As part of its commitment to supporting Climate Action, the Dutch entrepreneurial development bank, FMO, has invested in Mongolia’s first-ever green bond issued by the country’s largest commercial financial institution, Khan Bank. FMO contributed $35 million in the $60 million, five-year bond offering, with IFC investing $15 million as the lead arranger. MicroVest Capital Management also contributed $10 million to the bond. This investment will help the bank grow its climate portfolio by funding projects that support renewable energy, energy efficiency, green buildings, green mobility, and climate-smart agriculture in Mongolia.
This green bond is expected to help Mongolia achieve its goal of increasing green lending from 1.4 percent at present to 10 percent of all banking sector lending by 2030, mitigating climate change by avoiding tens of thousands of tons of greenhouse gas emissions annually. Mongolia is a country facing significant environmental challenges, with high levels of air pollution and significant climate change, including increased average temperatures and declining rainfall. The investment from FMO, IFC, and MicroVest is expected to help Mongolia meet its climate and development goals while promoting green financing and a sustainable economy.