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Projects

Summary of proposed guarantee

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
TDB Leasing LLC
Project ID
11090
Fiscal year
2014
Status
Proposed
Guarantee holder
MG Leasing Corporation
Investor country
Japan
Host country
Mongolia
Environmental category
FI
Sector
Leasing
Date SPG disclosed
August 08, 2013
Projected Board date
September 05, 2013
Gross exposure
 $38.0 million
Project type
Non-SIP
Strategic priority area
IDA

Project description

This summary covers a shareholder loan by MG Leasing Corporation of Japan to TDB Leasing LLC, which is wholly owned by Mongol General Leasing LLC, a joint venture among the Trade and Development Bank of Mongolia LLC, TDB Capital LLC, and MG Leasing Corporation. The investor has applied for a MIGA guarantee of $38 million for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project involves the creation of a new leasing provider in Mongolia that will offer services to clients in the mining, construction, and infrastructure sectors.

Environmental Categorization

The project is a category FI under MIGA’s Policy on Social and Environmental Sustainability.

Development Impact

A World Bank Financial Sector Assessment for Mongolia in 2012 showed that, despite growth in the financial sector, there is still significant potential to deepen and broaden financial intermediation to channel the gains of the country’s resource boom toward productive investments. 

Currently there are only limited financial instruments for small and medium enterprises (SMEs) in Mongolia, as national banks predominantly offer loans, deposit and savings products, and some trade financing. Leasing options are very limited and this proposed project would help meet the increasing demand for leasing as a form of asset financing.

The proposed project’s goal is consistent with the World Bank Group’s Country Partnership Strategy for Mongolia as it relates to increasing financing options for private sector-led growth.

MIGA’s support for this project is also aligned with MIGA’s priority of supporting investments into countries eligible for financing from the International Development Association.

 
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