The third phase of the project, called Capacity Development Project for Air Pollution Control in Ulan Bator, focuses on providing processed fuel for low-income households in the capital's highly polluted areas and continuing efforts to reduce car emissions, as well as the accreditation of water heaters, according to a statement by the mayor's office.

The two sides will continue to improve the monitoring of data in environmental measurement, the statement said.

Ulan Bator, home to more than half of the country's 3.2-million population, suffers from one of the world's worst air pollutions in winter.

More than 800,000 residents, half of Ulan Bator's population, live in slums, also known as ger districts. They burn raw coal and other flammable materials to keep warm and cook meals during the six-month-long winter season.

It is estimated that 80 percent of air pollution in the city is caused by ger stoves.

Since the early 2000s, the Mongolian government in cooperation with international organizations has carried out a number of measures aimed at reducing air pollution in Ulan Bator. However, the city has not seen a significant reduction in air pollution levels.

Ulan Bator's air pollution on Jan. 3 exceeded by over 20 times the safety level set by the World Health Organization, according to the National Agency for Meteorology and Environment Monitoring.