ADB supports first Distributed Renewable Energy System in Mongolia

The Asian Development Bank’s (ADB) Board of Directors has approved a US$40 million loan to develop a 41 megawatt (MW) distributed renewable energy system—a first-of-its-kind in Mongolia using a variety of renewable energy technologies to supply power and heating in the remote and less-developed western regions of the country.

The project will also be co-financed by a US$14.6 million grant from the Strategic Climate Fund (SCF) under the Scaling Up Renewable Energy Program in Low-Income Countries, one of the Climate Investment Funds designed to support scaled-up deployment of renewable energy solutions to increase energy access and economic opportunities, and a US$6.0 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM), which supports the adaptation of advanced low-carbon technologies in ADB-supported projects.

The Upscaling Renewable Energy Sector Project will help develop a 40.5 MW distributed renewable energy system using solar photovoltaic and wind powers with advanced battery storage technology and energy management systems to supply clean and reliable electricity to geographically scattered local towns in western Mongolia, which rely on high-cost and high-carbon-intensive electricity imports from neighboring countries. Meanwhile, the project will also showcase a 500-kilowatt thermal shallow-ground heat pump system, which will supply pollutant-free space heating in public buildings. This system could be scaled up in the future and, ultimately, help mitigate local air pollution during winter.

The distributed renewable energy system financed by the project will help connect more than 258,313 people in the project areas to clean and reliable electricity and heat supply, while a total of 87,968 tons of carbon dioxide emissions annually will be avoided by 2023.

The project will also help enhance the ability of the local electricity utilities and related agencies to manage a stable electricity supply. In addition, it will  help build a foundation for future private renewable energy investment in western Mongolia by supporting preparation of long-term renewable energy investment plan.

The total cost of the project is US$66.22 million, with the Government of Mongolia contributing US$5.62 million. It is expected to be completed by 2023.