In a landmark move that underscores Pakistan’s commitment to sustainable finance and green economic development, the Government of Pakistan has launched the country’s first Green Sukuk. This groundbreaking initiative not only marks a new chapter in the evolution of Islamic finance in the region but also aligns national financial instruments with global standards for environmental responsibility.
The Green Sukuk is designed to channel investment into environmentally sustainable projects, setting a precedent for future financial instruments aimed at climate resilience and ecological preservation. With an initial target size between PKR 20 billion and PKR 30 billion, the issuance will be executed through a competitive auction. The Pakistan Stock Exchange (PSX) will take a leading role in the listing, promotion, and distribution of this sukuk, ensuring visibility and accessibility for a diverse pool of investors.
This issuance is backed by Pakistan’s Sustainable Investment Sukuk Framework, a policy document recently approved by the federal cabinet. The framework sets out the guidelines and objectives for using sukuk to fund projects that contribute to environmental sustainability. It serves as the foundational pillar of the Green Sukuk Program, ensuring compliance with global best practices in green finance and Shariah principles.
The Green Sukuk also ties into Pakistan’s Vision 2028, a strategic development roadmap that includes the ambition to transition toward an interest-free financial system. By launching this Shariah-compliant and environmentally focused financial instrument, the government reinforces its dual commitment to ethical finance and sustainable development.
Joint Financial Advisors for this Green Sukuk initiative include some of Pakistan’s leading Islamic banks: Meezan Bank Limited, Bank Alfalah Limited, Dubai Islamic Bank Pakistan Limited, and Bank Islami Pakistan Limited. Their involvement ensures credibility, market confidence, and a seamless execution of the sukuk structure, adhering strictly to Islamic finance standards while promoting sustainability.
This initiative is seen as a major step toward broadening the investor base in Pakistan’s capital markets. By offering a green-focused sukuk, the government aims to attract impact investors—both local and international—who are increasingly looking to allocate capital into projects that contribute positively to environmental outcomes.
The proceeds from the Green Sukuk are expected to be directed toward a range of eco-friendly initiatives. These may include renewable energy projects, sustainable water management systems, climate-resilient infrastructure, and green transportation networks. The sukuk will thus not only offer returns to investors but also deliver measurable environmental benefits in line with the United Nations Sustainable Development Goals (SDGs).
The launch of Pakistan’s first Green Sukuk is a powerful statement of intent. It represents a fusion of Islamic finance principles with environmental consciousness, forging a pathway for future instruments that can support both economic growth and ecological preservation.
As global demand for green finance products continues to rise, Pakistan’s entry into this space could position it as a regional leader in sustainable Islamic finance. The Green Sukuk offers a unique blend of financial innovation, ethical investment, and strategic development—heralding a new era of eco-conscious financing in the country.