NEW RISK FINANCING STRUCTURES CAN ENHANCE THE FINANCING CAPACITY OF LARGE SCALE INVESTMENT PROJECTS

 

The Financial Regulatory Commission of Mongolia has introduced a presentation on Alternative Risk Transfer (ART) mechanisms, with particular emphasis on the reinsurance Sidecar structure.

The presentation highlights how insurance risks can be financed not only through the traditional reinsurance market but also by leveraging capital markets. It outlines the Sidecar structure based on a Special Purpose Vehicle/Entity (SPV/SPE) and showcases international practices where investor capital is mobilized to support risk financing.

Beyond expanding the risk-bearing capacity of the insurance sector, this structure enables both institutional and private investors to access a new class of investment opportunities. Globally, Sidecar structures are increasingly recognized as an effective mechanism for strengthening the integration between capital markets and the insurance industry.

(Source: Financial Regulatory Commission of Mongolia)

As Ulaanbaatar advances strategic infrastructure, green development, and other large-scale investment initiatives, exploring innovative financial structures and modern risk management frameworks aligned with international best practices is essential for establishing a sustainable long-term investment ecosystem.

UBIM is actively exploring innovative financing solutions through partnerships with international investors, development finance institutions, and the private sector to diversify sustainable funding sources for Ulaanbaatar’s mega development projects.