😎 RENEWABLE OPPORTUNITIES | BANKING LAW | ₮500 BILLION BOND

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Hello folks! Here we meet again. The Mongolian Economic Forum 2023 held successful. We conducted several interviews which you can watch here.

In today’s edition:

• Energy Sector in Mongolia

• Banking law to be amended

• $3.3 trade surplus

• ₮500 billion municipal bond

Here we go!

🤝 Renewable opportunities in Mongolia

Can Mongolia export its renewable energy products to the global market amidst changing development models?

• Energy sector: The total electricity production reached 10.3 billion kWh, while the distribution amounted to 9.3 billion kWh in 2022. Notably, 79.3% of the electricity distributed was sourced domestically, while the remaining 20.7% was imported electricity.

Energy source distribution

Analyzing the source structure of domestic energy production from the previous year reveals that thermal power plants accounted for the majority, contributing 90.9%. Meanwhile, solar, wind, and hydro combined constituted 9.07%, and a small fraction of 0.03% came from diesel sources.

Mongolia’s energy imports are decreasing compared to previous periods. However, we still have an opportunity to:

• Increase the installed capacity of thermal power stations and build new ones;

• Expand renewable energy sources to fulfill its domestic energy needs and explore possibilities for exporting energy to other markets.

The installed renewable energy capacity is 1,400 MW per year, accounting for about 20% of total consumption.

Resources and opportunities

Sun, wind, and water are categorized as renewable energy sources, known for being particularly inexhaustible and sustainable natural resources. According to ADB estimates, Mongolia has the potential to produce 5,457 TWh of electricity per hour using wind and solar energy. This is equivalent to 63% of China's total electricity production in 2022.

In conclusion, the development of renewable energy capacity using this resource offers a unique opportunity to diversify export earnings and make a substantial contribution to reducing carbon dioxide emissions in the region.

DATA STORY: Trade Surplus

In the first half of 2023, the total turnover of foreign trade reached $11.8 billion, an increase of 27.9% from the same period last year.

During this period, Mongolia traded with 143 countries, of which exports were $7.6 billion and imports were $4.3 billion. Total exports increased by $2.3 billion whereas imports increased by $325.6 million which lead to $3.3 billion trade surplus.

⚒️ The Banking law to be amended

According to the amendments to the Banking Law, no person or related parties may hold more than 20% of the shares of a bank, and banks must meet this requirement by the end of this year. But it may change.

Statement: Lkhagvasuren.B, Governor at Bank of Mongolia

The IPOs of the top 5 commercial banks have raised a total of ₮720 billions, which is "probably saturated" the liquidity of the domestic market. So we need foreign investment. However, according to the law, an investor cannot be a shareholder of more than one bank, and provisions such as the 20% limit are unfavorable conditions for foreign investors. For instance, the company law stipulates that foreign investors should have at least a normal majority and 34% of the company, which is causing us to re-examine the provisions of the law. Click here for his interview with us at MEF.

Although bank IPOs have advanced capital market development, legal restrictions limit further expansion and new opportunities. Therefore, the Bank of Mongolia is preparing a proposal to amend the Banking Law to be discussed at the autumn session. This is a crucial legal discussion that will take place starting in autumn, so pay attention.

FEATURING: Together towards a bright future

Attention all eco-conscious individuals!

Capitron Bank is introducing environmentally friendly green loan products designed to make a positive impact on the environment and society.

But that's not all – they are going above and beyond by offering you the chance to purchase both electric and pedal bicycles with flexible loan terms under their green credit initiative.

As their esteemed customer, you have the exclusive opportunity to purchase a bicycle with a warranty card from a certified bicycle dealer under the green loan conditions.

🔗 Click HERE for more information

🏃 QUICK STORIES

🔵 The Cabinet approved the issuance of up to ₮500 billion bond in “Capital City” securities to finance development projects and measures in Ulaanbaatar. Furthermore, The Capital Governor's Office will organize securities trading in a phased approach.

🔵 Mongolia presented the Voluntary National Review (VNR) of the SDGs to the UN High-Level Political Forum on Sustainable Development. During the forum Vice Minister of Economy and Development Tuvdendorj. G stressed Mongolia's proactive approach to achieving the SDGs and fostering a greener, more equitable future. Also, he met with the Lithuanian Minister of Environment to discuss green cooperation.

🔵 What3words expands in Mongolia. Global location technology what3words announces four major new partnerships across the e-services, postal, culture, and tourism sectors at the Mongolia Economic Forum 2023.

🔵 ION Energy closes $1M financing to advance lithium projects. They have completed a non-brokered private placement of four million units of the company, at $0.25 per unit, for gross proceeds of $1 million. The offering will be used for exploration activities at its properties and general corporate purposes.

⭐ WATCH: NAADAM in MONGOLIA Vlog

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Editor: E.Zolbayar
Writer: M.Khulan & A.Purevjargal

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be and does not constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.