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Mongolia Receives Backing for First Distributed Renewable Energy System

November 4, 2018

On November 2, the Government of Mongolia signed off on $85.6 million in loan and grant agreements from the Asian Development Bank, much of which will go towards the country's first distributed renewable energy system.

ADB Country Director for Mongolia Ms. Yolanda Fernandez Lommen (seated, left) with Minister of Finance Mr. Khurelbaatar Chimed (seated, right) during the signing of the projects to develop the country’s first distributed renewable energy system and improve tax administration and public investment management using ICT. Photo: Asian Development Bank

Other parts of the funds will go towards improving tax administration and public investment management using information and communications technology (ICT).

The agreements were signed by Minister of Finance Mr. Khurelbaatar Chimed and ADB Country Director for Mongolia Ms. Yolanda Fernandez Lommen at a ceremony in Ulaanbaatar. Representatives from the Ministry of Energy and Mongolian Tax Authority witnessed the event.

“These projects will support the government’s efforts to raise the share of renewable energy, decrease carbon dioxide emissions, and improve public financial resource mobilization and management,” said Ms. Fernandez Lommen. “They are also closely aligned with ADB’s Country Partnership Strategy for Mongolia to foster inclusive growth, improve people’s access to services, and strengthen environmental sustainability.”

The renewable energy loan will develop a 41 megawatt distributed renewable energy system—a first-of-its-kind in Mongolia—using solar photovoltaic and wind powers with advanced battery storage technology and energy management systems. The project will result in the supply of clean and reliable electricity to about 260,000 people in remote and less-developed towns in western Mongolia, who currently rely on high-cost and high-polluting carbon-intensive electricity. ADB’s funding of $40.0 million is supplemented by grant cofinancing; $14.6 million from the Strategic Climate Fund under the Scaling Up Renewable Energy Program in Low-Income Countries; and $6.0 from the Japan Fund for the Joint Crediting Mechanism. The Government of Mongolia is contributing $5.6 million to the project.

The second project will support the Mongolian Tax Authority in its tax collection efforts by streamlining processes for tax administration and public investment in line with international good practice. The $25 million loan will establish an information system and provide required ICT infrastructure to host it. The project will also develop an ICT-based public investment management information system to help the government select the investment projects that will bring most benefits to the country and better manage them. The Government of Mongolia is contributing $1.47 million to the project.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.

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