Ulaanbaatar, Mongolia, June 6, 2024— The Government of Mongolia and IFC, a member of the World Bank Group, have signed a landmark agreement that will harness private sector capital and expertise to develop wind power in the country.
Under the new agreement, IFC will act as the lead transaction advisor to the Ministry of Energy to prepare comprehensive project due diligence and develop a public-private partnership (PPP) for an initial wind power project of approximately 100 MW.
In Mongolia, a heavy reliance on coal power for energy and heating has made the energy sector the largest contributor to greenhouse gas (GHG) emissions in the country.
N.Tavinbekh, State Secretary of the Ministry of Energy, said: "By organizing a competitive auction for wind power, we anticipate a range of positive outcomes: larger power generation capacity, lower electricity tariffs, better access to clean and affordable energy, more jobs, less water and coal usage, fewer greenhouse gas emissions and a stable energy supply for the wider population. It should be noted that this essential project will help implement best practices from developed countries and increase green energy production."
This will be the first competitively tendered PPP in Mongolia's renewable energy sector, expected to create a positive milestone of establishing competitive electricity tariff, helping diversify Mongolia's energy mix through increased renewable energy generation and providing a template for future wind Independent Power Producers (IPPs) in the country.
Although Mongolia's current wind power installation capacity is only 155 MW, its total wind potential is estimated to be 209,000 MW, which is enough to power the entire country.
"IFC is pleased to support the Ministry of Energy in its efforts to increase the availability of wind and other renewable energy sources in the country," said Rufat Alimardanov, Resident Representative for Mongolia, IFC. "This project will be an important step in transitioning Mongolia's energy sector towards a cleaner, more sustainable future."
The new wind project will reduce carbon emissions by adding an additional renewable energy generation asset to Mongolia's energy mix, which will displace carbon intensive coal generation, while also increasing the countries available electricity generation.
Since 1997, IFC has invested about $5 billion in Mongolia, supporting private sector projects in areas such as sustainable mining, banking, hospitality, services, and finance for micro, small and medium sized enterprises. IFC has also been expanding its advisory services to improve the investment and business environment to spur private sector development.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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