IBEC becomes member of Green Loan program for SMEs by Trade and Development BankEconomy
Ulaanbaatar /MONTSAME/. The International Bank for Economic Co-operation (IBEC) has supported the Green Loan Program (GLP) of the Trade and Development Bank of Mongolia (TDBM) for small and medium-sized enterprises in Mongolia. IBEC has provided loan in the amount of USD 10 million for a period of up to 3 years.
The total green financing volume under the GLP program is USD 50 million and is formed both from TDBM funds and with the support of a number of other banks, including international development institutions. The full implementation period of the Program is 5 years.
Participation in the program is fully consistent with the new IBEC strategy and confirms the Bank's pathway towards financing sustainable development, stimulating green investments, promoting social stability and supporting the SME sector.
The GLP program, developed by one of the country's leading banks, reflects Mongolia's active interest in addressing environmental issues and commitment to the UN's Sustainable Development Goals (SDGs). GLP implementation is in line with the following SDGs: clean water and sanitation, affordable and clean energy, decent work and economic growth, industrialization, innovation and infrastructure, sustainable cities and towns, responsible consumption and production, and combating climate change.
The country has approved the National Green Development Policy, in accordance with the Paris Agreement, Mongolia has committed itself to reducing greenhouse-gas emissions by 22.7% by 2030. The systematic approach of the Mongolian authorities is proved by the creation of the Committee on Green Taxonomy in 2019, whose task is to develop methodological principles and approaches to the implementation of the green agenda and its financial support. Under the auspices of the Mongolian Sustainable Finance Association (MSFA), the Central Bank of Mongolia, and the Ministry of Environment and Tourism, the Green Taxonomy Committee focused on the following key industry areas: energy, green buildings, environmental pollution, water and waste, sustainable agriculture.
These priorities are the key to the GLP program, the implementation of which is supposed to inform small and medium-sized businesses about green business models, the development of environmentally friendly products and services, and stimulate green consumer behavior, including through the introduction of green credit products, and, of course, – expanding the access of small and medium-sized businesses to long-term loans. The focus on the SME sector is not accidental.
In Mongolia, these are key economic agents in all sectors of industry and service, with the exception of mining. This is 77% of all registered companies, 72% of the working population, and 17.8% of GDP. It is the SME sector that can become the green locomotive in Mongolia, provided that financial and information support is provided. The availability of medium and long term financing is one of the key challenges for the development of Mongolian SMEs.
The Trade and Development Bank of Mongolia expects that the launch of GLP will result in a reduction in air pollution, a decrease in heat loss in buildings, an increase in the share of hybrid and electric vehicles, support for traditional Mongolian animal husbandry from an environmental perspective, and the creation of new jobs in the national economy. Among the projects and contracts already being worked out by the bank are purchases of equipment for solar energy, deep processing of waste, projects of organic animal husbandry. At the same time, the program also provides support for the foreign economic activity of SMEs in the implementation of green financing transactions.
IBEC participation in such an important and strategically-focused program places the Bank alongside with international financial organizations and development banks aimed at implementing the tasks of climate action, targeted support for the sector of small and medium-sized enterprises, including their foreign economic activity.
“We expect not only the successful implementation of the project in Mongolia and the achievement of the stated ambitious goals, but also that the Green Loan Program will become a success story for other countries and financial institutions. IBEC is interested in the development of such socially and environmentally significant projects and will continue supporting them”. - Denis Ivanov, Chairman of the IBEC Board
“We are truly delighted to have launched our Green Loan Program together with our well-established partner and leading international financial institution – IBEC, which is a milestone event for both IBEC and TDBM since this first-of-a-kind Program aims to support sustainable and green growth in Mongolia. Especially in the context of COVID-19 recovery, supporting green and resilient growth of the economy by building capacities and financing innovative green projects, products, and technologies of SMEs, together with IBEC, we are opening a window of new possibilities for our customers to shift their mindset and business models into a “green” new normal”. - Erdenebileg Doljin, Chairman of the TDBM Board.