Project Reference Profiles – Mongolia(MN13)Mongolia Green Finance Corporation

At a Glance

Strategic Outcomes SO1
Start Date Q1  Jan 1 2019
End Date q1 Dec 31 2020
Funding Source Core
Actual Budget (USD) 63,841
Budget Percentage 93%
Actual Expenditure (USD) 59,213
Status Active
GGGI Share (USD) 63,841
Poverty and Gender Policy Markers poverty, gender
Name of Client (Lead/Prime implementer if GGGI is part of a consortium)
Participating Organization (Funding/donor)
Name of consortium members, if any
Thematic Area
  • Cross Cutting

Project context, objectives and description

Mongolia lacks the necessary resources to finance its planned transition to a low-carbon and resource-efficient economy and achieve its Intended Nationally Determined Contribution (INDC) targets. The financing necessary to achieve INDCs (mitigation) is estimated at USD 3.5 billion (35% of GDP). 

The objective of the MGFC is to mainstream green finance for low-carbon, climate-resilient development through dedicated financing to large energy consumers and households in partnership with local financial institutions. Specifically, the financial products of the MGFC will directly support the following INDC target: implementing advanced technology in energy production through the provision of affordable financing for i.Thermo-retrofitting solutions of existing houses ii.Energy efficiency measures of large energy users iii.Green mortgages for EE housing. This project is aligned with IO2. Increased green growth investment flows which enable partner governments to implement green growth policies. 

In its first stage, MGFC will target households living in peri-urban (Ger) areas of Ulaanbaatar (216,000 households), businesses transitioning to low-carbon and energy efficient practices (at least 127 designated entities)  which are large energy users having the highest potential to reduce emissions and the Mongolian Financial Institutions (11 commercial banks), with a product pipeline that is complementary to existing GCF credit lines in Mongolia and positions the institution well, to build upon early successes to attract larger amounts of financing and extend the market impact. MGFC’s direct beneficiaries are expected to reach 104,602 people who will benefit from affordable and inclusive financial products. Once operational, MGFC will have the capacity to target additional markets in relationship with Mongolia’s climate change and green development commitments. 

The MGFC presents an opportunity to drive significant GHG emission reduction far above what is typical of GCF projects and programs due to the revolving nature of the lending facility and the indefinite lifetime of the institution. While the GCF’s loan contribution will be repaid within a 15-year timeline, the institution of MGFC will continue to exist, attract additional funding from public or private, and drive transformational projects and an overall GHG emission reduction far higher than the numbers shown in this Funding Proposal. In this way, through MGFC the GCF can initiate GHG emissions reduction at a magnitude much higher than typically seen in GCF projects. 

Type of services provided, and results achieved

Impact: Direct and indirect reduction of GHG emissions. 

Outcome: MGFC is established and starts operations, disburses funds. 

Project Outputs completed in 2019:

i. Green Growth Policies:N/A

ii. Green Investments: 

  • Advisory outputs for inform NFV: The purpose of establishing Mongolian Green Finance Corporation is to enhance the availability and supply of cheaper financing with terms better suited to the nature of green projects. GGGI project team led the designing and structuring of MGFC as part of GCF Readiness program. As for PPF, GGGI project team was only responsible for facilitating GIG with collecting data and reaching out to relevant stakeholders. The main purpose of the PIN was to secure a co-lender.  
  • Green investments catalyzed: Total capitalization amount for MGFC is USD 50M, 10M committed in 2018 In 2019, GGGI engaged with AIIB to bring on board as a co-lender, but Government of Mongolia decided to co-finance MGFC and USD13M was raised. Submission of MGFC funding proposal is postponed to 2020. 

iii. Capacity Building and Knowledge Products: N/A 

Number of staff provided

Project Manager: Batzaya Bayasgalan  

Andrew Lee, Bayarmaa Enkhbayar, Lasse Ringius, Oyunchimeg Amartuvshin 


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