Pakistan intends to launch domestic green Sukuk bonds by December 2024, as confirmed by Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb. These bonds will finance projects geared towards sustainable development, according to a statement from the Finance Division released on Friday.
This announcement was made as part of Aurangzeb’s keynote speech delivered via an online platform at the UK-Pakistan Green Investment Forum, which was organized by the British High Commission in Pakistan on Friday.
In his statement, Aurangzeb detailed Pakistan’s strategy to harness innovative financing methods to attract international climate finance. He also acknowledged the substantial funding deficits in projects focused on adaptation, resilience, and mitigation, and emphasized the critical need to bridge these gaps.
Additionally, Aurangzeb highlighted the necessity for a robust portfolio of green investment projects and underscored the reliance on the private sector to support these initiatives. He also pointed out the government’s ongoing efforts to boost investor confidence in viable green projects.
The finance minister further discussed notable improvements across various macroeconomic indicators over the past ten months. These improvements include better inflation rates, growth in the agricultural sector’s GDP, rising foreign exchange reserves, an upward trend in the stock market, and a forecasted decrease in the current account deficit.
Furthermore, Aurangzeb mentioned the successful conclusion of a 9-month-long Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) and expressed intentions to engage with the IMF for a medium-term funding program. This move is part of Pakistan’s commitment to achieving sustained economic growth and stabilization.
In his address, Aurangzeb reiterated Islamabad’s resolve to enhance the business climate for international investors and underscored Pakistan’s dedication to combating climate change and advancing green investment opportunities. He also highlighted the country’s vulnerability to the adverse impacts of climate change, despite contributing minimally to global greenhouse gas emissions, referencing a World Bank study that projects potential annual GDP losses of up to 1% due to climate-related risks.
