Mongolia : Ulaanbaatar Air Quality Improvement Program

Sovereign Project | 51199-001

The Government of Mongolia has requested financial assistance from the Asian Development Bank in the form of a policy-based loan to address Ulaanbaatar''s severe air pollution problem which (i) harms citizens' health, disproportionally affecting children and poor people; and (ii) results in significant health and economic costs, which are a long-term burden on the already weak national economy. The proposed program is grounded in the 2017-2025 National Program for Reducing Air and Environmental Pollution.

Flickr photos from the 51199-001: Ulaanbaatar Air Quality Improvement Program in Mongolia album.

Project Details

  • Project Officer
    Ramachandran, Pavit
    East Asia Department
    Request for information
  • Country/Economy
  • Sector
    • Public sector management
Project Name
Ulaanbaatar Air Quality Improvement Program
Project Number
Country / Economy
  • Mongolia
Project Status
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Loan 3648-MON: Ulaanbaatar Air Quality Improvement Program
Source Amount
Ordinary capital resources US$ 130.00 million
Loan: Ulaanbaatar Air Quality Improvement Program
Source Amount
Korea Exim Bank US$ 60.00 million
Strategic Agendas
  • Environmentally sustainable growth
  • Inclusive economic growth
Drivers of Change
  • Gender Equity and Mainstreaming
  • Governance and capacity development
Sector / Subsector
  • Energy / Energy sector development and institutional reform

  • Health / Health sector development and reform

  • Public sector management / Public administration

  • Transport / Transport policies and institutional development

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

Some gender elements
The Government of Mongolia has requested financial assistance from the Asian Development Bank in the form of a policy-based loan to address Ulaanbaatar''s severe air pollution problem which (i) harms citizens' health, disproportionally affecting children and poor people; and (ii) results in significant health and economic costs, which are a long-term burden on the already weak national economy. The proposed program is grounded in the 2017-2025 National Program for Reducing Air and Environmental Pollution.
Project Rationale and Linkage to Country/Regional Strategy

Ulaanbaatar is the world''s coldest capital, with temperatures regularly dropping below 20 degrees Celsius in winter (October-March). It is also one of the most polluted cities in the world. During January 2018, levels of harmful fine particulate matter in the ambient air were nearly forty times the daily limits recommended by the World Health Organization. These dangerous high levels of pollution are a seasonal fact of life for Ulaanbaatar''s residents with severe health impacts. Medical costs, lost productivity, chronic illnesses, and shorter life expectancy affect the economy and quality of life of people in Ulaanbaatar, especially poor families who cannot afford proper nutrition and medical care. Children are particularly vulnerable to pollution.

The air pollution problem in Ulaanbaatar stems from unplanned and inadequate urban development. In the past 20 years, Ulaanbaatar has witnessed rapid urban development due to the inflow of people who have looked for better lives in the capital city or have sought refuge after losing their livelihoods to more frequent and severe climate induced disasters in the countryside. The city core has expanded only marginally to accommodate the new migrants and a vast peri-urban area (named ger areas) has developed with no adequate public services such as water, sanitation, heat supply, and public transport.

In ger areas, most households rely on the combustion of raw coal (or solid waste, for the poorest) for heating and cooking. Government and private buildings mostly rely on highly polluting and inefficient coal-fired heat-only boilers. These highly polluting energy systems are the largest sources of air pollution, affecting the whole city; they contribute to an estimated 80% of ambient concentrations of inhalable particulate matter of less than 2.5 micrometers in diameter. Ulaanbaatar''s central core, where jobs and services are concentrated, has seen an increasing number of private vehicles and highly polluting public transport buses. These sources are thought to be responsible for 10% of ambient particulate matter of less than 2.5 micrometers in diameter. Coal burning in the combined heat and power plants generating electricity and heat for the city contributes to 5%-6% of ambient particulate matter of less than 2.5 micrometers in diameter, and resuspension of unpaved ger road dust and combined heat and power plant fly ash add 4%-5%. Moreover, the city''s topography and climate are conducive to poor air quality. Ulaanbaatar is surrounded by mountains which, in combination with cold, dry air in the autumn and winter months, traps the air near the surface in and around the city, preventing dispersion of the pollution.

Inadequate urban and energy planning and insufficient investment in infrastructure often result in haphazard urban development, which leads to air pollution and unlivable cities. In Ulaanbaatar, these conditions are exacerbated by declining economic growth and fiscal budget constraints that leave very few resources for the government to tackle the problem.

Mongolia''s economy is recovering from its latest budgetary crisis, triggered in 2014 by declining foreign direct investment, falling commodity prices, and growth moderation in the People's Republic of China (Mongolia''s biggest trading partner), which prompted a deceleration in gross domestic product growth from 17.3% in 2011 to 1.2% in 2016. The implementation of an International Monetary Fund program, which aims to restore debt sustainability and improve fiscal and monetary management, has had a positive impact on the economy, which has seen growth recover solidly to 5.1% in 2017.

Strengthening environmental sustainability is a pillar of Asian Development Bank's country partnership strategy for Mongolia, 2017-2020. ADB will support efforts to reduce Ulaanbaatar's air pollution and greenhouse gas emissions under the national program by helping the government prioritize and deliver its implementation action plan commitments based on cost-effective policy actions.

By developing the capacity of relevant agencies and strengthening their coordination, the program will (i) promote complementary measures, (ii) encourage consistent policy objectives through measures that are financially and economically viable and sustainable, and (iii) minimize contradictory actions. The program will also ensure timely and adequate allocation of resources for the national program implementation action plan. The program will achieve this by prioritizing and expanding public resources for air pollution reduction efforts, focusing on cost-effective actions, and catalyzing private sector finance.


Public health and living standards in Ulaanbaatar improved

Project Outcome

Description of Outcome

Air quality in Ulaanbaatar improved

Progress Toward Outcome
The project has achieved the intended goal of encouraging the Government of Mongolia to prioritize the air pollution problem, with substantially increased budget allocated to air pollution reduction efforts. The government also announced a city-wide ban on the use of raw-coal for burning - starting May 2019 - for which the Municipality is actively working with Ministry of Energy and of Environment to secure adequate production of cleaner coal.

Implementation Progress

Description of Project Outputs

Improved implementation action plan efficiency and air pollution control regulatory framework

Key measures on air pollution reduction and health protection

Mechanisms for environmentally sound and integrated urban, energy, and transport systems

Status of Implementation Progress (Outputs, Activities, and Issues)

Most of the policy actions under this output have been complied with.

Pending a few policy actions, most of the commitments under the last two outputs have been completed with ADB support. The release of tranche 2 is expected to be Quarter 3 2019.

Geographical Location
Ulan Bator

Safeguard Categories

Involuntary Resettlement
Indigenous Peoples

Summary of Environmental and Social Aspects

Environmental Aspects

No adverse environmental impacts have been identified and, as such, the program is categorized C for the environment.

The policy-based loan adopts a systematic, multisector approach to address the air pollution problem from short-, medium-, and long-term perspectives. The provision of 80,000 tons of cleaner coal is a key short-term policy, which can significantly reduce air pollution; the longer-term development of the ger areas will reduce the urgency of this measure. The Asian Development Bank technical assistance will aid in the design and monitoring of effective, transparent, and accountable distribution of high-quality lower-emitting coal, significantly reducing pollution locally and creating both demand and supply for cleaner coal, thereby ensuring sustainability of the policy. In addition, expanding the heating network will create opportunities to connect ger households and other buildings to district heating, further reducing traditional air pollutants and greenhouse gas emissions through the retirement of heating only boilers. Positive environmental impacts also include co-beneficial climate mitigation through short-lived climate pollutants (i.e., black carbon) emission reductions.

Other policy actions, such as on upgrading air quality monitoring systems, may further reduce emissions by improving regulatory enforcement and environmental supervision, but their actual contribution is difficult to quantify. Hence, the team adopted the proportionality approach to estimate the climate finance for the program, considering two policy actions in tranche 1 and four policy actions in tranche 2 contributing towards climate mitigation.

Climate change risksdirect and indirecthave been mitigated by including policy commitment that urban and energy planning agencies take into consideration anticipated climate impacts in the rural areas on future migration patterns (i.e., increased frequency of climate-induced natural disasters) and, in the urban context, on the infrastructure (i.e., heat waves increasing peak electricity demands, or freezing temperatures compromising renewable energy supply systems).

Involuntary Resettlement
Program activities are confined to policy reforms, and their benefits will accrue to all Ulaanbaatar residents. None of the policy actions will result in or lead to involuntary resettlement or adversely affect indigenous peoples. The program is categorized C for involuntary resettlement.
Indigenous Peoples
The program is categorized C for indigenous peoples.

Stakeholder Communication, Participation, and Consultation

During Project Design
During Project Implementation


Responsible ADB Officer
Ramachandran, Pavit
Responsible ADB Department
East Asia Department
Responsible ADB Division
Environment, Natural Resources & Agriculture Division, EARD
Executing Agencies
Ministry of Finance (formerly Ministry of Finance and Economy)


Concept Clearance
21 Sep 2017
Fact Finding
23 Oct 2017 to 31 Oct 2017
23 Jan 2018
23 Mar 2018
Last Review Mission
Last PDS Update
30 Sep 2019


Loan 3648-MON

Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Mar 2018 04 Apr 2018 30 Apr 2018 30 May 2019 30 Nov 2019 30 Oct 2019
Financing Plan
  Total (Amount in US$ million)
Project Cost 130.00
ADB 130.00
Counterpart 0.00
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 17 Jun 2022 130.00 0.00 100%
Cumulative Disbursements 17 Jun 2022 130.00 0.00 100%

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 Access to Information Policy (AIP) 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.

None currently available.

Evaluation Documents See also: Independent Evaluation

Title Document Type Document Date
Mongolia: Ulaanbaatar Air Quality Improvement Program and Ulaanbaatar Air Quality Improvement Program – Phase 2 Validations of Project Completion Reports Aug 2022

Related Publications

None currently available.

The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.


No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.