Green Sukuk Bond
KARACHI: Pakistan has taken a significant step toward sustainable economic development with the launch of its first-ever Green Sukuk bond. The announcement was made by Federal Minister for Finance and Revenue Muhammad Aurangzeb during a virtual address to the Pakistan Stock Exchange (PSX).
In his remarks, Minister Aurangzeb praised the PSX for its strong performance, noting that the stock exchange had recently closed at an all-time high. This, he said, reflects growing investor confidence in the country’s macroeconomic trajectory.
The Green Sukuk bond has been introduced as part of Pakistan’s broader strategy to fund environmentally sustainable and climate-resilient infrastructure projects. Aurangzeb underlined that climate change is one of the most pressing threats facing Pakistan, and this initiative represents a proactive step in securing financing to address environmental challenges.
He shared insights from recent interactions with international investors in Washington and London, where he said Pakistan’s economic stability was met with confidence and support. This positive outlook, he added, is driven by improvements in several key indicators, including a decline in inflation and the strengthening of foreign exchange reserves.
Aurangzeb also highlighted that preparations for the 2025–26 federal budget are underway. The government is currently engaging with stakeholders across sectors to develop a comprehensive and inclusive fiscal plan, with a strong emphasis on sustainable and green economic policies.
Advocating for long-term sustainable finance, Aurangzeb cited Malaysia’s model as a successful example of how green finance can be integrated into national economic planning. He noted that Pakistan is actively pursuing climate finance partnerships to mitigate the impact of environmental degradation and to support the transition to cleaner technologies and practices.
The finance minister also mentioned the countrywide celebrations of Thanksgiving Day, linking the event to growing optimism about Pakistan’s economic resilience and green development agenda.
Additionally, Aurangzeb reiterated Pakistan’s plan to enter China’s capital markets by launching its first Panda Bond by June 2025. This initiative aims to raise around $200 million from Chinese investors and is seen as part of Pakistan’s strategy to diversify its funding sources. He stressed that this effort aligns with the government’s vision of shifting towards an export-led growth model and ensuring sustainability in the country’s balance of payments.
The twin initiatives — Green Sukuk and Panda Bond — underscore Pakistan’s evolving financial strategy, one that balances fiscal discipline with a firm commitment to sustainability and international investor engagement.
