Article / 23 Oct, 2017
Mongolia Technology Review Opens Way to Cut Emissions

UN Climate Change News, October 23 - Mongolia is opening new energy efficiency and renewable energy opportunities for its small companies at the same time as encouraging greater business participation by women, thanks to a UN-sponsored review of the country’s technology needs.

The results of this Technology Needs Assessment (TNA) led to the Green Climate Fund contributing USD19.5 million for Mongolia’s XacBank to extend its existing USD40 million business loan programme helping local companies cut their greenhouse gas emissions.

The project also stresses the important role of women in driving low-emission business opportunities and at least half of the financial support will go towards enterprises led by women, a good example of how a country’s climate action and sustainable development goals can combine for stronger results.

 “The increased involvement of women should mean a higher probability of effective climate finance”, said Amartuvshin Hanibal, President of XacBank. “Statistics show women have a lower probability of default of loans, while our anecdotal observations indicate women-led businesses tend to be more accurate, risk averse and better planned”.

The project is expected to reduce greenhouse gas by almost 150,000 tonnes of carbon dioxide (CO2) each year, resulting in cleaner air and reduced related health impacts from fossil fuel pollution. It will decrease total national energy consumption, with the aim of lowering energy prices for consumers.

The programme will also contribute to the country’s national climate plan (nationally determined contribution) under the Paris Climate Change Agreement, which has a goal of reducing its greenhouse gas emissions by 14% by increasing renewable electricity generating capacity and energy efficiency.

At this year’s COP 23 UN Climate Change Conference in Bonn, more technology needs assessment success stories will be presented, with the opportunity to engage with practitioners and learn about their experiences in the field. Find out more.

How Does an Assessment Work?

By undertaking a TNA, a country gets a clearer understanding of its climate technology needs so it can determine how best to accelerate is own low-emission, resilient and sustainable development.

Mongolia participated in a global technology needs assessment project funded by the Global Environment Facility and implemented by the United Nations Environment Programme with the Technical University of Denmark Partnership.

Since 2001, more than 80 developing countries have conducted TNAs to address climate change. Other key actors supporting TNA work include the UNFCCC Technology Executive Committee, the UNFCCC Climate Technology Centre and Network, and the Green Climate Fund

Joining the Clean Technology-Development Dots

In this case, the study found that in Mongolia, small businesses make up 90% of all companies and many use outdated and inefficient technologies. With air pollution on the rise, it identified the potential social, economic and environmental benefits that could arise by encouraging such businesses to use low-emission technologies.

It also found that high investment costs made it difficult for small business to access energy efficient and renewable energy technologies. This was a key challenge to accelerating sustainable development.

Based on the recommendations from the assessment, XacBank then took the initiative to address this barrier to access technology by submitting a proposal to the Green Climate Fund to support investments by micro-, small- and medium-sizes enterprises in energy efficient and renewable energy technologies.

This means Mongolian enterprises can afford to adopt enduring, low-carbon business models and help alleviate the current prevalence of high financing costs and relatively short-term loan periods.

Mongolia’s technology needs assessment is also leading to other examples of action on the ground. Through the assessment, it identified solar photovoltaic as one of the key priority technologies.

Earlier this month, the Green Climate Fund approved another XacBank proposal of almost USD 9 million for financing a 10MW solar power plant. This project aims to reduce Mongolia's over-reliance on fossil fuels for power generation and help reach the government's nationally determined contributions of 30% of electricity capacity sourced from renewable energy by 2030.

More on technology needs assessments here.