Japan, EBRD support infrastructure for renewables in Mongolia

The EBRD and Japan are supporting Mongolia’s renewable energy sector with a new project to modernise part of the country’s electricity transmission infrastructure. The project will support plans for renewable energy production in the Gobi desert through wind power. The Japan-EBRD Cooperation Fund is providing a US$ 750,000 grant to enable Mongolia’s national transmission company NPTG to modernise an electricity substation near the site of a planned wind farm. The urgently needed upgrade will allow the Tavan Tolgoi substation, located 550 km south of the capital Ulaanbaatar in the Gobi desert, to connect the new wind farm to the central grid.

The grant agreements were signed in Ulaanbaatar during the visit of EBRD First Vice President Phil Bennett. The wind farm, known as Tsetsii, is expected to go on stream at the end of 2017. The EBRD and JICA are also planning to co-finance the 50 MW Tsetsii wind farm, which is being developed by Newcom, a Mongolian company, and Japan’s SoftBank group. Mongolia has undertaken a commitment, under the COP21 climate agreement, to reduce carbon emissions by 14 per cent by 2030. The State Energy Policy sets a target of reaching 20 per cent of installed capacity from renewable energy sources by 2020, and 30 per cent by 2030.

The country already has one operational wind farm, Salkhit, also co-financed by the EBRD. The Bank is the largest renewables financier in the regions where it invests. Salkhit alone accounts for 5 per cent of Mongolia’s installed capacity; together, both wind farms will account for 10 per cent. The Japan-EBRD Cooperation Fund channels donor funds from the Japanese government to technical assistance projects in the EBRD region, including renewable energy.