Ch.Khashchuluun: “Development Bank to Issue Bonds to Raise Funds”
Mr. Ch.Khashchuluun, Chairman of the National Development and Innovation Committee and Chairman of the Board of the Development Bank of Mongolia, shares his opinion on the recent development of establishing the Development Bank of Mongolia.
Q: Law on Development bank was adopted and its old regulation was amended. Board is going to be changed also. Is there any change in the pre-requirement for management team or from the team? Can you provide us the importance of this amended law?
Ch.Hashchuluun: In 2007, Development Bank was planned and in order to establish the bank, the law was being developed, but its implementation failed. The NDIC was established in 2009.
It was understood that budget can’t provide sufficient fund for the planned projects of the Government. Therefore, it was necessary to have a new structure of financing – the Development Bank.
At the first instance, we worked with international advisers to compose the rule of the Development Bank to be approved by the Government. This rule was the soil for the new law. Adopting the separate law was inevitable.
Q: Can you give us details on the independent board members?
Ch.Hashchuluun: Representative from Central Bank of Mongolia (Bank of Mongolia), Mongolian Banks’ Association and MNCCI (Mongolian National Chamber of Commerce and Industry) will be appointed.
Q: The foreign management team will direct the Development Bank. Will this team be composed of Mongolians?
Ch.Hashchuluun: Having foreign management team for the Development Bank has advantages. Mongolia lacks experience of industrialization, especially through the Development Bank, in its history of last 20 years. Financing structure of the Development Bank has much difference from those commercial banks.
Its fund shall be paid back, therefore it is different from budget. We ca prepare and train our HR ourselves. But it takes 3-4 years. Within this period, we shall seek assistance from foreign expertise. This team was selected from teams of the developed countries. The agreement with team will be concluded this Friday (April 29 2011).
Q: Where will be the location of the Bank and who will be the employees?
Ch.Haschuluun: 90% of the total employees will be Mongolians and few Korean managers will be working. Half of the management team will be Mongolians. As for the office, it is located at Ministry of Finance and there will be 40-50 people working for the bank, so I believe this building is enough to house all our employees.
Q: This fund will be used for Industrial Park, new industrialization and railway building. What project shall attract the biggest attention?
Ch.Hashchuluun: I think energy and construction will be the first ones and we have the list of projects.
Because of lag in the development of infrastructure, there are certain obstacles in the national development. Therefore, electricity network shall be created in Ulaanbaatar and countryside immediately.
Also, heating, clean water supply and sewage system shall be developed for Ulaanbaatar, urging housing program for 100,000 households. Moreover, SME development request is made by many people and Korean Development Bank has rich experience in supporting SME.
Its management team says that intensive funding for SME is possible, especially in food, agriculture and innovating processing factories. It has own interest in developing it also.
Third. Preparation work of the Industrial Park. We are negotiating with Bechtel Company to hire as the General Consultant. Bechtel will produce the main Feasibility Study of Industrial Park, infrastructure requirements, drawings and factories. Hence, building the industrial park work will start from building heating, water and sewage system and then SME complex will be created.
According to the plan, 3-4 big factories will be built, in doing so SME will be developed in parallel. It is called as the development of cluster. It shall steeply decrease infrastructure cost, while allowing centralization of many industrialization objects and projects on the existing infrastructure, yet promoting competition.
It will not be limited only to Sainshand, also it will be created in Darkhan, Selenge, Gobi regions. But infrastructure building cost is higher in Gobi region, just for an example, road building takes 2-3 years. But it needs water, heating and sewage system also.
As for now, it is correct to concentrate on Sainshand, Darkhan, Selenge, Erdenet where the infrastructure is decently developed.
Its fund shall be paid back, therefore it is different from budget. We ca prepare and train our HR ourselves. But it takes 3-4 years. Within this period, we shall seek assistance from foreign expertise.
This team was selected from teams of the developed countries. The agreement with team will be concluded this Friday (April 29 2011).
Q: Where will be the location of the Bank and who will be the employees?
Ch.Haschuluun: 90% of the total employees will be Mongolians and few Korean managers will be working. Half of the management team will be Mongolians. As for the office, it is located at Ministry of Finance and there will be 40-50 people working for the bank, so I believe this building is enough to house all our employees.
Q: This fund will be used for Industrial Park, new industrialization and railway building. What project shall attract the biggest attention?
Ch.Hashchuluun: I think energy and construction will be the first ones and we have the list of projects. Because of lag in the development of infrastructure, there are certain obstacles in the national development.
Therefore, electricity network shall be created in Ulaanbaatar and countryside immediately. Also, heating, clean water supply and sewage system shall be developed for Ulaanbaatar, urging housing program for 100,000 households.
Moreover, SME development request is made by many people and Korean Development Bank has rich experience in supporting SME. Its management team says that intensive funding for SME is possible, especially in food, agriculture and innovating processing factories. It has own interest in developing it also.
Third. Preparation work of the Industrial Park. We are negotiating with Bechtel Company to hire as the General Consultant. Bechtel will produce the main Feasibility Study of Industrial Park, infrastructure requirements, drawings and factories.
Hence, building the industrial park work will start from building heating, water and sewage system and then SME complex will be created. According to the plan, 3-4 big factories will be built, in doing so SME will be developed in parallel.
It is called as the development of cluster. It shall steeply decrease infrastructure cost, while allowing centralization of many industrialization objects and projects on the existing infrastructure, yet promoting competition.
It will not be limited only to Sainshand, also it will be created in Darkhan, Selenge, Gobi regions.
But infrastructure building cost is higher in Gobi region, just for an example, road building takes 2-3 years. But it needs water, heating and sewage system also.
As for now, it is correct to concentrate on Sainshand, Darkhan, Selenge, Erdenet where the infrastructure is decently developed.
Q: Law on Development bank was adopted and its old regulation was amended. Board is going to be changed also. Is there any change in the pre-requirement for management team or from the team? Can you provide us the importance of this amended law?
Ch.Hashchuluun: In 2007, Development Bank was planned and in order to establish the bank, the law was being developed, but its implementation failed. The NDIC was established in 2009.
It was understood that budget can’t provide sufficient fund for the planned projects of the Government. Therefore, it was necessary to have a new structure of financing – the Development Bank.
At the first instance, we worked with international advisers to compose the rule of the Development Bank to be approved by the Government. This rule was the soil for the new law. Adopting the separate law was inevitable.
Q: Can you give us details on the independent board members?
Ch.Hashchuluun: Representative from Central Bank of Mongolia (Bank of Mongolia), Mongolian Banks’ Association and MNCCI (Mongolian National Chamber of Commerce and Industry) will be appointed.
Q: The foreign management team will direct the Development Bank. Will this team be composed of Mongolians?
Ch.Hashchuluun: Having foreign management team for the Development Bank has advantages. Mongolia lacks experience of industrialization, especially through the Development Bank, in its history of last 20 years. Financing structure of the Development Bank has much difference from those commercial banks.
Its fund shall be paid back, therefore it is different from budget. We ca prepare and train our HR ourselves. But it takes 3-4 years. Within this period, we shall seek assistance from foreign expertise. This team was selected from teams of the developed countries. The agreement with team will be concluded this Friday (April 29 2011).
Q: Where will be the location of the Bank and who will be the employees?
Ch.Haschuluun: 90% of the total employees will be Mongolians and few Korean managers will be working. Half of the management team will be Mongolians. As for the office, it is located at Ministry of Finance and there will be 40-50 people working for the bank, so I believe this building is enough to house all our employees.
Q: This fund will be used for Industrial Park, new industrialization and railway building. What project shall attract the biggest attention?
Ch.Hashchuluun: I think energy and construction will be the first ones and we have the list of projects.
Because of lag in the development of infrastructure, there are certain obstacles in the national development. Therefore, electricity network shall be created in Ulaanbaatar and countryside immediately.
Also, heating, clean water supply and sewage system shall be developed for Ulaanbaatar, urging housing program for 100,000 households. Moreover, SME development request is made by many people and Korean Development Bank has rich experience in supporting SME.
Its management team says that intensive funding for SME is possible, especially in food, agriculture and innovating processing factories. It has own interest in developing it also.
Third. Preparation work of the Industrial Park. We are negotiating with Bechtel Company to hire as the General Consultant. Bechtel will produce the main Feasibility Study of Industrial Park, infrastructure requirements, drawings and factories. Hence, building the industrial park work will start from building heating, water and sewage system and then SME complex will be created.
According to the plan, 3-4 big factories will be built, in doing so SME will be developed in parallel. It is called as the development of cluster. It shall steeply decrease infrastructure cost, while allowing centralization of many industrialization objects and projects on the existing infrastructure, yet promoting competition.
It will not be limited only to Sainshand, also it will be created in Darkhan, Selenge, Gobi regions. But infrastructure building cost is higher in Gobi region, just for an example, road building takes 2-3 years. But it needs water, heating and sewage system also.
As for now, it is correct to concentrate on Sainshand, Darkhan, Selenge, Erdenet where the infrastructure is decently developed.
Its fund shall be paid back, therefore it is different from budget. We ca prepare and train our HR ourselves. But it takes 3-4 years. Within this period, we shall seek assistance from foreign expertise.
This team was selected from teams of the developed countries. The agreement with team will be concluded this Friday (April 29 2011).
Q: Where will be the location of the Bank and who will be the employees?
Ch.Haschuluun: 90% of the total employees will be Mongolians and few Korean managers will be working. Half of the management team will be Mongolians. As for the office, it is located at Ministry of Finance and there will be 40-50 people working for the bank, so I believe this building is enough to house all our employees.
Q: This fund will be used for Industrial Park, new industrialization and railway building. What project shall attract the biggest attention?
Ch.Hashchuluun: I think energy and construction will be the first ones and we have the list of projects. Because of lag in the development of infrastructure, there are certain obstacles in the national development.
Therefore, electricity network shall be created in Ulaanbaatar and countryside immediately. Also, heating, clean water supply and sewage system shall be developed for Ulaanbaatar, urging housing program for 100,000 households.
Moreover, SME development request is made by many people and Korean Development Bank has rich experience in supporting SME. Its management team says that intensive funding for SME is possible, especially in food, agriculture and innovating processing factories. It has own interest in developing it also.
Third. Preparation work of the Industrial Park. We are negotiating with Bechtel Company to hire as the General Consultant. Bechtel will produce the main Feasibility Study of Industrial Park, infrastructure requirements, drawings and factories.
Hence, building the industrial park work will start from building heating, water and sewage system and then SME complex will be created. According to the plan, 3-4 big factories will be built, in doing so SME will be developed in parallel.
It is called as the development of cluster. It shall steeply decrease infrastructure cost, while allowing centralization of many industrialization objects and projects on the existing infrastructure, yet promoting competition.
It will not be limited only to Sainshand, also it will be created in Darkhan, Selenge, Gobi regions.
But infrastructure building cost is higher in Gobi region, just for an example, road building takes 2-3 years. But it needs water, heating and sewage system also.
As for now, it is correct to concentrate on Sainshand, Darkhan, Selenge, Erdenet where the infrastructure is decently developed.
Comments
Post a Comment