ADB and UBF Partner to Boost Mongolia’s Wheat Sector with $10 Million Loan

In a significant move to strengthen food security and promote inclusive agricultural growth, the Asian Development Bank (ADB) and Ulaanbaatar Flour Limited Liability Company (UBF) have signed a landmark three-year loan agreement worth $10 million. The funds will support the procurement of locally grown wheat, addressing the growing domestic demand for wheat flour in Mongolia and reducing reliance on imports.

Wheat flour remains a dietary staple in Mongolia, accounting for approximately one-third of the daily caloric intake for most Mongolian households. Despite its importance, the domestic wheat sector faces notable challenges. Mongolia's wheat farmers must contend with a single, short growing season and the looming threats of climate change, which has increased the frequency of droughts, floods, and temperature fluctuations.

“Wheat flour is a key staple for Mongolian families,” said Shannon Cowlin, ADB Country Director for Mongolia. “This project will help stabilize the wheat supply chain by supporting UBF’s procurement from local farmers, especially women, and will contribute to a more resilient and inclusive agriculture sector.”

By enabling consistent wheat procurement from domestic farmers, the financing will help mitigate the risks of seasonal shortages and global price volatility. Importantly, this intervention will enhance Mongolia’s food self-sufficiency and contribute to long-term national food security goals.

Empowering Smallholder and Women-Led Farms

The ADB-financed initiative is designed to directly benefit around 250 wheat farming enterprises across Mongolia. Many of these are smallholder farms, including a substantial number led by women. These groups often lack access to steady buyers and affordable financing, making it difficult for them to sustain or scale their operations.

UBF, a major flour processor controlling approximately 30% of Mongolia’s wheat flour market, will serve as a stable offtaker, purchasing wheat from these local suppliers. The company will revise its procurement policy to better accommodate the needs of women suppliers and will implement initiatives to raise awareness about unpaid care work and domestic violence in rural farming communities.

“This financing is critical to ensuring a reliable supply of quality wheat for our operations while empowering smallholder and women-led farms,” stated Bakhatguli Nuktarkhaan, CEO of Ulaanbaatar Flour LLC. “Through this collaboration, we aim to improve food security, promote inclusive growth in rural communities, and build resilience against climate impacts.”

Technical Assistance for Sustainable Farming

In addition to the loan, ADB has committed $500,000 in technical assistance to bolster the resilience of Mongolia’s wheat farmers. The grant will support a comprehensive training program covering:

• Financial literacy: To improve money management and access to financial services.

• Climate-adaptive agriculture: Promoting soil conservation, efficient irrigation, and integrated pest management.

• Sustainable farming practices: Encouraging environmentally responsible food production methods that enhance long-term yields and minimize ecological impact.

These efforts aim to equip farmers with the skills and knowledge necessary to thrive despite increasingly erratic weather patterns and resource constraints.

Part of a Broader Regional Food Security Push

The ADB-UBF agreement is part of a wider ADB strategy to improve food systems and reduce hunger across Asia and the Pacific. In response to growing regional food insecurity, ADB recently expanded its food and nutrition funding portfolio by $26 billion, raising its total food security commitment to $40 billion for 2022–2030. Of this, $11 billion is earmarked for private sector engagement—emphasizing the pivotal role that businesses like UBF play in strengthening agrifood value chains.

“Direct support for farmers and agribusiness is a cornerstone of our food security strategy,” added Cowlin. “By partnering with private sector actors like UBF, we can amplify our impact and foster more inclusive economic development.”

A Growing Partnership for Impact

This marks ADB’s fourth transaction with Tavan Bogd Group—UBF’s parent conglomerate—and the third specifically with UBF. The longstanding collaboration highlights the bank’s confidence in UBF’s operational capacity and commitment to sustainability and social inclusion.

Founded in 1966, ADB continues to be a leading multilateral development institution dedicated to building inclusive, resilient, and sustainable societies throughout Asia and the Pacific. With 69 member countries, 50 of which are from the region, ADB combines financial innovation with strategic partnerships to tackle complex development challenges.

Through this renewed partnership with UBF, ADB underscores its commitment to reinforcing Mongolia’s food systems, supporting marginalized farmers, and strengthening the foundations of economic resilience in the face of global uncertainty.