IFC and Mongolia’s financial regulator sign MOU to scale green and blue bonds, supporting climate policy update and ESG compliance. ESG BROADCAST shares key takeaways.
The International Finance Corporation (IFC) and the Financial Regulatory Commission (FRC) of Mongolia have renewed their strategic partnership to advance the country’s sustainable finance ecosystem. The two institutions formalised their cooperation through a new Memorandum of Understanding (MOU), which also marks the official launch of the second phase of the IFC Green Finance Market Development Project in Mongolia.
The renewed collaboration is focused on deepening Mongolia’s access to climate finance and expanding the range of financial instruments beyond conventional green bonds. With an emphasis on regulatory development, the initiative aims to introduce frameworks for innovative thematic instruments such as blue bonds, sustainability-linked bonds, and broader sustainable bonds. Additionally, it seeks to align Mongolia’s Environmental, Social, and Governance (ESG) disclosure standards with the recently released International Financial Reporting Standards (IFRS) Sustainability Standards 1 and 2.
Mongolia has made measurable progress in developing its green finance market in recent years. In 2021, supported by the Government of Japan through its Comprehensive Trust Fund, IFC assisted FRC in drafting Mongolia’s inaugural Green Bond Regulation and Guideline. Since the adoption of this framework, the country has seen seven successful issuances of green and social bonds in both domestic and international markets, collectively raising over $338 million.
Building on this momentum, the FRC, with IFC’s support, introduced the ESG and Sustainability Reporting Guidance for Mongolian companies in 2022. This guidance references globally recognised frameworks and the IFC Disclosure and Transparency Toolkit, laying the groundwork for enhanced corporate accountability. By 2023, the FRC became a member of the IFC-supported Sustainable Banking and Finance Network, signalling its growing commitment to global ESG integration.
According to FRC Chairman Jambaajamts Tundev, the expansion of climate-themed financial instruments will help Mongolian issuers diversify their capital sources and access new funding for sustainable projects. “By collaborating with IFC, we can help build a more resilient and environmentally sustainable financial sector that aligns with international standards,” he said.
Matthieu Le Blan, IFC’s Resident Representative for Mongolia, highlighted the broader socio-economic benefits of the initiative: “Mongolia’s sustainable development plans present a significant opportunity to invest in infrastructure, farming, and forestry—driving job creation, innovation, and inclusive growth. By leveraging our expertise, we are committed to creating an enabling environment that mobilizes more private sector solutions to help turn this vision into reality.”
Since initiating its support more than a decade ago, IFC has played a central role in Mongolia’s sustainable finance trajectory. In earlier phases of the green finance project, IFC conducted a comprehensive climate risk exposure assessment for the banking sector and made catalytic investments in the country’s first green and social bonds in 2023 and 2024, respectively.
Strategic significance lies in the partnership’s potential to anchor Mongolia’s sustainable finance sector in international best practices, while enabling domestic issuers to access diversified ESG-aligned capital. This development represents a critical step forward for climate policy advancement and private-sector participation in responsible finance.
ESG BROADCAST will continue monitoring the updates related to this topic. Stay tuned to be updated on the related policy and pivotal regulatory shift.
