The prestigious US Treasury Development Impact Honors award has recognised the EBRD Salkhit wind farm project in Mongolia.
Salkhit wind farm, the first large-scale renewables project in Mongolia and the first new electricity generator in the country for the last 30 years, was conceived by local investors with early EBRD equity participation. The plant is located 70 km from the capital Ulaanbaatar.
It received long-term financing from the EBRD and the Netherlands Development Finance Company FMO (US$ 47 million each) and further equity contribution from General Electric which also provided the turbines to harness the powerful Mongolian wind.
The US Department of the Treasury announced the award today at the third annual Development Impact Honors for exceptional development projects undertaken by multilateral development banks (MDBs). According to the Treasury, “the projects honoured at the ceremony today reflect the critical work of the MDBs, which strengthens communities around the world, including in fragile states.”
Riccardo Puliti, ERBD Managing Director, Energy and Natural Resources, received the award from the US Treasury Department, in Washington, DC. Mr Puliti said: “The Salkhit wind farm will help Mongolia’s capital improve its health-threatening air quality. The project captures the best of the EBRD: a strong presence on the ground with very good relationships with the government in order to develop the legal and regulatory framework of this public-private partnership project; the capability to work with local and international shareholders; quick decision-making on the early equity portion of the transaction; the capability to provide long-term debt financing; and the capacity to manage grant funding from international donors.”
Mr Puliti added: “We are the largest investor in renewables in our region, and we have also helped many countries adopt legal and regulatory frameworks that allow for the sustainable development of renewable energy. And, as demonstrated by this project, we boldly go where no one has gone before. We work in markets ranging from Morocco to Tajikistan, where later this week we will sign a multimillion-dollar deal to modernise a hydropower plant and reduce electricity blackouts”.
“When you consider recent global events, it is clear that we must continue to support international financial institutions like those that we are honoring today,” said Treasury Secretary Jacob J. Lew. “The United States has demonstrated steadfast support for the multilateral development banks, which leverage each dollar of U.S. investment many times over. Yet our support goes beyond funding. We have marshalled our best experts and best thinking to make measurable progress on reducing poverty, promoting broadly-shared economic growth, and expanding our trade partners.”
Salkhit, which means Windy Mountain in Mongolian, was built in 2013 and provides about 5 per cent of Mongolia’s electricity production. It is operated by Clean Energy LLC and majority-owned by a local investor, Newcom. According to EBRD research, Mongolia has serious potential for further wind power exploration, provided that the country’s transmission grid is properly upgraded and modernised.
Other MDBs whose projects were also recognised by the US Treasury today are: the Asian Development Bank, the African Development Bank, the Inter-American Development Bank, the International Fund for Agricultural Development and the World Bank. Among the multilateral development banks, the EBRD places emphasis on its investments in the private sector. In addition to focusing on principles of sound banking, the EBRD engages in policy dialogue and manages technical cooperation funds provided by international donors.
The Mongolian wind farm project benefited from donor support provided by Japan (to the Mongolian government for the legal and regulatory framework) and Luxembourg (for environmental and social assistance).
Since 2006, the EBRD has invested over €13 billion into sustainable energy projects. A third of the Bank’s funding for power and energy utilities goes to renewable energy projects. Small-scale renewables are supported via credit lines to local banks.
The EBRD’s new Energy Strategy, adopted late last year, places renewable energy high on the agenda. It also highlights energy efficiency as its main priority for the energy-intensive region where it operates, as one of the ways to strengthen energy security.