The federal government on Thursday said it has initiated work on a number of green financing instruments, buoyed by widespread global investor interest in Pakistan's first green bond floated in the international market last week.

The Water and Power Development Authority (Wapda) on May 27 launched the country's first-ever US dollar-denominated green Eurobonds, seeking $500 million for environmentally friendly projects to enhance the clean energy share in the country's power generation mix, which relies heavily on fossil fuels — particularly coal.

“The green bond was six times oversubscribed ... which shows there is a global appetite for a country that has economic stability and as well as green credibility,” Prime Minister's Special Assistant on Climate Change Malik Amin Aslam told Reuters.

Pakistan, which is the host country of the UN's annual World Environment Day on June 5, is one of the most vulnerable countries in the world to climate change, and has been hit hard by extreme weather events including devastating floods.

It is now looking to become a major player in the global green financing market.

Read: Pakistan not at fault but most at risk due to climate change, says PM Imran

Aslam said the government plans to further tap the green bond avenue for building and transport financing.

The government on Thursday also completed its first assessment for blue bonds, a financing instrument that raises capital from global investors for projects that protect ocean ecology and related industries, such as fisheries and eco-tourism.

For this, Aslam said that Pakistan had launched its first blue carbon estimation, aided by the World Bank.

He said the World Bank had estimated the country's new plantation projects — including planting 10 billion trees over the next few years — if nurtured successfully would be worth $500m by 2050.

The World Bank, he said, had used conservative estimates for carbon pricing, and the valuation could go up to $2.5bn.

Pakistan on Thursday also released a joint statement with Canada, Britain, Germany and the United Nations Development Programme outlining its push to establish a “Nature Performance Bond” to provide the country with accelerated access to development financing and debt relief in exchange for meeting ecosystem restoration targets.

“The nature bond is chartering totally unchartered territory,” Aslam said. The bond will be developed by a consortium of financial advisers, and is in its initial stages.