ADB to Support Mongolia’s Largest Solar and Battery Storage Project for Energy Security

The Asian Development Bank (ADB) has been appointed by the Government of Mongolia to serve as transaction advisor for the Stable Solar Energy in Mongolia Project, a landmark renewable energy initiative that will significantly expand the country's clean energy capacity while improving grid stability and reducing dependence on fossil fuel imports.

The project envisions the development of about 115 megawatts (MW) of solar photovoltaic (PV) capacity and 65 MW / 237 megawatt-hours (MWh) of battery energy storage systems (BESS) across Mongolia's Western and Eastern Energy Systems — two of the country's most critical yet isolated grid networks. Once operational, it will represent one of Mongolia's largest renewable energy procurements and the nation's first-ever combined solar and BESS auction.

A Major Milestone in Mongolia's Clean Energy Transition

Mongolia's vast steppes and high solar irradiance provide ideal conditions for solar power generation, but the country's energy system remains heavily dependent on coal-fired plants and imported electricity, particularly from neighbouring Russia. The new project aims to change that by delivering reliable, affordable, and low-carbon power to some of the nation's most remote areas.

"ADB is proud to support Mongolia in advancing its clean energy transition through innovative renewable energy and storage solutions," said Shannon Cowlin, ADB Country Director for Mongolia. "This project will help strengthen energy security, enable greater integration of renewables, and lay the foundation for larger investments in solar and BESS in the years ahead."

The project will deploy advanced battery technologies to store solar energy and provide key grid services such as peak shifting, frequency regulation, and voltage stabilization. By balancing supply and demand more efficiently, the system will make it possible to integrate a higher share of intermittent renewable energy into Mongolia's electricity network.

Supporting a More Reliable and Self-Sufficient Grid

Mongolia's Western Energy System (WES) and Eastern Energy System (EES) are not connected to the central grid and have historically struggled with reliability challenges and limited access to clean power. The addition of solar generation and battery storage will stabilize these networks, helping reduce blackouts and voltage fluctuations while lowering costs associated with fossil fuel imports.

According to ADB experts, the project will also play a vital role in helping Mongolia diversify its energy mix and cut greenhouse gas emissions, in line with its Nationally Determined Contribution (NDC) under the Paris Agreement.

Transparent Bidding and Private Sector Participation

The Stable Solar Energy in Mongolia Project will be implemented through a competitive, transparent auction process, designed to attract private sector investors and independent power producers (IPPs). ADB's transaction advisory role will include structuring the project, designing the tender process, and advising on risk allocation and regulatory frameworks to ensure fair competition and investor confidence.

ADB will also help the government establish long-term power purchase agreements (PPAs) and create a replicable model for future renewable energy and storage investments in the country.

Aligned with Mongolia's Long-Term Energy Vision

The project directly supports Mongolia's State Policy on Energy (2015–2030) and the government's New Recovery Policy, both of which prioritize energy diversification, decarbonization, and infrastructure modernization. It is also consistent with Mongolia's long-term vision to achieve carbon neutrality by 2050, emphasizing the role of clean energy as a cornerstone of economic resilience and sustainability.

Through its collaboration with the Ministry of Energy, ADB aims to ensure that the project contributes to national energy security, job creation, and technological advancement in renewable energy and energy storage systems.

Mongolia's Expanding Renewable Energy Ambitions

Mongolia's renewable energy sector has grown rapidly over the past decade, with solar and wind projects now accounting for nearly 20% of installed capacity. However, the potential remains largely untapped — the country's solar energy resources are estimated at more than 4,500 terawatt-hours (TWh) annually, among the highest in Asia.

By adding battery energy storage to its renewable infrastructure, Mongolia will be able to maximize solar output, store excess generation, and stabilize supply during periods of low production or high demand — a crucial capability for a country with a cold climate and vast, sparsely populated terrain.

Driving Regional and Climate Benefits

ADB's involvement in the Stable Solar Energy Project also aligns with its broader Energy Policy 2021, which focuses on supporting low-carbon, inclusive, and resilient energy systems across Asia and the Pacific. The initiative will contribute to regional climate action goals and set a model for other countries transitioning from fossil fuel dependence to integrated clean energy systems.

In addition to improving energy access and reliability, the project will help reduce air pollution, create local employment opportunities, and promote green technology transfer.

Looking Ahead

Once completed, the Stable Solar Energy in Mongolia Project will stand as a flagship example of sustainable infrastructure development, showcasing how renewable energy combined with storage can deliver both economic and environmental benefits.

"Mongolia's clean energy transition is gathering momentum," Cowlin added. "With ADB's support, this project will demonstrate that renewable power and innovation can drive energy security, stability, and prosperity for all."