GDF Suez subsidiary International Power in association with consortium partners has been selected as preferred bidder for the combined heat and power plant CHP5 in Ulaanbaatar, Mongolia.

Following finalization of the engineering, procurement and construction contract, the consortium comprising International Power, Sojitz, Posco Energy and Newcom will build and operate a coal-fired CHP plant with an electricity capacity of 415MW and a steam of 587MW.

The plant will consist of three circulating fluidised bed boilers, and is expected to go online in 2015.

The Mongolian government will purchase the entire output produced from the plant under a 25-year power purchase agreement. The Ulaanbaatar city will use the steam produced for heating purposes.

A mix of debt and equity in a ratio of 75:25 will be used by the consortium to fund total cost of the project, which is expected to meet the rising energy demand in Mongolia.

International Power, Sojitz and Posco Energy each hold 30% stake in the consortium, while Newcom acquires a 10% stake.