Islamabad: In a landmark move aimed at promoting sustainable development and diversifying the country’s financing tools, Pakistan on Friday launched its first Sovereign Domestic Green Sukuk worth PKR 30 billion at the Pakistan Stock Exchange (PSX).
The Islamic bond—structured to support environmentally friendly projects—will finance climate-resilient infrastructure, including the construction of three new dams, as part of the country’s broader push toward green energy and sustainable growth.
Speaking via video link at the launch ceremony, Finance Minister Muhammad Aurangzeb said the issuance of the Green Sukuk reflects growing investor confidence in Pakistan’s economy and capital markets. “This is a key step in our journey toward lower-cost, long-term borrowing,” he said, adding that more innovative financing products for both local and international investors will be introduced in the near future.
The three-year Sukuk is based on the Ijarah structure (lease-based Islamic financing) with a variable rental rate, and issued under the Sustainable Investment Sukuk Framework. Proceeds will be directed exclusively to eligible green energy and climate projects.
Aurangzeb emphasized the government’s shift from short-term borrowing instruments like Treasury Bills to longer-tenor, cost-effective options such as Pakistan Investment Bonds (PIBs) and Sukuk, aligning with the global trend toward sustainable finance. With this issuance, Shariah-compliant debt now comprises 14% of Pakistan’s PKR 37 trillion domestic debt.
Meezan Bank is the lead joint financial advisor for the issuance, alongside Dubai Islamic Bank, Bank Islami, and Alfalah Islamic. The Sukuk is open to a broad investor base, including institutional and retail investors, non-resident Pakistanis, Roshan Digital Account holders, and foreign investors.
The launch coincided with Youm-e-Tashakur (Thanksgiving Day) and came on a high note, as the PSX reached an all-time high of 119,961.91 points. “The best is yet to come for both PSX and Pakistan,” Aurangzeb said, citing strong interest from global investors during his recent visit to London.
Looking ahead, he hinted at broader structural reforms and revealed plans for a Panda Bond—a renminbi-denominated bond to be issued in the Chinese market by late 2025, marking Pakistan’s entry into diversified international debt markets.
Advisor to the Finance Minister, Khurram Schehzad, also spoke at the event, noting encouraging macroeconomic trends. He reported a reduction in Pakistan’s debt-to-GDP ratio from 74% to 65%, and an improvement in the tax-to-GDP ratio from 9.5% to 10.6%, with a target of 11% by FY26. However, Schehzad cautioned that climate change and rapid population growth remain two of Pakistan’s most urgent economic challenges, making tools like the Green Sukuk essential for future stability and resilience.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
