AKIPRESS.COM - In a boost to the local economy the EBRD is extending new financing to Gobi JSC, a leading cashmere garments maker in Mongolia.

The funding facility, with a volume of up to US$ 16 million, will support the crucial sector and contribute to a more resilient and sustainable economy, EBRD said in a release on May 31.

Cashmere is a key export commodity for Mongolia, second only to products from the mining industry. Developing a sustainable cashmere industry and value chains is one of the EBRD’s strategic priorities in Mongolia, where the Bank supports diversification from the mining sector.

Gobi JSC is the largest vertically integrated cashmere and camel wool processor and garments manufacturer in Mongolia. The EBRD financing will support the opening of a new flagship store in the Ulaanbaatar Galleria, a new shopping mall in the country’s capital. It will also finance a capacity increase and the modernisation of sewing equipment. Gobi JSC will increase purchases of raw cashmere from herders in remote areas to expand production of garments.

The company, a long-standing client of the Bank, will obtain a total of US$ 16 million in EBRD financing: a US$ 12 million six-year loan and a US$ 4 million working capital facility for up to three years. The working capital facility will provide Gobi JSC with more flexibility, allowing the company to access funds as necessary for seasonal purchases of raw material.

Mongolia produces about 50 per cent of the global supply of raw cashmere, which is a reliable source of income for nomadic herders, bolstering a traditional lifestyle threatened by rapid urbanisation. The EBRD is planning a technical cooperation (TC) project, with additional contribution from Gobi JSC, aimed at developing a sustainable cashmere supply. With this TC the suppliers and cashmere goat herders in remote areas will get educated and trained on how to increase the quality and sustainability of the fibre.