Contributed by: RePaRe Project
Ulaanbaatar, the world’s coldest capital and home to over 1.5 million people, has around 20% of its residents living in prefabricated panel buildings. Built more than 30 years ago, these homes are reaching the end of their lifespan. They are increasingly energy inefficient, with poor insulation leading to cold interiors, leaky roofs, and persistent mold problems.
In a city with long and harsh winters, heating demand is extremely high and largely met by fossil fuel power plants, driving per-capita CO2-emissions that are roughly twice the global average. Retrofitting these buildings is therefore not only a matter of comfort but also of climate protection, public health, and sustainability while extending the lifespan of the buildings by up to 30 additional years.
The Mitigation Action Facility is addressing this challenge through the Energy Performance Contracting for Residential Retrofitting in Ulaanbaatar City project (RePaRe). The initiative is co-financed by the Ministry of Urban Development, Construction and Housing of Mongolia and the Municipality of Ulaanbaatar, and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
The project aims to:
- Reduce greenhouse gas emissions by reducing the energy demand of panel buildings by 40%.
- Establish sustainable financing mechanisms to scale up thermo-technical retrofitting city-wide.
- Improve the living conditions of residents, contributing to a healthier and more sustainable future for Mongolia.
- Support the Government towards transitioning to consumption-based and market-rate heating tariffs
A Greener, Healthier Ulaanbaatar
Through the RePaRe project, Ulaanbaatar is taking significant steps toward reducing energy consumption, cutting greenhouse gas emissions, and improving the daily lives of its citizens. By combining building retrofitting, policy innovation, and sustainable financing, the project illustrates how climate action and urban development can work hand in hand paving the way for a greener and healthier future for Mongolia.
Building the Policy Framework
In June 2025, the Energy Regulatory Commission, in cooperation with the RePaRe project, hosted a consultation-conference on “Introducing a Consumption-Based, Market-Oriented Heat Billing System.”
The event gathered over 150 participants from more than 70 organizations, representing government agencies, private companies, and research institutions. Discussions focused on:
- Establishing a legal and regulatory framework for consumption-based tariffs.
- Amending building norms and standards.
- Ensuring full metering for heat consumption.
- Adopting international billing tools and technologies.
- Identifying opportunities for collaboration.
The outcomes of the event will guide the development of an Action Plan for introducing a consumption-based heat billing system. This shift will help create a fairer and more efficient system, where households pay according to actual heat use, encouraging energy savings and improved building performance.
Consultation conference: Introducing a consumption-based, market-oriented heat billing system © GIZ Mongolia
Retrofitting in Practice
While policy advances set the stage, construction work is already underway. The first pilot building retrofitted with mineral wool insulation is nearing completion. Once finalized, residents will benefit from improved insulation, upgraded roofs and facades, and smart mixing loop installations that boost energy efficiency.
Looking ahead, tenders have been announced for approximately 50 additional residential building blocks, with construction scheduled to begin in November. Among these, residents of 17 building blocks have already signed “on-bill repayment” contracts, demonstrating growing community support for sustainable financing models.
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