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The European Bank for Reconstruction and Development (EBRD) has announced a significant investment aimed at bolstering Mongolia's agribusiness landscape.
Providing a $20 million loan to APU Dairy – the country’s second-largest producer of dairy products – this financing is part of a broader strategy to support the sector, which employs nearly one-third of Mongolia's workforce and contributes approximately 13% to the national GDP.
The loan, which will be disbursed in Mongolian Tugrik equivalent, is supplemented by up to $2 million in concessional finance from the Canadian government under the High Impact Partnership on Climate Action (HIPCA). The funds are earmarked for upgrading APU Dairy’s processing plant and packaging equipment, enhancing raw milk sourcing capabilities, and addressing working capital requirements.
APU Dairy, fully owned by APU JSC – Mongolia's oldest and largest beverage producer – plans to use this financing to improve operational efficiency and product quality.
The investment will also facilitate the acquisition of new processing lines, positioning APU Dairy to better meet the growing demand for dairy products in Mongolia and beyond.
In addition to enhancing its production capacity, APU Dairy's expansion project is designed to uplift the local farming community. The initiative aims to improve climate change resilience for over 1,700 local farmers supplying raw milk to the company.
It will also engage small-scale yak herders in the Arkhangai region, equipping them with modern technologies and essential market skills to boost their productivity and sustainability.
Technical assistance for the adoption of climate-smart farming practices will be provided by Canada and implemented by the United Nations Food and Agriculture Organization (FAO). This collaboration underscores the commitment to sustainable agricultural practices in Mongolia’s dairy sector, which has faced challenges from climate variability and market fluctuations.
The project is further supported by a parallel loan of a similar amount from the Asian Development Bank, highlighting a multi-faceted approach to financing that aims to ensure growth in Mongolia’s agribusiness sector.
To date, the EBRD has invested over €2.4 billion across 150 projects in Mongolia, with nearly 90% of these funds directed towards private sector initiatives.
The support for APU Dairy is expected to not only enhance the company’s market position but also contribute to the overall resilience and sustainability of Mongolia’s dairy industry, ensuring that it can meet both domestic and international demands effectively.
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