Mongolia’s first privately-owned generator is preparing to break ground on the country’s first wind farm after winning support for its project from the international lending community.

Clean Energy LLC is developing the 50 MW Salkhit wind farm with the help of a $42.4 million loan and $4.4 million equity stake from the European Bank for Reconstruction and Development (EBRD).

The company was created to build the wind farm after Mongolia adopted a progressive renewable energy law and is 75 per cent owned by Mongolian firm Newcom LLC.

“Mongolia is rich not only under the ground but also above the ground: its strong winds can provide a lot of electricity for the growing needs of the country which is hoping to diversify its sources of power supply,” said Nandita Parshad, EBRD’s director for power and energy. “We hope this transaction paves the way for increased private interest in the renewable power sector which can reduce Mongolia’s dependence on coal and its carbon footprint and will contribute to Mongolia’s sustainable development.”

Mongolia has set a target of producing a quarter of its energy needs from renewable resources by 2020. “The Salkhit wind farm is a flagship project for Mongolia’s renewable energy,” said Bayanjargal Byambasaikhan, chief executive of Newcom. “It marks the dawn for Mongolia’s aspiration to becoming Asia’s renewable energy champion.”

The wind farm will be built at a site 70 km from the capital city of Ulaanbaatar and will consist of 31 GW 1.6 MW wind turbines. It will provide around five per cent of the country’s electricity needs.

Legal firm Norton Rose advised the EBRD on the financing of the project.