ADB and AIIB support andmark Pakistan Panda Bond with partial guarantee structure in China market debut

Pakistan has entered China’s domestic bond market with its first-ever Panda Bond issuance worth $250 million (CNY 1.75 billion), supported by the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB), according to a statement issued by the ADB.

The sustainable development bond marks Pakistan’s debut in the renminbi-denominated capital market and is tied to financing for its Sustainable and Green Infrastructure Project.

The issuance was structured with partial credit guarantees and is being positioned as a milestone in enabling developing countries to access China’s onshore capital market, the ADB said.

It noted that the bond was the first with less than 100% guarantee coverage to achieve a domestic AAA rating, establishing a precedent for using partial guarantees to mobilise private capital in emerging markets.

The transaction, jointly supported by the Asian Development Bank and the Asian Infrastructure Investment Bank, facilitated Pakistan’s entry into China’s onshore debt market.

Officials said the $250 million issuance was well received by investors, reflecting confidence in Pakistan’s reform programme and its commitment to sustainable and inclusive infrastructure development.

ADB Director General for Central and West Asia Leah Gutierrez said the transaction allowed Pakistan to access China’s capital market while securing competitive pricing to support infrastructure and human capital development.

She said the Panda Bond expands Pakistan’s access to international capital markets and strengthens financial cooperation between Pakistan and China.

Proceeds from the issuance will finance projects in water governance, energy reliability and efficiency, and healthcare capacity expansion.

The ADB said the financing structure integrates sustainability objectives into public sector spending and reinforces Pakistan’s focus on green infrastructure and broader engagement with global capital markets.