UB Muni BESS

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The project involves development, construction, operation and maintenance of a greenfield 50 megawatt (MW)/200 megawatt hours (MWh) battery energy storage system (BESS) located 130 km north east of Ulaanbaatar in Baganuur district of Ulaanbaatar City, Mongolia (the Project). The project will be owned by a Special Purpose Vehicle (“SPV”), which will be fully owned by Municipality of Ulaanbaatar’s (MUB) subsidiary, Ulaanbaatar Development Corporation (“UBDC”). UBDC is a holding company, and its assets are typically owned, developed and operated by subsidiary SPVs. The project will be built on a 9 hectare (ha) land that MUB owns and has provided to the SPV on a long-term lease basis. The project also involves a 400 m long overhead transmission line to connect to the grid substation.      The engineering, procurement and construction (EPC) contract for the Project has been awarded to Envision (https://www.envision-group.com/). Envision has engaged Monhorus (https://www.monhorus.mn/en/) for civil works and balance of plant electrical works including the transmission line. Further, Envision is contractually required to operate and maintain (O&M) the BESS plant for first two years from commissioning after which it will be handed over to UBDC for O&M. Construction at the project site started in Mid September 2024 and the project is in advanced stage of completion with commissioning scheduled for end December 2024.IFC is considering subscribing to a 300 billion MNT bond to be issued by MUB via private placement, specifically for the BESS project. The financing will be through a senior debt of up to US$65 million from IFC own account and a US$25 million concessional senior debt from the IFC-Canada Blended Climate Finance Program (BCFP). Further, IFC is considering an additional investment of up to US$90 million in the subsequent IFC MUB Bond(s) which is expected in 12-24 months for another BESS project or a similar project supporting the country’s energy needs.