Energy Performance Contracting for Residential Retrofitting in Ulaanbaatar City

The NSP intend to drive transformational, sustainable and replicable change in the areas of EE finance and policy. By treating energy savings as energy generation, the NSP helps trigger utilities to reconsider their business model and leads GoM to review the current subsidies scheme. The physical component of the NSP creates an immediate demand for ESCO services. ESCO and policy-makers work towards development the industry. It will leverage the financial contribution of all key stakeholders including the GoM which plans to retrofit 24 residential buildings in 2019 and households which will finance a portion of the retrofits and conserve energy. The NSP size, of EUR 18 million, will allow the retrofitting of 35% of the total building stock and will be the first of 3 phases to extend the retrofitting to the total precast building stock. Total estimated investment needed for NSP preparation and implementation amounts to approx. EUR 65 million; total requested funding from the NAMA Facility is EUR 18.38 million, including EUR 380.17 thousand for the Detailed Preparation Phase (DPP). Once EPC model is set-up after the NSP and tariff reform is triggered, retrofitting of the remaining 702 blocks will be financed by the private sector and ESCOs without the need for additional financial support from other sources. Through Component 2 of the NSP, an annual 1,351 MWh/year of heat loss is expected to be saved, which is equal to 96,891 tons direct CO2 emissions, with a 10 years cumulative saving of 775,128 tCO2e. The establishment and development of an ESCO market through successful implementation of the support mechanisms in Components 1 and 3 will allow for future increased GHG emissions’ mitigation through the multiplication of EE projects.