Russia stalls China’s $1 billion hydropower loan for Mongolia

• 8 years ago (2016-07-13)

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Mongolia is looking to build the 103 m high dam in order to ease its reliance on electricity from Russia and dependence on coal-fired generation. Every year, Mongolia spends $25 million on power imports from Russia.

Odkhuu Durzee, the director of the hydropower project, said in an interview in Ulaanbaatar: “We need to know if we are independent or just a marionette of Russia and China… if we give up it means the Western coalition will lose Mongolia as a supporting nation – the Mongolian people will know that we can do nothing without Russian or Chinese permission.”

During a meeting last week, Russian President Vladimir Putin told both the Mongolian President, Tsakhiagiin Elbegdorj, and Chinese President, Xi Jinping, that the proposed dam would create “serious risks” to the water supply in the Irkutsk region. He instead proposed “increasing the supply of energy” to Mongolia.

Mongolia’s foreign ministry has argued that, since the Eg river is fully within Mongolia, the dam is an internal issue and that they will seek other investors if the $1 billion put forward by Chinese Ex-Im bank falls through.