Mongolia Readying Its First Wind Farm Project
Mongolia’s first wind energy project is receiving $47 million in funding from the European Bank for Reconstruction and Development. The bank is extending a loan of $42.4 million to Clean Energy, which is collaborating with Mongolian investment firm Newcom to build the 50-megawatt Salkhit wind farm. Newcom owns 75 percent of Clean Energy and the bank owns the remaining 25 percent. The European Bank will also invest another $4.4 million equity stake in Clean Energy.
Bayanjargal Byambasaikhan, chief executive officer of Newcom calls the Salkhit wind farm “a flagship project for Mongolia’s renewable energy. It marks the dawn for Mongolia’s aspiration to becoming Asia’s renewable energy champion.”
The Salkhit wind farm, located approximately 43 miles away from Mongolia’s capital city, Ulaanbaatar, will produce enough electricity to meet around five percent of the country’s power needs, and will also result in a carbon dioxide emission reduction of approximately 164,000 metric tons per year. The project will also generate carbon credits that Clean Energy can sell.
In 2005, the Mongolian Parliament enacted a National Renewable Energy Program that set a goal of increasing its renewable energy share to at least 20 percent by 2020. Officials believe Mongolia’s strong winds can be used to successfully diversify the country’s energy mix. Currently, the country’s installed renewable energy capacity is approximately 800 MW.
The Salkhit project will be the first significant renewable energy generator in the country, which primarily still depends on coal. General Electric will be providing the turbines for Salkhit and the wind farm is scheduled to become operational sometime in 2012.
Nandita Parshad, director for power and energy for the European Bank for Reconstruction and Development, adds: “We hope this transaction paves the way for increased private interest in the renewable power sector which can reduce Mongolia’s dependence on coal and its carbon footprint and will contribute to Mongolia’s sustainable development.”