Mongolia Unveils Action Plan to Attract and Diversify FDI
Mongolia's government has approved a comprehensive action plan to attract, retain and support foreign investment, targeting annual foreign direct investment (FDI) inflows of $5.5 billion by 2028. The plan, which runs from 2026 to 2028, prioritizes five sectors: renewable energy, AI data centers, value-added mining, agriculture and tourism.
The initiative comes as Mongolia seeks to reduce its reliance on mining-led investment. Of the $52.3 billion in FDI the country attracted between 1990 and 2025, 74.4 percent went into mining, with most of the remainder flowing into wholesale and retail trade, banking and finance, and construction. The Netherlands was the largest source, accounting for 44.5 percent of total inflows, followed by China at 12.6 percent and Singapore at 8.2 percent.
The five priority sectors are intended to broaden that base. Renewable energy and AI data centers mark the plan's clearest push into new growth areas, opening Mongolia to capital well beyond its traditional resource economy. Value-added mining, meanwhile, aims to capture more of the value chain at home by shifting from raw commodity exports toward downstream processing.
Five pillars of implementation
The plan is built on five pillars: strengthening the legal environment for investment, developing a more effective system for attracting foreign capital, building institutional and human resource capacity, establishing a mechanism to resolve foreign investor grievances, and introducing an investor aftercare system. Implementation will be led jointly by the Ministry of Economy and Development, the Ministry of Foreign Affairs, the Ministry of Finance, and the Ministry of Digital Development, Innovation and Communications.
Baganuur pyrolysis plant puts value-added mining into practice
In a concrete step toward value-added mining, the government also approved the creation of Baganuur Coal-Chemical Plant LLC, a public-private partnership that will build and operate a coal pyrolysis plant at the Baganuur coal mine. The Chinggis Khaan Sovereign Wealth Fund will hold a 67 percent stake in the company's ordinary shares, while the Capital City Citizens' Representative Khural will determine the holder of the remaining 33 percent.
What this means for investors
The plan sends a clear signal that the government recognizes the need to move Mongolia's investment story beyond mining. The emphasis on renewable energy and AI data centers is particularly notable, as these sectors could attract a new pool of international investors that has historically overlooked Mongolia. The grievance mechanism and aftercare system also respond to long-standing investor concerns, reflecting the reality that retaining existing investors is often as important as attracting new ones.
Still, the $5.5 billion target will ultimately hinge on execution. Foreign investors place a premium on legal stability and policy consistency, and progress on the plan's first pillar, the legal environment, is likely to shape the credibility of the rest. Clear timelines, a transparent project pipeline and regular progress reporting would go a long way toward building investor confidence.
