The government action plan includes building new energy sources to meet the growing electricity demand. From this perspective, it was decided to make new energy sources available in three main scopes:

To increase and expand the capacity of existing energy sources.

To build new sources with pulverized coal combustion technology.

To make renewable energy sources available.

The construction project of the Tavantolgoi Thermal Power Plant (TPP) with a capacity of 450 MW is one of the significant projects to build new energy sources that are operated with pulverized coal combustion technology. In April 2020, a resolution was issued by the Government that it will finance the project through its own resource. According to the resolution, Erdenes Tavantolgoi JSC will allocate 30 percent of the financing through owning shares of the plant and the remaining 70 percent will be financed by a loan through the government’s loan guarantee. In this framework, the government submitted its request for a debt guarantee to the State Great Khural. However, the State Great Khural refused to issue the debt guarantee due to the debt ceiling, stopping the project.

The Minister of Energy, B. Choijilsuren, stated that the Russian side has put forth a proposal to cooperate with Mongolia to continue the project.

Specifically, some Russian commercial banks have expressed their interest in financing the project. According to the Ministry, the tender for Tavantolgoi TPP will be announced before January, and the participants will be selected and contracted by the end of May 2023. It is planned to commence construction in the second half of next year and to be commissioned in the second half of 2026. Furthermore, Minister B. Choijilsuren highlighted that no offtake agreements will be established for this project.