Completed Mixed AidData Chinese Aid

SFECO provides $26.5 million supplier credit for 12MW Durgun Hydropower Project

$26.5M USD

Funder	Bank of China (BOC)
Recipient Organization	China Shanghai (Group) Corporation for Foreign Economic and Technological Cooperation (China SFECO Group)
Country	Mongolia
Start Date	Aug 23, 2001
End Date	Jun 01, 2030
Duration	10,509 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`86164`

Grant Description

SFECO provides $26.5 million supplier credit for 12MW Durgun Hydropower Project On August 23, 2001, Shanghai Corporation for Foreign Economic and Technological Cooperation (SFECO) and the Government of Mongolia signed a $26.5 supplier’s credit agreement for the 12MW Durgun Hydropower Project. Bank of China provided the supplier's credit to SFECO, which then on-lent the funds to the Government of Mongolia.

📋 Loan / Grant Terms

📅 Maturity12.5 years

💹 Interest Rate2%

However, the IMF characterized the loan as ‘nonconcessional’. At the time that the loan was contracted, the IMF noted that is was worth 2.2% of Mongolia’s GDP.

The purpose of the project was to construct a 12MW hydropower facility on the Chono Kharaih River in the Durgun soum (detailed locational coordinates: 48.3262, 92.808).

Upon completion, the project was expected to generate an estimated 38,000 MWh of electricity per year and transmit the generated power to Bayan Ulgii, Khovd and Uvs provinces for commercial and residential purposes. The project was built in a narrow steep canyon of the Chono Kharaih River, 6km downstream from the Dalai-Kharus lakes.

It consisted of a 230 meter long earth-filled dam and an adjacent 60 meter long concrete gravity dam incorporating the powerhouse, a low-level outlet spillway, and fishway. The powerhouse was designed to accommodate 3 generating units each consisting of a 4MW Kaplan turbine.

The electricity generated by the power plant was to be dispatched to the grid (Myangad substation) by a 76 km, 110 kV transmission line. SFECO was the contractor responsible for implementation. Construction commenced on June 8, 2004 and ended on October 12, 2008. Commercial power generation began on January 7, 2009.

The project was officially handed over to the local authorities January 28, 2010 handover ceremony.

📋 Staff Comments

The Mongolian project title is Дөргөний усан цахилгаан станцыг барьж байгуулах төслийг or ДӨРГӨНИЙ УСАН ЦАХИЛГААН СТАНЦ. The Chinese project title is 蒙古都日根电站.
According to the Clean Development Mechanism (CDM), the 12MW Durgun Hydropower Project was financed with a Bank of China loan. For the time being, AidData assumes that SFECO obtained an export seller’s credit from Bank of China and then used the proceeds to on-lend to the Government of Mongolia. However, this issue requires further investigation.

📚 Sources & References

Дөргөний усан цахилгаан станцийг хүлээлгэн өгөв, Бага оврын усан цахилгаан станц, Эгийн гол-хөгжлийн гол, Дөргөний усан цахилгаан станц, ДӨРГӨНИЙ УСАН ЦАХИЛГААН СТАНЦЫН ТӨСЛИЙГ ХЭРЭГЖҮҮЛЭХ ЗАРИМ АРГА ХЭМЖЭЭНИЙ ТУХАЙ, ЗАСГИЙН ГАЗРЫН ТОГТООЛ (ЗАХИРАМЖ), ЗАСГИЙН ГАЗРЫН ТОГТООЛ
Mongolia—Letter of Intent
Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding
About SFECO
中国承建蒙古国都日根水电站竣工, Дөргөний усан цахилгаан станцийг хүлээлгэн өгөв, УЛСЫН ТӨСВИЙН ХӨРӨНГӨ ОРУУЛАЛТААР ХЭРЭГЖҮҮЛЭХ ТӨСӨЛ, АРГА ХЭМЖЭЭ, БАРИЛГА БАЙГУУЛАМЖИЙН 2004 ОНЫ ЖАГСААЛТ /ЗГ-ын 2004 оны 229-р тогтоолоор хүчингүйд тооцсон/ (ТӨСВИЙН ЭРХ ЗАХИРАГЧААР)
Validation Report Durgun Hydropower Project in Mongolia
Mongolia: First and Second Reviews Under the Poverty Reduction and Growth Facility
Mongolia: First and Second Reviews Under the Poverty Reduction and Growth Facility Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.