Pakistan to auction first-ever Green Sukuk bonds worth PKR 30 billion on May 16

Pakistan government to sell first of Green Sukuk bonds worth PKR 30 billion on May 16, the auction would be transacted though Pakistan Stock Exchange aimed to consume the funds for construction of water reservoir and hydel electricity generation unit, according to a stock filing.

The government has been mulling hard to launch first ever Green Sukuk bonds one of the key conditions of International Monetary Fund to accelerate renewable energy projects and increase green infrastructure project.

International Monetary Fund last week approved funding of $1.4 billion under Resilience Sustainability Facility aimed to seek green led projects.

According to the notification received from Pakistan Stock Exchange the Ministry of Finance (MoF), Debt Management Office (DMO) in collaboration with Securities & Exchange Commission of Pakistan (SECP) and Pakistan Stock Exchange Limited (PSX), is pleased to announce the inaugural issuance of Green Sukuk under the SI Sukuk Framework.

The Green Sukuk is structured in compliance with the Shariah Principles. The proceeds from the Green Sukuk issuance will be used to finance projects that contribute to environmental sustainability, such as renewable energy and green infrastructure.

The inaugural issuance of PKR 30 billion, will be through an auction process by Pakistan Stock Exchange Limited (PSX), Central Depository Company of Pakistan (CDC) and National Clearing Company of Pakistan (NCCPL), collectively known as Capital Market Infrastructure Institutions [CMIIs]. The Green Sukuk auction of 3-Year Listed Variable Rental Rate GOP Ijarah Green Sukuk will be conducted on Friday, May 16, 2025 as per the auction mechanism currently in place at PSX. The auction notice along with the Term Sheet shall be notified separately.

This structure facilitates the issuance of the Government of Pakistan (“GoP”) domestic Green Sukuk based on Ijarah. For the Sukuk structure, the underlying asset (“The Asset”) would be identified as an asset of the Capital Development Authority. However, since this is a Green Sukuk to be issued in line with the Sustainable Investment Sukuk Framework (SI Sukuk Framework), therefore the Sukuk proceeds raised from the issuance of the Green Sukuk would be utilized on the identified Green Project selected by the Project Selection and Evaluation Committee under SI Sukuk Framework and notified via the Term Sheet to the Investors.

The tentative list of Green Projects to be financed through Green Sukuk would be as follows:

1. Construction of Garuk Storage Dam

2. Construction of the Naigaj Dam Project

3. Construction of 26MW Shagarthang Hydro Power Skardu

The documentation for this structure will include a Sukuk Issuance Undertaking, Purchase Agreement, Title Agency Agreement, Agency Agreement, Ijarah Agreement, Service Agency Agreement, Purchase Undertaking, Cost Undertaking, and Rules

Identified underlying asset of Capital Development Authority (“CDA”) together with identified, unencumbered, and undisputed land of CDA surrounding the identified asset.

These lands would be identifiable by survey numbers (if applicable) and area and would be recognized as the proposed Asset (the “Asset”) to facilitate the issuance of GoP Ijarah Sukuk (the “Sukuk”).

The underlying Asset (Sukuk Assets) on which this Sukuk would be issued include the Land, Building & Infrastructure of Capital Development Authority specifically located at

The underlying Asset (“Sukuk Asset”) may be used as per the requirements of GOP to be ascertained at the time of issuance of Sukuk. Accordingly, the proportionate share of undivided Asset(s) will be purchased.

Two PBA-approved independent evaluators evaluated the asset, and the lower valuations have been accepted as the sale price.

The Relevant Authority: The Asset is controlled by a government institution or authority, the Capital Development Authority (CDA). Title Agent: A government institution or authority, namely Capital Development Authority (CDA), which will hold the title of the Asset on behalf of the Investors under the Title Agency Agreement.