Home » FINANCE » IFC, MIGA to Provide More Than $2 Billion for Mongolian Jobs’ Creation

IFC, MIGA to Provide More Than $2 Billion for Mongolian Jobs’ Creation

IFC and MIGA, members of the World Bank Group,have arranged $2.2 billion in debt and guarantees to support the world-class Oyu Tolgoi copper and gold mine, which is set to generate jobs and growth in Mongolia for decades.

Located in the South Gobi desert, Oyu Tolgoi is one of the world’s largest untapped deposits of copper and gold and has an expected mine life of at least 40 years. The mine’s development is set to create thousands of jobs, generate billions of dollars in government revenues and local spending, and support a large-scale vocational training program in Mongolia.

Oyu Tolgoi is being developed in phases – its initial open pit mine has already contributed more than $1 billion in taxes and other payments to the Government of Mongolia, plus about $4 billion for local businesses and suppliers since 2010. The World Bank Group support announced today is for the mine’s Phase 2 underground expansion.

IFC is providing a total loan facility of $1,221 million to the project including syndicated debt from BNP Paribas, Australia and New Zealand Banking Group, ING Bank, Société Générale, Sumitomo Mitsui Banking Corporation, Standard Chartered Bank, Canadian Imperial Bank of Commerce, Crédit Agricole, Intesa Sanpaolo, National Australia Bank, Natixis, HSBC Bank, The Bank of Tokyo-Mitsubishi UFJ, KfW IPEX-Bank and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden. MIGA is providing a guarantee of up to $1 billion to 13 of the same institutions. This is part of $4.4 billion in project debt financing organized by Oyu Tolgoi LLC, a joint venture company owned by Rio Tinto Plc-controlled Turquoise Hill Resources Limited and the Mongolian state-owned Erdenes Oyu Tolgoi LLC. IFC is also engaged in monitoring of environmental, social, health and safety aspects of the mine, in line with IFC’s Performance Standards.

“Oyu Tolgoi is the world’s largest copper and gold development project whose low-cost operation is set to remain competitive throughout the commodity cycle. We are delighted to see it advance with support from Rio Tinto and our international banking partners,” said Sujoy Bose, IFC Global Director of Infrastructure and Natural Resources. “IFC is committed to ensuring that Oyu Tolgoi supports local job creation and business growth in Mongolia and meets international best practices.”

MIGA’s Executive Vice President and CEO Keiko Honda said: “We are very proud to play an integral risk-sharing for this phase of Oyu Tolgoi’s underground expansion.” She continued, “Our guarantees have optimized the availability of debt financing, contributing to the success of this joint and complex effort among financing parties and the sponsor group. I also want to stress the importance of this investment for the Mongolian people—as they will benefit from its creation of thousands of jobs, enhanced infrastructure, high-quality training, and significant government revenue.”

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