World Bank Approves US$33 Million for Improved Livelihoods for Rural Households in Mongolia

June 19, 2007

WASHINGTON DC, June 19, 2007 – The World Bank’s Board has just approved an investment credit and grant of US$33.0 million for the Sustainable Livelihood Project II (SLP II) in Mongolia.  The Sustainable Livelihoods Project II (SLPII) is the second phase of a three phase Adaptable Program Loan (APL) supported by the World Bank.

Mongolia’s economy has grown rapidly in recent years, however the country still faces considerable social challenges.  Despite encouraging trends in poverty reduction, there is considerable variation within the country. Poverty incidence in Mongolia is higher in rural areas, where almost half of the population lives, at 43 percent compared to 30 percent in urban areas. Nomadic herder households constitute the single largest group amongst the poor.

The first phase of the Sustainable Livelihoods Program has already demonstrated innovative approaches to reducing herder risk, enhancing the government’s capacity to be informed of and respond to crises caused by climatic events, building local-level assets through citizens’ engagement and contributions, and increasing access to better and more competitive loan products. Through its support of SLPII, the Bank will assist the Government of Mongolia to institutionalize the lessons of the first phase, as well as ensuring that linkages are strengthened with the complementary activities supported by other donors.

The development objective of the SLP II will be to enhance livelihood security and sustainability by scaling up institutional mechanisms that reduce the vulnerability of communities throughout Mongolia. The project will scale-up nationwide the effective mechanisms and processes piloted in 8 aimags (provinces) under the first phase in the local communities and governments.

"The most important aspect of the SLP is that it places primary emphasis on addressing the key concerns of rural citizens by ensuring their active participation in the decision making of activities supported,” said Nathan Belete, World Bank Task Team Leader and Senior Rural Development Economist“The World Bank remains committed to finding the most effective mechanisms by which to address rural vulnerability throughout Mongolia."

The total cost of the project is expected to be approximately US $ 51.40 million, comprising about US$33 million of credit and grant from the International Development Association, about US$15 million grant from the European Commission, and US$3.4 million from the Government of Mongolia.  The activities to be financed from the Project are categorized into four components:

  • Component 1: Pastoral Risk Management (PRM) which aims to scale-up and replicate effective strategies to prepare for and respond to pastoral risk.
  • Component 2: Community Initiatives (CI) which aims at establishing, on a nationwide basis, effective, transparent and socially inclusive mechanisms that empower communities to identify and implement small public facility improvement projects.
  • Component 3: Microfinance Development (MD) which aims to deepen and widen access to sustainable financial services to rural citizens.
  • Component 4: Capacity Building and Project Management (PM) which aims to ensure quality implementation and management of all activities under components 1, 2, and 3 and compliance with all World Bank policies and procedures.

The project will be implemented by a central Sustainable Livelihoods Project Office, with sub-offices in each aimag (province) and soum (district) throughout the country.  The project will be under the overall responsibility of the Ministry of Finance and include a Project Steering Committee comprised of relevant government agencies.  Duration of the project is expected to be four years from September 2007 until December 2011.

Media Contacts
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