Hello friends 👋
Welcome back to CMM Capital, your guide to uncovering alpha across Mongolia’s fast-evolving markets.
This week, we turn to one of the most transformative and overlooked drivers of long-term value: energy sector and its missing piece in the current environment grid-scale storage. The country has vast renewable energy potential and as the new build-out, the structural gaps in its coal-dominated grid are creating a rare window for investors to step into a new asset class with strong fundamentals, multilateral backing, and clear long-horizon upside.
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⚡ Mongolia’s Energy Shift: Why Grid-Scale Storage is essential
As Mongolia's fixed-income market matures, a parallel transformation is unfolding in the energy sector—one that presents a powerful new frontier for infrastructure and project finance investors. While the nation’s power grid has long been dominated by coal, the accelerating push toward renewables is exposing structural gaps and, in turn, creating compelling, large-scale investment opportunities.
The central challenge is that Mongolia's grid, while reliable for its sustainable for its current needs, is not designed to handle high penetration from variable renewable sources like wind and solar. This is where grid-scale storage and operational flexibility emerge as the critical missing piece to unlock the country’s green energy potential.
Why Storage and Flexible Generation Matter?
Grid-scale storage, particularly Battery Energy Storage Systems (BESS), offers both technical and economic solutions:
Technical Role: Storage helps in energy shifting (charging during high renewable output and discharging during peaks), provides stability services (frequency regulation, inertia), supports ramping (managing solar and wind variability), and enables peak shaving (reducing reliance on inefficient coal plants).
Economic Role: By reducing the need for coal plant cycling, storage leads to cost deferral and lower system costs. It also builds higher investor confidence by lowering curtailment risk, which in turn enables better financing terms. Furthermore, storage creates multiple revenue streams through capacity payments, ancillary services, and arbitrage, while also contributing to reduced fuel costs and emissions.
Emerging Mongolian Projects
Several major initiatives are already signaling Mongolia’s shift toward storage and grid reinforcement:
ADB’s First Utility-Scale Energy Storage Project:
A 115 MW solar + 65 MW / 237 MWh storage project across Western and Eastern systems.EBRD’s Renewable Auction and Strategy Framework:
A new MoU between Deputy PM Togmid Dorjkhand and EBRD First Vice President Jürgen Rigterink positions the EBRD to help Mongolia launch competitive solar auctions, starting with at least 100 MW by end-2025. The partnership also supports the government’s plan to add around 500 MW of renewables by 2028 and develop the required grid upgrades. In parallel, the EBRD will work with the Ministry of Energy on a sector-wide strategy aligned with Mongolia’s Paris Agreement goals, strengthening long-term clarity for investors.
World Bank’s Fourth Energy Sector Project:
A major upgrade to Mongolia’s grid, including a new 220 kV transmission line, which will expand transmission capacity by roughly 590 MW and integrate an estimated 150 MW of additional wind and solar generation.
These initiatives are reducing first-mover risk and building the foundation for a storage and flexibility market that was previously dominated by coal.
As Mongolia pivots toward a flexible, low-carbon system, early movers in storage and grid-support assets are positioned to capture significant value. This transition opens up a new asset class for infrastructure investors, with opportunities for project financing in ESG-aligned investments that offer diversified revenue streams and risk-adjusted returns.
Only 2 Days Left Until the Mongolia Investment Forum: Singapore 2025
Following the success of its inaugural edition, the Mongolia Investment Forum is back in Singapore!
Taking place in just 2 days, this year’s Forum will once again bring together Mongolia’s leading corporates and financiers with the vibrant regional investment community.
The CMM team is excited to be in Singapore this week and looks forward to connecting, sharing insights, and exploring opportunities with you all. Whether you’re attending the Forum in person or following along virtually, we can’t wait to welcome you and showcase the latest from Mongolia’s dynamic investment landscape.
See you soon in Singapore!
📅 Date: November 20, 2025
📍 Location: PARKROYAL COLLECTION Pickering, Singapore
💡 Here are some of our recently published CMM Insights:
