AKIPRESS.COM - The European Bank for Reconstruction and Development (EBRD) and the local lender XacBank are contributing to the development of dairy farming and processing in Mongolia by supporting the expansion of the country’s leading dairy company Suu Milk, EBRD said.
In a joint transaction, XacBank will be providing a local currency loan equivalent to US$ 4.8 million to Suu Milk, while 65 per cent of the risk on the loan will be assumed by the EBRD under a risk-sharing facility signed between the two financial institutions.
The funds will be used to finance the expansion of production capacity and the renewal of Suu Milk’s transport fleet, including the acquisition of new delivery trucks serving more than 2,500 nomadic herders across Mongolia. New ice cream, dairy production and packaging equipment will widen its range of products, extend their shelf life and raise food safety standards.
These improvements will lead to significant reductions in the consumption of energy and water. Suu Milk is also committed to adapting its operational policies and practices to provide new employment opportunities for women.
Technical assistance funded by the European Union helped Suu Milk improve its accounting and financial reporting practices and enhance the firm’s marketing.
Suu Milk is the oldest dairy company in Mongolia and was founded in 1958. It sources milk supplies from 19 collection points in the country and has more than 420 employees.
In Mongolia, the EBRD works to help build a diverse economy by developing the private sector and supporting infrastructure improvements. The Bank has invested more than €1.84 billion in 116 projects in the country since it started operations there in 2006.