Mongolia Mining Energy Fund: captive power for mines under long-term lease

Mongolian mines face expensive, coal-heavy and increasingly unreliable grid power, or they run diesel. Captive renewables plus storage solve the cost and the carbon problem at once, but mines will not put capital into assets that are not their core business, and grid-connected projects in Mongolia stall on tariff approval, dispatch agreements and curtailment risk.

The Mining Energy Fund removes both obstacles. The fund's project companies own the generation and storage assets, build them behind the meter at the mine, and lease them to the mining company under a 20-year finance lease with transfer at end of term. The mine commits no capital and pays a lease indexed at roughly 2% a year. Because the assets are off-grid and behind the meter, there is no power purchase agreement with the dispatch centre, no tariff approval, no grid connection risk and no curtailment. Due diligence collapses to two documents: the lessee's credit and the lease.

The pipeline is real, not theoretical. The first transaction is at term sheet: 12 MWp of solar and a 4 MW / 16 MWh battery at Mongolchekhmetall, covering 59% of its consumption, USD 13.2M capex, Envision as EPC and operator, Sinosure-wrapped Chinese senior debt. Behind it sit storage projects in Dundgovi, and a 100 MW captive platform for Gobi data centre load.

NovaTerra structured Mongolia's first grid-scale battery, 50 MW / 200 MWh at Baganuur, built in 77 days, and developed the country's first wind farm, raising USD 120M from EBRD, FMO and GE.

We are seeking anchor limited partners, co-investors at project level, and DFI or ECA debt partners. Target returns are indicative and not guaranteed.