MonSEFF - XacBank Sustainable Energy Loan

Location:

Mongolia

Project number:

46429

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

23 Jul 2014

Status:

Repaying

PSD disclosed:

20 Jun 2014

Translated version of this PSD: Mongolian

Project Description

The EBRD is considering a Sustainable Energy loan in the amount of up to US$ 10 million equivalent in MNT under the Mongolian Sustainable Energy Financing Facility (MonSEFF). The funds will be on-lent to private enterprises in Mongolia for financing sustainable energy projects in the country. The project is expected to contribute to building capacity of XacBank in sustainable energy lending and to provide much needed medium-term local currency funding to Mongolian companies.

Transition Impact

This will be the first sub-project under the pilot MonSEFF facility, and it will generate transition impact by demonstrating the benefits of energy conservation and promoting the early adoption of sustainable energy financing. As part of MonSEFF, this project will demonstrate the effects of rational energy utilisation for improving industrial competitiveness in light of rising energy costs in Mongolia.

The project is also expected to build expertise related to sustainable energy investments among XacBank and its sub-borrowers. The bank will build expertise in assessing the risk and creditworthiness of clients for sustainable energy investments and enhance their capability in identifying clients with sustainable energy savings potential. Sub-borrowers, supported by technical cooperation (TC) are expected to learn the technical and financial benefits of Sustainable Energy Investments to improve their operations.

The Client

XacBank is the fourth largest bank in Mongolia. It is a leading micro and small business lender in Mongolia with 92 branches and service outlets across the country.

EBRD Finance

Senior loan in the amount of US$ 10 million equivalent in MNT.

Project Cost

US$ 10 million equivalent in MNT.

Environmental Impact

Categorised FI. XacBank is an existing client of the Bank and has adopted an Environmental Policy and Environmental and Social Procedures, which satisfy the EBRD’s performance requirements 2 and 9.

Technical Cooperation

In 2011-2012, XacBank benefited from technical assistance to support the bank’s plans to expand its outreach to SME and corporate clients. The funding was provided by the government of the Republic of Korea.

Previously, between 2008 and 2010, TC was provided to the bank to support its MSME lending activities. The funding was provided by the EBRD Early Transition Country Fund and the EBRD Shareholder Special Fund.

The TC under the current project is envisaged to support the identification of sustainable energy projects (e.g. via energy audits, training to loan officers, marketing support, etc.) and to build capacity in sustainable energy lending at XacBank. The funding for this TC is yet to be secured.

Company Contact

XacBank HQ Bldg
Ulaanbaatar-14200
Post Branch 20A
PO Box-721
MONGOLIA

Tel: +976 11 318185
Fax: +976 11 328701
Email: info@xacbank.mn
Website: www.xacbank.mn

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

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