Each citizen to get land compensation of 15 million MNT under Erdeneburen project
During the parliamentary plenary session on April 8, Minister of Energy N.Tavinbekh presented on the construction process of the Erdeneburen hydropower plant and other relevant measures.
Power Construction Corporation of China Ltd and PowerChina Chengdu Engineering Corporation Limited were selected to construct the 90-megawatt Erdeneburen hydropower plant and signed a turnkey contract with the Ministry of Energy on September 17, 2021.
Minister N.Tavinbekh informed that the contractors are preparing to begin construction this year. With a soft loan from the Chinese government, the construction is planned to be completed in 2026, with the plant opening in 2027. In specific, the government of Mongolia’s Resolution No. 160 of May 30, 2018 included the hydropower plant’s construction in the list of projects to be implemented with a 1 billion USD soft loan from the Chinese government. The total estimated cost of the project is 271.48 million USD, according to the minister.
The Erdeneburen hydropower plant is expected to produce 366 million kWh of electricity annually and supply energy to the Altai-Uliastai regional power grid. With the commissioning of the Erdeneburen hydropower plant, the western region will be able to use energy that is seven to 10 times cheaper than the energy imported from
Russia and China.
Its detailed environmental impact assessment report was developed by a professional organization and reviewed by the Professional Evaluation Council of the Ministry of Environment and Tourism on May 21, 2021. The council’s recommendations were reflected in the assessment report and approved on November 2 last year.
The energy minister reported that a 24-kilometer-long and four-kilometer-wide reservoir required for the plant will be built on 9,871.1 hectares of land acquired for special state needs. Currently, 270 households live in this area designated for the reservoir. The environmental impact assessment report, in particular, stated that 125 households living on the eastern bank of Khovd River in Umnugovi soum of Uvs Province, 145 households living on the western bank of the river in Bayannuur soum of Bayan-Ulgii Province, and 206 sets of historical and cultural monuments in 84 locations need to be relocated.
Expenditures for relocation of households, their compensation and relocation of historical and cultural monuments are planned to be included in the state budget from 2022 to 2025. Particularly, in accordance with the 2022 state budget, a total of 91 households will be relocated this year, Minister N.Tavinbekh underscored.
He also highlighted that as most of these households do not have land ownership or ownership certificates, it is difficult to value their land and set compensation at the same rate under the current law.
On April 6, Cabinet decided to provide compensation equal to the 36-month minimum wage to each member of the affected 125 households in Uvs Province and 145 households in Bayan-Ulgii Province.
Moreover, the government plans to improve the livelihoods of herders, prepare new irrigated fodder plantations and pastures according to international experience, and create opportunities for small and medium enterprises based on specific proposals from herders, Minister N.Tavinbekh further explained.
During the session, parliamentarian Ts.Davaasuren
commented that the project is expected to fully satisfy the domestic energy demand of the western region, which is currently 90 percent dependent on Russian imports. He pointed out that one of the downsides is that the cost of generating electricity at the Erdeneburen hydropower plant is two to three times higher than the world standard.
The energy minister responded, “There are no fixed figures for capital investment costs for a hydropower plant. If the cost of one MW produced exceeds 3.6 million USD, it is considered economically unprofitable. The cost per MW varies depending on the environment and plant capacity. The Erdeneburen hydropower plant is profitable based on international estimations. Moreover, the feasibility study indicates that the price of one kWh of energy will be 5.6 cents. The cost of transmission and distribution is expected to be added to this. The total cost is estimated at 1.7 cents. However, the Energy Regulatory Commission will determine the price rate the electricity will be delivered to consumers.”
Lawmaker D.Ganbat emphasized, “It was said that each household would receive an average of 15 million MNT in compensation. But the energy minister has just said something contradicting. Which law governs intangible compensation? How was the compensation amount determined? It would take an average of 70 billion to 80 billion MNT to give 15 million MNT to every member of 270 households as compensation.”
“Compensation will be offered to 1,251 people from 270 households. Under the current law, in addition to relocation costs, compensation will be provided based on the property value. However, the amount of compensation was too low according to this calculation. For instance, these herders would receive 270,000 MNT to 10 million MNT respectively. Therefore, in order to increase the amount of compensation, the government has decided to provide around 15.1 million MNT to each citizen,” the energy minister answered.
Legislator B.Purevdorj summarized that each household will receive an average of 120 million to 150 million MNT in compensation and that with the Erdeneburen hydropower plant, five western provinces will be fully supplied with electricity and Khovd Province will be connected to the power grid.