Mongolia: CPS Final Review Validation, 2012-2016 · x Mongolia: CPS Final Review Validation,...

MongoliaCountry Partnership Strategy Final Review Validation, 2012–2016

CPS Final Review

Validation

EvaluationIndependent

Raising development impact through evaluation

Reference Number: FRV: MON 2017-01 Independent Evaluation: VR-23

Validation Report March 2017

Mongolia: Country Partnership Strategy Final Review Validation, 2012–2016

This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011.

NOTES

(i) The fiscal year (FY) of the Government of Mongolia ends on 31 December.

(ii) In this report, “$” refers to US dollars. (iii) For an explanation of rating descriptions used in ADB evaluation

reports, see ADB. 2015. 2015 Guidelines for the Preparation of Country Assistance Program Evaluations and Country Partnership Strategy Final Review Validations. Manila.

Director General

M. Taylor-Dormond, Independent Evaluation Department (IED)

Director N. Subramaniam, Independent Evaluation Division 2, IED Team leader Y. Ono, Senior Evaluation Specialist, IED

E. Kwon, Principal Evaluation Specialist (to November 2016) Team members C.J. Mongcopa, Associate Evaluation Officer, IED E. Li-Mancenido, Evaluation Analyst, IED

R. Tepace, Senior Evaluation Assistant, IED C. Regodon, Evaluation Assistant, IED

The guidelines formally adopted by the Independent Evaluation Department (IED) on avoiding conflict of interest in its independent evaluations were observed in the preparation of this report. To the knowledge of IED management, there were no conflicts of interest of the persons preparing, reviewing, or approving this report. In preparing any evaluation report, or by making any designation of or reference to a particular territory or geographic area in this document, IED does not intend to make any judgments as to the legal or other status of any territory or area.

Abbreviations

ADB – Asian Development Bank ADF ANR

– –

Asian Development Fund agriculture, natural resources, and rural development

CAPE CHP5

– –

country assistance program evaluation Combined Heat and Power Plant 5

COBP – country operations business plan CPS – country partnership strategy CPSFR – country partnership strategy final review EIRR – economic internal rate of return GDP – gross domestic product ICPS – interim country partnership strategy IED – Independent Evaluation Department JFPR – Japan Fund for Poverty Reduction JICA – Japan International Cooperation Agency MDG MFF MTR NDS

– – – –

Millennium Development Goal multitranche financing facility midterm review National Development Strategy

O&M – operations and maintenance PBL – policy-based lending PRC – People's Republic of China SMEs – small- and medium-sized enterprises TA – technical assistance WUS – water and other urban infrastructure and services

Currency Equivalent (as of 31 December 2016)

Currency Unit – togrog (MNT)

MNT1.00 = $0.0004 $1.00 = MNT2,486.50

Contents

Page

Acknowledgments vii

Executive Summary ix

Chapter 1: Introduction 1

Chapter 2: Country Context, Government Plan, and the ADB Country Strategy 2

A. Country Context 2 B. Government Development Plans 5 C. Country Partnership Strategy and ADB Portfolio 6

Chapter 3: Validation of the Country Partnership Strategy Final Review 11

A. Relevance 11 B. Effectiveness 15 C. Efficiency 19 D. Sustainability 21 E. Development Impacts 24 F. ADB and Borrower Performance 29 G. Assessment of the Quality of the Final Review 31 H. Overall Assessment 31

Chapter 4: Issues and Recommendations 33

A. Issues 33 B. Recommendations 33 Appendixes 1. Loans, Grants, and Technical Assistance Projects Covered, 2012–2016 36 2. Country Partnership Strategy, 2012–2016, Results Framework and Updates—

Outcomes that ADB Contributes to and Indicators 48 3. Major Development Partners 52 4. Assessment of Progress Toward Country Development Goals and Sector

Outcomes 55 5. List of Linked Document 59

Acknowledgments This validation report is a product of the Independent Evaluation Department (IED) of the Asian Development Bank (ADB). The validation was led by Yuji Ono, who succeeded Eunkyung Kwon, former Principal Evaluation Specialist, in November 2016. The team members were Caren Joy Mongcopa, Elizabeth Li-Mancenido, Randy Tepace, and Charina Regodon. Philip John Sayeg, Battulga Sergelen, and Sergio Villena were the consultants. Valuable inputs and comments at various stages were received from Brahm Prakash and Gabrielle Ferrazzi (external peer reviewers). The report benefited from the overall guidance of Marvin Taylor-Dormond and Nathan Subramaniam. Véronique Salze-Lozac'h, Walter Kolkma, Farzana Ahmed, Marco Gatti, and PV Srinivasan commented on an earlier draft of this study. For their time and opinions, the team would like to thank the officials (including former officials) and representatives interviewed in Mongolia from the Ministry of Construction and Urban Development; Ministry of Education, Culture, Science and Sports; Ministry of Energy; Ministry of Environment and Tourism; Ministry of Finance; Ministry of Food, Agriculture and Light Industry; Ministry of Health; Ministry of Labor and Social Protection; Ministry of Road Transport and Development; Office of Governor of Zamyn-Uud; Border Specialization and Inspection Agency; Customs General Administration; Bank of Mongolia; Erdenes Mongol LLC; the Municipality of Ulaanbaatar; National Statistics Office; Japan International Cooperation Agency; United Nations Development Programme; the World Bank; Independent Research Institute of Mongolia; and nongovernment organizations. The team is grateful to ADB staff in Manila who made themselves available for interviews, as well as staff from ADB’s Mongolia Resident Mission, who provided invaluable inputs and facilitated the field work for this validation. Their inputs strengthened the evidence base for this report. IED remains fully responsible for the report.

Executive Summary This report provides an independent assessment and validation of the Mongolia country partnership strategy final review (CPSFR), 2012–2016, prepared as a self-evaluation by the East Asia Department of the Asian Development Bank (ADB). It reviews the performance of the country partnership strategy (CPS), 2012–2016 and the interim country partnership strategy (ICPS), 2014–2016, and provides lessons and recommendations for the design and implementation of the next CPS covering 2017–2020 for Mongolia.

Country Context

Mongolia is a landlocked country, bordered by the People's Republic of China to the south and the Russian Federation to the north. In 2015, it had a population of 2.96 million, growing at 2% per annum. As a result of a recent economic downturn, Mongolia was downgraded by the World Bank in 2016 to a lower middle-income economy from an upper middle-income economy (Mongolia was upgraded in 2015 from lower middle-income country).

At the time of the CPS approval in March 2012, the economy was strong and rapidly expanding, as a result of new mineral discoveries and associated investment. During 2012–2015, however, the country’s annual gross domestic product (GDP) growth declined from 12.3% to 2.3% due to external shocks, in particular, plummeting mineral prices. Government revenues have also dropped because of declines in investment and exports in recent years, while public debt has increased to 77.4% of GDP in 2015, up from 51.7% in 2011. In 2015, the International Monetary Fund assessed Mongolia as having a high risk of debt distress. Agriculture, mining, and wholesale and retail trade are the top three sectors in terms of their share of GDP. In 2015, the share of agriculture was 13%, mining was 17%, and wholesale and retail trade was 20%. The agriculture sector employs nearly 30% of Mongolia’s labor force, while mining provides employment to only 4%. Exports of mineral products accounted for 89% of Mongolia’s total exports in 2012, but this decreased to 79% in 2015 due to external shocks, including the drop in mineral prices. In 2014, the private sector contributed about 80% of the country’s GDP and provided over 70% of total employment.

ADB Support

The CPS, which was aligned with the government’s National Development Strategy, 2008–2021 and ADB’s Strategy 2020, addressed two major constraints on economic development: (i) infrastructure gaps, including regional economic integration and access to basic urban services; and (ii) social development, including health services and a skills mismatch in education. To achieve its objectives, the CPS focused its loans and technical assistance (TA) on five sectors: transport, energy, water and other urban infrastructure and services, higher and technical and vocational education, and health. The sector focus was aligned with the 2008 country assistance program evaluation, which recommended a strategic focus and sector selectivity in ADB operations. Although the country assistance program evaluation did not specifically recommend sectors for exclusion, the CPS excluded agriculture and natural resources, finance, and

x Mongolia: CPS Final Review Validation, 2012–2016

basic education. The selection of sectors was supported by the government since it recognized that (i) the lack of a national road network was a major development constraint and the CPS needed to focus on transport within a limited envelope (average annual lending of $150 million) and (ii) other development partners were expected to support the excluded sectors.

Only 3 months after CPS approval, a new government was formed in June 2012. This government prioritized rural development and asked ADB to focus on agriculture. It also introduced a moratorium on borrowing from many international financial institutions because of the favorable macroeconomic conditions and disbanded donor coordination meetings. After the moratorium, ADB was the only leading multilateral development partner in Mongolia, since (i) it had established a good partnership with the government, and (ii) the government recognized the value additions brought by ADB projects. The government requested ADB to increase its lending portfolio, since in 2012, Mongolia became eligible for ordinary capital resources lending, which was more favorable than loans on market terms. In response to the government’s needs, the ICPS, 2014–2016 was formulated to (i) scale up both sovereign and nonsovereign operations, and (ii) include agriculture and natural resources and finance sectors in ADB’s operations. In 2015, the economic situation worsened, and another new government, which was formed in June 2016, restarted donor coordination meetings in December 2016.

From January 2012 to December 2016, ADB approved (i) 16 sovereign loan projects totaling $729.8 million, (ii) 2 nonsovereign loan projects totaling $80.0 million, and (iii) 8 grant projects totaling $21.5 million (2 projects included sovereign loans and grants), for a total value of $831.3 million (for 24 projects); and 55 TA projects totaling $48.6 million. The approved sovereign financing by sector was transport (25.3%), public sector management (25.3%), water and other urban infrastructure and services (12.0%), finance (11.0%), health and social protection (10.3%), agriculture and natural resources (6.9%), industry and trade (5.8%), and education (3.4%).

Assessment

This validation rates the ADB program less than successful on the borderline, while the CPSFR rated it highly successful. The validation score downgraded the CPSFR ratings from highly relevant to relevant, from highly effective to less than effective, from likely sustainable to less than likely sustainable, and from highly satisfactory development impacts to less than satisfactory. The coordination of sector level work to achieve cross sectoral objectives is very important for achievement of ADB developing member countries’ long-term development objectives. The validation gives importance to both achievement of outcomes at sector level and contributions to thematic objectives. Assessments for relevance and development impacts are consolidated by giving equal weights to sector level and cross-sector CPS objectives.

This validation acknowledges the ADB program’s relevance, including its strategic positioning and the program’s relevance to the CPS. The program was well aligned with Mongolia’s needs and government policies in a turbulent and uncertain period. The validation emphasizes the following positive points: (i) ADB remained as Mongolia’s only multilateral development partner after the moratorium in 2012, since ADB’s responsiveness to government needs and the value additions brought by ADB operations were much appreciated by the government; and (ii) ADB made extensive use of several financial modalities in response to various government needs. However, this validation downgrades the sector program rating to relevant for the following reasons:

Executive Summary xi

(i) actual loans approved during the CPS, 2012–2014 period is 85% and during ICPS, 2014–2016, 69% of the planned engagements were approved, reflecting issues in the design of the program pipeline; and (ii) the timing of the CPS should have been aligned with the political cycle as this resulted in misalignment with the needs of the new government.

Strategy 2020 has three strategic agendas of inclusive economic growth, environmentally sustainable growth, and regional integration. The support for inclusive growth is visible in most projects covering all sectors. The CPS set up the five thematic drivers of development change: (i) gender, (ii) governance, (iii) private sector development, (iv) regional cooperation, and (v) environmental sustainability. Regional cooperation has been explicitly addressed through development of cross-border transport. The ICPS continued to emphasize the thematic drivers, particularly private sector development, by improving access to finance for small and medium-sized enterprises (SMEs) and support for agriculture. These design frameworks were aligned with Strategy 2020 and midterm review. Overall, crosscutting objectives of the CPS and ICPS are rated relevant. Combining relevance ratings for the sector program and crosscutting work, the validation rates ADB’s program relevant.

The validation notes that there has been good progress in achieving project outputs and outcomes. The validation views that progress was made in each sector and on thematic issues. Of the 23 projects that were completed during the CPS period, 13 had ratings for effectiveness (5 out of these 13 projects were validated). Of these, 3 were rated highly effective (1 was validated) and 10 effective (4 were validated). Of the five grants which have no ratings for effectiveness but have overall ratings, one was rated highly successful, three were rated successful, and one was rated partly successful. None of these five grants was validated. In terms of the program, the ICPS represented 72% of total approvals during 2012–2016. Many of the CPS indicators had a target date of end-2016 but data was only available as of end-2014 or end-2015 for most of these targets and have been reflected as such in the validation report. There are 17 indicators in the ICPS, but targets for only five were achieved and two are likely to be achieved by 2016. The targets for five are unlikely to be achieved by 2016, the targets for three cannot be assessed at this time with the available data, the target for one was not achieved, and the target for one had no data available. Thus, 41% of the ICPS targets were achieved or likely to be achieved. For example, targets for “average speed with delay on CAREC 4b” and “higher education net enrollment among the population in the age group of 18-24 years are unlikely to be achieved. In large sectors, one of the three ICPS indicators in transport is likely to be achieved; one of the two ICPS indicators was achieved in energy; and the ICPS indicator in agriculture and natural resources is likely to be achieved. Overall, this validation rates ADB’s program less than effective.

Of the 18 projects and grants for which completion reports are available, only three projects had recalculated economic internal rate of return results at completion, and all of them were found to be economically viable. Of the three, only one was validated. Of the 13 projects for which ratings for efficiency were available, 2 were rated highly efficient (none was validated), 10 efficient (4 were validated), and 1 less than efficient (validated). No project conducted unit cost analysis. The average contract award ratio and disbursement ratios in 2012–2013 were 20.8% and 15.2%, respectively, against the ADB average ratios of 22.4% and 17.7%, respectively. An average of 2-year implementation delays have largely been attributed to changes of governments and counterpart staff during the period. This validation rates ADB’s program efficient.

xii Mongolia: CPS Final Review Validation, 2012–2016

With regard to program sustainability, the validation highlights the following risks to sustainability: (i) relocation of counterpart staff due to frequent government changes, leading to changes in priorities at the project level and project design changes; and (ii) funding shortages leading to cuts in programs (an ADB loan was provided to fund short-term revenue shortages, which if unaddressed, would have resulted in significant cuts in welfare programs in 2015). Most public utilities operate at a loss because of the government’s control of tariffs, which may lead to inadequate maintenance and challenges in undertaking new investment. Domestic power tariffs are still below full cost recovery levels, despite progress toward setting up a modern energy regulatory regime. In education, the continued growth in students in the coming years will strain what is already an overtaxed system. In health and social services, health care facilities are financed from the state budget, the Health Insurance Fund, and self-generated revenue. However, state funding appears to be reduced whenever tariffs are increased, thus creating risks to the quality and coverage of rural health services that are costly to provide. Adequate recurrent finance and new investment in facilities are essential to maintain quality and keep pace with the demand for education. There is a risk that sufficient recurrent funding will not be available in an economic downturn, although the government will prioritize the budget for recurrent funding. If recurrent expenditure is not sufficient, infrastructure investments will not be adequately maintained and the quality of essential health and education services could be reduced. At the project level, of the 13 closed loans and grants during 2012–2016 that have ratings on sustainability, 4 were rated most likely sustainable (1 was validated), 8 likely sustainable (4 were validated), and 1 less than likely sustainable (not validated). Overall, considering the key risks to long-term sustainability in Mongolia, this validation rates the ADB program less than likely sustainable.

The national poverty rate declined from 27.4% in 2012 to 21.6% in 2014. ADB contributed significantly to social protection improvement through a combination of policy reform support and project funding, e.g., health insurance coverage increased from 80% in 2010 to 97.8% in 2013. At the project level, of the six closed loans and grants between 2012 and 2016 with ratings for impact, five were rated significant (two were validated and rated for development impact, two were validated but not rated, and one was not validated); and one moderate (validated and rated for development impact). However, the validation notes that of all the proposed country development goals (as identified in the CPSFR) only one had been partially achieved by 2015. The goal of meeting education- and health-related MDGs achieved three targets out of four. Goals such as the creation of 40,000 jobs a year and the increase in per capita gross domestic product were yet to be achieved as a result of the economic downturn. The goal of reducing poverty incidence to 18% of the population by 2015 cannot be assessed since 2015 data is not available. This validation therefore rates the development impacts of ADB’s sector program less than satisfactory.

Significant progress was found in the five CPS thematic drivers of development change. Private sector development by improving access to finance for SMEs in agriculture was emphasized in the ICPS, and there was significant achievement in this area. As for impacts on thematic issues, the CPSFR indicates that (i) ADB’s agriculture operation supported the development of value added agriculture products and led to the creation of over 1,000 jobs, and (ii) the Transparency International Corruption Perception Index ranked Mongolia 72nd out of 168 countries in 2015, an improvement from 95th out of 176 countries in 2012. The validation rates the development impacts of the crosscutting work satisfactory. Combining the development impacts rating for the sector program and the crosscutting work, the validation rates the development impacts of ADB’s program less than satisfactory.

Executive Summary xiii

This validation rates ADB’s performance satisfactory and concurs with the CPSFR. The validation found that ADB is highly regarded by Mongolia’s government agencies, other development partners, and nongovernment organizations. ADB has made use of an extensive range of modalities in responding to urgent and specific needs, and diligently supervised the program through adequately staffed semi-annual missions and international and national project officers at the Mongolia Resident Mission. As stated in the CPSFR, ADB has been a leader in aid coordination, working in close partnership with other key development partners. Some of ADB’s sector strategies (e.g., for education) and knowledge products are being used by other development partners to strengthen aid coordination.

While the CPSFR did not provide a rating, this validation rates the borrower’s performance satisfactory. Throughout the CPS period, various governments showed commitment and support to ADB. In addition, since 2014, staffing stability has increased; staff usually had relevant experience and demonstrated adequate commitment. However, while this was the case for most of the implementation period, during the early stages of the CPS, political fluctuations led to significant changes in ministry structures and the replacement of staff, which in turn resulted in low contract award and disbursement ratios. In addition, ADB had to renegotiate business plans with some ministries almost every year.

Issues and Recommendations

Given the above findings and the rapid changes in the economic environment, this validation raises the following issues and recommendations as inputs for the formulation of the next CPS.

Issues

Finalizing the new CPS just before the new government took over resulted in a misalignment with the new government’s needs. The CPS was finalized in March 2012 and a new government was formed in June 2012 following a national election. When the CPS was finalized, the national election was imminent and the CPS process should have anticipated that there might be fundamental changes to government policies. The new government showed more interest in rural areas, whereas the CPS had excluded agriculture. This validation concurs with the CPSFR and suggests that the next CPS be closely aligned with the political cycle. In addition, the validation suggests that the next CPS needs to be flexible because of the volatile political environment.

Weak capacity of counterparts, mostly due to high staff turnover, affected ADB operations. ADB trained counterpart staff at ministries and government agencies. However, when the government changed, a number of the newly trained staff were transferred and some counterpart ministries were reshuffled. From 2014, when another new government was formed, there was more staff stability. However, another new government took office in June 2016, and it took 4 months to assign new staff and steering and procurement committee members at many ministries. Since continuity of counterpart staff is important for coordination between ADB and counterpart ministries and agencies, this issue needs to be addressed. Improved staff continuity will enable substantial improvement to be made to the efficiency and effectiveness of ADB operations. As the CPSFR proposed, the stationing of consultants at counterpart offices, as Japan International Cooperation Agency does, may help to mitigate this weakness.

xiv Mongolia: CPS Final Review Validation, 2012–2016

Recommendations

Promote diversification of the economy with a focus on improving the productivity of agribusiness small and medium-sized enterprises. Mongolia’s economy has been largely dependent on the mining sector and, since commodity prices fluctuate, it is vulnerable to external economic shocks. Mongolia needs to diversify by developing other strong export-oriented sectors, e.g., value chains for Mongolia’s agricultural resources for export to nearby northeast Asian markets. However, most agro-enterprises are SMEs, and capable only of basic processing. There is limited capacity in production, marketing, and quality assurance, and inadequate access to finance. ADB needs to continue to provide support to improve the productivity of agribusiness SMEs through pilot projects and by improving physical connectivity across borders.

Reduce the delay in the implementation of projects. The major reason for the delays was the suspension of important decisions until new staff were assigned under new governments and became familiar with their new tasks. To mitigate this risk, training to newly assigned staff, as has already been done by the resident mission, is crucial. Workshops should be organized for newly assigned counterparts and stakeholders. Since close communications and consultations between ADB’s project managers and counterpart staff are also very important, ADB needs to strengthen the resident mission, e.g., by increasing the number of outpostings of staff from headquarters.

Improve the value addition of projects in response to government needs by embedding innovative and knowledge solutions as part of the financing. One of the reasons that ADB remained as the sole multilateral development partner when a new government was formed in 2012 was that ADB focused on complex projects that required more than just financial support. Given the country’s capacity constraints, it is difficult for the government to design and implement complex projects on its own to meet the basic needs of the people. ADB needs to include innovative and knowledge solutions as part of its financing. ADB should also continue to make contributions to policy development and capacity development under TA projects. ADB has implemented a holistic approach in some important areas, including the strategically important North–South corridor. Since ADB’s resources are limited, it needs to focus on important areas and to combine several projects and TA projects effectively so they can act as successful model cases and improve the impacts of projects.

Prioritize and support maintenance expenditure of the government in infrastructure and health and prioritize social protection activities as part of the new CPS. Under the current tight fiscal budget, recurrent government expenditure may be reduced. Maintenance budgets for roads are already underfunded. It may be more cost-effective to maintain existing roads rather than to invest in new ones. Health and social services also need recurrent budgets to maintain the quality and coverage of their services. During economic downturns, poor and vulnerable people will be most affected, so public resources need to be focused on them. ADB supported the health and social protection program during the CPS period. In light of substantial financing needs, continued financing support with focused policy actions will be needed for social protection during the next CPS period.

CHAPTER 1

Introduction 1. The Independent Evaluation Department (IED) of the Asian Development Bank (ADB) has validated the final review for the Mongolia Country Partnership Strategy (CPS), 2012–2016, prepared by the East Asia Department.1 The country partnership strategy final review (CPSFR) was submitted to IED for validation on 7 July 2016.2 The purpose of this validation report is to validate the findings of the self-assessments in the CPSFR, assess the quality of the final review of the ADB assistance portfolio, and identify lessons and recommendations to improve the design and implementation of the next CPS (2017–2020), while providing a basis to ensure the quality and accountability of future self-evaluations.

2. This validation report is based on consultations with various stakeholders during an independent evaluation mission to Mongolia from 18 to 29 September 2016 and a supplementary independent evaluation mission to Mongolia from 30 January to 3 February 2017, meetings with relevant ADB staff at headquarters, reviews of relevant reports on projects and programs, and analysis of available country data and the CPSFR. This validation report assesses the objectives of the current CPS against actual project approvals, implementation, and portfolio performance. It was prepared in accordance with the 2015 Guidelines for the Preparation of Country Assistance Program Evaluations and Country Partnership Strategy Final Review Validations. 3

1 ADB. 2012. Country Partnership Strategy: Mongolia, 2012–2016. Manila. 2 ADB. 2016. Country Partnership Strategy Final Review: Mongolia, 2012–2016. Manila (accessible from the

List of Linked Document in Appendix 5). 3 ADB. 2015. Guidelines for the Preparation of Country Assistance Program Evaluations and Country

Partnership Strategy Final Review Validations. Manila.

CHAPTER 2

Country Context, Government Plan, and the ADB Country Strategy

A. Country Context

3. Mongolia is a landlocked country, bordered by the People's Republic of China to the south and the Russian Federation to the north. In 2015, it had a population of 2.96 million, growing at 2% per annum.4 Mongolia was ranked as an upper middle-income economy by the World Bank in July 2015, having previously been a lower middle-income country.

4. At the time of the CPS approval in 2012, the economy was strong and rapidly expanding, as a result of new mineral discoveries and associated investment.5 During 2012–2015, however, the country’s annual gross domestic product (GDP) growth declined from 12.3% to 2.3% because of external shocks, in particular, plummeting mineral prices. Government revenue also dropped because of declines in investment and exports, while public debt increased from 51.7% of GDP in 2011 to 77.4% in 2015.6 In 2015, the International Monetary Fund assessed Mongolia as having a high risk of debt distress. This decline made it clear that Mongolia needed to shift from a resource-dependent economy to a more diversified economy.

5. Agriculture, mining, and the wholesale and retail trade sectors are the top three sectors in terms of their contribution to GDP. The share of agriculture output was 11.2% in 2012, increasing slightly to 13.3% in 2015. The share of mining was almost stable at 17% during the CPS period. While the trade sector accounted for 19.9% of GDP in 2012, this decreased to 16.7% in 2015. In addition to its contribution to GDP, agriculture absorbs nearly 30% of Mongolia’s labor force (35.0% in 2012 and 28.5% in 2015). In contrast to agriculture, mining provides employment to only 4% of Mongolia’s labor force (4.4% in 2012, decreasing to 3.7% in 2015). Exports of mineral products accounted for 89.2% of Mongolia’s total exports in 2012, although this decreased to 78.8% in 2015 because of external shocks and the drop in mineral prices.

6. In 2014, the private sector accounted for about 80% of the country’s GDP, and provided over 70% of total employment. A Competition Law passed in mid-2010 provides a good legal framework for addressing anti-competitive conduct by firms. The Investment Law passed in 2013 eliminated restrictions on foreign private

4 ADB. 2015. Basic Statistics 2015. http://www.adb.org/sites/default/files/publication/158591/basic-

statistics-2015.pdf 5 GDP growth rate jumped from –1.3% in 2009 to 17.3% in 2011. 6 ADB. 2016. ADB Development Outlook 2016. Manila.

http://www.adb.org/sites/default/files/publication/158591/basic-statistics-2015.pdf

http://www.adb.org/sites/default/files/publication/158591/basic-statistics-2015.pdf

Country Context, Government Plan, and the ADB Country Strategy 3

investment and offered investment incentives for both national and international investors. Mongolia has one of the least restrictive trade and capital control regimes in Asia. There is little direct state intervention in goods markets and few parastatals are operating. Corporate governance laws generally encourage disclosure and protection of shareholder rights, although enforcement needs to be improved.

7. Private sector development in Mongolia faces a number of challenges. According to the World Bank’s Doing Business 2016 survey, Mongolia ranked 56th of 189 economies in terms of ease of doing business. Although the ranking was not low among developing countries, the survey identified starting a business, dealing with construction permits, trading across borders, and resolving insolvency as the areas in need of most attention. On the other hand, according to the Global Competitiveness Index prepared by the World Economic Forum, Mongolia ranked 104th of 140 countries in 2016. Inadequate laws and regulations on commercial and financial transactions, such as arbitration, currency convertibility and remittances, and tax and duties have increased investors’ risk perceptions.

8. The government maintains its predominant position in public utilities and social services. Prices for utility services (e.g., electricity and water) are highly subsidized, which acts as a disincentive to private sector investment. Although the scope for private sector initiatives in several subsectors (e.g., higher education and municipal services) has expanded in recent years, reforms are needed to help boost Mongolia’s competitiveness and to enable it to achieve more inclusive and sustainable growth.

9. Substantial progress has been made toward several Millennium Development Goals (MDGs).7 For instance, in 2015, Mongolia achieved the targets for the under-5 mortality rate, infant mortality rate, and maternal mortality ratio.8 Mongolia's human development index for 2014 was 0.727 (ranking it 90th out of 188 countries), which put the country in the high human development category.9

10. Poverty has been on a downward trend over the past decade, with the national poverty rate declining from 27.4% in 2012 to 21.6% in 2014,10 although many people remain near the poverty line. Approximately 35% of the population had a monthly per capita consumption range of MNT150,000–MNT250,000 in 2014. Considering that the poverty line for that year was MNT146,650 per month, a large part of the population was living just above the poverty line, and was, therefore, particularly vulnerable to shocks or a prolonged economic crisis and at risk of falling back into poverty. Table 1 shows that the poverty headcount ratios for 2010–2014 significantly improved in the Western and Eastern regions, while the ratio in the Eastern region moderately improved. As a result, the ratio was highest in the Eastern region (31.4%) in 2014.

7 United Nations Economic and Social Council. 2015. Mongolia Comprehensive National Development

Strategy. https://webapps01.un.org/nvp/indpolicy.action?id=2966 (accessed 1 August 2016). This document emphasizes Mongolia’s achievements against the MDGs; the strengthening of the economy through export orientation, employment creation and knowledge development; support for national savings through exploitation of strategic mineral resources; reducing rural–urban disparities; halting ecosystem imbalances; and consolidating democracy and governance.

8 Achievements versus targets are (i) under-5 mortality rate—18.0 vs. a target of 21.0, (ii) infant mortality rate—15 vs. a target of 15.0, and (iii) maternal mortality ratio—25.6 vs. a target of 50.0. Mongolian Statistical Information Service. http://www.1212.mn/en/ (accessed 6 October 2016).

9 United Nations Development Programme (UNDP). 2015. Human Development Report 2015: Work for Human Development. New York. Mongolia also ranked 63rd in the gender equality index of UNDP.

10 World Bank. 2016. Mongolia Overview. http://www.worldbank.org/en/country/mongolia/overview#1

http://www.1212.mn/en/

http://www.worldbank.org/en/country/mongolia/overview#1

4 Mongolia: CPS Final Review Validation, 2012–2016

11. Inequality declined slightly, as evidenced by the decline in the Gini coefficient from 0.34 in 2012 to 0.32 in 2014.11 However, there are wide differences in consumption patterns, with consumption of the richest 20% of the population being 7.7 times higher than that of the poorest 20%.12

Table 1: Poverty Head Count Ratio, 2010–2014 Statistic 2010 2011 2012 2014

National Poverty Line (MNT, per person per month)

92,072 99,729 118,490 146,650

Poverty Rate (%) National Average 38.8 33.7 27.4 21.6 Urban 33.2 28.7 23.3 18.8 Rural 49.0 43.2 35.4 26.4 Region Western 52.7 40.5 32.3 26.0 Khangai/Highlands 51.9 49.1 38.5 25.3 Central 29.9 28.1 28.2 22.2 Eastern 42.3 40.0 33.4 31.4 Ulaanbaatar 31.2 25.8 19.9 16.4 Sources: World Bank. 2015. Mongolia Economic Update—November 2015. Washington, DC. http://www.worldbank.org/en/country/mongolia/publication/mongolia-economic-update-november-2015 and National Statistics Office. http://www.1212.mn/en/

12. The World Bank forecasts that immediate growth prospects are expected to be weak—real GDP growth was projected to be 0.8% in 2016 and 3.0% in 2017 (footnote 10). ADB predicted in September 2016 that growth would stagnate at 0.1% in 2016 and 0.5% in 2017 as mining production declines and disbursements from the Development Bank of Mongolia shrink, along with rising debt repayments and mounting balance-of-payments pressures that necessitate tighter macroeconomic policy. ADB also stresses the need to pursue a consistent fiscal policy, continue efforts to diversify the economy, and ensure social protection.13

13. A budget amendment and a revised fiscal framework for 2016–2018 were approved in late August 2016 amid worsening fiscal pressures, largely from off-budget expenditures, and several fiscal consolidation measures were enacted. Despite these measures, the government estimates that the fiscal deficit will reach 18.2% of GDP in 2016, exceeding the 4% ceiling set by the Fiscal Stability Law. Public debt (including the central bank’s liabilities) is projected to exceed 90% of GDP by the end of the year.14

14. Mongolia is prone to extreme climatic conditions and multiple hazards (e.g., floods, storms, drought, wildfire, and epidemics), which caused 268 deaths, affected 4.2 million people, and resulted in direct physical damage estimated at $1.9 billion during 1980–2015. Melting of permafrost and glaciers, surface water shortages, and soil and pasture degradation have been identified as significant threats. The annual mean temperature increased by more than 2°C between 1940 and

11 World Bank. 2015. Mongolia–Economic Update. November. http://www.worldbank.org/en/

country/mongolia/publication/mongolia-economic-update-november-2015. 12 Mongolian Statistical Information Service. http://www.1212.mn/en/ (accessed 6 October 2016). 13 ADB. 2016. Asian Development Outlook 2016: Asia’s Potential Growth. Manila. 14 ADB. 2016. Asian Development Outlook 2016 Update: Meeting the Low-Carbon Growth Challenge.

Manila.

http://www.worldbank.org/en/country/mongolia/publication/mongolia-economic-update-november-2015






2014.15 Annual precipitation decreased over the same period and seasonal rainfall patterns have changed, with a gradual increase in winter precipitation and a decrease in summer rain in some regions. Climate change affects all Mongolians, but poor households are likely to face particular threats to their livelihoods and well-being. Climate-induced variability is likely to increase water stress, and lack of access to improved water and sanitation facilities is likely to put poor people at greater risk of infectious diseases.

15. Major political changes occurred in June 2012, November 2014, August 2015, and June 2016. These changes resulted in frequent changes in ministers, ministerial restructuring, and major staffing changes in ministries, as ruling parties brought in their own supporters.

B. Government Development Plans

16. The government’s National Development Strategy (NDS), 2008–2021 (footnote 6) has six priorities: (i) achieve the MDGs; (ii) develop an export-oriented, private sector-led, high-technology, and knowledge-based economy; (iii) exploit strategic minerals to build savings, growth, and a modern processing industry; (iv) develop regions and infrastructure to reduce urban–rural disparities; (v) halt ecosystem imbalances; and (vi) consolidate political democracy and implement an accountable system free from corruption. Targets for 2021 include a per capita income of $12,000; expansion of manufacturing; and the near-elimination of poverty. Strong growth that capitalizes on the proximity of markets in the People’s Republic of China (PRC) and the Russian Federation is a key feature of the strategy. After the general elections of 2012, the new government retained the NDS while stressing the need for (i) green development; (ii) economic diversification, including small and medium-sized enterprise (SME) development; (iii) balanced regional development, including the development of cities and towns; and (iv) new infrastructure. To meet these objectives, the government substantially increased public expenditure, which was largely funded by external borrowing and channeled through the Development Bank of Mongolia.

17. In February 2016, the Parliament approved the Sustainable Development Vision 2030, incorporating the prior Green Development Policy. According to this document, by 2030, Mongolia aspires to be among the world’s leading middle-income countries based on per capita income. It hopes to have a multisector stable economy; a society dominated by middle and upper-middle income classes, which would preserve the ecological balance; and stable and democratic governance. The document notes that Mongolia aims to (i) increase its gross national income (GNI) per capita to $17,500 and become an upper middle-income country; (ii) ensure average annual economic growth of not less than 6.6% during 2016–2030; (iii) end poverty in all its forms; (iv) reduce income inequality, with 80% of the population in the middle and upper-middle income classes; (v) increase the enrollment rate in primary and vocational education to 100%, and establish a culture of lifelong learning; (vi) improve the living environment of the Mongolian people so that they can lead a healthy life, and increase life expectancy to 78 years; (vii) achieve a ranking among the top 70 countries on the Human Development Index; (viii) preserve the ecological balance and achieve a ranking among the top 30 countries on the Green Economy Index;

15 D. Dagvadorj, B.Khuldorj, and R. Z. Aldover. 2009. Mongolia Assessment Report on Climate Change

2009. Ulaanbaatar: Ministry of Environment, Nature and Tourism. Prepared with support from the United Nations Environment Programme and the UNDP.


(ix) achieve rankings among the top 40 countries in the Doing Business Index16 and among the top 70 countries in the Global Competitiveness Index;17 and (x) build professional, stable and participative governance, free of corruption, and adept at implementing development policies at all levels.

C. Country Partnership Strategy and ADB Portfolio

1. ADB Country Partnership Strategy

18. Previous ADB country assistance program evaluation. The most recent country assistance program evaluation (CAPE) for Mongolia was in 2008.18 It evaluated ADB’s assistance to Mongolia from 1997 to 2007, a period during which the country carried out a transition to a market economy. It recommended the following for the next CPS: (i) reorienting ADB’s role by placing more emphasis on building country capacity for sound public financial management, (ii) strengthening the strategic focus and sector selectivity in ADB’s operations (it did not specify which sectors should be excluded, although it specified the inclusion of core sectors such as transport, education, and urban development), (iii) supporting private sector development and fostering public–private complementarity, (iv) fostering regional cooperation, and (v) improving portfolio performance and client responsiveness.

19. ADB country partnership strategy, 2012–2016. The CPS, 2012–2016, aligning it with the government’s NDS, 2008–2021 and ADB Strategy 2020, aimed to (i) help generate and sustain employment by addressing priority infrastructure gaps; (ii) emphasize social development, particularly education, and efficient delivery of health services; and (iii) support capacity development, policy reform, and private sector development.19 Mongolia became eligible for ordinary capital resources (OCR) lending in 2012, with access to a blend of OCR loans, Asian Development Fund (ADF) grants, and concessional loans. It had two strategic pillars: (i) competitive, sustainable, and regionally integrated growth; and (ii) inclusive social development. Its priority sectors were transport, energy, water and other urban infrastructure and services (WUS), higher and technical and vocational education, and health. The government made a strong request for health to be included in part because of the limited assistance from other development partners. In line with the findings of the 2008 CAPE, ADB planned to withdraw from agriculture and natural resources, finance, and basic education. The government agreed that these sectors could be excluded because (i) ADB’s average annual lending amount of around $150 million was not enough to cover many sectors (the lack of road networks was perceived to be a major development constraint and therefore about 70% of sovereign loans in the CPS were for road projects), (ii) excluded sectors were supported by other development partners, and (iii) the contributions of ADB interventions to the excluded sectors had not been significant during the former CPS period. The CPS identified private sector development and good governance as thematic drivers of change, while regional cooperation, environmental sustainability, and gender equality were to be mainstreamed. 16 Mongolia was ranked 56th in 2015 by the World Bank’s Doing Business Index— Measuring Business

Regulations. http://www.doingbusiness.org/rankings (accessed 6 October 2016). 17 Mongolia was ranked 104th in 2015/2016 by the World Economic Forum. See Competitiveness Rankings.

http://reports.weforum.org/global-competitiveness-report-2015-2016/competitiveness-rankings/ (accessed 6 October 2016).

18 Independent Evaluation Department. 2008. Country Assistance Program Evaluation: Mongolia— From Transition to Takeoff. Manila: ADB.

19 ADB. 2008. Strategy 2020: The Long-Term Strategic Framework of the Asian Development Bank, 2008–2020. Manila.


20. In June 2012, a moratorium on borrowing from international financial institutions was introduced by a new government which had taken office following a national election in which an opposition party recorded a landslide victory. With the exception of a few agencies, including ADB, the new government did not have good partnerships with the international financial institutions nor did it feel that it needed financial support from them given the favorable economic conditions. The official annual donor coordination meetings were therefore disbanded until December 2016.

21. ADB interim country partnership strategy, 2014–2016. Mongolia became eligible for OCR lending in 2012. The government, recognizing the importance of the value additions embedded in ADB loan projects, requested ADB to increase its lending portfolio to allow Mongolia to borrow from OCR, which it regarded as more attractive than borrowing from the commercial market. In response to the government’s needs, an interim country partnership strategy (ICPS), 2014–2016 was formulated to (i) scale up both sovereign and nonsovereign operations with annual OCR allocations of $200 million (after 2014) and biennial ADF allocations of about $78 million, and (ii) include agriculture and natural resources and the finance sector ADB’s operations.20 These sectors were included because of (i) a recognition that an annual lending amount of $300 million by ADB would enable other important sectors to be included in the ADB program, (ii) ADB was Mongolia’s largest multilateral development partner and the government expected value from ADB projects, and (iii) the new government intended to emphasize the agriculture sector to support rural development.

22. Mongolia’s public debt at the end of 2012 stood at 63% of the GDP due to expanded government expenditure during the high economic growth period. In response to the changing environment, the government needed to develop an export-oriented, high-technology, knowledge-based economy, focusing on economic diversification, employment creation, and green development. While the CPS referred to inclusive and sustainable growth as a major objective, the ICPS has the following four thematic drivers of change: (i) private sector development, (ii) governance and capacity development, (iii) gender equity and mainstreaming, and (iv) knowledge sharing.

2. Mongolia’s Development Partners 23. ADB, the People’s Republic of China, European Bank for Reconstruction and Development, European Union, the Republic of Korea, GIZ,21 Japan International Cooperation Agency (JICA), Millennium Challenge Corporation, United Nations Development Programme, United States Agency for International Development, and the World Bank, are major development partners in Mongolia, with ADB and JICA the two largest. ADB lent or granted approximately $831 million during the CPS period, compared with $50 million–$70 million by the World Bank in the same period. In monetary terms, the key sectors supported by these development partners were (i) transport, 40%; (ii) finance, 22%; (iii) education, 8%; (iv) water and other urban infrastructure and services, 8%; (v) health, 7%; (vi) agriculture and natural resources, 4%; (vii) energy, 3%; and (viii) others, 8%.

20 ADB. 2014. Interim Country Partnership Strategy: Mongolia, 2014–2016. Manila. 21 Deutsche Gesellschaftfür Internationale Zusammenarbeit (GIZ) GmbH.


3. ADB Country Program Approved for the Country Partnership Strategy Period

24. Planned country program. The CPS proposed total lending of about $739.9 million from 2012 to 2016. For 2012–2014, a total lending program of $439.9 million was envisaged in the country operations business plan (COBP), with the following sectoral distribution: (i) transport ($301.9 million, 69%); (ii) energy ($62.0 million, 14%); (iii) education ($25.0 million, 6%); (iv) health ($15.0 million, 3%); and (v) water supply and other municipal infrastructure and services ($36.0 million, 8%).

25. In the ICPS, 2014–2016, total lending of about $758 million over the 3 years was envisaged. The sectoral distribution expanded to (i) transport ($255 million, 34%); (ii) energy ($194 million, 25%); (iii) education ($78 million, 10%); (iv) health ($50 million, standby project focused on disability for 2016); (v) WUS ($20 million, 3%); (vi) finance ($62 million, 8%); and (vii) agriculture, natural resources, and rural development (ANR, $149 million, 20%). The planned non-lending program totaled $29.7 million for technical assistance (TA) projects during 2014–2016.

26. Table 2 summarizes the planned and approved sovereign loans by sector during 2012–2016. Table 3 lists approved sovereign and nonsovereigns loans and grants by year from 2012 to 2016. ADB approved (i) sovereign loans totaling $729.8 million; (ii) nonsovereign loans totaling $80.0 million; and (iii) grants, including six Japan Fund for Poverty Reduction (JFPR) grants worth $21.5 million, for a total value (loans and grants) of $831.3 million. The approved sovereign financing by sector during 2012–2016 was transport (25.3%), public sector management (25.3%), water (12.0%), finance (11.0%), health and social protection (10.3%), agriculture and natural resources (6.9%), industry and trade (5.8%), and education (3.4%). ADB approved 55 TA projects totaling $48.6 million from January 2012 to December 2016: 15 policy and advisory TA projects, 26 capacity development TA projects, and 14 project preparatory TA projects (Table 4). Details of the ADB portfolio of loans, grants, and TA projects for Mongolia for 2012–2016 are in Appendix 1. Table 2: Planned and Approved Sovereign Loans by Sector, 2012–2016

Sector

CPS, 2012–2014 ($ million)

Approved, 2012–2014 ($ million)

Planned vs. Approved, 2012–2014

(%)

ICPS, 2014–2016 ($ million)


Planned vs. Approved, 2014–2016

(%)


Transport 301.9 184.9 61.2 255.0 125.0 49.0 184.9 Energy 62.0 0 0 194.0 0 0 0 Finance 0 20.0

62.0 60.0 96.8 80.0

PSM 0 0 0 0 185.0

185.0 ANR 0 0 0 149.0 50.0 33.6 50.0 WUS 36.0 68.5 190.3 20.0 37.9 189.5 87.9 Education 25.0 25.0 100.0 78.0 25.0 32.1 25.0 Health 15.0 75.0 500.0 0 0 0 75.0 IAT 0 0 0 0 42.0

42.0

MUL 0 0 0 0 0 0 0 Total 439.9 373.4 84.9 758.0 524.9 69.2 729.8

ANR = agriculture, natural resources, and rural development; CPS = country partnership strategy; IAT = industry and trade; ICPS = interim country partnership strategy; MUL = multisector; PSM = public sector management; WUS = water and other urban infrastructure and services. Note: The CPS planned for $739.9 million in sovereign loans during 2012–2016, but a breakdown by sector is not available during 2015–2016. Source: Asian Development Bank database.


Table 3: Sovereign and Nonsovereign Loans and Grants Projects Approved, 2012–2016 2012 2013 2014 2015 2016 2012–2016

Sector No. Amount ($ million) No.

Amount ($ million) No.




Amount ($ million)

Transport 1 61.4 0 0.0 1 125.0 0 0.0 0 0.0 2 186.4 Energy 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Finance 0 0.0 2 60.0 1 40.0 1 60.0 0 0.0 4 160.0 PSM 0 0.0 0 0.0 0 0.0 1 150.0 1 35.0 2 185.0 ANR 1 2.5 0 0.0 0 0.0 2 53.0 2 5.0 5 60.5 WUS 0 0.0 1 53.7 1 18.5 0 0.0 2 22.2 4 94.4 Education 0 0.0 0 0.0 1 25.0 1 3.0 0 0.0 2 28.0 Health 2 55.0 1 20.0 0 0.0 0 0.0 0 0.0 3 75.0 IAT 0 0.0 0 0.0 0 0.0 1 15.0 1 27.0 2 42.0 MUL 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Total 4 118.9 4 133.7 4 208.5 6 281.0 6 89.2 24 831.3

ANR = agriculture, natural resources, and rural development; IAT = industry and trade; MUL = multisector; PSM = public sector management; WUS = water and other urban infrastructure and services. Source: Asian Development Bank database.

Table 4: Technical Assistance Approved, 2012–2016

2012 2013 2014 2015 2016 2012–2016

Sector No. Amount

($ million) No. Amount





($ million) Transport 3 2.1 1 0.5 1 1.0 2 1.9 2 1.5 9 7.0 Energy 0 0.0 0 0.0 4 4.1 1 1.8 1 1.5 6 7.4 Finance 0 0.0 0 0.0 1 0.5 1 0.8 1 1.6 3 2.8 PSM 3 1.7 2 0.8 2 1.8 2 1.2 2 1.8 11 7.2 ANR 0 0.0 1 1.0 2 0.9 4 5.5 2 1.6 9 9.0 WUS 1 0.2 0 0.0 1 0.4 1 1.0 1 1.0 4 2.6 Education 1 1.0 0 0.0 0 0.0 1 1.0 1 0.8 3 2.8 Health 0 0.0 2 2.0 1 1.0 3 3.1 0 0.0 6 6.1 IAT 0 0.0 0 0.0 1 0.5 0 0.0 0 0.0 1 0.5 MUL 1 1.0 1 1.5 0 0.0 0 0.0 1 0.7 3 3.2 Total 9 6.0 7 5.8 13 10.2 15 16.3 11 10.5 55 48.6 ANR = agriculture, natural resources, and rural development; IAT = industry and trade; MUL = multisector, PSM = public sector management, WUS = water and other urban infrastructure and services. Source: Asian Development Bank database.

27. Between 2012 and 2016, 23 loan and grant projects (with an aggregate value of $393.7 million) were closed (Table 5).22 As of 2016, the total value of the active loans and grants amounted to $773.4 million (Table 6).

22 Two closed loans with active supplementary loans are excluded, since these projects are still ongoing.


Table 5: Sovereign Loans and Grants Closed, 2012–2016

2012 2013 2014 2015 2016 2012–2016

Sector No. Amount






($ million) Transport 2 63.1 1 37.3 3 100.4 Energy 1 2.0 1 2.4 1 2.0 3 6.4 Finance 2.5 1 2.5 PSM 1 150.0 1 150.0 ANR 2 4.5 1 2.0 1 2.0 4 8.5 WUS 1 1.5 1 1.5 Education 1 13.0 1 17.0 2 12.9 4 42.9 Health 1 60.0 1 2.0 3 19.0 5 81.0 IAT 1 0.5 1 0.5 MUL 0 0.0 Total 7 81.5 3 6.4 7 101.1 3 50.2 2 154.5 23 393.7

ANR = agriculture and natural resources, IAT = industry and trade, MUL = multisector, PSM = public sector management, WUS = water and other urban infrastructure and services. Note: Number stands for project numbers and not loan and grant numbers. Amounts corresponds to amounts at date of project approval. Source: Asian Development Bank database.

Table 6: Active Sovereign Loans and Grants by Sector

(as of December 2016)

Sector Amount

($ million) Number Volume

(%) Transport 314.0 5 40.59 Energy 0.0 0 0.00 Finance 80.0 2 10.34 PSM 35.0 1 4.53 ANR 56.0 3 7.24 WUS 109.4 5 14.15 Education 48.0 3 6.21 Health 89.0 3 11.51 IAT 42.0 2 5.43 MUL 0.0 0 0.0 Total 773.4 24 100.00

ANR = agriculture, natural resources, and rural development; IAT = industry and trade; MUL = multisector, PSM = public sector management; WUS = water and other urban infrastructure and services. Source: Asian Development Bank database.

CHAPTER 3

Validation of the Country Partnership Strategy

Final Review 28. This section validates the CPSFR assessment of the CPS performance against the following seven criteria: (i) relevance (including strategic positioning, which is merged with relevance in the 2015 guidelines), (ii) effectiveness, (iii) efficiency, (iv) sustainability, (v) development impacts, (vi) performance of ADB, and (vii) borrower performance.

A. Relevance

29. Program relevance concerns the adequacy of the actual programs and projects approved during the CPS period to meet the CPS objectives and sector-strategic priorities. In line with the 2015 guidelines, the CPSFR assessed the strategic positioning of the CPS and the program’s relevance to the CPS. The strategic positioning was assessed by the following subcriteria: (i) relevance to the country context and the government’s development priorities; (ii) focus, selectivity, and alignment with the ADB Strategy 2020 and the midterm review of Strategy 2020; (iii) coordination with development partners; (iv) long-term continuity and the extent to which lessons learned were incorporated; and (v) appropriateness of resource allocation based on the CPS results frameworks. The program relevance was assessed by the following sub-criteria: (i) relevance to key sector identified in the CPS in terms of the consistency between the program and the CPS and COBPs, (ii) regional relevance, (iii) the adequacy of technical or sector-specific aspects in project design, and (iv) relevance of crosscutting objectives.

30. Country context and development priorities. This validation considers ADB was responsive to the context and changing government priorities. The CPSFR provides a detailed summary of the country context, which is similar to that in Chapter 2 of this report. The ADB program was designed to address government priorities as they stood in late 2011 and early 2012, a period of optimism in the country’s growth prospects. Increased GDP per capita led ADB and other development partners to substitute grant financing with lending, carrying increasingly less concessional terms. At the same time, the government de-emphasized the role of official development aid. In the CPS, 2012–2016, ADB responded to the government priorities at the time, as set out in the NDS 2008–2021, and as determined from consultations with the government. It therefore appears to have responded to Mongolia’s genuine and most urgent development needs. The emphasis was on transport, energy, WUS, higher and technical and vocational education, and health. About 70% of ADB lending was planned for transport projects in an attempt to address a major development constraint, the lack of a trunk road network. With its two strategic pillars, the CPS focused on inclusive and


sustainable growth. In line with the ADB Strategy 2020 and its midterm review (MTR), the focus was on addressing infrastructure gaps. Other development partners were expected to take the lead in ANR, finance, and basic education, which would permit ADB to greatly reduce its support for these areas or to withdraw from them altogether.23 Priorities shifted with the election of the new government in 2012, which asked ADB to include these three sectors as well as climate change and social protection. These were incorporated in the ICPS 2014–2016, reflecting ADB’s responsiveness to changing priorities.

31. Alignment with ADB strategies. Regional cooperation and environmental sustainability, private sector development, gender equity, good governance, and capacity development are key themes in the CPS, aligning it with Strategy 2020. The CPS focused on transport, energy, WUS, and education, while planning to withdraw from ANR, finance, and basic education. Although health was classified as an “other area of operations” in Strategy 2020, a strong request from the government and limited assistance from other development partners in the sector led ADB to retain health in the CPS. Major implications of the MTR included a strengthened focus on the private sector and climate change, both of which were fully incorporated in the ICPS, which was completed after the MTR. The increased lending capacity in the MTR was also reflected in the scaling-up of lending operations from an annual $147 million in the CPS to $224 million in the ICPS.

32. Focus and selectivity. The CPS was fully aligned with government needs and took into account the findings of the 2008 CAPE, which concluded that efforts to provide assistance to many sectors in many parts of the country had resulted in a proliferation of small, high-transaction-cost activities (footnote 18). The government also fully supported the CPS when it was approved. However, the new government recognized that the CPS did not match the changed government’s needs and asked for it to be revised. Thus, while focus and selectivity were important, the need for flexibility was recognized by the ICPS, which noted the need to strike a practical balance between selectivity and flexibility in the CPS of a small developing member country.24 In addition, as the CPSFR indicates, since government priorities may change if governments themselves change, the timing of the CPS should have been closely aligned with the political cycle.25 Nevertheless, the ICPS responded to the changed policy priorities of the new government and the validation views its responsiveness as very positive.

33. Coordination with development partners. Following the discontinuation of formal donor coordination meetings in June 2012, the World Bank, ADB, JICA, and other development partners of Mongolia coordinated among themselves on a monthly basis as was confirmed to the evaluation mission in meetings with the World Bank and JICA. Although informal, the group worked in a structured way, creating working groups on (i) education; (ii) health; (iii) social protection; (iv) urban development, (v) agriculture; (vi) financial sector, macro, fiscal; (vii) public–private partnership (PPP); (viii) energy; (ix) mining and extractive industries; (x) environment; (xi) gender; and (xii) humanitarian concerns. Because of ADB’s leading role in financing and its comprehensive coverage, it appears that ADB provided room for other development partners to target their support, as shown in Appendix 3, Figure A3. The ICPS aimed to increase cofinancing, with an emphasis on securing grant or concessional funding. ADB was successful in mobilizing a $29.7 million grant from the Climate Investment Fund.

23 For example, no lending for ANR or finance was included in the CPS. 24 Footnote 20, para. 14. 25 Footnote 2, para. 14.

Validation of the Country Partnership Strategy Final Review 13

The JFPR provided $8.5 million in grants, and the Japan Fund for Joint Crediting Mechanism $10.0 million in credit.

34. Continuity. The CPSFR places value on the continuity of support to Mongolia in a period of economic change and uncertainty. ADB is commended for its diligent efforts and its use of the full range of modalities and instruments available to it to maintain continuity. ADB continued to be Mongolia’s leading international partner for transport, urban development, education, health, and social protection, areas it had been involved with since Mongolia joined ADB in 1991. ADB maintained its strong support for regional cooperation and integration, environmental protection, and private sector development. Changes were introduced within the sectors, with the CPS defining higher education and technical and vocational education and training as the priority subsectors.

35. Appropriateness of resource allocation. The CPSFR describes how the planned focus and selectivity of the CPS, and the broadened scope of the ICPS, reflect ADB’s responsiveness and flexibility in addressing government priorities and the country’s changing circumstances. While the transport, energy, and WUS sectors were allocated 91% of CPS resources, their allocation decreased to 60% in the ICPS. In the ICPS, the increased in ADB resources created greater room for the education sector (from 6% to 10% of the planned allocation), and for new sectors—finance (8%) and ANR (19%).

36. Actual versus planned lending volumes. The CPS, 2012–2016 proposed an overall lending envelope of about $739.9 million. Against this planned lending, the actual total sovereign lending was $729.8 million, 1% below the envisaged lending. The ICPS proposed total lending amount of $758.0 million from 2014 to 2016, but the actual total lending was $524.9 million, 31% lower than the target. The lending amount in 2016 was only $81.4 million, compared with $168.5 million in 2014 and $275.0 million in 2015. The shortfall in 2016 was largely due to the fact that the expected Combined Heat and Power Plant 5 (CHP5) Project ($150 million) was not sufficiently prepared for approval.

37. Regional allocations. The CPSFR provides a thorough analysis of ADB’s lending and nonlending activities by sector and region. Although projects were concentrated in fast-growing parts of the country, such as Ulaanbaatar, as recommended by the CAPE, 1998–2007, a significant share of lending ($392.4 million) was allocated to nationwide projects which received nearly two-fifths of the total allocation.26 However, significant regional differences emerge in the allocated amounts. The main recipients were Ulaanbaatar with $200.0 million (19.0%), the West with $130.7 million (12.5%), and the South with $227.6 million (21.7%), while the East received $10.2 million (1.0%), the Central $36.9 million (3.5%), and the North $51.7 million (4.9%). Finance, public sector management, transport, and WUS were concentrated in particular regions, while education, health and social protection, and ANR were more spread out. The validation views the ADB lending program to be generally well balanced regionally, but more attention could be paid to the low-income areas such as the East.

38. Use of available instruments and modalities. After 2012, ADB was required to be particularly reactive and flexible. It made extensive use of the financial and project instruments available to it, including grants, loans that combined ADF and OCR funds, OCR loans, multitranche financing facilities (MFFs), policy-based lending (PBL), and nonsovereign loans. The 19 closed grants (mainly JFPR) and five new grants after 2012

26 IED. 2008. Country Strategy and Program Final Review: Mongolia, 1998–2007. Manila.


provided an opportunity to pilot new approaches (e.g., the Energy Conservation and Emissions Reduction Project from Poor Households Grant that closed in 2014) or to respond to urgent needs (e.g., the Dzud Disaster Response Project in 2016). The Education for the Poor—Financial Crisis Response Project, financed by an ADF grant from 2009 to 2014, met the recurrent financing needs for schools, facilitated continued access to preschool and basic education for the poor, and kept a free preschool feeding program running. This project received an award from IED in 2016 as one of ADB’s three most successful development projects. The MFF modality provides the long-term perspective required to address the complex development challenges related to urban development and associated urban transport in Ulaanbaatar. Apart from the MFF, ADB has approved eight OCR loans since 2012, despite the lending constraints set by the government. ADB supported social programs through the PBL to help address short-term revenue gaps in 2015, thus, enabling the government to avoid cuts in welfare programs. The PBL supported the increase in beneficiaries and amounts for a food stamp program which has been one of the key tools used subsequently by the government to address emergency needs and economic crisis.

39. As identified by the CPSFR, the trade financing program and the two nonsovereign operations were strategically relevant to economic development. The nonsovereign operations in 2013 and 2015 involved senior loans to domestic commercial banks that, in turn, could on-lend to SMEs at more favorable terms than those otherwise available. Under the Agriculture and Rural Development Project approved in 2008, ADB also provided credit guarantees to local banks for lending to 12 selected ANR enterprises. This approach is continuing under the Agriculture and Rural Development Project (Additional Financing). TA projects included capacity development for developing a conducive environment for PPPs, and for municipal concessions with Ulaanbaatar Municipality; transaction advisory services for the CHP5 project; and capacity development for preparation of the credit guarantee system projects.

40. ADB actively mobilized cofinancing. The key cofinancers were the European Investment Bank, the Global Environment Facility, GIZ, and the World Health Organization. ADB mobilized the first major climate finance for Mongolia, a $29.7 million grant from the Climate Investment Fund, in cooperation with the World Bank. ADB made great use of the Japan Fund for Poverty Reduction (JFPR) which provided $8.5 million in grants and $20.1 million in TA from 2012 to 2015, as well as mobilizing $10.0 million from the Japan Fund for the Joint Crediting Mechanism.

41. Value addition. The validation supports the CPSFR view that ADB maximized its relevance by focusing on complex projects that required more than merely financial support and contributed to adding values to the projects. One of the reasons that the government asked for an increase in ADB lending is that it recognized the value additions of ADB projects and TA projects. Program relevance was enhanced when ADB made good use of available modalities, financial instruments, and nonlending support (TA and grants). The use of MFFs in the urban sector and urban transport is a particularly striking example of areas where a long-term perspective is essential to build capacity, engage in dialogue, and address the complex challenges of urban areas.

42. Rating for the sector program. This validation acknowledges the ADB program’s relevance, including strategic positioning, as it was well aligned with Mongolia’s needs and governmental policies in a turbulent and uncertain period. The validation emphasizes the following positive points: (i) ADB remained Mongolia’s only multilateral development partner after the government’s moratorium in 2012 and ADB’s responsiveness to government needs and value additions of ADB projects were much


appreciated by the government; and (ii) ADB made extensive use of several financial modalities in response to various government needs. However, this validation rates the program relevant for the following reasons: (i) actual loans approved during the CPS, 2012–2014 period is 85% and during ICPS, 2014–2016, 69% of the planned engagements were approved, reflecting issues in the design of the program pipeline; and (ii) the timing of the CPS should have been aligned with the political cycle as this resulted in misalignment with the needs of the new government.

43. Relevance of crosscutting objectives. The CPSFR states that the ADB program was relevant to Mongolia’s key economic, social, and environmental issues. Strategy 2020 has three strategic agendas of inclusive economic growth, environmentally sustainable growth, and regional integration. The support for inclusive growth is visible in most projects covering all sectors. The CPS set up the five thematic drivers of development change: (i) gender, (ii) governance, (iii) private sector development, (iv) regional cooperation, and (v) environmental sustainability. The CPS emphasized two strategic priorities: (i) competitive, sustainable, and regionally integrated growth; and (ii) inclusive social development. Regional cooperation has been explicitly addressed through development of cross-border transport. The ADB program included urgent social development through the provision of clean water and sanitation, improved education access and quality, better health services, and more effective social protection. The ICPS continued to emphasize the thematic drivers, particularly private sector development, by improving access to finance for SMEs and support for agriculture. These design frameworks were aligned with Strategy 2020 and MTR. Overall, crosscutting objectives of the CPS and ICPS are rated relevant. Combining relevance ratings for the sector program and crosscutting work, the validation rates ADB’s program relevant.

B. Effectiveness

44. The validation assessed the effectiveness of the ADB program in Mongolia against three criteria: (i) achievement of outputs and outcomes of projects; (ii) achievement of outcomes in the results frameworks of the CPS and ICPS; and (iii) progress on the thematic issues of private sector development, regional cooperation and knowledge sharing, capacity development, and governance. Progress on the thematic issues is discussed under impact.

1. Outputs and Outcomes of Projects and Technical Assistance

45. Outputs and outcomes in completed projects. Achievements of outputs and outcomes in completed projects (loans and grants) are measured by the effectiveness rating of projects. During 2012–2016, 23 projects were closed. Of these 23 projects, 18 were reviewed by project completion reports, project completion report validation reports, or implementation completion memorandums (Appendix 1, Table A1.1). Of these 18 projects, 13 had ratings for effectiveness (five grants had no ratings for effectiveness). Of these 13 projects, three were rated highly effective (1 was validated) and 10 were rated effective (4 were validated). These favorable effectiveness ratings indicate that project outputs and outcomes were considered to be achieved. Of the five grants which have no ratings for effectiveness but have overall ratings, one was rated highly successful, three were rated successful, and one was rated partly successful.

46. Effectiveness of ongoing projects. It was difficult for the validation to assess the effectiveness of ongoing projects, since the lending portfolio increased in 2014 and most projects are at too early a stage for them to be assessed.


47. Effectiveness of technical assistance. ADB approved 55 TA projects from January 2012 to December 2016: 15 policy and advisory TA projects, 26 capacity development TA projects, and 14 project preparatory TA projects. Of the 29 closed TA projects, 14 have overall ratings. Of the 14, 3 were rated highly satisfactory, 9 were rated satisfactory, and two partly satisfactory, generally indicating that they were likely to have been effective. It was not possible to assess the effectiveness of the over 38 ongoing TA projects. The outputs of many TA projects were integrated into government strategic papers and laws. For example, the TA for Promoting Inclusive Growth27 developed a list of inclusive growth indicators which were used in the Law on Development Planning in 2015. The TA for Strengthening Hospital Autonomy supported the enactment of the Medical Care and Services Law,28 which has enabled health sector reform initiatives, such as the autonomous status of public hospitals, hospital financing, governance, private sector engagement, and primary health care gate-keeping. Many capacity development TA projects trained government officials in important areas. For example, under the TA for Strengthening the Anti-Money Laundering Regime,29 workshops were held to train government officials to combat money laundering offences and methods. The validation views the TA projects as providing significant contributions to important areas and to the government’s recognition of the value addition of ADB operations.

2. Progress Toward Sector Outcomes

48. This validation is based on an analysis of the achievement of the targets in the CPS results framework, as reported in the CPSFR. In several cases, the latest available data on indicators are older than the 2015 data that is ideally required. Appendix 2 of this validation report summarizes the sector outcomes in the CPS, 2012–2016 and ICPS, 2014–2016.

49. The validation reviewed whether the targets adopted in the CPS and ICPS were achieved. Table 7 summarizes the assessed progress toward sector outcome indicators and substantial achievements. Detailed information on baselines, targets, and actual achievements is provided in Appendix 4. There is no sector description or outcome statement for PSM, despite its importance, since it was formally added only in 2015.

50. There are 17 indicators in the ICPS, but targets for only five were achieved and two are likely to be achieved by 2016. The targets for five are unlikely to be achieved by 2016, the targets for three cannot be assessed at this time with the available data, the target for one was not achieved, and the target for one had no data available. Thus, 41% of the ICPS targets were achieved or likely to be achieved. In large sectors, one of the three ICPS indicators in transport is likely to be achieved; in energy, one of the two ICPS indicators was achieved; and the ICPS indicator in agriculture and natural resources is likely to be achieved. The validation regards the ICPS indicators as key indicators for this evaluation, since they were revised to respond to the situation then prevailing. There were 19 indicators in the CPS, but targets for only seven were achieved or are likely to be achieved, the targets for five were unlikely to be achieved, the targets for 3 needed recent data to be assessed, and the targets for 4 had no data available. Thus, 37% of the CPS targets were achieved (if those that could not be assessed are excluded, 58% of the targets were achieved). If the validation uses the CPS indicators, the results are nearly the same. A major reason for projects not achieving

27 ADB. 2012. Promoting Inclusive Growth. Technical Assistance Number: TA-8241-MON. Manila. 28 ADB. 2015. Strengthening Hospital Autonomy. Technical Assistance Number: TA-9037-MON. Manila. 29 ADB. 2012. Strengthening the Anti-Money Laundering Regime. Technical Assistance Number: TA-8255-

MON.


targets presumably resulted from economic downtown in recent years, particularly for those closely related to economic activities.

Table 7: Summary of Progress toward Sector Outcomes to which ADB Contributes

Government Sector Objectives

Sector Outcomes that ADB Contributes to and

Indicators

Summary of Progress toward Sector Outcomes (Achievement of Indicators and Progress)

Transport (Core Areas 1 and 3: Infrastructure, and Regional Cooperation and Integration) Regional trade development

Improved competitiveness of Ulaanbaatar (removed from ICPS, 2014–2016)

Improved access of rural populations to markets and public services

Increased capacity of the transport sector institutions and industry

More efficient movement of people and goods in urban and rural areas and across borders

Evaluation mission comment: Given the emphasis on passenger access in rural and urban areas, alternative wording may have been more suitable: “More efficient and connected movement of goods and passengers domestically and across borders and improved access of people in urban and rural areas.”

Of three ICPS indicators, one was achieved. One indicator on “freight turnover”—is likely to be achieved. Two indicators were very challenging (e.g., the CAREC corridor target speed was to be quadrupled, and the target to connect aimags with a paved road was to be 100%, from a baseline of 33% in 2009).

Of four CPS indicators, one was achieved.

A road between Ulaanbaatar and Zamyn-Uud was completed in 2014 under the Regional Road Development Project (ADB financed 428 km), which reduced the travel time by 50% and increased traffic by 26% from 2012 to 2016. A road between Yarant and Khovd was completed in 2015 under the Western Regional Road Corridor Investment Program-Tranche 1, which reduced the travel time by 50% and increased annual traffic by 30%.

Energy (Strategy 2020 Core Area 1: Infrastructure) Energy security

Improved energy access (removed from ICPS, 2014–2016)

Energy conservation (removed from ICPS, 2014–2016)

Energy efficiency and security (added to ICPS, 2014–2016)

Renewable energy (added to ICPS, 2014–2016)

Improved energy access and efficiency in urban centers and remote areas

Of the two ICPS indicators, that on the electrification rate was achieved but the indicator on electricity consumption was not achieved.

Of the two CPS indicators, one was achieved and another needs recent data to be assessed.

ADB financed transaction advisory services to support processing the CHP5 PPP project. However, the project was not approved in 2016.

Education (Core Area 5: Education) Improved quality, access, efficiency, and effectiveness of the education sector

Improved educational attainment and improved quality, access, efficiency, and relevance in secondary education, higher education, and TVET

Of the two ICPS indicators, neither was achieved. One indicator on “employment rates of graduates from TVET” needs recent data and another indicator on “gross enrollment ratios” is unlikely to be achieved (one of three sub-indicators has no data and the other two sub-indicators are unlikely to be achieved).

Of the four CPS indicators, none was achieved. One indicator has no data and the other three are unlikely to be achieved.

The Education for the Poor—Financial Crisis Response Project ensured free meals for 148,000




Indicators


preschool children, and the procurement and delivery of 2.1 million free textbooks to about 152,000 pupils and about 95,000 teachers’ guides.

Enrollment for kindergartens increased as a result of the provision of 136 ger kindergartens. The adoption of the first policy document to regulate the preschool education service was an output under the grant for Early Childhood Education for Rural, Nomadic and Migrant Children.

Health (2020 Area: Other Areas of Operation) Millennium Development Goals’ achievement with improved allocative efficiency and greater pro-poor focus

Quality and financial accessibility of health services improved (removed from ICPS, 2014–2016)

More people enjoy improved social insurance, welfare, and health services (added in ICPS, 2014–2016)

Of the three ICPS indicators, two were achieved and one has no data. Indicators on universal coverage of citizens’ health insurance and the percentage of government health sector budget were achieved. The indicator on prevalence of hepatitis B and C has no data.

Of five CPS indicators, three were achieved and two has no data.

Under the Third Health Sector Development Project, more than 700,000 poor people gained access to better primary health care services.a The government revised the Social Health Insurance Law with ADB’s support. The revised law increases the coverage of health insurance, targeting the inclusion of low-income groups.

Water Supply and Other Municipal Infrastructure Services (Strategy 2020 Core Area 1: Infrastructure; Core Area 2: Environment [Livable Cities]) Improved financial sustainability of service provision

Enhanced investment in operations, including infrastructure maintenance (removed from ICPS, 2014–2016)

Improved urban environment, particularly improved air quality and reduced soil and water pollution

Reduced urban congestion and improved urban efficiency

Greater availability of municipal services and improved living conditions in urban areas

More people enjoy improved urban services and better living conditions in urban areas (added in ICPS, 2014–2016)

Of the three ICPS indicators, all need to have recent data to be assessed. Indicators on water consumption in ger areas, drinking water in urban areas, and sanitation facilities in urban areas have only 2014 data.

Of the four CPS indicators, two were achieved and two need recent data.

The Urban Development Sector Development Project contributed to an overall improvement in living conditions and the quality of over 300,000 residents in ger areas. Connecting 91 water kiosks to the centralized water system enabled access to safe drinking water to over 40,000 households at a cheaper cost than previously.

Finance (Core Area 4: Finance) More efficient financial intermediation to support private sector growth, economic diversification, long-term investment, innovation, and access to

Increased use of more efficient financial intermediation by private sector enterprises and individuals (added to ICPS, 2014–2016)

Of the three ICPS indicators, those on “bank credit to GDP” and “total bonds outstanding as a % of GDP” were achieved. The remaining indicator on “SME turnover” appears unlikely to be achieved.




Indicators


finance (added to ICPS, 2014–2016).

There is no CPS indicator.

The TA for Promoting Inclusive Financial Services for the Poor contributed to an increase in the number of clients for savings and credit cooperatives from 15,000 in 2019 to 41,000 in 2015.

Agriculture, Natural Resources, and Rural Development (Area: Other Areas of Operation) Improved environmental services, quality in ecosystems, and agricultural production (added to ICPS, 2014–2016).

Increased productivity in the agriculture sector in line with the national green development policy (added to ICPS, 2014–2016)

One ICPS indicator is likely to be achieved.

There is no CPS indicator.

The Agriculture and Rural Development Project supported 12 enterprises to raise the quality of premium-value Mongolian agriculture products in selected niche markets. It played a pivotal role in economic diversification.

ADB = Asian Development Bank, CHP5 = Combined Heat and Power Plant 5 project, CPS = country partnership strategy, ICPS = interim country partnership strategy, PPP = public–private partnership, TVET = technical and vocational education and training. a ADB. 2016. Completion Report: for Third Health Sector Development Project in Mongolia. Manila. Source: Asian Development Bank’s Independent Evaluation Department.

3. Rating

51. Good progress has been made toward achieving project outputs and outcomes. Significant progress has been made in each sector. The rating for each of the 13 reviewed projects was highly effective or effective. However, only 41% of the ICPS targets were achieved or likely to be achieved. Many ICPS targets were not achieved due to the unexpected economic downturn. Overall, this validation rates ADB’s program less than effective.

C. Efficiency

52. The assessment of efficiency considers how well ADB’s sector support has been delivered over the evaluation period. The CPSFR examined the following major criteria: (i) the efficiency ratings of completed projects, including the economic internal rate of return (EIRR) of projects and programs, where applicable; (ii) the performance of ADB’s portfolio in terms of contract awards, disbursements, and other portfolio performance indicators; and (iii) the quality and timeliness of monitoring and evaluation arrangements.

53. Start-up delays. The average time from approval to effectiveness was 6.4 months in 2011 and 14.4 months in 2015. However, two projects30 took an exceptionally long time to become effective for exceptional reasons; if they are excluded to see the efficiency in normal cases, the average approval time from approval to effectiveness was 6.7 months. The ADB-wide average time was 7.5 months in 2011 and 6.9 months in 2015, so the performance in Mongolia was better than the ADB average if the two exceptional cases are excluded. In fact, the Mongolia Resident

30 The Urban Transport Development Investment Program (tranche 1), which was approved in November

2012, took 31 months to become effective, and the Payment System Modernization Project, which was approved in November 2013, took 21 months to become effective. Declaration of effectiveness for these projects was suspended due to exceptional reasons.


Mission had good partnerships with parliament members to facilitate the ratification by the Parliament.

54. Implementation delays. Implementation delays have largely been attributed to changes of governments and counterpart staff during the period. The average contract award ratio for project loans was 34.2% in 2012, 7.3% in 2013, 5.4% in 2014, 25.9% in 2015, 11.9% in 2016, while the ADB average was 24.9% in 2012, 19.8% in 2013, 23.9% in 2014, 22.9% in 2015, and 23.7% in 2016. New lending amounts increased from 2014 which implies that the contract awards ratio would tend to be lower than the ADB average, making it unfair to compare the Mongolia and ADB averages in 2014–2016. The reason the contract award ratio in Mongolia was higher than the ADB average in 2015 was that a major civil works contract valued at about $90 million was awarded under the Western Regional, Road Corridor Investment Program (tranche 2), which was approved in May 2014. Given the size of the total portfolio, one large civil work contract can have a disproportionate effect on the contract awards ratio. Comparing the 2-year average contract awards ratio in 2012 and 2013, the ratio in Mongolia was 20.8% against the ADB average of 22.4%.

55. The average disbursement ratio for project loans was 13.4% in 2012, 17.0% in 2013, 16.6% in 2014, 7.7% in 2015, 10.5% in 2016, while the ADB average was 17.9% in 2012, 17.8% in 2013, 18.2% in 2014, 17.1% in 2015, and 18.2% in 2016. The disbursement ratios were much lower than the ADB average in 2015 and 2016. Since the ADB average undisbursed percentage of project loans is about 80%, 2 years after approval, the lower disbursement ratios in 2015 and 2016 are reasonable given the rapid increase of the portfolio since 2014. The 2-year average disbursement ratio in 2012 and 2013 was 15.2% in Mongolia against the ADB average of 17.7%. Implementation has been consistently delayed, as can be seen by the average extension of loan closing dates of 2 years (although this is the same as the ADB average). In conclusion, the low ratios for contract awards and disbursements in Mongolia in 2012 and 2013 indicate implementation delays.

56. The validation regards the frequent changes in counterpart and procurement staff at many government agencies as the main reason for the implementation delays. Others included (i) a prohibition on advance contracting before loans are effective, which means consultant recruitment starts only after loans become effective, and (ii) cessation of civil works during winter because of the severe weather.

57. Economic internal rates of return. Of the 18 completed projects, only 3 had recalculated EIRRs at completion (among three, only one was validated). The recalculated EIRRs all exceeded the threshold of economic viability. The one available project performance evaluation report, for the Customs Modernization Project,31 recalculated the EIRR at 16.4%, which was lower than that estimated both at appraisal (19.6%) and at completion (37.2%), but still higher than the threshold. Since the number of projects is small, it is difficult to generalize the results for all ADB programs, but the results are positive. No project conducted unit cost analysis.

58. New lending approach. The CPSFR mentions the efficiency gained through use of PBLs and a two-step lending process through financial institutions. The validation acknowledges that these two approaches appear to have a valuable continuing role in Mongolia, with efficiency gains for ADB and the government. However, while PBLs have lower transaction costs, not all of Mongolia’s development support is necessarily best

31 IED. 2016. Performance Evaluation Report: Customs Modernization Project in Mongolia. Manila: ADB.


delivered by PBLs. Conventional projects and programs continue to be relevant because of the standards, technology, and capacity building that ADB can and should provide.

59. Steps to improve project efficiency. Several steps were taken to improve project efficiency and enhance the prevailing enabling environment. Although the CPSFR did not mention it, the resident mission increased the amount of tailored procurement training, mainly targeted at new counterpart staff and responding to the individual needs of the counterparts. Training programs were held eight times in 2012 and 22 times in 2016. As discussed in the CPSFR, other steps included (i) outposting of international staff from headquarters to the Mongolia Resident Mission to address specific sectors (although the national officers working on several sectors are doing a professional and diligent job); (ii) using MFFs for complex projects, which provides a long-term perspective for engagement and permits detailed designs of subsequent tranches to be prepared at an early stage, thus reducing implementation delays and minimizing cost overruns (because the cost estimation is based on the experience of earlier tranches and is therefore more accurate); (iii) requesting the government to shift procurement responsibility gradually from line ministries to the Government Procurement Agency for future projects; and (iv) financing counterpart funding where needed though it should be financed by the government and minimizing counterpart financing requirements for new projects. The CPSFR (Figure 3) shows that the number of problem projects decreased from two to zero from 2012 to 2015, while potential problem projects increased from three to four (one transport, one health, and two WUS).32

60. ADB monitoring. The validation agrees with the CPSFR’s assessment of the adequacy of supervision and the advantages of having resident-mission-based project officers (international and national) available for a quick response. The CPSFR mentions the value of the East Asia Department’s quarterly project reviews since 2014, although no minutes of these reviews appear to have been taken.33 ADB’s reporting of sector results to date is a positive sign of efficiency and a sign that indicators are being used as a regular reporting mechanism.34

61. Rating. Of the 13 closed loans and grants during 2012–2016 with ratings on efficiency, 2 projects were rated highly efficient (none was validated), 10 efficient (4 were validated), and 1 less than efficient (validated). The average contract award and disbursement ratios in 2012 and 2013 were lower than the ADB average. A major cause of delays in procurement was the frequent government changes which led to frequent changes in counterpart staff. Overall, this validation rates ADB’s program efficient.

D. Sustainability

62. The assessment of sustainability according to the CAPE and CPSFR guidelines of 2015 considers whether the outputs and outcomes of the various sector programs are likely to be sustainable over the medium term—technically, financially, environmentally, politically, and institutionally. Also, para. 43 of the guidelines requires that the rating should assess the “extent to which the outputs are likely to be maintained after the completion of the interventions for the design life of the project outputs (as specified in the original project documents).” The CPSFR considered four criteria: (i) government ownership of and commitment to the project objective, (ii) adequacy of funding for 32 A project is given a “potential problem” rating when there is a 25% gap between elapsed project time and

cumulative disbursements under the project. 33 During the mission to Mongolia, members of the mission were advised that minutes were not taken. 34 Footnote 2, Appendix 3.


operation and maintenance, (iii) institutional capacity to ensure sustainability, (iv) degree of policy support, and (v) sustainability of projects.

1. Government Commitment and Capacity

63. The CPSFR describes how ADB responded to changes in government priorities and the enabling environment by (i) continuing its dialogue with government agencies and ministers; (ii) focusing lending operations on basic social needs and supporting infrastructure; (iii) taking actions to institutionalize appropriate governance mechanisms (laws and regulations), developing IT systems, providing support to a national procurement system, and strengthening human and technical capacity at national and sector levels; (iv) flexibly responding to government budgetary and technical needs; and (v) making effective use of a wide array of available sovereign and nonsovereign lending operations, JFPR, and other grants and TA to address specific needs, in addition to mobilizing substantial cofinancing. ADB, together with the World Bank, JICA, and other development partners, maintained informal monthly coordination following the discontinuation of formal government-organized coordination after June 2012.

64. ADB’s approach appears to have been useful in mitigating the risks arisen from frequent government changes. These risks included: (i) frequent changes in policy directions and priorities at sector and project levels; (ii) interruptions in continuity in agency responsibilities; and (iii) counterpart staff turnover when there is a change in government. There are promising signs that the next 4 years will provide more stability, particularly for continuity of policy directions and agency responsibilities, but there is a risk that counterpart staff may be changed if ministers are changed. This risk will be mitigated to some extend by the intensive training programs provided by the resident mission. The new government re-started donor coordination meetings in December 2016. It is a positive sign that partnerships between the government and its development partners are likely to be maintained over the next few years.

2. Sustainable Financing and Institutional Capacity

65. The CPSFR identifies increasing concerns about the sufficiency of recurrent financing to ensure adequate operation and maintenance (O&M) for Mongolia’s infrastructure and services in general, and those supported through ADB’s operations, given the government’s highly constrained fiscal condition.35

66. Roads. Roads are ADB’s largest sector of operations. The existing transport infrastructure needs to be maintained before new investments are made. About 40% of the 2,600-kilometer paved national road network requires urgent periodic maintenance or rehabilitation, but maintenance budgets are significantly underfunded.36 However, on the north-south corridor, the validation noted that only very short sections from Zamyn-Uud to Ulaanbaatar (not from Ulaanbaatar to Zamyn-Uud) were in need of urgent maintenance or rehabilitation. Under the Regional Road Development Project, a weigh station was established in Zamyn-Uud to check the overloading of trucks heading to Ulaanbaatar. When it was established in 2014, about 40% of trucks were overloaded but this decreased to 10% after the weigh station was in place (trucks are not allowed to pass through the station without unloading their overweight loads). In practice, the validation observed that the ADB-financed section from Zamyn-Uud to

35 Footnote 2, paras. 65–70. 36 ADB. 2015. Connectivity for Growth. Manila (TA 8465-MON). See Table 3.3 and section 3.2.2.


Sainshand was well maintained. In the validation’s view, (i) establishing a system to avoid overloading (rather than merely funding a maintenance budget) is important, and (ii) the project successfully implemented a show case to improve the sustainability of the road sector (the same component is being implemented under the Western Regional Road Corridor Development Project).

67. Energy, water, and sanitation. Most public utilities operate at a loss because of the government’s control of tariffs, which may lead to inadequate maintenance and challenges in undertaking new investment. The government’s control of utility tariffs is a reason for the delay of the proposed CHP5 PPP project. Domestic power tariffs are still below full cost recovery levels, despite progress toward setting up a modern energy regulatory regime. For water supply and sanitation tariffs, each tariff increase has to be approved by the Water Services Regulatory Commission. While infrastructure is generally old, tariffs have not kept pace with the cost of service provision and the need for new investment. ADB’s latest 2016 sector assessment points to “...limited and variable successes in raising tariffs for urban services, resulting in underfunding of O&M.”

68. Education. The government, with international support, has expanded the number of kindergartens during 2012–2015, but there have been limited increases in the number of primary and secondary facilities, mainly in Ulaanbaatar, as shown in Appendix 4. Although the gross enrollment rates are improving, the continued growth in students in the coming years will strain what is already an overtaxed system. The cost of running preschools, and primary and secondary schools is funded by the government budget. Adequate recurrent finance and new investment in facilities are essential to maintain adequate quality and keep pace with the demand for education in Ulaanbaatar.

69. Health and social services. Health care facilities are financed from the state budget, the Health Insurance Fund, and self-generated revenue (co-payment, fee for service, and renting of rooms). A social health insurance scheme was implemented in 1994 and has become a stable source of health financing. However, the Ministry of Finance appears to reduce state funding whenever the Health Insurance Department increases tariffs, thus creating risks to the quality and coverage of rural health services that are costly to provide.37 Funding by the Ministry of Finance needs to be stable and predictable. ADB’s capacity development TA project, which was approved in 2013, aims to support the strengthening of the health insurance system.

70. Agriculture and natural resources. ADB’s support has to be directed at local communities so they can provide the water stations that previous self-evaluations have rated likely sustainable or better. ADB’s support under the Agriculture and Rural Development Project (original and additional financing) has supported, and is supporting, local ANR enterprises to expand markets and become more profitable. ADB’s nonsovereign lending—which provides financing at favorable terms to micro, small, and medium-sized enterprises via local banks—has supported sustainability.

71. Overall. At the macroeconomic level, ADB’s support via the recent PBL and the policy and advisory TA on Public Finance Resource Management (on public debt management, cash management, and the establishment of a sovereign wealth fund) is

37 World Health Organization 2013. Mongolian Health Systems Review. Report Vol. 3, No. 2; ADB. 2014.

Consultant’s Report: ADB TA 8466 MON: Strengthening the Health Insurance System of Mongolia: Provider Payments Systems & Diagnostic Related Groups Main Issues/Challenges and Options to Strengthen the DRG System in Mongolia. Report No. 5, Discussion Paper. Manila.


important for maintaining fiscal stability. In addition, the tight fiscal outlook raises questions about which sectors and what form of assistance should be prioritized for ADB support. It appears that priority should be given to (i) helping the government meet its recurrent financing needs and strengthening capacity building for essential health and social protection and education services, and (ii) providing essential infrastructure. The present government budget policy appears sound since it prioritizes these, including maintenance of infrastructure. ADB is already actively supporting efforts to loosen undue government control over tariffs, and supporting improved O&M for roads and utility providers.

3. Rating

72. Of the 13 closed loans and grants during 2012–2016 that have ratings on sustainability, 4 were rated most likely sustainable (1 was validated), 8 likely sustainable (4 were validated), and 1 less than likely sustainable (not validated).

73. With regard to program sustainability, although there is a positive sign of reducing overloading in transport, the validation highlights the following risks: (i) relocation of counterpart staff due to frequent government changes, leading to changes in priorities at the project level and project design changes; and (ii) funding shortages leading to cuts in programs (an ADB loan was provided to fund short-term revenue shortages, which if unaddressed, would have resulted in significant cuts in welfare programs in 2015).38 Most public utilities operate at a loss because of the government’s control of tariffs, which may lead to inadequate maintenance and challenges in undertaking new investment. Domestic power tariffs are still below full cost recovery levels, despite progress toward setting up a modern energy regulatory regime. In education, the continued growth in students in the coming years will strain what is already an overtaxed system. In health and social services, health care facilities are financed from the state budget, the Health Insurance Fund, and self-generated revenue. However, state funding appears to be reduced whenever tariffs are increased, thus creating risks to the quality and coverage of rural health services that are costly to provide. Adequate recurrent finance and new investment in facilities are essential to maintain quality and keep pace with the demand for education. Although the government intends to prioritize the budget for recurrent funding, this may be threatened by economic downturn, possibly leading to inadequate maintenance of infrastructure and a reduction in the quality of essential health and education services. Although project ratings were overall satisfactory considering the key risks to long-term sustainability in Mongolia, this validation rates the ADB program less than likely sustainable.

E. Development Impacts

74. The assessment of development impacts refers to the extent to which ADB’s program has helped the country make sufficient progress toward achieving ADB’s CPS and ICPS objectives. Performance was assessed against progress toward achieving (i) the overall development goals; (ii) sector goals; and (iii) crosscutting thematic impacts. The CPSFR’s assessment of progress toward achievement of sector goals has already been discussed under effectiveness.

38 ADB. 2015. Report and Recommendation of the President to the Board of Directors: Proposed Policy-Based

Loan to Mongolia for the Social Welfare Support Program. Manila (Loan 3297).


1. Progress Toward Goals

75. Six country development goals were set up in the CPS and four country development goals were set up in the ICP. Of the four goals, two goals are unlikely to be achieved, one goal was not measurable, and one goal for the MDG targets has been partially achieved, as shown in Appendix 4. Of the six CPS goals, two goals are likely to be unachieved, three goals was not measurable or have no available data, and one goal for the MDG targets has been partially achieved. These goals were derived from the government’s policies and strategies. By their nature, they are not solely related to ADB-supported sector strategies, and all but two are beyond the government’s control. Accordingly, while it appears that most goals will not be achieved by the end of 2016, external factors (such as economic circumstances) and internal factors (such as political changes) contributed to this underachievement, reflecting concerns about the sustainability of program results.

2. Pursuing Sustainable Development

76. As shown under effectiveness, ADB has made good efforts to mainstream gender, climate change, and environmental issues across sectors. The need to provide continual and targeted capacity building for implementation is recognized by the CPSFR to improve the sustainability of intended benefits.39 ADB has provided such capacity development support through 22 TA projects and other activities, but some of the benefits may have been lost due to frequent staffing changes. The launch of the country’s Sustainable Development Vision in 2016 showed that the government was paying attention to the Sustainable Development Goals as well as the current MDG-led NDS, 2008–2021. 77. Partnerships. ADB has maintained cooperative and proactive relations with Mongolia’s many other development partners. As identified in the CPS, and continued under the ICPS, ADB sought to mobilize climate funds, with some success. ADB has also been successful in arranging some $29.5 million of cofinancing, almost all for the health sector. Through its grant and loan operations, mainly in the ANR sector, ADB has worked with many local civil society organizations to encourage more sustainable development practices, and virtually all these operations have performed well.

3. Mitigating Impacts of Economic Cycles

78. The CPSFR noted the comprehensive range of additional activities undertaken by ADB to mitigate the impacts of economic cycles. These included (i) strengthening financial and judicial systems, (ii) improving public finance resource management, (iii) improving education, (iv) enhancing regional cooperation and trade policy to provide better access to external markets, (v) providing finance and capacity development to Mongolia’s enterprises to increase their capacity and value addition, and (vi) providing PBLs to help stabilize the economy and provide important protection for the poor.40 By April 2016, the Parliament had approved the Comprehensive Macroeconomic Adjustment Program, amended the Fiscal Stability Law, and made the Budget Transparency Law effective. The CPSFR recommends greater use of PBLs and other mechanisms to achieve both economic stimulus and direct support to vulnerable populations. The validation considers the range of measures that ADB initiated appropriate and by and large successful. It also agrees that PBLs may have a valuable

39 Footnote 2, para. 40. 40 ADB 2016. Progress Report on Tranche Release: Social Welfare Support Program in Mongolia (Second

Tranche). Manila (Loan 3297)


role in future, but each PBL needs to be examined on its merits to ensure it continues to support targeted programs and policy change as effectively as possible. ADB appears to have taken an important step toward improving governance and transparency in the mining sector through its TA loan to Erdenes Mongol LLC, an initiative designed to restore investment confidence in the mining sector. However, weaknesses remain in facilitating PPPs because of legal and capacity constraints and the recent lack of market stability for potential investors.

4. Rating for the Sector Program

79. The national poverty rate declined from 27.4% in 2012 to 21.6% in 2014. ADB contributed significantly to social protection improvement through a combination of policy reform support and project funding (e.g., health insurance coverage increased from 80% in 2010 to 97.8% in 2013). At the project level, of the six closed loans and grants between 2012–2016 with ratings for impact, five were rated significant (2 were validated and rated for development impacts, 2 were validated but not rated, and 1 was not validated); and one moderate (validated and rated for development impacts). However, the validation notes that, of the proposed country development goals (as identified in the CPSFR), only one had been partially achieved by 2015, and goals such as the creation of 40,000 jobs a year and the increase in per capita GDP were yet to be achieved as a result of the economic downturn. This validation therefore rates the development impacts of ADB’s sector program less than satisfactory.

5. Progress on Crosscutting Thematic Issues

80. The CPS set up the five thematic drivers of development change: (i) gender, (ii) governance, (iii) private sector development, (iv) regional cooperation, and (v) environmental sustainability. The ICPS continued to emphasize the thematic drivers, particularly private sector development, by improving access to finance for SMEs and support for agriculture. The importance of maintaining social protection programs is apparent from the positive achievements on health and education. ADB, by virtue of its comprehensive support for these sectors, has assisted in the achievement of individual targets. Continued attention by the government and its development partners is required to ensure that progress in these areas continues.

81. Gender. The CPSFR states that “closed social protection, health and urban sector projects are deemed effective in delivering gender equality results.” The validation agrees, since relevant projects are usually classified as gender equity or effective gender mainstreaming. The validation notes that, for ANR, the Agriculture and Rural Development Project (additional financing and original project) and the Integrated Livelihoods Improvement and Sustainable Tourism in Khuvsgul Lake National Park Project are also classified as “effective gender mainstreaming.” The CPSFR identifies the need to expand gender concerns across all sectors, including infrastructure. The Ulaanbaatar Urban Transport Project–Tranche 1 and the Ulaanbaatar Urban Services and Ger Area Development Program–Tranche 1, which are classified as “effective gender mainstreaming” provide good examples of how such mainstreaming may be achieved in future operations.41 However, the challenge of incorporating gender elements in road subsector projects was noted.

41 They start from being designed to benefit a wide range of vulnerable people, including women and their

families, and then provide special features to benefit these groups (e.g., safety features, inclusive design of facilities).


82. Private sector. ADB’s trade financing facility, nonsovereign senior lending to local banks, and credit guarantees through the Agricultural and Rural Development Project (original and additional financing) have all supported the development of SMEs in Mongolia. The TA provided under the ANR project has helped to improve marketing and branding to support value creation in dairy, meat processing, leather, wool, and cashmere products. ADB has supported (i) capital market development during 2011–2014 through a policy and advisory TA project, (ii) a proposed credit guarantee system for economic diversification through a project preparatory TA project, and (iii) PPPs through a policy and advisory TA project for developing a conducive environment for PPPs. Transaction advisory services for the CHP5 project have been provided since 2014. However, PPP investments in power plants are being delayed by tariff and other issues, such as an unresolved tension in Mongolia’s law, which mandates tariffs to be based on the real costs of operations, yet requires them to be affordable to consumers. The Ulaanbaatar School Concession Program was first planned by ADB as a standby for 2015 in the COBP, 2014–2016, accompanying the ICPS, 2014–2016, to address bottlenecks in the capacity for primary and secondary education primarily in Ulaanbaatar, but this has been dropped for similar reasons. Currently, ADB is supporting Ulaanbaatar Municipality in undertaking a broader range of municipal services via PPP arrangements through a capacity and development TA project approved in 2015. In general, the validation supports the CPSFR’s view that ADB has effectively promoted private sector development in Mongolia.

83. Regional cooperation. The validation agrees with the conclusion of the CPSFR that ADB has actively promoted regional cooperation via the CAREC program through investments in hard and soft infrastructure to improve Mongolia’s integration with the PRC, Central Asian, and Russian markets.42 Major activities included two international highways, a logistics facility at Mongolia’s principal border town with the PRC, improving customs and sanitary and phytosanitary (SPS) services, and building capacity, particularly in trade facilitation. ADB supported the strategically important 770 km corridor between Ulaanbaatar and Zamyn-Uud (the border with the PRC). The Regional Road Development Project marked the full operation of the corridor in 2014. The travel time was reduced to 6-7 hours in 2014 from 14 hours before the road was built with pavement. Traffic increased 26% from 2012 to 2016 in spite of the economic downtown. In response to the expected increase in traffic and to cultivate further demand, two loans were approved in November 2015 to improve the quality and speed of facilitating cross-border movements. A soon-to-be-completed TA project approved in 2014 has supported the development of an effective trade policy. Linking transport investments have also been provided, although the Regional Logistics Development Project, approved in 2010, has been delayed for 3 years. ADB has adopted a series of projects to develop the corridor effectively.

84. Climate change and sustainable development. ADB’s efforts in support of climate change adaptation and mitigation are mentioned throughout the CPSFR. However, few projects have a strong climate change classification. An exception is the Urban Transport Program for Ulaanbaatar, which is classified as ”high” for mitigation. Proposed loans on energy efficiency, and the recent emergency grant for the dzud disaster response also have direct links to mitigation and adaptation. Climate proofing and climate resilience are now routinely addressed in ADB’s infrastructure operations, including in Mongolia. As mentioned in the CPSFR, ADB has approved three capacity development TA projects and one policy and advisory TA project, primarily for climate change adaptation.43 Of the capacity development TA projects, the recently approved 42 Footnote 2, para. 56. 43 Footnote 2, paras. 14 and 56.


Strengthening Capacity for Environmental Economic Accounting Project at the National Statistics Office is oriented to both ”green development” and “sustainable development.” ADB has mobilized a grant from the Global Environment Facility for the Ulaanbaatar Urban Transport Program, approved in 2012, for studying low-emission vehicle technologies. However, due to delays in implementation of tranche 1 of the program, this grant remains unutilized. As mentioned in para. 54 of the CPSFR, ADB has also mobilized a $10 million grant from the Japan Fund for Joint Crediting Mechanism, but its use has been delayed because of slow progress in completing the CHP5 project. The CPSFR also notes that ADB has succeeded in gaining indicative approval for $29.7 million of grant funds from the Scaling Up Renewable Energy for Low Income Countries Program.

85. Governance. According to the CPSFR, two capacity development TA projects enabled the first steps to be made to strengthen governance, transparency, and efficiency in public financial management. The Mongolia National Audit Office was provided with training on public auditing, focusing on financial auditing.44 The same TA covered auditing training for projects financed by international financial institutions, and produced an audit manual for such projects. The other TA provided support to the Budget Investment Department and Mongolia Tax Authority of MOF to improve transparency and efficiency in budget planning, execution, monitoring, and taxation by using information and communication technology.45 The Transparency International Corruption Perception Index ranked Mongolia 72nd of 168 countries in 2015 with a score of 39, compared with 94th of 176 countries and a score of 36 in 2012.46

86. Knowledge sharing and capacity development. This issue is not included in the CPS, but the CPSFR reviewed the progress in this area and the validation has done the same.47 The CPSFR describes what appears to have been ADB’s de facto strategy for knowledge transfer (and retention). It mentions that some targeting of knowledge-sharing activities was aimed at organizations that are less subject to change, including specific government agencies, civil society, the private sector, and local government. Many TA projects and activities contributed to knowledge development—80% of TA approved after 2012 was for either capacity development or policy and advice. ADB’s knowledge products on the conflict between mining and agricultural uses of water and the current TA project on the Country Water Security Assessment are proving valuable.48 IED was informed that the latter study was requested by the Ministry of Environment and Tourism because of ADB’s Asian Water Development Outlook 2013, which surveyed key water security issues in the Asia and Pacific Region.49 The validation also notes the value of ADB’s efforts to update sector strategies and master plans for transport in 2015, energy in 2013, and education in 2009. Even if none of these have been adopted formally by the government, they have been actively used by it and by ADB’s development partners to guide the selection of sector interventions.

87. Holistic approach. ADB-financed projects are part of Mongolia’s overall infrastructure and social systems and to be effective ADB needs to work as part of those systems. For example, a distribution water system was installed in Sainshand under the Southeast Gobi Urban and Border Town Development Project, but a wastewater treatment plant was not built because of the government’s financial 44 ADB. 2013. Development of State Audit Capacity. Manila (TA number: 8504-MON). 45 ADB. 2014. Transparency and Efficiency in Public Financial Management. Manila (TA number: 8742-MON). 46 Perceived level of public sector corruption ranges from 0 (highly corrupt) to 100 (very clean). 47 Footnote 2, para. 59. 48 ADB. 2014. Demand in the Desert: Mongolia’s Water-Energy-Mining Nexus. Manila. 49 ADB. 2013. Asian Water Development Outlook 2013—Measuring Water Security in Asia and the Pacific.

Manila. Asia-Pacific Water Forum.


constraints (this component was originally to be financed by the government). ADB provided additional financing to build the wastewater treatment plant. In the same way, several ADB projects for roads, border services, and logistics to improve the effectiveness of the Ulaanbaatar and Zamyn-Uud corridor were inter-related. The validation supports a holistic approach rather than widely scattered projects.

88. Rating. Significant progress was found in the five CPS thematic drivers of development change. Private sector development by improving access to finance for SMEs in agriculture was emphasized in the ICPS, and there was significant achievement in this area. Overall, the validation rates the development impacts of the crosscutting work satisfactory. Combining the development impacts rating for the sector program and the crosscutting work, the validation rates the development impacts of ADB’s program less than satisfactory.

F. ADB and Borrower Performance

1. ADB Performance

89. The CPSFR assessed ADB performance according to the 2015 guidelines. It considered whether ADB had (i) prepared well-designed projects; (ii) been responsive to client needs; (iii) carried out procurement and supervision, and designed and implemented safeguards; and (iv) conducted policy dialogue, coordinated aid, and adhered to its policies.

90. The validation found that ADB is highly regarded by Mongolia’s government agencies, other development partners, and nongovernment organizations.50 As stated in the CPSFR, ADB has been a leader in aid coordination, working in close partnership with other key development partners. Some of ADB’s sector strategies (e.g., for education) and knowledge products are being used by other development partners to achieve aid coordination. The World Health Organization, in its 2013 assessment of assistance to Mongolia’s health system, cited international development organizations, particularly ADB, for their contribution to strengthening primary health care as a national policy.

91. The evaluation mission assessed the project designs and their links to desired sector outcomes (Appendix 2), and found them to be generally relevant and measurable, with well-chosen indicators. The continual engagement in ANR, education, and health, coupled with the use of MFFs for transport and urban development, has enabled ADB to engage in effective dialogue and to manage, to the extent possible, the risks in the enabling environment. ADB’s long-term engagement in the sector focuses on what the CPSFR termed as “urgent and specific needs” likely to engender the support of project officers, their agency executives, and politicians.51

92. ADB diligently supervised the program through adequately staffed semi-annual missions and resident mission staff. Selected operations were delegated to the resident mission, where there was a strong and active presence of international and national sector specialists. This was essential during the four political leadership changes during the CPS period. During 2014, ADB permitted counterpart funding to be financed by relevant project loans, thus overcoming one source of delay. Through annual country

50 The IED determination of nongovernment organizations’ views is admittedly based on evaluation mission’s

limited consultation in this mission. 51 Footnote 2, para. 61, (ii).


portfolio review missions and consultation meetings, ADB discussed and agreed on remedial actions with the borrower on key issues affecting quality, procurement, and implementation performance.

93. ADB supported the development of a national procurement system and strengthened safeguards. It has tried to strengthen the environment for PPPs, but with limited success. While enabling legislation for PPPs was passed in 2009, institutional and regulatory capacities still need to be developed, and the success will depend on sector-specific tariffs and other policies required to reduce regulatory and political risks to acceptable levels.

94. In late 2012, the government decided not to borrow from multilateral and bilateral development institutions. However, ADB continued to be one of Mongolia’s few development partners after the moratorium was introduced, and played a leadership role among the partners, most of whose new operations were interrupted. ADB helped to develop sector strategies (e.g., for energy, education, and transport), and these have been useful for both the government and its partners.

95. Rating. This validation concurs with the CPSFR and rates ADB’s performance satisfactory. The validation found that ADB is highly regarded by Mongolia’s government agencies, other development partners, and nongovernment organizations. ADB has made use of an extensive range of modalities in responding to urgent and specific needs, and has diligently supervised the program. As stated in the CPSFR, ADB has been a leader in aid coordination, working in close partnership with other key development partners. Some of ADB’s sector strategies (e.g., for education) and knowledge products are being used by other partners to strengthen aid coordination.

2. Borrower Performance

96. According to the CAPE and CPSFR guidelines of 2015, the assessment of borrower performance considers the following: (i) whether the clients and implementing agencies performed well in implementing or facilitating the achievement of strategic objectives; and (ii) what was the observed project implementation and monitoring capacity of executing and implementing agencies. The CPSFR examined the following: (i) ownership, (ii) leadership in aid coordination, (iii) participation in design, (iv) loan covenants and conditions, and (v) involvement during implementation including counterpart funding. The validation examines these points in the discussion below.

97. Staff turnover. Frequent government changes during the CPS period led to significant changes to ministry structures and the replacement of staff. From 2013, changes in the government’s political leadership meant ADB had to renegotiate business plans nearly annually. The CPSFR mentions that, as a result, processing of operations in some ministries was adversely affected.52 From 2014, there was more stability, as appointed staff usually had relevant experience and demonstrated commitment. However, during transitional periods, staff may have postponed important decisions until senior staff were appointed. When the government changed, important decisions on projects, including procurement, were suspended for four months in many cases.

52 Footnote 2, para. 95.


98. The CPSFR commended the Ministry of Construction and Urban Development for establishing a single steering committee for all its projects, headed by the state secretary. Energy sector meetings were held at the Ministry of Energy with the participation of development partners, and aid coordination at the Ulaanbaatar Municipality was good. These are positive signs of government leadership. In addition, ADB and the Municipality of Ulaanbaatar have maintained a positive relationship since 2011 through the Urban Transport Development Investment Program and the subsequent Ulaanbaatar Urban Services and Ger Area Development Investment Program.

99. Commitment to global development agendas. With the support of its development partners, the government showed commitment and continuity to the MDGs, as evidenced by the NDS 2008–2021, the adoption of the Green Development Policy in 2014, the Sustainable Development Vision in 2016 (Mongolia’s response to the Sustainable Development Agenda 2015–2030), and Mongolia’s ratification of the Paris Agreement on Climate Change in September 2016.

100. Covenants. Only the Social Sector Support Program (a PBL) and tranche 1 of the Western Regional Ring Road Corridor Project, were closed between January and August 2016. The CPSFR concluded that, in general, covenants for these projects had been complied with. However, insufficient counterpart funding led to delays throughout the CPS period and ADB had to allow counterpart funding to be financed by ADB loans.

101. Rating. While the CPSFR did not provide a rating for this category, this validation rates the borrower’s performance satisfactory. Although policy and project priorities as well as counterpart staff were changed due to frequent government changes, each government supported ADB’s program and stability in staffing increased from 2014. However, borrower performance could have been better in several respects. During the early stages of the CPS, political fluctuations led to significant changes in ministry structures and the replacement of staff, which resulted in significant delays in project implementation. In addition, ADB had to renegotiate business plans with some ministries almost every year.

G. Assessment of the Quality of the Final Review

102. The CPSFR generally follows the 2015 ADB guidelines (footnote 3). However, a comprehensive review of all projects and relevant sectors and a clearer set of summative lessons, differentiated from recommendations, would have been instructive, and allowed recommendations to emerge more clearly. For example, the explanation of positive results from a few projects is not enough to determine the achievement of criteria. Many explanations of achievements need more quantitative and objective descriptions. Overall, since the CPSFR describes the performance against the CPS well, the validation rates the CPSFR satisfactory.

H. Overall Assessment

103. The ADB program is rated less than successful on the borderline overall when integrating individual ratings for relevance, effectiveness, efficiency, development impacts, and sustainability. The derivation of the rating is shown in Tables 8 and 9.


Table 8: Ratings Comparison between the CPSFR and the IED Validation Report

Evaluation Criteria CPSFR

Ratings Validation

Ratings Reasons for Rating Deviations Relevance Highly relevant Relevant Actual loans approved during the ICPS

period were 31% lower than the target and the timing of the CPS should have been aligned with the political cycle.

Effectiveness Highly effective Less than effective Only 41% of ICPS sector outcome targets were achieved or are likely to be achieved.

Efficiency Efficient Efficient

Sustainability Likely Less than likely sustainable

Risks include the relocation of counterpart staff, and insufficient funding for recurrent expenditure under tight fiscal conditions.

Development impacts

Highly satisfactory

Less than satisfactory Of the four ICPS country development goals that can be measured, only one was partially achieved, two were unlikely to be achieved, and one was not measurable.

Overall rating Highly successful

Less than successful on the borderline

ADB performance Satisfactory Borrower performance Satisfactory CPSFR Quality Satisfactory ADB = Asian Development Bank, CPSFR = country partnership strategy final review, IED = Independent Evaluation Department. Source: ADB Independent Evaluation Department.

Table 9: Overall Score of Sector Programs and Country Partnership Strategy Crosscutting Objectives

Item Relevance Effectiveness Efficiency Sustainability Development

Impacts Overall Overall sector 2.0 1.0 2.0 1.0 1.0 1.4 Crosscutting objectives 2.0 2.0 Weighted score 2.0 1.0 2.0 1.0 1.5 1.5 Note: Overall rating is less than successful on the borderline. Source: Asian Development Bank Independent Evaluation Department.

CHAPTER 4

Issues and Recommendations

104. This chapter highlights issues that emerged from the validation and makes some suggestions that may prove useful for the new CPS. First, the CPSFR (section II) notes 21 key lessons and recommendations under the evaluation criteria (e.g. relevance, effectiveness). They are considered, in general, very relevant. However, because they are generated under each criterion, there is no overall distilling of lessons in the concluding section of the CPSFR. In addition, there is no prioritization of the lessons.

A. Issues

105. Finalizing the new CPS just before the new government took over resulted in a mismatch with the new government’s needs. The CPS was finalized in March 2012 and the new government was formed in June 2012. When the CPS was finalized, the national election was imminent and the CPS process should have anticipated that there might be changes in fundamental government policies. The new government showed more interest in rural areas, while the CPS excluded the agriculture. This validation concurs with the CPSFR and suggests that the next CPS be closely aligned with the political cycle. In addition, the validation recommends that the next CPS needs to allow a certain flexibility given the volatile political environment.

106. Weak capacity of counterparts, mostly due to staff turnover, affected ADB operations. ADB provided training to counterpart staff at ministries and government agencies. However, when the government changed, a number of the newly trained staff were transferred and some counterpart ministries were reshuffled. From 2014, when the new government was formed, there was more staff stability. However, another new government took office in June 2016, and it took four months to assign new staff and steering and procurement committee members at many ministries. Since continuity of staff is important for coordination between ADB and counterpart ministries and agencies, this issue needs to be addressed. Improved staff continuity will enable a substantial improvement in the efficiency and effectiveness of ADB operations. As the CPSFR proposed, the stationing of consultants at counterpart offices, as JICA does, may be an option to mitigate this weakness.

B. Recommendations

107. The CPSFR provides several valuable recommendations that are generally supported by this validation. The following suggestions may be useful for the preparation of the new CPS.

108. Promote diversification of the economy with a focus on improving the productivity of agribusiness small and medium-sized enterprises. Mongolia’s economy


has been largely dependent on the mining sector and, since commodity prices fluctuate, it is vulnerable to external economic shocks. Mongolia needs to diversify by developing other strong export-oriented sectors, e.g., value chains for Mongolia’s agricultural resources for export to nearby northeast Asian markets. However, most agro-enterprises are small and medium-sized enterprises (SMEs), and capable only of basic processing. There is limited capacity in production, marketing, and quality assurance, and inadequate access to finance. ADB needs to continue to provide support to improve the productivity of agribusiness SMEs through pilot projects and by improving physical connectivity across borders.

109. Reduce the delay in the implementation of projects. The major reason for the delays was the suspension of important decisions until new staff were assigned under new government and became familiar with their new tasks. To mitigate this risk, training to newly assigned staff, as has already been done by the resident mission, is crucial. Workshops should be organized for newly assigned counterparts and stakeholders. Since close communications and consultations between ADB’s project managers and counterpart staff are also very important, ADB needs to strengthen the resident mission, e.g., by increasing the number of outpostings of staff from headquarters.

110. Improve the value addition of projects in response to government needs by embedding innovative and knowledge solutions as part of the financing. One of the reasons that ADB remained as the sole multilateral development partner when a new government was formed in 2012 was that ADB focused on complex projects that required more than just financial support. Given the country’s capacity constraints, it is difficult for the government to design and implement complex projects on its own to meet the basic needs of the people. ADB needs to include innovative and knowledge solutions as part of its financing. ADB should also continue to make contributions to policy development and capacity development under TA projects. ADB has implemented a holistic approach in some important areas, including the strategically important North–South corridor. Since ADB’s resources are limited, it needs to focus on important areas and to combine several projects and TA projects effectively so they can act as successful model cases and improve the impacts of projects.

111. Prioritize and support maintenance expenditure of the government in infrastructure and health, and prioritize social protection activities as part of the new CPS. Under the current tight fiscal budget, recurrent government expenditure may be reduced. Maintenance budgets for roads are already underfunded. It may be more cost-effective to maintain existing roads rather than to invest in new ones. Health and social services also need recurrent budgets to maintain the quality and coverage of their services. During economic downturns, poor and vulnerable people will be most affected, so public resources need to be focused on them. ADB supported the health and social protection program during the CPS period. In light of substantial financing needs, continued financing support with focused policy actions will be needed for social protection during the next CPS period.

Appendixes

APPENDIX 1: LOANS, GRANTS, AND TECHNICAL ASSISTANCE PROJECTS COVERED, 2012–2016

Table A1.1: Closed Loans and Grants with Ratings, 2012–2016

No. Project Title

Loan/ Grant No.

Amount ($ million)

Cofinancing Approval

Date Account Closed Rating

Rele-vance

Effec-tiveness

Effi-ciency

Sustai-nability

Impact Source Source

Amount ($ million)

Agriculture and Natural Resources

1 Water Point and Extension

Station Establishment for Poor Herding Families

G9124 2.00 30 Jul 08 12 Oct 12 S HR FV FC LS NR ICM (Apr 2013)

2 Poverty Reduction Through Community Based Natural Resource Management

G9125 2.00 5 Aug 08 22 Jul 13 S RLV HFV FC MS NR ICM (Sep 2013)

Education 3 Third Education Development

Project L2238 13.00 GTZ,

UNICEF 0.69 21 Jun 06 26 Jun 12 S HR FV FC LS SG PCR (Sep 2012)

4 Education Sector Reform Project

G0125 10.00 21 Nov 08 6 Mar 15 S HR FV FC MS SG

PVR (Nov 2015), PCR (Mar 2015),

5 Education for the Poor—Financial Crisis Response Project

G0158 17.00 18 Sep 09 18 Aug 14 S R HFV FC LS SG

PVR (Jul 2015), PCR (Aug 2014)

6 Early Childhood Education for Rural, Nomadic, and Migrant Children

G9138 2.89 28 Aug 09 30 Jun 15 S NCR NCR NCR NCR NR ICM (Aug 2016)

Energy 7 Community Based Heating

Supply in Rural Remote Areas G9109 2.00 29 Jun 07 22 Aug 12 HS HR HFV HFC LS NR ICM (Dec 2014)

8 Energy Conservation and Emissions Reduction from Poor Households

G9127 2.00 23 Sep 08 15 Mar 14 HS HR FV HFC MS NR ICM (Dec 2014)

9 Demonstration Project for Improved Electricity Service to the Low Income Communities in Rural Areas

G9139 2.40 9 Nov 09 5 Dec 13 S R FV FC MS NR ICM (Dec 2014)

Finance 10 Promoting Inclusive Financial

Services for the Poor G9152 2.50 17 Dec 10 24 Aug 16 S NR NR NR NR NR ICM (Aug 2016)

Health and Social Protection 11 Social Sectors Support

Program L2523/ G0151

60.00 IMF, JICA, WB

342.00 24 Jun 09 30 Sep 12 S R FV LeFC LS SG PVR (Nov 2014), PCR (Mar 2013)

12 Third Health Sector Development Project

G0086 14.00 19 Nov 07 30 Jun 14 S R FV FC LS MD PVR (Dec 2015), PCR (Jun 2015)

13 Reducing Persistent Chronic Malnutrition in Children in Mongolia

G9131 2.00 16 Mar 09 13 Mar 14 HS R NCR NCR NCR NR ICM (Aug 2016)

Attachment y

37

Loans, Grants, and Technical Assistance Projects Covered, 2012–2016 37

No. Project Title

Loan/ Grant No.

Amount ($ million)

Cofinancing Approval

Date Account Closed Rating

Rele-vance

Effec-tiveness

Effi-ciency

Sustai-nability

Impact Source Source

Amount ($ million)

14 Protecting the Health Status of the Poor During the Financial Crisis

G9136 3.00 30 Jul 09 30 Apr 14 S NCR NCR NCR NCR NR ICM (Apr 2015)

Industry and Trade 15 Customs Modernization

Project G0070 0.50 20 Dec 06 11 Jan 12 S R FV FC LS SG PPER (Jul 2016),

PVR (Feb 2015) PCR (Mar 2014)

Transport and Information Communications Technology 16 Regional Road Development

Project L2087/ L2621/ G0199

61.10 Korea, PRC

25.40 22 Jul 04 (L2087);

30 Mar 10 (L2621/ G0199)

31 Dec 14 S R FV FC LeLS NCR PCR (Aug 2015)

17 Community-Based Local Road Upgrading and Maintenance in the Western Region

G9121 2.00 10 Jun 08 1 Jul 14 PS R NCR NCR NCR NCR ICM (Aug 2014)

Water and Other Urban Infrastructure and Services 18 Urban Development Sector L2301 37.33 19 Dec 06 18 Dec 15 S HR FV FC LS NCR PCR (Sep 2016) Total 235.72 368.09 FC = efficient, FV = effective, G = grant, HFC = highly efficient, HFV = highly effective, HR = highly relevant, HS = highly successful, ICM = implementation completion memorandum, L = loan, LeFC = less than efficient, LeLS = less than likely sustainable, LeS = less than successful, LS = likely sustainable, MS = most likely sustainable, NCR = no clear rating, NR = no rating, PCR = project completion report, PPER = project performance evaluation report, PRC = People's Republic of China, PS = partly successful, PVR = project completion report validation report, R = relevant, S = successful, SG = significant, WB = World Bank. Note: Grants that are fully administered by ADB were not included in the cofinancing column. Source: ADB Listing of Loan, Technical Assistance, Grant and Equity Approvals database; ADB Loan and Grant Financial Information Services, and ADB Project Records

38 Appendix 1

Table A1.2: Closed Loans and Grants with No Ratings, 2012–2016

Loan/Grant Amount

($ million) Cofinancing Loan Closing

No. Project Title Loan/

Grant No. Approval Effectivity Approved Current/ Actual Source

Amount ($ million) Original Actual Source

Agriculture and Natural Resources 1 Dzud Disaster Response G0475 6 Apr 16 13 Apr 16 2.00 2.00 11 Oct 16 11 Oct 16 PDS (Aug 2016) 2 Establishment of Climate-Resilient

Rural Livelihoods G9164 8 Jun 12 13 Jun 12 2.50 2.50 13 Dec 16 13 Dec 16 GAR (May 2012);

PDS (Aug 2016) Health and Social Protection 3 Access to Health Services for

Disadvantaged Groups in Ulaanbaatar G9115 19 Dec 07 25 Apr 08 2.00 1.83 - - 24 Apr 12 30 Aug 13 RRP (Nov 2007);

PDS (Aug 2016) Public Sector Management 4 Social Welfare Support Program L3297 29 Sep 15 13 Nov 15 150.00 150.00 - - 31 Dec 16 15 Jun 16 RRP (Sep 2015);

PDS (Aug 2016) Water and Other Urban Infrastructure Services 5 Community-Driven Development for

Urban Poor in Ger Areas G9106 2 Mar 07 14 May 07 1.50 1.48 - - 30 Jun 11 9 Jul 12 RRP (Feb 2007);

PDS (Aug 2016) Total 158.00 157.81 GAR = grant approval report; PDS = project data sheet; RRP = report and recommendation of the President. Note: Grants that are fully administered by Asian Development Bank (ADB) were not included in the cofinancing column. Closed loans with active supplementary loans are excluded since the projects are still ongoing. Source: ADB Listing of Loan, Technical Assistance, Grant and Equity Approvals database; ADB Loan and Grant Financial Information Services, and ADB Project Records (available: http://www.adb.org/projects/search/country/mon).

Attachment y

39


Table A1.3: Closed Technical Assistance Projects With and Without Ratings, 2012–2016

No. TA No. Project Title SEC TA

Type

Approved Amount ($‘000)

Approval Date

Account Closed Rating Source

1 7139 Agricultural Marketing and Brand Development ANR PA 2,000 29 Sep 08 31 Jul 13 S TCR (Jun 2014) 2 8299 Reforms in Technical and Vocational Education and

Training in Mongolia EDU PP 1,000 19 Dec 12 30 Jun 15 … …

3 7711 Capacity Building for Enhanced Partnership and Development Impact

EDU CD 600 14 Dec 10 31 Dec 14 … …

4 7571 Reforming Higher Education for a Knowledge Society

EDU PA 500 4 Aug 10 31 Mar 13 S TCR (May 2013)

5 7619 Updating Energy Sector Development Plan ENE PA 1,000 19 Oct 10 30 Dec 13 HS TCR (Feb 2015) 6 7502 Ulaanbaatar Low Carbon Energy Supply Project

Using a Public-Private Partnership Model ENE PA 3,000 26 Feb 10 31 May 12 … …

7 7462 Ulaanbaatar Clean Air ENE PA 500 14 Dec 09 1 Jun 12 S TCR (May 2013) 8 8757 Preparation of an Investment Plan for Scaling Up

Renewable Energy ENE CD 300 14 Nov 14 19 Jan 16 … …

9 8792 Supporting the Credit Guarantee System for Economic Diversification and Employment

FIN PP 500 4 Dec 14 31 Dec 15 … …

10 7971 Government Bond Market Development FIN PA 1,000 14 Dec 11 31 Dec 14 S TCR (Mar 2016) 11 7577 Public–

Private Partnership Development FIN PA 500 17 Aug 10 30 Sep 13 S TCR (Mar 2014)

12 7479 Transformational Mobile Banking Services FIN PA 400 18 Dec 09 31 Jul 13 S TCR (Jul 2014) 13 7397 Policy and Institutional Support for Banking Sector

Systemic Risk Management FIN PA 2,000 27 Nov 09 31 Oct 14 … …

14 7882 Fifth Health Sector Development Project HLT PP 700 7 Oct 11 30 Sep 12 … … 15 7175 Technical Assistance Completion Report HIV/AIDS

Prevention in ADB Infrastructure Projects and the Mining Sector

HLT CD 1,000 19 Nov 08 30 Sep 13 HS TCR (Oct 2013)

16 8241 Promoting Inclusive Growth MUL PA 1,000 06 Dec 12 31 May 16 … … 17 8236 Developing a Conducive Environment for Public–

Private Partnerships PSM PA 750 03 Dec 12 30 Dec 15 … …

18 8210 Preparation of Regulations and Capacity Development Plan for Involuntary Resettlement

PSM CD 200 12 Nov 12 31 Mar 14 S TCR (Jun 2015)

19 8504 Development of State Audit Capacity PSM CD 300 14 Nov 13 31 Mar 16 … … 20 7596 Managing for Development Results PSM PA 1,800 7 Sep 10 28 Feb 14 PS TCR (Sep 2014) 21 8985 Public-Private Partnership in Urban Public Transport

Sector of Ulaanbaatar TRA PA 350 5 Nov 15 30 Apr 16 … …

22 8465 Connectivity for Future Growth TRA PA 500 26 Sep 13 30 Jun 16 … … 23 7844 Road Sector Capacity Development TRA CD 2,000 11 Aug 11 31 Mar 15 PS TCR (Jun 2015) 24 7570 Preparation of a National Road Sector Capacity

Development Roadmap TRA CD 150 3 Aug 10 31 Mar 12 HS TCR (Jun 2012)

25 7556 Public Transport Information and Communication Technology

TRA CD 500 29 Jun 10 30 Sep 12 S TCR (May 2013)

26 7449 Regional Transport Development Project TRA PP 1,200 15 Dec 09 30 Jun 14 … … 27 7156 Urban Transport Development Project (with 2

supplementary grants) TRA PP 1,625 27 Oct 08 31 Dec 13 … …

40 Appendix 1

No. TA No. Project Title SEC TA

Type

Approved Amount ($‘000)

Approval Date

Account Closed Rating Source

28 7970 Ulaanbaatar Urban Services and Ger Areas Development Investment Program (with supplementary)

WUS PP 1,700 13 Dec 11 30 Sep 14 … …

29 7591 Ulaanbaatar Water and Sanitation Services and Planning Improvement

WUS PA 600 3 Sep 10 30 Sep 12 S TCR (Jun 2013)

TOTAL 27,675 … = not available, ANR = agriculture, natural resources, and rural development; APRV = approval date, CD = capacity development, EDU = education, ENE = energy, FIN = finance, HLT = health, HS = highly successful, MUL = multisector, PA = policy and advisory, PP = project preparatory, PS = partly successful, PSM = public sector management, S = successful, SEC = sector, TA = technical assistance, TCR = TA completion report; TRA = transport; WUS = water and other urban infrastructure and services. Source: ADB Listing of Loan, Technical Assistance, Grant and Equity Approvals database; ADB Loan and Grant Financial Information Services, and ADB Project Records (available: http://www.adb.org/projects/search/country/mon).

http://www.adb.org/projects/search/country/mon

Attachment y

41


Table A1.4: Active Unrated Sovereign and Nonsovereign Loan and Grant Projects, 2012–2016

No. Project

No. Loan/

Grant No.

Closing Loan Amount Cofinancing

Project Title Approval Effectivity Original Current Approved ($ million) Source

Amount ($ million) Source

A. Sovereign Agriculture and Natural Resources 1 39229 L3287/

L3288 Agriculture and Rural Development— Additional Financing

23 Sep 15 11 Jan 16 30 Jun 21 30 Jun 21 50.00 - - RRP (Aug 2015); PDS (Aug 2016)

2 48216 G9183 Integrated Livelihoods Improvement and Sustainable Tourism in Khuvsgul Lake National Park

7 Dec 15 16 Mar 16 30 Jun 20 30 Jun 20 3.00 - - RRP (Nov 2015); PDS (Aug 2016)

3 48236 G9187 Strengthening Community Resilience to Dzud and Forest and Steppe Fires

14 Sep 16 31 Jan 17 30 Apr 20 3.00 - - GAR (Oct 2016); PDS (Feb 2017)

Education 4 43007 L2766 Higher Education Reform Project 28 Jul 11 10 Jan 12 30 Jun 17 31 Dec 18 20.00 - - RRP (Jul 2011);

PDS (Aug 2016) 5 45010 L3243 Skills for Employment 16 Dec 14 2 Oct 15 30 Nov 19 30 Nov 19 25.00 - - RRP (Nov 2014);

PDS (Aug 2016) 6 49168 G9182 Improving School Dormitory

Environment for Primary Students in Western Region

26 Nov 15 16 Mar 16 30 Apr 19 30 Apr 19 3.00 - - RRP (Nov 2015); PDS (Aug 2016)

Finance 7 46312 L3072 Payment System Modernization 26 Nov 13 14 Aug 15 30 Jun 17 31 Dec 19 20.00 - - RRP (Nov 2013);

PDS (Aug 2016) 8 48015 L3338 Supporting the Credit Guarantee

System for Economic Diversification and Employment

27 Nov 15 14 Apr 16 31 Oct 21 31 Oct 21 60.00 - - RRP (Nov 2015); PDS (Aug 2016)

Health and Social Protection 9 41243 G0236/

Fourth Health Sector Development Project (With additional financing L2932)

29 Nov 10 3 Mar 11 31 Dec 16 31 Dec 18 14.00 WHO 0.45 RRP (Nov 2010); PDS (Aug 2016)

L2932 5 Nov 12 25.00 10 42322 L3086 Additional Financing of Food and

Nutrition Social Welfare Project 10 Dec 13 21 Jul 14 30 Nov 17 30 Nov 19 20.00 - - RRP (Nov 2013);

PDS (Aug 2016) 11 45009 L2963 Fifth Health Sector Development

Project 10 Dec 12 14 Jun 13 31 Dec 18 31 Dec 18 30.00 WHO,

MOH-Germany

0.67 RRP (Nov 2012); PDS (Aug 2016)

Industry and Trade 12 46315 L3313 Regional Upgrades of Sanitary and

Phytosanitary Measures for Trade 12 Nov 15 28 Mar 16 30 Jun 21 30 Jun 21 15.00 - - RRP (Oct 2015);

PDS (Aug 2016) 13 47174 L3387 Regional Improvement of Border

Services 22 Apr 16 11 Jul 16 30 Jun 22 30 Jun 22 27.00 - - RRP (Apr 2016);

PDS (Aug 2016) Public Sector Management 14 49409 L3385 Strengthening Institutional

Framework and Management Capacity

31 Mar 16 21 Jun 16 31 Oct 19 31 Oct 19 35.00 - - RRP (Mar 2016); PDS (Aug 2016)

Transport and ICT 15 39265- G0107 Western Regional Road Corridor 26 Feb 08 22 May 08 31 Oct 12 18 May 16 37.60 - - RRP (Aug 2012);

42 Appendix 1

No. Project

No. Loan/

Grant No.

Closing Loan Amount Cofinancing

Project Title Approval Effectivity Original Current Approved ($ million) Source

Amount ($ million) Source

022 Development Project—Phase 1 PDS (Feb 2017) [* extended]

16 39256 L2934/ L2935/ G0315

Urban Transport Development Investment Program—Tranche 1

8 Nov 12 09 Jun 15 28 Feb 18 28 Feb 18 61.40 - - RRP (Aug 2012); PDS (Aug 2016)

17 41192 L2719/ G0240

Regional Logistics Development Project

13 Dec 10 23 Mar 11 30 Jun 16 30 Jun 19 45.00 - - RRP (Nov 2010); PDS (Aug 2016)

18 41193-015

L2847 Western Regional Road Corridor Investment Program—Tranche 1

22 Dec 11 3 May 12 30 Jun 17 30 Jun 17 45.00 - - RRP (Nov 2011); PDS (Aug 2016)

19 41193-019

L3129 Western Regional Road Corridor Investment Program—Tranche 2

14 May 14 31 Aug 14 30 Jun 19 30 Jun 19 125.00 - - PDS (Aug 2016)

Water and Other Urban Infrastructure and Services 20 37697 L3244/

L3245 Darkhan Wastewater Management 16 Dec 14 25 Aug 15 30 Jun 19 30 Jun 19 18.50 - - RRP (Nov 2014);

PDS (Aug 2016) 21 42184 G0204 Southeast Gobi Urban and Border

Town Development Project 19 Apr 10 30 Jul 10 31 May 15 31 May 17 15.00 - - RRP (Mar 2010);

PDS (Aug 2016) 22 42184 L3388 Southeast Gobi Urban and Border

Town Development—Additional Financing

22 Apr 16 5 Jul 16 30 Jun 20 30 Jun 20 19.43 - - RRP (Apr 2016); PDS (Aug 2016)

23 45007 L3098/ L3099/ G0380

Ulaanbaatar Urban Services and Ger Area Development Investment Program—Tranche 1

17 Dec 13 24 Sep 14 30 Jun 18 30 Jun 18 53.70 EIB 28.38 PDS (Aug 2016)

24 49113 G9189 Managing Soil Pollution in Ger Areas Through Improved On-Site Sanitation

10 Nov 16 7Feb-17 30 Jun 21 2.80 - - GAR (Dec 2016); PDS (Feb 2017)

Subtotal

773.43 29.50 B. Nonsovereign Finance 25 7401/

3102; 7402/ 3103

Xacbank and Tenger Financial Group 12 Dec 13 40.00 - - RRP (Nov 2013); PDS (Aug 2016)

26 7410/ 3136

Khan Bank (Supporting Micro, Small, and Medium-Sized Enterprises)

30 Jun 14 40.00 - - RRP (Jun 2014); PDS (Aug 2016)

Subtotal

80.00 0.00

Total

853.43 29.50

GAR = grant approval report, EIB = European Investment Bank, MOH = Ministry of Health, PDS = project data sheet, RRP = report and recommendation of the President, WHO = World Health Organization. Note: Grants that are fully administered by ADB were not included in the cofinancing column. Source: ADB Listing of Loan, Technical Assistance, Grant and Equity Approvals database; ADB Loan and Grant Financial Information Services, and ADB Project Records (available: http://www.adb.org/projects/search/country/mon).


Table A1.5: Sovereign and Nonsovereign Loans and Grants Projects Approved, 2012–2016 2012 2013 2014 2015 2016 2012–2016

Sector No. Amount






($ million) Transport 1 61.4 0 0.0 1 125.0 0 0.0 0 0.0 2 186.4 Sovereign 1 59.9 0 0.0 1 125.0 0 0.0 0 0.0 2 184.9 Nonsovereign 0 0.0 0 0.0 0 0 0 0.0 0 0.0 0 0.0 Grants 0a 1.5 0 0.0 0 0 0 0.0 0 0.0 0a 1.5 Energy 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Sovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Nonsovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Grants 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Finance 0 0.0 2 60.0 1 40.0 1 60.0 0 0.0 4 160.0 Sovereign 0 0.0 1 20.0 0 0 1 60.0 0 0.0 2 80.0 Nonsovereign 0 0.0 1 40.0 1 40.0 0 0.0 0 0.0 2 80.0 Grants 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 PSM 0 0.0 0 0.0 0 0.0 1 150.0 1 35.0 2 185.0 Sovereign 0 0.0 0 0.0 0 0.0 1 150.0 1 35.0 2 185.0 Nonsovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Grants 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 ANR 1 2.5 0 0.0 0 0.0 2 53.0 2 5.0 5 60.5 Sovereign 0 0.0 0 0.0 0 0.0 1 50.0 0 0 1 50.0 Nonsovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0 0 0.0 Grants 1 2.5 0 0.0 0 0.0 1 3.0 2 5.0 4 10.5 WUS 0 0.0 1 53.7 1 18.5 0 0.0 2 22.2 4 94.4 Sovereign 0 0.0 1 50.0 1 18.5 0 0.0 1 19.4 3 87.9 Nonsovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Grants 0 0.0 0b 3.7 0 0.0 0 0.0 1 2.8 1b 6.5 Education 0 0.0 0 0.0 1 25.0 1 3.0 0 0.0 2 28.0 Sovereign 0 0.0 0 0.0 1 25.0 0 0.0 0 0.0 1 25.0 Nonsovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Grants 0 0.0 0 0.0 0 0.0 1 3.0 0 0.0 1 3.0 Health 2 55.0 1 20.0 0 0.0 0 0.0 0 0.0 3 75.0 Sovereign 2 55.0 1 20.0 0 0.0 0 0.0 0 0.0 3 75.0 Nonsovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Grants 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 IAT 0 0.0 0 0.0 0 0.0 1 15.0 1 27.0 2 42.0 Sovereign 0 0.0 0 0.0 0 0.0 1 15.0 1 27.0 2 42.0 Nonsovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Grants 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Multisector 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Sovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Nonsovereign 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Grants 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Total 4 118.9 4 133.7 4 208.5 6 281.0 6 89.2 24 831.3

Sovereign 3 114.9 3 90.0 3 168.5 4 275.0 3 81.4 16 729.8 Nonsovereign 0 0.0 1 40.0 1 40.0 0 0.0 0 0.0 2 80.0 Grants 1a 4.0 0b 3.7 0 0.0 2 6.0 3 7.8 6a,b 21.5

ANR = agriculture and natural resources, IAT = industry and trade, PSM = public sector management, WUS = water and other urban infrastructure and services. a Grant 0315 not counted as separate project. It has the same project ID number as Loans 2934/35. b Grant 0380 not counted as separate project. It has the same project ID number as Loans 3098/99. Source: Asian Development Bank database.

44 Appendix 1

Table A1.6: Technical Assistance Approvals, 2012–2016 TA Closing Date Amount ($’000)

No. TA No. Project Title

TA Type

Date Approved Effectivity Original Current TASF Others

Other Sources Total Ref Source

Agriculture and natural resources 1 8560 Tuul River Improvement PP 13 Dec 13 6 Jan 14 31 Mar 15 31 Dec 16 1,000 JFPR 1,000 TAR (Dec 2013);

PDS (Aug 2016) 2 8802 Strategic Planning for Peatlands CD 12 Dec 14 28 Jan 15 30 Jun 16 31 Dec 16 400 JFPR 400 TAR (Dec 2014);

PDS (Aug 2016) 3 8855 Country Water Security Assessment PA 19 Dec 14 12 Jan 15 15 Jun 16 15 Jun 17 500 500 TAR (Dec 2014);

PDS (Aug 2016) 4 8874 Sustainable Forest Management to

Improve Livelihood of Local Communities

CD 13 Jan 15 28 Jan 15 31 Aug 17 18 Oct 17 2,000 JFPR 2,000 TAR (Dec 2014); PDS (Aug 2016)

5 8960 Supporting Agriculture Value Chain (attached to Loans 3287 and 3288)

CD 23 Sep 15 20 Oct 15 31 Mar 19 31 Mar 19 2,000 JFPR 2,000 PDS (Aug 2016)

6 9043 Strengthening Capacity for Environmental-Economic Accounting

CD 11 Dec 15 6 Jan 16 31 Mar 18 31 Mar 18 700 700 TAR (Dec 2015); PDS (Aug 2016)

7 9066 Fostering Value-Added Activities in Western Mongolia

PA 16 Dec 15 16 Feb 16 31 Dec 17 31 Dec 17 815 815 TAR (Dec 2015); PDS (Aug 2016)

8 9230 Sustainable Tourism Development PP 14 Nov 16 22 Dec 16 31 May 18 1,100 JFPR 1,100 TAR (Nov 2016); PDS (Feb 2017)

9 9233 Conservation of Forest Genetic Resources

CD 18 Nov 16 30 Nov 18 500 JFPR 500 TAR (Nov 2016); PDS (Feb 2017)

Education 10 8299 Reforms in Technical and

Vocational Education and Training in Mongolia

PP 19 Dec 12 7 Feb 13 15 Jan 14 30 Jun 15 1,000 JFPR 1,000 TAR (Dec 2012); PDS (Aug 2016)

11 8931 Education Sector Development CD 16 Jul 15 30 Oct 15 31 Jul 17 31 Jul 17 1,000 JFPR 1,000 TAR (Jul 2015); PDS (Aug 2016)

12 9216 Sustaining Access to and Quality of Education during Economic Difficulties

PP 3 Nov 16 30 Nov 16 30 Jun 18 800 JFPR 800 TAR (Nov 2016); PDS (Feb 2017)

Energy 13 8637 Transaction Advisory Services for

the Combined Heat and Power Plant 5 (With supplementary)

PA 09 Apr 14 03 Oct 14 31 Dec 15 31 Dec 16 1,450 1,450 PDS (Aug 2016)

14 8649 Energy Efficiency and Urban Environment Improvement

PP 12 May 14 30 May 14 31 May 16 31 Mar 17 2,000 JFPR 2,000 TAR (May 2014); PDS (Aug 2016)

15 8757 Preparation of an Investment Plan for Scaling Up Renewable Energy

CD 14 Nov 14 07 Jan 15 19 Jan 16 19 Jan 16 300 SCF-SREP 300 TAR (Nov 2014); PDS (Aug 2016)

16 8776 Coal to Cleaner Fuel Conversion for Heating in Ger District and Power Generation

PA 4 Dec 14 24 Feb 15 29 Feb 16 31 Oct 16 350 350 TAR (Dec 2014); PDS (Aug 2016)

17 9001 Strategy For Northeast Asia Power System Interconnection

PA 27 Nov 15 26 Jan 16 15 Feb 18 15 Feb 18 1750 CCF, PRCF,

1750 TAR (Nov 2014); PDS (Aug 2016)

Attachment y

45


TA Closing Date Amount ($’000)


TA Type


Other Sources Total Ref Source EAKPF

18 9224 Upscaling Renewable Energy Sector PP 09 Nov 16 23 Nov 16 31 Jul 18 1,500 SCF-SREP 1,500 TAR (Nov 2016); PDS (Feb 2017)

Finance 19 8792 Supporting the Credit Guarantee

System for Economic Diversification and Employment

PP 4 Dec 14 7 Jan 15 31 Oct 15 31 Dec 15 500 FSDPSF 500 TAR (Jan 2015); PDS (Aug 2016)

20 9000 Supporting the Credit Guarantee System for Economic Diversification and Employment (attached to Loan 3338)

CD 27 Nov 15 23 Dec 15 31 Mar 18 31 Mar 18 800 800 PDS (Aug 2016)

21 9180 Supporting Financial Sector Development and Stability

CD 26 Sep 16 11 Oct 16 30 Jun 19 1,250 300 EAKPF 1,550 TAR (Sep 2016); PDS (Feb 2017)

Health and social protection 22 8466 Strengthening the Health Insurance

System CD 25 Sep 13 13 Dec 13 31 Oct 16 30 Apr 17 1,500 JFPR 1,500 TAR (Sep 2013);

PDS (Aug 2016) 23 8544 Supporting Social Protection

Reforms (attached to Loan 3086) CD 10 Dec 13 21 Jul 14 30 Nov 17 30 Nov 19 500 500 PDS (Aug 2016)

24 8850 Ensuring Inclusiveness and Service Delivery for Persons with Disabilities

PP 12 Dec 14 11 Aug 15 30 Nov 15 30 Sep 16 1,000 JFPR 1,000 PDS (Aug 2016)

25 8967 Improving Access to Affordable Medicines in Public Hospitals

CD 29 Sep 15 28 Dec 15 31 Oct 18 31 Oct 18 1,000 1,000 TAR (Sep 2015); PDS (Aug 2016)

26 8970 Improving Access to Health Services for Disadvantaged Groups

PP 2 Oct 15 23 Oct 15 31 Dec 16 31 Jul 17 1,000 JFPR 1,000 TAR (Oct 2015); PDS (Aug 2016)

27 9037 Strengthening Hospital Autonomy PA 9 Dec 15 01 Apr 16 31 Mar 18 31 Oct 18 1,100 1,100 TAR (Dec 2015); PDS (Aug 2016)

Industry and trade 28 8822 Building Trade Policy Capacity:

Formulating an International Trade Policy

PA 16 Dec 14 08 Jan 15 30 Jun 16 30 Nov 16 500 500 TAR (Dec 2014); PDS (Aug 2016)

Multisector 29 8241 Promoting Inclusive Growth PA 6 Dec 12 07 Feb 13 31 May 15 31 May 16 1,000 JFPR 1,000 TAR (Dec 2012);

PDS (Aug 2016) 30 8467 Ulaanbaatar Urban Planning

Improvement CD 1 Oct 13 13 Dec 13 30 Sep 15 30 Sep 16 1,500 JFPR 1,500 TAR (Oct 2013);

PDS (Aug 2016) 31 9201 Gender-Responsive Sector and Local

Development Policies and Actions CD 5 Oct 16 22 Dec 16 14 Nov 18 700 JFPR 700 TAR (Nov 2016);

PDS (Feb 2017) Public sector management 32 8210 Preparation of Regulations and

Capacity Development Plan for Involuntary Resettlement

CD 12 Nov 12 12 Nov 12 31 May 13 31 Mar 14 200 200 TCR (Jun 2015); PDS (Aug 2016)

33 8236 Developing a Conducive Environment for Public–Private

PA 3 Dec 12 28 Dec 12 30 Dec 14 30 Dec 15 750 750 TAR (Dec 2012); PDS (Aug 2016)

46 Appendix 1



TA Type



Partnerships 34 8255 Strengthening the Anti-Money

Laundering Regime (With supplementary)

CD 11 Dec 12 4 Jan 13 31 Dec 14 30 Jun 17 360 360 CRTFSI 720 TAR (Dec 2012); PDS (Aug 2016)

35 8504 Development of State Audit Capacity

CD 14 Nov 13 12 Dec 13 31 Mar 16 31 Mar 16 300 300 TAR (Nov 2013); PDS (Aug 2016)

36 8579 Public Finance Resource Management

PA 13 Dec 13 27 Jan 14 30 Jun 16 30 Sep 16 500 500 TAR (Dec 2013); PDS (Aug 2016)

37 8742 Transparency and Efficiency in Public Financial Management

CD 29 Oct 14 10 Nov 14 30 Nov 16 30 Nov 16 1,100 JFPR 1,100 TAR (Oct 2014); PDS (Aug 2016)

38 8863 Promoting Effectiveness of Development Cooperation

CD 12 Dec 14 20 Jan 15 31 Mar 17 31 Mar 17 700 700 TAR (Dec 2014); PDS (Aug 2016)

39 8939 Concessions for Ulaanbaatar’s Municipal Services

CD 11 Aug 15 7 Sep 15 30 Sep 17 30 Sep 17 700 JFPR 700 TAR (Aug 2015); PDS (Aug 2016)

40 8995 Strengthening the Capacity of Judicial Training

CD 20 Nov 15 22 Dec 15 31 Mar 18 31 Mar 18 500 500 TAR (Nov 2015); PDS (Aug 2016)

41 9158 Strengthening of Public Procurement for Improved Project Implementation

CD 19 Aug 16 12 Sep 16 31 Oct 18 750 750 TAR (Aug 2016); PDS (Feb 2017)

42 9261 Macroeconomic Advisory Support PA 8 Dec 16 30 Dec 16 31 Dec 18 1,000 1,000 TAR (Dec 2016); PDS (Feb 2017)

Transport 43 7156 Urban Transport Development

(Supplementary) PP 25 Jun 12 … … 31 Dec 13 200 200 PDS (Aug 2016)

44 8080 Logistics Capacity Development CD 22 May 12 18 Jun 12 15 Aug 14 15 Aug 17 900 JFPR 900 TAR (May 2012); PDS (Aug 2016)

45 8212 Ulaanbaatar Urban Transport Capacity Development

CD 8 Nov 12 19 Dec 12 30 Nov 14 31 Dec 16 1,000 JFPR 1,000 TAR (Nov 2012); PDS (Aug 2016)

46 8465 Connectivity for Future Growth PA 26 Sep 13 29 Oct 13 31 Dec 15 30 Jun 16 500 500 TAR (Sep 2013); PDS (Aug 2016)

47 8852 Regional Road Development and Maintenance

PP 19 Dec 14 26 Jan 15 31 Jan 16 1 Jun 17 1,000 1,000 TAR (Jan 2015); PDS (Aug 2016)

48 8935 Bogdkhan Railway Bypass Investment Program

PP 29 Jul 15 20 Aug 15 31 Dec 16 30 Sep 17 1,500 1,500 TAR (Aug 2015); PDS (Aug 2016)

49 8985 Public–Private Partnership In Urban Public Transport Sector of Ulaanbaatar

PA 5 Nov 15 1 Dec 15 30 Apr 16 30 Apr 16 350 PPIAF 350 TAR (Nov 2015); PDS (Aug 2016)

50 9131 Intelligent Transport Systems Development for Mongolia

PA 1 Jul 16 … 14 Jul 17 14 Jul 17 500 EAKPF 500 TAR (Jul 2016); PDS (Aug 2016)

51 9137 Development of Road Safety Policy and Action Plan

PA 19 Jul 16 … 14 Oct 17 14 Oct 17 1,000 1,000 TAR (July 2016); PDS (Aug 2016)

Water and other urban infrastructure and services 52 7970 Ulaanbaatar Urban Services and Ger

Areas Development Investment PP 25 May 12 … 30 Apr 13 30 Sep 14 200 MDTF-

WFPF 200 PDS (Aug 2016)

Attachment y

47




TA Type



Program (Supplementary) 53 8841 Darkhan Urban Utility Institutional

Improvement Action Plan (attached to Loans 3244/3245)

CD 16 Dec 14 12 Jan 15 30 Jun 17 30 Jun 17 400 UEIF 400 PDS (Aug 2016)

54 9030 Ulaanbaatar Affordable Housing and Urban Renewal

PP 10 Dec 15 26 Jan 16 1 Dec 17 1 Dec 17 1,000 JFPR 1,000 TAR (Dec 2015); PDS (Aug 2016)

55 9100 Management and Reuse of Sewage Sludge from On-site Sanitation Facilities and Decentralized Wastewater Treatment Plants (attached to Loan 3388)

CD 22 Apr 16 … 31 Oct 18 31 Oct 18 1,000 SFPTF-WFPF

1,000 PDS (Aug 2016)

Total 18,225 30,360

48,585 … = not applicable, CD = capacity development, CCF = Climate Change Fund, CRTFSI = Cooperation Fund for Regional Trade and Financial Security Initiative, EAKPF = e-Asia and Knowledge Partnership Fund, FSDPSF = Financial Sector Development Partnership Special Fund, JFPR = Japan Fund for Poverty Reduction, FSDPSF = Financial Sector Development Partnership Special Fund, na = not applicable, PA = policy and advisory, PDS = project data sheet, PP = project preparatory, PPIAF = Public-Private Infrastructure Advisory Facility, PRCF = People's Republic of China Regional Cooperation and Poverty Reduction Fund, SCF-SREP = Strategic Climate Fund–Scaling Up Renewable Energy for Low Income Countries Program, SFPTF-WFPF = Sanitation Financing Partnership Trust Fund–Water Financing Partnership Facility, TAR = technical assistance report, TASF = Technical Assistance Special Fund, UEIF = Urban Environmental Infrastructure Fund, MDTF-WFPF = Multi-Donor Trust Fund under the Water Financing Partnership Facility.

APPENDIX 2: COUNTRY PARTNERSHIP STRATEGY, 2012–2016, RESULTS FRAMEWORK AND UPDATES—OUTCOMES THAT ADB CONTRIBUTES TO AND INDICATORS

CPS, 2012–2016 Objectives & Outcomes (also in COBP, 2012–2014) COBP 2013

ICPS, 2014–2016 Objective & Outcomes (also in COBP, 2014–2016) COBP 2015 and COBP 2016

Sector Sector Outcomes Sector Sector Outcomes Transport (2020 Core Areas 1 and 3: Infrastructure, and Regional Cooperation and Integration)

Transport (Core Areas 1 and 3: Infrastructure and Regional Integration)

Regional trade development Improved competitiveness of Ulaanbaatar Improved access of rural populations to markets and public services Increased capacity of the transport sector institutions and industry

More efficient movement of people and goods in urban and rural areas and across borders Indicators: Total freight turnover in ton kilometers increases by 10% annually up to 2016 from 12.1 billion in 2010

Average speed with delay on CAREC corridor 4b (road and rail) reaches CAREC’s average of 18 kilometers per hour (kph) by 2016 (2010 baseline: 4 kph)

Public transport journeys along Ulaanbaatar’s north–south corridor increase by 15% from 164,000 average daily in 2010

100% of aimag centers are linked with Ulaanbaatar with paved roads by 2016 (2009 baseline: 33%)

No change. Wording of indicators made clearer.

Regional trade development; improved access of rural populations to markets and public services; increased capacity of the transport sector institutions and industry Comment: Mention of urban development and Ulaanbataar in particular dropped

Unchanged except fourth indicator dropped and third indicator revised to: − Average bus speed along the bus

rapid transit system corridor in Ulaanbaatar reaches 26 km/h by 2016 (2013 baseline: 20 km/h)

Comment: Revisions include: − Outcome/ indicator wording for

water and health both revised below to focus on the number of beneficiaries.

− The indicator for education had already been changed to focus on the number of beneficiaries.

− Bus speeds for the Ulaanbaatar bus rapid transit system became the indicator instead of the number of public transport passenger journeys

No change.

Energy (2020 Core Area 1: Infrastructure) Energy (Core Area 1: Infrastructure) Energy security Improved energy access Energy conservation

Improved energy access and efficiency in urban centers and rural remote areas Indicators: Electrification rate increases


Energy efficiency and security; renewable energy

Improved energy access and efficiency in urban centers and rural remote areas Second indicator changed to:

No change.

Attachment y

49

CPS, 2012–2016, Results Framework and Updates—

Outcomes that ADB Contributes to and Indicators 49



Sector Sector Outcomes Sector Sector Outcomes

to 95% in 2016 (2011 baseline: 90%)

Energy consumption increases to 1,313 megawatt electrical (MWe) in 2016 (2011 baseline: 762 MWe)

− Electricity consumption increased to 8,987 GWh in 2016 (2013 baseline: 5,984 GWh

Education (2020 Core Area 5: Education) Education (Core Area 5: Education) Improve quality, access, efficiency, and effectiveness of the education sector

Improved educational attainment; improved quality, access, efficiency, and relevance in secondary education, higher education, and technical and vocational education and training (TVET) Indicators: Percentage of higher education graduates employed in fields in which they received training after graduation increases from 40% in 2007 to 50% by 2016

Higher education net enrollment among the population in the age group of 18–24 years increases from 47% in 2010 to 50% in 2015

The number of students enrolled in TVET institutions increases from 46,945 in 2009 to 49,213 by 2015

The number of students enrolled in priority subjects (natural sciences, engineering, technology, and agriculture) increases to 40% by 2016 (from 26.8% in 2010)


Unchanged Improved educational attainment and improved quality, access, efficiency, and relevance in all levels of education Indicators revised to: Employment rates of graduates from TVET in priority sectors increased from 54% in 2013 to 57% by 2016

Gross enrollment ratios for pre-primary (85.8%), primary (116.7%), and secondary (103.5%) education in 2012 increased to close to 100% (optimal level) by 2016

Comment: wording expanded to include primary and pre-school education.

Some change. First indicator changed to a baseline of 55% in 2012. New second indicator added: Percentage of higher education graduates employed in fields in which they received training after graduation increased to 50% by 2016 (2007 baseline: 40%, current value in 2013: 40%). Former second indicator unchanged – 2014 baseline data added, i.e., current value in 2014: primary 103.6%, secondary 100.3%.

Health (2020 Area: Other Areas of Operation) Health (Area: Other Areas of Operation) Millennium Development Goal

Quality and financial accessibility of health services

No change. Wording of

No change More people enjoy improved social insurance, welfare, and health

Indicators unchanged

50 Appendix 2



Sector Sector Outcomes Sector Sector Outcomes achievement with improved allocative efficiency and greater pro-poor focus

improved

Indicators: Universal coverage of citizens’ health insurance in 2015 (2010 baseline: 80%)

Proportion of government health sector budget allocated to primary health care increases to 25% in 2015 (2010 baseline: 20.2%)

% of illegal or substandard drugs in the market reduces to 13% in 2016 (2007 baseline: 26%)

Prevalence of hepatitis B and C among health workers is reduced to 12% in 2015 (anecdotal baseline measurement in 2010 above 15%)

indicators made clearer. However, a desire to increase the efficiency and transparency of delivery of social welfare and insurance services was included.

services Target for universal coverage of health insurance retained, but year changed to 2016.

Other three outcomes replaced by: The social pensions for informal sector workers (herders, self-employed, and nonwage earners) increase by 10% in coverage by 2016 (2012 baseline: 60,700)

Water Supply and Other Municipal Infrastructure and Services (2020 Core Areas 1 and 2: Infrastructure and Environment [Livable Cities])

Water and Other Urban Infrastructure and Services (Core Areas 1 and 2: Infrastructure and Environment [Livable Cities])

Improved financial sustainability of service provision Enhanced investment in operations, including infrastructure maintenance Improved urban environment, particularly improved air quality and reduced soil and water pollution

Greater availability of municipal services and improved living conditions in urban areas Indicators: 65% of urban population with access to potable water supply by 2016 (2008 baseline: 46%)

40% of urban population with access to adequate sanitation by 2016 (2008 baseline: 27%)

Average water consumption in ger areas at 10 liters per capita per day (lpcd) by 2016

No change. Wording of indicators made clearer

Improved financial sustainability of service provision; improved urban environment, particularly air, and soil and water quality; reduced urban congestion

More people enjoy improved urban services and better living conditions in urban areas First two indicators revised to add ‘improved’ and increase the targets: − Population using an improved

drinking water source in urban area increases to 85% by 2016 (2010 baseline: 78%)

− Population using an improved sanitation facility in urban areas increases to 45% by 2016 (2010 baseline: 37%)

Unchanged

Attachment y

51

CPS, 2012–2016, Results Framework and Updates—

Outcomes that ADB Contributes to and Indicators 51



Sector Sector Outcomes Sector Sector Outcomes Reduced urban congestion and improved urban efficiency

(2010 baseline: 6.5 lpcd)

Prevalence of intestinal and pulmonary infections decreases 15% by 2016 (12,000 cases in 2010)

Third indicator unchanged and fourth dropped

Finance (Core Area 4: Finance) More efficient financial

intermediation to support private sector growth, economic diversification, long-term investment, innovation, and access to finance

Increased use of more efficient financial intermediation by private sector enterprises and individuals

Indicators:

Bank credit to GDP increases to 100% of GDP by 2016 (2012 baseline: 83.9%)

Annual MSE turnover as a share of GDP rises to above 3.0% by end of 2016 (2012 baseline: 1%)

Total bonds outstanding as % of GDP rises to 18% by end of 2016 (2012 baseline: 7.1%)

Indicators revised as follows: First and second indicators unchanged, but 2014 baseline values reported

Third indicator unchanged.

New fourth indicator added: Total market capitalization of companies listed on MSE as a share of GDP rises above 15% by the end of 2016. (2012 baseline: 12.6%, current value in 2 014: 6.3%)

Agriculture, Natural Resources, and Rural Development (Area:

Other Areas of Operation)

Improved environmental services, and quality in ecosystems and agricultural production

Increased productivity in agriculture sector in line with the national green development policy Indicators: By 2016: Value added of agro-processing increased by at least 30% (2012 baseline: MNT460 billion)

Unchanged

Source: Asian Development Bank database.

APPENDIX 3: MAJOR DEVELOPMENT PARTNERS

Table A3: Major Development Partners by Sector

Sector/Main Donors Main Sectors/Subsectors Geographical Coverage Agriculture and Natural Resources ADB Climate-Resilient Rural Livelihoods, Strategic Planning for Wetlands,

Water Security, Sustainable Forest Management National

PRC tbd EC Livelihood security, animal health, food and nutrition security National FAO Participatory Forest Management, Plant Protection Institutional

Capacity, Integrated Livestock-based Livelihoods Support, Biodiversity conservation, SFM and carbon sink enhancement

National

SDC Pasture management Pasture management (9 provinces targeted)

UNDP Protected Area Networking, Biodiversity Conservation, SFM and Carbon Sink, Green Development Policy

National

WB

Sustainable livelihood of rural households, livestock insurance, agricultural marketing

National

Education ADB Education Sector Development and Reform National and regional

(western) EC Technical and vocational education and training National JICA Pre-school, primary and secondary education National

SDC Vocational Education and training Western Region UNICEF Basic education, non-formal education and early childhood

development National

WB Rural education National Energy ADB Low carbon energy supply, Energy Efficiency, Renewable Energy National and Ulaanbaatar PRC tbd JICA CHP capacity expansion, electricity transmission and distribution Ulaanbaatar World Bank Household stoves improvement Urban centers Finance ADB Banking Sector Systemic Risk Management, Mobile Banking Services,

SME development loan National

PRC tbd EBRD SME development loan National JBIC/JICA SME development loan (phase-2) National Health and Social Protection ADB Sector Development, Health Services for Disadvantaged Groups in

Ulaanbaatar, Food and Nutrition Social Welfare National and Ulaanbaatar

PRC e-health project National EDCF Korea Establishment of National Diagnostics and Treatment Center National UNFPA Youth development, Reproductive health National UNICEF Child friendly interventions

Nalaikh district of UB, and Khuvsgul province

WB Protecting the poor, pensions reform National WHO

Primary health care, health-related MDGs targets, control of non-communicable diseases, injuries, violence and their determinants, health security including control of communicable and vaccine-preventable diseases and environmental health

National

Industry and Trade ADB Customs Modernization, Sanitary and Phytosanitary Measures,

Regional Logistics Development, Western Regional Road Corridor National and regional (western)

PRC tbd EU Modernization of Mongolia's Standardization System National IFC Business Inspections Reform National KOICA Immigration Control System Modernization National USAID Business Plus Initiative National

Major Development Partners 53

Sector/Main Donors Main Sectors/Subsectors Geographical Coverage Public Sector Management ADB Transparency and Efficiency in Public Financial Management, National PRC tbd SDC Governance, decentralization policy

National and Ulaanbaatar

UNDP Democratic governance National and local WB Governance, mining sector, and smart government National Transport and ICT ADB Road and aviation, urban transport sector Regional (western) and

Ulaanbaatar PRC Roads, other (tbd) JICA Urban transport, airport, transshipment facility Ulaanbaatar, and regional

(south border province) Water supply and other urban/municipal infrastructure and services ADB Urban services and ger areas development

Urban areas (Ulaanbaatar and Darkhan)

PRC tbd GIZ Urban development Ulaanbaatar JICA

City master plan, urban development, water supply, sewerage sector

Ulaanbaatar

WB Services improvement, community-led infrastructure development

Ulaanbaatar

Abbreviations: ADB = Asian Development Bank, EBRD=European Bank for Reconstruction and Development, EC = European Commission, EDCF Korea = Economic Development Cooperation Fund Korea, EU = European Union, FAO = Food and Agriculture Organization of the United Nations, GIZ = German Agency for International Cooperation, IFC = International Financial Cooperation, JBIC = Japan Bank for International Cooperation, JICA = Japanese International Cooperation Agency, KOICA = Korean International Cooperation Agency, PRC = People's Republic of China, SDC = Swiss Development Cooperation, tbd = to be determined, UNDP = United Nations Development Programme, USAID = United States Agency for International Development, UNICEF = United Nations Children’s Fund, UNFPA = United Nations Population Fund, WB = World Bank, WHO = World Health Organization. Source: Linked documents (Development Coordination) for the RRPs of the following projects: Integrated Livelihoods Improvement and Sustainable Tourism in Khuvsgul Lake National Park; Mongolia: Agriculture and Rural Development Project - Additional Financing; Skills for Employment; Improving School Dormitory Environment for Primary Students in Western Region Project; Payment System Modernization Project; Supporting the Credit Guarantee System for Economic Diversification and Employment Project; Fifth Health Sector Development Project; Additional Financing of Food and Nutrition Social Welfare Project; Regional Upgrades of Sanitary and Phytosanitary Measures for Trade Project; Strengthening Institutional Framework and Management Capacity; Urban Transport Development Investment Program; Western Regional Road Corridor Investment Program; and Ulaanbaatar Urban Services and Ger Areas Development Investment Program.

54 Appendix 3

Figure A3: Value of Support by Major Development Partners by Sector, 2009–2015 ($ million)

Source: Government of Mongolia, Ministry of Finance.

89.99

182.15

58.2

482.8

155.39

69.2

876.53

15

168.41

103.8

0 200 400 600 800 1000

Agriculture and natural resources

Education

Energy

Finance

Health and social protection

Public sector management

Transport

Trade and regional cooperation

Water supply and urban services

Other

APPENDIX 4: ASSESSMENT OF PROGRESS TOWARD COUNTRY DEVELOPMENT GOALS AND SECTOR OUTCOMES

Topic Indicator and Target Reported in CPSFR IED Validation Team Comments on

Current Measurement Country Development Goals as in CPSFR Increase per capita gross domestic product (GDP) to $6,000 by 2015.

$3,882 (2015). Not achieved. This is not surprising given the downturn in the economy since 2013.

Foster employment to generate jobs for 40,000 persons a year by 2015.

8.787 (May 2015). Not achieved. This is not surprising given the downturn in the economy since 2013.

Reduce poverty incidence to 18% of the population by 2015.

21.6% (2014).

Since the poverty rate is calculated in Mongolia once every 2 years, no data are available for 2015. 2016 data will be available in 2017.

Keep public investment at 8%–10% of GDP.

8.5% (central government 2011–2014). Removed in ICPS, 2014–2016. There is no publicly available figure for 2015 as the latest public investment figure was calculated in 2014.

Private investment to average 16% of GDP from 2011 to 2015 (a doubling from 2007)

Not publicly available. Removed in ICPS, 2014–2016 as noted in footnote to table in Appendix 3 of CPSFR.

Meet education- and health-related Millennium Development Goals by 2015.

CPSFR states “Two out of four met. Limit and prevent the spread of Human Immunodeficiency Virus (HIV)/Acquired Immune Deficiency Syndrome (AIDS) by 2015 and reduce the under-five mortality rate by 4 times between 1990 and 2015.”

Three education and health MDG targets were achieved, the two stated plus that on maternal health. There were four education- and health-related MDGs: (1) achieve universal primary education (net enrollment ratio target is 100%, latest value for 2015 was 96.3%; (2) reduce child mortality (under 5 mortality rate target is 21 per 1000 live births, latest value for 2015 was 18.0 and infant mortality rate target is 15 per 1000 live births, latest value for 2015 was 15.0; (3) improve maternal health (maternal mortality ratio target is 50 per 100,000 live births, latest value for 2015 was 25.6; and (4) combat STIS, HIV/AIDS and tuberculosis, reverse other diseases (HIV prevalence among population aged 15-24 years target is <0.1%, latest value for 2015 was 0.0006% [for all refer www.1212.mn]. But other targets related to tuberculosis have not been achieved).

Ensure that sector strategies and budgets are well-linked.

Not measurable. An unmeasurable indicator should not have been included. The Development Policy Planning law could have been mentioned as it was passed in 2015.

Summary of progress towards achievement of goals: Of five goals retained, one on MDGs partially met, two not achieved, one does not have up-to-date data and one is not measurable. Sectors Selected for ADB Support Government Sector Objectives

Sector Outcomes that ADB Contributes to and Indicators

IED Validation Team Comments

Transport (Core Areas 1 and 3: Infrastructure, and Regional Cooperation and Integration) Regional trade development

Improved competitiveness of Ulaanbaatar

More efficient movement of people and goods in urban and rural areas and across borders.

Total freight turnover in ton kilometers – Target of 10% p.a. growth from 2010 to 2016.

Likely to be achieved. 11.6% from 2010 to 2015 for CPS and 20.7% from 2013 to 2015 for ICPS.

56 Appendix 4


Current Measurement (removed in ICPS, 2014–2016)

Improved access of rural populations to markets and public services

Increased capacity of the transport sector institutions and industry

Average speed with delay on CAREC corridor 4b (road and rail) reached. Target of 18 kph by 2016 (2010 baseline: 4 kph; 2013 baseline: 8 kph).

Unlikely to be achieved. Actual at 2015 is 10 kph.

Average daily public transport journeys along Ulaanbaatar’s north–south corridor (removed from ICPS, 2014–2016).

No data. Appears to have been removed as the Bus Rapid Transit project in tranche 1 of the Urban Transport project has been delayed.

Aimag centers linked with Ulaanbaatar with paved roads (removed from ICPS, 2014–2016). Target of 100% by 2016 (2009 baseline: 33%).

Target unlikely to be achieved. Actual at 2015 is 71.4%.

Average bus speed along the bus rapid transit system corridor in Ulaanbaatar (added to ICPS, 2014–2016). Target 26 kph by 2016 (2013 baseline: 20 kph). Appears to be the replacement indicator for passenger journeys above, expecting that the BRT may be implemented by 2016.

Target unlikely to be achieved. Bus speed in 2015 is 21.5 kph. Corridor speed is improving without any major project intervention.

Energy (Strategy 2020 Core Area 1: Infrastructure) Energy security

Improved energy access (removed from ICPS, 2014–2016)

Energy conservation (removed from ICPS, 2014–2016)

Energy efficiency and security (added in ICPS, 2014–2016)

Renewable energy (added in ICPS, 2014–2016)

Improved energy access and efficiency in urban centers and remote areas.

Electrification rate. Target of 95% by 2016 (2011 baseline: 90%; 90% in 2013).

Achieved. Current value (2014) is 96.7%.

Energy consumption. Target of 1,313 MWe by 2016 (2011 baseline: 762 MWe). Removed from ICPS, 2014–2016.

Likely to be achieved. Current value of 1,123.3 MWe (2014).

Electricity consumption. Target of 8,987 GWh by 2016 (2013 baseline: 5,984 GWh). Added to ICPS, 2014–2016.

Not achieved. 7,342 MWe (2016).

Education (Core Area 5: Education) Improved quality, access, efficiency, and effectiveness of the education sector

Improved educational attainment and improved quality, access, efficiency, and relevance in secondary education, higher education, and technical and vocational education and training (TVET).

% of higher education graduates employed in fields in which they received training after graduation. Target of 50% by 2016 (2007: baseline 40%). Removed from ICPS, 2014–2016.

No data. It is difficult measure this indicator as it requires extensive tracer studies. HEIs in Mongolia usually do not conduct tracer studies.

Higher education net enrollment among the population in the age group of 18-24 years. Target of 50% by 2015 (2010 baseline: 47%). Removed from ICPS, 2014–2016.

Target unlikely to be achieved. Current value 27% (2014).

The number of students enrolled in TVET institutions. Target of 49,213 by 2015 (2009 baseline: 46,945). Removed from ICPS, 2014–2016.

Target not achieved. Current value 42,675 (2015).

Employment rates of graduates from TVET in priority sectors. Target of 57% by 2016 (2013 baseline: 54%). Added to ICPS, 2014–2016.

Target unlikely to be achieved. Current value 49% (2014).

Gross enrollment ratios (GER). Target 100% by 2016 (2012 baseline: pre-primary 85.8%, primary 116.7%, secondary 103.5%).

Targets unlikely to be achieved. No data for pre-primary GER, current value 99.3% (2015) for primary GER, and current value 97.8% (2015) for secondary GER.

Assessment of Progress Toward Country Development Goals and Sector Outcomes 57


Current Measurement Ratios higher than 100% indicate backlog of older students that should be cleared.

Health (2020 Area: Other Areas of Operation) Millennium Development Goal achievement with improved allocative efficiency and greater pro-poor focus

Quality and financial accessibility of health services improved. Removed from ICPS, 2014–2016. More people enjoy improved social insurance, welfare, and health services. Added to ICPS, 2014–2016.

Universal coverage of citizens’ health insurance. Target of 100% in 2016 (2010 baseline: 80%).

Achieved. Current value 100% (2015).

Percentage of government health sector budget allocated to primary health care increased. Target of 25% in 2015 (2010 baseline: 20.2%).

Achieved. Current value 26.6% (2015).

Illegal or substandard drugs in the market. Target of 13% in 2016 (2010 baseline: 26%). Removed from ICPS, 2014–2016.

No data until 2018. Current value 17.8% (2013). Good progress but not possible to determine likely achievement.

Prevalence of hepatitis B and C among health workers. Target of 12% in 2015. (2010 baseline: 15%).

No data.

Social pensions for informal sector workers (herders, self-employed and non-wage earners). Target of 10% increase in coverage in 2015 (2012 baseline: 100,971 persons). Removed from ICPS, 2014–2016.

Achieved. Current value 147,102 (2013).

Water Supply and Other Municipal Infrastructure Services (Strategy 2020 Core Area 1: Infrastructure; Core Area 2: Environment [Livable Cities]) Improved financial sustainability of service provision

Enhanced investment in operations, including infrastructure maintenance removed from ICPS, 2014–2016)

Improved urban environment, particularly improved air quality and reduced soil and water pollution

Reduced urban congestion and improved urban efficiency

Greater availability of municipal services and improved living conditions in urban areas. More people enjoy better urban services and living conditions in urban areas. Added to ICPS, 2014–2016.

Urban population with access to potable water supply. Target 65% in 2016 (2008 baseline: 46%). Removed from ICPS, 2014–2016. An MDG and an SDG target.


Urban population with access to adequate sanitation. Target 40% in 2016 (2008 baseline: 27%). Removed from ICPS, 2014–2016. An MDG and SDG target.

Target likely to be achieved. Current value 41.4% (2014).

Average water consumption in ger areas. Target 10 liters/capita/day in 2016 (2010 baseline: 6.5 lpcd).

Recent data are needed to assess the achievement. Current value 7.7 lpcd (2014).

Prevalence of intestinal and pulmonary infections. Target 15% decline by 2016 (2010 baseline: 12,000 cases). Removed from ICPS, 2014–2016.

No data.

Population using an improved drinking water source in urban areas increased. Target 85% by 2016 (2010 baseline: 78%). Added to ICPS, 2014–2016.

Recent data are needed to assess the achievement. Current value 80.4% (2014).

Population using an improved sanitation facility in urban areas increased. Target 45% by 2016 (2010 baseline: 37%). Added to ICPS, 2014–2016.

Recent data are needed to assess the achievement. Current value 41.4% (2014).

58 Appendix 4


Current Measurement Finance (Core Area 4: Finance) More efficient financial intermediation to support private sector growth, economic diversification, long-term investment, innovation, and access to finance. Added to ICPS, 2014–2016.

Increased use of more efficient financial intermediation by private sector enterprises and individuals. Added to ICPS, 2014–2016.

Bank credit to GDP. Target 100% by 2016 (2012 baseline: 83.9%). Added to ICPS, 2014–2016.

Achieved. Current value 102.8% (2014). It is not clear what is included in bank credit (e.g., whether it includes bad loans).

Annual MSE turnover as a share of GDP. Target 3.0% by 2016 (2012 baseline: 1.0%). Added to ICPS, 2014–2016.

Target unlikely to be achieved. Current value 1.6% (2014).

Total bonds outstanding as a percentage of GDP. Target 18% by 2016 (2012 baseline: 7.1% in 2012). Added to ICPS, 2014–2016.


Agriculture, Natural Resources, and Rural Development (Area: Other Areas of Operation) Improved environmental services, and quality in ecosystems and agricultural production. Added in ICPS, 2014–2016.

Increased productivity in agriculture sector in line with the national green development policy. Added to ICPS, 2014–2016.

Value added of agro-processing. Target 30% increase by 2016 (2012 baseline: MNT460 billion). Added to ICPS, 2014–2016.

Target likely to be achieved. Current value 27.2% (2015).

CAREC = Central Asia Regional Economic Cooperation, CPSFR = country partnership strategy final review, ICPS = interim country partnership strategy, IED = Independent Evaluation Department, MDG = Millennium Development Goals. Source: Asian Development Bank Independent Evaluation Department.

APPENDIX 5: LIST OF LINKED DOCUMENT 1. Country Partnership Strategy Final Review: Mongolia, 2012–2016 https://www.adb.org/sites/default/files/linked-documents/MON-CPS-Final-Review-2012-

2016.pdf

https://www.adb.org/sites/default/files/linked-documents/MON-CPS-Final-Review-2012-2016.pdf

https://www.adb.org/sites/default/files/linked-documents/MON-CPS-Final-Review-2012-2016.pdf

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