MONGOLIA: Cost Benefit Analysis (CBA) Project selection

Team members present at the training: Ms.Tsendsuren Batsuuri, Ministry of Environment and Green

Development, Ms.Erdenetsetseg Baasandai, Institute of Meteorology,

Hydrology and Environment Ms. Munkhtsetseg Zorigt, Mongolian National University

Capacity Building Program on the Economics of Climate change adaptation2nd Regional training, Bangkok, Thailand

1st October 2013

Case 1: Overview of Selected Project for Agriculture

Project Name: Introducing water-efficient irrigation technology (for farmers who grow seabucktorn and blueberries ) in Kharkhiraa river basin in Uvs province

Alternative scenario: (1) continue with current practice

Case 1: Current situationCanal irrigation system

Current irrigation practiceSurface/ flood irrigation is widely used in the target region with water coming from irrigation canals (through a tube, direct divergence from the river with assistance of dam, or through open canals).

Problems--No mechanism for allocation of water among different users raising conflict among them (herders, farmers)-Not enough water for everyone especially downstream people during months with peak demand-Payment for water is starting with the new law

Case 1: project activity

Berry

Seabuckthorn

Target crop*

*Drip irrigation is more suitable for high value crops (because of high capital cost of the system) that are planted in rows.

Activities:-Installing drip irrigation system-Digging well (to secure water when no water is coming from canals)-Connecting to electricity source

Project time frame: May 2014- September 2014

Case 1: Cost and benefits of the project and challenges

Costs1.Capital cost of drip irrigarion system2.Cost of digging well3.Cost of building transmission line4.Operational cost of drip irrigation system and well (electricity and fuel usage etc)

Benefits1.Water saving2.Increased yield3.Labor saving

Case 2: Overview of Selected Project for Water

Project Name: Protection of upstream of Ulz River basin (protection of headwater stream of Ulz river).

Alternative scenario: no protection

Case 2: project activity

Activities:-fencing around the upstream-planting trees around the fence-Making exits, passways for households and animals to get to the water.Project timeframe: May 2014- October 2014

Case 2: Cost and benefits of the project and challenges Costs

1.Cost of fence2.Cost of tree planting3.Maintenance cost

Benefits1.Conservation of river run-off2.Clean water3.Sustainable water supply4.Support recharging of ground water resources5.Improved sustainability of ecosystem

Overview of (alternative)*Project for Water

Project Name: Construction of a dam and 100 MW Hydro Power Plant on Orkhon river to collect flood water, produce electricity that can help regulate demand of the central energy system.

Alternative scenario: Not building the proposed HPP by (1) Building coal fired thermal power plant or diesel power plant

* Depending on how much more work it requires from us, to be selected simultaneously.

Case 2: project activity

Activities:-construction of dam, hydro power plant and transmission lineProject timeframe: 2014- 2018

Case 2: Cost and benefits of the project and challenges Costs

1.Construction of dam 2.O&M cost 3.Accident cost 4.Downstream effect 5.Land inundation loss 6.Fishery loss

Benefits1.Power generation2.Flood protection 3.CO2 emission reduction 4.Peak demand regulation5.Economic growth6.Air pollution reduction