Clean Energy Asia LLC together with its shareholders, Newcom LLC and SB Energy Corp., signed today with the Japan International Cooperation Agency (hereafter “JICA”) and the European Bank for Reconstruction and Development (hereafter “EBRD”) financing agreements to construct a 50MW wind farm in southern Mongolia.
Clean Energy Asia LLC, (Head office: Ulaanbaatar city, CEO: Gankhuyag Dagva, hereafter “Clean Energy Asia”), is 51% owned by Newcom LLC, a Mongolian conglomerate with activities in telecommunications, property and energy. The remaining 49% is owned by a subsidiary of SB Energy Corp. (Chairman & CEO: Masayoshi Son, hereafter “SB Energy”), a subsidiary of SoftBank Group Corp. (the telecommunications and technology conglomerate).
Mongolia faces great challenges in meeting its growing demand for electricity, almost all of which is currently met by ageing and polluting coal-fired plants. The wind farm will help supply Mongolia's power demand with clean, eco-efficient electricity by harnessing Mongolia's vast and inexhaustible wind resources. The project will help contribute to sustainable economic development and the mitigation of climate change. Clean Energy Asia will aim to launch operations in December 2017.
Mongolia has a power-supply capacity of 1130MW, consisting of 88% coal, 6% diesel, 6% renewable energy, and 2% hydropower sources (Department of Energy, Mongolia, 2015). While being the world’s eighth country most susceptible to climate change (Climate Risk Index. Source: GERMANWATCH “Global Climate Risk Index 2014”), electricity supply-demand balance along with its economic growth is an urgent issue for Mongolia; accordingly, Mongolia is a country that particularly requires safe and secure power sources such as renewable energy. The State Great Khural approved a national power policy in 2015 that sets Mongolia’s mid-to-long term target and plan for 2015-2030 in the energy sector. The policy aims to increase the power generation share of renewable energy to 20% by 2020 and to 30% by 2030, and it stipulates the promotion of investment in the energy industry in cooperation with international financial institutions and donor countries, utilizing the abundant wind and solar resources in the Gobi region. Mongolia is the first country to sign a memorandum with Japan on the Joint Crediting Mechanism (JCM) to reduce greenhouse gas emissions.
In these circumstances, this Tsogttsetsii wind farm project will help contribute to the increased adoption of renewable energy in Mongolia.
This wind farm project is the first dollar-denominated project finance debt transaction by JICA through its Private Sector Investment Finance scheme in the renewable energy field, and the second renewable energy project in Mongolia for Newcom and EBRD following the 50 MW Salkhit Wind Farm, the first wind farm and first private power generator in Mongolia, which began its operations in 2013. The 50MW Tsetsii Wind Farm project marks the first power generation business in Mongolia for SB Energy and the SoftBank Group.
Masayoshi Son, SB Energy Chairman & CEO commented as follows:
“This project marks the first step to develop renewable energy in Mongolia for the SoftBank Group. Power generated from the wind farm will supply electricity in Mongolia by connecting to its domestic grid, and I believe the project will help contribute to the stable supply of power for the nation. With this project, the SoftBank Group will have bases in Japan, India and Mongolia for its renewable energy business. We will work to further expand our global business to increase the adoption of renewable energy and reduce CO2 emissions.”
Source: Clean Energy Asia LLC
Date: Sep 28, 2016