Ulaanbaatar, April 30 2007 - The Government of Mongolia ("GOM") has signed MOU with World Bank Group ("WBG"), which comprises the International Bank for Reconstruction and Development (“IBRD” or “WB”) and the International Finance Corporation ("IFC"), the Asian Development Bank (“ADB”), and the European Bank for Reconstruction and Development (“EBRD") together International Financial Institutions “IFIs”, to achieve the following objectives:
(a) assist the GOM in reforming the legal, regulatory and fiscal framework for the sector and the implementation thereof to promote stability and encourage private investment;
(b) assist the GOM to identify and assess the options available for supporting the medium and long term development of the mining sector by the private sector;
(c) assist the GOM in its participation in “Strategic Deposits” under the new mining law; establish a transparent valuation process and a range of financial structure options for the sustainable development of these Projects; and support the GOM in concluding the transactions for the initial developments;
(d) assist the GOM in the preparation of an overall sector development strategy including an Integrated Master plan for the Sustainable Development of the Coal sector in Mongolia.
The IFIs could help the GOM achieve its strategic objectives and address the key issues through focused Technical Assistance, Financial and Advisory Services.
1. Policy Framework, Sector Reform, and Capacity Building. IFIs will assist in strengthening the legal, regulatory and fiscal framework, assessing GOM equity ownership options to ensure a fair sharing of the Projects’ risks and rewards.
2. IFIs will provide Technical Assistance to the GOM to establish a framework for Strategic Deposits valuation.
3. IFIs will provide Technical Assistance relating to a holding company structure for GoM’s shareholdings in the mining sector.
4. IFIs will assist in promoting widespread local participation.
5. IFIs may facilitate Future Private Investment in Mining and Associated Infrastructure.
6. The IFIs will provide current international good practice to ensure the highest possible levels of environmental safeguards and sound regional economic development.
The GOM acknowledges that the IFIs can play a unique role as a "neutral and honest broker" to facilitate communications between GOM and potential strategic investors, and as such may be involved both pre- and post-development of the Strategic Deposits.
Within two weeks from the date of signing this MoU, the IFIs and GOM will create a joint working group to draft the detailed TORs for the specific IFI Assistance. The working group will aim to complete the TORs within two weeks of its establishment and start implementation immediately thereafter.