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GCF begins funds transfer to Mongolia’s XacBank

Songdo,
The Green Climate Fund has completed the initial tranche of a USD 20 million financing package to XacBank, a leading lender in Mongolia.

A major part of GCF’s opening financial transfer will raise awareness about the potential of tackling climate change in the country’s fledgling low-carbon energy sector. It will help XacBank train entrepreneurs find new business opportunities in this sector and compile a list of best-available technologies in renewable energy and energy efficiency to provide investment assurance.

Anand Batsukh, a senior project development officer at XacBank, said GCF assistance will help XacBank complement the Mongolian Government’s efforts to mainstream energy usage as the first step towards boosting energy efficiency and renewable energy.

The Mongolian Government is encouraging citizens to derive their energy from electric power grids. A significant proportion of the population currently burns low-quality coal in their homes for heating and cooking.

This problem is particularly acute in Mongolia’s capital, Ulan Bator, home to one of the highest air pollution levels on the planet. The Mongolian Government has been stepping up moves to tackle deteriorating air quality and climate change simultaneously during the past three months, Mr. Batsukh said.

“Increasingly, Mongolian people are drawing the link between climate change and air pollution,” he explained. “People are becoming more concerned as the air quality here has been particularly bad this year.”

GCF’s transfer of a USD 500,000 grant to XacBank marks the first phase of a GCF Board-approved funding proposal to enhance the bank’s ability to support micro, small and medium-sized enterprises (MSMEs) finance low-carbon initiatives.

At least 50 percent of the beneficiaries of this programme are expected to be women-led MSMEs. GCF’s total contribution of USD 20 million is being blended with other climate finance sources to help kick start Mongolia’s low-carbon energy sector as part of a five-year, USD 60 million programme.

XacBank has been a pioneer in generating Mongolia’s sustainable development since becoming the country’s first and only bank specializing in eco-banking in 2009. It has been shifting its focus to supporting large-scale renewable energy projects since GCF accredited it as a direct access entity in October 2016.

Keep an eye on the GCF website to learn about the completion of GCF’s climate finance to XacBank, expected by next month.