XacBank Syn 2022 The proposed investment is an up to US $130mn senior loan syndication to XacBank LLC (the Bank), an existing IFC partner and the fifth largest bank in Mongolia, consisting of up to US$40 million for IFCs own account and mobilization of up to US$90 million from international lenders. The loan aims to support XacBank to grow its lending portfolio in two key priority sectors - climate and micro, small and medium enterprises (MSMEs) finance, including women-owned MSMEs in Mongolia and is expected to be supported by the Women Entrepreneurs Finance Initiative (We-Fi) and the Women Entrepreneurs Opportunity Facility (WEOF) (the Project).    Assuming that the Project will fully reach the agreed impact targets, IFC as implementing entity of WEOF and We-Fi is expected to provide up to US$329,000 (equivalent to up to 0.25% of the total project cost of US$130 million) as a performance-based incentive (PBI) to support additional on-lending to women-owned small and medium enterprises (WSMEs) and women-owned very small enterprises (WVSEs) to help counter the gender financing gap in Mongolia. IFC is open to engaging further with financial institutions and consider structures similar to the one proposed in this investment with the support of WEOF and We-Fi. As is the case with all IFCs blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for Development Finance Institution (DFI) Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles, IFCs blended finance approach and governance, and historical information on estimated subsidy levels in IFCs blended finance portfolio can also be found at:   www.ifc.org/blendedfinance . Stakeholder Effects: Increased access to finance for women-owned/led MSMEs: Access to finance has been cited as one of the top three obstacles for firms (2019 Enterprise Survey), with high interest rates, high collateral requirements, and stringent documentation as commonly mentioned barriers, and these issues are more acute for women-owned/led enterprises. Through this Project, IFC expects to support the Bank in growing its women-owned/led MSME portfolio.
Stakeholder Effects: Increased access to green finance: Through this Project, IFC anticipates to help the Bank grow its climate finance portfolio. More specifically, the proceeds from the loan will be used for financing of eligible green assets in the areas of renewable energy, energy efficiency, green buildings, pollution prevention and control. The supported projects are expected to contribute towards the reduction of GHG emissions in the country. 
Market Creation: Sustainability: As part of a programmatic approach to support climate finance in Mongolia, IFC anticipates that this Project, together with the green bond issuance being processed with Khan Bank in parallel (Project# 46970), will promote greater sustainability by promoting and reinforcing internationally recognized best practices in climate-finance in the country. By supporting leading banks in Mongolia to establish a viable climate-finance portfolio, these investments by IFC, through demonstration and replication channels, will showcase best practices in developing climate finance portfolio and demonstrate the importance of climate finance as a separate asset class. Moreover, this is expected to create competitive pressure among other financial institutions within the country and contribute to the development of the climate finance market.