Ulaanbaatar’s Power Plant Test

Half of Mongolia lives in Ulaanbaatar, a city that shivers through winters of minus 30. Heat and light come from Soviet plants built in the 1980s, now prone to breakdowns and even fires. 

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 new Ulaanbaatar power plant (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.

One shortlisted bidder, MiTime International, has been accused of filing dubious paperwork and conflicting signatures in earlier projects. Public records about its experience are patchy: some reports depict a flimsy operator, others describe a company that has completed energy projects in Mongolia and localized its operations. The contradictions raise an obvious question: are these red flags genuine or planted by rivals in a high-stakes contest?

That ambiguity is precisely the problem. Mongolia’s tendering system is opaque enough that rumor and fact blur. The public cannot tell whether corruption is being exposed or allegations are just another weapon.

Officials may argue they have little choice but to press forward. Decades of frozen tariffs have starved the sector of investment, and every winter deadline adds pressure to get something or anything built. 

But cutting corners in the name of speed risks repeating the same cycle: projects mired in dispute, investors deterred, and Mongolia locked into costly imports.

The government’s real test is to prove that speed and integrity aren’t mutually exclusive. A clean tender, defensible even by the losers, would be a departure from the habits that doomed Power Plant-5 for over a decade. Anything murkier would show that reform pledges remain talk.

The politics around the project are just as brittle. Ulaanbaatar’s mayor, Nyambaatar, oversees the tender. Once close to former Prime Minister Oyun-Erdene, he is now exposed under new premier Zandanshatar. A transparent outcome could salvage his standing and strengthen the government’s reform story. A flawed one would likely cost him his job and deepen Mongolia’s reliance on Russian electricity—with Beijing waiting in the wings as an emergency supplier.

There are hints of another path. In Umnugovi province, local authorities won the Cabinet approval to issue 500 billion MNT ($139m) in bonds for a 50 MW thermal plant, backed by their own revenues. The project is smaller, but the model shows how provinces can push past Ulaanbaatar’s paralysis with cleaner financing structures.

Power Plant-5 is an example of whether Mongolia can discipline its politics enough to deliver what its people need. And whether governance failures will leave the country dependent, exposed, or in the cold.