Construction is to begin in March on Mongolia’s first wind farm, and its backers hope it will be the beginning of a renewable energy boom.

Mongolia’s first wind installation is a $120 million project that will provide 5 percent of the country’s electricity demand. Transmission lines were installed last year, while turbine construction waited out the fierce Mongolian winter. It is scheduled to begin in March.

The 50-megawatt installation will provide the first new power added to Mongolia’s grid since 1986 — when the population was 30 percent smaller — and it is the country’s first-ever private energy enterprise.

“The rest of the energy sector is all state owned. We are essentially breaking a monopoly,” said Bayanjargal Byambasaikhan, chief executive of the Mongolian investment firm Newcom, which holds a 75 percent share in the project. Until 1990, a Soviet-style communist party governed Mongolia.

The project could set off a sea change in the Mongolian – and possibly Asian – electricity mix. A recent Green blog article described Mongolia’s vast and heavily exploited coal reserves, but available renewable resources may be even more vast. This sparsely populated country has potential to generate 2.6 terawatts of renewable energy per year, according to recent data from the National Renewable Energy Laboratory in the United States and the National Renewable Energy Center of Mongolia.

This quantity constitutes about one-quarter of global electricity demand. “One of the best outcomes of the project is that people are aware of the potential,” Mr. Byambasaikhan said in a recent presentation at Yale.

Given the country’s location, Mr. Byambasaikhan is hoping to establish Mongolia as the hub of an Asian clean energy “supergrid” that supplies Russia, China, the Koreas and Japan. His first farm is being developed 40 miles southeast of Ulan Bator, Mongolia’s capital city, on Salkhit Uul, or appropriately, Wind Mountain.

Because this was the first project of its kind, requiring development of new legal and regulatory frameworks, the work took twice as long and was almost 40 percent more expensive than a comparable project in the United States. But Mr. Byambasaikhan said he was confident that operations will now run more smoothly and he hoped to expand wind capacity 20 times by 2025.

“People always explain to me that 80 percent of our territory is covered with coal,” said Mr. Byambasaikhan. “Well, yes, but 100 percent is covered with wind. I beat you on that one.”