Description of the Project:
Mongol Micron Cashmere LLC (“MMC”) is a leading cashmere processing company in Mongolia. MMC plans to expand its businesses through the construction of a 12-story building that contains: (i) a 123-room hotel with associated food & beverage, health and business areas; (ii) 4 stories of retail space; and (iii) 200 parking lots (together, the “Project”). The Project is being carried out by MMC Polaris LLC (“MMC Polaris” or the “Company”), a wholly owned subsidiary of MMC.
Project Sponsor and Shareholders of Project Company:
MMC is 100% owned by Mr. Battogoo Choidon, a first generation Mongolian entrepreneur with extensive experience in the cashmere sector. MMC Polaris is 100% owned by MMC.
Total Project Cost and Amount and Nature of IFC’s Investment:
Total Project cost is estimated to be US$21.3 million. IFC has been invited to provide up to US$6.5 million of long-term senior loan to support the Project.
The Project is located in south-west Ulaanbaatar, Mongolia.
Expected Development Impact of the Project:
Expected development impact includes: (i) construction of business-enabling infrastructure in an area that is expected to be redeveloped into an extended commercial and residential zone of Ulaanbaatar city center; (ii) creation of direct and indirect employment opportunities and knowledge sharing; and (iii) creation of demand for locally-sourced materials, services, and labor both during construction and operation phases.
IFC’s Expected Role & Additionality:
(i) Long-term financing. IFC will provide long-term financing that would match the cash flow generation profile of the Project. Such financing is not readily available in Mongolia.
(ii) Demonstration effect. IFC will support a local company to participate in the development of an extended commercial and residential zone of Ulaanbaatar city center, amidst a difficult economic period for the country, thus sending a positive message to other investors about economic conditions in Mongolia.
(iii) Environmental and social best practices. IFC will share environmental and social international best practices with the Company. IFC will also help the Company identify and quantify the energy efficiency opportunities of the Project.
Environmental and Social Categorization Rationale: B – Limited
Key Environmental & Social (“E&S”) risks and issues associated with this project include: the company’s capacity, systems and performance to date in terms of E&S management during construction of the project; design plans for the hotel development and the use of an internationally recognized L&FS code for such; efficiency of raw material, water and energy use in hotel design, construction and operations; emissions and waste management and disposal; labor and working conditions; management of contractors and suppliers (during construction and operational phases) and impacts of the project on the nearby communities, including those due to traffic.
The project will result in a limited number of potentially adverse environmental and social impacts, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. On this basis, this project is therefore classified as a Category B project according to IFC’s Policy on Environmental and Social Sustainability and Performance Standards.
Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project are provided in the Environmental & Social Review Summary.
For inquiries and comments about the project contact:
Mr. Battogoo Choidon
Mongol Micron Cashmere LLC office building
2nd khoroo, Khan-Uul district
Local access of project documentation:
The Company will disclose the SII locally at the following address:
Hotel Entrance Door of MMC Polaris
2nd khoroo, Khan-Uul district