During her first official visit in Mongolia, we had the opportunity to speak with Odile Renaud-Basso, the first female president of the European Bank for Reconstruction and Development (EBRD). As a prominent leader spearheading EBRD's green economy transition and inclusive growth agenda, Ms. Renaud-Basso shared her perspectives on the Bank's programs in Mongolia and its future direction. In this exclusive interview, she discusses the strategic importance of Mongolia, EBRD's efforts to foster sustainable development, and initiatives to support women entrepreneurs and drive green finance in the region.

Mongolia’s economic landscape is evolving, with an increasing focus on sustainability and inclusivity. What are the EBRD’s key strategic priorities in Mongolia for the next decade?

Several years ago, the EBRD introduced its Green Economy Transition (GET) approach, under which we pledged to scale up our climate and environmental finance to more than 50% of our annual investment by 2025. We exceeded this target ahead of schedule and have maintained it since 2021. The global shift towards a greener, more environmentally conscious world is evident, as demonstrated by the recent COP climate summits. Most major economies are accelerating efforts to meet the goals of the Paris Agreement, and the EBRD is fully committed to this green transition.

Over the next decade, our focus in Mongolia will be to support the transition to a greener economy, foster inclusive growth, and strengthen infrastructure resilience. This will involve continued investments in renewable energy and green finance, as well as promoting gender equality and inclusive business practices. Additionally, we aim to enhance Mongolia’s financial systems and support small and medium-sized enterprises (SMEs) by providing them with access to capital and advisory services to help them thrive in a competitive market.

The EBRD’s WiB (Women in Business) program has supported many women entrepreneurs in Mongolia. How has this program impacted gender equality in the local business environment, and what further initiatives are planned?

The EBRD believes that an unequal distribution of economic opportunities in any country, when access to economic opportunities is constrained, has a detrimental impact on the growth potential of this country and, subsequently, its political stability. Equal access to economic opportunity is integral to sustainable market development. When individuals are unable to make the best use of their skills and talents because they were born in a remote or climate change-affected area, or because of their disadvantaged background or their gender, markets and economies are negatively affected. However, if people are given a chance to succeed, they are more likely to become educated, participate in the workforce, and thus contribute to economic growth and prosperity.

Our new Equality of Opportunity Strategy until 2025 recognizes the fact that factors such as gender, place of birth or residence, age, disability, skill types, displacement, etc can lead to inequality of opportunity but can change throughout a person’s life.

We are promoting inclusive investment and policy engagements, including the EBRD’s successful Women in Business and Youth in Business programs. In the context of our projects, we offer inclusive vocational market-oriented training for various groups of population regardless of their age, gender, or geographical remoteness. Our Women in Business program has had a transformative effect on Mongolia’s business landscape. Since its launch early in 2022, we’ve provided over 65 women-led businesses through local advisory projects conducted 10 dedicated training sessions for over 200 participants engaged over 130 women entrepreneurs through 4 mentoring programs, and conducted 4 network-building activities, which attracted almost 500 women-run or owned SMEs.

This is particularly important, as nearly 60% of the country’s 60,000 local micro, small, and medium-sized enterprises are owned by women. Mongolia’s micro-lenders, Transcapital and VisionFund, were the first institutions to join the program. We’re now working with major banks like Khan Bank to tailor financial products that meet the specific needs of women-led SMEs, supporting their digital transformation and market expansion. The country’s largest commercial lender Khan Bank joined the WiB programme in 2023. As part of this engagement, Khan Bank is developing financial products and lending practices required to meet the specific needs of women-led micro, small, and medium-sized enterprises, including their digitalization.

Also in 2023, the EBRD launched a 7-year €200 million Youth in Business (YiB) program in Central Asia. It targets micro, small, and medium-sized enterprises led or owned by young individuals under the age of 35. Mongolia’s leading micro lender Transcapital was the first financial institution in the country to join this framework. Targeted non-financial services for eligible small businesses under YiB will be provided by the Bank’s Advice for Small Businesses program to help develop their entrepreneurial skills through training, advisory services, and networking opportunities.

Last but not least, I should also say that we want to see more women in senior management and companies’ boards of directors. This is a global trend, that the EBRD itself is following. As a matter of fact, if you look at our senior leadership group (these are Managing Directors running different areas of our business), half of them are females.

Given the challenges in Mongolia’s energy and infrastructure sectors, particularly outdated coal-based power plants, how is the EBRD working to encourage renewable energy projects and more energy-efficient infrastructure?

Mongolia’s energy infrastructure is indeed in need of modernization, and our focus is on scaling up renewable energy projects while enhancing energy efficiency. We’ve supported several solar and wind power projects, and we’re advocating for the adoption of stricter energy-efficiency standards in new buildings. By working with both the government and private sector, we aim to make Mongolia’s energy systems more resilient, sustainable, and less reliant on fossil fuels.

Furthermore, The Green Economy Transition (GET) approach has fundamentally shifted our focus towards climate resilience and sustainable investments. In Mongolia, the EBRD has actively supported several green initiatives. Central Asian states such as Uzbekistan and Kazakhstan have demonstrated that renewable energy is the way forward and initiated wind and solar auctions to achieve lower feed-in tariffs. Additionally, new renewable projects in the two countries helped minimize harmful emissions and increase FDI. These are good examples for Mongolia. The recent renewable energy auctions in Mongolia show that the country is ready to embrace cleaner alternatives, which will reduce its dependence on coal and address the pressing issue of air pollution in cities like Ulaanbaatar.

Ulaanbaatar became the first Asian city to join the EBRD’s Green Cities program. Could you share some key achievements of this initiative in Mongolia, and how it’s improving urban infrastructure and environmental sustainability?

One of the standout achievements of Ulaanbaatar’s participation in the Green Cities program has been the improvement in waste management systems, which has benefited over 700,000 residents. The program has also supported the modernization of district heating systems, reducing energy waste and improving air quality in the city. These initiatives are making Ulaanbaatar a more sustainable, livable city by addressing its most urgent environmental challenges. XacBank, Mongolia’s most active creditor of green economy projects was the first financial institution to join GEFF in the country in September 2022. That said, XacLeasing began working with us under GEFF in 2000 and supported leases, which covered investments in technologies such as energy-efficient production machinery, agricultural irrigation, and rainwater harvesting equipment. It was the time when we introduced the Green Technology Selector, which helped identify climate-friendly technologies with the help of a consultancy team funded by the GCF and Japan.

Most recently the EBRD invested US$ 12.5 million in a green bond issuance by Khan Bank. This is the first EBRD investment in a listed green bond in Mongolia and will support the first such bond of a local commercial bank to be listed on the Mongolian Stock Exchange.

Thank you, Ms. Renaud-Basso, for sharing your insights into the EBRD’s role in driving sustainable growth in Mongolia. We look forward to seeing the continued progress of these impactful initiatives.

Thank you for the opportunity to discuss the EBRD’s work in Mongolia. It’s been a pleasure to highlight our commitment to green finance and inclusive growth, and I’m excited about the future progress we can make together. Mongolia holds great potential, and through collaboration with local partners, we aim to ensure long-term sustainability and prosperity.