Khan Bank Secures Its First Direct Proparco Loan of USD 50 million at COP17

Khan Bank has signed its first bilateral facility with Proparco, the private-sector arm of France’s AFD Group, securing a USD 50 million credit line split between climate finance and lending to micro, small and medium-sized enterprises (MSMEs).

Of the facility, USD 30 million is earmarked for climate mitigation and adaptation, while USD 20 million will support MSMEs across ten of Mongolia’s poorest provinces. The climate component is expected to finance renewable energy, energy efficiency and sustainable buildings, while also supporting sustainable livestock and land management.

That mix is particularly relevant to Mongolia’s two-sided environmental challenge: cutting emissions and reducing the coal-driven air pollution concentrated in Ulaanbaatar, while addressing overgrazing and land degradation across the countryside. Close to 77% of Mongolia’s territory has been affected by land degradation, underscoring the scale of the adaptation challenge.

The facility arrives as Ulaanbaatar hosts UNCCD COP17, the first United Nations desertification summit held in East or Central Asia, drawing 197 parties from 17 to 28 August under the theme "Restoring Land. Restoring Hope." A private credit line routing capital toward herders and rangelands aligns neatly with the policy signal Mongolia is broadcasting this month.

The rural component speaks to a longer imbalance. Deployed through Khan Bank's 535 branches, the USD 20 million would widen long-term credit in provinces where activity remains thin and poverty sits above the national average, helping diversify an economy still concentrated in the capital and tied to the mining cycle.

The read for investors is in the sender. Proparco's debut bilateral follows the record USD 170 million package the EBRD committed to Khan Bank earlier in 2026. Development lenders across Europe are increasingly comfortable using Mongolia's largest bank as the conduit for green and inclusion mandates. The list of development finance names behind Khan Bank keeps growing, and France has now joined it.