The Securities and Exchange Commission of Pakistan (SECP) has taken a significant step toward addressing the country’s infrastructure financing needs by launching a new category of mutual funds titled Infrastructure Schemes. Developed under the framework of open-end collective investment schemes, this initiative seeks to mobilize long-term domestic savings and channel them into projects of national importance.
Pakistan’s infrastructure gap has remained a pressing challenge for years. The country requires close to $15 billion annually to meet financing demands in sectors such as energy, housing, healthcare, and transport. Yet, current spending stands at just 2.1% of GDP, far below the international benchmark of 8–10%. By introducing a regulatory framework dedicated to infrastructure-focused funds, SECP aims to bridge this gap while providing investors with structured, transparent opportunities to participate in critical development projects.
The launch of Infrastructure Schemes was identified as a priority milestone under SECP’s Fund Management Department Roadmap 2025-26. The framework was finalized following extensive consultations with the Mutual Funds Association of Pakistan (MUFAP) and other key stakeholders. According to SECP, the primary goals include regulatory clarity, investor protection, and alignment with the broader national development agenda.
Commenting on the development, Ali Najib, Deputy Head of Trading at Arif Habib Ltd, called the move transformative for Pakistan’s economy and capital markets. He noted that the initiative would not only provide new investment avenues for the Pakistan Stock Exchange (PSX) and its investors but also strengthen portfolio diversification and long-term stability. For institutional and retail investors alike, the dedicated infrastructure category promises structured access to vital projects that could enhance liquidity and market depth.
From a broader perspective, the introduction of these funds could benefit society at large. As savings are directed toward infrastructure development, the outcome could mean job creation, better public services, and improved living standards. In the long run, this could support sustainable economic growth while improving transparency in an area often plagued by inefficiencies.
Under the new framework, Asset Management Companies (AMCs) are permitted to classify infrastructure schemes as equity, debt, or hybrid funds. Investment options will cover a wide range of areas, including transport, logistics, energy, water, sanitation, communication networks, industrial parks, affordable housing, and even social infrastructure such as hospitals and schools. To reinforce investor confidence, minimum fund sizes have been set at Rs100 million, while AMCs must invest Rs25 million as seed capital in closed-end schemes with maturities exceeding three years.
The framework also introduces safeguards such as requiring at least 70% of net assets to remain invested in infrastructure securities. Any shortfalls must be addressed within three months, while Net Asset Value (NAV) disclosures must be updated at least once a month. Management fees have been capped at 3% for equity schemes and 1.5% for debt schemes, with hybrid funds following a weighted average formula. Sales loads are disallowed, although contingent loads may apply in cases of early redemption.
Maaz Azam, Research Head at Optimus Capital Management, described the framework as a much-needed alternative investment avenue. He emphasized that public projects in Pakistan have often been undermined by inefficiency and corruption, but a regulated fund structure could enforce higher standards and foster accountability. According to Azam, the new structure not only provides investors with exposure to a unique asset class but also ensures that infrastructure projects are executed with a focus on results and returns.
SECP’s move reflects broader efforts to expand the role of capital markets in Pakistan’s development. By addressing the infrastructure financing gap, the regulator hopes to attract both domestic and foreign investors, while simultaneously strengthening confidence in the fund management industry. This approach signals an important shift in how Pakistan plans to fund its long-term infrastructure needs, moving away from traditional reliance on government spending toward a more market-driven model.