The Asian Development Bank (ADB) and the Leading Asia’s Private Infrastructure Fund (LEAP) today signed an $18.7 million loan with Sermsang Power Corporation Public Company Limited (SSP) and Tenuun Gerel Construction LLC (TGC) to build, operate, and maintain a 15-megawatt solar power plant supplying electricity to Mongolia’s central grid system.
The loan agreement for the Sermsang Khushig Khundii Solar Project marks ADB’s first cofinancing with LEAP in Mongolia’s renewable energy sector. The Canadian Climate Fund for the Private Sector in Asia provided a technical assistance grant to offset first mover costs and to catalyze the financing of ADB’s first private sector solar power project in Mongolia.
“This project uniquely incorporates climate-resilient technical solutions from the private sector to accommodate Mongolia’s cold and dry climate,” said Director General of ADB’s Private Sector Operations Department Mr. Michael Barrow. “The project also benefits from the transfer of operational knowledge and advanced technology from Japan and Thailand in developing and operating solar power plants.”
The solar power plant is located in the Khushig valley at Tuv aimag (province) Sergelen soum (county). It will supply electricity to the Central Energy System, which delivers power to an area accounting for over 80% of the country’s energy demand.
The solar project will generate clean electricity totaling 22.3 gigawatt-hours annually in Mongolia, while lowering the country’s carbon emissions by 26,400 tons per year. It will help the government increase the share of renewable energy in total installed capacity from 12% in 2017 to a targeted 20% by 2023 and 30% by 2030. Shifting to cleaner energy sources will also reduce electricity imports, improve Mongolia’s energy security, and mitigate air pollution. The energy sector is dominated by coal-fired power plants and currently accounts for over 60% of the country’s greenhouse gas emissions.
TGC is owned by Sermsang Power Corporation Public Company Limited (SSP) in Thailand, Sharp Energy Solutions Corporation (SESJ) in Japan, and AMOE Solar LLC and SH Energy Solution LLC in Mongolia.
“For SSP, this project is not only an important milestone for investment in renewable power projects in Asia, but also reflects our philosophy in developing ecologically sustainable projects,” said SSP CEO Mr. Varut Tummavaranukub. “We are honored to be trusted by ADB for this milestone transaction.”
“With ADB’s and LEAP’s support, we are excited to equip the Mongolian central area with clean energy and contribute to the reduction of greenhouse gas emissions through this landmark project,” said SESJ Senior Executive Director and TGC Chair Mr. Tatsuya Satoh.
LEAP was established in 2016 to fill financing gaps and increase access to finance for ADB-supported infrastructure projects in Asia and the Pacific. The fund is supported by the Japan International Cooperation Agency and is managed by ADB’s Private Sector Operations Department.
The Canadian Climate Fund for the Private Sector in Asia (CFPS) was established by the Government of Canada in 2013 to provide blended concessional financing and technical assistance grants to private sector climate change mitigation and adaptation projects in Asia. The CFPS is administered by ADB under the Clean Energy Financing Partnership Facility.
Sermsang Power Corporation Public Company Limited, established in 2015 and based in Bangkok, Thailand, is a renewable energy producer and distributor in Asia that is committed to sustainable power production, as well as promoting a clean environment for a better future.
Sharp Corporation, parent company of SESJ, founded in 1912 and headquartered in Sakai City, Osaka, Japan, is a leading global electronics manufacturer. It is dedicated to contributing to the culture, benefits, and welfare of people worldwide through the use of its unique and innovative technology.
Strength of IEA-ASEAN energy cooperation highlighted at Ministerial meeting
IEA Executive Director Fatih Birol spoke today to Energy Ministers from across Southeast Asia about the latest global and regional energy trends, pathways to net zero emissions and the importance of clean energy investment.
He was participating in the seventh annual dialogue between the IEA and Ministers from the Association of Southeast Asian Nations (ASEAN) – the economic bloc comprised of 10 Southeast Asian economies. The meeting was hosted via video link by Brunei Darussalam, which is chairing ASEAN’s 39th annual Ministers on Energy Meeting (AMEM).
“The IEA remains firmly committed to assisting ASEAN and its member states in developing pathways towards net zero that respect their capacities and capabilities,” Dr Birol told the Ministers. “One of the key messages from the IEA’s Roadmap to Net Zero by 2050 Roadmap is that not all countries are starting the race to net zero from the same place. I have and will continue to underscore the importance of ensuring that a greater share of global clean energy investment is directed towards the emerging and developing economies including in Southeast Asia to unlock new economic growth possibilities and emissions reductions.’’
This year’s ministerial marks the tenth anniversary of IEA-ASEAN energy cooperation, which was established with a Memorandum of Understanding at the 2011 AMEM in Brunei’s capital, Bandar Seri Begawan. The Ministers and Dr Birol welcomed the adoption of a Commemorative Statement on IEA-ASEAN Energy Cooperation.
The IEA has significantly scaled up its work with ASEAN and its Member States over the past six years. Indonesia and Thailand became IEA Association Countries in 2015, and Singapore did so the following year. In 2019, under Thailand’s Chairmanship, the IEA was named a Strategic Partner of ASEAN.
The IEA is committed to continue working with ASEAN and its Member States on key energy priorities, including energy security, energy efficiency, clean energy, energy investments and decarbonisation.
“On this, the tenth anniversary of our collaboration, the IEA is more determined than ever to continue to work hand in hand with our partners in the region to help achieve your energy goals,’’ Dr Birol said. “I very much look forward to the next ten years.”
The ASEAN Chair in 2022 will be held by Cambodia.
Indonesia’s First Pumped Storage Hydropower Plant to Support Energy Transition
The World Bank’s Board of Executive Directors today approved a US$380 million loan to develop Indonesia’s first pumped storage hydropower plant, aiming to improve power generation capacity during peak demand, while supporting the country’s energy transition and decarbonization goals.
“The Indonesian government is committed to reduce greenhouse gas emissions through, among others, development of renewable energy, energy conservation, and use of clean energy technology. Emission reduction in the energy sector will be driven by new and renewable energy generation and application of energy efficiency,” said Arifin Tasrif, Minister of Energy and Mineral Resources of the Republic of Indonesia.
Over 80 percent of the power generated for the Java-Bali grid, which supplies electricity to 70 percent of the country’s population, comes from fossil fuels. A key measure to support Indonesia’s decarbonization agenda is the development of energy storage to enable integration of renewable energy into the grid. Pumped storage hydropower plays a crucial role in this approach.
The financing will support the construction of the Upper Cisokan pumped storage hydropower plant, to be located between Jakarta and Bandung, with an expected capacity of 1,040 MW. The facility will have significant power generation capacity to meet peak demand, provide significant storage capacity to enable a larger penetration of renewable energies and, because of its close location to two large demand centers, will alleviate increasing transmission loads on the grid. As a result, a more environmentally friendly and reliable supply of electricity will benefit consumers in Java and Bali.
“We are excited about this project as it will be the first of its kind for Indonesia. It represents a turning point for Indonesia’s decarbonization pathway. The World Bank will continue to support Indonesia in its efforts to achieve resilient, sustainable, and inclusive development that will benefit the people of Indonesia now and in the future,” said Satu Kahkonen, World Bank Country Director for Indonesia and Timor-Leste.
Pumped storage hydropower makes use of two water reservoirs at different elevations. At times of low electricity demand or when there is abundant generation from clean power sources, such as solar energy, power from the grid is used to pump water to the upper reservoir. Power is generated during peak demand, usually evening hours, as water moves down to the lower reservoir using a turbine, when electricity generation costs are high.
The project will help enhance the system flexibility and efficiency in balancing supply and demand, and therefore improve the reliability and quality of electricity services in Java and Bali. It also aims to support the government to integrate variable renewable energy into the Java-Bali grid, and to do so in an environmentally and socially sustainable manner.
Iran determined to boost oil exports despite sanctions
Iranian Oil Minister Javad Oji has said the Islamic Republic is determined to increase its oil exports despite the U.S. sanctions on the country’s oil industry, adding that the use of oil sanctions as a “political tool” would harm the market.
“There is strong will in Iran to increase oil exports despite the unjust and illegal U.S. sanctions; I promise that good things will happen regarding Iran’s oil sales in the coming months,” Oji told the state TV.
As reported by IRIB, Oji noted that Iran can barter its crude oil for goods or even for services and investment not only in the oil industry but also in other sectors as well.
“Oil sales have dropped dramatically since the imposition of unjust sanctions, but this capacity exists in the Oil Ministry and all the industry’s departments to increase oil sales,” the minister said.
Iranian oil exports have plunged under U.S. sanctions, which were reimposed three years ago after Washington abandoned Tehran’s 2015 nuclear deal with six powers.
“Iran will return to its pre-sanctions crude production level as soon as U.S. sanctions on Iran are lifted,” Oji said.
“We are against using oil as a political tool that would harm the oil market.”
Since April 9, Tehran and six world powers have been in talks to revive the nuclear pact. The sixth round of the negotiations adjourned on June 20. The next round of talks has yet to be scheduled.
Oji said Iran backed a decision made by the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, on Wednesday to stick to a policy from July of phasing out record output cuts by adding 400,000 barrels per day (bpd) a month to the market.
Iran has been gradually boosting crude oil production to get ready for a strong comeback into the global market as the talks with world powers over the nuclear deal show signs of progress.
According to a Bloomberg report, National Iranian Oil Company (NIOC) officials have stated that the country’s oil fields are going through overhaul operations and connections with oil buyers are being re-established.
“In the most optimistic estimates, the country could return to pre-sanctions production levels of almost four million barrels a day in as little as three months,” the report published in May stated.
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