Mongolia is a landlocked country in the Central Asian plateau. It is considered as one of the least densely populated in the worlds with 2 people per km2. Mongolia has rich resources, including coal, minerals, livestock, and wind and solar energy potential.
Most heat and power demand is met by coal-based combined heat and power plants, heat-only boilers in rural areas and half of Ulaanbaatar, and coal-based stoves at household level. The energy sector has unbundled into generation, load dispatch centers, and transmission and distribution state owned companies since 2001. Due to lack of available public and commercial funding, private investment in the sector is a policy priority for the government. Existing facilities for heating and electricity are not efficient and outdated. Two out of three coal-based combined heat and power (CHP) plants in Ulaanbaatar, CHP 2 and 3, have operated for more than 40 years without proper emission control devices. The largest plant CHP 4 has operated for more than 25 years. Sue to inadequate heat supply and central heating system, residents in areas surrounding Ulaanbaatar have to use coal-based household stoves and small, inefficient, heat-only boilers. The result is serious urban air pollution during winter in Ulaanbaatar.
Mongolia is rich in renewable energy resources. It has wind resources equivalent to 1,100 GW potential. It also has 270-300 sunny days per year with an average sunlight duration of 2,250-3,300 hours.
Although the Government of Mongolia has issued policies to support renewable energy development, actual progress has been slow, mainly due to the difficulty of access to long term commercial financing, as well as weak institutional and technical capacity of the grid company and regulators. Mongolia is committed to promoting renewable energy development. With interest in the SREP program, Mongolia has appointed Ministry of Energy as the lead agency.
The Government of Mongolia intends to develop an investment plan for the SREP and has requested a technical assistance (TA) on grant basis of $300,000 from SREP for preparatory activities, which will be executed by ADB in close consultation with partnership MDBs, developing partners and the Government of Mongolia.