BCM Eneregy & Environmnet Working Group Meeting, 15 Sep 2016

1. Business Council of Mongolia
www.bcmongolia.org
1
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

2. Business Council of Mongolia
www.bcmongolia.org
2
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.

3. Business Council of Mongolia
www.bcmongolia.org
3
- 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.