Construction of the first city to be built in Mongolia since 1980 has commenced, it has been revealed.

The Khushigt Valley – New Settlement Zone, which is set to be home to 150,000 people by 2040 and become a thriving hub for business, tourism and culture, is part of an effort by the Mongolian Government to develop ‘satellite cities’ around the country’s capital Ulaanbaatar.

Baatarsaikhan Ts, president of the Tavan Bogd Group – one of Mongolia’s largest employers – said that the company plans to build a factory in the area, creating 4,000 jobs. Additionally, a decision was taken by the Mongolian cabinet to move some government institutions to the valley.

The development of the Khushigt Valley is a key part of the Mongolian government’s New Recovery Policy and Vision – 2050 ambition, which aim to transform Mongolia into a leading regional power by the middle of the century through supporting economic development, improving the education system and promoting gender equality.

The Mongolian government has already committed 30bn MNT in this year’s state budget to the project, with this figure set to rise to over 200bn MNT next year. Construction is initially focusing on creating new water wells and a 35kw power line.

Oyun-Erdene L, the prime minister of Mongolia, said: "The start of construction work in the Khushigt Valley today shows to the international community the progress that Mongolia is making in delivering our New Recovery Policy.

“This is just the start of delivering on our ambition, with the government committed to supporting development in other areas around our capital, upgrading local infrastructure and creating an environment that will attract investment from all over the world.

“With the Bogdkhan railway running around the new settlement area, the Khushigt Valley not only has the ability to become a thriving economic centre but also an independent transportation and logistics hub that will support Mongolia’s growth for decades to come.”