VZCZCXRO3377
RR RUEHLMC
DE RUEHUM #0572/01 2082329
ZNR UUUUU ZZH
R 272329Z JUL 06
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 0165
INFO RUEHBJ/AMEMBASSY BEIJING 5137
RUEHUL/AMEMBASSY SEOUL 2368
RUEHKO/AMEMBASSY TOKYO 2170
RUEATRS/DEPT OF TREASURY WASHDC
RUCPODC/USDOC WASHDC 1073
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0326

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000572 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PLEASE PASS TO OPIC AND EXIMBANK TALAAT RAHMAN 
 
E.O. 12958: N/A 
TAGS: EFIN EAID PGOV PREL KMCA MG
SUBJECT: Exim's First Visit to Mongolia: Transactions in Aircraft 
and Rail Likely 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET 
DISTRIBUTION. 
 
¶1.  (SBU) SUMMARY:  Export-Import Bank of the United States (Ex-Im 
Bank) Export Finance Group Senior Vice President (SVP) John McAdams 
visited Mongolia July 6 to 11 to explain Ex-Im Bank's programs. 
Prime Minister Enkhbold gave McAdams an overview of the Mongolian 
situation and desired projects, while McAdams encouraged the PM to 
prioritize these possibilities.  Minister for Industry and Trade 
Jargalsaikhan had his preferred bank for transactions and urged 
excluding the U.S. Embassy from communications; McAdams pushed back 
on both points.  The Ministry of Roads, Transportation and Tourism 
brought together an unprecedented group of stakeholders in the 
sectors of rail and air to explain future plans and learn of Ex-Im 
opportunities.  Ex-Im met with a wide array of Mongolian businesses 
which do not currently import much product from the U.S. due to 
transportation costs, but were greatly interested in increasing 
U.S.-sourced purchases.  In addition, McAdams attended opening 
events celebrating Naadam and Mongolia's 800th Anniversary.   End 
summary. 
 
Comment 
------- 
 
¶2. (SBU) This first trip by Ex-Im to Mongolia was an important 
educational opportunity for both the GOM and private sector, as 
there has been no presence in Mongolia by any of the similar major 
export import banks. The Chinese export import bank has been active 
here and they offer soft loans, something Ex-Im does not do.  There 
was great local interest in utilizing Ex-Im's financing 
opportunities for some short-term goods exports, while major 
projects may not develop for a few years, there is a bright future 
here for Ex-Im involvement as Mongolia's economy continues to grow. 
The visit was also covered widely in the media.  END COMMENT. 
 
Mongolian Government Meetings 
----------------------------- 
 
¶3. (SBU) Ex-Im's meetings with the Government of Mongolia (GOM) were 
primarily to introduce how Ex-Im functions and to look for possible 
projects idea for financing.  Ms. Talaat Rahman, Ex-Im Bank's 
Regional Director for Asia and the Middle East accompanied McAdams 
during his visit.  Prime Minister Enkhbold gave an overview of the 
Mongolian situation and desired projects, while McAdams encouraged 
the PM to prioritize these different project possibilities.  While 
no immediate projects are on tap, there are strong possibilities in 
the next few years exist for U.S exports, particularly in the 
transportation sector.  Although Ex-Im met with Minister of Health 
Gundalai, who is interested in acquiring large amounts of U.S. 
equipment, there appears to be no funding available for health 
sector U.S. exports at this time.  If the health diagnostic center 
proposed by the GOM to the Millennium Challenge Corporation (MCC) 
comes to fruition, there may be increased opportunities. 
 
¶4. (SBU) Of particular interest was the meeting with Minister of 
Industry and Trade Jargalsaikhan, who invited McAdams to Mongolia 
while in Washington earlier this spring.  Jargalsaikhan included 
Commerz Bank representatives in his meeting with McAdams. 
Jargalsaikhan has designated Commerz Bank as his intermediary to 
deal with Ex-Im.  McAdams explained Ex-Im operations, including that 
they will work with any qualified bank, not just Commerz Bank. 
Jargalsaikhan did not have any immediate projects, although he 
suggested that several large mining projects (including properties 
now in private hands) might be proposed by the GOM.  Jargalsaikhan 
expressed concern over the role of the U.S. Embassy as an 
intermediary as he and Ex-Im should "talk straight business" and 
avoid politics.  McAdams reiterated that the U.S. Embassy is Ex-Im's 
intermediary in Mongolia and that communication should flow through 
post. 
 
¶5. (SBU) The Ministry of Roads, Transportation and Tourism's (MRTT) 
new State Secretary Bat-Enkh brought together an unprecedented group 
of stakeholders in the sectors of rail and air to explain future 
plans and learn of Ex-Im opportunities. (NOTE:  The different 
agencies responsible for these two sectors experience frequent 
infighting so the expression of solidarity indicates growing 
strength on the part of the MRTT in its oversight role)  The most 
likely U.S. exports in the next several years would include a 
purchase of Boeing planes, ADS Mode B radar and General Electric 
rail kits.  None of these projects are certain at this time, but 
McAdams encouraged the GOM to contact Ex-Im for possible financing 
if the projects come to fruition.  McAdams also encouraged the MRTT 
to explore USTDA assistance in learning more about how to attract 
 
ULAANBAATA 00000572  002 OF 002 
 
 
U.S. companies to tenders for roads projects. 
 
Mongolian and U.S. Private Sector Interests 
------------------------------------------- 
 
¶6. (SBU) Ex-Im met with a wide array of Mongolian businesses which 
do not currently import much product from the U.S. due to 
transportation costs.  However, there is great interest in the 
possibility of increasing their U.S.-sourced purchases in the future 
through financing assistance from Ex-Im.  Larger Mongolian 
conglomerates that already purchase some U.S. exports provided a 
more focused picture of projects, both small and large scale that 
could qualify for Ex-Im financing.  For example, a Mongolian company 
entering the domestic aviation market is looking at purchasing Bell 
helicopters and a meat importer would like to bring in frozen 
chicken several times a year. 
 
Participation in 800th Anniversary Celebrations 
--------------------------------------------- -- 
 
¶7. (SBU) The Ex-Im delegation represented the USG at several of the 
opening events for Mongolia's 800th anniversary celebrations, 
including the dedication of a new statue Chinggis Khan memorial hall 
on the main square and a wreath-laying at the Sukhbaatar statue. 
The GOM greatly appreciated the presence of this VIP delegation as 
an expression of the continued strengthening of bilateral 
relations. 
 
¶8. (U) The Ex-Im delegation cleared this cable. 
 
SLUTZ