Mobilising private sector capital is critical to climate transformation, and the Green Climate Fund’s (GCF) partnerships in Mongolia demonstrate how the Fund can leverage public funds to engage private investment.
This was the message emphasised by Ayaan Adam, Director of GCF’s Private Sector Facility, in a statement to the Mongolian Sustainable Finance Forum in Ulaanbaatar on Thursday, September 14, 2017.
”GCF is providing strong support for developing countries to build their climate capacity and ownership,” stated Ms Adam in her keynote speech. “We are also using public funds to catalyse private players and encouraging their full participation, providing creativity, innovation and massive capital for climate action. This is the sustainable, long-term solution to respond to climate change,” she explained.
Ms Adam addressed the 450+ attendees of the international forum in Ulaanbaatar, and used the Fund’s partnerships in the country as an example of how GCF can respond rapidly and with transformative impact to support country ownership and crowd-in private capital.
The Green Climate Fund recently disbursed $20 million for an investment to create a business loan programme for GHG emission reduction in Mongolia. The project was developed in partnership with XacBank, one of Mongolia’s leading banks. It was fast-tracked from accreditation, to project approval, signature, and disbursement in less than a year.
While the Fund has many international private sector projects, this is its first local private commercial project in a developing country.
At the same time, GCF is providing readiness funds to the country in order to support the development of the Mongolian Green Credit Fund by the Mongolian Ministries of Finance and Environment. Delivered in partnership with the Global Green Growth Institute (GGGI), this project will enable the creation of a national financing vehicle to deliver long-term climate finance to stimulate green growth.
At the same time, GCF is providing readiness funds to the country in order to support the development of the Mongolian Green Credit Fund by the Mongolian Ministries of Finance and Environment. Delivered in partnership with the Global Green Growth Institute (GGGI), the one year project will enable the creation of a national financing vehicle to deliver long-term climate finance to stimulate green growth.
The proposal was approved for an amount of $350,000 that will help in scaling up a national finance vehicle to bring long term finance to projects and programmes that stimulate green growth in the country.
In stressing the Fund’s ability to engage the private sector, Ayaan Adam also highlighted the Fund’s Mobilising Funds at Scale programme. A recent Request for Proposals under this $500 million programme has generated over 350 proposals to GCF from private sector institutions around the planet, including from national financial institutions in developing countries.
The most promising ideas will be developed and submitted to GCF’s Board for funding consideration.
