Mongolia and IFC Sign Agreement to Boost Wind Power Development

Mongolia currently relies heavily on coal power for energy and heating, making the energy sector the largest contributor to the country’s greenhouse gas (GHG) emissions.


Devdiscourse News Desk | Ulaanbaatar | Updated: 07-06-2024 12:37 IST | Created: 07-06-2024 12:37 IST
Mongolia and IFC Sign Agreement to Boost Wind Power Development
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The Government of Mongolia has signed a landmark agreement with the International Finance Corporation (IFC), a member of the World Bank Group, to harness private sector capital and expertise for developing wind power in the country. This agreement marks a significant step towards a cleaner and more sustainable energy future for Mongolia.

Under the new agreement, IFC will serve as the lead transaction advisor to the Ministry of Energy. Their role includes preparing comprehensive project due diligence and developing a public-private partnership (PPP) for an initial wind power project of approximately 100 MW.

Mongolia currently relies heavily on coal power for energy and heating, making the energy sector the largest contributor to the country’s greenhouse gas (GHG) emissions. This new initiative aims to diversify Mongolia's energy mix and significantly reduce its carbon footprint.

N.Tavinbekh, State Secretary of the Ministry of Energy, emphasized the expected 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. It should be noted that this essential project will help implement best practices from developed countries and increase green energy production."

This project represents the first competitively tendered PPP in Mongolia's renewable energy sector. It is expected to establish a competitive electricity tariff, diversify the energy mix through increased renewable energy generation, and provide a template for future wind Independent Power Producers (IPPs) in the country.

Although Mongolia's current wind power installation capacity is only 155 MW, the country has an estimated wind potential of 209,000 MW—enough to power the entire nation. The new wind project aims to tap into this vast potential, reducing carbon emissions by displacing coal-based power generation and increasing the availability of renewable energy.

Rufat Alimardanov, IFC Resident Representative for Mongolia, expressed support for the initiative: "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."

Since 1997, IFC has invested about $5 billion in Mongolia, supporting private sector projects in various sectors, including sustainable mining, banking, hospitality, services, and finance for micro, small, and medium-sized enterprises. Additionally, IFC has been expanding its advisory services to improve the investment and business environment, aiming to spur private sector development.

The new wind power project is expected to not only provide environmental benefits but also enhance energy security and economic growth in Mongolia, making it a pivotal development in the country's pursuit of sustainable energy solutions.  

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