Mongolia to join data center frenzy with Chinggis Khaan sovereign wealth fund
Mongolia is on a mission to shift its focus from mining to technology by building data centers powered by renewable energy. The country is also gearing up to launch its first sovereign wealth fund, the Chinggis Khaan Sovereign Wealth Fund, with a reserve of $1.4 billion.
Temuulen Bayaraa, CEO of the sovereign fund, highlighted the country’s favorable climate and vast land as ideal for hosting data centers. Mongolia is developing special economic zones dedicated to data centers, with Hunnu City envisioned as a smart and sustainable urban center.
The investment strategy of the sovereign wealth fund is still pending government approval, but it aims to tap into the global demand for computing power and clean energy. With the rise in AI workloads globally, there is a growing need for data centers, leading countries like Japan, Singapore, and Malaysia to invest in expanding their data center capacity.
In addition to data centers, the fund plans to invest in mega-scaled renewable energy projects to boost green energy exports to neighboring countries. Mongolia aims to increase its share of renewable energy capacity to 30% by 2030, up from 18.3% in 2023.
The fund’s investment strategies will also focus on countering risks associated with commodity price fluctuations, as Mongolia’s economy is heavily dependent on mining. The country has seen a boom in prices for minerals like coal, copper, uranium, and rare-earth elements.
The Mongolian government has faced pressure to distribute its mineral wealth more equitably and combat corruption in the sector. The sovereign wealth fund is seen as a way to rebuild trust with the people by providing transparency and ensuring that mineral wealth is used to support education, healthcare, and housing needs.
Bayaraa emphasized the importance of building a governance model for the fund and plans to hire members of the Mongolian diaspora with expertise in banking, investment, and wealth management to help manage the fund. Mongolia is shifting from attracting investment to becoming an investor on the global stage, contributing to the global agenda.
Overall, Mongolia’s shift towards technology and renewable energy through the sovereign wealth fund and data center projects marks a significant step towards sustainable development and diversification of its economy.
