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GDF SUEZ has announced, together with its consortium partners, that its preferred bidder status for the combined heat and power plant CHP5 in Ulaanbaatar, the capital of Mongolia, has been confirmed. A Memorandum of Understanding has been signed with the new Mongolian government allowing the consortium to begin talks on project agreements.

Following financial close the consortium will build and operate a coal-fired CHP plant with an electricity capacity of 415MW and a steam capacity of 587MW. The plant will have three circulating fluidised bed boilers that use efficient pollutant control measures to significantly reduce emissions of particulates.

The entire output from the plant will be purchased by the Mongolian government under a 25-year Power Purchase Agreement. The steam produced will be used for city heating in Ulaanbaatar.

The new plant will support the rising energy demand in Mongolia, which is largely driven by the mining sector and the abundant supply of natural resources, together with a growing population.

The current size of the Mongolia electricity market is 856MW and the GDP growth is expected to be on average ca. 15% in 2012 - 20131.The consortium comprises GDF SUEZ (30%), Sojitz Corp (30%), POSCO ENERGY (30%) and Newcom LLC (10%).Background on consortium partners:

• Sojitz Corporation: Japan's sixth largest trading corporation
• POSCO ENERGY: South Korea's largest private power producer
• Newcom LLC: leading Mongolian conglomerate

The Asian Development Bank (ADB) advised the Government of Mongolia in structuring the 450-megawatt combined heat and power plant as a public-private partnership (PPP).The projected cost for the project was $US650 million.Source: GDF Suez & ADB