CLEAN Energy Asia LLC and its shareholders, Newcom LLC and SB Energy Corp, have signed financing agreements with the Japan International Cooperation Agency (JICA) and the European Bank for Reconstruction and Development (EBRD) to construct a 50MW wind farm in southern Mongolia. Clean Energy Asia will construct the Tsetsii Wind Farm at Tsogttsetsii Soum, Umnugobi Aimag, and aims to launch operations in December 2017.
|Newcom LLC’s 50MW Salkhit Wind Farm became Mongolia’s first wind farm when it began operations in 2013.|
Clean Energy Asia is 51% owned by Newcom LLC, a Mongolian conglomerate with activities in telecommunications, property and energy. The remaining 49% is owned by a subsidiary of SB Energy Corp, a subsidiary of SoftBank Group Corp.
Mongolia faces great challenges in meeting its growing demand for electricity, almost all of which is currently met by ageing and polluting coal-fired plants. The wind farm will help supply Mongolia’s power demand with clean, eco-efficient electricity by harnessing Mongolia’s vast and inexhaustible wind resources. The project will help contribute to sustainable economic development and the mitigation of climate change.
Mongolia has a power-supply capacity of 1130MW, consisting of 88% coal, 6% diesel, 6% renewable energy and 2% hydropower sources. While being the world’s eighth country most susceptible to climate change, electricity supply-demand balance along with its economic growth is an urgent issue, and accordingly, Mongolia is a country that particularly requires safe and secure power sources such as renewable energy.
The State Great Khural approved a national power policy in 2015 that sets Mongolia’s mid-to-long term target and plan for 2015-2030 in the energy sector. The policy aims to increase the power generation share of renewable energy to 20% by 2020 and to 30% by 2030, and it stipulates the promotion of investment in the energy industry in cooperation with international financial institutions and donor countries, utilising the abundant wind and solar resources in the Gobi region.
Mongolia is the first country to sign a memorandum with Japan on the Joint Crediting Mechanism to reduce greenhouse gas emissions. In these circumstances, Tsetsii Wind Farm will help contribute to the increased adoption of renewable energy in Mongolia.
It is the first dollar-denominated project finance debt transaction by JICA through its Private Sector Investment Finance scheme in the renewable energy field, and the second renewable energy project in Mongolia for Newcom and EBRD following the 50MW Salkhit Wind Farm, which began operations in 2013.