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Ulaanbaatar, Mongolia – In a significant collaboration aimed at advancing Mongolia’s renewable energy sector, the Government of Mongolia and the International Finance Corporation (IFC), a member of the World Bank Group, have signed a pioneering agreement. This agreement aims to leverage private sector investments and expertise for the development of wind power projects across the country.
Under the terms of the agreement, IFC will serve as the lead transaction advisor to Mongolia’s Ministry of Energy. Their role includes conducting comprehensive project due diligence and facilitating a public-private partnership (PPP) for an initial wind power project with a capacity of approximately 100 MW.
Mongolia currently relies heavily on coal for energy and heating, resulting in the energy sector being the largest contributor to greenhouse gas emissions nationwide. The initiative aims to diversify the energy mix, enhance energy security, and reduce carbon emissions through the introduction of renewable energy sources.
N.Tavinbekh, State Secretary of the Ministry of Energy, emphasized the anticipated benefits of this initiative, including expanded power generation capacity, reduced electricity tariffs, improved access to clean and affordable energy, job creation, and a decrease in water and coal usage. He noted that the project aligns with international best practices, aiming to boost green energy production in Mongolia.
This project marks Mongolia’s first competitively tendered PPP in the renewable energy sector, setting a precedent for future wind Independent Power Producer (IPP) projects. Despite the country’s current wind power installation capacity of 155 MW, Mongolia boasts a vast wind potential estimated at 209,000 MW, sufficient to power the entire nation.
Rufat Alimardanov, IFC’s Resident Representative for Mongolia, underscored IFC’s commitment to supporting Mongolia in its transition to a cleaner energy future. He highlighted the project’s role in reducing carbon emissions and diversifying Mongolia’s energy sources away from coal-intensive generation.
Since 1997, IFC has invested approximately $5 billion in Mongolia, backing private sector initiatives spanning sustainable mining, banking, hospitality, and micro, small, and medium-sized enterprises. IFC continues to expand its advisory services to foster a conducive investment climate and bolster private sector growth in the country.
The wind power project represents a critical step towards achieving Mongolia’s sustainable development goals, contributing to environmental conservation and enhancing energy resilience across the nation.
