🏭 TAVANTOLGOI POWER PLANT | GROWING CORRUPTION | XACBANK ON SECONDARY MARKET

POWERED BY

Greetings! We have a question to ask!

🏭 TAVANTOLGOI POWER PLANT PROJECT MOVES FORWARD

Mongolia’s energy minister said last week that the Tavantolgoi thermal power plant project tender would be launched soon, and the winner would be announced by autumn.

The project, which has a capacity of 450 megawatts (MW), is expected to meet the electricity demand of Oyu Tolgoi (OT), the country’s largest copper mine, and other mining ventures in the south.

• OT consumes about $100 million worth of electricity a year. That figure is set to double as the mine ramps up its underground operations.

• Last year, the copper venture signed a long-term power supply agreement with Mongolia’s national grid, paving the way for the construction of the Tavantolgoi plant.

The project will cost $808 million, of which 30% will come from Erdenes Tavantolgoi, the state-owned coal miner that owns the Tavantolgoi deposit, and 70% will be financed by government-guaranteed loans.

The plant will be built in two phases: 300MW followed by 150MW. The first phase will require about $600 million, of which 70% will be funded by the successful bidder and 30%, or $180 million, will be paid by Erdenes Tavantolgoi over three years.

The project is expected to bring significant economic benefits to Mongolia, such as:

• Saving about $120 million a year that currently goes to China for importing 2.2 billion kilowatt-hours of electricity for OT.

• Generating about $34.5 million in annual tax revenues for the central and local governments.

• Developing the strategic mineral resources of the Gobi region.

The Tavantolgoi thermal power plant project has been delayed twice in the past due to procurement issues, but it is now finally moving forward.

📊 DATA STORY: TRADING VOLUME OF SECURITIES COMPANIES

In the first 5 months of 2023, the trading volume of securities companies on the Mongolian stock exchange increased by 94.7% compared to the same period in 2022. Top 10 securities companies accounted for 95.6% of this trading volume, with BDSec securities accounting for 38.1%. Of BDSec's trading volume, 90.6% was made up of primary market trading, which was related to the IPO of Khan Bank.

🙈 CORRUPTION CASES RISE BY A SIXTH IN MONGOLIA

The number of corruption cases registered by Mongolia’s anti-graft agency increased by 16.3% to 1,520 last year amid a national reckoning on power abuse and opportunity costs of the country’s corruption habit.

The Investigation Department of the Independent Authority Against Corruption said that 55.9% of the cases involved officials who abused their power and position, up from 45.3% in 2020. The crime of receiving a bribe accounted for 13.2% of the cases, while bribing a public official and unjust enrichment, money laundering and misuse of public funds made up 7.6% and 23.3% respectively.

The corruption crimes caused damages of ₮5.2 trillion ($1.5 billion), five times more than in 2020. This is equivalent to twice the annual budget of the Ministry of Education and Science, and 2.5 times the market capitalization of Khan Bank, the country’s largest lender.

The anti-corruption agency said it had recovered 46.2% of the total damages, or ₮2.4 trillion, compared with 9.6% in 2020.

According to Transparency International, Mongolia ranked 116th out of 180 countries in its Corruption Perceptions Index last year, down six places from 2020, while the poverty rate hovers around 30% – a staggering figure that hardly changed over the past two decades.

The government has launched an anti-corruption campaign that includes whistleblower protection, repatriation of illicit funds and disclosure of public spending. Several high-profile corruption cases, such as coal smuggling and bank bribery scandals, have been sent to trial amid public pressure. However, analysts have urged the authorities to focus more on systemic solutions to curb corruption.

🏃 QUICK STORIES

🔵 The Mongolian Government amended the budget to increase spending by ₮1.89 trillion. The budget adjustment measures encompass a range of areas including salary and pension increases, targeted social benefits, and the implementation of 21 projects aimed at addressing Ulaanbaatar's traffic congestion issues. The finance minister highlighted that the budget deficit for 2022, originally at ₮2.4 trillion, has been significantly reduced by ₮1.5 trillion to reach ₮980 billion through this budget amendment.

🔵The Speaker of Mongolia’s parliament, G. Zandanshatar, is undertaking an official visit to the Russian Federation from the 18th to the 22nd of this month. This visit is in response to an invitation extended by the Chairman of the State Duma of Russia. The discussions will cover diverse topics such as trade, economy, education, culture, and the expansion of humanitarian relations between both countries.

🔵XacBank (XAC) has commenced trading through a secondary offering of shares on the Mongolian Stock Exchange. The bank recently conducted a successful IPO, generating ₮41.8 billion in subscriptions. Its newly listed shares closed at ₮665.9 last week, slightly below the IPO price. With this development, all five of Mongolia's systematically important banks have transitioned into public companies, contributing to the remarkable achievement of the Mongolian stock market surpassing a market capitalization of over ₮11 trillion for the first time in history.

🔵The Ministry of Foreign Affairs hosted the 8th Ulaanbaatar Dialogue on Northeast Asian Security international conference from June 15 to 16. Besides the Northeast Asian countries, more than 200 representatives from 30 countries and international organizations participated in the conference. The conference discussion covered a wide range of topics, such as the Korean Peninsula issue, humanitarian cooperation, security, food, agriculture, energy, tourism, natural disaster, and green economy.

⭐ WATCH: NAADAM in MONGOLIA 2022 Vlog

Partnership Inquiries:
Place an ad

Editor: E. Zolbayar
Writer: A. Purevjargal & A. Bilguun

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be and does not constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.