23.08.2010, Update on the Development Bank of Mongolia and on the planning of the Sainshand...
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Transcript of 23.08.2010, Update on the Development Bank of Mongolia and on the planning of the Sainshand...
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
2010.08.23
NATIONAL DEVELOPMENT AND INNOVATION COMMITTEE
G o v e r n m e n t a g e n c y o f M o n g o l i a
www.ndic.gov.mn
Industrialization policies of Mongolia
and Development Bank of Mongolia
Ch. KhashchuluunNational Development and Innovation Committee,
Government Agency of Mongolia
1
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• Priority one: Developing mining sector by exploiting mineral resources deposits and setting the foundation for heavy industry
• Priority two: Developing intensified agriculture and implementing industrialization policy: Projects in biotechnology, intensive agriculture to increase food production –
• Priority three: Developing infrastructure: Projects for developing infrastructure linked with exploiting mining deposits such as constructing new railroads, new power stations and constructing paved roads in rural areas.
• Priority four: Providing sustainable development through human development and protecting the environment: Projects on environment protection, promoting tourism, establishing training-production parks for information technology.
• Priority five: Improving governance and supporting private sector: Supporting private sector and developing public-private-partnership.
Strategic priorities in investment, 2010-2015 Government decree No 320, 2009
2
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• Tavantolgoi, other smaller projects. TT project bidding to finish in 2010
• Sainshand industrial complex planning finished, 2 years preparation time. Government resolution and Sainshand industrial complex council chaired by Prime Minister. Working group under NDIC umbrella, international bidding documents for project management are finalized, formally start in September 2010
• Copper smelter plans (small scale in Erdenet), various construction material plants projects
3
Priority one: Developing mining sector by exploiting mineral resources deposits
and setting the foundation for heavy industry
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
44
A Steering Committee has been created for implementation of the Sainshand industrial and railway infrastructure projects
National Dev. Strag.
Government Resolutions
Task Force per #52 note Implementation Unit Implementation Projects
Ministry of Road, Transport, Construction and Urban Development
Ministry of Mineral Resources and Energy
Ministry of Finance
Ministry of Food, Agriculture, Light Industry
Ministry of Environment
National Development and Innovation Committee
Implementation Task Force(2)
Local and International Advisors:
• Global Project Manager (PMC)
• Local Advisor• International counsel• Local counsel• Financial Advisor• Technical Advisors
Industrial Mining Railway
Copper Smelter
Metallurgical Facilities
Coke Chemical Facility
Coal Chemical Facilities
Power Plant(s)
Railways
Pro
ject
s to
be
imp
lem
ente
d
GOM is ready to kick-start implementation of the complex and integrated industrial and railway infrastructure projects in Mongolia
• Resolution #299• Resolution #320• Meeting Note #52
Steering Committee(1)
1) The Steering Committee shall include Parliament members, Government and non-government organizations.2) NDIC shall be the contracting party to all local and international advisors. MOF is to fund necessary operating capital.
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
5
Major mines, such as Tavan Tolgoi and Oyu Tolgoi, are heart of industrial and railway projects as suppliers of feedstock
Loca
l Eq
uit
y Sp
on
sors
Inte
rnat
ion
al
Equ
ity
Spo
nso
rs
EQU
ITY:
30
-40
%
Multilateral Tranche
ECA Guaranteed Tranche
Commercial Tranche
DEB
T: 6
0-7
0%
PROCESS UNIT
Tavan Tolgoi LLC
Oyu Tolgoi LLC
Supply Agreement
Freight Agreement(1)
EPC Agreement
Operations & Maint.
Agreement
State Property Committee
Concession Agreement
Products:
• Coke• Iron pellets• HBI/DRI• Copper cathodes• Synthetic gas• Liquefied gas• Industrial diesel
and other oil products
Companies that expressed interest:
• ThyssenKrupp• Noble Group• Posco• Sinopec• Petrochina• Marubeni• Sojits• Itochu• Sumitomo
Offtake Agreement
Freight Agreement(1)
International Banks
Mongolia Commodity Exchange
• Linking with NYMEX and other commodity exchanges
• Provides price discovery• Transparency
1) Please refer to slide 16 for railway financing structure
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
6
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• The National Development and Innovation Committee of Mongolia (“NDIC”) is accepting proposals from engineering, construction and project management companies to serve as Program Manager (“Program Manager”) and provide overall Program Management Consultant Plus (“PMC-Plus” or “PMC+”) services in connection with the greenfield development and construction of certain industrial and infrastructure projects (“Projects”) in Mongolia.
• The anticipated PMC-Plus services will include the development of a Master Plan, the provision of overall program management consulting services for all of the Projects, plus the provision of EPC or EPCM services for offsites and utilities and for certain individual Projects.
• PMC-Plus will be selected based on the principles stated this tender documents and according to the combined evaluation method, which are compliant to the Procurement Law of Mongolia.
7
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• Projects intensive agriculture to increase food production – Atar III national
campaign. In 2007 Mongolia produced 25% of grain consumed. In 3 years, 65% of
equipment and 80% of tractors is updated, 100% self sustainability in grain and
potato, 60% of vegetables is reached. 26 technology-maintenance stations have
been created to service more than 1000 new tractors creating 3300 jobs in the
process.
• High technology policy adopted by Parliament
• NDIC announced first bidding for high tech projects in biotechnology
• 25 million US dollars loan from Hungary
• Information technology town campus to be situated in Nalaih area based on
Information technology faculties of national universities.
8
Priority two: Developing intensified agriculture and implementing
industrialization policy:
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
Regional development index and regional development
goals for 2010-2015
< 0.15Regional development index of the Government of Mongolia consists of9 groups of indicators in total including 80 indicators such as overalldevelopment, infrastructure, healthcare, education, culture, naturalresources and financial capacity
RDI
0.15-0.18
0.18-0.20
0.21-0.22
> 0.22
2009 2015
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• Construction for Mogoit Power station (30-60 mWt) started to supply Western
Mongolia with electricity
• Hydro power stations to gradually attain project capacity (Durgun and Taishir
stations)
• Power Plant No 5 to be situated in Baganuur, feasibility study by ADB to start in fall
2010 to increase production of electricity by 2015
• Currently negotiating terms for Shivee Ovoo coal-based Power Plant (4 gWt)
• Railroad policy is finalized for 2010-2020
• Optic fiber cables network, national scale
10
Priority three: Developing infrastructure: Projects for developing infrastructure
linked with exploiting mining deposits such as constructing new railroads, new
power stations and constructing paved roads in rural areas.
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
11
Railway plan 2010
1) ЗТБХБЯ-аас дэвшүүлсэн Монгол Улсын Төмөр замын бодлогыг Засгийн газар болон Үндэсний аюулгүй байдлын зөвөлөл нэр 2010 он 4-р сард дэмжиж УИХ-д оруулах зөвлөмж өгсөн болно. УИХ нь Төрөөс баримтлах Төмөр замын бодлогыг батлана.
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
Planned automobile road network
ªëãèé
Õîâä
Óëààíãîì
Óëèàñòàé
Ãîâü-Àëòàé
Áàÿíõîíãîð Àðâàéõýýð
Öýöýðëýã
Áóëãàí
̺ðºí
Ýðäýíýò
Äàðõàí
Ñ¿õáààòàð
Çóóíìîä
Óëààíáààòàð
×îéð
Ñàéíøàíä
Ìàíäàëãîâü
Äàëàíçàäãàä
ªíäºðõààí
Áàðóóí-Óðò
×îéáàëñàí
Óëààíáàéøèíò
Õàíäãàéò
Àðö ñóóðü Áàãà-Èëýíõ
Õàíõ
ÀëòàíáóëàãÝðýýíöàâ
Óëüõàí
Õàâèðãà
Áè÷èãò
Çàìûí ̄ ¿ä
Ãàøóóí ñóõàéò
Áóðãàñòàé
ßðàíòàé
Äàÿí
Õàðõîðèí
Currently under construction 1461.65 км
Øèâýýõ¿ðýí
New roads 1977,95 км
Current roads: 2190.17 км
newly needed roads: 3439,6 км, including:
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• As of 2008, ICT sector produces 9% of Mongolian GDP. • “National Data Centre - the completed project costs around
$5.2 million • “Telecommunication Backbone Network of Mongolia”- the
project costs around $45.0 million - ongoing project.• “Information technology development and training town”
project- the project costs around $100.0 million, in the early stage of implementation
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
14
• In addition to usual hydro power stations, Mongolia has widespread use of
solar, wind energy
• currently the country uses commercially 16 midscale solar and wind power
stations, villages and individual farmers utilize 74 222 solar energy
generators
• Mongolia produces more than 1% of its energy by sustainable energy
resources, which is better than half of EU countries
• This year, 20000 more solar generators will be introduced
• Mongolia aims to produce 5% of its total energy use by renewable energy
means in near future
• Mongoali is preparing a deployment of larger wind power commercial
project 70 mwt
Priority four: Providing sustainable development through human development
and protecting the environment: Projects on environment protection, promoting
tourism, establishing training-production parks for information technology.
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
Mongolian ranking in “Doing business” survey 2010
60
78
103
44
25
71
27
69
155
36
110
58 61
104
49
20
68
25
87
156
35
110
0
20
40
60
80
100
120
140
160
180
Doing business
Starting a business
Dealing with
construction permit
Employing workers
Registering property
Getting credit
Protecting investors
Paying taxes
Trading across border
Enforcing contract
Closing a business
2010 2009
Doing Business, WB 58th out of 181 countries 2009
60th out of 183 countries 2010
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• Concession Law is ratified at the beginning of 2010, 90 projects in pipeline, some have already started in South Gobi
• Business environment reform year 2010
• Preparing legal environment for lobby, business policy advocacy and better links with business by updating NGO legislation
• Improving public tender/bidding process: creating an independent agency to centralize and improve public bidding process
• Improving the Stock Exchange
• Preparing governance reforms including:
– Smaller and more efficient central government and fiscal decentralization
– Rethinking role and functions of local governments and introducing Public Service Standards
– Better planning and fiscal planning system: Fiscal Stabilization Law is adopted, Law on Development Planning and Bugdet Law are prepared
Priority five: Improving governance and supporting private sector: Supporting
private sector and developing public-private-partnership.
16
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
OBJECTIVES, MEASURESRESPONSIBLE
ORGANISATION
IMPLEMETATION
PERIOD,
EXPEDITURES
INDICATORS OF
ACHIEVEMENT
One. Actions and measures directed towards enhancing Mongolia’s ranking in Doing business
survey
1.1. Ease of starting business
1.2. Dealing with construction permit
1.3. Employing workers
1.4. Registering property
1.5. Getting credit
1.6. Protecting investors
1.7. Paying taxes
1.8. Trading across border
1.9. Enforcing contract
1.10. Closing a business
Action plan/Appendix 1. Ease of doing business/
Highlights of the plan:Registration improvement, less bureaucratic procedures
and less costs for startups, e-governance development, one-stop services, reducing licences and permits by up to
90%, encourage entrepreneurship, improve property rights protection, introduce loan guarantees, increase SME funding
by 4 times from 2009 up to 120 billion MNT in 2011, national Corporate Governance
program, development of financial markets, reinvest into securities market balances of government funds, protect
minority shareholders, trade guarantees system, trade logistics improvement, expand capacity of border
points, PPP.
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
OBJECTIVES, MEASURESRESPONSIBLE
ORGANISATION
IMPLEMETATION
PERIOD,
EXPEDITURES
INDICATORS OF
ACHIEVEMENT
Two. Actions measures directed towards improving legal and regulatory environment
Three. Actions measures directed towards improving financial and investment climate
Four. Actions measures directed towards optimizing public service delivery and quality
Action plan/Appendix 1. Ease of doing business/
Improve 81 existing laws, ensure transparency of economic policies, implement public consultations on legislature development, export promotion actions, improve procurement
system, introduction of international standards, Private Sector development strategy, improve legal infrastructure for planning and public investment, improve credit
environment, access to finances through bond issue, Development bank and reform of stock exchange and securities market, transfer some government activities to NGOs, improve
professional inspection, customs, green economy
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• Budget investment - Projected 2010-2013 annual revenue public investment possibilites:
350-600 million USD (GOM), Stabilization and Human development Funds
• Loans and aid - no more than 200 million dollars annually ,with gradual reduction of
concessional loans
• Borrowing: on scale of 500 million dollars annually (source: Sainshand industrial
complex plan, GOM).
Funding
19
Government domestic debt, 1996-2008
-
20.0
40.0
60.0
80.0
100.0
120.0
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
bill
ion
, MN
T
Source: Ministry of Financebond sold bond paid balance Interest expense
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
Introducing Development Bank of Mongolia
• Need for a specialized institution to finance investment using
proceeds from mining and international development finance sources
• Development Bank of Mongolia is a financial institution primarily dealing
with offering long-term capital finance to projects generating positive
externalities in strategic priority development sectors such as infrastructure
and heavy industry
• Government decree of August 2010 approved establishment of
Development Bank of Mongolia with international management team
• Allocation of 14 million US dollars to set bank is approved by Parliament
in 2010 budget amendment in July 2010
• International bidding terms for management team are finalized
20
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
A proposed channel of funds into development
Shareholders
Intl. Org.GoM Private
investors
Development Priority Projects
21
International development capital market
Development Bank of Mongolia
Human Development Fund (240 million in 2011. approximately 400 mln dollars in 2011)Stabilization Fund (from 2013)Together will reach 1 billion US dollars by 2015
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
• According to the resolution of the Government of Mongolia of August 2010, the executives function of Development Bank of Mongolia /hereinafter reffered to as “DBM” / shall be exercised by an international team on a contract basis.
• The selection procedure shall be implemented by a working group organized by the joint order of Board of Directors of Development of Mongolia, National Development and Innovation Committee and State Property Committee
22
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
Development Bank Partnership with Commercial Banks
• The DBM will not compete with commercial banks in their
funding activities, it will provide conditions for
harmonious and mutually beneficial cooperation with
commercial banks.
The DBM will provide long term funding for large, technology intensive
industrial projects that CBs can’t provide.
• The DBM partnership with CBs will create new banking
activities.
Funding large projects through loan syndication
Assisting in raising funds in international markets
Providing guarantees to private sector
23
ҮНДЭСНИЙ ХӨГЖИЛ, ШИНЭТГЭЛИЙН ХОРОО
З а с г и й н г а з р ы н т о х и р у у л а г ч а г е н т л а г www.ndic.gov.mn
Corporate Governance of Development Bank
• Good corporate governance of the DBM is a key factor
• Therefore, on one hand the DBM needs to secure equity
participation from international organization and on the other
hand the DBM’s Board of Directors should include
representatives from the government and domestic investors –
Government will put highest ranking officials on Board, as well as
invite most respected independent members
• Finding and attracting the best experienced specialists with the
required skills set are vital to the DBM, while their compensation
should be competitive with the compensation offered by
commercial banks - Management team
24