Pakistan launches its first Green Sukuk to fund eco-friendly projects

ISLAMABAD: The Government of Pakistan has announced a major milestone in the country’s sustainable finance journey with the launch of its first Green Sukuk, Finance Ministry said in a press release on Wednesday.

According to the ministry, this pioneering financial instrument is set to revolutionize Pakistan’s sukuk market by channeling investments into environmentally sustainable projects while fostering economic growth.

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The Green Sukuk marks a pivotal step in aligning Pakistan’s financial markets with global best practices in green financing, the ministry added.

It said that the inaugural issuance, ranging between PKR 20 billion and PKR 30 billion, will be conducted through an auction process, with the Pakistan Stock Exchange (PSX) playing a central role in listing and promoting this innovative instrument to investors.

“The Green Sukuk Program has been structured with the support of the Joint Financial Advisors: Meezan Bank Limited, Bank Alfalah Limited, Dubai Islamic Bank Pakistan Limited, and Bank Islami Pakistan Limited.”

The ministry further said the Sustainable Investment Sukuk Framework, approved by the Cabinet, lays the foundation for the landmark debut of the Green Sukuk.

“This initiative is closely aligned with Pakistan’s Vision 2028, particularly its goal of transitioning to an interest-free economy. It reflects the government’s strong commitment to leveraging financial markets in support of sustainable development.”

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The statement said that “the Green Sukuk is a beacon of innovation and a testament to our unwavering commitment to fostering sustainable development and reducing our environmental impact. It offers investors a unique opportunity to support environmentally friendly projects while promoting economic growth.”

This is a historic step toward integrating sustainable finance into the core of Pakistan’s development strategy as the Green Sukuk will attract a broader investor base, deepen our financial markets, and accelerate the country’s transition to a green and resilient economy, the ministry added.