ADB launches $92.6 million fund to support sustainable agribusiness in Mongolia
The Asian Development Bank (ADB) has launched a new fund aimed at expanding access to finance for herders, cooperatives, small and medium-sized enterprises and agribusinesses investing in sustainable livestock value chains in Mongolia, Qazinform News Agency cites the bank’s press service.
The Green Inclusive Regional Agribusiness Fund (GIRAF) was established with $92.6 million from the Green Climate Fund, under the ADB-supported Aimag and Soums Development Investment Program. An additional $25 million is expected to be provided by commercial banks.
The fund will support sustainable rangeland management, livestock production and rural businesses through concessional loans, credit guarantees, microfinance and grants for green innovation. The initiative is designed to address longstanding financing challenges facing Mongolia’s rural economy.
“By providing tailored financial solutions for sustainable livestock production and improved rangeland management, the fund will help create jobs, strengthen rural economies, combat land degradation and desertification, and build resilience to disasters,” he added.
Temperate grasslands cover approximately 82% of Mongolia and underpin the country’s livestock sector, which accounts for around one-quarter of employment and more than 10% of gross domestic product.
However, Mongolia’s rangelands and the communities that depend on them are facing growing pressures from desertification and land degradation.
The GIRAF Fund will initially deploy $37.5 million, including a $3 million grant, to provide tailored financing for rural businesses. The financing package will include concessional loans, credit guarantees designed to reduce collateral requirements and grants supporting green innovation.
Priority will be given to businesses that have commercial partnerships and benefit-sharing arrangements with herders and herder cooperatives.
The initiative will also introduce a digital traceability and monitoring system using geospatial and remote-sensing technologies. The system will track investments and assess their environmental and socioeconomic impact.
By 2034, the GIRAF Fund is expected to support approximately 500 small and medium-sized enterprises and cooperatives and 1,000 microenterprises.
According to ADB, the initiative will help increase the value generated from livestock products while promoting sustainable rangeland management, land restoration and more resilient livelihoods in rural Mongolia.
Earlier, Qazinform reported ADB had priced a $2 billion 10-year global benchmark bond.