Tsetsii Wind Farm to be Built in Southern Mongolia

Tsetii Wind Farm
Image photo for completion of Tsetsii Wind Farm at Tsogttsetsii soum, Umnugobi aimag, Mongolia (Photo: Business Wire)

Clean Energy Asia together with its shareholders, Newcom  and SB Energy, have signed a financing deal  with the Japan International Cooperation Agency (JICA) and the European Bank for Reconstruction and Development (EBRD) to construct a 50MW wind farm in southern Mongolia.

Clean Energy Asia is 51% owned by Newcom, a Mongolian conglomerate with activities in telecommunications, property and energy. The remaining 49% is owned by a subsidiary of SB Energy Corp. , a subsidiary of SoftBank Group (the telecommunications and technology conglomerate).

Mongolia faces great challenges in meeting its growing demand for electricity, almost all of which is currently met by ageing and polluting coal-fired plants. The wind farm will help supply Mongolia’s power demand with clean, eco-efficient electricity by harnessing Mongolia’s vast and inexhaustible wind resources. The project will help contribute to sustainable economic development and the mitigation of climate change. Clean Energy Asia will aim to launch operations in December 2017.

Mongolia has a power-supply capacity of 1130MW, consisting of 88% coal, 6% diesel, 6% renewable energy, and 2% hydropower sources (Department of Energy, Mongolia, 2015). While being the world’s eighth country most susceptible to climate change (Climate Risk Index. Source: GERMANWATCH “Global Climate Risk Index 2014”), electricity supply-demand balance along with its economic growth is an urgent issue for Mongolia; accordingly, Mongolia is a country that particularly requires safe and secure power sources such as renewable energy. The State Great Khural approved a national power policy in 2015 that sets Mongolia’s mid-to-long term target and plan for 2015-2030 in the energy sector. The policy aims to increase the power generation share of renewable energy to 20% by 2020 and to 30% by 2030, and it stipulates the promotion of investment in the energy industry in cooperation with international financial institutions and donor countries, utilizing the abundant wind and solar resources in the Gobi region. Mongolia is the first country to sign a memorandum with Japan on the Joint Crediting Mechanism (JCM) to reduce greenhouse gas emissions.

In these circumstances, this Tsogttsetsii wind farm project will help contribute to the increased adoption of renewable energy in Mongolia.

This wind farm project is the first dollar-denominated project finance debt transaction by JICA through its Private Sector Investment Finance scheme in the renewable energy field, and the second renewable energy project in Mongolia for Newcom and EBRD following the 50 MW Salkhit Wind Farm, the first wind farm and first private power generator in Mongolia, which began its operations in 2013. The 50MW Tsetsii Wind Farm project marks the first power generation business in Mongolia for SB Energy and the SoftBank Group.

 

 

JICA commented as follows: “The Tsetsii Wind Farm project in Mongolia marks JICA’s first dollar-denominated project finance debt transaction through its Private Sector Investment Finance scheme in the renewable energy field. This project is also the first co-financing arrangement with EBRD. The project is consistent with the ‘Partnership for Quality Infrastructure’ being promoted by the Japanese government with due consideration on life cycle costs, environmental and social sustainability, and contribution to the local society and economy.

JICA has been supporting the power sector in Mongolia, especially Ulaanbaatar Thermal Power Plant No.4. JICA intends to continue providing support to the power sector in Mongolia for stable socioeconomic growth.

Going forward, JICA will coordinate with governments and international agencies toward socioeconomic development in developing countries and regions, promoting ‘quality infrastructure financing’ and responding to climate change.”

Philip Bennett, EBRD’s First Vice President and Chief Operating Officer, said: “We are delighted to mark the tenth anniversary of our operations in Mongolia today by singing the financing for our second wind farm in the country. We are pleased to cooperate in this transaction not only with our long established partner Newcom, but also with our new partners JICA and the SoftBank Group. This signing today builds on eight years of sustained work with the Mongolian authorities to help them put in place the regulatory framework that allows them to harness Mongolia’s huge renewable resources. Of the EUR 1.4 billion we have invested in the Mongolian private sector in the last 10 years, the Salkhit and the Tsetsii wind farms are amongst the projects we are most proud of.”

 

Summary of Wind Farm

Location Tsogttsetsii soum, Umnugobi aimag, Mongolia
Output scale 50MW: 2,000kW x 25 generators

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This post was prepared by Solar Thermal Magazine staff.

1 Comment

  • Bruce Miller says:

    The real benefit: Renewable! perpetual, Eternal and clean! GE makes the very most recent advances in generators of Wind Turbines? just how long can the make them last before overhauls? how inexpensive can they make the overhauls, the maintenance? The competition is on!

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