A senior delegation from the European Bank for Reconstruction and Development (EBRD), led by President Thomas Mirow, was in Mongolia on April 8-9. Mr. Mirow was accompanied by Mr. Olivier Descamps, Managing Director for Turkey, Eastern Europe, the Caucasus and Central Asia, and Mr. Paul Vlaanderen, EBRD Board Director for the Netherlands and Mongolia.
The delegation met President Ts. Elbegdorj, Parliament Speaker D. Demberel, Minister of Finance S. Bayartsogt and the Governor of the Central Bank, Mr. L. Purevdorj. It also held negotiations with the Bank’s existing and potential business partners and signed an EBRD-funded transaction with Mongolia Opportunities Fund, the country’s first private equity fund serving the fast-growing small and medium-sized businesses sector.
The delegation reinforced the Bank’s strong commitment to supporting the economic development of Mongolia with a view to promoting and supporting further private sector development, including micro, small, medium and large local enterprises and ensuring sustainable development of Mongolia’s emerging and important natural resources sector as well as to contribute to a strengthening of the country’s financial sector. The USD10 million equity contribution by the EBRD to the Mongolia Opportunities Fund, signed by Mr. Mirow and Mr. Mandar Jayawant, the Fund’s Managing Partner, is aimed at increasing the availability of equity capital for the growing SME sector in Mongolia.
A specific feature of the Fund is that it is dedicated to the non-natural resource sector. It will support companies along the mining supply chain operating both in services and manufacturing, food processing and food supply sectors, as well as small scale infrastructure development. The Fund will make a significant contribution to balanced growth in the Mongolian economy. It will consider making equity investments in Mongolian SMEs with individual investment ranging from USD2.5 million up to USD7.5 million.
“With this investment the EBRD will take a 25 per cent stake in Mongolia Opportunities Fund that will play an important role in developing the private equity market in Mongolia. Jointly with our partner investor International Finance Corporation, the Fund will provide support to the country’s small and medium-sized businesses, especially, at a time when long-term equity financing remains a scarcity in the country,” Mr. Mirow said.
Since the beginning of its operations in Mongolia in October 2006, the EBRD has committed about USD 425 million to 36 projects in various sectors of Mongolia’s economy, with 100 per cent of the projects being related to private sector debt and equity investments.
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