The Green Climate Fund has signed a funding agreement with Mongolian-based Direct Access Accredited Entity XacBank in the country’s first renewable energy project financed by a local bank.

GCF can now provide USD 8.7 million in loans, following the signing of a Funded Activity Agreement (FAA) with the Mongolian bank. The FAA covers a USD 17.6 million project to build Mongolia’s second large-scale solar plant with a capacity of 10 MW.

XacBank President Amar Hanibal and GCF Private Sector Facility’s Director Ayaan Adam signed the FAA on the side-line of the 23rd Conference of the Parties of the United Nations Framework Convention on Climate Change that is currently convening in Bonn, Germany.

The signing of the agreement, which is a prerequisite for GCF’s disbursal of funds, comes soon after the GCF Board approved this project at its most recent 18th meeting, last month.

Mongolia is committed to generating 30 percent of the country’s power using renewable energy by 2030, as part of its climate action plan under the Paris Agreement.