The Energy Regulatory Commission is set to increase electricity tariffs from November 15, 2024. The Energy Regulatory Commission has announced that the average electricity tariff will be raised from MNT 216 per kWh to MNT 280. The changes were made in a way to not overburden households financially and encourage them to monitor their energy consumption and save energy.

A three-tier tariff based on consumption is to be introduced. The average household tariff was previously MNT 140, but under the revised tariff, consumption up to the first 150 kWh in a month will be charged at MNT 175, consumption between 150-300 kWh at MNT256, while consumption exceeding 300 kWh will be MNT285.

In other words, if consumers use energy efficiently, they will be charged at a lower price and pay less. This will result in a change of MNT 35-131 per kWh of electricity consumption. The average monthly electricity consumption of households nationwide is 220 kWh, and the monthly electricity bill was MNT 36,220. Therefore, the new tariff will add an average of MNT 15780 to the electricity bill of a household in a month, noted the officials of the Energy Regulatory Commission.

Chair of the Energy Regulatory Commission Tuvshinchuluun Erdenechuluun emphasized, “The energy sector is operating at a loss, as it is selling electricity and heat below the cost of production. If this continues, normal operations of the energy industry will be disrupted. Therefore, there is a need to increase prices. Two main issues were taken into account when increasing prices. We plan to bring the price of electricity and heat to its production cost while adding the lowest possible financial burden on consumers.”

According to a study, 45 percent of the 788 thousand households in Mongolia consume electricity up to 150 kWh each month, 40 percent use 150-300 kWh, and 15 percent use more than 300 kWh.

In addition to the current two tariffs for electricity, daytime and nighttime, a new evening “Peak Hour Tariff” is being introduced. The nighttime electricity discount for households in Ger districts will continue to apply. In addition, the tariff for households in need of social welfare support and assistance will remain unchanged.

The electricity tariff for businesses and organizations will be increased by an average of 30 percent.

Household electricity and heating tariffs in Mongolia have not changed in five years since 2019. Therefore, the Energy Regulatory Commission highlights that the tariff change that adheres to market principles will create conditions to ensure the financial and economic self-sufficiency of the energy sector.

Mongolia's gross domestic product (GDP) grew by 5.0 percent year-on-year during the first three quarters of 2024, according to data released by the National Statistics Office (NSO) on Monday.

The GDP reached approximately 56.2 trillion Mongolian tugriks (over 15.4 billion U.S. dollars) from January to September, the NSO reported.

The growth was primarily driven by increased value-added contributions from the mining and quarrying sector, as well as the service sector, said the statistical agency.

Renowned for its abundant natural resources, Mongolia has long relied on its mining industry as a key driver of economic growth. In 2023, the landlocked country's economy expanded by 7.0 percent, mainly driven by the mining sector.

Singapore, November 18, 2024 -- Moody's Ratings (Moody's) has upgraded the Government of Mongolia's long-term issuer and senior unsecured ratings to B2 from B3. The short-term issuer ratings are affirmed at Not Prime. The outlook remains stable.

The upgrade of Mongolia's ratings to B2 reflects a significant consolidation in its debt burden on the back of an uptick in mineral revenues, combined with an emerging track record of effective debt and fiscal management.

In conjunction with fiscal consolidation, prudent liability management has resulted in debt obligations being successfully refinanced over recent years, thus clearing the maturity schedule until 2026 and alleviating liquidity risks, albeit from high levels.

Strong trends in trade over the last year are also reflected in a build-up in foreign reserve buffers, which are likely to remain around current levels, underpinned by steady export growth. As a result, external vulnerabilities have come off from high levels more recently and should stabilize going forward, although they continue to remain a credit constraint relative to B-rated peers.

The B2 rating reflects Mongolia's susceptibility to commodity price cycles due to its narrowly diversified economic structure, which results in high growth and fiscal volatility. This is balanced by strong growth prospects, backed by structural global demand for copper, which will temper the economy's overall sensitivity to coal demand over time.

Although it is likely that some of the improvements in these metrics could normalize as commodity prices and demand fluctuate, a lengthening track record of effective fiscal and monetary management would continue to support the credit profile. The stable outlook reflects our view that external liquidity risks, while elevated, will remain manageable. Mongolia's sizeable market debt obligations in 2026 are expected to be met with continued market access at non-prohibitive costs, mitigating the probable risk of a credit event consistent with a B2 rating.

Concurrently, we have also raised Mongolia's local-currency country ceilings to Ba3 from B1 previously. The two-notch gap to the sovereign rating reflects a large government footprint in the economy, high commodity reliance in overall revenues, and still-high external imbalances. The foreign-currency country ceiling is raised to B2 from B3 previously, representing a two-notch gap to the local currency ceiling, to take into consideration the assessment of weak policy effectiveness and high external debt that point to transfer and convertibility risks at times of heightened external vulnerability.

Please click on this link https://www.moodys.com/viewresearchdoc.aspx... for the List of Affected Credit Ratings. This list is an integral part of this Press Release and identifies each affected issuer.

RATINGS RATIONALE

RATIONALE FOR THE UPGRADE TO B2

DEBT BURDEN TO STABILIZE FOLLOWING SIGNIFICANT CONSOLIDATION

Mongolia's debt ratio has declined from a peak of over 93% in 2016 and to 43% of GDP at the end of 2023. We expect that the debt burden will moderate further at the end of this year, before gradually increasing to 54% by the end of the decade. However, this remains consistent with the median for B1-B2 rated sovereigns between 2025-2030, at 50.7% of GDP.

Debt reduction has been driven by a combination of high nominal GDP growth and debt repayments, whilst new borrowings were limited. Although nominal GDP has been propped by high inflation over 2021-22, real growth has also seen a steady expansion. In addition, the fiscal balance has consolidated: on the back of improved mineral revenues due to a favorable commodity price environment for coal and copper, the fiscal position moved to a surplus in 2023, for the first time since 2018.

We expect that fiscal surpluses will be short-lived, and factors in the balance reverting to a deficit this year. This, coupled with the government's large planned infrastructure program could further add to the debt burden.

Mongolia also has a history of procyclical fiscal policies. Nevertheless, improvements in debt management will likely keep fiscal outcomes within a range comparable to B2 peers. Recent amendments to the government's fiscal responsibility legislation specify the debt ceiling of 60% of GDP in nominal rather than net present value terms, allowing for greater transparency. New rules prioritize concessional funding and mandate a structural fiscal deficit that is limited to 2% of GDP in debt per year. While these measures are too recent to have any visible impact yet, adherence could boost fiscal transparency and limit increases in market debt. Moreover, despite the forecasted upward drift in the debt ratio, it may be less likely that Mongolia will experience a spike in leverage comparable to the previous cycle in 2013, as growth cycles have turned more predictable given structural demand for copper, and as Mongolia enjoys more established financial market access compared to the past, allowing for a smoother refinancing of maturities.

GOVERNMENT LIQUIDITY RISKS HAVE ALLEVIATED, UNDERPINNED BY CLOSER FISCAL POLICY MANAGEMENT

Refinancing risks are materially lower in the medium term. Since 2020, the government has been consistently refinancing upcoming maturities for the year ahead. This is in line with its debt management strategy, that aims to reduce the pressure of the external debt on budget in the long term and lengthen the maturity profile of the debt portfolio. In addition, borrowing requirements have significantly reduced.

Factoring in a wider fiscal deficit and large upcoming maturities, we expect gross borrowing requirements to rise to 11.7% of GDP in 2026, from an estimated 5.4% of GDP 2024. Nonetheless, this is lower both relative to peers as well as to historical trends. These debt obligations should be financed relatively smoothly. The issuance of domestic debt presents another financing option that has not been tapped into in the past but could be met with demand from the banking system and support the building of a yield curve.

HEALTHY GROWTH PROSPECTS REDUCE RISK OF VOLATILITY

Following a very strong growth performance in 2023 where real GDP expanded by 7.1%, we expect trends will moderate to 5.8% this year, before edging higher in 2025. Beyond 2025, growth should average around 6% with the completion of Oyu Tolgoi after it hits sustainable production in 2028 resulting in some normalization in the structural growth trajectory.

Mongolia's exposure to commodities continues to introduce a disproportionate degree of growth volatility. While diversifying its production and export base to other sectors has been a key policy effort, that process has been slow and proceeded incrementally. As Mongolia veers its commodity mix toward copper, this volatility in growth caused by commodity cycles could moderate.

Copper production would be supported by output from the Oyu Tolgoi mine as it moves towards hitting peak production, and copper content improves. Increased production should also be supported by strong demand impetus, driven by organic improvements in living standards, but more importantly by the use of copper in electrification as energy transition goals become predominant, and demand for digital infrastructure –which consumes more electricity – increases. As currently operating copper mines are mature and will face declining ore grades, this puts Mongolian copper in a favorable position to meet global demand.

These trends should support a degree of vertical diversification within the commodities sector.

Meanwhile, exports of coal - Mongolia's largest commodity export - face the risk of a gradual slowdown in demand in the long run, due to slower growth in China and global efforts toward carbon transition. Nonetheless, agencies such as the International Energy Agency still project relatively stable coal demand in the near term, particularly for coking coal, which is used primarily for steel-making. Mongolia's competitive pricing, strong ash content, and better connectivity to China would likely underpin this demand.

Another focus area for Mongolia has been to leverage its critical mineral resources, as well as diversifying to other sectors such as agriculture, tourism, and renewable energy.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook is premised on the view that external liquidity risks will remain at elevated, albeit manageable levels. While financing pressures may spike at various junctures given Mongolia's market debt obligations, and the fiscal deficit will widen as spending pressures persist and mineral revenues normalize, this is balanced by our expectation that the government will continue to have access to markets at costs that are not prohibitive, containing risks of a credit event to levels consistent with a B2 rating. While growth performance should remain strong in 2025, it is subject to downside risks from slower growth in China, Mongolia's largest trading partner.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Mongolia's ESG credit impact score is CIS-4, driven by high exposure to environmental and governance risks. The sovereign also has moderate exposure to social risks. The CIS-4 score indicates that the rating is lower than it would have been if ESG risk exposures were not present.

Mongolia has high exposure to environmental risks (E-4 issuer profile score), reflecting an economy that is highly dependent on the production and export of hydrocarbons, particularly coal, which leaves the sovereign susceptible to carbon transition risk. The nature of the coal-based economy coupled with continued urbanization has also resulted in waste and pollution levels, particularly air pollution. Mongolia is also vulnerable to water scarcity driven by mineral extraction, overgrazing, deforestation and desertification. These risks are driven by mining and urbanization, and have threatened the livestock sector.

Exposure to social risks is moderate (S-3 issuer profile score). The uneven distribution of incomes is balanced by a young population coupled with a strong social safety net that has enhanced the provision of health and education benefits. However, access to basic services, including drinking water and sanitation, is very weak.

Mongolia has high exposure to governance risks (G-4 issuer profile score) with weak executive institutions and policy effectiveness against ongoing structural reforms. Low fiscal prudence and a tendency to procyclical policies curb the sovereign's financial capacity to respond to environmental and social risks particularly during economic downturns.

GDP per capita (PPP basis, US$): 17,884 (2023) (also known as Per Capita Income)

Real GDP growth (% change): 7.2% (2023) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 7.9% (2023)

Gen. Gov. Financial Balance/GDP: 1.4% (2023) (also known as Fiscal Balance)

Current Account Balance/GDP: 0.6% (2023) (also known as External Balance)

External debt/GDP: 168.3% (2023)

Economic resiliency: b1

Default history: No default events (on bonds or loans) have been recorded since 1983.

On 13 November 2024, a rating committee was called to discuss the rating of the Mongolia, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have materially increased. The issuer's institutions and governance strength, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has materially increased. The issuer's susceptibility to event risks has not materially changed.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

FACTORS THAT COULD LEAD TO AN UPGRADE

The rating would likely be upgraded upon evidence of a sustained build-up in the foreign exchange liquidity buffer supported by non-debt creating inflows, that alleviate external liquidity risks from sizeable debt obligations.

Evidence of a lengthening track record of policy prudence, particularly with regard to measures that mitigate a tendency to veer toward procyclical fiscal policies as well as enhanced governance and supervision around state-owned entities, would be credit positive.

A consistently falling debt burden accompanied by steady improvements in debt affordability would also alleviate fiscal constraints and drive upward rating momentum. These indications would likely relate to improvements in the management of domestic public finances, containing the government's funding requirements and the economy's external financing needs.

Progress toward economic diversification away from a reliance on commodities that reduces susceptibility to boom-bust economic cycles would also likely be a trigger for upward rating action.

FACTORS THAT COULD LEAD TO A DOWNGRADE

A rating downgrade could be triggered by widening gross borrowing requirements, and/or rising government liquidity risks that point to difficulties in meeting these borrowing needs. Persistent external financing gaps that threaten macroeconomic stability would also exert downward rating pressures. A sustained shock to growth, for instance through the derailment of large mining projects, would also be a trigger for downward rating action.

The principal methodology used in these ratings was Sovereigns published in November 2022 and available at https://ratings.moodys.com/rmc-documents/395819. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

REGULATORY DISCLOSURES

The List of Affected Credit Ratings announced here are a mix of solicited and unsolicited credit ratings. For additional information, please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com. Additionally, the List of Affected Credit Ratings includes additional disclosures that vary with regard to some of the ratings. Please click on this link https://www.moodys.com/viewresearchdoc.aspx... for the List of Affected Credit Ratings. This list is an integral part of this Press Release and provides, for each of the credit ratings covered, Moody's disclosures on the following items:

• Rating Solicitation

• Issuer Participation

• Participation: Access to Management

• Participation: Access to Internal Documents

• Endorsement

• Lead Analyst

• Releasing Office

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.

For any affected securities or rated entities receiving direct credit support/credit substitution from another entity or entities subject to a credit rating action (the supporting entity), and whose ratings may change as a result of a credit rating action as to the supporting entity, the associated regulatory disclosures will relate to the supporting entity. Exceptions to this approach may be applicable in certain jurisdictions.

For ratings issued on a program, series, category/class of debt or security, certain regulatory disclosures applicable to each rating of a subsequently issued bond or note of the same series, category/class of debt, or security, or pursuant to a program for which the ratings are derived exclusively from existing ratings, in accordance with Moody's rating practices, can be found in the most recent Credit Rating Announcement related to the same class of Credit Rating.

For provisional ratings, the Credit Rating Announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating.

Moody's does not always publish a separate Credit Rating Announcement for each Credit Rating assigned in the Anticipated Ratings Process or Subsequent Ratings Process.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating.

Anushka Shah

VP - Senior Credit Officer

Sovereign Risk Group

Moody's Investors Service Singapore Pte. Ltd.

71 Robinson Road #05-01/02

Singapore, 068895

Singapore

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Gene Fang

Associate Managing Director

Sovereign Risk Group

JOURNALISTS: 852 3758 1350

Client Service: 852 3551 3077

Releasing Office:

Moody's Investors Service Singapore Pte. Ltd.

71 Robinson Road #05-01/02

Singapore, 068895

Singapore

JOURNALISTS: 852 3758 1350

Client Service: 852 3551 3077

Electricity tariffs in Mongolia are set to increase starting November 15, 2024, following a decision by the Energy Regulatory Commission to align consumer electricity prices with real costs. Heating tariffs will also see adjustments beginning May 16, 2025.

The current average electricity tariff of MNT 216 per kWh will be MNT 280, but a tiered system will now be applied to household electricity consumption to encourage energy efficiency and minimize the financial impact on families. For households, the first 150 kWh of monthly consumption will be charged at MNT 175 per kWh, consumption between 150 and 300 kWh will cost MNT 256 per kWh, and usage exceeding 300 kWh will be charged MNT 285 per kWh. Previously, households were charged an average of MNT 140 per kWh.

The introduction of this tiered system reflects the principle that higher consumption incurs higher costs. Households consuming up to 150 kWh, accounting for 45% of all households, will see modest increases, while 40% of households consuming 150-300 kWh and 15% consuming more than 300 kWh will experience steeper tariff changes. For the average household consuming 220 kWh per month, the monthly electricity bill will rise from MNT 36,220 to MNT 52,107, marking an increase of MNT 15,887.

To accommodate varying usage patterns, an evening peak-hour tariff will be introduced, supplementing the existing day and night tariffs. Households in ger districts will continue to benefit from the night-time electricity discount, and tariffs for socially vulnerable households will remain unchanged. Household tariffs have remained stable for the past five years since 2019.

The electricity tariffs for businesses and organizations will increase by an average of 30%. The Energy Regulatory Commission stated that this reform, aligning prices with market principles, aims to promote financial and operational sustainability within Mongolia’s energy sector.

Korea and Mongolia took significant steps to deepen their partnership at the third Korea-Mongolia Future Strategy Forum, held Friday in Busan, where experts shared insights and challenges in collaborating in the areas of energy and health care.

Energy: Tapping into Mongolia’s vast potential

The first session focused on energy cooperation, a key area where the two nations can complement each other. Mongolia, with its vast reserves of coal and critical minerals like lithium and cobalt, is looking to modernize its energy sector and reduce greenhouse gas emissions, while Korea, reliant on energy imports for 94 percent of its needs, is eager to secure sustainable resources.

“Mongolia has set a goal to cut greenhouse gas emissions by 22.7 percent as part of its 2050 Long-Term Development Policy,” said Ganbaatar Enkhtvshin, director general of Mongolia’s Ministry of Energy. He outlined plans to expand renewable energy, address electricity shortages and develop eco-friendly tourism powered by clean energy. However, he acknowledged that challenges like infrastructure gaps and funding delays remain significant obstacles.

Korean energy expert Park Chan-kook, from the Korea Energy Economics Institute, noted that Mongolia’s energy mix is currently dominated by coal, which accounts for 86 percent of electricity production. “As demand for electricity in Mongolia grows rapidly, there’s an urgent need to diversify into renewables,” he said. He highlighted the opportunity for Korea and Mongolia to collaborate, with Mongolia providing raw materials for renewable technologies like batteries and Korea contributing advanced technology and investment.

Mongolian energy researcher Battsengel Lkhagvademberel added that much of Mongolia’s energy is wasted due to outdated systems. “Improving efficiency and integrating renewable energy will require significant innovation,” he said, outlining Mongolia’s exploration of hydrogen as a long-term clean energy solution.

Health care: From diagnostics to drug development

The second main session shifted focus to health care, with a specific emphasis on eliminating hepatitis, a major public health challenge in both Korea and Mongolia. Dr. Cho Nam-joon, a leading materials scientist and infectious disease expert from Singapore’s Nanyang Technological University, presented his groundbreaking work on combating hepatitis B and D -- viruses that significantly contribute to liver cancer worldwide.

Cho highlighted the prevalence of hepatitis in Mongolia, which has one of the highest rates of liver cancer globally, and detailed a trilateral research initiative between Stanford University, Korea and the Mongolian Onom Foundation. The collaboration has yielded a low-cost rapid diagnostics kit for hepatitis delta virus, priced under $3, with sensitivity and specificity rates nearing 100 percent.

“This achievement combines the technological expertise of Korea and Mongolia to create the world’s first rapid diagnostics kit for delta virus, enabling faster, more affordable detection and treatment,” he explained. The initiative has expanded to include diagnostics for hepatitis B and C, with the ultimate goal of eliminating hepatitis-related liver cancer globally.

Luvsan Khurelbaatar, chairman of Mongolia’s Monos Group, shared details about the Silk Road Project, a long-term initiative in partnership with Korea’s Daegu Haany University. The project aims to enhance medical education, research, and production in Mongolia, with a particular focus on traditional medicine and pharmaceutical innovation.

“We have been collaborating with Daegu Haany University for over 15 years, building a foundation of trust and shared expertise,” said Khurelbaatar. “Through this partnership, we are working to improve Mongolia’s medical workforce, foster innovation in research and development, and explore new markets for Mongolia’s unique natural resources.”

Khurelbaatar also discussed Monos Group’s broader activities, including the development of R&D centers in cooperation with Mongolian universities and investments in beauty and wellness products derived from plants native to Mongolia.

“This initiative will combine Mongolia’s rich natural resources with advanced Korean technology to develop new products for the global market,” he added.

BY

Moon Joon-hyun

mjh@heraldcorp.com

The Asian Development Bank (ADB) has approved a $100 million policy-based loan to help accelerate and sustain investment in climate action in Mongolia.

The Accelerating Climate Investment Program (Subprogram 1) will help Mongolia achieve its nationally determined contribution (NDC) and implement its National Adaptation Plan (NAP), including promoting gender-responsive actions.

“The program will help Mongolia anchor climate action in national plans and budgets and catalyze public and private climate finance to accelerate a low-carbon, inclusive, and resilient economy,” said ADB Country Director for Mongolia Shannon Cowlin. “This will be achieved by developing climate investment programs, mobilizing affordable and accessible climate finance, and improving the ease of doing business in key sectors.”

Mongolia is vulnerable to climate-related hazards and is particularly at risk of the impacts of global warming. Rising temperatures and intensifying aridity threaten many Mongolians' traditional nomadic herding lifestyle. The severity and frequency of climate-related hazards, like dzuds, have been increasing, causing high livestock mortality. Women and vulnerable communities, such as herders and rural to urban migrants, are most affected by these climate change risks.

The program will help strengthen the institutional framework, investment planning, and budgeting system for climate action. This will include policy actions that would catalyze investments in renewable energy generation; energy efficiency use in the buildings sector; and climate-resilient agriculture, livestock, and food processing.

It will help enhance climate finance and resource management by strengthening the funding and financing of investments in climate action through the issuance of green and sustainable bonds and increasing the green loan portfolio of the banking sector. It also aims to improve the sector investment pathways to low-carbon and climate-resilient development, focusing on energy and agriculture.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.

The draft resolution on the approval of the parliament's Strategic Plan for 2024-2028 was discussed in a regular session of the parliament. This follows the amendment made last spring to the Law on Parliament, which allows the parliament to work with a strategic plan during its term and to discuss and approve it as soon as a new parliament is formed after the elections.

The draft resolution was initially discussed on November 14, where members had the opportunity to ask questions and express their opinions based on the conclusions of the Standing Committee. The project was brought up again for a vote. A majority of the 104 members who participated in the general session supported the adoption of the strategic plan for the 2024-2028 term.

The Strategic Plan outlines key goals and initiatives aimed at addressing the nation’s challenges and promoting long-term stability, economic growth, and sustainable development. The approval of this plan reportedly marks a significant step in the country's political and governance landscape, with the parliament now working with a formal strategic blueprint during its term of office. Under the new amendments to the Law on the Parliament, the government is required to develop and approve a strategic plan as soon as a new parliament is formed after elections. This strategic approach ensures continuity and focused efforts on national priorities, regardless of changing political leadership.

The 2024-2028 Strategic Plan focuses on several critical areas, including economic development and diversification which is one of the main pillars of the strategic plan to foster economic growth through diversification. Mongolia aims to reduce its dependency on extractive industries, particularly mining, by investing in sectors such as agriculture, technology, and tourism. The plan highlights the importance of creating jobs, improving productivity, and boosting foreign investment in emerging industries.

Enhancing infrastructure is another priority, with the government looking to improve transportation, energy, and digital connectivity across the country. This includes upgrading road networks, expanding access to reliable energy, and increasing broadband access in rural areas to ensure that all citizens can participate in the digital economy. Mongolia’s vast landscapes face significant environmental challenges, including desertification and air pollution in urban areas.

The 2024-2028 Strategic Plan also emphasizes sustainable resource management, renewable energy development, and the protection of biodiversity. A strong focus is placed on addressing climate change and promoting green technologies. Education and healthcare reform are essential to ensuring a prosperous future for Mongolia’s citizens. The strategic plan sets ambitious goals to improve access to quality education, particularly in rural and underserved regions, and to expand healthcare services, with an emphasis on preventive care and modernizing health facilities.

Strengthening governance, enhancing transparency, and fighting corruption are also key components of the 2024-2028 Strategic Plan. The government plans to implement measures to ensure more accountable leadership and improve the delivery of public services to citizens. Lastly, in terms of international relations and diplomacy, Mongolia’s foreign policy will focus on maintaining balanced relations with neighboring countries and expanding its international partnerships. The strategic plan outlines efforts to strengthen Mongolia’s position in the global community through increased trade, cultural exchange, and participation in international organizations.

On November 13, the European Union, European Bank for Reconstruction and Development (EBRD), and the Mongolian National Chamber of Commerce and Industry (MNCCI) jointly organized an event titled “Green Economy, Green Business - Energy Transition”, focusing on Mongolia’s energy transition towards more sustainable practices. The event brought together key stakeholders, including EU Ambassador to Mongolia IIna Marciulionyte and resident representative of the EBRD in Mongolia Hannes Takacs.

In his opening speech, CEO of the MNCCI T.Duuren highlighted the importance of aligning Mongolia’s energy policies with international agreements such as the Paris Agreement. He emphasized the country’s commitment to reducing greenhouse gas emissions in line with its Nationally Determined Contribution targets and other strategic documents, such as the National Green Development Policy and government’s energy policy. According to a study by the Dayan Global Institute, Mongolia’s greenhouse gas emissions from coal-fired power plants are projected to reach approximately 56 million tons by 2035. However, the study also showed that by adopting renewable energy solutions and improving energy efficiency, Mongolia could halve its emissions by 2035.

He also noted the urgent need to increase the production and consumption of renewable energy and implement public-private partnership projects to ensure sustainable energy development. He also mentioned that in September 2023, the Energy Council was established under MNCCI to encourage greater private sector participation in the renewable energy sector.

In his remarks, Hannes Takacs discussed the bank’s efforts to support countries in reducing greenhouse gas emissions and fostering energy efficiency. He acknowledged that while increasing energy tariffs in Mongolia could strain household incomes, there is also significant potential for the development of renewable energy systems. Takacs pointed out that implementing energy efficiency measures could reduce Mongolia’s energy consumption by up to 25 percent, emphasizing the importance of renewable energy sources like solar, wind and hydropower, which Mongolia has considerable potential to harness but has not yet fully exploited. Takacs stressed that most of the country’s energy production still relies on coal, contributing significantly to its emissions.

A key part of the event was the panel discussion on “Greenhouse Gas Calculations, Sustainable Financing and Private Sector Support”. During the discussion, General Secretary of MNCCI S.Bayasgalan highlighted the role of private sector organizations in addressing greenhouse gas emissions and their responsibility in adopting energy-saving solutions. He emphasized that enterprises are increasingly focusing on renewable energy and energy-efficient technologies, which can lead to both environmental benefits and increased income by supplying surplus energy to the national grid.

The event also provided participants with detailed information on the EBRD’s green loan financing and green consulting services. Experts discussed how greenhouse gas emissions are calculated at the enterprise level, and the role of the private sector in implementing energy-saving solutions and sustainable financing models. Government policies and the private sector’s participation in green economy initiatives were key topics, with representatives from business associations, enterprises and energy companies in attendance to learn more about greenhouse gas calculations and how to engage with the green economy.

The Economic Partnership Agreement (EPA) between Mongolia and Japan entered into force in June 2016 and has been implemented since 2017. The Mongolian National Chamber of Commerce and Industry (MNCCI) intends to develop a recommendation on improving the Agreement's implementation and submit it to the relevant state authorities of the two countries. As part of this initiative, MNCCI organized a discussion on November 13, 2024, to resolve the challenges faced by businesses in implementing the EPA.

Under the Economic Partnership Agreement, Mongolia agreed to lower import customs tariffs on approximately 5,700 types of goods in 97 groups, while Japan committed to reducing tariffs on about 9,300 types of goods in 97 groups. Since the agreement entered into force in June 2016, Mongolia has exempted customs taxes on 59 percent of these imported goods (3,429 types) and Japan on 86 percent (8,000 types). However, statistical data indicates that Mongolia's export types and quantities have not significantly increased.

Ts. Tsend-Ayush, Executive Director of the Woolen Handicrafts Support Center NGO, said, “We have been exporting felt slippers to Japan for more than 10 years, but the trade has not been expanded. The main reason is the discrepancy in HS codes. Even though felt is exempted, felt slippers are not exempted as a product for shoes and footwear. If the code issue is resolved, the export of felt products to Japan can expand.”

Executive Director of the Association of Non-Mining Exporters Ch. Nergui emphasized, “There has been no significant progress in trade between the two countries. Though eight years have passed since the agreement was signed, Mongolia has been still exporting only a few types of goods, including wool and wool products that we used to export. The businesses of Mongolia and the MNCCI should critically examine the reasons for this stagnation. Considering the cultural differences between Mongolia and Japan, it would be more effective to export products specifically tailored to the Japanese market. Rather than promoting sea buckthorn's health benefits to a nation with millennia-old tea culture, it would be more appealing to develop tea products that align with Japanese culture while incorporating Mongolian elements."

The proposals made by the participants will be presented at a meeting of the Mongolia-Japan Joint Subcommittee on November 27, 2024, to discuss the implementation, improvement, and reduction of trade and tariff barriers of the Agreement.

Since the establishment of the Vietnam-Mongolia diplomatic ties on November 17, 1954, the traditional friendship between the two countries has been continuously strengthened and grown.

Mongolia was one of the first countries to establish diplomatic relations with Vietnam, and Vietnam was the first country in Southeast Asia with which Mongolia set up diplomatic ties.

Just one year after the establishment of the diplomatic relations, President Ho Chi Minh made his first visit to Mongolia in July 1955, part of his first overseas trip following the restoration of peace in North Vietnam.

President Ho Chi Minh’s visit and the subsequent Vietnam visit by Yumjaagiin Tsedenbal, First Secretary of the Mongolian People's Revolutionary Party Central Committee and Chairman of the Council of Ministers, in September 1959, were of great significance to the two peoples, laying the foundation for their traditional friendship.

On their path of national construction and development, the two countries have closely collaborated in many areas, offering each other wholehearted and selfless support.

The two countries’ high-ranking leaders have maintained regular mutual visits, contributing to consolidating political trust and enhancing the bilateral ties.

Vietnam and Mongolia have also maintained the political consultation mechanism at the deputy foreign minister level established in 2002, and the intergovernmental committee on economic-trade and scientific-technical cooperation.

They have cooperated closely and supported each other at regional and multilateral forums, including the United Nations, the World Trade Organization (WTO), the Asia-Europe Meeting (ASEM), the Asia-Pacific Economic Cooperation (APEC), the ASEAN Regional Forum (ARF), and other regional organizations. This relationship is driven by their shared interests in peace, development, and stability.

The year 2024 marks a milestone in the relationship with the state visit to Mongolia by Party General Secretary and President To Lam (now Party General Secretary To Lam) on September 30 and October 1. This visit, which coincided with the 70th anniversary of the diplomatic relations, opened a new chapter in the traditional friendship.

During this visit, the high-ranking leaders of the two countries agreed to upgrade the bilateral relationship to a Comprehensive Partnership and continue to expand collaboration.

On this occasion, the leaders witnessed the signing of seven cooperation agreements between various ministries, agencies, and localities.

The economic, trade, and investment cooperation has made progress, with the two-way trade turnover increasing to USD 132 million in 2023 from only USD 41.4 million in 2017 and USD 85 million in 2022. In the first seven months of 2024, it reached USD 65.5 million. The two countries aim to raise the bilateral trade value to USD 200 million in the near future.

According to experts, the relationship has been growing and ample room remains for the two sides to expand their cooperation, especially in economy, trade, and agriculture. In the economic sphere, they should focus on areas of strength such as mining, steel production, and the import and export of agricultural products, processed foods, and livestock products.

Agriculture is also a promising area for cooperation, experts said, suggesting the two countries exchange technology, experience, and products in this field.

The two sides have signed a series of agreements and memoranda of understanding (MoUs) to establish a legal framework for cooperation activities, including the MoU on economic and trade cooperation in 2021, one on agricultural cooperation in 2022, and another on sustainable rice trade cooperation in 2023.

Notably, during the Vietnam visit by Mongolian President Ukhnaagiin Khurelsukh last year, the two countries inked an agreement on visa exemption for holders of diplomatic, official, and ordinary passports, facilitating travel and trade between the two countries’ people.

Strides have also been seen in collaboration in culture, tourism, education and people-to-people exchange.- (VNA/VLLF)