Mongolia Energy Crisis Deepens Amid Delays and Murky Power Plant-5 Project
- Amar Adiya
- Aug 26, 2025
- 3 min read
A murky tender for a critical energy project challenges Mongolia’s anti-corruption drive.
Almost half of Mongolia lives in Ulaanbaatar, the world’s coldest capital, where winters hit –30 °C.
Heat and power still come from aging Soviet-era plants—some from the 1960s and ’80s—prone to breakdowns and occasional fires, leaving the city shivering every winter.
Another winter is coming, and the capital’s energy security again rests on a project that has existed more on paper than in concrete: Power Plant-5.
For 14 years the plant has been promised, delayed, revived and shelved. Each failed deal has left Mongolia more dependent on imported electricity, mainly from Russia, now with China (Inner Mongolia) positioned as the backup supplier when shortages in Ulaanbaatar bite.
The Power Plant-5 phantom project has become shorthand for something larger—Mongolia’s inability to execute critical infrastructure without politics derailing the process.
The latest plan is a $658 million public-private partnership. If built, the plant would deliver 300 MW of power and enough heat to replace 51,000 coal stoves in Ulaanbaatar’s ger districts, easing both smog and household hardship. On paper, it could be a breakthrough. In practice, the tender already looks compromised.
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