Mongolia is particularly vulnerable to climate change, resulting in degradation of pastoral land and biodiversity, increased risk of winter “dzud”, and death of livestock, among other adverse effects. This has resulted in heavy migration to its capital city, Ulaanbaatar, which has the highest level of air pollution globally. Emissions from coal and wood burning for cooking and heating by households contribute to the severity of the air pollution. To this end, decreasing CO2 emissions at the household and business level is critical in Mongolia’s efforts to mitigate its climate change and air quality impacts.

Alongside the Government of Mongolia (GoM) and the Mongolia Sustainable Finance Association (MSFA), the programme will establish the Mongolia Green Finance Corporation (MGFC) to borrow through local partner financial institutions (PFIs) for thermal insulation of housing, energy efficiency for businesses and mortgages for green affordable housing. In this phase, the aim is to reduce 3.8 million tonnes of carbon dioxide equivalent (MtCO₂eq) in emissions. After initial operations, MGFC will look to attract new capital and target other sectors with potentially direct investment. Technical assistance is provided to operationalize MGFC and build the capacity of GoM and financial sector stakeholders.