Russian objections halt $1bn Mongolian dam

A $1bn hydroelectric scheme in Mongolia has been put on hold over Russian fears that it could affect the water level in Lake Baikal in Siberia.

The Egiin Gol dam on the Eg River was to have generated 315MW of electricity, making Mongolia self-sufficient in power and reducing its reliance on coal-fired power stations. However Russia has expressed concerns that it could affect the water level in the lake, 580km downstream, which is already at its lowest level for 100 years.

Russia wants to see energy control of Mongolia. It becomes a political issue– Odkhuu Durzee, project director

China’s National Development and Reform Commission, the Export-Import Bank of China and the government of Mongolia announced on 23 June that they had placed a temporary hold on construction until an agreement could be reached with Russia.

The project, which includes a dam, was scheduled to begin construction later this year. According to Odkhuu Durzee, the director of the project, Mongolia was planning to spend $830m on the hydroelectric project and about $170m on a highway to the capital of Ulaanbaatar.

Durzee told Bloomberg that the decision was motivated by political rather than environmental concerns. He said: "We need to know if we are independent or just a marionette of Russia and China. If we give up it means the Western coalition will lose Mongolia as a supporting nation – the Mongolian people will know that we can do nothing without Russian or Chinese permission."

He suggested that Russia wanted to maintain its export of electricity to Mongolia, worth around $25m a year, as a way of exerting control over the government. He said: "Russia wants to see energy control of Mongolia. It becomes a political issue.

The power lever is in Russian hands. Anytime we are stop listening, we have a fear they will shut off the power, especially in winter."

However, a 2014 Unesco study into the possible impact of the dam, as well as two other hydro schemes under consideration, could have "significant potential impacts and should be further assessed".

The Egiin Gol is located on the river Eg, which is a tributary of the Selenge, the main feeder for Lake Baikal.

Unesco also investigated the Shuren hydropower plant project, 360km from of the lake on the Selenge, and a plan to transfer water from the Orkhon, another tributary of the Selenge, to the Gobi desert for irrigation.

Greenpeace has reported that people living around the shores of Lake Baikal have lobbied the Russian federal government to try to stop the Egiin Gol dam, as well as the other two schemes.

According to the environmental watchdog, people from Buryatia Republic, located to the east of the lake, have requested that World Band and the Mongolian and Chinese governments do not to approve any dams planned for the Lake Baikal basin. They argue that they may threaten biodiversity of a world heritage site and their livelihoods.

At a meeting in June with Mongolian President Tsakhiagiin Elbegdorj and Chinese President Xi Jinping, Russia’s President Vladimir Putin said the dam would create "serious risks" to the water supply in the Irkutsk region. He proposed "increasing the supply of energy" to Mongolia.

In 2015, a $100m contract was awarded to China Gezhouba Group to build access roads and bridges to the Egiin Gol site.
Lake Baikal is thought to be 25 million years old and 1,700m deep, making it the oldest and deepest lake in the world. It contains 20% of the world’s unfrozen fresh water.

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