The bulk of GCF’s contribution, USD 19.5 million, will allow Mongolia’s XacBank extend loans to micro, small and medium-sized enterprises to break down financial barriers to low-carbon investment.

An aversion to the risks of opening new markets means Mongolian entrepreneurs currently lack the necessary commercial finance to carve out new businesses in energy efficiency and renewable energy.

This five-year project is being implemented by XacBank, one of Mongolia’s major lenders which became the country’s first and only bank specializing in eco-banking in 2009. At the end of last year, GCF designated XacBank as a direct access Accredited Entity, which propose and implement GCF-financed climate initiatives.

“This disbursement marks an important milestone in the continued development of sustainable financing business of XacBank and our cooperation with the Green Climate Fund,” said Amartuvshin Hanibal, President of XacBank.

While many Mongolian people currently burn low-quality coal in their homes for heating and cooking, the government is striving to leap frog their landlocked nation into adopting a low-carbon energy sector.

In accordance with GCF’s gender focus, at least half of GCF’s loan support in this project will go towards women-led enterprises.

“This project will empower women and reduce emissions,” said Ayaan Adam, Director of GCF’s Private Sector Facility. “It will show women-led enterprises can make a strong impact in Mongolia’s private sector. Mongolian micro, small and medium-sized enterprises can demonstrate that low-carbon investment is the business of the future.”

Ms Adam added the growth of a low-carbon energy sector fits well with the Mongolian Government’s move to raise the percentage of renewables to 20 percent of national energy generation by 2020, according to the country’s Nationally Determined Contribution under the Paris Agreement.