World Bank to finance $54m Mongolian energy project

Financing from the World Bank will help push forward a project to ease bottlenecks in electricity distribution and support solar development in Mongolia.

The institution will contribute $54.4 million to the Second Energy Sector Project, aimed at creating more reliable electricity service in the country. Of the funding, $42 million will come from a loan by the International Development Association, with the remaining $12.4 million provided by the Scaling-Up Renewable Energy Program, which is run through the Climate Investment Funds.

The programme will help expand the infrastructure of the Baganuur-Southeast and the Erdenet-Bulgan distribution networks, which power nine of Mongolia’s 21 provinces. Inefficient systems have led to distribution losses of up to 25 percent in some networks, according to the World Bank, making the need for improvements critical.

“More reliable access to electricity will improve the lives of families and help businesses thrive,” said James Anderson, the World Bank’s country manager for Mongolia.

In addition, the project will see the construction of a 10MW photovoltaic plant in Myangad, a district in the country’s Khovd province. The facility will provide energy to the country’s western region, which imports most of its power.

“With its abundant solar and wind power resources, the country is now considering [how] to more effectively and efficiently incentivise renewable energy investment to fully use its potential,” said World Bank senior energy specialist Peter Johansen.