Announced under COP31, Impact Fund Denmark is investing USD 30 million in Khan Bank to expand access to long-term green finance in Mongolia.
Impact Fund Denmark’s USD 30 million will be fully earmarked for green on-lending. The investment will enable the bank to scale long-term financing for climate change mitigation solutions in a market where such financing remains limited.
Mongolia is highly vulnerable to climate change and extreme weather. The country experiences harsh winters, while drought and other climate-related events put pressure on rural livelihoods and an economy that remains highly exposed to climate impacts.
Supporting Mongolia’s green transition ambitions
Mongolia has set ambitious targets for its green transition. The country aims to reduce its greenhouse gas emissions by 30 per cent by 2035, with the potential to achieve a 50 per cent reduction with international finance.[1]
As highlighted at COP31, mobilising climate finance at scale in emerging markets is critical to accelerate the global green transition.
Khan Bank is Mongolia’s largest universal bank and a leading green finance provider in the country. The bank’s green loan portfolio includes energy-efficiency investments such as building insulation alongside other energy-efficiency measures, helping reduce energy consumption and keep homes warm during Mongolia’s cold winters, as well as renewable energy and electric mobility. Micro, small and medium-sized enterprises (MSMEs) account for the majority of the bank’s green loan portfolio.
If we are to succeed in the global green transition, we need to finance more solutions that reduce CO2 emissions in emerging markets. With the right partners, these investments can also generate growth and financial returns. Khan Bank has solid experience in green finance and an extensive reach across Mongolia. Together, we can give more people and businesses access to long-term loans for projects that reduce emissions.
The investment is part of a USD 172 million syndicated loan, led by the Dutch development finance institution FMO, with Finnish development finance institution Finnfund among the co-investors.
[1] Mongolia | NDC Partnership
External Communications Director
Thøger Kirk
+45 53 76 08 05
