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BCM’s ENERGY AND ENVIRONMENT WORKING GROUP MEETING, 15 SEP 2016

BCM’s Energy and Environment Working Group (EEWG) meeting was held on 15 Sep 2016 at the

World Bank office with the following agenda in attendance of 60 people.

MEETING AGENDA:

16:15 – 16:30 Registration, welcoming tea/coffee

16:30 – 16:40 Opening remarks, Introduction of a panelist & Rules and Expected Outcome for

Discussion (Chatham House, Solution-oriented, and concise)

Jon Lyons, Mongolia Country Representative, GGGI , Co-Chair of BCM’s EEWG

/Moderator/

16:40 – 17:30 Facilitated discussion with J. Batbayasgalan, Deputy Governor of Capital City

17:30 – 17:40 Wrap-up of discussion and next steps, Ch. Mergen, Executive Director, BCM

17:40 – 18:00 Open discussion & networking

The session took the form of a facilitated discussion between a Deputy Governor and BCM members,

exploring ways of improving public-private cooperation under the new Government's agenda for Energy

and the Environment issues.

SUMMARY OF THE MEETING

Objective of the meeting was to get questions and suggestions from BCM members and the business

community stakeholders on the new Governments agenda, particularly on the Capital City’s Action Plan

for the next 4 years, as well to discuss possible cooperation between the government and the private

sector. J. Batbayasgalan, Deputy Governor of Capital City was the key panelist to hear participant’s

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comments and questions as the Capital City was willing to get feedback before approving the Capital

City’s Action Plan.

It was agreed that BCM will compile all comments and suggestions received before, during and after the

meeting to send to the Capital City as a recommendation. BCM sent this document on 19 Sep 2016 with

an official letter expressing interest to collaborate in the future for exchange of information and regular

communication.

The key topics of discussion were:

1. Air pollution and ger district issues from resettlement and soil pollution: Out of 190 households

living in Ulaanbaatar, 90 households live in ger districts while 30-35 thousand people move to

Ulaanbaatar every year. Out of 6 tons of raw coal coming to UB, less than 10% is used by ger

district residents in the capital, but resulting in 90% of dust and particulate matter. Questions

were on how to do the ger area re-development effectively considering the resettlement and air

pollution issues.

2. Infrastructure and Public Private Partnership (PPP): how to improve PPPs and how to effectively

collaborate, how the Capital City is planning to implement the Green Development Strategic

Action Plan for Ulaanbaatar 2020, and what are the priority areas for the next 4 years.

3. Energy and heating: providing central heating to ger areas may not be an efficient way in

financial terms; therefore alternative solutions should be discovered including suitable night time

tariff.

In response to the first and second points, Deputy Governor responded that approach from the current

Capital City is to reduce government involvement in PPPs, not to be the 3rd

party in the contracts of ger

area redevelopment, and not to interfere with rights and duties of all parties, but to let the private sector

do their work. Focus will be on air pollution, soil pollution and water as these issues are no longer issues

of the capital city, but are affecting a national security.

Suggestions:

- Tariff reform should start for electricity, heating and water sector as these are critical issues that

needs to be addressed. The reason of low investment from private sector side into these sectors is

directly related to tariff issue. Once tariff reform is made with staged increase, investors will

come in and the companies will enter the market.

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- In order to reduce the concentration of UB city, six or more centers could be established. As most

of the government buildings are located in the city center, it creates traffic and concentration.

Therefore centers could be established with its independent heating systems, and tariff reform

should be made to facilitate this. There is a fear of increasing tariff, but there are organizations

who are willing to support and raise funding for this. It is possible to manage gradual tariff

increase with an establishment of a necessary fund.

- Advanced technologies should be introduced and supported. Many of the existing procedures and

standards in Mongolia are not in favor of the latest technologies, but rather keep using outdated

inefficient technologies. Government and the city could choose the technology first and then set

the budget to plan for the long-term efficiency rather than doing the opposite way.

Response:

- Tariff is certainly a challenging issue that is discussed at the Governor’s Office every day. A lot

of private companies come to the Governor’s Office offering to invest in projects, and suggesting

to set the necessary tariff to attract the investment. However, it is not within the Governor’s

Office to decide the tariff. It should be agreed and decided by the Ministry of Energy. The first

steps on night time tariff are not being successful as there are regulatory issues. Obviously, there

are issues related with living cost where 20% of the UB residents cannot even buy raw coal. The

government’s policy is going into 2 directions: one into social welfare aspect of distributing

improved stoves, subsidized coal and ger which results in a huge number of investments. But the

city will take strong emphasize on tariff, and have included tariff in the 2nd

section of the City’s

Action Plan for the next 4 years.

Follow-up Actions:

- BCM collected additional comments and suggestions from members via email after the meeting,

and has submitted them to the Governor’s Office on 19 Sep 2016.

- BCM members met with the Deputy Governor in the following week providing their suggestions

in personal meetings. Some of them include meetings from the ABB Group, Monhorus LLC,

COTES Group from Russia.

- Next meeting will be held in October 2016.

To see the meeting summaries of previous meetings or other BCM Working Groups, please click here.

If you have certain suggestions for the next meeting agenda, please contact Bayarmaa Amarjargal, Senior

Manager of BCM at Bayarmaa@bcmongolia.org.