ULAANBAATAR CITY, MONGOLIA (March 20, 2019) — Today, the Asian Development Bank (ADB) and Leading Asia’s Private Infrastructure Fund (LEAP) together, Tenunun Hyo Construction (TGK) and Sermsang Power Corporation has signed a loan agreement of 18.7 million US dollars with Public Company Limited. Under the contract, a solar power plant with a capacity of 15 megawatts (MW) will be built and operated to supply electricity to the central power grid.

This project of the Sermsang-Khushig Valley solar plant, which is being established with TGK, is the first financing provided jointly by ADB and LEAP in Mongolia’s renewable energy sector. A technical assistance grant from the Canadian Climate Fund for Private Sector Development in Asia to support the seed funding of this project enabled ADB to initiate Mongolia’s first private sector financing for solar energy.

Mr. Michael Barrow, Director of ADB’s Private Sector Operations Department, said, “This project is very unique in that it combines technical solutions developed by the private sector to adapt to Mongolia’s dry and cold climate. Localization of technology and operational experience will be a condition for the successful implementation of the project.

The construction work of the solar power plant located in the Khushi valley in the Sergelen Sum region of the Central Province has been completed.

With the implementation of this solar energy project, Mongolia will produce 22.3 million kilowatt-hours of clean electricity per year and reduce annual carbon emissions by 26,400 tons. In addition, it will contribute to the achievement of the government’s goal of increasing the share of renewable energy in the total installed capacity of the energy sector from 12 percent in 2017 to 20 percent in 2023 and 30 percent in 2030. By moving to clean energy sources, it is important for Mongolia to reduce electricity imports, strengthen energy security, and reduce air pollution. Mongolia’s energy sector is dominated by coal-fired power plants, which account for more than 60% of total carbon emissions.

The shareholders of TGK are Thailand’s Sermsang Power Corporation Public Company Limited, Japan’s Sharp Energy Solutions Corporation, and Mongolia’s AMOE Solar LLC and HS Energy Solutions LLC.