1

THE DEVELOPMENT
BANK OF MONGOLIA
SUMMARY REPORT
FOR THE FIRST-HALF OF 2014
2
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014 3
4
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
TYPES OF DEVELOPMENT BANKS
Policy bank a type of bank that is exists in countries
such as Japan, the PRC, the Republic of Korea and
Malaysia, and which directly supports government
economic policies and planning.
Special-purpose financial institution an entity that has
a specific organisational structure and duties such as
small- and medium-enterprise development (Thailand),
agricultural intensification (India), infrastructure
(Malaysia), environmental protection (the Federal Republic
of Germany), housing (in most countries), etc.
Universal bank a type of bank that concurrently grants
multiple types of financing in addition to development
policy financing (Philippines, Indonesia and India).
Commercial development bank a bank that operates
under purely commercial principles and supports economic
development (Singapore).
A DEVELOPMENT BANK IS A
FINANCIAL INSTITUTION WHICH
IS OBLIGATED TO PROVIDE WITH
REQUIRED FINANCING AND
PROFESSIONAL ADVICES FOR
ACHIEVING THE SOCIO-ECONOMIC
DEVELOPMENT OBJECTIVES OF A
PARTICULAR COUNTRY.
WHAT IS A
DEVELOPMENT BANK?
THE DEVELOPMENT BANK
OF MONGOLIA IS
A POLICY BANK.
5
As loans granted by domestic commercial banks have had
a relatively high interest rate, were shorttermed and
imposed limits on the maximum amount of loans being
granted, financing opportunities for major projects which
would support economic development were limited. Also,
as the foreign trade balance of our country is in deficit,
and our infrastructure development is relatively weak, it
has been necessary to create a development bank.
On 20 July 2010, the Government of Mongolia decided to
establish the Development Bank of Mongolia. Following
that, on 10 February 2011, the Parliament of Mongolia
enacted the Law on the Development Bank of Mongolia,
stipulating that the Development Bank will be a
state-owned for-profit legal entity with the specific
functions of conducting activities aimed at financing
major projects and programmes for the development of
Mongolia.
When raising financial sources, the Development Bank
operates in accordance with approval obtained the scope
of guarantee by the Government.
TO BE A LEADING INSTITUTION
INSTIGATING FINANCIAL
SOLUTIONS WHICH ENSURE
AND DIVERSIFY SUSTAINABLE
ECONOMIC DEVELOPMENT IN
MULTIPLE SECTORS, SUPPORT
MANUFACTURING OF VALUE
ADDED PRODUCTS, AND
CONSOLIDATE AND IMPLEMENT
THE COUNTRYS DEVELOPMENT
POLICIES.
TO MAKE MONGOLIA A
DEVELOPED COUNTRY RANKING
HIGH IN COMPETITIVENESS AND
ECONOMIC STRENGTH.
VISION
MISSION
THE DEVELOPMENT
BANK OF MONGOLIA
6
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
HOW BIG IS THE DEVELOPMENT BANK OF MONGOLIA?
THE TOTAL CAPITAL OF BANKS; BANKS ASSETS AS OF THE FIRST-HALF OF 2014
The Development Bank of Mongolia
Trade and Development Bank
Khan Bank
Golomt Bank
Xac Bank
UB City Bank
Capital Bank
Chinggis Khaan Bank
Capitron Bank
National Investment Bank
Erel Bank
Trans Bank
Credit Bank
State Bank
1.000 2.000 3.000 4.000 5.000 6.000
INVESTMENTS MADE BY THE DEVELOPMENT
BANK OF MONGOLIA EXCEED INVESTMENTS
BY THE STATES BUDGET FUNDS. THIS
INDICATES THE DEVELOPMENT BANKS
MAJOR ROLE IN OUR COUNTRYS ECONOMY.
In billion MNT
billion MNT billion MNT
EXPENSES OF
INVESTMENTS BY THE
STATES BUDGET FUNDS
(2013)
LOANS AND
ADVANCES GRANTED
BY THE DEVELOPMENT
BANK (2013)
1,447 1,686
SOURCE: The National Statistical Office
7
12 May 2011
Launched its
operations
31 December 2011 31 December 2012 31 December 2013 Since 2014
CORPORATE
GOVERNANCE
THE DEVELOPMENT BANKS FINANCIAL STATEMENTS AND REPORTS
ARE VERIFIED BY INDEPENDENT AUDITING EACH YEAR AND IT IS
FOUND THAT THE BANK COMMITTED NO VIOLATION OR BREACH,
AND ITS LOAN FINANCING IS ENSURED WITH COLLATERAL AND
GUARANTEES IN EXCESS OF THE APPLICABLE REQUIREMENTS.
Nomination Subcommittee
Remuneration Subcommittee
Internal Audit Subcommittee
Executive Management Committee
Assets and Liabilities Committee
Loan Committee
Risk Management Committee
SHAREHOLDERS MEETING
(The Government of Mongolia)
BOARD OF MANAGEMENT
EXECUTIVE MANAGEMENT
Assets and Liabilities
Management Department
Risk Management
Department
Monitoring &
Administrative Department
Investment
Department
Loan Department
THE DEVELOPMENT BANK OF MONGOLIA WILL GRANT LOANS FOR FINANCING MAJOR PROJECTS AND PROGRAMMES
FOR THE COUNTRYS DEVELOPMENT APPROVED BY THE PARLIAMENT OF MONGOLIA. DURING ITS SPRING SESSION
EACH YEAR THE PARLIAMENT WILL APPROVE A LIST OF PROJECTS AND PROGRAMMES TO BE FINANCED.
(Clause 8.1, Article 8, Section 2, the Law on the Development Bank of Mongolia)
Audited twice Twice
8
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
THE DEVELOPMENT BANK OF MONGOLIA
THE STATE AND CIVIL SOCIETY REPRESENTATIVES
INTERNATIONAL FINANCIAL INSTITUTIONS
SUPPORT ECONOMIC DEVELOPMENT
THE BANK IS UNDER DUTY TO FINANCE PROJECTS RELATED TO THE
SECTORS THAT ARE ESSENTIAL FOR ECONOMIC DEVELOPMENT
FUNDINGS FROM THE ISSUE OF BONDS AND SOFT LOANS MAINLY
RAISED FROM INTERNATIONAL FINANCIAL MARKETS AS WELL AS
FUNDINGS FROM OTHER INTERNATIONAL FINANCIAL INSTITUTIONS
LOANS INTEREST RATE IS LOWER AND AMOUNT IS GREATER
LOANS ARE GRANTED IRRESPECTIVE OF TIME FRAME
FLEXIBLE REQUIREMENTS IN TERMS OF COLLATERAL
MEDIUM AND/OR LONG-TERM FINANCIAL CAPACITY
THE AIM
BUSINESS OPPORTUNITIES
LOAN TERMS
STUDIES
REGARDING PROJECTS
FUNDINGS
SOURCES
SUPERVISION
9
COMMERCIAL BANKS
MANAGEMENT BY THE BANK ITSELF AS WELL AS BY THE MONGOLBANK
LOAN AMOUNT LIMITATION AND HIGH INTEREST RATE
SHORT OR MEDIUM-TERM LOANS ARE GRANTED
STRICT REQUIREMENTS IN TERMS OF COLLATERAL
BALANCE AND FINANCIAL STATEMENTS AS WELL AS
FINANCIAL CAPACITY OF BORROWERS
SEEK TO INVEST IN PROFITABLE
BUSINESSES
MAINLY CURRENT AND SAVINGS ACCOUNTS
BUSINESS PROFIT
AS FAR AS THE DEVEL-
OPMENT BANK IS CON-
CERNED, ECONOMIC,
SOCIAL AND ECOLOGICAL
PARAMETERS ARE IMPORT-
ANT IN ADDITION TO
PROFIT.
AS FOR FINANCE, EARN-
ING THE MAXIMUM PROFIT
IS NOT OUR PRIMARY
PURPOSE IN COMPARISON
WITH OTHER FINANCIAL
INSTITUTIONS.
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THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
CHRONOLOGY
The official opening of the
Development Bank of Mongolia
took place and its operations
commenced.
12 May 2011
The Development Bank of Mongolia
successfully issued USD580 million
bonds.
The Bank organised meetings with
investors in Hong Kong, Singapore
and London, the world financial
market centres, and for the
first time via open subscription,
traded 5year bonds, guaranteed
by the Government of Mongolia,
of USD580 million in value at
an interest rate of 5.75% in the
international markets.
21 March 2012
The Development Bank of
Mongolia granted its first
financing to road projects.
In accordance with
Government Resolutions
Nos.47, 110, 106, 336, 124
and 105 dated 2012, the
Development Bank granted
MNT202,5 billion in total
to road projects in 2012,
enabling the commencement
of construction of 1,280 km
of roads.
6 August 2012
The Development Bank of
Mongolia received an award
from the Bloomberg Television
Mongolia.
During the closing ceremony
of the economic forum
of Mongolia 2012, the
Bloomberg Television granted
its Best Debut Bond award
to the Development Bank
team that had successfully
issued the bonds, guaranteed
by the Government of
Mongolia, in the international
markets for the first time.
31 December 2012
The Development Bank of Mongolia
and the Korea Development Bank
entered into a Management
contract. An open international
bid was announced by the State
Property Committee for competitive
selection of an experienced
team to implement the executive
management of the Development
Bank of Mongolia, resulting in the
selection of the Korea Development
Bank. It was decided that the Banks
executive management would be
implemented by a joint team from
the Development Bank of Mongolia
and the Korea Development Bank
that had been selected through the
international bid.
30 August 2011
The Development Bank of
Mongolia granted financing to
the housing-purpose soft loan
project. Under Government
Resolution No.55 dated 2012
and for the programme
Project for granting housing-
purpose soft loans to citizens
at an interest rate of up to 6%
per annum, the Development
Bank of Mongolia granted
MNT50 billion to the State
Bank in 2012.
15 June 2012
Under Government Resolution
No.148 dated 2012, the
Development Bank of
Mongolia granted USD100
million financing to Erdenes
Tavantolgoi JSC. The projects
activities will lead to the
development of the mining,
energy and other economic
sectors.
5 October 2012
MIAT JSC (Mongolian Civil Aviation
Corporation) purchased an aircraft of
767300R model in May 2013. This
purchase is of significant importance in
supporting Mongolias aviation industry
development by increasing MIAT JSCs
operational effectiveness. Considering
the significance of this purchase, the
Development Bank of Mongolia lent in
total USD83,9 million including USD5,34
million toward the aircrafts advance
payment on 20 June 2012 and a bridge
loan of USD78,55 million on 7 May
2013 toward the principal payment, in
accordance with Government Resolution
No.137.
7 May 2013
11
Government Resolution No.180
dated 18 May 2013 approved the
finance of a togrog equivalent
of up to USD14 million required
for implementation of the project
Housing construction industrial
complex1 within the scope
of the medium-term target
programme New Development
and the work to provide citizens
with housing by way of entering
into a direct loan contract in
2013, and financing through the
Development Bank with the capital
raised via Government securities
trading.
18 May 2013
During the official visit of Altankhuyag N.,
Prime Minister of Mongolia, in Japan on
912 September 2013, the Bank signed a
Memorandum of Understanding with the
Japan Bank for International Cooperation
(JBIC), which led to Mongolias successful
launch of fund raising in yen in Japans
capital market, and trading of JPY30 billion
industrial bonds Samurai, guaranteed by
the Government of Mongolia and the JBIC, in
Japans capital market at an interest rate of
1,52 % per annum, and receipt of the funds in
its yen account with the Mongolbank.
6 January 2014
The Bank signed cooperation
memoranda with thirteen
banks in total in connection
with granting loans to 888
projects for export promotion
and import substitution
manufacturing with its own
resources through commercial
banks.
22 April 2014
The Development Bank of Mongolia
has signed a Memorandum
of Understanding with the
Vnesheconombank of the Federation
of Russia, and is cooperating with
the Russian bank towards the
re-financing of a turbo generator
required for the project to Increase
and expand the capacity of the
Combined power and heat plant
IV along with its accompanying
fittings. Going forward, the Bank is
planning to cooperate in financing
goods, services and equipment to
be purchased from the Federation
of Russia.
24 April 2014
From 18 November 2013 to 1 February 2014,
jointly with the Bloomberg Television Singapore,
the Development Bank of Mongolia organised
an advertising campaign Inside Mongolia.
This aimed at raising Mongolias international
reputation, introduction to the investment
environment and creating a positive impression
with investors. Within the scope of this work,
90-second short editorial broadcasts for
investors covering five topics and 30-second
commercials were cast. These resulted in over
2,887,500 comments being received via the
www.bloomberg.com website.
The Bank granted USD12,8 million for
financing the purchase of main and
auxiliary equipment of a factory with
a capacity to manufacture 100,000
tons of steel products, which is a
project to be implemented by Beren
Group LLC in Orkhon province,
within the scope of Government
Resolution No.256 dated 2013
regarding the supporting of metal
production.
18 November 2013 16 April 2014
In 2012 the Development Bank
granted USD61,3 million loans in total
for financing the project to increase
the capacity of the Khutul cement
factory. The factorys construction
and assembly, and equipment
installation were completed, a trial
production was successful and the
factory has been fully commissioned
into operation as per Basement
LLCs plan.
14 May 2014
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THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
THE TOTAL ASSETS OF
THE DEVELOPMENT
BANK OF MONGOLIA
WAS MNT4,493.8
BILLION AS OF 30 JUNE
2014, A 1.4-FOLD RISE
COMPARED TO THE END
OF THE PREVIOUS YEAR.
FINANCIAL
INDICATORS
In billion MNT
0
50
100
150
200
49
67
143,8
175,1
2011 2012 2013
In billion MNT
(halfyear)
(halfyear)
0
1.000
2.000
3.000
4.000
2011 2012 2013 2014
2014
77
888
3,231
4,493.8
TOTAL ASSETS
TOTAL EQUITY
13
(halfyear)
(halfyear)
2014
2014
2,799.6
In billion MNT
In billion MNT
0
1.000
500
1.500
2.000
2.500
2011 2012 2013
494
2,180
-10
0
10
20
30
27
31,3
(6)
(1)
2011 2012 2013
LOANS AND ADVANCES
NET PROFIT AFTER TAX
BY INVESTING IN
PROFITABLE PROJECTS,
THE DEVELOPMENT
BANK MADE A PROFIT OF
MNT31,3 BILLION IN THE
FIRST-HALF OF 2014.
14
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
THREE-YEAR FINANCIAL INDICATORS
* The Development bank paid MNT 23,4 billion in full, to the states budget, in incorporate income tax imposed as of the first-half of 2014.
The first-half
of 2014 2013 2012 2011
TOTAL ASSETS 4,493.8 3,230.9 888.1 76.9
Cash and cash equivalents 937.8 379.5 216.5 75.8
Bank deposits 709.7 652.3 168.9 0.0
Loans and advances 2,799.6 2,179.6 493.6 0.0
Investment 10.0 - - -
Other assets 11.3 6.0 2.3 0.0
Current income tax prepayment - 3.8 0.0 0.0
Fixed assets 0.6 0.6 0.2 0.2
Intangible assets 0.8 0.8 0.7 0.8
Deferred tax assets 24.0 8.2 5.9 0.0
TOTAL LIABILITIES 4,318.6 3,087.0 821.1 27.8
Customer accounts 23.0 16.3 0.0 0.0
Customer accounts 2.2 0.4 0.5 1.1
Current income tax payable* 15.2 0.0 3.3 0.0
Due to other banks 57.3 111.0 0.0 0.0
Bonds 1,698.2 972.1 817.3 26.6
Borrowings 2,522.7 1,987.2 0.0 0.0
TOTAL EQUITY 175.1 143.9 67.0 49.1
Contributed capital 143.8 123.3 73.3 49.7
Retained earnings 31.3 20.6 (6.3) (0.6)
TOTAL LIABILITIES AND EQUITY 4,493.8 3,230.9 888.1 76.9
BALANCE INDICATORS (In billion MNT)
Unaudited
15
The first-half
of 2014 2013 2012 2011
NET INTEREST INCOME/(EXPENSE) 53.2 42.0 (0.8) 0.1
Interest income 152.4 131.1 12.9 0.3
Interest expense (99.2) (89.1) (13.7) (0.1)
Provision for loan impairment 4.4 (6.2) - -
Gains less losses from trading in foreign currencies 0.5 2.0 0.0 -
Foreign exchange translation gain/losses (15.4) 1.9 (5.8) 0.0
Administrative and other operating expenses (3.8) (4.6) (1.7) (0.7)
PROFIT/(LOSS) BEFORE TAX 38.9 35.1 (8.3) (0.6)
Income tax (expenses)/return (7.6) (8.2) 2.6 -
PROFIT/(LOSS) FOR THE YEAR 31.3 26.9 (5.7) (0.6)
INCOME STATEMENT INDICATORS
The first-half
of 2014 2013 2012 2011
Return on equity (R) 23.41% 18.7% -8.5% -1.2%
Return on assets (R) 0.81% 0.8% -0.6% -0.8%
Net interest margin (NIM) 1.39% 2.4% -0.2% 3.0%
Capital adequacy ratio (CAR) 11.59% 12.8% 18.3% 8.9%
KEY FINANCIAL RATIOS
(In billion MNT)
Unaudited
16
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
THE DEVELOPMENT BANK IS UNDER DUTY
TO RAISE FUNDS, TO A CERTAIN EXTENT,
FOR FINANCING MAJOR PROJECTS AND
PROGRAM FOR THE DEVELOPMENT OF
MONGOLIA. THROUGH COOPERATION
WITH FINANCIAL INSTITUTIONS OF
INTERNATIONAL REPUTE, THE BANK
SUCCESSFULLY RAISED THE REQUIRED
FUNDS IN THE PAST.
IN JANUARY 2014, THE
DEVELOPMENT BANK OF MONGOLIA
SUCCESSFULLY TRADED JPY30
BILLION BONDS TERMED FOR
10 YEARS GUARANTEED BY THE
GOVERNMENT OF MONGOLIA
AND THE JAPAN BANK FOR
INTERNATIONAL COOPERATION
(JBIC) TO JAPANESE INVESTORS,
FURTHER STRENGTHENING ITS
SUCCESS WITH THE 2011 MEDIUM-
TERM USD BONDS.
INDUSTRIAL BONDS
SAMURAI
FUND RAISING
OPERATIONS
17
FINANCING BY THE EX-IM BANK OF THE USA
The Development Bank granted in total USD83,9 million
which is bridge financing and an advance required for the
payment of an aircraft of Boeing767 300R model to
be purchased by MIAT SOJSC from Boeing company
of the USA, in the first phase, within the scope of the
Mongolian Governments Action Plan for 20122016 and
the state policies in relation to the civil aviation sector for
the period until 2020. Also, the Bank jointly organised the
re-financing, using long-term funds guaranteed by the
Ex-Im Bank of the USA.
THE GUARANTEE ISSUANCE BY THE JAPAN BANK
FOR INTERNATIONAL COOPERATION (RATING: S&P/
MOODYS AA-/AA3) FOR 95% OF THE PRINCIPAL
AND INTEREST PAYMENTS FOR THE INDUSTRIAL
BONDS OF THE DEVELOPMENT BANK OF MONGOLIA
ENABLED FIXING THE COUPON INTEREST OF THE
DEVELOPMENT BANK BONDS AT 1.52% PER ANNUM,
I.E., AT A RELATIVELY LOWER RATE THAN THE
INTEREST RATE OF OTHER COUNTRY BONDS.
FINANCING BY THE COMMERZBANK
The Bank entered into a contract with the Commerzbank
on 28 April 2014 in order to raise EUR13,1 million, which
was required for implementation of the project Housing
construction industrial complex1 within the scope of
the medium-term target programme New Development
and the work to provide citizens with housing.
Bond issuer The Development Bank of Mongolia
Guarantor The Ministry of Finance on behalf of
the Government of Mongolia, and
the Japan Bank for International
Cooperation
Total amount JPY30 billion
Maturity 10 years
Coupon interest 1.52% per annum (fixed)
Bond issuance purposes Support the industrial sector
Investment banks Daiwa Securities Co. Ltd.
Nomura Securities Co. Ltd.
Legal consultant entity International law firm Shimazaki
18
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
LENDING AND
FINANCING
OPERATIONS
Within the scope of the resolution
enacted by the Government of Mongolia
regarding the financing through
the Development Bank, loans have
been granted to the road, railway,
manufacturing, mining, power plant,
aviation and infrastructure investment
sectors as well as housing finance
and small- and medium-enterprise
development funds, on terms whereby
they are repayable from the states
budget, and also from proceeds of the
projects. Such financing was granted to
projects in implementation within the
scope of the economic development
policies for increasing export,
substituting import and supporting
industrialisation.
Projects name Using funds
from the issue of
Chinggis bonds
From the
Development
Banks resources
Total financing
Repayable from the states
budget revenues
596.7 371.1 967.7
Roads 396.8 364.6 761.3
The Street project 54.8 0 54.7
Infrastructure 145.1 3.8 148.8
The Mongolian Stock
Exchange
- 2.7 2.7
Repayable from proceeds
of the projects
767.1 1.026.6 1.793.6
Roads 0 170.6 170.5
Power plants 33.4 146.0 179.4
Railway 324.1 41.1 365.1
Housing finance - 106.6 106.6
Industrial Complex
Sainshand
- 6.3 6.2
SME Development Fund - 45.8 45.7
Aviation 5.3 0 5.2
Mining 23.4 381.9 405.2
Housing construction 84.7 14.3 98.9
Agriculture & light industry 270.7 0 270.7
Construction materials 25.5 114.1 139.6
TOTAL 1.363.8 1.397.6 2.761.4
THE DEVELOPMENT BANKS
TOTAL LOANS AND ADVANCES (as of 30 June 2014)
In billion MNT
19
LOAN FINANCING
SOURCES
PROJECTS FINANCED USING LOAN SOURCES
BORROWED FROM THE GOVERNMENT
(Funds from the issue of Chinggis bonds)
Road
38.4%
Power plants
10.5%
Construction
materials
8.0%
Housing program
finance
7.7%
Housing
construction
6.2%
Infrastructure
10.6%
Others
8.0%
Other
6.8%
Agriculture &
light Industry
19.8%
Road
33.0%
Railway
23.7%
Mining
27.4%
PROJECTS FINANCED WITH THE DEVELOPMENT
BANKS OWN RESOURCES
1,397.6
billion MNT
1,363.7
billion MNT
20
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
PROJECTS BEING FINANCED WITH FUNDS FROM THE ISSUE OF CHINGGIS
BONDS AND THE DEVELOPMENT BANKS OWN RESOURCES
ROADS
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
1.600
1.800
1.400
1.200
1.000
800
600
400
200
209.3
billion MNT
BALANCE
FINANCED
157
724
1.020
at the end of the first-half of 2014
km
km
km
535.2
billion MNT
THE DEVELOPMENT BANK
396.8
billion MNT
CHINGGIS BONDS
km
TOTAL FINANCING APPROVED BY
GOVERNMENT RESOLUTIONS
IN TOTAL
billion MNT
1141.3
The Development Banks
concurrent financing for
road projects along with
their monitoring consultancy
companies will lead to the
increase of the effectiveness
of those projects and the road
quality improvement.
IN TOTAL
billion MNT
932.0
assumption
FINANCED WITH
FUNDS FROM THE
ISSUE OF CHINGGIS
BONDS AND THE
DEVELOPMENT BANKS
OWN RESOURCES
FINANCED WITH
OTHER SOURCES
S
RAILWAY
200
FINANCING WAS
GRANTED FOR THE
DEVELOPMENT OF THE
PROJECT NEW RAILWAY
MILLION
USD
22.5
THE DEVELOPMENT BANK
million USD million USD
177.5
USING THE FUNDS FROM THE ISSUE OF CHINGGIS BONDS
With the Tavantolgoi-
Gashuunsukhait railroad
being brought into operation
in 2016, transport costs will
be reduced by 50% and the
competitiveness in export of
raw materials of
mining-origin will increase.
21
22
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
URAL ROAD
PROJECTS IN
IMPLEMENTATION
FINANCED BY THE
DEVELOPMENT
BANK OF
MONGOLIA
PROJECTS BEING FINANCED
BY FUNDS FROM THE ISSUE OF
CHINGGIS BONDS
128 kmAltai
Bayankhongor road
Budgeted costs: 54.4
100 kmMankhan
Darvi road
Budgeted costs: 42.9
100 kmUlaangom
Khyargas road
Budget costs: 45.0
67 kmTosontsengel
Uliastai road
Budgeted costs: 38.2
90 km Ulaangom
Naranbulag road
Budgeted costs: 49.5
Naranbulag
Songgino
Myangad
Bulgan
Bugat
Buutsagaan
Durvuljin
Khovd
Ulaangom
Altai
Ulaanbaishint
Artssuuri
K
Dayan
Burgastai
Durgun
Darvi
Shiveekh
Gurvantes
Tsagaankhairkhan
Delger
Tugrug
Bayanleg
Bogd
Numrug
Telmen
Uyench
Gurvanbulag
Tsagaannuur
Ulgii
Khandgait
Mankhan
Uliastai
23
Bayan-Uul
Baruun-Urt

Rashaant
Teshig
Basengel
Arshaan
Arvaikheer
Murun
Erdenet
Darkhan
Ulaanbaatar
Sainshand
Mandalgovi
Dalanzadgad
Choibalsan
Baga-Ilenkh
Khankh
Altanbulag
Ereentsav
Ulikhan
Khavirga

Zamiin-Uud
Gashuun-Sukhait
Kharkhorin
setserleg
Munkhkhaan
Tushig
Zelter
huren
Sukhbaatar
Buregkhangai
Zuunmod
Tarialan
Airag
Erdene
Undur-Ulaan
Nariinteel
Tsogsetsii
Nalaikh
Baganuur
Bagakhangai
luut
Lun
Norovlin
Bayan-Ovoo
nkhongor
Tsogt-Ovoo
Undurkhaan
Chuluunkhoroo
296 kmMandalgovi
Dalanzadgad road
Budgeted costs: 137.3
107 kmArvaikheer
Bayankhongor road
Budgeted costs: 45.4
177.9 kmUndurkhaan
Munkhkhaan
Baruun urt road
Budgeted costs: 87.8
104 kmUlaanbaatar
Mandalgovi road
Budgeted costs: 49.1
238.4 km Undurkhaan
Choibalsan road
Budgeted costs: 111.3
165.3 km Murun
Tarialan road
Budgeted costs: 82.6
127.1 km Tsakhir
Tosontsengel road
Budgeted costs: 62.9
100 kmKhanzanburgedei
Solongot road
Budgeted costs: 46.4
Projects in implementation
Projects completed as end of 2013
A
M
24
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
PROJECTS FINANCED WITH FUNDS FROM THE ISSUE OF CHINGGIS
BONDS AND THE DEVELOPMENT BANKS OWN RESOURCES
POWER AND HEATING PLANTS
EXPANSION OF THE COMBINED
HEAT AND POWER PLANT III
EXPANSION OF THE COMBINED
HEAT AND POWER PLANT IV
31.5 48.5
MILLION USD
This expansion will enable a
50 megawattcapacity, which
is higher than the Darkhan
CHPs. When it is operational, 1
kW-power generation costs will
reduce from MNT74.7 to MNT36.
Power generation will increase by
over 500,000,000 kW.h, and heat
generation by 400,000 Gcal/h
these equate to 10% of the current
consumption.
THE TAVANTOLGOI
POWER PLANT
THE EG RIVER
HYDROELECTRIC PLANT
14.8
3.5
Value added products will be manufactured
using thermal coal from the Erdenes
Tavantolgoi and Ukhaa Khudag mines, and
energy for the Oyutolgoi Project will be
supplied with domestic sources.
Mongolia will have a regime adjustment and
emergency backup capacity, thereby achieving
diversification in terms of the power regime.
Also, USD10 million cash flow, which is paid
annually to the power grid of the Federation
of Russia will be retained in Mongolia.
25
HOUSING, CONSTRUCTION AND ASSEMBLY
THE SOHCS MICRO-DISTRICT
BUYANTUKHAA I
RESIDENTIAL BUILDINGS ADJACENT
TO THE YARMAG BRIDGE
THE HOUSING CONSTRUCTION
INDUSTRIAL COMPLEX1
THE RESIDENTIAL MICRO-
DISTRICT NEW YARMAG
14.2 84.7
NT50 billion financing
contract between the
Ministry of Finance
and the State Bank
Through the project,
150,000 m concrete
components will be
manufactured per annum, which
will be sufficient to supply for
5,000-household residences.
A Guarantee for USD83,9 million
loans under a contract between New
Yarmag Housing Project LLC and the
ExportImport Bank of the PRC
Through opening an unfunded letter of credit, the Development
Bank is financing EUR13,1 million in total by borrowing from
the mmerzbank of Germany and sub-lending it to Erel LLC.
This is within the scope of the project to renovate Erel LLCs
Housing construction industrial complex1 (HCIC1) within the
work to provide citizens of cities and settled areas with housing.
THE 1,152-HOUSEHOLD
RESIDENTIAL MICRO-DISTRICT
billion
MNT
billion
MNT
THE STATE BANKS HOUSING
LOANS AT AN INTEREST RATE OF 6%
80
billion
MNT
Individuals of target groups will be
able to purchase at a price 40%
cheaper than the market rate, i.e.,
MNT1,28 million per square metre.
1.280.000
26
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
PROJECTS FINANCED WITH FUNDS FROM THE ISSUE OF CHINGGIS
BONDS AND THE DEVELOPMENT BANKS OWN RESOURCES
AGRICULTURE AND LIGHT INDUSTRY
40.1%
26.2%
16.1%
9.7%
7.9%
SUPPORT THE WOOL
AND CASHMERE
INDUSTRY
MILK AND DAIRY
PRODUCT FACTORY
GREENHOUSE
FARMING
WOOLPROCESSING
AND WASHING
SEWN PRODUCT
FACTORY
BEING GRANTED
THROUGH
GOLOMT BANK
270.7
BILLION MNT
FINANCING WITH FUNDS FROM
THE ISSUE OF CHINGGIS BONDS
27
OTHER PROJECTS FINANCED WITH FUNDS FROM THE ISSUE OF CHINGGIS
BONDS AND THE DEVELOPMENT BANKS OWN RESOURCES
200
54.4
18.6
1.5
148.3
89.6
MIAT SOJSCS
AIRCRAFT
61.3
BASEMENT LLC
(KHUTUL CEMENT)
48.9
SMALL AND MEDIUM
ENTERPRISE DEVELOPMENT
6.3
INDUSTRIAL COMPLEX
SAINSHAND
ERDENES TAVANTOLGOI JSC
MILLION USD
THE STREET PROJECT
TECHNICAL REFURBISHMENT OF
BAGANUUR JSC
THE MONGOLIAN STOCK EXCHANGE
BILLION MNT
BILLION MNT
MILLION USD
MILLION USD
MILLION USD
BILLION MNT
BILLION MNT
INFRASTRUCTURE
BILLION MNT
Mongolias aviation sector development will be supported through
increasing MIAT JSCs operational efficiency and updating the aircraft
fleet with additions.
With the financing granted by the Development Bank of Mongolia to
Erdenes Tavantolgoi JSC, loan interest expenses that the company paid
were reduced by 50%.
With the provision of the engineering infrastructure, lines and pipelines network
projects, it will become possible to construct residential towns, micro-districts, schools,
kindergartens and hospitals in 1,210,4 ha areas in seven locations in the capital city.
The indirect socio-economic benefits of the eighteen junctions and two roads that
were expanded and refurbished in 2013 are MNT20 billion.
The coal crushing and loading capacity will grow reaching
4,5 million tons per year and continuity of coal supply to heating plants
and ger district households will be ensured.
The finance granting will contribute, to a certain extent, to making the
Mongolian Stock Exchanges operations internationally accepted and ensuring
its conformity to the applicable standards.
With granting soft loans to 62 small and medium enterprise-
manufacturers for expanding their factories and plants, job opportunities
will increase and the populations livelihood will improve.
An industrial zone will be created, providing over 2,700 individuals in
rural areas with job opportunities and increasing export substantially.
Will supply approximately 40% of domestic cement demands.
28
THE DEVELOPMENT BANK OF MONGOLIA
PROJECTS AND PROGRAMMES
FINANCED WITHIN THE SCOPE OF
THE EXPORT PROMOTION AND
IMPORT SUBSTITUTION POLICIES
Increase the export of coal from
the Tavantolgoi deposit
Increase the export of wet
iron ore concentrate
500.1
FINANCING AIMED AT THE
CAPITAL CITYS SOCIO-
ECONOMIC DEVELOPMENT
Create new electricity and heat
sources in the capital city
Increase housing supply
844.1
FINANCINGAIMED AT
THE SOCIO-ECONOMIC
DEVELOPMENT IN RURAL AREAS
Support stable employment
in rural areas
Connect rural areas to
national and foreign markets
697.0
790.2
230.4
45.1
160.7
892.1
258.9
45.3
234.5
846.9 580.8
44.6
IN TOTAL
959.7
BILLION MNT
CHINGGIS BONDS:
CHINGGIS BONDS:
CHINGGIS BONDS:
IN TOTAL
891.3
BILLION MNT
IN TOTAL
626.3
BILLION MNT
29
FINANCED PROJECTS AND PROGRAMMES (IN THREE MAINLINES OF BUSINESS)
Increase the export of
non-mineral resources
Substitute the import of
construction materials
Substitute the import of
processed and industrial products
Improve housing ownership capability of
medium-income individuals
Support stable employment
in the capital city
Prioritise road traffic jam, air pollution
and smoke-related problems
432.4
Support urbanisation
in rural areas
277.3
131.8
274.5
176.5
275.5
33.0
90.0
82.2
31.1
90.0
0.4
57.2
417.8
6.6
135.7
703.4
THE DEVELOPMENT BANK:
THE DEVELOPMENT BANK:
THE DEVELOPMENT BANK:
approved granted
THE DEVELOPMENT
BANK OF MONGOLIA
GRANTS FINANCING
TO ANY PROJECTS AND
PROGRAMMES BASED
ON THEIR ACTUAL WORK
PROGRESS.
30
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
With the Development Banks financing, the project to
expand the capacity of the Combined heat and power
KHUTUL CEMENT
AND LIME JSC
With the Development Banks loans, the dry method plant
will increase the Khutul cement production capacity to
1,000,000 TONS
per year. The plant was fully commissioned and brought
into operation in May 2014.
With the Development Banks financing, construction
work of
SOME MAJOR PROJECTS
SUCCESSFULLY COMPLETED WITH THE
DEVELOPMENT BANKS FINANCING IN
THE FIRST-HALF OF 2014
BAGANUURJSC
THE COMBINED HEAT
AND POWER PLANT III ROADS
plant III bysuccessfully implemented,
commissioned and brought into
operation on 16 June 2014.
The coal crushing and loading capacity
has increased to 4,500,000 tons per year
and enabled the continuous coal supply to
heating plants and ger district households.
50
267 KM
4.5
This plant is able to supply
40%
of the UlaanbaatarMandalgovi
Dalanzadgad road has been completed
and is ready to be handed over to the
State Commissioning Authority.
km
megawatts
of domestic cement demands.
31
32
THE DEVELOPMENT BANK OF MONGOLIA
SUMMARY REPORT FOR THE FIRST-HALF OF 2014
www.dbm.mn www.dbm.mn
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Juulchin Street 4/4 Juulchin Street 4/4
Ulaanbaatar 15170, Mongolia Ulaanbaatar 15170, Mongolia
Tel: 70130512 Tel: 70130512
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THE DEVELOPMENT BANK OF MONGOLIA