International and national development institutes join efforts to support the economies of Russia and Mongolia: IBEC has funded the development of Mongolia's railway infrastructure by attracting tied funding from Roseximbank JSC

International Bank for Economic Co-operation has provided a targeted loan to the Ulaanbataar Railway (UBTZ) for the purchase of locomotives produced by the Russian Transmashholding JSC. Tied financing for a period of 11 years from Roseximbank JSC with the insurance coverage by EXIAR, successfully attracted in June 2020, allowed the Bank to implement the transaction with the maximum efficiency. This complexly structured financial transaction totaling EUR 40 million ensures the implementation of a long-term investment program to modernize the Mongolian railway infrastructure. Target loan also contributes to an increase in exports from Russia – the purchased main freight two-section diesel locomotives meet the latest environmental and safety requirements for such types of equipment.

The structure of the transaction includes a loan from Roseximbank for 11 years with a subsidized interest rate as part of the program by the Ministry of Industry and Trade of the Russian Federation supporting the production of high-tech products. According to Denis Ivanov, Chairman of the IBEC Board, “the first partnership experience with Roseximbank opens up new perspectives for cooperation between national and multilateral development institutions.”

The tenor of the loan provided to UBTZ corresponds to the guidelines of the Mongolian railway infrastructure modernization program, prepared with the participation of the international company PwC, financial adviser of the UBTZ. The head of the UBTZ Damdinsuren Jigjidnyamaa spoke about development plans at the beginning of the year during a visit to the IBEC headquarters. The Mongolian railway shareholders are Mongolia and the Russian Federation, so looking at the interests of the IBEC member states, the deal has a multilateral multiplier socio-economic effect - support for high-tech industries, infrastructure development, export promotion and economic cooperation. The implementation of such a large-scale and long-term project against the background of global instability due to the COVID-19 pandemic indicates the effectiveness of the financial mechanisms offered by IBEC.

The deal is significant both in terms of the participation of several development institutions, and taking into account the use of the state program of subsidizing and export support. Moreover, this is the first transaction in the history of IBEC with the participation of the export credit agency.

“We are grateful to our partners in Mongolia and Russia for their professionalism and prompt resolution of all the issues thatwe have inevitably faced in such a complicatedtransaction’s structure, for their determination in the fulfilling the task, which allowed us to successfully implement the project,” said the head of IBEC Denis Ivanov, signing the agreement.


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