The International Finance Corporation (IFC), a member of the World Bank Group, has proposed to extend a five-year financing package of up to $70 million to Mongolia-based lender Khan Bank, according to a disclosure. The financing package entails subscription to a five-year US dollar-denominated green bond of up to $30 million, and provision of five-year sub-debt of up to $40 million from IFC’s own account. The green bond will represent the first issued by a private sector company in the country. Through the partnership with Khan Bank, IFC aims to strengthen the capital base of the bank and to promote financing support to micro, small and medium enterprises (MSMEs). IFC has been a shareholder in Khan Bank since 2004, providing both financing and advisory support to the bank. The bank is the largest in Mongolia in terms of assets and has nationwide coverage of 537 branches. Shareholders of Khan Bank include Japan’s Sawada Holdings (41.30 per cent stake) and Tavan Bogd Trade (22.96 per cent), a Mongolian conglomerate engaged in businesses such as international trade, food production and services, and hospitality. The rest of the shares are owned by D. Khulan, director at Khan Bank, who holds a 13.32 per cent stake, and H.S. International (Asia) Limited (13.10 per cent) and IFC (9.32 per cent). As of December 2018, IFC had committed about $1.5 billion in Mongolia, supporting key sectors such as mining, banking, microfinance, hospitality, and services.

Published Date:2019-05-08