Mongolia has signed a memorandum of understanding with global investment manager Franklin Templeton as part of a plan to overhaul the governance of state-owned enterprises and prepare them for listings on domestic and international capital markets by 2027, the government said on July 8.

The agreement is part of a broader reform programme under which the government intends to improve the management and financial performance of state-owned companies before placing them under a National Investment Fund.

The memorandum was signed by Government Secretariat head B. Enkhbayar and representatives of Franklin Templeton, which manages about $1.78 trillion in assets.

The government said it had approached 12 of the world's largest investment management firms as it seeks international expertise to reform state-owned enterprises. Franklin Templeton expressed interest in the initiative and will work with Mongolia to identify areas of cooperation and develop an implementation roadmap.

Mongolia has 108 state-owned enterprises employing around 60,700 people, with combined assets of about MNT60 trillion ($16.6bn). While some operate in strategically important sectors, the government said many fall short of international standards for corporate governance, profitability and investment readiness.

Officials said the reforms would not involve rapid privatisation. Instead, companies will first undergo assessments based on international methodologies, followed by improvements to governance, financial management and operations before they are considered for stock market listings.

The government hopes the programme will help attract foreign investment, strengthen corporate governance and improve returns from state assets.

Franklin Templeton has previously advised governments on reforms to state-owned enterprises, including projects in Romania and Uzbekistan aimed at preparing companies for access to capital markets.