Pakistan sells first-ever green sukuk worth PKR 31.99 billion
Oversubscribed fivefold, sukuk boosts climate-focused investments
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
Pakistan has successfully sold its first-ever Green Sukuk, raising PKR 31.99 billion through the Pakistan Stock Exchange, exceeding the initial target of PKR 30 billion.
The issuance is part of a broader strategy developed in consultation with the International Monetary Fund (IMF) to secure funding for renewable projects aimed at reducing carbon emissions.
The government announced the issuance on Friday, highlighting strong investor interest from financial institutions and securities companies.
The Green Sukuk saw overwhelming participation, with bids totaling PKR 161.74 billion—more than five times the targeted amount.
The government accepted PKR 31.99 billion at a cut-off yield of 10.64%.The funds raised will be allocated to climate-related projects, with both the fundraising process and project execution monitored by the IMF.
Last week, the IMF approved a $1.4 billion Resilience and Sustainability Facility to support Pakistan's environmental initiatives.
Green Sukuk proceeds will be directed toward sustainable and social projects, including renewable energy infrastructure and environmentally beneficial developments.
The Project Evaluation and Selection Committee will approve initiatives based on their environmental impact.
The Green Sukuk fully complies with Shariah principles and aims to enhance long-term sustainability in Pakistan’s development sector.
A tentative list of projects to be financed through the Green Sukuk includes:
Garuk Storage Dam Construction
Naigaj Dam Project Construction
26MW Shagarthang Hydropower Project in Skardu
Farrukh H. Sabzwari, managing director and CEO of the Pakistan Stock Exchange, welcomed the launch, stating, "We are delighted to have facilitated Pakistan’s inaugural sovereign domestic Green Sukuk.
The remarkable oversubscription of 5.4 times underscores strong investor confidence in our market.
This milestone reflects the growing integration of Environmental, Social, and Governance (ESG) principles within Pakistan’s capital market.
In the coming months, investors can anticipate further Green Sukuk issuances, as PSX remains committed to promoting innovative and responsible financial instruments aligned with sustainability.
Issued by the Government of Pakistan, the Green Sukuk will fund environmentally friendly projects while offering an attractive investment opportunity for local and foreign investors.
With competitive rental rates and government backing, the initiative ensures security and reliability. By increasing access to capital for green initiatives, Pakistan positions itself as an emerging leader in the global Islamic and sustainable finance markets.
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