Khan Bank and Proparco Sign USD 50 Million Facility Agreement for Climate and Rural Finance
Khan Bank has signed a USD 50 million facility agreement with Proparco, a development finance institution and subsidiary of the French Development Agency Group (AFD Group), to accelerate climate investment and expand access to finance for micro, small and medium-sized enterprises (MSMEs) in rural areas. This is the first bilateral financing extended by Proparco to Khan Bank, strengthening the long-term partnership between the two institutions.
Of the total, USD 30 million will be dedicated to projects advancing climate change mitigation and adaptation, while USD 20 million will empower rural enterprises whose growth underpins livelihoods far beyond the capital.
Investing in a climate-resilient economy
The climate component of the credit line will primarily finance mitigation projects, including renewable energy, energy efficiency and sustainable buildings. These investments are particularly important in Mongolia, where reducing reliance on coal, improving energy efficiency and expanding clean energy are key to reducing emissions and air pollution. It may also support adaptation projects, particularly in the agricultural sector. Eligible investments include sustainable livestock practices designed to limit overgrazing, land degradation and desertification—issues that are particularly important in Mongolia’s climate-vulnerable rural economy.
Widening access to long-term finance in rural areas
Through its extensive national network of 535 branches, Khan Bank will use the rural SME component to expand access to finance in ten of Mongolia’s underserved rural provinces where poverty levels remain above the national average, many of which continue to face limited access to long-term financing despite their strong entrepreneurial potential. By strengthening economic activity in rural areas, the operation is expected to contribute to more balanced regional development and support the diversification of an economy that remains highly concentrated in Ulaanbaatar and dependent on the mining sector.
About Khan Bank JSC
Khan Bank is Mongolia’s largest commercial bank, serving 83% of the country’s total population through its extensive nationwide network and digital banking channels. With a strong commitment to growing together with its customers, the Bank provides comprehensive banking and financial services to individuals, businesses and communities across the country. As a trusted financial partner to millions of Mongolians, Khan Bank plays an important role in supporting economic growth, financial inclusion and the development of local businesses. Sustainability is an integral part of the Bank’s long-term strategy, with a focus on expanding green and sustainable finance, supporting responsible business growth, and strengthening the resilience of its customers and communities.
About Proparco
Proparco is France's development finance institution and the private-sector arm of the French Development Agency (AFD) Group. For over 50 years, Proparco has promoted sustainable economic, social, and environmental development across Africa, Asia, Latin America, Eurasia, and the Middle East, by financing and supporting companies and financial institutions in more than 115 countries.
Proparco has strong expertise across key development sectors, including renewable energy, infrastructure, agribusiness, healthcare, and education. It offers a diversified range of financial tools—guarantees, loans, and investments—tailored to the different stages of a company’s development, as well as technical assistance through its Propulse program to enhance the impact and performance of its partners. Additionally, its subsidiary Digital Africa is dedicated to financing early-stage African tech startups.
With an international network of 26 local offices, Proparco works closely with its clients and their beneficiaries to build a more just and sustainable world.
