The Asian Development Bank (ADB) has signed a loan agreement with the Government of Mongolia under which it will be providing $60.6 million for distributed renewable energy projects in the country.
The loan and grant agreements were signed by Minister of Finance Khurelbaatar Chimed and ADB Country Director for Mongolia Yolanda Fernandez Lommen in Ulaanbaatar. Representatives from the Ministry of Energy and Mongolian Tax Authority witnessed the event.
The loan towards renewable energy is to develop a 41 MW distributed renewable energy system—a first-of-its-kind in Mongolia—using solar photovoltaic (PV) and wind energy with advanced battery storage technology and energy management systems.
The project will result in the supply of clean and reliable electricity to about 260,000 people in remote and less-developed towns in western Mongolia, who currently rely on high-cost and high-polluting carbon-intensive electricity.
ADB’s funding of $40 million is supplemented by grant co-financing; $14.6 million from the Strategic Climate Fund under the scaling up renewable energy program in low-income countries; and $6 million from the Japan Fund for the joint crediting mechanism. The Government of Mongolia is contributing $5.6 million to the project.
In July 2018, ADB announced that it will give $20 million loan to Bangladesh under its Power System Efficiency Improvement Project for the furtherance of off-grid solar solutions in the country. The loan was coupled with $25.44 million in grant financing to encourage off-grid solar photovoltaic (SPV) pumping for agricultural irrigation. The grant included $22.4 million from the Scaling up Renewable Energy in Low Income Countries Program, which comes under its Strategic Climate Fund, and another $3 million from the Clean Energy Fund for Output-based Aid under the ADB-administered Clean Energy Financing Partnership Facility.
ADB is also supporting Sri Lanka’s rooftop solar PV sector via a loan of $50 million. The goal of the program was to support the government’s “Battle for Solar Power Programme” to achieve the target of installing solar projects worth 200 MW by 2020 and 1,000 MW by 2025.
In February, ADB provided a $235 million loan to B. Grimm Power Public Company Limited for the expansion of renewable energy projects in the member countries of the Association of Southeast Asian Nations (ASEAN). Previously, the bank also administered a $20 million loan provided by the Canadian Climate Fund for the private sector in Asia under the Clean Energy Financing Partnership Facility.
Image Credit: ADB
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.