KEY OUTCOMES OF THE NEW INVESTMENT LAW Javkhlanbaatar Sereeter Director General 18 November 2014, Hong Kong, PRC MONGOLIA INVEST in
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KEY OUTCOMES OF THE NEW INVESTMENT LAW
Javkhlanbaatar SereeterDirector General
18 November 2014, Hong Kong, PRC
MONGOLIAINVEST in
2
Contents
Section 1: Implications of the Investment Law
Section 2: More Legal Enchancement
Section 3: Projects initiated for Industrialization
3
Ease of Doing Business, 2015
INVESTMENT POLICY REVIEW
/April 2014, UNCTAD/ TRADE POLICY REVIEW
/September 2014, WTO/
POSITIVE AND GOOD NOTES
From the Members of the UNCTAD and WTO
Representatives of foreign investors
5
The Interest of Investors is Higher in 2014
• Over 50 forums and conferences
• Over 4500 potential investors of 22 countries
• 257 newly registered foreign entities in first 10 months in 2014
� The list of 22 economies:
- China
- Hong Kong, PRC
- France
- Japan
- USA
- Switzerland
- Canada
- Korea
- Germany
- England
- Turkey
- Myanmar
- India
- Latvia
- Austria
- Russia
- Taiwan, PRC
- Italy
- Spain
- Poland
- Hungary
- South Africa
Declining FDI Inflow
/in billion USD/
7
Contents
Section 1: Implementation of Investment Law
Section 2: More Legal Enhancement
Section 3: Project Development
8
• The amendment to Mineral’s Law seeks to limit
the state’s role in mining and create a stable and
feasible development in the industry.
• The new law provides a number of incentives
available to petroleum explorers, including
exemptions from customs duty and VAT in the
first 5 years, and income taxes from oil sales.
Mineral Law is revised
Petroleum Law is revised
Issue of 106 licenses Issue of 106 licenses
State Policy for Minerals • A policy framework that would define the
country’s priorities and strategies in the minerals
sector in the future.
• The Government approved a decree to settle the
uncertainty caused the frozen 106 mining licenses.
More Legal EnhancementMore Legal Enhancement
9
•The “Glass Account Law” enables public control andmonitoring of the budget spending and procurement fortransparency.
SMART Governance Initiative
• Decisive Regulatory reform aimed to reduce andabolish inefficient, business unfriendly, excessivegovernment regulations and red tapes
The Glass Account Law
State Policy on Railway
More Legal Enhancement
1435 mm gauge routes:
• Tavantolgoi – Gashuun Sukhait
• Khuut – Bichigt
1520 mm gauge routes:
• Arts suuri – Erdenet
• Tavantolgoi – Sainshand – Baruun-Urt – Khuut –
Choibalsan
• Khuut – Numrug
10
More International Engagement in 2014
EPA• Japan-Mongolia Economic Partnership
Agreement is the first free trade agreement
of Mongolia.
• Negotiations were finalized.
FIPA • Foreign Investment Protection and Promotion
agreements with 43 countries
• Mongolian-Canadian BIT negotiations were
re-commenced
Transparency Agreement • An Agreement on Transparency in Matters
Related to International Trade and Investment
between the United States of America and
Mongolia was signed in September 2014.
• MIGA Guarantee Agreement is underway to
approved at the Parliament.
11
Contents
Section 1: Implementation of Investment Law
Section 2: More Legal Enhancement
Section 3: Projects initiated for Industrialization
12
Signed PPP Projects- USD 7.5 bln
In 2013, the Government of Mongolia approved 43 projects under the condition of PPP
mechanism.
№ Project name Total Cost Concessionaire
1 “Telmen power plant” project USD 183.0 million “New Asia Group” LLC
2“Altanbulag-Ulaanbaatar-Zamyn-Uud
highway” projectUSD 5.0 billion
“CHINGGIS LAND
DEVELOPMENT GROUP” LLC
3“Nariinsukhait – Shiveehuren” road
projectUSD 47.6 million “RDCC” LLC
4“Establishment of the mining and
metal processing complex” projectUSD 725.0 million “QSC” LLC
5 “Tuul-Songino power plant” project USD 163.1 million “MORIT IMPEX” LLC
6“Tavantolgoi-Khanbogd-Hangi” road
projectUSD 237.8 million “MCCC” LLC
7 “POWER PLANT #5” (CHP5) project USD 1.2 billion“GDF SUEZ, SOJITZ, POSCO,
NEWCOM” LLC
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CHP 3 CHP 4“Baganuur”
SOE
Amgalan
Power Plant
USD 30.9 millionUnder the project, the
capacity of the plant has been
increased by 50.0 Mw and
reached 186 Mw. The cost for
producing 1 kw/h energy will
decrease from MNT 74.7 to
MNT 36.
Performance: 100%
USD 47.4 millionUnder the project, the
capacity of the plant has
been increased by 123.0
Mw and reached 580
Mw.
The expansion amount
wi l l provide 10% of
domestic energy
consumption.
Performance: 81%
USD 10 millionThe capacity for Coal
crushing and loading
wi l l increase by 4.5
mi l lion ton yearly and
can provide heating and
Ger district households
continuously with coal.
Performance: 100%
USD 25.6 millionThis power plant will
provide east side of
Ulaanbaatar with energy.
Performance: 75%
Million
USD113.9
Light industryPower Plants
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Ulaanbaatar Engineering Infrastructure
Energy
Infrastructure
projects
Performance: 61.1%
Construction
Infrastructure
projects
Performance: 93.2%
City’s ger district
redevelopment
Infrastructure
projects
Performance: 24.2%
Million
USD103.4
More USD 300 mln
loan has been
granted from ADB
and EB from 2013.
15
Project financing:
184,5 Million USD
Performance: 43%
Railway
267 km railroad Tavantolgoi
- Gashuun Sukhait Route is
built from 1800 km
145Million
USD
48.6Million
USD
75.1Million
USD
21.3Million
USD
888 projects for import substitution
and export promotion projectsFinanced 85 entities through the
commercial banks
Agriculture and light industry
sectorAim to develop domestic final products’
industry and supply domestic demands
Financed 110 entities
Projects to develop SMEsFinanced 116 entities through the
commercial banks
Light industry
Light industry
“Expecting a positive trend in FDI”
Thank you for your attention
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