February, 2020
This is an EvD cluster evaluation of the mining portfolio in Mongolia since EBRD operations began in 2006 and involved a review of the themes emerging from 14 private sector projects, worth €734m of net cumulative investment (€704m debt, €30m equity) and associated donor funded EBRD technical assistance, most of which was non-transactional. The mining sector in Mongolia is critical to the economy, representing around 27% of GDP, 19% of state budget, and 88% of exports, mainly to China. Top mineral exports are coal, followed by copper and gold.
The first period of EBRD investment, from 2006 to 2012, was characterised by a mining boom with the EBRD becoming closely involved, less risk adverse and more prepared to support small and domestic players. From 2012 to 2016, global commodity prices fell. Around half the existing portfolio ended up in Corporate Recovery in part due to the global commodity price slump, business conduct issues and lack of sponsor support.
The review makes three recommendations based on its findings, which cover evaluation of the biggest current operation, improvements more generally to project design for stronger delivery of the Bank’s transition mandate, and critically, development of an improved programme of policy dialogue and IFI collaboration.