The International Finance Corporation (IFC) has supported the launch of Mongolia’s first Green Bond on the international market, aimed at financing renewable energy and environmentally friendly green projects and programs. The IFC invested in KhanBank as well.
The IFC organized the raising of USD 60 million in green bonds for a period of five years, investing USD 15 million, while the Dutch Entrepreneurial Development Bank (FMO) provided USD 35 million for projects and programs with a positive impact on the environment and society. Additionally, US-based investment company “MicroVest” provided USD 10 million in funding.
This investment will finance Mongolia’s renewable energy, energy-efficient green buildings, and environmentally friendly agricultural projects.
Mongolia is facing significant challenges caused by climate change. The level of air pollution in the capital Ulaanbaatar is among the highest in the world because households use coal for heating purposes. Also, the average air temperature in Mongolia is higher than the world level in recent years, which indicates rapid climate change and a decrease in precipitation. The share of green loans in the total loan portfolio of the banking sector is 1.4 percent, with a goal of increasing it to 10 percent by 2030.
Furthermore, by 2030, Mongolia aims to reduce greenhouse gas emissions by 22.7 percent. The implementation of this goal will require approximately USD 413 million, and 80 percent of this funding will be provided by international investors and the private sector.