Last Friday, the Economic Development Minister, N. Batbayar, and the Energy Minister, M. Sonompil, met with a variety of other organizations to partner with in the establishment of the 5th Combined Heat and Power Plant LLC. In joint collaboration with International Power PLC, the main implementer of the project, Sojitz Corporation, Posco Energy, and Newcom LLC, the two ministers signed a concession agreement with Ribesse Benoit to build a new power plant with a capacity of 450 MB to meet the urban power demand.
From September 2011, the government declared a procurement in which 34 companies competed along with 11 consortiums to take on the implementation of the project. After undergoing a three-stage selection process, International Power PLC was chosen. After discussing the concession agreement conditions, a memorandum was signed on November 26th, 2013. The agreement was then further reviewed by parliament members, who allowed N. Batbayar to sign the concession agreement after June 12th of this year.
The project will become fully active and operational once International Power PLC decides the investment outlines in addition to agreements on buying and selling power, land ownership, and water usage, complete with Mongolian entities. With an operational status, the project can launch into construction through the collaboration of public and private partnerships.
Construction is estimated to take four years. This power plant will be used for 25 years before being transferred, free of charge, to the Mongolian government. The capacity of the 5th power plant stands at 450 MB of electricity and 587 MB of thermal power. The project will use a CFB (circulating fluidized bed) which offers the least negative impacts on the environment. The establishment of the 5th Combined Heat and Power Plant will service the ger districts by providing enough power to connect them to electricity and thermal power. This will not only allow more houses and apartments to replace the homes in ger districts, but it will also create over 600 jobs for citizens.
SOURCE: Mongolian Economy