GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a five-year 100% payment default guarantee to Trade and Development Bank JSC (TDB) in Mongolia. Through this transaction, GuarantCo and PIDG will crowd-in long-term offshore market liquidity to boost sustainable infrastructure financing in Mongolia.
The innovative credit-enhanced solution enables TDB to access a sustainability loan from Korea Development Bank (KDB) - Tokyo Branch, which will be on-lent to eligible green and social projects under TDB's sustainability framework verified by Moody's ESG Solutions (formerly Vigeo Eiris). The target on-lending sectors include renewable energy, green buildings, sustainable manufacturing, sustainable agriculture, waste management, clean transportation and other social sectors.
The government and regulators in Mongolia have placed great emphasis on sustainable finance, with initiatives such as the National Sustainable Finance Roadmap (2028) and the Green Taxonomy, which set clear criteria for green investments. However, a substantial funding gap remains, with the country requiring an estimated USD 11.5 billion to meet its 2030 greenhouse gas reduction targets.
Despite policy support, limited funding availability, high interest rates and a lack of green finance products continue to constrain Mongolia’s green finance sector. Further support is needed to scale up Mongolia’s sustainable investment landscape and mobilise private sector participation.
Building on TDB's proven track record in sustainable sector financing, the new GuarantCo-KDB facility represents a strategic opportunity to expand the bank's sustainable portfolio through innovative offshore capital partnerships that leverage TDB's deep sector expertise while accessing new funding sources to accelerate sustainable development across the region.
The facility is projected to generate significant sustainable development impact, with the resulting lending portfolio designed to support businesses and end users throughout the broader economy, stimulating economic activity and creating meaningful employment opportunities across multiple sectors. There is also an important Gender & Inclusion focus with TDB committed to supporting women-led businesses through its lending activities.
The deal is aligned to the UN’s Sustainable Development Goals 13 – Climate Action as downstream businesses are expected to either reduce emissions for the planet or contribute to climate change adaptation.
TOGETHER TOWARDS SUSTAINABILITY
TRADE AND DEVELOPMENT BANK