Mongolia is positioning itself as a global data centre hub, signing agreements for 863 megawatts of data centre capacity on the sidelines of a United Nations conference on desertification that brought 197 delegations to Ulaanbaatar this month. The move to attract data centre investment was the most concrete economic outcome of the 12-day COP17 conference of the UN Convention to Combat Desertification, where delegates are discussing how to restore land degraded by climate change. According to Deputy Prime Minister Togmid Dorjkhand, Mongolia has three main competitive advantages: cheap renewable energy, a cold climate that reduces cooling costs, and a vast land area and stable legal framework.
"We have a lot of energy generation potential, above the ground and under the ground and we have all kinds of deposits, uranium and coal and other resources," Togmid told Euronews. "And yes, we are a very cold country, eight months a year are very cold. Cold weather is important for the data centres because they need a lot of cooling, so the colder the weather the more you save on cooling." "There is a third reason, that we are a democracy, we are governed by law and not by a person or a party.
We have a strong legal environment that protects the investors,” Togmid said. Togmid told Euronews energy costs for data centres in Mongolia would be below 4 cents per kilowatt-hour — compared with 14 to 16 cents in the US — and that grid connection could be delivered within 24 months. He said investors could expect returns of around 18%.
"We are 40% cheaper than other countries," he said. The high-level investment event, "Sovereign by Design – Mongolia’s Green AI Data Centre Initiative," was opened by Mongolian Prime Minister Nyam-Osor Uchral. Digital Development, Innovation and Communications Minister Chinbat Nomin presented Mongolia’s investment opportunities in green data centres, while Deputy Prime Minister Togmid delivered the closing remarks.
"We offer more than just natural resources, we offer safety and data sovereignty," Chinbat told investors. "Once you store data it is secure and the data connection is also sovereign and secure." "We hope that Mongolia will become a data centre hub, especially for those who wish to serve one of the largest markets, China, but keep the data outside China." Ten memoranda of understanding were signed at the event, Minister Chinbat said. The government has drafted a Data Law and a strategic framework called "Sovereign by Design," built around three pillars: energy sovereignty, network sovereignty and legal and regulatory sovereignty.
The government has said it is not seeking to build and operate data centres itself, but to create the conditions for domestic and international investors to do so. Up to $2 billion in financing is available for eligible green and renewable infrastructure projects. The government said it had benchmarked its investment framework against those of 26 countries.
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