JICA and EBRD-backed Clean Energy Project in Mongolia
Newcom LLC, one of the largest conglomerates in Mongolia, has been improving its sustainability efforts to address environmental challenges including climate change and air pollution. The solution emerged when wind resource studies revealed that Mongolia possesses vast wind energy potential, presenting an opportunity to produce sustainable, green energy that can contribute to meet the rising demand for electricity.
With funding of $85 million from JICA and EBRD, a clean energy project was initiated in Mongolia, leading to the creation of Clean Energy Asia LLC. The company owns and operates the 50MW Tsetsii Wind Farm, located in South Gobi, 542km from the capital, Ulaanbaatar. The project’s transition impact arises from three key factors: (i) as the second private power generation and wind farm project in Mongolia, it will be highly visible and serve as a model to attract new investors; (ii) with most of Mongolia's power sector assets being state-owned, this project introduces a new private player into the market; and (iii) the project supports Mongolia's effort to diversify its coal-dependent energy sector.
Since its commercial operation date in 2017, Tsetsii Wind Farm has delivered over 1,000 GWh of green energy to the central grid, reducing approximately 150,000 tCO2 emissions each year and increasing renewable energy share in the energy mix. This is equivalent to taking 34,294 cars off the road while supplying enough green energy to power 63,853 households annually.
The project has created job opportunities, offering an average hourly wage of over $6.73 to more than 240 employees since its launch, including over 40 women. At least 840 herders have benefited from the project, helping them avoid financial strain during the harsh winter months and preventing a 3.6% decrease (equivalent to $31 USD) in their annual average income of $844.73 USD. This support helped lift them above the national poverty line ($70 USD/month or $2.25 USD/day). Moreover, the Tsetsii project has contributed to boost the local economy through employment and procurement.
The collaboration between Newcom LLC, Terras Energy Corporation, JICA, and EBRD highlights the significant environmental and social benefits achievable through sustainability-linked loans and foreign investment.
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