Sustainable Transformation and Economy Program (STEP)
An implementation-ready programme designed to finance and support climate-smart, sustainable business investment across Mongolia by combining blended credit with hands-on technical assistance for startups, SMEs, and growth-oriented enterprises.
Turning climate-smart business investment into a practical delivery platform.
The Sustainable Transformation and Economy Program (STEP) is conceived as a fully designed, implementation-ready facility that finances and supports sustainable and climate-smart business investment across Mongolia. It is structured to bridge the gap between investors, projects, entrepreneurs, and local delivery institutions through a combined Private Financing and Technical Assistance Facility.
At its core, STEP offers a single access point where Mongolian startups, SMEs, and corporations can secure blended credit together with practical technical support. This allows enterprises to move from climate intention to implementable, bankable investments in renewable energy, energy efficiency, sustainable agriculture, water and waste systems, eco-tourism, and other low-carbon sectors.
Key programme profile
| Programme Name | Sustainable Transformation and Economy Program (STEP) |
| Programme Type | Climate-smart SME credit facility with blended finance and technical assistance |
| Geography | Mongolia, with intended reach across provinces, aimags, and local enterprise ecosystems |
| Core Purpose | Increase access to affordable green and climate-smart finance while building SME capability and project readiness |
| Facility Structure | Blended credit lines plus a dedicated technical assistance facility |
| Primary Beneficiaries | Startups, SMEs, cooperatives, women-led enterprises, youth-led enterprises, and growth-stage climate-smart businesses |
| Strategic Outcome | Build a pipeline of investable sustainable business projects that create jobs, cut emissions, and improve resilience |
What STEP is designed to achieve
Increase access to green credit
Provide concessional, fit-for-purpose financing in local currency for climate-smart investments that SMEs can realistically service.
Catalyze climate-smart enterprise investments
Support practical investments in renewable energy, energy efficiency, sustainable agriculture, water management, circular systems, and eco-tourism.
Strengthen SME capacity
Combine lending with feasibility work, procurement support, technical guidance, implementation coaching, and operations training.
Create green jobs and value
Generate enterprise growth, local jobs, and measurable climate and development outcomes across Mongolia’s SME ecosystem.
How STEP works in practice
Originate
Build a pipeline of qualified SMEs and enterprises through local outreach, associations, Science Hub support, and partner channels.
Prepare
Screen projects, develop feasibility and cash-flow logic, verify climate benefits, and structure bankable proposals with technical assistance.
Finance & Support
Disburse climate-smart finance through partner institutions while providing post-loan handholding, monitoring, and implementation support.
Priority investment areas
Renewable energy
Rooftop solar, storage, hybrid systems, biomass and biogas solutions for enterprise operations and remote service settings.
Energy efficiency and clean heating
Insulation, efficient boilers, heat recovery, motors, LEDs, and cleaner heating solutions for businesses and workshops.
Climate-smart agriculture and livestock
Protected cultivation, irrigation, cold storage, fodder systems, climate-resilient production, and efficient agro-processing.
Water, waste, and circular systems
Water reuse, wastewater treatment, leak reduction, recycling, organics recovery, and circular business upgrades.
Programme and implementation references
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Why STEP matters
Mongolia’s economy is highly climate-sensitive, with SMEs exposed to energy costs, weather variability, land degradation, drought, dzud, and resource stress. At the same time, many climate-smart upgrades that would improve resilience and competitiveness remain under-deployed because enterprises cannot access affordable finance or trusted technical support in one place.
STEP directly addresses that market gap. It lowers borrowing barriers, extends tenors, provides grace periods where needed, supports project preparation, and creates a transparent delivery model that connects investors, local institutions, and enterprises. This makes it a practical programme for translating climate ambition into real enterprise-level investments.
In that sense, STEP is not just a funding window. It is a structured implementation platform for sustainable transformation, enterprise resilience, green job creation, and measurable climate outcomes.
Institutional model behind the programme
Science Hub / local implementation role
Anchors in-country coordination, governance, secretariat support, outreach, and operational delivery with local stakeholders.
GreenWorks / NatWorks technical role
Provides technical leadership, standards, programme design, due diligence support, M&E design, and capacity building.
Financial institutions
Deliver on-lending and credit origination under structured facility agreements with climate-smart eligibility rules.
Investor and oversight functions
Provide committed capital, strategic oversight, fiduciary discipline, and performance-oriented reporting.