50088-002: Upscaling Renewable Energy Sector Project | Asian Development Bank

Mongolia: Upscaling Renewable Energy Sector Project

Sovereign (Public) Project | 50088-002 Status: Proposed

The proposed project will support to (i) deploy the distributed renewable energy systems in remote and less developed regions in Mongolia, and (ii) enhance capacity of local public utilities in investment planning, project management, and grid control for sustainable renewable energy upscaling in the targeted region. Upon successful completion, the project delivers clean electricity to 70,000 households while annually avoiding 82,789 tons of carbon dioxide emission.

The impact will be imported electricity reduced and energy security improved. The outcome will be renewable energy supply in the country increased. The output will be (i) renewable energy capacity addition for electricity and heating supply in remote grid systems implemented, and (ii) capacity of local public utilities in investment planning, project management, and grid control enhanced.

Project Details

Project Officer
Yamamura, Shigeru East Asia Department Request for information
Country
  • Mongolia
Modality
  • Grant
  • Loan
Sector
  • Energy
 
Project Name Upscaling Renewable Energy Sector Project
Project Number 50088-002
Country Mongolia
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Loan: Upscaling Renewable Energy Sector Project
Ordinary capital resources US$ 40.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector

Energy / Renewable energy generation - geothermal - Renewable energy generation - solar - Renewable energy generation - wind

Gender Equity and Mainstreaming No gender elements
Description

The proposed project will support to (i) deploy the distributed renewable energy systems in remote and less developed regions in Mongolia, and (ii) enhance capacity of local public utilities in investment planning, project management, and grid control for sustainable renewable energy upscaling in the targeted region. Upon successful completion, the project delivers clean electricity to 70,000 households while annually avoiding 82,789 tons of carbon dioxide emission.

The impact will be imported electricity reduced and energy security improved. The outcome will be renewable energy supply in the country increased. The output will be (i) renewable energy capacity addition for electricity and heating supply in remote grid systems implemented, and (ii) capacity of local public utilities in investment planning, project management, and grid control enhanced.

Project Rationale and Linkage to Country/Regional Strategy

Mongolia currently has a total of 969 megawatt (MW) of installed capacity, but because of aging power facilities that are well past their economic life, only 769 MW is available. Growing power demand over the decade has also pressured such obsolete power system. It resulted in increasing high cost imported electricity which meets around 20% of the country's power demand in 2015. The energy sector in Mongolia relies heavily on coal-fired power generation which accounts for 91% of total installed capacity. Such coal dependent power system has contributed to over 63% of carbon dioxide emission in the country which is the world's fifth most carbon-intense economy; whereas the country has tremendous renewable energy potential which could sufficiently meet long term domestic demand. Promoting a diversified energy mix with a higher share of renewable energy is a core priority both to reduce dependence on high cost imported electricity and to decarbonize the country's energy sector. The Government of Mongolia has taken several initiatives for renewable energy deployment since 2000, most notably (i) implementing the successful 100,000 Solar Ger Electrification Program (2000 2012) which provided access to modern energy to nomadic herders through solar home systems, and (ii) enacting the Law on Renewable Energy, which involves a set of regulatory arrangements with a US dollar denominated feed-in-tariff, facilitated the development of 50 MW Salkit wind firm, the first private power producer. However, a share of renewable energy in total capacity still stands at 7.6%.

The country's power system is comprised of four grid systems which has successfully expanded electricity access to 97% of the population. The central energy system, which covers around 90% of power demand in the country, has already attracted a total of around 200 MW of private sector-led renewable energy projects so far. On the other hand, the other three grid systems in remote and less developed regions which supply power to 32% of the population, and witnessed above 10% of annual load demand growth for the last five years, has failed to attract private investment in renewable energy development due to smaller size of power demand, high transportation cost, and relatively lower renewable energy resource endowments. Inadequate investment in power generation capacity addition for remote grid systems has led to heavy dependence on imported electricity from neighboring countries to meet up to 70% of load demand in geographically scattered load centers, through long stretched transmission lines which has resulted in very high power loss. To address such unique challenges in remote grid systems, the government has sought to develop the first-of-its-kind distributed energy system utilizing renewable energy potential. It is comprised of a smaller scale and modular renewable energy system, which locally produces reliable electricity and thermal energy for local use while minimizing transmission loss.

Impact Imported electricity reduced and energy security improved
Outcome Renewable energy supply in the country increased
Outputs

Renewable energy capacity addition for electricity and heating supply in remote grid systems implemented

Capacity of local public utilities in remote grid systems in investment planning, project management, and grid control enhanced

Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The tentative safeguard category for the first batch is B in environment. An initial environmental examination and an environment management plan will be prepared for the first batch to demonstrate adherence to ADB's Safeguard Policy Statement (2009), and national law and regulations.
Involuntary Resettlement The tentative safeguard category for the first batch is C in land acquisition and resettlement. A resettlement framework will be prepared for the subsequent batches to guide environment and social impact assessments and safeguard implementation while ensuring adherence to ADB's Safeguard Policy Statement, and national law and regulations.
Indigenous Peoples The tentative safeguard category for the first batch is C in indigenous people. An indigenous peoples planning framework will be prepared for the subsequent batches to guide environment and social impact assessments and safeguard implementation while ensuring adherence to ADB's Safeguard Policy Statement, and national law and regulations.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The consulting services will be implemented over an 18-month period and is expected to start in November 2016 and be completed in April 2018. The technical assistance (TA) will require a total of 28 person-months of international and 65 person-months of national consulting services. The consulting firm will be engaged by ADB using the quality-and cost-based method with a standard quality and cost ratio of 90:10, in accordance with the Guidelines on the Use of Consultants (2013, as amended from time to time). The proceeds of the TA will be disbursed in line with ADB's Technical Assistance Disbursement Handbook (2015, as amended from time to time).
Responsible ADB Officer Yamamura, Shigeru
Responsible ADB Department East Asia Department
Responsible ADB Division Energy Division, EARD
Executing Agencies
Ministry of Energy
Government Building 14, Khan-Uul District
Chinggis Avenue, 3-r khoroo
Ulaanbaatar, 17060 Mongolia
Timetable
Concept Clearance 09 Nov 2016
Fact Finding 30 Apr 2018 to 09 May 2018
MRM 25 Jun 2018
Approval -
Last Review Mission -
Last PDS Update 23 Mar 2018

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

No tenders for this project were found.

Contracts Awarded

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Procurement Plan

None currently available.