UB Phase I

pending

IFC is considering a corporate loan package to Mongolian Railway JSC (MTZ or the Company) of up to US$200 million with a maturity of up to 10 years, comprising an IFC A Loan and bringing in mobilization from other lenders. MTZ is a wholly state-owned rail company established in 2008 to develop, own, and operate state-funded rail assets in Mongolia. It is one of the two public rail carriers in the country and a pivotal player in the national railway sector. MTZ operates several freight rail lines with a total length of over 650 km.The proceeds will be used to finance the construction of the Bagakhangai-Khushig Valley branch railway (the Project), which is a greenfield 87.7km single-track railway branching off from the Bagakhangai station on the Trans-Mongolia Railway and terminating at Khushig Valley.Right-of-way (RoW) of the railway is free of structures and residential areas. In some areas it traverses through the pasture lands and wildlife movement corridor. The construction of the railway commenced in April 2025, and embankment works, construction of bridges and junctions, as well as underpasses and overpasses along the RoW have been completed. Ongoing construction work includes primarily installation of rails and sleepers. Construction of the railway is to be completed by mid-2026. The design studies for the railway stations and the transmission line have not been completed, and the exact location of these facilities and timeline of construction have not been defined. During operations, the rolling stock will be maintained and washed by the MTZ personnel at the existing facilities leased from Ulaanbaatar Railway Company (UBTZ), as MTZ does not have maintenance facilities in the region. No additional locomotives/wagons shall be procured as a part of the Project, as existing locomotives/wagons will be used. The Project represents Phase I of a larger urban transformation program with next phase focused on relocating exiting rail logistics and cargo facilities to create a new logistics hub on the city’s outskirts and completing the remaining segment to enable the full bypass.