Invest Mongolia Agency INVESTMENT OPPORTUNITIES OF MONGOLIA Presented

Invest Mongolia Agency INVESTMENT OPPORTUNITIES OF MONGOLIA Presented by: Mr. IRMUUN Demberel, Deputy Director Invest Mongolia Agency

Content • • Economic overview Foreign investment environment Projects are available for funding Invest Mongolia Agency

Economic overview:

Mongolia Overview Mongolia has a leading land per capita in the world GDP 2013 in USD billions Population 2013 in millions RUSSIA US$ 2, 014 143 Territory: 1. 6 million sq. km MONGOLIA US$ 11, 4 Population: 3. 00 million (2015) 3 S. KOREA US $1, 129 50 CHINA US$ 8, 358 1, 351 JAPAN US$ 5, 959 127 Source : World Bank, 2015 4

Key reasons to invest in Mongolia • Neighboring with two of the largest global economies- China and Russia • Large mineral resource base that can be leveraged for value- added processing for high capital returns • Huge potential in agriculture and husbandry (over 60 million livestock) • A growing banking and financial services industry through transparent and open policies • Great potential for the development of renewable energy sources • Promising foreign investment opportunities in tourism, leisure and regional development • Vibrant and flourishing democratic Government and friendly FDI environment • Developing industry and infrastructure • Young and well educated population

International Indexes FORBES Mongolia is ranked in 63 th from 146 world countries. Doing Business Mongolia is ranked in 72 nd from 189 world countries.

Foreign investment environment:

GDP growth rate (%) 20 17, 5 18 16 14 12, 3 12 10 8, 2 8 6 4 11, 8 3, 7 6, 0 2008 2009 7. 4 4, 5 2 0 2006 Source: NSO bulletin 2007 2010 2011 2012 2013 2014

Trade is balanced Foreign trade Exports $M e: Bank of Mongolia, Customs general office Imports $M Trade balance $M

Foreign direct investment /in billion USD/ 6, 00 4, 99 5, 00 4, 40 4, 00 386, 36% billion USD 3, 00 2, 29 2, 00 1, 00 0, 32 0, 37 15, 85% 2005 2006 0, 50 36, 23% 2007 1, 03 0, 80 0, 71 41, 80% 2008 0, 41 28, 06% 13, 01% 2009 2010 (1, 00) (2, 00) FDI Percentage 2011 -11, 82% 2012 2013 2014 -47, 95% -82, 31%

Foreign direct investment /by sector/ 0, 3 Information and communications technology 0, 4 Hospitality and tourism 0, 4 Livestock-derived raw materials processing 0, 8 Light industry 0, 9 Construction 1, 3 Transportation Banking and financial services 1, 4 Other 3, 4 16, 6 Trade and food 73, 6 Geology, mining and exploration 0 Invest Mongolia Agency 20 40 60 80

Foreign invested companies /by number of companies/ 1800 1609 1505 1400 1551 1200 1000 800 971 933 774 769 600 613 400 390 200 335 80 4 , 0 20 15 14 20 13 20 12 20 11 20 10 20 09 20 08 20 07 20 06 20 20 05 0 Source: Invest Mongolia Agency, 2015

TOP INVESTORS COUNTRIES /2014/ Top investor countries 1990 -2014 № % 188 United. . . 1 Netherlands China 2 China Russian. . . 79 3 Luxemburg Hong Kon. . . 77 4 British Virgin Brazil Islands 5 Singapore 6 Canada 7 South Korea 8 USA 9 Russia 10 4. 2 26. 65 3. 75 8. 17 1. 15 64 7. 87 1. 10 64 5. 14 62 3. 53 -3 Australia 27 43 50 6 39 Spain Mexico Source: Invest Mongolia Agency 13 26 38 338 29. 96 101 Canada 124 /Billion USD/ Amount /in billion USD/ 95 92 FDI inflow FDI outflow 0. 72 0. 49 2. 69 0. 38 2. 19 0. 31 2. 11 0. 30 1. 84 0. 26

Investment Incentives Investment Law of Mongolia, 2013 provides: ØProtection of investor`s interests and rights ØTax stabilization ØInvestment incentives ØStability guarantees

Investment Incentives Tax incentives Exemption from the payment of certain taxes, including: • Preferential tax treatment • Accelerated depreciation and amortization that is deductible from taxable income, • Tax waiving

Investment Incentives Non-tax incentives • • • No import duty for machines and equipment of manufacturing, processing and industrial facilities Employee training costs are deducted from taxable income Investors are served through simplified registration and immigration procedures Land lease by foreign investors from 40 to 60 years to development projects Simplified procedures for permanent residence permit and multiple entry visa for investors

Investor’s Protection in Mongolia WTO member since 1997 Agreement on Mutual Protection and Promotion of Investment with 44 countries Japan-Mongolia Economic Partnership Agreement (EPA) signed /2015/ Agreement on Avoidance of Double Taxation with 34 countries Investors in Mongolia Seoul Convention on Investment Insurance, 1999 Member of Multilateral Investment Guarantee Agency (MIGA) General agreement on trade and economy with 24 countries Washington Convention on Investment Dispute Settlement, 1996

Signed PPP projects № Project name Total Cost Concessionaire 1 “Telmen power plant” project $183. 0 MLN “New Asia Group” LLC 2 “Altanbulag-Ulaanbaatar-Zamyn- $5. 0 BLN Uud highway” project 3 “Nariinsukhait – Shiveehuren” road project 4 “Establishment of the mining and USD 725. 0 metal processing complex” project MLN 5 “Tuul-Songino power plant” project CNY 1. 0 BLN “MORIT IMPEX” LLC 6 “Tavantolgoi-Khanbogd-Hangi” road project MNT 440. 0 BLN “MCCC” LLC 7 “POWER PLANT #5” (CHP 5) project $1. 2 BLN “GDF SUEZ, SOJITZ, POSCO, NEWCOM” LLC MNT 88. 0 BLN “CHINGGIS LAND DEVELOPMENT GROUP” LLC “RDCC” LLC “QSC” LLC

List of Concession projects № 1 2 3 4 Project Name The Center for Elder Care and Advanced Illness Improve morgue service Tsogt ovoo- Tsogttsets paved road Тype of PPP Design-Build-Own-Operate Build-Transfer Ulaanbaatar city Conference and convention center Design-Build-Own-Operate 5 Center for Transportation and logistics in western part of Ulaanbaatar city Center for Transportation and logistics in eastern part of Ulaanbaatar city Renovation of soum center infrastructure Nalaikh Civilian and Special purpose airport Design-Build-Own-Operate 6 7 8 Design-Build-Own-Operate Renovate/Equip-Lease-Operate Transfer Design-Build-Operate-Transfer 9 Renovation and Retrofitting of Dalanzadgad airport into International airport 10 Hazardous waste disposal processing plant Design-Build-Operate-Transfer 11 Tuul river cascade reservoirs Design-Build-Transfer, Design-Build. Operate-Transfer 12 13 14 Waste to electricity plant Kidney hemodialysis services Improve morgue service /Government Resolution N. 313/ Build-Own-Operate Buy-Own-Operate Build-Own-Operate 15 Medical oxygen production plant Build-Own-Operate

Investment opportunities: Energy and Mineral Resources Light industry Road, Urban development Agriculture Trade & service Tourism Food ICT and Human Development

PROJECTS ARE AVAILABLE FOR FUNDING :

CONSTRUCTION SECTOR Eco- Yarmag 1 Redevelopment of ger area , Requested amount: 100 million USD Buyant Ukhaa-2 Phase -2 , Requested amount: 116. 6 million USD Industrial and technology park of construction materials in Nalaikh district Requested amount: 47. 8 million USD Building information modelling Requested amount: 1. 6 million USD MINING AND HEAVY INDUSTRIES SECTOR New cleaner fuel comprehensive utilization project Requested amount: 6 million USD Nanometal steel plant Requested amount: 129. 7 million USD Tanil lime project Requested amount: 12. 8 million USD Chandmani Uul Copper, Gold and Iron mine Requested amount: 30 million USD Dorniin Gan project Requested amount: 40. 5 million USD Project to expand the concentrators Requested amount: 11. 4 million USD

Tumurtein Gol Project Requested amount: 21. 2 million USD Glass factory of Dundgobi province Requested amount: 119 million USD Wood based panel by processing secondary raw materials Requested amount: 20. 3 million USD LIGHT INDUSTRY SECTOR Emeelt light industry and technology park Requested amount: 262 million USD ROAD SECTOR New railroad project Requested amount: 8, 575 million USD FOOD AND AGRICULTURE SECTOR Seaberry bio-farm Requested amount: 21 millions of USD Mutton export project Requested amount: 105 million USD

ENERGY SECTOR Tavan Tolgoi power plant project Requested amount: 933. 8 million USD LOGISTIC & FREIGHT SECTOR Zamyn Uud Free Economic Zone Requested amount: 300 million USD Altanbulag free trade zone Requested amount: 193 million USD

Invest Mongolia Agency:

IMA’s structure Director General Project Assessing Council Promotion and Consulting Division Investment Policy, Assessment Division Administration, Human Resources Division Concession, Public. Private Partnership Division

Mission 1. Promotion of investment 2. Protection of investors 3. Update the domestic market to foreign investors 4. Consulting support in planning their investments 5. E-consulting services 6. Issuing tax stabilization certificate 7. Review the implementation of invested projects 8. To support in continuing the investment 9. One-Stop Shop services 10. Organize field trips / Project site visit 27

Services to Investors 1. Provide integrated information 2. Guide Investors to business and public procedures 3. Organize Field Tours 1. Legal Consultancy 2. Project Management Consultancy 3. Aftercare assistance 1. Investment Research 2. Investment & Investors Database 3. Targeted Promotion & AD Campaign 1. To establish and develop the national systems of innovation policy and regulations 2. To improve the business environment for policy and strategy formulation and implementation of coordination 3. Industrial cluster development policy and strategy formulation and implementation

“Create a value in Mongolia” Address: Invest Mongolia Agency Sambuu Str. 11, Government Bld. 11, Ulaanbaatar 211238, Mongolia Email: javkhlan@investmongolia. com Website: www. investmongolia. com