Welcome to this week’s CMM Capital.

Tsetsens Mining and Energy (TME) has opened 2026 with a notable milestone: a US$300 million senior secured bond, listed on the Singapore Exchange (SGX). For Mongolia’s external debt market — long characterized by sovereign and bank-led issuance — this represents an important evolution. The deal shows that a privately sponsored, contract-backed infrastructure asset can raise offshore capital on its own.

The transaction follows closely behind renewed sovereign activity, with the Government of Mongolia returning to international markets to refinance upcoming maturities. Final sizing and coupon pricing are expected to be announced later this week.

Together, these transactions suggest a maturing external funding landscape — one where corporate and project-level credits are beginning to stand alongside traditional sovereign issuance.

Grab your coffee— and let’s unpack the asset, the ownership, and the structural features underpinning the deal — and assess what this landmark bond means for Mongolia’s private infrastructure financing framework.

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Tsetsens Mining and Energy LLC (TME) has quietly executed the first Mongolian corporate bond transactions of 2026. A US$300 million 11.375% senior secured issuance due 2031, listed on the Singapore Exchange (SGX).

For a market where offshore funding has historically been dominated by sovereign, quasi-sovereign and banks, the transaction signals a different credit story and raised immediate questions. Who is the issuer? How robust is the credit structure? And what does this transaction signal about Mongolia’s evolving project finance landscape?

We unpack the asset, the ownership, and the structural features underpinning the deal.

At the center of the credit narrative sits the Buuruljuut Power Plant — a 600 MW coal-fired thermal facility located approximately 120 kilometers southeast of Ulaanbaatar in Tuv Province.

The project is positioned as a national energy-security asset. Once fully operational, it is projected to supply:

In a country facing recurring winter peak shortages and structural generation deficits, incremental baseload capacity of this magnitude materially strengthens grid reliability and reduces import dependence.

Scale alone, however, does not make a bankable project. Structure does.

The development is structured across two phases, comprising four 150 MW generating units. Engineering, procurement, and construction (EPC) responsibilities rest with Sinosteel Equipment & Engineering Co., Ltd under a fixed-price, date-certain contract — a critical risk mitigant in frontier markets where cost overruns can rapidly erode project economics.

Phase 1 (Blocks 1 & 2) has already transitioned into operations:

With Phase 1 online, the project is no longer purely a construction story; it is generating contracted revenues.

Phase 2 (Blocks 3 & 4) began construction in April 2025.

The staggered commissioning schedule aligns capacity ramp-up with demand growth while moderating execution risk.

One of the project’s defining features is its vertically integrated fuel model. The power plant and the Buuruljuut coal mine are owned by the same issuer.

The mine holds JORC-standard approved thermal coal resources of approximately 6.8 billion tons. Within its active licenses, 298 million tons of confirmed reserves are available sufficient to fuel the plant for more than three decades at full four-block capacity.

The plant requires approximately 3.0–3.1 million tons of coal annually when fully operational.

Logistics further strengthen the model: the mine is located just two kilometers from the plant, and coal is transported via a dedicated 1.8-kilometer conveyor belt system. This eliminates trucking exposure, reduces operating costs, and insulates the plant from external supply chain disruptions — a non-trivial advantage in Mongolia’s harsh winter environment.

From a credit standpoint, long-term reserve life combined with physical proximity translates into exceptional fuel supply visibility.

Following TME’s landmark corporate issuance, the Government of Mongolia has signaled its own return to the international bond markets with plans for a new six-year USD-denominated sovereign bond. Proceeds are expected to focus on refinancing near-term maturities and managing outstanding notes, reinforcing a proactive liability management strategy.

Beyond routine refinancing, the transaction will serve as Mongolia’s first sovereign benchmark of 2026 — setting the tone for pricing, investor appetite, and broader market access for quasi-sovereign and corporate issuers in the year ahead.