Translated version of this PSD: Mongolian
The provision of a senior loan of up to USD 30 million to Sainshand Salkhin Park LLC (the "Company") to support the development, construction and operation of the Sainshand Wind Farm (the "Project"), a 55MW wind power plant to be located approximately 460km to the south east of Ulaanbaatar (UB) in the Gobi desert.
The Sainshand Wind Farm will be the third wind energy project developed in Mongolia, following the Salkhit Wind Farm and the Tsetsii Wind Farm projects, which EBRD financed in 2012 and 2016 . The operation will contribute to reducing Mongolia's carbon intensity as well as meeting its increasing power demand. In addition, the project will also strengthen the private sector presence in the energy sector in the country and contribute to reaching the national renewable energy targets.
The transition impact stems from the fact that (i) the Project will assist Mongolia in diversifying its coal-dependent power sector and reducing CO2 emissions by up to 5 million tons over the Project's lifetime; and (ii) the Project will result in a new private entrant in the Mongolian power generation sector, where assets are almost entirely state-owned. The Project will be in line with the Bank's Green Economy Transition approach (GET).
Sainshand Salkhin Park LLC
The Company is a special purpose limited liability company incorporated in Mongolia to be owned by Engie, the IFU, Ferrostaal Industrial Projects as well as a local partner.
EBRD Finance Summary
Senior secured loan of up to USD 30.0 million (EUR 28.4 million equivalent) to the Company on a limited-recourse project finance basis.
Total Project Cost
Environmental and Social Summary
Category B (2014). The Bank's Environmental and Social Due Diligence (ESDD), which was supplemented with a review from an independent environmental and social consultant (IESC), confirmed that the Project has been structured in accordance with national legislation, EBRD's Performance Requirements, EIB's Standards on Assessment and Management of Environmental and Social Standards and Risks and the substantive environmental standards of the EU. The ESDD included a site visit by the IESC and a review of the Project's Environmental Impact Assessment (EIA) for the wind farm and associated transmission line and access road, Non-Technical Summary (NTS), Stakeholder Engagement Plan (SEP) and Resettlement Action Plan (RAP). These documents, along with an Environmental and Social Action Plan (ESAP) and an Information Sheet on Land Acquisition have been disclosed in English and Mongolian on the Company's website.
The 55MW Project, which will comprise of 25 wind turbine generators (WTGs), is located approximately 7km southeast of Sainshand city, in the Gobi region of Mongolia, approximately 460km southeast of the capital Ulaanbaatar. The Project is located in the Dornogobi aimag (province), on the convergence of the territories of three different soums (districts): Sainshand, Urgun and Altanshiree. The land for the Project is government owned and has been leased by the Sainshand Salkhin Park LLC (the Project Company) for 30 years. Key issues addressed in the EIA and supporting documentation included potential impacts to air (e.g. dust, noise), water, waste management, traffic management, visual landscape (wind turbines and shadow flicker), community health and safety, contractor management, biodiversity, cultural heritage and the potential for limited and temporary economic displacement (e.g. loss of grazing areas during the construction phase) and the permanent resettlement of two herder households' winter camps located within the 500m setback zone required to ensure people's safety. Whilst there are no Special Protected Areas (SPAs) in the proximity of the site, supplemental flora and fauna surveys were carried out to confirm that the project will not result in significant adverse impacts to critical habitats and/or species of conservation importance, as per EBRD Performance Requirement 6. A Stakeholder Engagement Plan was developed to complement the information and consultation activities carried out during the national EIA and permitting process, and to provide a more rigorous analysis of the different stakeholders and tailored means of engagement for each group, as well as a formal grievance mechanisms and the appropriate resourcing for implementation and reporting.
The Project will contribute to reducing Mongolia's carbon intensity and meeting its increasing power demand while furthering the commercial development of the Mongolian power market. The Project is expected to result in a reduction of greenhouse gas emissions of approximately 150,000 TCO2e annually.
Stakeholder engagement culminated in 2015 with community meetings in Sainshand, Ulgun and Altanshiree soums to disclose the results of the national EIA process. Additional public consultation will be carried out prior to and during construction / operations of the project in accordance with the Stakeholder Engagement Plan.
In order to ensure implementation and effective management of the planned mitigation measures included in the EIA during the life of the Project, Environmental and Social Management Plans (ESMPs) have been prepared. The ESMPs provide a framework for wider environmental and social management systems (ESMS) that will be created during the construction and operation phases by the Engineering, Procurement and Construction (EPC) contractor and site operator respectively. The Project Company will also employ an environmental and health and safety professional as well as a community liaison officer to oversee the implementation of the Project's environmental and social management commitments.
An ESAP has been agreed with the Company to ensure compliance with the Bank's Performance Requirements and includes various measures such as (i) develop and implement an Environmental and Social Management System (ESMS) for the Project, (ii) prepare a Workers Accommodation Management Plan in accordance with IFC/EBRD Guidelines, (iii) audit the status of pastureland following construction to determine suitability for continued grazing, and incorporate additional livelihood restoration measures if pastureland is no longer viable for grazing, and (iv) develop and train workers (including contractors) in the use of a chance find procedure. Finally, the company and its activities will be subject to regular monitoring by the Bank's specialists or appointed consultants.
Construction commenced in August 2017 and completion is estimated to be January 2019. At the time of the November 2017 construction monitoring site visit, activities on site were observed to be in material compliance with the Bank’s PRs and the Company is on track with its ESAP commitments.
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