MCA-Mongolia First Compact

In October 2007, the Millennium Challenge Corporation signed a five-year, $285 million compact with the Government of Mongolia aimed at reducing poverty and promoting sustainable economic growth through investments in four projects. The compact in Mongolia entered into force in September 2008, formally initiating the five-year timeline for project implementation.

Subsequently, at the request of the Government of Mongolia, the compact’s rail project was canceled, and its funds were formally reallocated to expand the existing projects and the addition of two new projects. The Mongolia Compact was amended in January 2010 to reflect these changes.

MCA-Mongolia First Compact Projects

The strategic investments of the compact will increase economic activity through improving the land registration system, helping people in poorer urban areas register their land, and providing for sustainable management and utilization of rangelands in selected peri-urban areas; improve vocational training to help Mongolians qualify for more demanding and financially rewarding market-oriented jobs, ensuring that they become healthier and more productive as they enter the marketplace; increase the adoption of energy-efficient and lower-emission appliances and homes in the ger districts and support the development of renewable energy; and improve the road in the critical north-south economic corridor.

The compact aimed to reduce poverty through economic growth by achieving the following objectives:

(i) Increased security and capitalization of land assets of lower-income Mongolians and increased peri-urban herder productivity and incomes;

(ii) Increased employment and income among unemployed and underemployed Mongolians;

(iii) Reduced risk and incidence of premature death and disability from non-communicable diseases and injuries (NCDIs);

(iv) More efficient transportation for trade and access to services through the north-south corridor; and

(v) Increased savings and productivity through greater fuel-use efficiency and decreased pollution-related health costs in Ulaanbaatar.

Property Rights Project: MCC funded several improvements to the property registration system designed to improve the system’s reliability, efficiency, ease of use, and affordability to the average citizen. These improvements included renovating 11 registry office buildings, providing modern registration computer hardware and software to these offices and improving the processes these offices used to register rights. Every Mongolian citizen and company who seeks to privatize, buy, sell, lease, or otherwise transfer land will benefit from this improved system. 

MCC also helped individual households receive ownership of their household land plots (khashaa plots). So far the project has helped provide titles for 18,336 land plots through this assistance.

Finally, MCC funded the design of a land-leasing system for pasture areas around cities, provided 15-year land leases to 387 herder groups comprising approximately 1,300 households, installed wells on most of these leases and trained the herder groups on sustainable pasture use and improving livestock productivity. The herders are expected to benefit from higher incomes, and Mongolia is expected to benefit from reduced land degradation.

Vocational Education: MCC supported Mongolia in moving towards a modern, demand-driven technical and vocational education and training (TVET) system through extensive policy and legal reform, a new labor market information and career guidance system and quality improvements in six priority trades benefitting 50 vocational colleges and 12,609 students. More than 100 employers engaged in establishing new skill standards, updating curricula in 28 trades, competency-based assessment, expanded apprenticeship opportunities, industrial workshops and faculty-industry exchanges. MCC helped train hundreds of teachers in new technical skills and teaching methodologies, as well as provide new technical equipment including multimedia resource centers.  In addition, to help the Mongolian system align with best international practices in TVET, three Mongolian TVET schools were established as model “Centers of Excellence” (CoEs) in their respective fields of mining, construction and health, and linked with two equivalent Australian institutions.

Health: The NCDI project is working to reduce the prevalence and incidence of non-communicable diseases and injuries through a multi-level and multi-pronged approach. This approach includes working with the Government of Mongolia at the policy level to change laws on tobacco and alcohol use, providing training to more than 16,000 medical and non-medical personnel, supporting 35 health care workers in a Masters in Public Health program to develop a new cohort of public health and NCDI advocates, and providing equipment and supplies to health care facilities at both the soum (district) and aimag (province) level, as well as in the capital. As of September 2013, 15,604 people have been trained on NCDIs. Seven clinical guidelines and four clinical standards have been approved and distributed. More than 1.4 million health education materials have been distributed nationally. A revised tobacco control law was approved by Parliament in October 2012. The project funded vaccination of 9,111 girls age 11-15 with three doses of the human papillomavirus vaccine in a targeted vaccination campaign, reaching 65 percent of the age group targeted by the project.

Road: The North-South Road Project is constructing 176.4 kilometers of road to connect Ulaanbaatar with southern Mongolia completing one of the last remaining unpaved sections of road connecting Mongolia to China and Russia. Travel time from Choir to Sainshand previously took five hours; travel time has now been reduced to just over 2 hours. The improved conditions will reduce transportation costs, increase the flow of freight traffic and reduce the cost associated with transporting products to markets in Ulaanbaatar and other parts of the country.

Energy and Environment: MCC funded a broad-based public awareness and marketing campaign that provided information to support consumer purchases of energy-efficient household appliances. MCC funded product testing, the establishment of a new distribution channel and limited subsidies to support consumer purchases of new energy-efficient products demonstrated to reduce air pollution, resulting in sales of more than  103,000 solid fuel stoves, as well as insulation, vestibules and energy-efficient homes covering approximately 69 percent of the targeted market. MCC also funded the testing, selection and replacement of some of the worst-performing heat-only boilers in the city and replaced 15 of them at 10 sites. Thirteen small, competitive grants for greening and air quality research were awarded in two rounds, and MCC funded tree planting in 2.3 acres of the newly established National Garden Park in Ulaanbaatar. Finally, to reduce emissions from a planned expansion in combined heat and power generating capacity, MCC funded transmission network upgrades to facilitate the introduction of at least 112,000,000 megawatts of wind power into the national grid. Collectively, these efforts are expected to reduce air pollution in Ulaanbaatar, where half of the national population lives, by 20 percent according to the Air Quality Office of Ulaanbaatar City.

Environmental and Social Assessment (ESA): The Millennium Challenge Account-Mongolia ESA unit closely monitored the environmental and social impacts of all five projects and introduced good practices into the country’s existing environmental regulations and procedures. For example, the compact work influenced the development and implementation of the Hazardous Materials and Waste Management Guidelines, which resulted in the proper handling, transportation, storage, and disposal of asbestos, lead-based paint and other hazardous wastes resulting from the rehabilitation of registry buildings and TVET schools. Additionally, an annual conference on hazardous waste management was organized three times in Ulaanbaatar during the lifespan of the compact. MCA-Mongolia’s efforts with respect to this issue have contributed to the government of Mongolia’s decision to ban the importation of asbestos-containing materials for construction purposes.

Social and Gender Assessment (SGA): The Mongolia Compact has made efforts toward integrating gender into five different areas of projects and cross-cutting fields like monitoring and evaluation and public communications following the adoption of the Compact-wide Gender Integration Plan in July 2011.

MCA-Mongolia First Compact Close-out

Grant Total: $284,911,363
Grant Committed: $274,217,841
Grant Expended: $268,809,037

Signed: October 22, 2007
Entry Into Force: September 17, 2008
Completed: September 17, 2013

On September 9, 2013 the Mongolia Compact Close-out Ceremony took place at the Ulaanbaatar hotel, Restaurant Hall. At the event, State Minister, Head of Cabinet Secretariat, Member of MCA-Mongolia Board Saikhanbileg Ch., U.S. Ambassador Piper Campbell, and Senior Advisor of the MCC Cassandra Butts attended and made remarks. Remarks were followed by information about the each six projects and handing over gratitude letters. Lastly, the closing remarks were made by Acting CEO of the MCA-Mongolia Mr. Batbaatar B. To see the ceremony photos, visit Embassy’s Facebook page.