30 Jul CHP5 CONCESSIONAIRE PRELIMINARILY SIGNS POWER PURCHASE AGREEMENT WITH ENTITIES REPRESENTING THE GOVERNMENT OF MONGOLIA (JUL 2015)
The Government of Mongolia (“Government”) is encouraging investment in the heating and electric power sector in Mongolia, and in pursuit of this aim, the Government acting through the State Property Committee (“SPC”) held the competitive bidding process for the concession for the CHP5 project (“Concession”) in September 2011. As a result, on 5 July 2012, the Government selected a consortium comprising ENGIE (previously GDF SUEZ) (from France, 30%), Sojitz Corporation (from Japan, 30%), POSCO ENERGY Co. Ltd. (from Korea, 30%) and Newcom LLC (from Mongolia, 10%) as the preferred bidder for the grant of the Concession. On 20 June 2014, the Government and the Concessionaire signed Concession Agreement under a Build-Own-Operate-Transfer scheme.
On 29 July 2015, The National Dispatching Center LLC and the National Power Transmission Grid State Owned Joint Stock Company, representing the Government of Mongolia have signed “Power Purchase Agreement”, which is one of the important agreement of project, with the CHP5 Concessionaire. The entire output from the plant will be purchased by the organizations which represent the Government of Mongolia in the agreement and the heat produced will be used to satisfy the rising electricity and heating demand of Ulaanbaatar.
The CHP5 project is the first and largest Public-Private Partnership in Mongolia of this scale in the energy sector. Our partner Enkhbat.B, who is leading our firm’s energy sector, and associate Odzaya.B are advising ADB (Asian Development Bank, Legal counsel of Government) on the CHP-5 project as Mongolian local legal counsels.