Mongolia : Project Readiness Enhancement Project

Sovereign Project | 55291-001

Facility scope. The facility will finance a series of small-scale activities related to one or more of the outputs. Each activity will be linked to the proposed CPS for 2021-2024, priority sectors of the SEFF are agriculture, natural resources and rural development; water and other urban infrastructure and services; public sector management; and transport.

Project Details

  • Project Officer
    Arora, Chandra
    East Asia Department
    Request for information
  • Approval Date
    1 December 2021
  • Country/Economy
  • Sector
    • Transport

Related Projects

Project Name Project Readiness Enhancement Project
Project Number 55291-001
Country / Economy Mongolia
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 0002-MON: Project Readiness Enhancement Project
Ordinary capital resources US$ 20.00 million
Operational Priorities OP4: Making cities more livable
OP6: Strengthening governance and institutional capacity
Sector / Subsector

Public sector management / Public administration

Transport / Multimodal logistics - Road transport (non-urban)

Description Facility scope. The facility will finance a series of small-scale activities related to one or more of the outputs. Each activity will be linked to the proposed CPS for 2021-2024, priority sectors of the SEFF are agriculture, natural resources and rural development; water and other urban infrastructure and services; public sector management; and transport.
Project Rationale and Linkage to Country/Regional Strategy

Strategic context. The Asian Development Bank's (ADB) country partnership strategy (CPS), 2017-2020 for Mongolia was the largest ever partnership between ADB and Mongolia, resulting in commitments of $1.49 billion. Following parliamentary elections in June 2020, the newly elected government has come in with an ambitious development program and action plan designed to close Mongolia's infrastructure gap and launch the country onto a new development trajectory. Mongolia needs an immediate upgrade of basic infrastructure in Ulaanbaatar and other regions to meet its competitiveness and development goals. ADB is the largest development partner in the country and the government has requested ADB's leadership in supporting this program. As such, ADB's new CPS covering 2021-2024, is even larger than CPS, 2017-2020.

Country portfolio overview. ADB's role as Mongolia's lead development partner by proactively enhancing coordination with development partner agencies that remain engaged in its identified priority sectors. ADB knowledge in addressing its priority areas of inclusive and sustainable economic growtheconomic diversification, poverty reduction, employment generation, urban development, social protection, environmental protection, climate change response, and disaster risk management. As of 15 February 2021, ADB have an active portfolio of 40 projects financed by 66 loans and grants with a total net value of $1,705.85 million and 58 active technical assistance projects with total net value $50,952.00 million.

Over the course of the new CPS, 2021-2024, ADB will support several large infrastructure projects greatly increasing the complexity (as well as the size) of ADB's portfolio. These projects include complex projects in urban transport and traffic management in Ulaanbaatar city, satellite city development and associated rail and logistic support projects, export-oriented agriculture and livestock development, and road transport projects. Delivering on a such a complex portfolio will require high level of project design readiness, a strong focus on project administration and in-depth support to the government on procurement and project management.

Project startup risks. Mongolia Resident Mission (MNRM) undertook an in-depth review of project management issues in undertaking the CPS Final Review. There are important challenges that need to be addressed in a systematic way to ensure enhanced project implementation and solid portfolio delivery. The current average start-up delays in the portfolio are more than 14 months across all projects. Key factors leading to startup risks include (i) the lack of detailed designs and safeguard documents, (ii) insufficient use of recently approved advance procurement, (iii) systematic delays in establishment of project management units (PMUs), (iv) a lack of continuity of PMU staff from design to implementation, and (v) possible cost overruns and project cancellations. Mongolia also face unique challenge of shorter construction season for civil works. Design readiness will help to plan the project delivery better.

Proposed facility and ADB value addition. The small expenditure financing facility (SEFF) presents a unique opportunity for ADB to strengthen project implementation, allowing for ADB to deliver the priorities of the new CPS, 2021-2024. The government has already agreed to the inclusion of the SEFF, agreeing to borrow for project design costs for the first time and underlining the government's commitment to strengthening project administration. The SEFF is preferred since it can respond quickly and responsively to the small financing needs for ensuring project readiness. The government intends to improve project design readiness to avoid startup delays which affect contract awards and disbursement ratios, possible cost overruns, and timely delivery of project benefits to the Mongolian people. The SEFF will allow ADB and the government to greatly enhance project implementation by (i) supporting early design work and advanced procurement actions to alleviate project startup bottlenecks; (ii) strengthen the governments project implementation capacity; (iii) introduce new technologies, standards, and management approaches; and (iv) complete infrastructure investments in conformance with up-to-date performance standards.

Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Output 1: Project implementation readiness for ensuing projects improved. The facility will support project preparation, design activities, and institutional strengthening for ADB-financed projects i scheduled for approval from 2022 to 2024. This output will include Ulaanbaatar traffic management and other transport improvement interventions, energy, export-oriented logistics improvement, management of the agriculture and livestock supply chain, and improvements in regional connectivity projects.

Output 2: New technology, innovation, or improvement in design standards pilot-tested. The facility will support pilot-testing of advanced technologies and management approaches to reduce life-cycle costs, improve service efficiency and quality, and minimize negative environmental and social impacts. Developing smart traffic management in Ulaanbaatar is an example of using new technology and management approaches.

Output 3: Project efficiency and sustainability enhanced. The facility will improve project efficiency and sustainability, including capacity building and implementation support for new projects, institutional efficiency, governance improvements, preparation of safeguard documents, financial and economic analysis for ensuing projects, and operations and maintenance. The institutional arrangements for the proposed mass transit system in Ulaanbaatar is the first activity planned under output 3.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Ulaanbaatar
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 Arora, Chandra
Responsible ADB Department East Asia Department
Responsible ADB Division Mongolia Resident Mission (MNRM)
Executing Agencies
Ministry of Finance (formerly Ministry of Finance and Economy)
Concept Clearance 26 Feb 2021
Fact Finding 01 Mar 2021 to 15 Apr 2021
MRM 23 Aug 2021
Approval 01 Dec 2021
Last Review Mission -
Last PDS Update 01 Dec 2021

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.

Title Document Type Document Date
Facility Agreement (Ordinary Operations) for Loan 0002-MON: Project Readiness Enhancement Project Loan Agreement (Ordinary Resources) Jun 2022
Project Readiness Enhancement Project: Report and Recommendation of the President Reports and Recommendations of the President Nov 2021

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.

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.


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Procurement Plan

None currently available.