IFC Invests in Mongolia’s First Private Equity Fund to Support Small and Medium Firms
Ulaanbaatar, Mongolia, June 24, 2011—IFC, a member of the World Bank Group, will provide a $7.5 million equity investment to Mongolia Opportunities Fund I L.P., the first private equity fund in the country focused on providing small and medium firms much-needed capital and expertise to help them grow and create jobs.Despite strong growth prospects, small and medium enterprises in Mongolia find it difficult to obtain financing because most investments go toward large mining projects. The $75 million fund will provide capital to companies, such as those involved in agribusiness and those along the mining supply chain but are not directly engaged in mineral extraction activities. The fund will also provide quality management support to these firms.
“IFC’s investment in the fund will deliver a strong development impact in Mongolia as it will promote economic, financial, and private sector development as well as ensure social and environmental sustainability among small and medium enterprises,” said Mandar Jayawant, Managing Director of Mongolia Opportunities Fund. “This is a good example of how an investment can bring development as well as commercial returns.”
IFC will also help the fund adopt best practices in transparency and corporate governance as well as environmental and social standards.
“Small and medium enterprises, representing over 99 percent of all Mongolian firms, are important for job creation and for a diversified economy. IFC’s investment will not only provide capital to these businesses but will also support about 400 new jobs and the development of the supply chain around the mining sector,” said Hyun-Chan Cho, IFC Country Manager for China and Mongolia.
IFC played a strong catalytic role in mobilizing institutional investors to support the fund. IFC’s early involvement during the formation of the fund helped it attract interest from other development finance institutions and several private institutional investors.