THE CABINET DECIDES ON FINANCING FOR HYDROELECTRIC STATION PROJECT

Ulaanbaatar /MONTSAME/ The cabinet Saturday issued a resolution to form a project unit for a hydroelectric station construction and approved its start-up financing. The construction of the hydroelectric station over the Eg river with a 220 megawatt capacity will be financed from a 50 million USD that previously had been decided for a project of a 450 megawatt power plant nearby the Tavan tolgoi coal mining deposit. The cabinet assigned the Energy Minister M.Sonompil and Economic Development Minister N.Batbayar to establish related agreements and to launch the project within 2014, after settling further financing in a form of domestic and/or foreign investments and loans. Building a hydro-electric station is considered to give its benefits in enhancing the capacity of the central power stations of Mongolia and in stabilizing their activities. Moreover, creating a new energy source will contribute in efforts to get free from the foreign dependency in energy supplies. Once built, the hydro electric plant is estimated to save ten million USD a year and to recover its investments in 10-15 years. The Asian Development Bank experts, who have been exploring ways to build a hydroelectric dam in Mongolia, submitted their proposal to grant an irretrievable financing for development of feasibility studies of the Eg river hydro-electric dam in May 1991. However, the building project stopped due to a financing deadlock in 1996-1997.