Canada’s development finance institution FinDev Canada has signed a $50 million loan to Mongolia’s Golomt Bank, with 30% of the proceeds earmarked for climate and nature-related projects and the remainder allocated to MSMEs.
The financing marks FinDev Canada’s first transaction with a designated nature finance component, according to a statement seen by CrowdFund Insider.
Golomt Bank, Mongolia’s second-largest commercial bank, will use 70% of the facility to support MSMEs, including businesses owned or led by women.
The loan is intended to expand access to financing for smaller businesses, per the statement, while helping Mongolia address environmental challenges linked to its reliance on coal-fired energy and emissions-intensive agricultural practices.
MSMEs account for approximately 70% of employment in Mongolia, according to the Asian Development Bank.
Golomt Bank has developed lending products for women-owned and women-led businesses that offer lower interest rates and more flexible collateral requirements.
The transaction is aligned with the 2X Challenge, an initiative that promotes investments supporting women’s economic empowerment.
It is also consistent with FinDev Canada’s objectives of expanding financial inclusion and promoting private-sector-led development in emerging markets.
The climate and nature allocation will support energy-efficient construction and projects designed to improve water efficiency or reduce water pollution.
Eligible investments include sustainable water supply and wastewater management initiatives that meet the International Finance Corporation’s guidelines for blue finance.
Golomt Bank plans to increase climate-related lending to 10% of its total loan portfolio by 2030 using the financing as part of its broader sustainable finance strategy.
Mongolia faces significant challenges in reducing greenhouse gas emissions because of its dependence on coal and emissions from agriculture.
The country has pledged to cut emissions by more than 30% by 2035, with reductions exceeding 52% possible with international support, according to the NDC Partnership.
Lori Kerr, chief executive officer of FinDev Canada, said:
This transaction reinforces FinDev Canada’s commitment to deepening financial sector capacity across emerging markets in the Asia-Pacific, deepening Canada’s long-term economic engagement in the region and supporting inclusive and sustainable economic growth.
Kerr said Golomt Bank’s presence in corporate banking, exports and the MSME segment positioned it to expand access to climate and nature finance and investments supporting gender equality.
A. Odonbaatar, chief executive officer of Golomt Bank, said the facility established the two institutions’ first financing partnership and provided a basis for a longer-term strategic relationship.
The collaboration would strengthen the bank’s ability to support smaller businesses, including women-led enterprises, while expanding financing for climate mitigation and nature-focused projects, Odonbaatar said.
FinDev Canada provides debt, equity, blended finance and advisory services to businesses in developing economies, with investments spanning infrastructure, agribusiness, and financial services.
Golomt Bank was founded in 1995 and serves retail, corporate and institutional clients in Mongolia.