In a groundbreaking step toward sustainable finance and Shariah-compliant public funding, the Government of Pakistan has officially launched its first sovereign Green Sukuk. This historic issuance marks a strategic shift in the country’s financing approach, combining environmental goals with Islamic financial principles. The Green Sukuk was developed with the strategic support of Meezan Bank and the Pakistan Stock Exchange (PSX), signaling a collaborative effort to align economic development with climate responsibility.
Meezan Bank played a central role in facilitating this milestone transaction, acting as both Joint Financial Advisor and Shariah Advisor. The bank also led the formulation of the Sustainable Investment (SI) Sukuk Framework, which was formally approved by the federal cabinet in April 2025. This framework is notable for its dual alignment with international sustainability standards and Islamic finance principles. It incorporates the United Nations Sustainable Development Goals (SDGs) and Maqasid-e-Shariah, reflecting Pakistan’s commitment to ethical and sustainable development.
To ensure transparency and investor readiness, Meezan Bank conducted multiple information sessions and webinars. These sessions targeted Non-Resident Pakistanis, institutional investors, asset management companies, and those with a focus on Environmental, Social, and Governance (ESG) investing. According to the official press release, the objective was to foster broad-based awareness and promote participation in this innovative financial instrument.
The launch of the Green Sukuk involved extensive collaboration with key Islamic banking institutions, including Dubai Islamic Bank Pakistan, Bank Islami, and Bank Alfalah Islamic. These institutions ensured that the transaction maintained full Shariah compliance while adhering to the structural integrity required for a sovereign issuance.
The formal launch event was held at the Pakistan Stock Exchange and attended by several high-profile dignitaries. Among them were Federal Finance Minister Muhammad Aurangzeb, PSX Chairperson Dr. Shamshad Akhtar, and Meezan Bank’s Founding President and CEO, Irfan Siddiqui. Their presence at the ceremony highlighted the national importance of the initiative and reinforced the government’s commitment to green finance.
The market response to the inaugural Green Sukuk was overwhelmingly positive. Initially set at Rs. 30 billion, the issuance received bids exceeding Rs. 161 billion within just two hours—a 5.4 times oversubscription. Due to the high demand, the issue size was subsequently increased to Rs. 31.98 billion. The auction was facilitated through the PSX and executed by the Pakistan Domestic Sukuk Company Limited (PDSCL), a wholly-owned entity of the Ministry of Finance.
The Green Sukuk is structured as a three-year Ijarah-based instrument and offers semi-annual rental returns. Fully tradable on the Pakistan Stock Exchange, it is also recognized for Statutory Liquidity Requirement (SLR) eligibility. Designed for accessibility, the minimum investment amount was set at PKR 5,000, encouraging participation from retail investors, institutions, and Roshan Digital Account (RDA) holders.
The funds raised through this Sukuk will be allocated to specific green infrastructure projects. These include the Garuk Storage Dam in Kharan, the Naigaj Dam in Dadu, and the 26MW Shagarthang Hydropower Project in Skardu. These projects are focused on improving water resource management, boosting renewable energy capacity, and enhancing climate resilience in underdeveloped regions of Pakistan.
With this first-of-its-kind sovereign Green Sukuk, Pakistan positions itself at the intersection of Islamic finance and sustainable development. The initiative sets a precedent for future green finance instruments and demonstrates how strategic public-private partnerships can help address climate challenges while maintaining financial inclusivity and integrity.