FUNDING FOR THE THERMAL POWER PLANT NO. 5 PROJECT HAS COMMENCED THROUGH MUNICIPAL BOND ISSUANCE

 

As part of the financing for the strategically significant Thermal Power Plant No. 5 project, a key infrastructure development for Ulaanbaatar, the primary market trading of the Municipal Bond was officially launched today, marked by a bell ringing ceremony. Attending the event were L. Khosbayar, Chairman of the Board of UBIM, L. Erdenebadrakh, Member of the Board and Head of the City Finance and Investment Department, and G. Gangamurun, Chief Executive Officer.

In accordance with the 2026 State Budget Law of Mongolia and the Debt Management Law, the maximum amount of municipal securities was approved at MNT 275 billion. Under this framework, it was decided to finance the Thermal Power Plant No. 5 project through MNT 200 billion in domestic bond proceeds.

Under this issuance:

3-year tenor

14% annual interest rate

Face value of MNT 1 million per bond

200,000 municipal bonds have been opened for public offering and trading

The project is being implemented under a public private partnership framework, and an agreement has been signed with Mitime International. The total projected cost of the project is USD 658.5 million. Of this amount, the city’s financing responsibility is 20%, equivalent to USD 131.7 million, and the first tranche of financing for 2026 is now being secured through this bond issuance.

The plant is scheduled to be constructed within 30 months, and once commissioned, it will create a major and reliable supply source to provide:

Electricity to 100,000 households

Heating to 40,000–50,000 households

This financing solution represents a concrete step toward supporting the city’s strategic infrastructure projects through capital market based solutions, establishing a stable long term funding source, and accelerating the implementation of public private partnership projects.