ADB AND JAPAN PREPARE PROJECT TO ADDRESS ULAANBAATAR'S POWER SHORTCOMINGS

Ulaanbaatar /MONTSAME/ Under a $2 million technical assistance grant project, the Asian Development Bank (ADB) and Japan will study the electricity transmission and distribution constraints faced by Ulaanbaatar in preparation for a major power project that would help 1.2 million people, the ADB website reported Tuesday. The grant comes from the Japan Fund for Poverty Reduction, provided by the Government of Japan and administered by ADB. The technical assistance project will look into the technological, economic, financial, social, institutional, and environmental challenges facing the Mongolian capital’s power delivery. “Mongolia has seen a surge in growth in recent years, accompanied by growing demands for electricity,” said Teruhisa Oi, Senior Energy Specialist. “Much of this demand is not being met due the unavailability of new power plants. The capital needs not only new plants to supply power, but also to strengthen existing networks to bring to the population a reliable, affordable, and cleaner source of energy.” The capital’s existing power network is old and outdated—its inefficiency and unreliability causing electricity distribution losses totaling 19.6% in 2012, almost four times higher than international best practice of 5%. Meanwhile, customers faced an average of 13 power interruptions during 2012 totaling 2,084.5 minutes. The planned electricity and transmission project would improve the reliability and quality of electricity services for 1.2 million people, or about 40% of Mongolia’s population. It would upgrade the electricity transmission and distribution networks in and around Ulaanbaatar to boost energy efficiency, reduce transmission and distribution losses, and cut back greenhouse gas and air pollutants from existing power plants. It would also develop a new heat and power plant through a public-private partnership supported by ADB. In addition to investments, the project would strengthen the capacity of Energy Regulatory Commission, which issues licenses to power plants and proposes customer tariffs. The total cost of the technical assistance, which will be carried out over two years, is about $2.2 million, of which $200,000 will be met by the Mongolian government in the form of logistical and staff help.