Mongolia and IFC Partner to Develop Landmark Wind Power Project

The organization has also been expanding its advisory services to improve the investment and business environment, thereby spurring private sector development.

The Government of Mongolia and the International Finance Corporation (IFC), a member of the World Bank Group, have signed a significant agreement aimed at harnessing private sector capital and expertise to develop wind power in Mongolia. This initiative marks a crucial step in Mongolia's transition towards renewable energy and reducing its reliance on coal.

Key Aspects of the Agreement

Role of IFC: IFC will serve as the lead transaction advisor to Mongolia's Ministry of Energy. It will be responsible for preparing comprehensive project due diligence and developing a public-private partnership (PPP) for an initial wind power project with an estimated capacity of approximately 100 MW.

Objectives: The project aims to establish competitive electricity tariffs, diversify Mongolia's energy mix, increase renewable energy generation, and create a template for future wind Independent Power Producers (IPPs) in the country.

Expected Benefits

Positive Outcomes: The competitive auction for wind power is anticipated to result in larger power generation capacity, lower electricity tariffs, improved access to clean and affordable energy, more jobs, reduced water and coal usage, fewer greenhouse gas emissions, and a stable energy supply.

Environmental Impact: By displacing carbon-intensive coal generation, the new wind project will significantly reduce carbon emissions, contributing to a cleaner and more sustainable energy future for Mongolia.

Statements from Key Figures

N.Tavinbekh, State Secretary of the Ministry of Energy, highlighted the multifaceted benefits of the project:

"By organizing a competitive auction for wind power, we anticipate a range of positive outcomes: larger power generation capacity, lower electricity tariffs, better access to clean and affordable energy, more jobs, less water and coal usage, fewer greenhouse gas emissions, and a stable energy supply for the wider population. This essential project will help implement best practices from developed countries and increase green energy production."

Rufat Alimardanov, Resident Representative for Mongolia at IFC, emphasized the project's significance:

"IFC is pleased to support the Ministry of Energy in its efforts to increase the availability of wind and other renewable energy sources in the country. This project will be an important step in transitioning Mongolia's energy sector towards a cleaner, more sustainable future."

Mongolia's Wind Power Potential

Current Capacity: Mongolia currently has a wind power installation capacity of only 155 MW.

Potential: The country's total wind potential is estimated to be 209,000 MW, sufficient to power the entire nation multiple times over.

Background and Future Prospects

Since 1997, IFC has invested approximately $5 billion in Mongolia, supporting various private sector projects, including sustainable mining, banking, hospitality, services, and finance for micro, small, and medium-sized enterprises. The organization has also been expanding its advisory services to improve the investment and business environment, thereby spurring private sector development.

The new wind power project represents a pivotal development in Mongolia's energy sector. By leveraging private sector expertise and investment, the country aims to achieve a more diversified, sustainable, and resilient energy infrastructure, ultimately benefiting the environment and the economy.