According to the Law on Public-Private Partnership, projects can be implemented in the fields of public infrastructure and government services. Specifically:

• Energy and heating supply;
• Waste management;
• Surface water and greywater infrastructure and management;
• Water supply and sewage systems, wastewater treatment plants;
• Highways, high-capacity public transport, and logistics centers;
• Facilities supporting food supply and food security.

However, public-private partnerships do not apply to profit-oriented activities involving the exploration, prospecting, extraction, or use of mineral resources—except when services are provided to the public through infrastructure in the defense, banking, financial markets, or mining sectors.

Law on Public-Private Partnership:

• Article 3. Scope of the Law
• Article 13. Sectors for Implementation of Partnerships

A partnership project must aim to improve the quality and accessibility of public services, maintain a balance between oversight and flexibility in fiscal and financial management, and support private sector–driven economic growth. It should clearly define the roles and responsibilities of the public and private sectors, ensure optimal risk sharing, and be based on the principles of good governance.

The selection of a private sector partner must be conducted in a fair, equitable, transparent, competitive, open, effective, and accountable manner. The entire selection process and its outcomes must be made publicly available.

Decisions on whether a project will be implemented through a partnership must be based on an assessment of its potential budgetary risks. During project implementation, financial performance must be monitored regularly.

Partnership projects must also adhere to principles that mitigate climate change, introduce environmentally friendly technologies, and support the development of a green economy.

Law on Public-Private Partnership:

Article 4. Principles of Partnership

A partnership project must meet the following general and specific requirements. Specifically, the project must be identified as suitable for implementation through a partnership in the fields of public infrastructure or public services. It must align with national development policy documents at the long-, medium-, and short-term levels, including regional development policies and the Medium-Term Budget Framework Statement.

The project should aim to improve the quality and accessibility of public services, introduce innovation and new technologies, and must not have adverse environmental impacts. It should also contribute to climate change mitigation and support green economic development, in line with general requirements.

Law on Public-Private Partnership:

Article 18. Requirements for Partnership Projects

A business entity or government organization seeking to initiate a partnership project must first approach its respective line ministry. For example, if the project relates to the energy sector, the proponent should approach the Ministry of Energy; if it relates to road infrastructure, then the Ministry of Road and Transport Development; and for environmental projects, the Ministry of Environment and Climate Change.

Additionally, they may consult the **Public-Private Partnership Center**, a state-owned enterprise, for technical and methodological guidance.

Law on Public-Private Partnership:

Article 22. Initiating a Partnership Project from the Private Sector

According to the Law on Public-Private Partnership, the following types of government support are available to private entities implementing partnership projects:

GOVERNMENT GUARANTEE

• Guarantee of financial obligations funded by the state budget
• Guarantee for public use and access

GOVERNMENT SUPPORT

• Provision of land use and ownership rights
• Provision of conditions for delivering public services
• Tax exemptions and incentives
• Financing of certain portions of the project from the state budget
• Insurance coverage for partnership assets, if necessary
• Access to public infrastructure and public services
• Other forms of support as specified by law

LAND

• Substitution, acquisition, or compensation-based repossession of privately owned, possessed, or used land essential for the project, in accordance with relevant laws
• Use of state-owned land under specific conditions and agreements by the private sector partner

Law on Public-Private Partnership:

Article 32. Government Support

The type of partnership agreement is determined based on the full analysis, operational model, and specific characteristics of the project being implemented through a public-private partnership.

Depending on the nature of the project, the following types of partnership agreements are defined:

• Design, build, operate, and transfer
• Build, operate, and transfer
• Build, transfer, and operate
• Build, lease, operate, and transfer
• Build, own, operate, and transfer
• Lease and provide public services under a lease
• Operate and maintain
• Rehabilitate, possess, operate, and transfer
• Manage operations
• Other types of agreements as identified through the project’s full analysis

Under this law, it is prohibited to enter into or implement a “build-transfer” type agreement that involves direct transfer upon completion, is executed in a short period, and is indistinguishable from traditional public investment projects.

Law on Public-Private Partnership:

Article 15. Types of Partnership Agreements for Project Implementation

Partnerships are based on the principles of encouraging private sector investment and participation, increasing fiscal and economic efficiency, and maintaining long-term stability. The duration of a partnership agreement is determined through mutual agreement between the parties, based on the project's sector, fundamental characteristics, and agreement type. However, the term of a partnership agreement must not exceed 30 years.

According to the Law on Public-Private Partnership, the following factors must be considered when determining the term of a partnership agreement:

• The conditions and amount of private sector investment
• The time required to build, commission, expand, or renovate infrastructure and facilities
• The depreciation period of the project’s infrastructure and facilities
• Requirements for the operation and service of facilities in accordance with applicable laws, regulations, norms, and standards
• Policies related to competition and market systems as defined by law in infrastructure and service sectors

Law on Public-Private Partnership:

Article 36. Duration of Partnership Agreements

The selection of a private sector partner is conducted in two stages. The first is the pre-qualification stage, followed by the competitive bidding stage. The deadline for submitting expressions of interest for pre-qualification must be no less than one month from the public announcement of the selection process.

Participants who meet the requirements must prepare and submit their project proposals in sealed form, in accordance with the pre-qualification documentation. Proposals are registered in the order in which they are received by the selection committee.

Law on Public-Private Partnership:

Article 25. Stages of Selecting a Private Sector Partner

Applicants seeking to become private sector partners in a public-private partnership must meet the following basic requirements:

• Have sufficient financial capacity, management expertise, qualified human resources, technical and technological capabilities, and relevant experience to implement the project
• Meet the licensing requirements under the Law on Licensing for the relevant general or special business activities
• Not be subject to dissolution, bankruptcy proceedings, asset seizures, or suspension of operations under applicable law
• Not have any final court decision in the past three years declaring failure to fulfill a partnership agreement
• Have shareholders and authorized officers who are not convicted, not in conflict of interest, and not affiliated with government officials of the public partner organization
• Ensure that the ultimate owners, subsidiaries, and affiliates of the applying company are not interdependent
• Comply with the independence criteria specified in Article 4.1.6 of the Competition Law
• Meet any additional specific requirements related to the partnership project, as set forth in the tender documents (except those prohibited under Article 27.1 of the law)
• Submit documentation confirming compliance with these legal requirements as part of the tender application
• If an applicant is proven by court to have submitted forged documents, they will be barred from participating in partnership projects and activities for 5 years following the final court decision
• The government authority responsible for partnerships, or the provincial/capital city governor’s office, shall maintain a public registry of entities restricted under Article 27.4 of the law
• Any applicant found to be in conflict of interest as defined by the Law on Regulating Public and Private Interests and Preventing Conflicts of Interest in Public Office shall be disqualified from participating in the partnership

Law on Public-Private Partnership:

Article 25. Stages of Selecting a Private Sector Partner

According to Article 13.2 of the Law on Public-Private Partnership, “Provinces with a population of 100,000 or more, or those that have not received financial support from the state or capital city budget for the last three consecutive years, may implement partnership projects in the following sectors.”

Governors of provinces and the capital city that meet these criteria shall exercise the following powers within the framework of partnerships:

• Develop partnership project proposals for the local area and present them to the Citizens' Representative Khural for discussion
• Submit the project proposals to the relevant central administrative body of the respective sector
• Ensure the implementation of local partnership projects, provide support to partners, collaborate, and monitor the fulfillment of the partnership agreement in accordance with the law and the agreement
• Participate in the composition of the project team conducting full project analysis, take part in agreement negotiations, and jointly conclude the partnership agreement on behalf of the public partner with the relevant central administrative body
• Transfer and register any property created or related to the partnership to local government ownership, in accordance with the law, the partnership agreement, and related legislation
• Conclude partnership and consulting service agreements for projects specified under Article 13.2 of the law, make amendments, and oversee project implementation

The Citizens' Representative Khural of the province or capital city shall exercise the following powers within the framework of partnerships:

• Monitor the implementation of partnership legislation and the fulfillment of partnership agreements for local projects
• Discuss partnership project proposals submitted by the Governor
• Support and collaborate on the implementation of local partnership projects
• Approve the list of partnership projects to be implemented under Article 13.2 of the law

Law on Public-Private Partnership:

Article 11. Powers of the Citizens' Representative Khural and the Governor of the Province or Capital City

Yes.