IFC ups stake in Mongolia's TenGer Financial Group

IFC, which previously held a 15% stake in TFG, has also signed advisory agreements with the group's commercial banking subsidiary XacBank to strengthen its capacity to serve smaller enterprises - many of which are run by women - and support climate-friendly energy projects in Mongolia.

The investment comes at a time when the country is undergoing rapid economic development and witnessing increased energy consumption following an influx of foreign investment into its mining sector.

According to a release, the sustainable energy financing agreement signed with XacBank is forecast to reduce greenhouse-gas emissions equivalent to 37,000 tons of carbon dioxide per year and mobilize at least $40 million worth of loans to finance energy-efficiency and renewable-energy projects in Mongolia.

"We have a long relationship with IFC and its expertise continues to help our bank adapt to market changes and boost our competitive edge," said Bold Magvan, TFG's CEO. "The latest agreements will help us further improve our business portfolio and expand our lending to women-led businesses and climate-friendly projects."

IFC has been working with TFG and its subsidiaries since 1999 and became a shareholder of the company in 2008.

According to the World Bank, Mongolia is one of the world's fastest-growing economies, with GDP growth reaching 12.3% in 2012 and likely to remain in the double digits over the next few years.

Also this week, Japanese financial services group Orix Corp. announced it had agreed to buy a 16% stake in TFG for approximately $24 million. Investments in sectors such as financial services are seen as a way to leverage mining growth without being directly exposed to commodities risk.

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• Topics
• Central Asia
• Financials
• Investments
• Expansion
• Mongolia
• International Finance Corporation
• Financial Services
• Growth capital