Mongolia: Upscaling Renewable Energy Sector Project

Sovereign Project | 50088-002

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
    Cowlin, Shannon C.
    East Asia Department
    Request for information
  • Country/Economy
    Mongolia
  • Modality
    • Grant
    • Loan
  • Sector
    • Energy
Project Name Upscaling Renewable Energy Sector Project
Project Number 50088-002
Country / Economy Mongolia
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0610-MON: Upscaling Renewable Energy Sector Project
Japan Fund for the Joint Crediting Mechanism US$ 6.00 million
Grant 0611-MON: Upscaling Renewable Energy Sector Project
Strategic Climate Fund - FIP US$ 14.60 million
Loan 3708-MON: 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 - 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 (20002012) 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

Greenhouse gas emissions reduced and imported electricity reduced

Project Outcome
Description of Outcome

Clean sources of energy supply in the country increased

Progress Toward Outcome Consultant recruitment is complete. The 5MW Uliastai solar PV package was awarded in March 2021, 10MW Altai solar PV awarded in May 2022, 10MW Moron solar PV was awarded in April 2022, Altai soum hybrid was inaugurated in August 2022.
Implementation Progress
Description of Project Outputs

Distributed renewable energy system developed

Shallow-ground heat pump system developed

Institutional framework strengthened and organizational capacity enhanced

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

Output 1: 1) Contract for 5 MW Uliastai solar PV was signed on 5 Feb 2021. Opening ceremony is planned for Q1 2023. 2) 0.5 MW Altai soum hybrid system was inaugurated in August 2022. 3) 10 MW Altai solar PV contract was signed on 16 May 2022. 4) 10 MW Umunogovi wind: Wind measurement device was moved to a new location in Oct 2020 because the wind measurements at the first site showed very low average wind speeds. Bid was advertised in Dec 2021 but no bids were received. A technical analysis will be conducted before rebidding. 5) 10 MW Moron solar PV: Contract was signed on 13 Apr 2022. 6) 5 MW Telmen wind: Wind measurements have confirmed that wind speeds are not sufficient for a financially viable facility. MOE is investigating a new site where previously measured data has shown sufficient wind resource and that could support a 15 MW facility (combining with Umunogovi package), which could be more attractive to bidders. Study is ongoing.

Output 2: SGHP Batch 1: The system was commissioned and turned over in Sep 2021. SGHP Batch 2: Contract for Uliastai SGHP (9A) was signed on 18 Mar 2022. Bayankhongor has been identified as an alternative to Moron, and the geotechnical survey at this location started in Q4 2021.SGHP Batch 3: Geotechnical and feasibility studies were completed for one building in Ulaangom soum and two buildings in Altai soum. Packages were advertised in Jul 2022 and bid evaluation is ongoing.

Output 3: The consultant has submitted first draft of investment plan to PMU on 16 Jun 2020. Ongoing.

Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The safeguard category for the first batch is B in environment. An initial environmental examination and an environment management plan will be prepared for the subsequent batches to demonstrate adherence to ADB's Safeguard Policy Statement (2009), and national law and regulations.
Involuntary Resettlement

The 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 Cowlin, Shannon C.
Responsible ADB Department East Asia Department
Responsible ADB Division EASI
Executing Agencies
Ministry of Energy
Timetable
Concept Clearance 09 Nov 2016
Fact Finding 30 Apr 2018 to 09 May 2018
MRM 25 Jun 2018
Approval 20 Sep 2018
Last Review Mission -
Last PDS Update 18 Sep 2022

Grant 0610-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Sep 2018 02 Nov 2018 12 Feb 2019 29 Feb 2024 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 6.00 Cumulative Contract Awards
ADB 0.00 18 Sep 2022 0.00 5.91 98%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 6.00 18 Sep 2022 0.00 6.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory - Satisfactory

Grant 0611-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Sep 2018 02 Nov 2018 12 Feb 2019 29 Feb 2024 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 14.60 Cumulative Contract Awards
ADB 0.00 18 Sep 2022 0.00 6.25 43%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 14.60 18 Sep 2022 0.00 2.95 20%

Loan 3708-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Sep 2018 02 Nov 2018 12 Feb 2019 29 Feb 2024 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 45.62 Cumulative Contract Awards
ADB 40.00 18 Sep 2022 20.73 0.00 52%
Counterpart 5.62 Cumulative Disbursements
Cofinancing 0.00 18 Sep 2022 3.64 0.00 9%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory - Satisfactory

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 Access to Information Policy (AIP) 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.

Title Document Type Document Date
Upscaling Renewable Energy Sector Project: Audited Project Financial Statements (January-December 2021) Audited Project Financial Statements Jun 2022
Upscaling Renewable Energy Sector Project: Procurement Plan Procurement Plans May 2022
Upscaling Renewable Energy Sector Project: Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Jun 2021
Upscaling Renewable Energy Sector Project: Audited Project Financial Statements (12 February-31 December 2019) Audited Project Financial Statements Jun 2020
Grant Agreement (Externally Financed) for Grant 0611-MON: Upscaling Renewable Energy Sector Project Grant Agreement Nov 2018
Project Agreement for Upscaling Renewable Energy Sector Project Project/Program Agreements Nov 2018
Loan Agreement (Ordinary Operations) for Loan 3708-MON: Upscaling Renewable Energy Sector Project Loan Agreement (Ordinary Resources) Nov 2018
Grant Agreement (Externally Financed) for Grant 0610-MON: Upscaling Renewable Energy Sector Project Grant Agreement Nov 2018
Upscaling Renewable Energy Sector Project: Report and Recommendation of the President Reports and Recommendations of the President Aug 2018
Upscaling Renewable Energy Sector Project: Project Administration Manual Project/Program Administration Manual Aug 2018
Түгээн Сэргээгдэх эрчим хүчний салбарын төсөл: Төслийн өгөгдлийн хүснэгт (Монгол орчуулга) Translated PDS Mar 2017
Upscaling Renewable Energy Sector Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Nov 2016
Upscaling Renewable Energy Sector Project: Project Preparatory Technical Assistance Report Project Preparatory Technical Assistance Reports Nov 2016

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 Access to Information Policy (AIP) 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

Tender Title Type Status Posting Date Deadline
Monitoring and Evaluation Officer Individual - Consulting Closed 01 Aug 2022 10 Aug 2022
0611-MON: Mongolia Upscaling Renewable Energy Sector Project [10A] Invitation for Bids Closed 20 Jul 2022 31 Aug 2022
0611-MON: Mongolia Upscaling Renewable Energy Sector Project [10B] Invitation for Bids Closed 20 Jul 2022 31 Aug 2022
0611-MON: Mongolia Upscaling Renewable Energy Sector Project [9B] Invitation for Bids Closed 20 Jul 2022 31 Aug 2022
3708-MON: Upscaling Renewable Energy Sector Project (A16) Invitation for Bids Closed 09 Feb 2022 24 Mar 2022
Detailed environmental impact assessments for non-core subprojects Firm - Consulting Closed 12 Jan 2022 10 Feb 2022
0611-MON: Mongolia Upscaling Renewable Energy Sector Project (9A) Invitation for Bids Closed 10 Dec 2021 24 Jan 2022
3708- MON, 0611-MON: Mongolia Upscaling Renewable Energy Sector Project (A1) Invitation for Bids Closed 10 Dec 2021 14 Feb 2022
3708- MON, 0611-MON: Mongolia Upscaling Renewable Energy Sector Project (A2) Rebid Invitation for Bids Closed 17 Nov 2021 17 Jan 2022
3708-MON: Upscaling Renewable Energy Sector Project (A5 10MW Moron Solar PV) Invitation for Bids Closed 23 Jul 2021 19 Nov 2021
Monitoring and Evaluation Officer Individual - Consulting Closed 23 Jan 2021 06 Feb 2021
3708-MON: Upscaling Renewable Energy Sector Project [A12] Invitation for Bids Closed 11 Dec 2020 22 Jan 2021
3708- MON, 0611-MON: Mongolia Upscaling Renewable Energy Sector Project [A2] Invitation for Bids Closed 30 Oct 2020 01 Feb 2021
3708/0611-MON: Mongolia Upscaling Renewable Energy Sector Project [A2] Invitation for Bids Closed 17 Feb 2020 10 Jun 2020
3708/0610- MON: Upscaling Renewable Energy Sector Project Invitation for Bids Closed 14 Feb 2020 10 Jun 2020
Procurement Specialist Individual - Consulting Closed 24 Apr 2019 29 Apr 2019
Environmental and Social Safeguard Officer Individual - Consulting Closed 09 Apr 2019 15 Apr 2019
Monitoring and Evaluation Officer Individual - Consulting Closed 15 Feb 2019 22 Feb 2019
Financial Specialist Individual - Consulting Closed 28 Dec 2018 03 Jan 2019
Shallow-ground Heat Pump Engineer Individual - Consulting Closed 28 Dec 2018 03 Jan 2019
Wind Power Engineer Individual - Consulting Closed 28 Dec 2018 03 Jan 2019
Solar PV Specialist Individual - Consulting Closed 28 Dec 2018 03 Jan 2019
Hybrid Renewable Energy System Engineer Individual - Consulting Closed 28 Dec 2018 03 Jan 2019
Project management Firm - Consulting Closed 20 Dec 2018 29 Jan 2019
Project Coordinator Individual - Consulting Closed 07 Nov 2018 13 Nov 2018

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
EPC for static var generator Loan 3708 29 Jun 2022 JV of Richwell Engineering LLC and NR Electric Co. Ltd. | Room 103, City Tower, Chinggis Khaan Square 5, Sukhbaatar District, Ulaanbaatar, 14280, Mongolia Ministry of Energy 1,145,846.00 1,145,846.00
DEIA for non-core subprojects Loan 3708 24 Jun 2022 Offset Consulting LLC | Ulaanbaatar, Mongolia Ministry of Energy 104,292.10 104,292.10
10MW Altai solar PV Loan 3708 19 May 2022 MCS International LLC | Shangri-La office, 7 floor 704, Olympics street 19A, 1 section, Sukhbaatar district, Ulaanbaatar, 14241 Ministry of Energy 10,442,254.00 4,612,254.00
10MW Altai solar PV Grant 0611 16 May 2022 MCS International LLC | Shangri-La office 7 floor 704 Olympics Street 19A 1 section Sukhbaatar district Ulaanbaatar 14241 Ministry of Energy 5,830,000.00
10 MW Moron solar PV Loan 3708 10 May 2022 Xian Electric Engineering Co. Ltd. and Changjiang Survey Planning Design & Research Co. Ltd | No. 7 Tangxing Road, Xian, Shaanxi, PRC / No. 1863 Jie Fang Avenue, Wuhan City, Hubei, PRC Ministry of Energy 9,498,866.00 9,498,866.00
Pkg 12: Hybrid system of Altai soum Loan 3708 10 Aug 2021 Consortium of ESPM International LLC and Shuangdeng Group Co., Ltd. | Suite 11, 107 Building, Chinggis Avenue, 2nd Khoroo, Khan-Uul district, Ulaanbaatar City Ministry of Energy 1,078,936.00 1,078,936.00
5MW ULIASTAI SOLAR PV Loan 3708 20 Mar 2021 JGC CORP-NGK INSULATORS LTD-MCS INTL LLC JV | 2-3-1, MINATO MIRAI, NISHI-KU, YOKOHAMA 220-6001, JAPAN JAPAN Ministry of Energy 7,533,236.73 2,510,166.37
PROJECT MANAGEMENT CONSULTANTS Loan 3708 15 Aug 2019 INTEGRATION ENVIRONMENT & ENERGY GMBH/RINA C | GERMANY GERMANY Ministry of Energy 1,548,347.00 548,347.00

Procurement Plan