$462M Infrastructure Investment Delivered On Time and On Budget www.montsame.mn

As the Millennium Challenge Account–Mongolia Water Compact approaches its end on March 31, 2026, it stands out as a rare achievement in large-scale infrastructure. The compact faced significant odds, yet delivered on time and within budget—while also adhering to standards of transparency, accountability, and quality.

The Water Compact represents one of the largest infrastructure investments in modern Mongolian history—and one of the most urgently needed. For a capital city where water demand is expected to soon outpace supply, the Compact offers a critical lifeline for the future of Ulaanbaatar.

Foreign technical experts and independent oversight teams, both foreign and local, played a central role in ensuring the Compact followed international standards at every stage—from design and procurement to construction and final commissioning.

Both foreign contractors and local authorities commented on how everyone part of the compact helped reinforce transparency, fairness, and accountability while providing rigorous quality control and technical assurance throughout the implementation process.

The Compact itself is a $462 million partnership—one of the largest investments—between the Government of Mongolia and the United States development agency, the Millennium Challenge Corporation. The USA contributed $350 million, while Mongolia committed $111.76 million.

The Compact includes three main components: an advanced water purification plant drawing on groundwater deposits near Biokombinat, Shuvuun, Mongolia’s first large-scale wastewater recycling plant, and a long-term sustainability program designed to build the institutional capacity needed to operate both facilities long after the Compact closes. Yet the Compact almost failed to reach this point.

Last year, the Mongolia Compact was at risk of being terminated just a year before its completion when the Trump administration put a freeze on certain foreign aid programs as part of its “America First” policy. Beginning in May 2025, most Millennium Challenge Corporation compacts worldwide were paused, and recently, a few were terminated. But Mongolia's Water Compact emerged as a notable exception.

Michael J. Petti, a vice president at Tetra Tech, a US engineering firm overseeing the Compact’s construction as Program Management Consultant (PMC), arrived in Ulaanbaatar expecting to help close it down.

“I came here initially to assist with the closeout, because we believed the Compact was going to be terminated—like many others,” Petti said.

"I was impressed by the Compact, but more by the team's dedication and professionalism,"

“But as the US government completed its global review and assessment of Compacts around the world, the Mongolia Compact remained as one they [the administration] chose to keep—probably because of how close it was to completion.”

Petti said the decision reflected the value of the infrastructure—and the people behind it. "I was impressed by the Compact, but more by the team's dedication and professionalism," he said.

The need for the investment has long been clear. While Mongolia is not globally considered a water-scarce country, studies by the World Bank show the challenge lies in availability rather than overall supply. Water resources are often not located where demand is highest or available in the right condition. That imbalance is particularly evident in Ulaanbaatar, home to over half of the population in the country. 

Delivering the Compact required navigating two major crises that might have ended it. Construction began in 2021 during the height of the COVID-19 pandemic, when borders were closed and global supply chains were severely disrupted. The Compact later faced uncertainty again when the foreign aid freeze was announced.

Luis Baires, the Compact’s Fiscal Agent Manager, USA, from Cardno Emerging Markets, said those challenges made the final outcome even more significant.

“These five years will end this month,” he said, “but there has been an enormous amount of work to reach this moment—especially with the pandemic, global conflicts, and disruptions to supply chains.” 

A key element in keeping the Compact moving was the independent oversight structure, which ensured procurement and financial management followed strict international rules.

Giorgi Tvalavadze, Procurement Agent Manager representing Charles Kendall & Partners, UK, oversaw roughly 270 contracts and coordinated contractors from 19 countries during the Compact.

All procurement decisions were accepted without formal challenge—a rare outcome for a compact of this scale.

There is a lot of human potential here That has been a decisive factor in delivering a Compact that is successful...

“I have experience working in many different countries,” Tvalavadze said. “Mongolians are perhaps the most motivated and very well-educated people I have worked with, and they have a strong sense of responsibility.”

Baires also agrees that the local team’s capability played a decisive role.

“There is a lot of human potential here,” he said. “That has been a decisive factor in delivering a Compact that is successful after five years of hard work.”

With foreign teams preparing to depart, responsibility for operating the new facilities will soon shift fully to the Mongolian side.

Odkhuu Natsag, head of the Engineering Policy Department at the Water Supply and Sewerage Authority (USUG), said local engineers began training early in the Compact, starting with theoretical instruction and moving to hands-on experience inside the facilities in 2024.

“Being physically present and working hands-on brings out the spirit of wanting to do things,” he said. Most of the engineers who will operate the facilities are young—a deliberate strategy to build long-term institutional capacity. “It will be a difficult undertaking, as we haven’t worked on such a facility before,” Odkhuu said. “But we are ready. We know there will be challenges, but we have taken many precautions to mitigate those risks.”

Looking back on the Compact’s journey through a pandemic, global supply disruptions, and a near cancellation, he pointed to one factor that kept it on track.

“They had very good management,” he said. “Without good managers, things can stall easily.”

As the projects close and the system begins operation, the Compact stands as a rare example of how strong international partnership, transparent governance, and rigorous quality oversight can deliver complex infrastructure—even under extraordinary circumstances.

The government has decided to liquidate LLC "Erchist Mongolia," a state-owned enterprise

The tasks of LLC 'Erchist Mongolia' included representing the interests of the state as a shareholder, including:

Participation in 34 percent of the shares of state joint-stock companies in the energy sector, as well as

Acting on behalf of the government in six different companies, such as MIAT Mongolian Airlines, the State Joint-Stock Company 'Mongolian Railways', the Road Repair and Maintenance Company, Auto Impex, LLC 'Information and Communication Network', and LLC 'State Housing Corporation'.

Operational expenses were financed through loans from commercial banks, resulting in the company accumulating a debt of ₮3.5 billion, which led to serious financial difficulties.

Founded in accordance with government decrees dated January 8, 2025, the purpose of creating the company was to ensure centralized management and control over state enterprises. However, despite these intentions, it failed to fulfill its assigned tasks and created additional financial problems. In this regard, the government decided to dissolve the company to prevent further deterioration of the financial situation.

Chinese President Xi Jinping expected to visit Mongolia in 2026 www.gogo.mn

Chinese President Xi Jinping is expected to visit Mongolia this year. It would be Xi Jinping’s first state visit to Mongolia since 2014, when he addressed a plenary session of the Parliament.

Mongolia and China marked a series of diplomatic milestones in 2024, including the 75th anniversary of diplomatic ties and the 30th anniversary of the renewed Treaty of Friendly Relations and Cooperation, milestones that have been highlighted by both governments as a basis for stepped-up high-level exchanges.

Mongolia previously sent its head of state to Beijing most recently in February 2020, when then-President Kh.Battulga met President Xi during an official visit to China.

Separately, Italy’s President Sergio Mattarella has accepted an invitation from President U.Khurelsukh and is scheduled to pay a state visit to Mongolia in 2026.

Joint Statement on the U.S.-Mongolia Annual Bilateral Consultation www.state.gov

The text of the following statement was released by the Governments of the United States of America and Mongolia on the occasion of the Annual Bilateral Consultations.

Begin text:

Representatives of the United States and Mongolia held the 17th Annual Bilateral Consultations on March 17 in Ulaanbaatar.

The dialogue was co-chaired by Michael George DeSombre, U.S. Assistant Secretary of State for East Asian and Pacific Affairs, and L. Munkhtushig, State Secretary of the Ministry of Foreign Affairs of Mongolia. It was attended by Richard Buangan, Ambassador of the United States of America to Mongolia, and U. Batbayar, Ambassador of Mongolia to the United States of America; by representatives from the U.S. Department of State and Department of War; and by officials from the Ministry of Foreign Affairs, Ministry of Economy and Development, Ministry of Defense, Ministry of Industry and Mineral Resources, Ministry of Energy, and Ministry of Digital Development, Innovation and Communications of Mongolia.

Recognizing that Mongolia and the United States have a shared interest in global peace, freedom, democracy, and economic prosperity, the two sides expressed their continued support for the U.S.-Mongolia Strategic Third Neighbor Partnership and pledged to deepen cooperation. Both sides celebrated the upcoming completion of the Millennium Challenge Corporation’s $462 million Mongolia Water Compact.

Mongolian and U.S. officials discussed their cooperation to promote bilateral and regional cooperation on peace and security matters, including in the Indo-Pacific, grounded in mutual respect for sovereignty and territorial integrity. The United States welcomed Mongolia’s commitment to increasing its contributions to international stability and security, including through playing a leading role in peacekeeping missions around the world. Both sides highlighted their shared resolve to promote responsible and legal travel through the Travel Responsibly campaign and other cooperation. They also discussed continuing their work together to uphold freedom of expression, religious freedom, and other human rights.

The two sides reaffirmed the importance of exchanging high-level visits and maintaining regular dialogues, as well as bolstering mutually beneficial economic engagement. They also committed to exploring opportunities to expand energy cooperation as a means of increasing long-term economic growth for both countries. Both sides expressed interest in collaborating in the digital domain, including artificial intelligence and other advanced technologies, to strengthen connectivity and prosperity. They highlighted critical minerals and clean coal technologies as areas for potential cooperation, and affirmed their desire to explore cooperation on alternative sources of energy. Both sides recognized that a predictable and transparent business climate is essential to expanding economic cooperation and increasing bilateral trade and investment.

The two sides committed to continue to work together to bolster people-to-people ties through educational and cultural exchanges and the promotion of the English language in Mongolia.

The United States and Mongolia decided to maintain the exchange of high-level bilateral visits and hold the next Annual Bilateral Consultations in 2027 in Washington.

President Khurelsukh Calls for Greater Responsibility, Leadership www.montsame.mn

Under the auspices of the President of Mongolia, the Third National Conference “Mongol Er Khun” (Mongolian Man) was held at the State Palace on March 17, 2026.

Opening the conference, President Khurelsukh noted that Mongolians have traditionally raised their sons to be courageous, wise, far-sighted, broad-minded, resilient, disciplined, honest, and faithful to their oaths. Men who embody these qualities and serve as a reliable pillar for their state and people have long been regarded as true Mongolian men. The Head of State emphasized his pride in Mongolian men and youth who carry forward the legacy, ideals, and achievements of their ancestors, elevating the reputation of their homeland across continents and the world. In particular, he highlighted the contributions of thousands of peacekeepers serving in global hotspots, who have brought recognition to the name “Mongolian soldier” worldwide.

The President stressed that loving and honoring one’s homeland, people, family, and children, while assuming greater duties and responsibilities and carrying the heavier burden, is a matter of a man’s honor and a noble obligation. He called on every man to strive to be physically healthy, mentally sound, broad-minded, possess the right attitude, uphold cultural heritage and values, and be knowledgeable, educated, and diligent.

The 2026 conference addressed three main themes: the traditional understanding of Mongolian manhood, leadership of the modern Mongolian man, and the value of men within the family. On this occasion, Minister of Family, Labour and Social Protection, Aubakir Telukhan, stated: “Men constitute 49 percent of our country’s total population. However, Mongolian men are more prone to accidents and have higher alcohol consumption, which increases the risk of cardiovascular diseases and premature death. Therefore, the government is implementing more systematic policies and measures targeting men.”

For instance, during the first national conference, attention was drawn to the significant disparity in life expectancy compared to the global average. As of the end of 2021, the average life expectancy for men was 66.7 years, while for women it was 76.2 years—a gap of 9.5 years. According to statistics at the end of 2024, male life expectancy reached 67.92 years and female life expectancy 77.1 years, reducing the gap by 0.32 points.

Since 2022, considerable attention has been given to improving occupational safety in male-dominated sectors such as mining, transport, road construction, and building. Policies and measures have also been implemented to support work–life balance for employees, the Minister noted in his report.

Subsequently, Deputy Minister of Defense Baasandamba Dashtseden introduced an initiative, proposed by the President, to launch the national movement “Ekh Oronch Mongol” (Patriotic Mongolian) for the year of 2026–2030. The movement aims to promote national core interests and cherished Mongolian values among children and youth, and to foster citizens who are healthy, educated, and ethically grounded.

More than 800 representatives from government bodies, civil society, and some aimags, the capital, and districts participated in the conference and issued policy recommendations. The conference has previously been organized under the auspices of the President of Mongolia in 2022 and 2024.

Mongolia, US to Expand All-Round Cooperation www.montsame.mn

Prime Minister Zandanshatar Gombojav received Michael DeSombre, the U.S. Assistant Secretary of State for East Asian and Pacific Affairs, on March 17.

Prime Minister Zandanshatar expressed his satisfaction with the strengthening and development of the Mongolia-United States Strategic Partnership. He emphasized Mongolia’s commitment to expanding bilateral relations and cooperation in trade, investment, energy, and mining, and to promoting private-sector partnerships and attracting investment within this framework.

Assistant Secretary Michael DeSombre expressed his sincere gratitude for the meeting and highlighted that the U.S. administration places great importance on its Strategic Partnership with Mongolia. He also thanked Mongolia for becoming one of the founding members of the “Peace Council” initiative proposed by U.S. President Donald Trump, noting that this further reaffirms Mongolia’s commitment to international peace and stability. He added that the United States will continue to pay special attention to expanding bilateral relations and cooperation across all sectors.

Prime Minister Zandanshatar and Assistant Secretary DeSombre also noted with satisfaction that the U.S. Millennium Challenge Corporation’s Water Compact, co-financed with approximately USD 460 million, will conclude on March 30, 2026, and that one of its key achievements, the Wastewater Recycling Plant in Ulaanbaatar, has been successfully commissioned.

Chingis Airlines Unity LLC Receives First Aircraft www.montsame.mn

A new carrier has joined Mongolia’s civil aviation sector, as “Chingis Airlines Unity” LLC welcomed its first aircraft from Morocco on March 17.

Established in 2025 with investment from Nomin Holding, the company is launching operations to improve accessibility to domestic air travel and reduce the development gap between urban and rural areas. As part of this effort, it has introduced a modern 70-seat ATR 72-600 aircraft and completed preparations to operate charter flights on domestic routes.

According to the plan, Chingis Airlines Unity aims to begin regular flights to Dalanzadgad, Khovd, and Murun starting in the second quarter of 2026. Looking forward, the company intends to expand its operations to international routes and develop into a competitive and reputable airline in the regional market.

Mongolia’s First Large-Scale Wastewater Recycling Plant Opens www.montsame.mn

A ceremony was held on March 16 to mark the official opening and launch of operations of Mongolia’s first large-scale Wastewater Recycling Plant.

The plant was constructed next to the new Central Wastewater Treatment Plant as part of the “Wastewater Recycling Project,” one of the three main projects under the Mongolia Water Compact (Compact II) agreement between the Government of Mongolia and the Millennium Challenge Corporation (MCC) of the United States.

In his opening remarks, President Khurelsukh Ukhnaa stated, “Today we gather here to witness a historic moment—the opening of Mongolia’s first large-scale Wastewater Recycling Plant, one of the two major infrastructure projects under the Water Compact, which symbolizes the strategic partnership between Mongolia and the United States. The commissioning of this plant represents the achievement of a major objective outlined in Mongolia’s National Security Concept, long-term development policies, and water policies in the Government's Action Plan, enabling our country to recycle wastewater and use it in energy production. This initiative not only represents the first-ever large-scale use of recycled water in Mongolia’s energy sector but also paves the way for other industries to reuse wastewater in the future. By doing so, we will conserve our groundwater resources for future generations.”

The Second Millennium Challenge Compact Agreement (Mongolia Water Compact) was signed on July 27, 2018. The program was funded by USD 350 million in grants from the U.S. government and USD 111.7 million from the Government of Mongolia.

The project aims to increase Ulaanbaatar’s water supply by up to 50 million cubic meters per year. Over the next 30 years, it will help provide stable and safe drinking and household water to more than 2.4 million residents of the city. It is also the largest investment in Mongolia’s water sector in the past 30 years.

As part of the “Wastewater Recycling Project,” Mongolia built its first large-scale wastewater recycling plant, along with 12 km of water transmission pipelines, a water storage tank, a booster pumping station, and related infrastructure. The plant will receive 50,000 cubic meters of treated wastewater per day – up to 18 million cubic meters annually- from the new Central Wastewater Treatment Plant, recycle it, and supply it for technical uses, including ash handling and cooling power operations, at Thermal Power Plants III and IV.

The plant was built with funding from the Government of Mongolia, with the dedication and expertise of Mongolian engineers and technical assistance from American experts.

The opening ceremony brought together high-level representatives from both countries, including the President of Mongolia, Khurelsukh Ukhnaa, U.S. Assistant Secretary of State for East Asian and Pacific Affairs Michael G. DeSombre, Minister of Foreign Affairs Battsetseg Batmunkh, Minister of Finance and Chair of the Board of Millennium Challenge Account Mongolia Javkhlan Bold, Governor of the Capital City and Mayor of Ulaanbaatar, Nyambaatar Khishgee, as well as other senior officials from the Governments of Mongolia and the United States. Representatives from the Municipality of Ulaanbaatar, the U.S. Millennium Challenge Corporation, Millennium Challenge Account–Mongolia, the Ulaanbaatar Water Supply and Sewerage Authority (USUG), the project contractors, partner organizations, and other stakeholders were also present at the event.

Through the project, the use of recycled water will be introduced into the energy sector, which is the largest water user in Ulaanbaatar. This will help manage limited water resources more efficiently and strengthen the city’s ability to deal with future challenges such as urbanization and population concentration.

Recycling wastewater will also create a new source of water supply for Mongolia, help preserve underground water resources, and support the ecosystem of the Tuul River, bringing valuable environmental benefits. 

Ulaanbaatar ready to accept private initiatives to reduce air pollution and traffic congestion www.gogo.mn

The “Ulaanbaatar- Investment” forum, running from 16–20 March 2026, showcased major public–private projects for the capital and introduced international and domestic investors to opportunities to partner on infrastructure and service delivery, officials said. The event, organised by the Ulaanbaatar Chamber of Commerce together with Ulaanbaatar Partnership Center LLC, aims to explain Mongolia’s regulatory framework for investors and to match firms seeking financing with relevant public bodies.

Speaking at the forum, T.Davaadalai, first deputy governor for economic development and infrastructure of Ulaanbaatar, said the city is following international best practice by deepening cooperation between the public and private sectors. “We are working with the private sector on major construction projects in the capital and are ready to consider new project proposals to tackle urgent problems such as air pollution and traffic congestion,” he said, stressing that the forum also provides practical information on the laws and procedures needed to operate in Mongolia.

‘We are being silenced’: Mongolian politicians face jail after vote calling for PM to resign www.theguardian.com

Former deputy speaker describes situation as absurd after being charged with ‘effort to unlawfully seize state power’
A number of younger Mongolian politicians, including many women, are facing the threat of extended jail sentences for their role in challenging the country’s political leadership, in what they claim are early skirmishes in a battle to prevent a slide into authoritarianism.

The dispute forms part of a factional power struggle in the ruling party that is threatening to weaken Mongolia, one of the few democracies in the region, as it seeks to navigate a foreign policy independent of neighbouring Russia and China.

The former deputy speaker of the parliament, Yale-educated Bulgantuya Khürelbaatar, told the Guardian she was facing the threat of 12 to 20 years in jail after being charged with the criminal offence of “an organised effort to unlawfully seize or retain state power”. She described the charge as absurd and unprecedented in Mongolia.

She also says she has been banned from leaving the country and had restrictions placed on her movements inside Mongolia. The charges have been brought with the help of the country’s state intelligence agency.

Mongolia is rich in minerals, and allegations of political corruption have led to a recent extended period of political infighting in the ruling Mongolia People’s party. There is also a generational divide within the MPP, with a younger group of reformists, including some educated abroad, challenging the traditional leadership.

The charge relates to Bulgantuya’s role as the chair of a vote in parliament in October in which a majority of MPs were declared to have voted for the prime minister, Zandanshatar Gombojav, to stand down, only four months into the job.

The vote related to a dispute over changes to the mineral exporters tax regime, which opponents of the prime minister said would benefit wealthy exporters and lower state income.

Bulgantuya says the procedure for the vote was in line with precedent, including a comparable vote in 2021.

President Ukhnaagiin Khürelsükh, an ally of the prime minister, vetoed the parliament’s decision to oust Zandanshatar.

At the same time, Zandanshatar’s cabinet secretary appealed to Mongolia’s constitutional court, which found that the parliamentary vote had used an incorrect voting formula and that the quorum count at the start of the proceedings had been manipulated.

The court ruling was not subject to appeal. Bulgantuya was given less than two days to prepare her defence at a hearing, largely occurring behind closed doors, and she says she was not given the right to legal counsel.

“It is absurd to claim that I have tried to seize state power when state power lies with the parliament, and I was fulfilling the wishes of the parliament,” she said. Her lawyers added: “Parliamentary supremacy lies at the very heart of Mongolia’s system of checks and balances and represents a cornerstone of its constitutional democracy.”

She has already been forced to stand down as deputy speaker and been expelled from the MPP. In a further step, a draft bill has now been tabled by Khurelsükh that will end the immunity of some MPs if their party deems they have behaved unethically.

Enkhbat Bolormaa, another parliamentary critic of the prime minister and the first female governor in Mongolia’s history, said: “This is an absolute test case of Mongolia’s democracy, its constitution and our ability to practise our rights as parliamentarians. What we did was hold the prime minister accountable for granting unlawful tax concessions to a handful of powerful mining conglomerates, and we are now being silenced for it.”

In a complaint, the inter-parliamentary union human rights body claimed power “is being centralised in an executive body with the result that reform-oriented independent minded and especially young parliamentarians face growing pressure, intimidation and retaliation for exercising their constitutional mandates”.

Mongolia’s previous prime minister, Oyun-Erdene Luvsannamsrai, stepped down last summer after three weeks of anti-corruption street protests that led him to lose a vote of confidence. He said this week: “What exactly did Kh. Bulgantuya do wrong? If leading a parliamentary meeting turns you into a criminal, do we even need parliamentary democracy? Leading a meeting and displeasing someone isn’t a crime. The scale of all this is getting way out of hand.”

Frequent leadership turnover has become a norm in Mongolia. In three decades of democracy, only two governments have completed full four-year terms, with governments lasting an average of 1.8 years.