Provision of a 5-year senior loan to Khan Bank LLC of up to USD 60 million, of which up to USD 45 million to be provided by EBRD and up to USD 15 million by the Green Climate Fund ("GCF") under the GCF - Green Economy Financing Facility ("GEFF") Regional Framework.
The proceeds of the loan will be used for financing investments in climate change mitigation and adaptation technologies by local private sector clients, in line with the standards and reporting requirements for GCF-GEFF Regional Framework.
ETI score: 65
The project contributes to the objectives of the GCF-GEFF Regional Framework, supporting the Green TI quality, with 100% of the use of proceeds allocated to GET activities in line with the GCF-GEFF Mongolia Policy Statement. The GEFF loan will contribute to GCF-GEFF Mongolia objective of building a green economy in Mongolia by facilitating the accelerated market penetration by climate technologies, particularly focusing on promotion of renewable energy, energy efficiency and climate resilient technologies.
KHAN BANK LLC
KB is the largest commercial bank in Mongolia with total assets of USD 4.7 billion, loan portfolio of USD 2.5 billion, and equity of USD 0.45 billion as of YE2021. The bank is currently rated "B3" by Moody's and "B" by Fitch, both with a stable outlook. The bank has a universal focus and a nationwide presence in the country through more than 547 offices.
EBRD Finance Summary
A senior loan of up to USD 45 million.
Total Project Cost
USD 60 million, of which up to USD 45 million to be provided by EBRD and up to USD 15 million by the GCF.
Combination of financing with technical assistance; medium-term tenor of the facility, otherwise unavailable in the market. Gender additionality will be achieved by ensuring gender considerations are reflected in the implementation of the transaction through KB's staff training and awareness-raising activities.
Environmental and Social Summary
Categorised FI (ESP 2019). KB is an existing client of the Bank and has adopted an Environmental Policy and Environmental and Social Procedures that satisfied the requirements of Performance Requirements 2, 4 and 9 under previous policies. KB will be required to continue to comply with their environmental and social procedures to all sub-loans funded out of EBRD funds, and ensure that sub-borrowers comply with national requirements for environment, health and safety and labour standards. KB will need to ensure an ongoing compliance with PRs 2, 4 and 9 and submit satisfactory annual environmental and social reports.
Beneficiaries financed under GEFF will further be required to comply with the E&S eligibility criteria for Energy Efficiency, Resource Efficiency, Renewable Energy projects as well as other GET eligibility criteria as per the Policy Statement. Where these investments involve solar technologies, the client will be required to follow the Management Approach for solar. These requirements will be confirmed by a Consultant engaged by the EBRD.
Technical Cooperation and Grant Financing
GEFF loan will be supported under the GEFF Mongolia TC package of up to EUR 6 million, of which EUR 4.5 million is secured (funded by the EBRD Shareholders Special Fund ("SSF"), the GCF, and Japan), with the remaining EUR 1.5 million to be sourced at a later stage (likely in 2023).
The objective of the TC is to assist KB with capacity building, implementation and monitoring of the GEFF loan. The consultant will transfer know-how and raise awareness about climate change mitigation and adaptation technologies in commercial operations; provide project appraisal support and guide sub-borrowers to most optimal technology choices. There is no specific TC allocation for each participating bank under the GEFF Mongolia TC package. A separate gender TC assignment ("Implementation and Monitoring of the Gender Action Plan under the Green Economy Financing Facility") will also be implemented in parallel to help address gender-specific supply and demand obstacles related to the design and marketing of green lending products.
Client contribution: KB will make a parallel contribution towards marketing and training costs connected with the implementation of the project in the amount of not less than EUR 10,000.
Company Contact Information
Erdenedelger B., Director of Treasury and Investment Banking
+976 11 332 333
+976 70 117 023
Khan Bank LLC Seoul Street-25, PO.BOX-192, Ulaanbaatar, Mongolia
PSD last updated
09 Aug 2022
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Environmental and Social Policy (ESP)
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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