GuarantCo completes first deal in Mongolia with Trade and Development Bank

  • Date written
  • September, 2025

GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a five-year 100% payment default guarantee of USD 41.5 million to support Trade and Development Bank JSC (TDB) in Mongolia. Through this transaction, GuarantCo and PIDG will facilitate overseas investors in offering long-term finance for critical sustainable infrastructure in Mongolia.

GuarantCo completes first deal in Mongolia with Trade and Development Bank

This innovative guarantee solution enables TDB to access a sustainability loan from the Tokyo branch of Korea Development Bank. This capital will be lent to eligible green and social projects aligned to TDB’s sustainability framework, which is verified by Moody’s ESG Solutions. 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, the market’s 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 Goal 13 – Climate Action as downstream businesses are expected to either reduce emissions for the planet or contribute to climate change adaptation. Importantly, the deal also aligns with SDG 9 – Industry, Innovation and Infrastructure, by facilitating investment in sustainable and resilient infrastructure through an innovative financial instrument.

Nishant Kumar, Managing Director of Asia Investments at GuarantCo and Head of Coverage – Asia at PIDG, said:

“We are delighted to move into the Mongolian market to help resolve the lack of local long-term finance options leading to subdued investment that is stifling growth. We engaged with key stakeholders in the market for this transaction including Bank of Mongolia, Financial Regulatory Commission of Mongolia, Mongolian Tax Authority, Ministry of Finance and Mongolian Sustainable Finance Association. These meetings established a foundation for collaborative efforts to deepen domestic financing options, promote sustainable infrastructure investment, and ensure that Mongolia’s capital markets can support long-term economic growth.

“Strengthening institutional investor engagement remains a critical priority, as expanding Mongolia’s investor base is essential for fostering long-term capital market stability.”

Orkhon O., CEO of TDB said:

“Since its establishment, TDB has been at the forefront of representing Mongolian commercial banks on the international stage. We were the first to issue bonds in the international capital markets, the first to issue green and social bonds internationally, and the first to establish direct USD payment channels from Mongolia.

“Today, we are proud to open the door of the Mongolian market to PIDG and GuarantCo, particularly in sustainable sector financing. Within this landmark transaction, TDB will continue to play a leading role in promoting the United Nations’ Sustainable Development Goals (SDGs) and supporting our clients in their transition towards environmentally and socially responsible business models that mitigate the impacts of climate change. We look forward to building on this partnership and expect to realise further successful transactions with these institutions in the future.”

NOTES TO EDITORS

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. Since 2005, GuarantCo has enabled USD 7.1 billion of total investment and USD 6.8 billion of private sector investment, giving 44.8 million people access to infrastructure and creating around 248,000 jobs. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of pioneering, partnership, safety, inclusivity, and urgency.

 

PIDG offers Technical Assistance for upstream, early-stage activities and concessional capital; its project development arm – InfraCo – invests in early-stage project development and project and corporate equity. PIDG credit solutions include EAAIF (the Emerging Africa & Asia Infrastructure Fund), one of the first and more successful blended debt funds in low-income markets; GuarantCo, its guarantee arm that provides credit enhancement and local currency solutions to de-risk projects; and a growing portfolio of local credit enhancement facilities, which unlocks domestic institutional capital for infrastructure financing.

 

Since 2002, PIDG has supported 258 infrastructure projects to financial close, which provided an estimated 232 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden and Global Affairs Canada. www.pidg.org

About TDB

Founded in 1990, Trade and Development Bank JSC (TDB) is Mongolia’s oldest and most pioneering commercial bank. As a systemically important institution, TDB has been at the forefront of the country’s financial sector, introducing international best practices and driving growth across all segments of the economy.

 

TDB is widely recognized for its innovation and global reach, especially in the field of sustainable development. It was the first bank in Mongolia to fully integrate an Environmental and Social Risk Management system into its operations more than a decade ago. The Bank also committed to providing sustainable financing worth USD 2 billion to its clients by 2030, contributing to inclusive and sustainable economic growth in the country. TDB continues to serve as Mongolia’s gateway to international finance, with a strong focus on sustainability, digital transformation, and supporting the nation’s long-term development.