Background

Mongolia faces significant challenges due to its reliance on coal, particularly in Ulaanbaatar’s Ger districts. Extensive coal usage contributes to severe air pollution, which is responsible for over 7,100 deaths annually and substantial economic losses, amounting to an annual loss of 10% of the nation’s GDP. There is an urgent need for a sustainable and affordable heating alternative that eliminates the use of coal while ensuring energy security at comparable or lower costs. Mongolia faces significant challenges in balancing rapid urbanization, environmental degradation, and public health. The capital city, Ulaanbaatar, exemplifies these struggles as it contends with a growing population, overreliance on coal, and a deteriorating urban infrastructure. Nearly half of Mongolia's 3.4 million citizens live in Ulaanbaatar, with a large portion residing in Ger districts—unplanned settlements where traditional yurts (gers) or detached houses dominate. These areas lack access to centralized heating systems, leading to widespread reliance on coal for heating and cooking.

Objectives

The Solar Facility Project in Mongolia will address this challenge and pilot a four-year phased initiative to drive a shift to clean energy in the Ger districts of Chingeltei District in Ulaanbaatar. The Project will build on the 2023 initiative of UNDP that has piloted the use of solar photovoltaic (PV) systems with battery storage and electric heaters equipped with heat storage for individual households in the Ger districts. The package included smart meters to capture the carbon emission reduction, to be translated into carbon credits, later verified and traded, and thus use carbon finance as an incentive.

Expected Results

• Output 1: Increased number of households transitioning from coal-based heating to renewable energy, particularly in Ulaanbaatar’s Ger districts.
• Output 2: Mobilized public and private sector funds from both local and international investors for renewable energy projects in Mongolia.
• Output 3: Capacity to Create an Enabling Environment for Renewable Energy Investments
• Output 4: Capacity to Create an Enabling Environment for Renewable Energy Investments
• Output 5: Evaluate Overall Impact on Households and Ulaanbaatar Municipality