China’s Foreign Minister Wang Yi signed signed major energy agreements, including a pledge to advance the Erdeneburen hydroelectric power plant during a two-day state visit to Mongolia in early this month. This was Wang’s fourth official visit to Mongolia since he became foreign minister of China in 2013.

The 90-megawatt Erdeneburen hydroelectric power plant, which is planned to be Mongolia’s biggest dam, is part of Ulaanbaatar’s effort to diversify its energy sources. Mongolia’s energy dependency on Russia and China – and the constant shortages and problematic management – have caused a headache for different administrations for decades.

In September 2021, Mongolia signed a deal awarding construction of the hydropower plant to the Power Construction Corporation of China, with the deal to be financed through a USD 1 billion loan from the Chinese government. In January 2022, Mongolia’s Minister of Energy N.Tavinbekh stated that construction would begin in March and take just over five years.

The Erdeneburen hydroelectric power plant is promising and a potential game-changer.