At the end of 2012, the Government of Mongolia successfully sold $1,5 billion worth of bonds at the international market. The Government is now working with certain plan so as to spend the bond money as effectively as possible.
The bond named after Chinggis Khaan is the first of its kind issued by the Government of Mongolia. Not so many countries in Asia issued the Government bonds. Just after the first issuance the country could raise funds of $1,5 billion, which is considered as a great success. An interest rate of this 10 year-term bond is lower than that issued by the experienced borrowers. It is also very appreciated indicator.
The Government aims to finance new construction and infrastructure projects able to give large economical yield from bond money. The Government decided to spend a certain amount of bond money on construction of 1400 km long paved roads to connect 6 aimags with the capital city. Mongolia with 21 aimags or provinces has a vast territory and its infrastructure development requires a large amount of investment.
In recent years, Mongolia is experiencing swift development and 40 percent of its population lives in the capital city. Thus, the next step is re-planning of Ulaanbaatar's infrastructure. It is planned to modify road network of Ulaanbaatar with the heaviest traffic by extending road-junctions and this project will be financed with the bond money.
The Government intends to bring country's industries based on animal husbandry raw materials to competitive level at the world market. It is also going to support the projects for wool and cashmere industries with some money from the bond. By doing so, the country, as estimated, can stop an export of raw cashmere, increase production of surplus valued products and create thousands of jobs.
In addition, as a country with large natural resources, Mongolia will promote the intensive construction of railways and the building of a new electric station based on the largest coal deposit.