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New $110 Million Project will Boost Transport Connectivity and Logistics in Mongolia

The World Bank’s Board of Executive Directors today approved a loan of $100 million and a credit of $10 million from the International Development Association (IDA) for the Mongolia Transport Connectivity and Logistics Improvement Project. The project aims to improve physical connectivity and reduce the cost of logistics for meat processing in Mongolia.

“This project is an important part of the government’s New Economic Recovery Policy, which underscores the need for strategic transport infrastructure and drastic improvement in logistics for critical sectors”, said Khaltar Luvsan, Minister of Road & Transport Development of Mongolia. “We are pleased to partner with the World Bank and look forward to successful implementation of the project.”

The project will support Mongolia’s plan to diversify its economy, which is heavily dependent on mining, and accelerate sustainable economic growth. With an estimated 70 million head of livestock on which most of the poor in Mongolia depend for sustenance and livelihood, the meat sector in Mongolia has potential to drive economic growth and boost shared prosperity. However, poor physical connectivity, lack of strategically located and efficient logistics hubs, and uneven information access among actors in the supply chain have proved to be major constraints to realizing the full potential of the sector.

“Improving logistics and investing in physical connectivity while supporting economic reforms will help lay the foundation for sustaining growth,” said Andrei Mikhnev, World Bank Country Manager for Mongolia. “Investing in infrastructure can also help Mongolia create jobs and increase resilience to the impacts of climate change.”

To improve the physical connectivity and logistics efficiency for meat processing in Mongolia, the project will introduce modern roads asset management practices, rehabilitate 51km of last mile connectivity roads and maintain 311km of selected national roads with the highest concentrations of livestock and freight flows, improve the logistics service by developing a model regional logistics hub under a public-private partnership (PPP), and establish a logistics and supply chain platform.

The World Bank’s Mongolia InfraSAP report and the Country Partnership Framework for Mongolia for 2021-2025 provided guiding frameworks for the project.  The project will also support the Government of Mongolia’s vision of unlocking productive sectors and economic diversification through investment in critical infrastructure, improvement of logistics services, and reform of the regulatory framework for national logistics.

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