The European Bank for Reconstruction and Development (EBRD), Triodos Investment Management (Triodos) and FMO have agreed to provide a syndicated loan to Desert Solar Power One (DSPO) for the construction of a solar plant in Mongolia.
DSPO is a specialised company that has been created by United Green Group (UGG) and Tucher Group to support the development, construction and operations of the solar plant.
The $31.6m syndicated loan comprises an EBRD A loan of $10.5m, and a B loan from impact investor Triodos and FMO Dutch Development Bank, who have agreed to each provide $10.5m.
The new 30MW solar photovoltaic (PV) power plant is reported to be the first utility-scale solar PV in the country that will generate clean electricity during the day when the demand is higher than supply.
It will be located about 450km to the south-east of Ulaanbaatar in the Gobi Desert.
By financing the first solar plant project, EBRD has further extended its support to Mongolia’s renewable energy sector.
The project is said to be in line with EBRD’s Green Economy Transition (GET) approach, a new initiative that promotes sustainable energy and resource use.
The project operation is set to contribute to reducing the country’s carbon intensity, meeting its increasing power demand and achieving the goal of renewable energy accounting for 20% of all power by 2020, and 30% by 2030.
Mongolia depends primarily on coal-fired combined heat and power plants to meet its power and heat generation needs.