Country context (P3 lens)

Mongolia is a lower-middle-income, landlocked country with a nascent but growing P3 market. P3s are used to mobilize private capital, accelerate infrastructure delivery, and transfer operational risk, primarily in transport, energy, and social infrastructure. Most projects rely on multilateral or donor support to ensure financial viability and attract private participation.

Verified sources: World Bank PPP Knowledge Lab, Mongolia Ministry of Finance, IMF, Asian Development Bank.

Economic and infrastructure conditions

• Economy: Resource-driven, with mining, agriculture, and services as main sectors; infrastructure investment is crucial for transport, energy, and municipal services.

• Infrastructure priorities:

  • Roads, bridges, and regional transport corridors

  • Electricity generation (coal, solar, wind) and distribution

  • Water supply, sanitation, and municipal services

  • Hospitals, schools, and social infrastructure

• Private sector: Small domestic investor base; most P3 projects require regional or international investors, often supported by donor guarantees.

Projects are typically medium-scale, donor-backed, and structured for predictable cash flows.

Public Private Partnerships framework

Legal and institutional setup

• Mongolia’s P3s are governed by the Law on Public-Private Partnership (2012), with oversight by the Ministry of Finance and the PPP Unit.

• Project approval requires feasibility studies, value-for-money assessments, fiscal risk evaluation, and multilateral advisory support.

• Typical P3 structures:

  • Concessions for transport infrastructure (roads, bridges, regional corridors)

  • Build-Operate-Transfer (BOT) for energy and utilities

  • Availability-payment contracts for hospitals, schools, and municipal services

Market characteristics

• Mongolia’s P3 market is nascent, with strong reliance on advisory support from the World Bank, ADB, or IMF.

• Financing structures include availability payments, revenue-sharing, and donor-backed blended finance.

• Investor participation is largely regional or international, given limited domestic technical and financial capacity.

Sector experience and opportunities

Transport

• Roads, bridges, and regional corridors are primary P3 opportunities.

Energy and utilities

• Coal, solar, and wind energy projects delivered under BOT or concession models.

• Transmission and distribution may involve private participation under structured agreements.

Water and municipal services

• Urban water supply, sanitation, and wastewater projects structured as service contracts or concessions.

Social infrastructure

• Hospitals and schools delivered through availability-payment P3s, often with multilateral or donor support.

Key P3 considerations

• Fiscal risk management: Government guarantees or donor support are critical due to limited fiscal capacity.

• Institutional capacity: P3 units provide oversight but rely heavily on multilateral advisory support.

• Market depth: Very limited domestic investor base; regional and international investors are essential.

• Project selection: Focus on revenue-generating or donor-supported projects to ensure bankability.

Outlook

Mongolia is a nascent P3 market with potential in transport, energy, water, and social infrastructure:

• Focus sectors: roads, energy (renewable and conventional), water, and social infrastructure

• Projects are generally medium-scale, government-backed, and structured for predictable returns

• Multilateral advisory and financing support is key to successful project delivery

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