The World Bank has approved a $53 million loan to help the government of Mongolia to improve heating services and support sustainable livelihoods in Ulaanbaatar.
Ulaanbaatar, the world’s coldest capital city according to a statement will leverage the loan to fund its Ulaanbaatar Heating Sector Improvement Project and additional financing of the Third Sustainable Livelihoods Project.
Up to $41 million will be directed towards the Ulaanbaatar Heating Sector Improvement Project to expand transmission capacity, upgrade and improve the efficiency of the district heating network.
The aim is to meet increasing demand for heating services and improved air quality.
The project will include replacing poorly insulated and leaking pipes and expansion loops, as well as support policy and institutional reforms of state owned utility Ulaanbaatar District Heating Company.
The utility’s grid is currently connected to approximately half of the city’s population whilst demand for heating is projected to grow by more than 5% a year over the next decade.
The network is currently out of its lifetime and the lack of investment over the past decades resulted in high technical losses of the network and its inability to provide heating to more consumers.
$12 million for the Mongolia Third Sustainable Livelihoods Project will scale up activities to improve the planning and delivery of priority local infrastructure investments in all 330 rural soums in Mongolia.
The energy transition is a hot topic disrupting the utility industry in Asia and will be a key focus at Enlit Asia which takes place in Jakarta, Indonesia from 23-25 March. For more details click here.
Andrei Mikhnev, World Bank’s country manager in Mongolia, said: “The World Bank has been actively supporting the modernisation of heating capabilities in urban areas to help develop a reliable and sustainable provision of central heating services and to reduce emissions in ger areas.
“The Local Development Fund serves as an important means of fiscal decentralization, allowing people and local authorities to prioritize investments at aimag and soum levels to improve citizen’s wellbeing,” said Andrei Mikhnev. “This additional financing will scale up investments in needed infrastructure with increased emphasis on public participation, transparency, and accountability at the soum level.”