The current installed power capacity in Mongolia is approximately 1GW.

Approximately 98 % of the electricity is generated in coal-fred power plants,

1% is produced by diesel generators and 1% by renewable energy sources
(mainly hydropower).

Around 93 % of the consumed electricity is generated in coal-fred power plants.
The remaining 6% is imported, mainly from the Russian Federaton. And others
were generated in diesel and hydropower plants.















Startng from 2006 power demand increased rapidly. Contnuing rise in electrici-
ty demand is being driven by the rapid development of the countrys mining
based economy. But the installed capacity has already become insufcient to
provide required demand for electricity, so imported energy from Russia covers
the unsupplied demand.

Power demand in South Gobi region is expected to grow rapidly as a result of
both existng and new mining developments. But the generaton is also not
enough to fully supply electricity to the big mining projects, like OT, and TT. OT
solved its electricity problem by importng the required power from China.
As tme passes, without new generaton facilites, the power sector of Mongolia
will be highly dependent on imported electricity from Russia and China, which
ofen not economically viable.
In order to ensure greater outcome from big mining projects and develop the
power sector, it is utmost important to build large scale power plants.

Only 80% of installed capacity is available because of aging power plants. The
transmission and distributon network, connects around 70% of the populaton,
has been less than reliable-causing frequent blackouts in major cites mainly be-
cause of aging transmission lines and substaton facilites.

The burning issues that needs to be solved in near tme:
1.Insufcient generaton
2.Over-aged power plants
3.Over-aged and poor developed Transmission and distributon net-
works
4.Old technology

The very important tme for the power sector of Mongolia has become. The Gov-
ernment has increased the investment in power sector signifcantly. At same
tme the government tries to atract the private investment.






By 2030 Mongolia needs 8 billion USD in power sector. The cost breakdown is
shown on the lef.



At this stage the government tries to atract the private investment by conces-
sion contracts for several power plant projects, including CHP5.
The full list of power plant projects, which will have Concession agreement, is
shown on the screen.
[Source: Ministry of economic development. September 2013]











Few days ago the CHP3 successfully expanded its capacity by 50 MW. This pro-
ject was done by Chinese Company Hunan Industrial Equipment Installaton.
The Government fnanced this project for 35 million USD from Chinggis bonds.


China machinery engineering corporaton has been awarded Turn-key con-
tract for reconstructon project of Amgalan heatng plant.

The capacity of the heat-only plant will be 300 MWth. It will be fnished this
year. The project received a Concession contract and it costs about 75 million
USD.

Project includes constructon of plant with capacity of 300 Gkal/h, 7 heat distri-
buton centers, 110/10kV of OHL and a substaton










The CHP4 will expand its capacity by 100 MW within this year.
Amount of fnancing from the Government of Mongolia is 70 million USD from
Chinggis bonds.
Russian 100 MW turbine, generator from Ural Turbine Works will be installed
by Russian EPC Company Soyuz which has awarded Turn-Key contract. The
implementaton is going well. We hope it will be fnished in tme.

TTPP is the frst big coal fred power plant IPP projects in Mongolia. The project
costs approximately 1 billion.

TTPP project includes design, fnancing, constructon, installaton, erecton, oper-
aton of a 450 MW power plant, with 132 km over head power line from OT to
TT. Project main of-taker will be Oyu Tolgoi copper mine project. The objectve
of our project is to provide secure reliably electricity to the OT project.









Government of Mongolia has provided inital fnancing to the project as develop-
ment cost.
As the OT Project is main of-taker for the project, we had entered into a joint
development agreement with the OT LLC, so since initaton of the project we
are working closely on this project with OT team. OT acts as a co-developer to
the project. Internatonal Investors (IPP) selecton process had initated already.
We strive to have most afordable and quality proposal from our bidders, thus
we endeavor to have most transparent approach for the selecton process of our
IPP bidders.

From the beginning the Project Unit is developing this project jointly with OT
and Rio Tinto with help of SMBC, WP, S&S.

Over the course of the year, PIU has prepared necessary documents, like feasi-
bility study, environmental study, geotechnical survey, land characteristcs and
assessment etc.

All these studies had been prepared and had been approved by appropriate gov-
ernmental organizatons. We also have necessary Special Licenses to construct
energy facility; to generate electrical and thermal energy etc. 11 type of special
licenses had been issued from Energy Regulatory Commission for the project.








In order to get greater efciency, we strive to have most transparent approach
for the selecton process. The selecton of investor would be on compettve ba-
sis. Our four potental investors have been selected from these long list of inves-
tors.
Selecton process of Potental investors:
At frst, Invitaton to Expression of Interest sent to the world recognized, famous
IPPs.
Secondly, we received Expression of Interest from 10 IPPs.
Lastly. we evaluated the proposals from IPPs, four IPPs has been selected as po-
tental investor.

We are happy that our pre-selected IPPs are all very respectable, professional,
famous developers in the world.
Our technical RFP had been issued on October 2013. On July we will issue Com-
mercial RFP. We assume that on October 2014 the preferred bidder will be cho-
sen.









Talking about the project development tmeline, On March 2013, Project Unit
was established by the Minister of Energys order. We selected advisors to the
project, and started to prepare necessary documents, and studies. Also we
prequalifed the Expression of Interest from global IPPs and created a short list
of potental investors.
Over the 6 months of intensive work, we had successfully issued the technical
RFP to you. Ever since we have been working hard on preparing Commercial
RFP. As you may know, commercial RFP contains various project agreements like
investment agreement, PPA, coal agreements, water agreements etc. Preparing
commercial RFP took some tme, longer than we assumed, but now it is being
completed and to be issued on July 2014.