Governor SBP advocates increased credit allocation for climate projects at the Green Bonds conference

The Governor of the State Bank of Pakistan (SBP), Jameel Ahmed, has emphasized the need to significantly increase credit allocation to projects that enhance climate resilience and promote environmentally sustainable growth.

Speaking at an event organized by InfraZamin Pakistan titled "Enabling Green Financing and Green Bonds via Credit Enhancement Solutions," Ahmed highlighted the importance of aligning the financial sector with global sustainability efforts to support national and international commitments.

Governor's address focused on Pakistan’s vulnerability to climate change and the urgency of addressing this challenge.

He cited the catastrophic floods of 2022, which caused economic losses of approximately $30 billion, as a stark reminder of the need for effective climate action.

He also reiterated Pakistan’s commitment to the Paris Agreement, which includes reducing emissions by 15 percent by 2030, with an additional 35 percent reduction contingent on external financing.

Ahmed said despite macroeconomic challenges, Pakistan has made significant strides in promoting renewable energy.

The SBP has introduced refinancing schemes for renewable energy, disbursing PKR 94.7 billion by the end of June 2024, financing over 4,500 renewable energy projects with a cumulative energy generation capacity of almost 2,061 MW.

The SBP has also issued comprehensive green banking guidelines to help regulated entities manage environmental risks.

In collaboration with the World Bank, the SBP is developing a comprehensive green taxonomy to establish a standardized framework for classifying green and transitional activities.

This framework aims to facilitate the flow of capital into sustainable projects.

Jameel Ahmed shared that climate change risk is a key theme in SBP's Strategic Plan 2023-28, which outlines goals and policy initiatives for the next five years to ensure sustainable growth.