A Cold Reality for Mongolia’s Energy Sector

As winter approaches, Mongolia is on the brink of a critical decision: continue propping up its heavily subsidized energy sector or impose substantial tariff hikes to confront the looming financial crisis. The government plans to raise electricity and heating prices this winter, a move that could either stabilize the sector or spark widespread discontent.

Mongolia’s energy sector has long been underfunded, primarily due to state subsidies that have stifled private investment.

Today, the country produces just 80% of its own electricity, relying heavily on costly imports from Russia and China to make up the shortfall. With energy consumption growing by 6-7% annually, this dependence makes Mongolia vulnerable to fluctuating prices and external political pressures.

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