MCC BOARD APPROVES RE-ALLOCATION OF USD 188 MILLION

Ulaanbaatar, /MONTSAME/ The U.S. Government’s Millennium Challenge Corporation (MCC) Board of Directors approved a USD 127 million MCC Compact with the Government of Mongolia. The Mongolia Compact comprises the North-South Road and the Energy and Environment Projects that are proposed by the Government of Mongolia to replace the cancelled Rail Project.
Now that the Board has approved the reallocation of funds, over the next month the Governments of the U.S. and of Mongolia must approve an amendment to the Compact to include these new projects and a USD 50 million expansion of the existing projects that had been approved last September.
The total amount re-programmed totals the amount of the original Rail project - USD188 million. The two new projects and the expansions will benefit thousands of Mongolians, and will contribute to the economic growth of the country.
The MCC due diligence team which evaluated the proposals worked in close cooperation with the Ministries of Mongolia in reviewing the high-quality proposals in priority sectors over the last six months. Now, MCC will work closely with the Millennium Challenge Account-Mongolia, the Government of Mongolia and relevant stakeholders to accelerate the implementation of the Compact in order to complete all the projects under the Compact, as only 3 years and 10 months remain.
The following are the new projects approved by the MCC Board of Directors: North-South Road Project (USD 79.75 million)
The importance of the road sector within the North-South corridor has been increasingly recognized. Thus, the Government of Mongolia requested completion of the 176.4 km Choir-Sainshand road section, as well as upgrading of the Ulaanbaatar-Nalaikh road section, and rehabilitation of the current Bayanzurkh Bridge and/or construction of a new bridge. This project also includes a technical assistance component. Together these components will provide an important increase in the capacity of the road network infrastructure along the critical north-south economic corridor of Mongolia, facilitating greater trade and economic development.
Energy and Environment Project (USD 47.2 million)
The Energy and Environment Project (EEP) is focused on a critical issue for many Mongolians: air quality. During the long and harsh winters in Ulaanbaatar, the air quality is significantly deteriorated due to pollution. A significant factor in the deterioration of air quality is heavy use by the city's poorest residents of cheap, low quality coal for heating and cooking, producing air pollutants at levels from two to ten times the international safe standards. In response, in collaboration with other donors, the project will create a facility to fund the introduction of cleaner technologies and to support the introduction of wind energy into the national power grid. The objective of the EEP is to reduce urban air pollution in Ulaanbaatar by increasing the adoption of energy efficient products and homes in the ger districts, and supporting the development of renewable energy. Mongolians will benefit from these initiatives through:
1) savings from reduced fuel consumption;
2) savings from reduced health costs; and
3) savings from increased productivity.
To support the implementation of the new and expanded projects, approximately $4 million has also been allocated for program administration, environmental assessment, and monitoring and evaluation. In addition, approximately $7 million is allocated for contingency purposes.
The United States of America looks forward to our on-going collaboration in implementing the Millennium Challenge Compact with the government and people of Mongolia.
B.Khuder