Mongolia: Energy Conservation and Emissions Reduction from Poor Household

Sovereign Project | 42059-012

Summary

The impact of the Project will be improved quality of life in ger (traditional) housing areas resulting from air quality improvements in Ulaanbaatar.

The outcome will be a reduction in the coal and firewood consumption of target households. The output will be improved ger insulation for about 4,000 target poor households.

The activities consist of (i) implementation of a pilot project involving the addition of highly insulated ger blankets for about 4,000 households in the ger district in Ulaanbaatar; and (ii) consulting services, which will include baseline and impact surveys, household selection, training for local ger blanket manufacturers to improve the blanket quality while reducing production costs, business model development, Clean Development Mechanism (CDM) assessment, consultation and knowledge dissemination, workshops, and grant management.

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Project Name Energy Conservation and Emissions Reduction from Poor Household
Project Number 42059-012
Country Mongolia
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 9127-MON: Energy Conservation and Emissions Reduction from Poor Household
Japan Fund for Poverty Reduction US$ 2.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector Energy - Energy sector development and institutional reform
Gender Equity and Mainstreaming
Description

The impact of the Project will be improved quality of life in ger (traditional) housing areas resulting from air quality improvements in Ulaanbaatar.

The outcome will be a reduction in the coal and firewood consumption of target households. The output will be improved ger insulation for about 4,000 target poor households.

The activities consist of (i) implementation of a pilot project involving the addition of highly insulated ger blankets for about 4,000 households in the ger district in Ulaanbaatar; and (ii) consulting services, which will include baseline and impact surveys, household selection, training for local ger blanket manufacturers to improve the blanket quality while reducing production costs, business model development, Clean Development Mechanism (CDM) assessment, consultation and knowledge dissemination, workshops, and grant management.

Project Rationale and Linkage to Country/Regional Strategy

Mongolia has an extremely harsh winter climate with an 8-month heating season. Mid-winter (late December and early January) daytime temperatures are minum 10 dgree C to minus 30 degree C, and can drop to as low as minus 40 degree C at night. Ulaanbaatar, where more than 60% of the population lives, is the coldest capital city in the world. There is severe winter air pollution in Ulaanbaatar, which is a major cause of the rise in serious respiratory problems among urban inhabitants. An estimated 23% of air pollution comes from ger areas, and is caused by burning low quality coal for space heating in inefficient stoves to heat minimally insulated ger.

There has been a major movement into Ulaanbaatar of rural families seeking job opportunities. They create informal settlements (the ger district) around the city, where about 60% of the population (135,000 households) in Ulaanbaatar now live in a combination of small traditional nomadic ger (typically 25 square meters) and small houses (typically 24-32 square meters), which are mostly informally constructed. In 2006 the incidence of poverty in Ulaanbaatar was 20%, compared to the national average of 32%. The total population of Ulaanbaatar is about 1 million; most of its poor residents (204,000 people or 46,000 households) live in the ger district.

The Government has passed three resolutions relating to the reduction of air pollution in Ulaanbaatar, and improvement of ger insulation is a key activity. The country strategy and program (2006-2008) identifies inclusive social development as one of the two strategic pillars; better urban services, environment and housing for the poor are targeted as key outcomes.

Based on preliminary estimates in 2006, the key contributors to ambient concentrations of particulate pollution are the ger district (23%), power plants (mainly thermal power plant number 3, 34%), and heat-only boilers (16%). Concentrations of particulates less than 10 micrometers in diameter (PM10, measured in parts per million) are attributable to the burning of about 650,000 tons (t) annually of lignite and other low quality fuels in the ger district. The households use rudimentary steel stoves with simple combustion chambers and short chimneys; the stoves contribute 40%-50% of winter PM10 concentrations. Coal supplied to households is mined mainly from artisanal mines around Nalaikh city, some of which are unlicensed. Both urban ger and small private houses are estimated to use an average of about 5t of coal ($125-$210) and 1.5t of fuel wood per year, primarily for space heating in winter. Recent studies suggest that the energy use in ger and small private houses could be halved with optimal levels of insulation, and halved again with high-efficiency stoves.

Ger were traditionally insulated with only one layer of felt in summer and two or even three layers in winter. More recently, prior to 1990, most ger were insulated with either two layers of felt or one layer of felt and a winter insulation blanket of cotton from Central Asian countries. However, since the 1990 post-Soviet Union economic contraction in Central Asia and the adoption of market pricing for Central Asian cotton, this form of insulation is now no longer cost-effective. The existing cotton insulation blankets are now worn out and mostly ineffective. It is estimated that 30% of urban ger (about 41,000 households) are insulated in winter with just a single insulating layer (for an R value of around 1.0, and an R-value of 0.5 for one layer of felt). Ger are generally occupied by families with the lowest incomes and no savings, whose winter incomes are often limited. The poor insulation forces households to spend MNT1,000-MNT2,000 ($1-$2) daily to purchase about 25 kilograms (kg) of domestic fuel. This expense accounts for over 50% of average household income.

The air pollution-related health impacts are also on the rise in Ulaanbaatar. The particulates (PM10, PM2.5, and secondary PM due to sulfur dioxide and nitrogen oxide emissions) cause negative health effects when inhaled by people working and living indoors, where cooking and heating is done using coal. These health effects include premature death, acute respiratory illness, aggravated asthma, chronic bronchitis and decreased lung function. Those especially at risk include the poor, undernourished, very young and very old, and people with preexisting respiratory disease and other ill health. In ger areas where population density is high and there is a high concentration of coal combustion units, the concentration of indoor and outdoor particulate matter in winter greatly exceeds the World Health Organization standard, and the incidence rates for related health effects are much higher than in other areas.

The United Nations Development Programme (UNDP) pilot-tested highly insulated ger blankets in 440 ger under the Commercialization of Super-Insulated Buildings in Mongolia project in 2005 and 2006. It was rated as a very successful project according to an independent evaluation in February 2007. Household fuel consumption was lowered by a factor of between 2 and 3: households saved MNT110,000-MNT180,000 ($90-$150) annually in fuel expenditures, accounting for 30%-50% of their annual expenditures. Households also reduced their solid wastes by 200 to 600kg/year. The aggregate carbon dioxide emission reduction by the sample of 390 ger was 1,462.5t/year, according to a survey by the Mongolian University of Sciences and Technology. However, it is estimated that there are still about 41,000 poor households living in under-insulated ger in Ulaanbaatar.

Impact Improved quality of life in ger housing areas due to reduced emissions in Ulaanbaatar.
Project Outcome
Description of Outcome Reduced coal and firewood consumption in ger households in Ulanbaatar
Progress Toward Outcome The project was successfully implemented and appreciated by the Minsitry of Mineral Resources and Energy, Ulaanbaatar municipal government, khooro governments, and the private sector. Other organizations, such as the Millennium Challenge Corporation (donor) and Xac Bank (private sector), have been replicating the project to the unserved households in the ger districts.
Implementation Progress
Description of Project Outputs Improved ger insulation
Status of Implementation Progress (Outputs, Activities, and Issues)

Distribution of ger blankets completed

Completed on 2 April 2012

Geographical Location Ulaanbaatar, Mongolia
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Implementation of the Project will reduce the fuel consumption of and emissions from the target ger by 50%. The amount of solid waste produced by household will also be reduced (by 200 to 600 kg/year). The emission reduction from ger households will greatly contribute to improved air quality and public health in Ulaanbaatar
Involuntary Resettlement

No impact.

The proposed JFPR Project will not include any physical construction work or upgrading or rehabilitation of existing physical facilities, thus there is no involuntary resettlement impact

Indigenous Peoples

No impact.

There are no indigenous people or ethnic minority groups present in project locations and no adverse or significant impact on indigenous people and vulnerable groups

Stakeholder Communication, Participation, and Consultation
During Project Design Project preparation has involved field visits and interviews as well as consultations with the Ministry of Environment, Ministry of Construction and Urban Development, MOFE, Ulaanbaatar city government, Japan International Cooperation Agency, Energy Conservation Center (an NGO), the World Bank, UNDP, Deutsche Gesellschaft f r Technische Zusammenarbeit (GTZ) and the Embassy of Japan in Mongolia. The other key external agencies involved in ger heating and insulation improvement in Ulaanbaatar are UNDP and the World Bank. UNDP has pilot tested the installation of highly insulated ger blankets in 440 ger under the Commercialization of Super-Insulated Buildings in Mongolia project in 2005 and 2006. The World Bank has been preparing a project to introduce improved ger stoves with better combustion for ger residents. The proposed World Bank Mongolia Ulaanbaatar Clean Air Project will target 120,000 households for stove replacement in the ger district; it is expected that households included in the proposed JFPR Project will also be beneficiaries of the World Bank's project, maximizing the impact of the two projects.
During Project Implementation The project steering committee, represented by the concerned ministries, will be a decision-making body for project implementation. In order to extend the project benefits to the neediest households in Ulaanbaatar target households will be identified by the project implementation unit (PIU) based on the selection criteria. When selecting target households the PIU, supported by the consulting team, will work closely with (i) the horoo administration office, and in particular the office's social workers, who has extensive knowledge about community situation; and (ii) CBOs established by the World Vision Mongolia. A needs assessment to plan the detailed project implementation at the community level will be conducted as part of the business model development activity, prior to replacement of the existing ger blankets.
Business Opportunities
Consulting Services The total input of international and national experts will be 14 and 52 person-months, respectively. The consultant will procure the office equipment and will deliver them to the EA at the conclusion of the Project. The consulting firm (including international and local consultants) will be recruited by ADB in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time) using quality- and cost-based selection to provide the services for implementation, management and progress monitoring of the Project.
Procurement All procurements under the Project will be conducted in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). Procurement method for goods for Project will be international competitive bidding, national competitive bidding or shopping. Before commencement of procurement, ADB and the Grant Recipient will review the Grant Recipient's procurement procedures to ensure consistency with ADB requirements. Any necessary modifications or clarifications to the Grant Recipient's procedures will be documented in the Procurement Plan.
Responsible ADB Officer Teruhisa Oi
Responsible ADB Department East Asia Department
Responsible ADB Division Energy Division, EARD
Executing Agencies
MongoliaTs. Oyungereloyungerel_2006@yahoo.comGovernment Implementing Agency, Energy Authority, Chinggis Avenue, Khan-Uul District, Ulaanbaatar, Mongolia
Ministry of Mineral Resources and EnergyGovernment Building-2, United Nation's
Street-5/2 Ulaanbaatar
210646, Mongolia
Ministry of Fuel and Energy Mr. Tserenpurev Tudevenergy@mmre.energy.mnGovernment Building 2, United Nation's Street 5/2, Ulaanbaatar, Mongolia
Timetable
Concept Clearance 01 Feb 2008
Fact Finding 07 Apr 2008 to 10 Apr 2008
MRM -
Approval 23 Sep 2008
Last Review Mission -
PDS Creation Date 04 Mar 2008
Last PDS Update 26 Apr 2013

Grant 9127-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Sep 2008 10 Jan 2009 10 Jan 2009 09 Jan 2011 30 Apr 2012 15 Mar 2013
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 2.00 Cumulative Contract Awards
ADB 0.00 23 Sep 2008 0.00 1.80 90%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 2.00 23 Sep 2008 0.00 1.80 90%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - -

Safeguard Documents

See also: Safeguards

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Evaluation Documents

See also: Independent Evaluation

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