Mongolia, GDF Suez-led Group Sign 450MW Power Plant Agreement

A GDF Suez SA-led group signed a concession agreement today with the Mongolian government to build a $1.2 billion power plant in Ulaanbaatar.

GDF, Sojitz Corp. (2768), Posco Energy Corp. and Mongolia’s Newcom Group, signed the 25-year concession agreement at Government House, according to Unenbat Baatar, the chief executive officer of Newcom. The 450-megawatt combined heat and power plant is scheduled for commissioning in 2017.

Half of Ulaanbaatar resides in unplanned districts where residents heat their homes with raw coal in winter. The resulting smoke has made Ulaanbaatar one of the world’s most polluted cities, according to the World Bank.

According to the concession agreement, the group will fund, construct and operate the plant for 25 years, sell its power to the central grid, and then transfer the facility to the government.

Terms for the power purchase agreement and heat purchase agreement are still under discussion, according to Uyanga Dashzeveg, Newcom’s chief operating officer.

To contact the reporter on this story: Michael Kohn in Ulaanbaatar at mkohn5@bloomberg.net

To contact the editors responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net Iain Wilson, Indranil Ghosh

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.