Dulmaazul Luvsandorj graduated from Charles University in Prague and the Tokyo University of Foreign Studies. In addition, she obtained a Postgraduate Diploma in Financial Strategy from the University of Oxford as well as an Executive MBA degree from Said Business School, University of Oxford. She has been working at the London subsidiary of Japan's Sumitomo Mitsui Banking Corporation and US management consulting firm Bearingpoint for the last 10 years. She has over 10 years’ experience in equity and debt financing in origination, structuring and execution of multinational entities’ infrastructure, mining, energy, renewable, petrochemical projects in the emerging markets of Europe, Middle East and Africa as well as project financing of Oyu Tolgoi and Tavan Tolgoi. Some of her executed projects have been awarded Deal of the Year by industry magazines such as Euromoney and Project Finance. Currently, she is working in Mongolia in the areas of renewable energy and infrastructure projects and fundraising.
- You have lived, studied and worked overseas for many years, but you have been regularly visiting Mongolia for work in recent years. How is Mongolia developing in your eyes?
- I have been working between Ulaanbaatar and London for the last five years, gaining lots of experience by working on major Mongolian projects and learning a lot about my country. The mining boom was taking place when I came to Ulaanbaatar in 2012. Although Mongolia has been developing since then, one of the causes of Mongolia’s current economic situation is the fact it scared away foreign investors
- You have worked in many countries in the area of project financing. How are projects financed and implemented in other countries?
- I have worked on energy, mining, natural gas, oil and renewable energy projects in Russia and Sahara desert countries. Emerging market ountries such as Russia, Turkey, Azerbaijan, South Africa, Angola and Ghana were able to quickly resolve the major projects. This shows that these countries have good decision-making policies, and the process accelerates and requires less time because fewer people make decisions. For example, decisions on major oil and coal projects such as Sakhalin Oil, Sibur Tobolsk and SUEK were made very quickly. These are projects that require investments of more than USD one billion, which is how much is necessary for our Tavan Tolgoi project. In 2015-2016, the financing of three projects that required USD three billion was resolved in just three months in Turkmenistan by raising funds from international syndicates.
The currently-discussed major projects of Mongolia can accelerate the development of the country if they are carried out professionally without being politicised.
Therefore, the currently-discussed major projects of Mongolia can accelerate the development of the country if they are carried out professionally without being politicised. Unfortunately, Mongolia has gone to date without getting moving on the main projects that must become economic propellers. It is necessary to move forward with the major projects as soon as possible by reaching appropriate conclusions, as it will help the country and its people.
- Up to today, Mongolia has talked about several megaprojects, but none of them have become a tangible reality. How do you see the situation of the mega projects? What is your opinion on how to continue these projects in the future?
- I am happy that the financing of the OT project was finally resolved after being stalled for so long. Also, the above-mentioned financing of SUEK would be a good example for Tavan Tolgoi. Unfortunately, it may not be the time due to the Chalco contract issues and because it has to go through parliamentary discussions. As I said earlier, professionally resolving projects in a short period of time is the most important thing. Sometimes works come to a halt after being submitted to parliament due to populists and various excuses.
L.Dulmaazul has over 10 years’ experience in equity and debt financing in origination, structuring and execution of multinational entities’ infrastructure, mining, energy, renewable, petrochemical projects in the emerging markets of Europe, Middle East and Africa as well as project financing of Oyu Tolgoi and Tavan Tolgoi.
It is unfortunate that the project of Thermal Power Plant No.5 has died after being delayed for so long when all the investment and loan issues were resolved.
So, it would be appropriate to focus more on 3-4 of the most important projects in a year according to other countries’ experiences. Implementing the World Bank’s and the Asian Development Bank's programmes to strengthen project implementation capacity and bringing professional project consulting services may be the correct solution.
- Almost 95 percent of our financial sector is dependent on the banking sector. Although certain steps are being taken to develop the stock market and other financial markets, there have not been any significant changes. What is your opinion on this matter?
- Debates regarding whether to bring in foreign banks or not have been taking place in the media. Personally, I think there is nothing to be scared of as the scale of competition among foreign banks and domestic banks is different. For example, foreign banks are interested in financing long-term projects in Mongolia exceeding the budget of USD 50 million. The purpose is to raise long-term cheap financing resources for major projects and programmes.
Foreign banks will not be able to bear the risks of small and medium-sized companies of Mongolia, so they will not compete with the Mongolian banks. Long-term and low-interest rate financing sought by Mongolia’s big projects will come from foreign banks, which will have a positive impact on the country’s development. I am also in agreement with regulating the legal environment so that they do not compete with domestic banks. For example, the world's largest banks have already entered Kazakhstan. Citibank is funding major projects in Kazakhstan with a team consisting of six people in Astana.
Personally, I think there is nothing to be scared of as the scale of competition among foreign banks and domestic banks is different.
- Mongolia will soon pay a USD 580 million debt (this debt has been paid since this interview). Mongolia has a lot of debt in general. Mongolia has many issues, such as improving debt management and adhering to proper budget expenditures. How are these troubles addressed in other countries?
- The IMF aid programme has created an opportunity to learn more about implementation of legal frameworks and policy monitoring. It is important for Mongolia to improve its skills, reduce the amount of debt in the future and learn to implement policies to ensure a balance in the economy. I have previously worked on projects during similar IMF aid programmes in Angola and Tanzania. It can create a controlled environment and improves bank financing in some cases. I expect an improved investment environment to be created with the implementation of the IMF aid programme.
- There are big business opportunities around the world. How can Mongolians create and harness such opportunities?
- Mongolia needs to understand that it is in between China and Russia, two of the largest markets in the world, and search for the way to wisely use this big opportunity. Since we cannot change our neighbours, we need to balance our relations with Russia and China. Mongolia has vast resources. The economy will surely recover if we learn from the best international solutions and adhere to investment and transparency policies, using the resources prudently. In addition to mining, Mongolia has vast energy and renewable energy resources. Renewable energy is projected to be profitable sector in the future. I believe that Mongolia has the potential to rapidly develop if it can correctly and quickly define its development opportunities and implementation methods and stay away from politicisation and populism.
By D. BEKHBAYAR
"Mongolian Economy" APRIL 2017 (127)