ULAANBAATAR, September 10, 2026 — Over the past three decades, Mongolia has significantly reduced poverty and tripled GDP per capita, reaching upper-middle-income status in 2024. Building on these achievements, the Government has prioritized private sector-led economic diversification to foster more sustainable investment, productivity growth, and job creation.
Targeted reforms in specific economic sectors in Mongolia could help broaden the country’s economic base, attract substantial private investment, and create thousands of new and better-paid jobs, says a new World Bank Group report released today.
The Mongolia Country Private Sector Diagnostic (CPSD) identifies barriers that discourage private investment in specific economic sectors with significant untapped potential—sustainable cashmere processing, solar and wind energy generation, and critical minerals—and identifies concrete policy actions to remove these impediments to private investment.
“Mongolia is richly endowed with strong mineral systems and exceptional renewable energy potential and is one of the world’s leading cashmere producers. Improving the policy environment can ensure that those assets work for Mongolian businesses and communities, creating prosperity and more jobs,” said Victoria Delmon, World Bank Group Country Manager for Mongolia. “This diagnostic gives policymakers and investors a clear, sector-by-sector picture of what those conditions look like and what it would take to put them in place.”
Mongolia supplies roughly 40 percent of the world’s raw cashmere. Yet only 20 percent is processed domestically and most of that is exported as semi-processed fiber rather than finished products. Moving up the value chain into finished garments could increase the value of the same raw material by more than 200 percent. Backed by reforms to strengthen fiber quality standards, pricing mechanisms, and access to finance, the sector could attract $150 million in private investment and create up to 5,000 jobs by 2030, supporting employment in rural areas.
Mongolia has an estimated technical potential of 700 gigawatts of solar and 400 gigawatts of wind—about 300 times current domestic energy consumption. Yet renewables account for roughly 10 percent of Mongolia’s electricity generation today. Unlocking this potential will require modernizing the grid, making power purchase agreements bankable, and allowing direct contracts between generators and large industrial users. In addition to ongoing capacity investments already planned by the government, these reforms could catalyze an estimated $230 million in private investment, create around 1,700 jobs, and put Mongolia on a lower-emissions growth path.
Mongolia is rich in copper, lithium, rare earth elements, and graphite—but much of that potential is untapped. Less than 15 percent of legally available land is under exploration licenses, reflecting limited public geological data and regulatory uncertainty that discourage investment. Addressing these barriers could help catalyze $200-500 million in exploration investment and support 700-1,400 new jobs in the medium term.
“Investor interest in Mongolia is real, but uncertainty around the rules is holding many back,” said Arnaud Dupoizat, IFC’s Division Director for East Asia region. “The reforms identified in this report are practical and specific. Implementing them would send a powerful signal that Mongolia is ready for long-term investment in these—and other—sectors.”
For each sector, the CPSD identifies concrete regulatory, institutional, and market reforms prioritized by feasibility of implementation in the near term, without a major fiscal cost.
