Mott MacDonald provides lenders' technical for Gobi Desert windfarm

08 December 2016 3 min. read

The 50MW Tsetsii wind farm situated in the Gobi Desert, Mongolia, reached financial close recently. The project, which is funded by European Bank for Reconstruction and Development and the Japan International Cooperation Agency, aims at boosting the country’s renewable stock as the country looks to reduce it carbon footprint and the blight of pollution affecting its capital city Ulaanbaatar.

The Mongolian energy sector is heavily reliant on coal for the generation of the country’s electricity needs: of its 1,130MW generation capacity in 2015, 88% came from coal, 6% from diesel, 6% from renewable energy, and 2% from hydropower. The country is, however, seeking (and obligated) to reduce its carbon footprint as well as expand its energy generation in line with growing demand.

The country also faces a blight from pollution, with its major city Ulaanbaatar suffering from 3 to 12 times the level of PM2.5 recommended by the World Health Organization – due to coal fired power plants, among others. One project aimed at reducing the country’s carbon dependence, by offsetting 151,000 tons of CO2 per year, and reduce pollution, is the Tsetsii wind farm situated in the Gobi Desert.

Mott MacDonald provides lenders technical for Gobi Desert windfarm

The Gobi Desert is a vast area covering almost 1.3 million kilometres across areas of Mongolia and China, and continues to grow rapidly through desertification around its boarders. The desert is an area of extremes, ranging in temperature differences of up to 35 C in a single day – besides an abundance of sand the region too has considerable periods of blustery weather.

The new Tsetsii wind farm is located on the Mongolian side of the Gobi Desert and consists of 25 turbines generating a total output of 50 MW. The wind farm, the second to be built in the country, has a price tag of around $120 million, and is financed by the European Bank for Reconstruction and Development and the Japan International Cooperation Agency.

As part of the lenders’ environmental and social due diligence process, Mott MacDonald was called in. The firm brings considerable experience to the project, having worked on the country’s earlier 50MW Salkhit wind energy scheme. As part of its lenders’ technical advisory, the firm probed, among others, the project participants’ technical capabilities, the project’s design, schedule, contract agreements and the financial model, as well as environmental, social and permitting matters.

Caedmon Shayer, Mott MacDonald’s Project Manager for the engagement, says, “The majority of power demand in Mongolia comes from the capital city Ulaanbaatar, which is primarily supplied by old coal power stations. Local residents also burn coal in open fires. As a result Ulaanbaatar is one of the most polluted cities in the world over its harsh winter. It is hoped that the renewable energy provided by Tsetsii will help reduce the dependence on fossil fuels in both the capital and Gobi Desert.”

The engineering consultancy will continue to provide monitoring services to the project, which is slated for completion in 2017.