InfraZamin Pakistan, in partnership with the State Bank of Pakistan (SBP), Pakistan Banks’ Association (PBA), and the Private Infrastructure Development Group (PIDG), recently hosted a seminar titled “Enabling Green Financing and Green Bonds via Credit Enhancement Solutions.” Held at a local hotel, the event attracted key figures from the SBP, Ministry of Finance, and major commercial banks in Pakistan, all gathered to discuss the transformative potential of green financing and green bonds in building a sustainable, low-carbon economy.
The seminar spotlighted green bonds as essential financial instruments for Pakistan to achieve sustainable economic growth by mobilizing private sector support. Distinguished speakers included SBP Governor Jameel Ahmad, PBA CEO Muneer Kamal, InfraZamin Pakistan CEO Maheen Rahman, and Philip Skinner, who leads operations for GuarantCo in the MENA and Pakistan regions and serves as the Origination Lead for Nature at PIDG.
In his opening remarks, Governor Jameel Ahmad of the State Bank underscored the SBP’s proactive role in creating a supportive environment for sustainable finance. “The SBP is leading from the front to provide a conducive environment to the financial industry and businesses to achieve the common objective of climate resilience,” Ahmad stated. He highlighted SBP’s dual approach, combining direct and indirect measures to enhance green financing. Among direct measures, the SBP has introduced refinancing schemes for renewable energy projects, disbursing Rs. 94.7 billion by June 2024 and supporting over 4,500 projects with a combined capacity of approximately 2,061 MW. Additionally, SBP’s indirect measures, such as the “Green Banking Guidelines,” have been introduced to help financial institutions recognize and manage environmental risks linked to their operations.
Furthering this vision, SBP is developing a “Green Taxonomy” in collaboration with the World Bank. This standardized classification framework will identify green and transitional activities, supporting the consistent assessment and funding of environmentally responsible projects. Ahmad believes this taxonomy will facilitate the flow of capital into Pakistan’s green economy, fostering growth through more robust investment in sustainability-focused initiatives.
Maheen Rahman, CEO of InfraZamin Pakistan, echoed the importance of private-sector engagement, stating, “For Pakistan to unlock the full potential of green financing, it is vital that we bring the private sector on board alongside government and regulatory bodies.” InfraZamin’s role, Rahman explained, is to reduce the investment risk for private stakeholders through credit enhancement solutions, which are critical to encouraging the issuance of green bonds and similar sustainable finance options.
Muneer Kamal, CEO and General Secretary of the Pakistan Banks’ Association, also emphasized the urgent need for a green finance ecosystem in Pakistan, given the country’s high climate vulnerability. “Sustainable finance is not merely an option—it’s a responsibility we, as an industry, must embrace,” Kamal noted, reiterating PBA’s commitment to support investments directed toward a low-carbon economy through strategic partnerships with the private and public sectors.
The seminar’s discussions delved into Pakistan’s current sustainable finance landscape, focusing on the role of SBP’s Green Banking Guidelines in driving green financial practices. Drawing on examples from other emerging markets, the speakers proposed ways to incentivize green financing and lower costs, making it feasible for a broader range of participants. Among the ideas was the need for capacity-building within Pakistan’s financial industry to help local players navigate the challenges of green finance, such as global certification processes and balancing investment risk.
Philip Skinner of GuarantCo expanded on the potential of green bonds and the support private entities can provide in developing this market. “With the right support, the private sector can lead the way in the development of certified green, social, and sustainability bonds and loans,” he explained, noting that GuarantCo has successfully supported green bond issuances in countries such as Bangladesh, Vietnam, and Kenya. Skinner pointed out that perceived barriers to entry are often lower than expected and that the societal benefits, particularly in climate-vulnerable nations, can be substantial.
The seminar marked an important step for InfraZamin and its partners in fostering a green finance culture in Pakistan. Discussions concluded with actionable recommendations to help reduce investment risks and support issuers in adopting green financing solutions. PIDG proposed grant provisions to cover certification costs, while InfraZamin highlighted the role of credit enhancements in alleviating balance sheet pressures and minimizing risk.
Through collaborations like these, InfraZamin Pakistan aims to reshape the financial sector to prioritize green projects and environmental stewardship, promoting a sustainable future for Pakistan’s economy.