Business Operations
Asia Clean Energy (ACE) executives made an official visit to current and potential future properties in Mongolia in late August, 2021. The early days of the visit were spent in meetings with several government officials, including the Commissioner of The Mongolian Energy Regulatory Commission. In this meeting, it was confirmed that with ACE's extensive connections in China and the lineup of potential off-takers for power agreements, ACE will not be restricted to the auction system that has been established for other clean energy companies hoping to establish solar and wind properties in the country. This only increases the competitive advantage for the company as it scales its plans in Mongolia. The meetings continued with a visit to the Commissioner of Taxation, who confirmed Mongolia's aggressive transformation from a coal-powered energy system to one that will rely increasingly on clean energy. Companies operating in the space, such as ACE, are eligible for considerable tax breaks, not only from the Mongolian Government’s Customs Duty Exemption, but also from the Canadian Government in the form of carbon tax credits. Mongolia does not tax exports, which is clearly favourable for clean energy companies developing power exports to China and beyond. The Commissioner also was clear in stating that government policy, under Prime Minister Luvsannamsrain Oyun-Erdene, is to attract and support investment in the country, most notably in the rapidly expanding clean energy sector. With a favourable taxation system aimed at growing the clean energy industry in Mongolia, the government has become a willing partner as ACE begins the first stage of its wind and solar projects. The meetings continued with a visit to the Commissioner of Taxation, who confirmed Mongolia's aggressive transformation from a coal-powered energy system to one that will rely increasingly on clean energy. Companies operating in the space, such as ACE, are eligible for considerable tax breaks, not only from the Mongolian Government’s Customs Duty Exemption, but also from the Canadian Government in the form of carbon tax credits. Mongolia does not tax exports, which is clearly favourable for clean energy companies developing power exports to China and beyond. The Commissioner also was clear in stating that government policy, under Prime Minister Luvsannamsrain Oyun-Erdene, is to attract and support investment in the country, most notably in the rapidly expanding clean energy sector. With a favourable taxation system aimed at growing the clean energy industry in Mongolia, the government has become a willing partner as ACE begins the first stage of its wind and solar projects. The ACE team also met with The Minister of Science & Education, Mr. Luvsantseran Enkh-Amgalan, where the parties discussed a potential future joint project to bring renewable energy to Mongolian schools, primarily in rural areas, where the needs are greatest. ACE and the Mongolian Government both acknowledge the need to work together to not only benefit the Mongolian economy, but also to develop social programs that benefit those who need it most. Mr. Enkh-Amgalan’s department is responsible for nearly 20% of the entire Mongolian Government’s budget, giving the Ministry of Science and Education the financial muscle to help bring projects into development. Mr. Enkh-Amgalan himself was formerly VP of the biggest conglomerate in the country, MCS International LLC, the leader in executing large energy and mining projects in Mongolia. Meanwhile, the global political climate continued to shift heavily to clean energy, with Chinese President Xi Jinping stating that China will no longer fund international coal projects around the world. He added: "China will step up support for other developing countries in developing green and low-carbon energy.” The country aims for carbon neutrality by 2060 and the future Northeast Asia Power Grid could supply a third of the world’s population for the same cost as coal. All of this adds up to a “perfect storm” for a company like Asia Clean Energy, which increased its first mover advantage with its recent visit to Mongolia. For the full article on President Xi’s vows to the UN General Assembly, read here
Business Operations
The rest of the official visit was spent visiting ACE’s current and potential future projects (as presented in the June Investor Update). Use the map below to familiarize yourself with the regional opportunities for the company. In this update, we will highlight three of the inspected properties:
Choir Site (Site #3)
This proposed site sits adjacent to a current 10 MW Korean-operated solar plant. The strategic location of the Choir [CHUR] site places it in the centre of the future power grid connecting Russia, Mongolia and China. With a substation just a short distance away, and the favourable central location of Choir, the opportunity to distribute power throughout the more populous eastern region of Mongolia is very attractive. The land parcel supports, at minimum, a 50MW project. (Note: all photos in this document are taken by the ACE team on their site inspections. Drone footage was also taken, and will be made available in future updates) Close up of solar modules operated by a Korean firm, adjacent to a much larger land parcel that ACE has the opportunity to develop.
The property line separating the Korean solar farm with the potential ACE project
Dundgovi Site (Site #4)
This premium 200-hectare land parcel is perfectly situated close to a new 330KV substation. It is close to highway access- a luxury in Mongolia’s Gobi Desert region- and the wind is present 24 hours per day, 365 days per year. Situated on very flat ground with limited foliage, it represents a tremendous opportunity for both solar and wind power. Like the Choir site, this land parcel is centrally positioned for inclusion in the future Northeast Power Grid, but with its more southerly location and potential for 100 MW capacity, the Dundgovi project would be highly sought-after by large Chinese off-takers. Key members of the ACE executive team have worked for decades in the Chinese renewable energy space, including projects in the province of Inner Mongolia, directly south of Mongolia (the country).
Power lines already installed and leading directly through the proposed land parcel to the nearby substation.
330Kv Substation in close proximity to the 200Ha site in Dundgovi Province.
Omnogovi Site- Near Oyu Tolgoi Copper-Gold Mine (Site #2)
For those unfamiliar with the Oyu Tolgoi Copper-Gold Mine, it is the second largest operating copper mine in the world, and it has become the largest private employer in the country. The mine is majority-owned by Rio Tinto, one of Canada’s global mining giants, along with Turquoise Hill Resources, another Canadian operator. The government retains a 34% stake in the mine, making it a vastly important part of the Mongolian resource economy. The operators have recently pledged to dedicate up to 30% of its energy purchases toward clean energy sources. With clear connections in both Mongolia and Canada, ACE is already moving to secure an agreement with the parties. Members of the team visited the Oyu Tolgoi site and inspected a nearby solar and wind land parcel available to them which could initially produce 50 MW of power.
Taken from the Oyu Tolgoi Website
View of Oyu Tolgoi from the access road (power lines extend out toward accessible land parcels for solar and wind energy)
Evening photo of land parcel offered to ACE, with power transmission lines in the background.
Listing Update
As the auditors complete the final stages of creating the Opening Memorandum (OM), investors can expect to receive a copy of its completed version within the next couple of weeks, after which all investors who have participated in the $0.10 round will receive their shares. We do recognize the delay in completing this OM, and we appreciate the patience of investors as our accountants and lawyers firm up the final edits on it. Once this is completed, further investment will be available to interested parties at an offering price of $0.15 per share. This round will precede a listing on the Canadian Securities Exchange (CSE). At this time, ACE is in the advanced stages of negotiating an RTO (reverse takeover) whereby the company acquires a public listing through an existing but non-operating publicly traded company. This common practice expedites the process of listing. Look for an immediate further update once the Opening Memorandum is completed and set to be mailed out. Please don’t hesitate to contact me with any questions you may have. Warmest Regards, Mark Dotto VP of Investor Relations Asia Clean Energy