Duties and Responsibilities
In Mongolia, around two thirds of energy mix is coal based, another 30% comes from oil, while the share of other sources, including renewable energy, was only 3% as of 2023. Large share of the oil and gas are imported, making the country energy system both carbon-heavy and import dependent. To address this situation, Mongolia is pursuing an ambitious energy strategy by lifting national energy production capacity and expanding renewable energy sources. Such a major energy transformation is having significant implications for its economy, ranging from fiscal and public debt conditions, private investment, external account balance, inflation and monetary policy, labour markets and household welfare. To pursue the energy transformation without jeopardizing other social and economic development goals, policymakers need to understand the macroeconomic implications of possible pathways and scenarios. Examples of factors that need to be considered include the pace and scale of energy transition, priority sectors and the mix of public and private investment. In this context, the national study to be prepared under this project aims to enhance policymakers' understanding of economic implications of energy transition under broader climate action policies. The study will support the design and implementation of policies that promote both energy goals and socioeconomic prosperity in Mongolia. The objective of this consultancy is to support the Bank of Mongolia in strengthening technical capacity to integrate macroeconomic goals into energy transition and climate action planning. Deliverables and Structure The consultancy comprises the following components: 1) preparation of the national study; 2) participation in a workshop (in-person or remotely), to be organized in Mongolia, to support the dissemination of the national study findings and conduct capacity-building activities informed by key findings of the national study. The core analytical work is expected to be completed by end-October 2026. The preparation for and participation in the national capacity-building workshop is planned for November 2026. Part A. Core study: A macroeconomic energy sector transformation and expansion assessment study The 2025 and 2026 editions of ESCAP’s flagship report “Economic and Social Survey of Asia and the Pacific” provide the analytical foundation of this national study. Both reports examine the macroeconomic-climate nexus in Asia-Pacific developing economies, including transition risks, such as stranded assets, employment shifts, fiscal pressures, inflation and income inequality. In addition to arguing for developmental-state industrial policy, including for energy sector, the Survey also analysed topics such as green value chains, carbon pricing with revenue recycling, and integrated planning that balances short-term costs with long-term productivity, resilience and co-benefits. This national study should be around 8,000-10,000 words. An indicative allocation is around one-third of the words each for (1), (2) and (3), with flexibility as needed. 1) Baseline and analytical framework a) Conduct a review of Mongolia’s energy sector development objectives based on available government documents to establish a baseline for the energy sector development and climate action analysis. b) Assess Mongolia’s macroeconomic exposure to energy sector, including the implications of economic structure. Identify the main fiscal transmission channels through which energy transformation may affect Mongolia’s public finances, including revenues, expenditures, contingent liabilities, public investment needs, financing conditions and debt sustainability. Discuss energy transformation impact on other macroeconomic indicators such as inflation, trade balance and exchange rates. Discuss monetary policy implications. c) Discuss the impact of renewable energy development plans and scenarios on macroeconomic dimensions. d) Specify and document a transparent analytical framework for tracing climate shocks into macro-fiscal outcomes and public debt sustainability, including key assumptions, transmission channels, indicative elasticities and sensitivity ranges, ensuring that the methodology is rigorous, transparent and accessible to government counterparts. e) Ensure modelled findings contribute to Mongolia’s renewable energy development strategy relevant for the discussed macroeconomic implications of climate action and development plans, in particular energy and industrial sectors. 2) Scenario design and analysis a) Design and analyse policy-relevant scenarios, drawing on modelled scenarios, external research, climate-scenario framework and other relevant national and international analytical inputs, as appropriate, and adapt them pragmatically to Mongolia’s macroeconomic context, including: i) Current Policies baseline: Business-as-usual pathway reflecting policies in force at the cut-off date ii) Nationally Determined Contributions (NDCs) / stated pledges scenario: Full implementation of Mongolia’s NDCs with no additional global policy tightening beyond stated pledges iii) Orderly Transition (Below 2°C / Net Zero 2050): Early, predictable and coordinated policy ramp-up consistent with Paris-aligned pathways iv) Disorderly Transition (Delayed / Divergent): Late and abrupt policy tightening to meet long-run targets, generating higher transition risks, such as stranded assets and inflationary and fiscal pressures b) Use Computable General Equilibrium (CGE) models (especially dynamic, multi-sector, multi-region versions, hybridised with energy-system details) to analyses various energy-related decarbonisation scenarios for Mongolia. i) Consider different timeframes, energy sources, capital intensity of energy investment, carbon and other taxes. ii) Ensure the models represent the full economy through interconnected markets for goods, factors (labour, capital), and energy. iii) Incorporate carbon pricing, renewable subsidies, energy expansion, technology shifts, and revenue recycling into scenarios. c) The analysis should distinguish, where relevant, between physical climate risks related to energy transition and expansion and transition-related risks, recognizing that they may affect Mongolia’s macro-fiscal position through different channels. d) Use these above policy scenarios to summarize key energy sector expansion and transition (climate action) impact channels to inform policy package discussed in point (3) below. 3) Policy package, implementation, and monitoring and evaluation a) Readiness and gaps assessment (evidence-based): Using the scenario results, assess the readiness of key macro-fiscal, public debt management, and relevant institutional arrangements to manage identified risks, highlighting priority capacity gaps and corresponding capacity-building actions. b) Propose tailored policy recommendations based on the scenario analysis, focusing on: i) Fiscal strategies: Possible areas may include a strategies embedded in Mongolia’s national development plans; climate fiscal-risk statements (including state-owned enterprises and public-private partnership projects); capital expenditures reprioritization and stronger public investment management; fiscal revenue options with targeted climate-related social protection; and prudent public debt management including the potential use of climate-resilient debt clauses and credible sustainability-linked bonds and loans. ii) Financing strategy and instruments: Link the macro-fiscal findings to feasible financing options, including, where relevant, sustainable financing instruments, concessional climate finance, blended finance or other mechanisms that could support resilience investments while maintaining debt sustainability. iii) Regulation and supervision considerations: Identify high-level financial sector climate-risk management implications relevant to macroeconomic resilience, including financial stability transmission channels and relevant data or disclosure considerations where appropriate. iv) Monetary policy and operations: Discuss relevant implications of energy sector expansion and transition for macro-financial conditions, including inflationary pressures, liquidity conditions, and broader financial stability considerations where relevant. v) Implementation and monitoring and evaluation: Issues such as a practical implementation roadmap identifying sequencing priorities, institutional responsibilities, indicative milestones, and capacity-building needs. Part B: Dissemination and capacity-building support 1) Prepare and deliver a policy-focused presentation of the study’s key findings, methodologies, and recommendations at the capacity-building workshop tentatively in November 2026. The consultant is expected to work under the general guidance of the Associate Economic Affairs Officer of the Macroeconomic Policy and Analysis Section (MPAS) of ESCAP’s Macroeconomic Policy and Financing for Development Division (MPFD). Broad and in-depth understanding of macroeconomic policy, climate risk analysis, climate-integrated debt diagnostics, fiscal instruments, disaster-risk financing and sustainable finance is required, along with sound knowledge of the policy landscape and challenges in Mongolia. Experience in analytical or advisory roles in support of national governments or international development agencies is highly desirable. Demonstrated experience in quantitative macroeconomic analysis, macro-fiscal assessment, debt sustainability analysis, climate-related fiscal risk assessment, scenario analysis or related analytical methodologies is highly desirable. Experience in developing or applying analytical frameworks for macro-fiscal, debt sustainability or climate-risk assessment in developing countries, especially least developed countries, would be an advantage.
