Mongolia: Community-Based Heating Supply in Rural Remote Areas

Sovereign Project | 40277-012 Status: Closed

The Asian Development Bank is working with Mongolia to improve the quality of life during winter months in remote rural areas (soum centers) in Mongolia. The project is providing sustainable heating services in remote rural areas by reducing the use of coal and strengthen local boiler manufacturing.

Project Details

Project Officer
Oi, Teruhisa East Asia Department Request for information
  • Mongolia
  • Grant
  • Energy
Project Name Community-Based Heating Supply in Rural Remote Areas
Project Number 40277-012
Country Mongolia
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 9109-MON: Community-Based Heating Supply in Rural Remote Areas
Japan Fund for Poverty Reduction US$ 2.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change
Sector / Subsector

Energy - Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements

The impact of the Project will be an improvement in the quality of life during winter months in remote rural areas (soum centers) in Mongolia.

The outcome will be provided sustainable heating services in remote rural area.

The outputs will be (i) reduction in coal purchases by local government, (ii) strengthen local boiler manufacturing capacity, and (iv) establishment standard operation and maintenance (O&M) systems.

The activities consist of (i) site selection for pilot projects, technical design and development of heating system packages, and community mobilization; (ii) installation of heating systems and training; and (iii) grant management, monitoring and auditing.

Project Rationale and Linkage to Country/Regional Strategy

Mongolia is situated halfway between the equator and the North Pole, with an average altitude of 1,500 meters above sea level. This gives it a harsh continental climate with a long cold winter season, during which the temperature drops to minus 40 degree Celsius. Administratively, Mongolia is divided into the capital city (Ulaanbaatar), three autonomous cities, 21 aimags (provinces) and 314 soums (districts). The population of the largest soum center is less than 10,000, which presents a serious challenge for providing basic services to the communities. The income poverty incidence in small urban areas is as high as 43%; the national average is 36%, and the income poverty incidence in Ulaanbaatar is 27%.

The harsh climate and long winter season make heating an absolute requirement for sustaining life. Heat is provided to households, government buildings, schools, hospitals, and industries primarily by district heating, which is distributed from central heating plants in larger cities, and from small boiler houses in aimag and soum centers. There are about 450 boiler houses, with 1,200 mainly Russian-made boilers in operation since the 1980s.The total heat load is 800 MW in aimag and soum centers, which includes heating for residences, hospitals, and schools. About 80% of these boiler houses are located in soum centers. The individual heat output of boilers is between 0.8 MW and 2.1 MW, and coal is the main fuel. The condition of these boilers has seriously deteriorated since the collapse of the former Soviet Union, and the heat efficiency is only about 40%. As a result, the quality of heating services in soum centers is now extremely poor. Improving the existing heating systems in soum centers (through refurbishment and modernization) is a high priority to sustain livelihoods in these areas.

The Government of Mongolia (the Government) has identified heat supply in rural households, schools, and hospitals as one of the main issues to be addressed in the Economic Growth Support and Poverty Reduction Strategy (EGSPRS) in 2003, which is recognized in the Country Strategy and Program 2006-2008 (CSP). The 2006-2008 CSP identifies inclusive social development as one of the two strategic pillars, and lack of civic amenities (including heating) as a constraint. A substantial improvement in the supply of heating is targeted as an outcome of the CSP. A needs assessment of soum centers concluded that improvement of heating systems ranked as the highest priority among various social services (e.g. water supply, electricity, education, health, and roads). Another study concluded that rehabilitation of the heating systems of hospitals, schools and other public offices in soum centers is the top priority.

Impact Improved quality of life in remote rural areas (soum centers) during winter months.

Project Outcome

Description of Outcome Provided sustainable heating services in soum centers
Progress Toward Outcome The boiler replacements for all soum pilot projects have been completed and all works have been accepted by the State Commission.
Implementation Progress
Description of Project Outputs

Reduced coal purchases by local government

Strengthened local boiler manufacturing capacity

Established standard operation and maintenance procedures.

Status of Implementation Progress (Outputs, Activities, and Issues)






Geographical Location Soum Centers in Mongolia

Safeguard Categories

Environment C
Involuntary Resettlement C
Indigenous Peoples C

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Project preparation involved field visits and interviews as well as consultations with the World Bank, GTZ, Japan International Cooperation Agency (JICA), the Embassy of Japan in Mongolia, and local residents. The other key external agencies involved in the heating supply subsector in aimag and soum centers are GTZ and the World Bank. GTZ is piloting decentralized heating supplies using solar energy and insulation in schools and hospitals in two soum centers. GTZ has also applied for funding to carry out a heat-only boiler project in Uliastai aimag in Zavkhan province. The component A consultant will review such alternative heating technology; if it is found appropriate, suitable changes in the project design will be incorporated. The World Bank is formulating technical assistance (TA) to pilot heat efficiency improvements in one or two aimag centers. The Project, which targets soum centers, will complement other donor activities. The lessons learned will be shared with other donors at the project workshop.
During Project Implementation To ensure the effective participation of local stakeholders, the Project will work with consumers in soum centers and soum center governments. The fieldwork undertaken at the grassroots level will ensure that the Project reflects the communities' priorities and needs. To build ownership and mobilize local resources, soum center governments will form the key decision-making body for project planning, implementation, monitoring, and evaluation. For example, consultation workshops will be held to fully understand the needs of local consumers. Once the pilot project sites are identified, the local communities will participate in implementation, either by providing labor or as owners and operators of the heating system.

Business Opportunities

Consulting Services

The project consulting firm (including international and national consultants) will be recruited in accordance with ADB's Guidelines on the Use of Consultants, using quality- and cost-based selection (QCBS) and a full technical proposal (FTP), to provide the consulting services for implementation, management and progress monitoring of the Project. The total input of international and domestic consultants will be 11 and 67 months, respectively.

International consultants - Component A (including tasks of Component C)

(i) Heating/Boiler engineer (2 pm)

(ii) Economist (1 pm)

(iii) Financial Specialist (1 pm)

(iv) Procurement Specialist (1 pm)

National Consultants:

(i) 2 Heating/Boiler engineers (6 pm total)

(ii) Economist ( 3pm)

(iii) Financial Specialist (3 pm)

(iv) Procurement Specialist (3 pm)

(v) Social Development Specialist

Component B (including tasks of Component C)

International Consultant

(i) Heating/Boiler Engineer/Team Leader -same person from Component A (3 pm)

National Consultants:

(i) 2 Heating/Boiler Engineers (same person from Component A (20 pm total)

(ii) Procurement Specialist - same person from Component A (4 pm)

(iii) Business Development Advisor (4 pm)

(iv) Publications and Workshops Organizer (2 pm)

Component C

International Consultant

(i) Accountant (2pm)

National Consultants:

(i) National Accountant (16 pm)

(ii) Environmental Specialist (1 pm)

(iii) National Environment Specialist (3 pm)

Procurement All procurements under the JFPR grant will be conducted in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). The procurement method for equipment for the pilot project is NCB. Before commencement of NCB 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 Staff

Responsible ADB Officer Oi, Teruhisa
Responsible ADB Department East Asia Department
Responsible ADB Division Energy Division, EARD
Executing Agencies
Ministry of Fuel and Energy
Mr. Ayurzana Tsogt
[email protected]
Ulaanbaatar - 46
Ministry of Mineral Resources and Energy
Government Building-2, United Nation's
Street-5/2 Ulaanbaatar
210646, Mongolia


Concept Clearance 04 Jul 2006
Fact Finding 09 Dec 2006 to 14 Dec 2006
Approval 29 Jun 2007
Last Review Mission -
PDS Creation Date 04 Aug 2006
Last PDS Update 13 Dec 2011

Grant 9109-MON

Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Jun 2007 23 Aug 2007 23 Aug 2007 22 Aug 2011 31 Dec 2011 22 Aug 2012
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 2.00 Cumulative Contract Awards
ADB 0.00 29 Jun 2007 0.00 1.90 95%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 2.00 29 Jun 2007 0.00 1.90 95%

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Safeguard Documents See also: Safeguards

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None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan