Mongolia’s Khan Bank has issued the first green bond in the East Asian country, a US$60 million offering that was placed privately to three investors, including the International Finance Corporation (IFC), the World Bank’s private sector arm.
The proceeds will help fund projects undertaken by Mongolia’s largest lender to support renewable energy, energy efficiency, green buildings, green mobility, and climate-smart agriculture, Khan Bank and IFC say in a joint statement on March 18.
The IFC took up $15 million of the five-year notes. Dutch development bank FMO bought $35 million and the balance $10 million went to US private debt investment firm MicroVest Capital Management. The coupon rate was not specified.
According to the statement, IFC’s investment is expected to support Mongolia’s goal to increase the share of its banking sector’s green lending from the current 1.4% to 10% by 2030, and help mitigate climate change “by avoiding tens of thousands of tons of greenhouse gas emission annually”.
“By supporting the country’s first green bond, in line with international standards, IFC is helping set a standard in the market and we hope it will send a strong signal to other banks and corporates to tap into green finance and develop projects that will help the country meet its climate and development goals,” says Allen Forlemu, the IFC’s regional industry director of financial institutions group for Asia and the Pacific.
