wealth Fund Management Institution
Technical Assistance Special Fund US$ 500,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Finance / Finance sector development

Gender Equity and Mainstreaming No gender elements
Description

The proposed knowledge and support technical assistance (TA) will support the Government of Mongolia to (i) establish a sovereign wealth fund (SWF) management institution with proper governance and accountability mechanism, and (ii) provide a capacity development program for required skills and staff. During the country programming mission in November 2016, the government requested the Asian Development Bank (ADB) to provide TA to establish a SWF management institution.

The TA will help the government (i) institutionalize effective SWF management mechanism based on transparent governance structure and proper accountability mechanisms, (ii) develop and implement the capacity development plans for required skill sets and human resources, and (iii) produce policy recommendations and guidelines for establishing and supervising the FHF based on research and international good practices.

Project Rationale and Linkage to Country/Regional Strategy Since 2007, Mongolia has established several funds in attempts to establish an effective mechanism to function as an SWF by accumulating portions of mining revenues. The Human Development Fund (HDF) was established in accordance with the Human Development Fund Law, 2009 and the Fiscal Stability Fund (FSF) in accordance with the Fiscal Stability Law, 2010. While the HDF and the FSF functioned effectively as fiscal stabilization and social protection mechanisms, long-term savings for intergenerational equity were created. Since revenues from finite natural resources need to be saved for the needs of future generations, the MOF established the Sovereign Wealth Fund Division to develop an institutional and legal framework that transforms the existing HDF and FSF into an effective and fully functioning SWF, which was named the Future Heritage Fund (FHF). This new fund will function not only as a fiscal stability mechanism, but also as an intergenerational fund. The SWF will need to be independently and professionally managed without being affected by political influence. Through a series of TA projects, ADB has provided institutional support, including capacity building and policy advisory assistance, to the MOF. The first TA project, managing for Development Results, was approved in 2010 and supported the MOF to (i) learn from international good practices in existing SWFs in other mineral-dependent economies, and (ii) develop a proper legal and institutional framework for the SWF in Mongolia. The second TA project, Public Finance Resource Management, was approved in 2013 and supported the MOF in (i) drafting the FHF Law to support the reform of the HDF into an effective SWF in Mongolia, (ii) setting up a capacity development road map and providing necessary training programs for MOF staff, and (iii) preparing a long-term development plan and strategy for the SWF. At present, the MOF is mandated to do the following for the SWF management institution: (i) formulate a framework; (ii) set up and staff the management team; and (iii) develop a comprehensive business plan and core guiding documents, including an investment mandate, a proper governance and accountability mechanism plan, and a short-term and medium-term strategy.
Impact Sustainable long-term economic growth for future generations achieved
Project Outcome
Description of Outcome SWF management institution established
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Core documents and guidelines for establishing a sovereign wealth fund management institution produced

A comprehensive capacity development plan for required skill and staff prepared and trainings conducted

A series of reports with policy recommendations and guidelines published for effective management of the SWF management institution

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services ADB will individually select and engage two international consultants (9 person-months in total: a sovereign wealth fund management specialist and a sovereign wealth fund institutional specialist) and three national consultants (36 person-months in total: a sovereign wealth fund expert, a sovereign wealth fund legal and regulatory specialist, and a capacity development planning and coordinating expert) in accordance with the Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement Computers, software, printers, and other equipment to be procured based on ADB's Procurement Guidelines (2015, as amended from time to time).
Responsible ADB Officer Lee, Seung Min
Responsible ADB Department East Asia Department
Responsible ADB Division Public Mgt, Financial Sector and Regional Coop Division, EARD
Executing Agencies
Financial Policy Department of the MOF
Zasgiin gazryn II bair, S. Danzangiin
gudamj 5/1r
Ministry of Finance
Government Building-2
Negdsen Undestnii gudamj-5/1
Ulaanbaatar-210646, Mongolia
Timetable
Concept Clearance 13 Jun 2017
Fact Finding 20 Mar 2017 to 30 Mar 2017
MRM -
Approval 04 Jul 2017
Last Review Mission -
Last PDS Update 26 Jul 2017

TA 9338-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
04 Jul 2017 26 Jul 2017 26 Jul 2017 31 Dec 2020 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 0.00 0.00 0.00 0.00 0.00 500,000.00 04 Jul 2017 9,139.57

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.

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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.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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Tenders

Tender Title Type Status Posting Date Deadline
Sovereign Wealth Fund Legal and Regulatory Expert Individual - Consulting Active 27 Aug 2017 02 Sep 2017
Capacity Development Planning and Coordinating Expert Individual - Consulting Active 27 Aug 2017 02 Sep 2017
Sovereign Wealth Fund Institutional Specialist Individual - Consulting Active 27 Aug 2017 02 Sep 2017
Sovereign Wealth Fund Management Specialist, Team Leader Individual - Consulting Active 27 Aug 2017 02 Sep 2017
Sovereign Wealth Fund Expert Individual - Consulting Active 27 Aug 2017 02 Sep 2017

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.