The Asian Development Bank (ADB) and APU Dairy LLC have signed a $20 million loan agreement to bolster Mongolia’s dairy sector and enhance food security. The financing will support nomadic herders by integrating them into the dairy value chain and strengthening dairy processing capacity.
The loan will fund the construction of 25 new raw milk collection centers within a 450-kilometer radius of Ulaanbaatar, the Mongolian capital. These centers will provide a stable market for herders’ milk and are projected to meet the growing demand from APU Dairy’s expanded processing facility by 2028. The facility expansion is expected to create 320 new jobs. Herders will also benefit from increased productivity, higher incomes, and the ability to use their milk production as collateral for credit.
The ADB’s financing also includes up to $750,000 in technical assistance to help 300 herders improve sustainable herd and pasture management practices. This assistance will also cover training in financial literacy, gender equality, disability awareness, and climate resilience.
The European Bank for Reconstruction and Development is participating as a co-financer and parallel lender for this project.
“This collaboration with APU Dairy is a significant step toward creating a more resilient and inclusive dairy value chain in Mongolia,” said Suzanne Gaboury, ADB Director General for Private Sector Operations.