The funds will be used to construct a new production facility for fresh noodles and for the purchase of equipment by the subsidiary Agi LLC. In addition, Icemark LLC – another subsidiary of the Teso Group – will receive a portion of the loan to acquire equipment for ice cream production expansion.

Teso Group is one of the largest local food and beverage companies in Mongolia. Initially founded as a small ice cream family business, the company is today a medium-sized enterprise producing ice cream, snacks, noodles, margarine, dairy products and beverages, as well as importing other foodstuffs.

The cooperation between Teso Group and the EBRD began in 2014 when the Bank provided Mongolia’s first local currency loan equivalent to US$ 5.5 million. Local currency funding reduces the exchange rate risk for Mongolian producers but access to these funds remains scarce.

Irina Kravchenko, the EBRD’s Head of Office in Mongolia, said: “We are proud to sign the agreement with Teso Group today as it will support the expansion and growth of a strong and competitive local producer. Having been a partner of the company for more than three years now, we are impressed with the vision, drive and determination of its owners and employees to make it one of the market leaders in Mongolia. The combination of high quality and reasonable prices is a guarantee that consumers will benefit from Teso Group’s success.”

Damjin Odon, Chairman of Teso Group’s Board of Directors, said: “Teso Group started cooperating with the EBRD in 2012 on an international advisory project in preparation for our first financing from the Bank. As a result, our first project together is being implemented successfully. Today we are signing a second loan agreement to support our business expansion, which is taking our cooperation to the next level of development. I am sure that we will work with the Bank on future projects, bringing significant benefits to the Mongolian economy.”

The EBRD is a leading institutional investor in Mongolia, with over €1.6 billion invested in 93 projects in the country to date. The Bank’s investments aim to make the local economy more competitive, integrated and resilient.