At a meeting of the Economic, Budget, and Investment Committee of the Ulaanbaatar City Citizens’ Representatives Khural, the issue of the capital city issuing domestic securities in 2027 to finance major projects was discussed in detail.
Under the Law on Debt Management and related policy documents, the capital plans to issue a total of ₮300 billion in domestic securities in 2027 to raise funding.
According to an presentation by L. Erdenebadrakh, head of the Finance and Investment Department of the Ulaanbaatar City Governor’s Office, the funds are earmarked for the implementation of Thermal Power Plant No. 5 and the Ulaanbaatar Tram project.
Specifically, Thermal Power Plant No. 5 requires ₮250 billion in financing from the capital city, which is planned to be secured through the issuance of securities, while ₮50 billion is expected to be raised from the same source for the Ulaanbaatar Tram project.
Once Thermal Power Plant No. 5 is put into operation, the reliability of the energy system will improve, it will be possible to supply electricity to around 100,000 households and heat to 40,000 households, and it is also expected to help reduce air pollution. In addition, the project is projected to create around 1,600 jobs during construction and more than 300 permanent jobs after becoming operational.
Meanwhile, the Ulaanbaatar Tram project is expected to deliver positive social and environmental impacts by increasing the accessibility and capacity of public transport, reducing travel time from 90-100 minutes to 29-37 minutes, and cutting annual carbon dioxide emissions by 35,000-73,000 tons. The project is planned to be implemented under a public-private partnership DBFOT model, with construction to take three years and operations to continue for 27 years. Officials said this would make it possible to use private-sector investment and management without increasing the burden of public debt.
The presentation also noted that, within the capital’s debt management framework, a proposal to gradually restructure the repayment of previously issued foreign securities and defer part of the amount due in 2027 had been submitted to the relevant ministry. The financing decision will be finalized at the regular 7th session of the Citizens’ Representatives Khural, scheduled for next Monday.
Last March, the city began publicly offering domestic bonds to finance Thermal Power Plant No. 5: ₮200 billion worth of Ulaanbaatar domestic bonds with a three-year maturity and an annual interest rate of 14 percent, totaling 200,000 bonds with a face value of ₮1 million each.
