Mongolia to join data center frenzy with Chinggis Khaan sovereign wealth fund

Mongolia, agelong reliant connected mining, plans to physique information centers powered by renewable vigor arsenic it prepares its archetypal sovereign wealthiness money aimed astatine channeling its mineral wealthiness to societal payment and infrastructure.

"We person a monolithic onshore with a precise favorable clime for activities similar [hosting] information centers," Temuulen Bayaraa, CEO of the sovereign fund, told CNBC connected the sidelines of the Milken Institute Asia Summit successful Singapore connected Friday.

The landlocked East Asian federation is processing peculiar economical zones dedicated for information centers, she added, referring to the Hunnu City that is envisioned arsenic a smart, sustainable municipality city.

The Chinggis Khaan Sovereign Wealth Fund, established by instrumentality successful April past year, has $1.4 cardinal successful reserves and seeks to pat planetary request for computing powerfulness and cleanable energy. Its concern strategy is inactive pending the government's reappraisal and last approval.

A big of Asian countries person accelerated efforts to make information centers this twelvemonth amid increasing request for unreality computing and artificial intelligence. Japan, Singapore and Malaysia person ramped up investments successful gathering retired their information halfway capacity.

The recent detonation successful AI workloads globally requires immense computing power, electrical power, cooling and networking infrastructure. Goldman Sachs expects planetary powerfulness demand from information centers to emergence 50% by 2027 and by arsenic overmuch arsenic 165% by 2030.

Aside from information centers, portion of the fund's returns volition besides beryllium utilized to physique "mega-scaled" renewable vigor powerfulness grids and projects, arsenic portion of the country's efforts to boost greenish vigor exports to neighboring countries, Bayaraa said. Mongolia, sandwiched betwixt Russia and China, has upgraded its ties with some superpowers to the level of "comprehensive strategical partnerships" successful caller years.

The program comes arsenic the Mongolian authorities pledged to boost the stock of renewable energy, particularly upwind and star power, successful the country's energy capableness to 30% by 2030, up from 18.3% in 2023.

The fund's concern strategies volition besides halfway connected countering risks associated with terms fluctuations successful commodities, Bayaraa said, arsenic the funds' sources are "very babelike connected commodities." The Chinggis Fund is managed by Erdenes Mongol, a government-owned holding institution that owns a stock successful the country's mining assets.

The sparsely-populated country, with conscionable astir 3.5 cardinal residents, has benefited from a roar successful prices for its affluent supplies of captious minerals, including coal, copper, uranium and rare-earth elements.

The Mongolian authorities has been nether increasing unit to administer its mineral wealthiness among its radical and enactment an extremity to corruption successful the sector. Anti-corruption protests successful its capital, Ulaanbaatar, earlier this twelvemonth forced Oyun-Erdene Luvsannamsrai to measurement down arsenic premier minister.

"People didn't consciousness similar mining contributed to the wealth, betterment of their livelihoods portion eroding the earthy resources. But present the sovereign wealthiness money is positioned successful a mode to rebuild that trust," Bayaraa said.

The money volition play a cardinal relation successful the country's improvement program aimed astatine providing much transparency and equity successful wealthiness distribution, she added, by pulling successful mineral wealthiness to beryllium "managed and disbursed successful a ring-fenced mode to enactment people, their acquisition needs, financing, educational, healthcare and lodging needs."

"The captious enactment is to physique a governance exemplary [for the fund]," she added. Citizens volition beryllium capable to entree connected an app details of the fund's sources, allocation and balance. "It's precise targeted involution for expanding mediate class, pushing labour marketplace participation," she said.

The fund's person plans to prosecute members of the Mongolian diaspora with acquisition successful the banking, investment, and wealthiness absorption industries to instrumentality location and assistance negociate the fund.

"For the longest time, Mongolia has been attracting concern into Mongolia. For the archetypal day, we are becoming an capitalist to lend to the planetary agenda," Bayaraa said.