The EBRD's pioneering investment will help build the first wind energy project in Mongolia.
Mongolia’s newly discovered wealth of natural resources has been on the minds of many investors with the main focus being on mineral resources such as coal, copper and iron ore. The EBRD is supporting another rich, but as yet unused, natural resource in this Asian democracy by investing in the first wind energy project and the first privately-owned generator in Mongolia, the Salkhit wind farm.
US$ 42.4 million loan
The EBRD is extending a loan of US$ 42.4 million to Clean Energy LLC. As part of the project financing, the EBRD will also take a further US$ 4.4 million equity stake in Clean Energy LLC. The company, created to build the wind farm, is currently 25 per cent owned by the EBRD and 75 per cent owned by Newcom LLC – a Mongolian incorporated company. Other participants in the project include the US-based General Electric which will supply thirty-one 1.6 MW wind turbines to the site. As the first private owner of a generator, Clean Energy LLC will facilitate the transition to a more liberalised market.
The 50 MW Salkhit wind farm will be built about 70 km away from the capital Ulaanbaatar. This landmark project will provide about five per cent of the country’s electricity needs currently served mainly by coal-fired power plants.
Clean energy is also badly needed to improve the dire environmental situation in the country whose capital is one of the most polluted cities on Earth. The wind farm is expected to reduce CO2 emissions in the country by approximately 164,000 tonnes annually, enabling the company to sell carbon credits.
In relation to this project, the EBRD has facilitated technical assistance to the Mongolian government funded by the government of Japan to develop the regulatory framework for renewable energy. In addition, EBRD received funding from the government of Luxembourg for the environmental and social impact assessment for the Salkhit wind farm.