Successful Continuation of Partnership with Mongolia's Largest Bank

Zurich/Ulaanbaatar, 17 December 2024 – A climate fund managed by Swiss impact asset manager responsAbility strengthens its partnership with Khan Bank, Mongolia’s largest financial institution, through a renewed financing facility of USD 15 million. The funding aims to support energy efficiency and renewable energy projects and reduce CO₂ emissions in a country that is one of the world’s most affected by climate change.

Mongolia ranks among the most climate-vulnerable countries in the world, facing extreme climatic challenges. Over the past 70 years, the average temperature has increased by 2.07°C, resulting in more frequent and intense extreme weather events such as long winter periods (Dzud), droughts, floods, desertification, and sandstorms. Particularly affected is the capital, Ulaanbaatar, where nearly all power and heat are derived from coal-fired power plants. This dependency leads to extremely high emission levels - especially in winter, when pollution levels exceed WHO-recommended limits by up to 27 times - making Ulaanbaatar one of the world’s most polluted cities.

Projects financed by Khan Bank and climate impact

Under this partnership several energy efficiency projects have already been financed, contributing to both CO₂ reduction and improved living conditions in Mongolia. These include:

• USD 14.9 million for energy-efficient industrial equipment: Supporting Mongolia’s food and dairy industries by introducing modern equipment, which strengthens livelihoods in the country’s nomadic communities reliant on livestock and dairy production.

• USD 4.6 million for energy-efficient greenhouses: Introducing innovative greenhouse technologies enable year-round vegetable production under extreme weather conditions, bolstering food security and reducing reliance on imports.

• USD 2.7 million for energy-efficient building measures: Projects such as the modernization of the historic Ulaanbaatar Hotel enhance energy efficiency, reduce emissions, and improve the quality of urban life.

As of Q2 2024, these projects have achieved remarkable results, saving 260,152 MWh of energy - equivalent to the annual consumption of 40,000 average Mongolian households¹ - and reducing CO₂ emissions by 0.25 million tons, comparable to the annual emissions of approximately 54,000 cars².

Khan Bank: a dedicated and innovative partner in green finance

Since partnering with responsAbility in 2021, Khan Bank emerged as a leader in green finance in Mongolia, leveraging its nationwide presence and innovative approaches to drive sustainability. For its contributions, Khan Bank received an Honorable Mention at the Global Climate Partnership Award in 2024. Special recognition was given to its sustainable loans for nomadic herders who practice certified environmentally friendly techniques. These projects model the integration of climate mitigation and adaptation measures and play a key role in counteracting land degradation from overgrazing in Mongolia.

David Diaz Formidoni, Head of Financial Institutions Investments, Climate Finance at responsAbility, said: “Our continued collaboration with Khan Bank reinforces our shared vision of a more sustainable and resilient Mongolian economy. The innovative projects enabled by this partnership make a valuable contribution to CO₂ reduction and to improving living standards in one of the world’s most climate-vulnerable countries.”

Erdenedelger Bavlai, First Deputy CEO of Khan Bank, said: “Green finance lies at the heart of our corporate strategy. Partnering with responsAbility allows us to implement innovative solutions to combat climate change and reduce CO₂ while supporting our local communities. Together, we are dedicated to creating a more sustainable future for Mongolia.”

About Khan Bank Khan Bank serves over 82% of its population, offering comprehensive banking services through its 547 branches and digital platforms. Over the past decade, the Bank has prioritized sustainable development, promoting environmentally responsible products and solutions to support Mongolia’s transition to greener future.

¹ Electric power consumption (kWh per capita) | Data ² Greenhouse Gas Equivalencies Calculator | US EPA