Investment agreement signed for Tavan Tolgoi power plant

PM Ch.Saikhanbileg presenting a speech at the agreement signing ceremony

Minister of Mongolia M.Enkhsaikhan, Executive Director of Tavan Tolgoi Power Plant LLC T.Munkhtur and General Director of MCS Power LLC Sh.Munkhbat signed the investment agreement for Tavan Tolgoi power plant (TTPP) on Friday.

Prime Minister Ch.Saikhanbileg attended the agreement signing ceremony. He emphasized that the agreement is another big event that proves Mongolia is back to businesses.

The Prime Minister said that the state policy on energy sector states that the TTPP will be built by 2023, and noted that one of objectives of his government’s action plan was to launch the project.

Government officials believe that the TTPP will supply energy to the Oyu Tolgoi project domestically, allowing the country to keep the money spent on imported energy, create new jobs, increase the value of Umnugovi Province, and attract more foreign investors.

Japanese Marubeni Corporation and MCS will jointly implement the project. The Prime Minister noted that the investment agreement has a historical significance.

“Establishing the investment agreement for the TTPP project in a time when the economic partnership agreement (EPA) between Mongolia and Japan became effective was the first project to prove the results of the EPA between the two countries,” underlined Ch.Saikhanbileg.

A working group led by Minister of Mongolia M.Enkhsaikhan worked on establishing the investment agreement. The Prime Minister highlighted that signing the agreement in a comparatively short period of time was thanks to placing high importance on the project, and close cooperation of the Ministry of Energy, Ministry of Justice, Ministry of Finance, Ministry of Environment and Green Development, and Invest Mongolia Agency.

Minister M.Enkhsaikhan said, “Mongolia is going to form its first independent power producer (IPP) that will supply energy to major developments and the central integrated system through the private sector partnership. The government will not issue any guarantee or collaterals on this project. The private sector will bear all the risks, and invest over one billion USD.”

The minister noted that as Mongolia is launching its first IPP project, everyone needs to understand that there are many new concepts, regulations, and things to learn and study.

“During the negotiations it was noticed that in connection to the new issues, we need to improve the legal environment. We will focus on this matter in the future,” M.Enkhsaikhan promised.

M.Enkhsaikhan said that over 3,000 workers are expected to work in the TTPP development project, the majority of which will be Mongolians. He also added that opening the power plant will contribute around 150 billion MNT in taxes and other payments to the state budget per year.