Mongolia’s central bank has taken a major step toward strengthening green finance within its banking sector. On July 22, 2026, the Bank of Mongolia signed a memorandum of understanding with the International Finance Corporation. This agreement supports technical assistance under the Green Finance Market Development Project II.
Governor Narantsogt Sanjaa represented the Bank of Mongolia during the signing ceremony held recently. Meanwhile, Victoria Delmon, World Bank Group Country Manager for Mongolia, signed on behalf of IFC. Together, both officials emphasized building resilience against climate-related financial risks nationwide.
Specifically, the memorandum focuses on refining supervisory requirements for identifying climate-related financial vulnerabilities. Additionally, parties plan to enhance capacity for collecting, processing, and reporting relevant climate data. Furthermore, they aim to develop infrastructure supporting stronger risk assessment integration across supervisory frameworks.
This agreement builds directly upon research conducted throughout 2025 by multiple organizations. Working alongside IFC, the central bank completed a comprehensive Banking Sector Climate Risk Exposure Assessment. Separately, collaboration with the UN Economic and Social Commission for Asia and the Pacific produced additional scenario analysis.
Both studies revealed troubling vulnerabilities within Mongolia’s banking sector regarding climate change impacts. Specifically, researchers identified significant exposure to physical and transition risks alike. Consequently, expected credit losses could rise substantially without proper intervention and preparation.
Given these findings, the Bank of Mongolia recognized an urgent need for comprehensive action. Officials concluded that banks require stronger readiness against environmental and climate-related risks. Moreover, improving data access remains essential for accurate risk evaluation and management purposes.
This newly signed memorandum formalizes continued green finance cooperation between Mongolia and IFC moving forward. Ultimately, these efforts aim to protect the banking sector while supporting broader climate resilience goals. As environmental risks intensify globally, such partnerships increasingly shape financial regulation across developing economies.
