China has suspended the issuance of loan Mongolia to hydropower plants because of the Russian claims

China holds a loan of $1 billion Mongolia, designed for construction of power plant, Bloomberg reports, citing documents of the Mongolian government.

According to these documents, the reason was the concern of Russia in connection with the construction of the power plant on the Selenge river can harm the lake Baikal. China has frozen the funding of the project as long as on this issue there is no compromise.

According to Bloomberg, Mongolia plans to build a 103-meter dam, which is able to generate 315 megawatts of renewable energy. The purpose of the construction, in particular, the generation of additional electricity during peak periods, and reduce dependence on Russia and coal generation. Mongolia spends on import of Russian electricity to more than $25 million a year, the newspaper notes.

“This project, in our opinion, can really have a negative impact on the lake. We’ve said it and continue to talk to our partners in Mongolia. We expect that we will be able to find a mutually acceptable solution through bilateral contacts”, — quotes Bloomberg press Secretary of the Russian President, Dmitry Peskov.

In the Ministry “Kommersant” reported that Mongolia has not conducted an assessment of the impact of construction of HPP on the environment. “Under the agreement on cross-border cooperation partners to negotiate the construction of the facility. The documents that were provided (terms of reference regional environmental assessment, evaluation environmental and social impact), cause many questions. We want to engage with the international community — particularly the world Bank and UNESCO”, — the Ministry said.

About the concern of Moscow concerning the construction of Mongolian hydropower plant in April, wrote “Izvestia”. In particular, several sources in the government and leading energy companies told the newspaper that the plant will have an irreversible negative impact on the ecological state of lake Baikal.

The newspaper noted that Mongolia is not satisfied with the economic terms under which Russia supplies her electricity. Among the alternative options that the Russian side had planned to transfer to Mongolian, was considered, in particular, optimization of the cost of Russian energy to China (such a proposal was made “Inter”). “Rosseti” proposed to develop the network infrastructure, “RusGidro” — to update the schema of the network infrastructure of Mongolia, and “Hydroproject” — to abandon a hydroelectric power station on the Selenga in favor of CHP (combined heat and power) and PSPP (pumped storage power plant).