The Asian Development Bank (ADB) and the Mongolian government on Tuesday (4 May) signed a loan pact worth 40 million U.S. dollars, and a Japan Fund for Poverty Reduction (JFPR) grant worth 2 million U.S. dollars, to help modernize government-owned irrigation networks and vegetable production in Mongolia.

Agriculture is the main source of livelihood in rural areas, but is not sufficiently diversified. Mongolia relies heavily on imports for vegetables and fodder. Meanwhile, the country’s irrigation systems are recognized as having low water productivity and lacking resilience to severe droughts and floods. Diversifying traditional low-value grain crops into high-value vegetables will promote income and jobs in rural areas.

The project aims to install efficient and climate-resilient irrigation infrastructure and management systems, improve sustainability of agriculture production systems, and strengthen technical, institutional, and management capacity and coordination, according to the ADB.

Specifically, the project will upgrade and modernize infrastructure to provide irrigation services for over 8,000 hectares of land, the bank said. A total of 3,458 households are expected to benefit, including 1,041 low-income households.

The ADB will administer the co-financing grant of 2 million U.S. dollars from the JFPR, which has supported projects in Mongolia in poverty alleviation, improving livelihoods, and safeguarding the environment over the past 20 years, the bank said.