ADB Approves $100M Loan to Boost Mongolia's Climate Resilience and Low-Carbon Growth

Mongolia’s proactive stance, supported by ADB, can serve as a blueprint for similar nations facing climate challenges.

The Asian Development Bank (ADB) has approved a $100 million policy-based loan to support Mongolia in advancing its climate action initiatives, under the Accelerating Climate Investment Program (Subprogram 1). This program is designed to help Mongolia meet its commitments under its nationally determined contribution (NDC) and implement its National Adaptation Plan (NAP), emphasizing gender-responsive actions and inclusive growth.

Driving Climate Action in Mongolia

ADB Country Director for Mongolia, Shannon Cowlin, highlighted the program’s transformative objectives: “The program will help Mongolia anchor climate action in national plans and budgets and catalyze public and private climate finance to accelerate a low-carbon, inclusive, and resilient economy. This will be achieved by developing climate investment programs, mobilizing affordable and accessible climate finance, and improving the ease of doing business in key sectors.”

Challenges in Mongolia

Mongolia faces acute climate vulnerabilities, including rising temperatures and intensifying aridity, which directly threaten traditional nomadic herding—a way of life for many Mongolians. Increasingly severe climate hazards, such as dzuds (harsh winter conditions leading to livestock mortality), are exacerbating socio-economic challenges, particularly for women, rural communities, and herders migrating to urban centers.

Key Features of the Program

Strengthening Climate Governance:

Enhancing institutional frameworks, policy planning, and budget alignment for climate action.

Promoting investment in renewable energy, energy-efficient buildings, and climate-resilient agriculture and livestock practices.

Mobilizing Climate Finance:

Facilitating the issuance of green and sustainable bonds to fund climate investments.

Expanding the green loan portfolio of Mongolian banks to support sustainable development.

Focusing on Sector-Specific Climate Pathways:

Targeting low-carbon growth in the energy sector through increased renewable energy generation and energy efficiency initiatives.

Strengthening climate resilience in agriculture, livestock, and food processing industries.

Gender-Inclusive Approaches:

Incorporating women’s perspectives and addressing their unique vulnerabilities in climate policies and programs.

Empowering women in rural areas through capacity-building initiatives tied to sustainable livelihoods and climate resilience.

Enhancing Adaptation and Resilience

The program aligns with Mongolia’s overarching climate objectives to combat global warming’s adverse effects. The initiative will bolster adaptation measures, ensuring that at-risk populations, especially women and vulnerable communities, are supported.

Additionally, the program aims to stimulate investment through improved ease of doing business in key sectors, fostering a climate that encourages private sector participation in climate-resilient projects.

Global Implications

As a model for climate investment in emerging economies, the program underscores the importance of combining international financing with local capacity-building to achieve sustainable and equitable growth. Mongolia’s proactive stance, supported by ADB, can serve as a blueprint for similar nations facing climate challenges.

This initiative also reflects ADB’s commitment to advancing its Strategy 2030, which prioritizes tackling climate change, fostering gender equality, and promoting sustainable economic development in the Asia-Pacific region.