MonSEFF |-Mongolian Sustainable Energy Financing Facility | favourable terms loans | reduce energy consumption

MonSEFF | Mongolian Sustainable Energy Financing Facility | favourable terms loans | reduce energy consumption Eligibility Requirements

Eligibility Requirements

It is important to note that to be eligible a project must result in:

  • A sustained reduction in consumption and/or cost of commercial energy, including fuel wood and charcoal, or,
  • The use of renewable energy that displaces in part or in full the energy demand of the site.
  • For new construction projects, the technology must exceed common market practices or the national building code.

Loans are only available for equipment intended for a facility in Mongolia owned by a private company registered in Mongolia and which:

  • Meet the lending criteria of the local bank;  
  • Are not involved in the production, marketing, distribution  of tobacco products, hard liquor, alcohol, gambling, arms manufacturing or any of the other industries or standards laid down by the EBRD;  
  • Comply with national Environmental Health and Safety legislation.

Energy efficiency projects:

  • Investments should result in energy savings of at least 15% (i.e. the piece of equipment or process involved must result in a specific reduction of energy consumption of at least fifteen percent (15%) as compared to the old equipment);
  • Investments should result in an IRR of at least 10%;
  • All equipment purchased should be new (although the EBRD may allow exceptions in some cases);
  • Investments should not involve trade in, or production of, ozone-depleting or asbestos-containing products;
  • Equipment being replaced must be disposed of and not placed on the resale market.

Renewable energy projects:

  • All loans must achieve a positive (> 0%) IRR;
  • All renewable energy investments must displace in part or in full the energy demand of the site.
  • Investment expenses that can be covered by a MonSEFF loan include equipment and hardware costs, installation services and works as well as commissioning costs.  No working capital costs other than those required to install the equipment are eligible. 
  • Minimum IRR = 10% for EE loans, and a positive 0% for RE projects; 
  • Loans not involving refinancing of existing loans; 
  • Loans not involving purchase of property or real estate; 
  • Maximum loan amount per project: USD 2.5 mln (larger projects will need to find additional sources of funding); 
  • Minimum loan amount: established by the partner bank; 
  • Dated, itemised receipts must accompany the final application; 
  • Equipment being replaced must be disposed of and not placed on the resale market.

The list includes:

  • Refinancing (or other displacement) of any existing loan or credit operation to the relevant sub-borrower;  
  • Second hand equipment – exceptions may be allowed subject to EBRD approval;  
  • Production or trade in products containing PCB or ozone depleting substances;  
  • Activities of exploitative nature, such as forced labour/harmful child labour;  
  • Production or trade in or use of unbounded asbestos fibres or asbestos-containing products.
     

Eligible enterprises shall not conduct business in the following activities:

  • Production or activities involving forced labor or child labor;  
  • Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements;
  • Any business relating to pornography or prostitution;
  • Trade in wildlife or wildlife products regulated under CITES;
  • Production or use of or trade in hazardous materials such as radioactive materials, unbounded asbestos fibers and products containing PCBs;
  • Cross-border trade in waste and waste products unless compliant to the Basel Convention and the underlying regulations.
  • Drift net fishing in the marine environment using nets in excess of 2.5 km in length;
  • Production, use of or trade in pharmaceuticals, pesticides/herbicides, chemicals, ozone depleting substances and other hazardous substances subject to international phase-outs or bans;
  • Destruction of Critical Habitat;
  • Production and distribution of racist, anti-democratic media;
  • Production or trade in Gambling, casinos and equivalent enterprises.