Ulaanbaatar District Heating Project

Location:

Mongolia

Project number:

49511

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

10 Sep 2019

Status:

Signed

PSD disclosed:

01 Oct 2018

Translated version of this PSD: Mongolian

Project Description

The provision of a sovereign loan of up to US$ 10 million (€ 8.3 million) to the state of Mongolia to be on-lent to the Ulaanbaatar District Heating Company (the "Company" or "UBDH"), Company's Priority Investment Programme ("PIP") includes i) the rehabilitation and the replacement of selected sections of the district heating network, (ii) the installation of an energy-efficient booster pumping station, (iii) other auxiliary investments, such as upgrading of central heating substations ("CHS") or installing individual heating substations ("IHS") in buildings directly connected to the UBDH network, (iv) the construction of a new energy centre to serve the north of the city and (v) the installation of DH accumulators, which could store heat energy either produced during the night hours when the cost of electricity is minimal or at times when CHP plants produce excess heat. The project is expected to be co-financed by a capital grant from bi-lateral or multilateral donors or the Special Shareholder Fund (or a combination of donor funding) amounting up to US$ 5 million (€ 4.5 million).

Project Objectives

The Project is expected to improve the quality of the Company's service by modernising the central DH infrastructure.

Transition Impact

Rehabilitation of the DH system will include the installation of energy-efficient pumping equipment, automatic control system, DH accumulators and replacement of selected sections of the DH network to reduce water leakages. The sources of transition impact are:

  • Demonstration of new replicable behaviour and activities
  • It will be the first time DH accumulators are used to store heat energy in Mongolia.
  • Demonstration of successful restructuring
  • Commercialisation: The project will have a positive demonstration effect on further commercialisation in Mongolia by assisting in Company's corporate development and building its institutional capacity.

Client Information

DISTRICT HEATING COMPANY OF THE CITY OF ULAANBAATAR

EBRD Finance Summary

USD 10,000,000.00

Total Project Cost

USD 15,000,000.00

Environmental and Social Summary

The Project has been categorised B in accordance with the EBRD Environmental and Social Policy 2014. The Project is expected to result in significant environmental and social benefits through energy efficiency measures and improved reliability of district heating services. Any risks and adverse impacts associated with the Project are likely to be site-specific and to easy to identify and mitigate, provided that adequate resources are allocated to the management of environmental and social issues by the Client. The Project will result in enhanced energy efficiency, reduced hot water and heat losses in the system and improved environmental standards, including reduced CO2 emissions at the associated coal-fired CHP plants. Key issues to be investigated include replacement of DH network pipes, and installation of Individual Heating Substations (IHS) in residential buildings, and compliance of the existing boilers with national legislation and EU IED and air emission standards. An ESDD will be undertaken as part of the overall Feasibility Study and will include an independent environmental and social audit, including a gender assessment, of the Company's current operations and facilities and assessment of the project's E&S impacts and benefits. An ESAP and SEP will be developed to structure the Project to meet the EBRD PRs, mitigate E&S impacts and enhance its benefits.

Technical Cooperation

The Project is expected to benefit from the following Technical Co-operation assignments:

Pre Loan Signing

TC 1: Feasibility Study including preparation of the investment's technical, financial, environmental and social elements. The assignment's cost is estimated at up to € 350,000, to be financed by the government of Japan.

TC 2: IFRS Audit to introduce the Company to auditing in line with international standards. The assignment's cost is estimated at up to € 50,000, proposed for financing by the Infrastructure Russia and Central Asia Consultancy Budget.

Post Loan Signing

TC3: Implementation support to develop tenders and ensure appropriate contracting and supervision, plus implementation of an Environmental and Social Action Plan ("ESAP"). The assignment's cost is estimated at up to € 600,000, proposed for financing by an international donor or the EBRD Shareholder Special Fund ("SSF").

TC4: Corporate development programme to support operational and financial improvements. The assignment's cost is estimated up to € 300,000, proposed for financing by an international donor or the SSF.

Company Contact Information

Dr. D. Byamba-Ochir
ochir@ubds.energy.mn
+976 11342397

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Public Information Policy (PIP)

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Text of the PIP

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