The Asian Development Bank (ADB)) and Asia’s Private Infrastructure Fund (LEAP) have signed an agreement to provide an $18.7 million loan to develop 15 MW of solar power project in Mongolia.
The loan agreement has been signed with Sermsang Power Corporation Public Company Limited (SSP) and Tenuun Gerel Construction (TGC), under which they will build, operate, and maintain the solar projects.
The solar power project is located in the Khushig valley located in Tuv aimag (province) Sergelen soum (county). It will supply power to Mongolia’s central grid system which delivers power to over 80 percent of the country’s energy demand.
“This project uniquely incorporates climate-resilient technical solutions from the private sector to accommodate Mongolia’s cold and dry climate. The project also benefits from the transfer of operational knowledge and advanced technology from Japan and Thailand in developing and operating solar power plants,” said Michael Barrow, Director General of ADB’s Private Sector Operations Department.
The solar project is likely to generate 22.3 GWh of electricity annually and lower Mongolia’s carbon emissions by 26,400 tons per year. It will also help the government increase the share of renewable energy in the total installed capacity from 12 percent in 2017 to a targeted 20 percent by 2023 and 30 percent by 2030.
“For SSP, this project is not only an important milestone for investment in renewable power projects in Asia but also reflects our philosophy in developing ecologically sustainable projects,” said Varut Tummavaranukub, CEO of SSP.
LEAP was established in 2016 to finance ADB-supported infrastructure projects in Asia and the Pacific and fill financing gaps and increase access. The fund is supported by the Japan International Cooperation Agency and is managed by ADB’s Private Sector Operations Department.
In November 2018, ADB signed a loan agreement with the Government of Mongolia under which it agreed to provide $60.6 million for distributed renewable energy projects in the country.
The loan towards renewable energy was to develop a 41 MW distributed renewable energy system—a first-of-its-kind in Mongolia—using solar photovoltaic and wind energy with advanced battery storage technology and energy management systems.