Irina Kravchenko: EBRD is involved in various activities other than project financingThe Mongol Messenger
On November 20, we interviewed Irina Kravchenko, Head of Mongolia Unit at the European Bank of Reconstruction and Development (EBRD), on the activities of the EBRD in Mongolia.
-How long have you been working as the Head of Mongolia?
-I started working as a head of Resident Office in Mongolia in March of 2017. But I have been familiar with Mongolia before. In 2008, the EBRD started studying investment opportunities in the private sector for its new products including risk sharing facility with local banks and direct lending. We worked directly with the small and medium sized companies.
-On what projects EBRD is working currently?
-Each year EBRD signs approximately 12 projects, implemented directly or in cooperation with financial sector, which helps us to reach SMEs and support more small companies of private sector across the country. This year we have signed few projects with our partners in the financial sector Khan Bank and Xac Bank. We have dedicated credit lines to support SMEs, energy efficiency and value chain development. The overall objective of the projects is to support the growth of private sector and diversification of the local economy.
-How do you choose the companies to cooperate?
-First of all, we assess the company’s financial standing, management and growth potential. The company should be financially viable to receive loans from the EBRD and the management should be with certain reputation. We also look at what contribution the project can make to the transition in economy.
-How many projects has the EBRD implemented in Mongolia?
-We are financing almost 100 projects in Mongolia, 56 of which are completed or ongoing projects. The overall portfolio is about USD 900 million. We are aiming to diversify, despite the fact that big share of our investment went to the mining sector, specifically to the Oyu Tolgoi projects.
-What is planned for 2019?
-We will continue supporting private sector through direct financing and financial intermediaries, local banks. In addition, we are planning to finance more infrastructure projects in Ulaanbaatar city as well as in Erdenet.
-Are there any special projects or priority sectors?
priorities are defined in the country strategy, which was approved last year.
It will be the guiding document for our activities in Mongolia for the next
four years. As I mentioned before, we will continue developing competitive
private sector, which also contributes to the diversification of local economy.
Since mining is one of the main pillars of economic development of the country,
we will continue supporting the sector, especially responsible mining, services
and production supporting mining sector. This year we signed the first project
in infrastructure with Ulaanbaatar city, the solid waste management project.
The EBRD will provide more support and financing in infrastructure, deepening
the relationship with the city and help to address the urgent needs including
urban transport, district heating and waste management. Solid waste management
projects are also planned for the regions. We are discussing the program and
signing the framework, where we can address these needs through investments and
-In what activities the EBRD is engaged apart from investments?
-We have a lot of ongoing policy initiatives. It includes different kinds of programs with grand financing from the European Union and technical assistance provided by the EBRD in various areas of marketing, strategy development, human resources and financial management. We are actively involved in promoting transparency, especially in mining sector. For instance, the implementation of the Extractive Industries Transparency Initiative (EITI) program is ongoing for several years. The EBRD is assisting the Ministry of Mining with drafting the Law on Mining, working on the regulation of NBFIs with the Financial Regulatory Commission and provide technical assistance in the capital and money market in cooperation with the Bank of Mongolia. The recently launched program is aimed at helping the Ministry of Energy with assessment of grid capacity. These are the main ongoing projects. We are active in different areas and sectors, working closely with the Government and private sector as well. The main objective is to promote Mongolia, attract foreign investors and develop an efficient market economy.
-So it means that EBRD does not have specific priority area?
-Yes, we are trying to do projects that create new jobs, improve the sector environment and bring new technologies, which is very important. The companies then set benchmark for other companies. So it is always more than financing. Our approach is to make a step forward through financing, technical assistance and advisory towards more efficient market economy.