ISLAMABAD: The government on Wednesday announced the launch of its first Green Sukuk to raise more than Rs50 billion in two phases to meet financing needs of a few hydropower projects under the Sustainable Investment Sukuk Framework (SISW) approved by the federal cabinet last month.

Pakistan’s first Green Sukuk worth Rs6.5bn was launched by the Water and Power Development Authority (Wapda) four years ago to fund an additional hydropower unit at Tarbela dam.

“The inaugural issuance, ranging between Rs20bn and Rs30bn, will be conducted through an auction process, with the Pakistan Stock Exchange (PSX) playing a central role in listing and promoting this innovative instrument to investors”, said the Pakistan Debt Management Office of the Ministry of Finance.

It hoped the pioneering financial instrument would revolutionise Pakistan’s sukuk market by channeling investments into environmentally sustainable projects while fostering economic growth. “The Green Sukuk marks a pivotal step in aligning Pakistan’s financial markets with global best practices in green financing to investors,” it said.

Initial auction for Rs20bn-30bn will be done via PSX

The Green Sukuk Programme has been structured with the support of joint financial advisors, including Meezan Bank Ltd, Bank Alfalah Ltd, Dubai Islamic Bank Pakistan Ltd, and Bank Islami Pakistan Ltd.

The Sustainable Investment Sukuk Framework initiative is closely aligned with Pakistan’s Vision 2028, particularly its goal of transitioning to an interest-free economy.

It reflects the government’s strong commitment to leveraging financial markets in support of sustainable development, an official statement said, adding that Green Sukuk was a “beacon of innovation and a testament to our unwavering commitment to fostering sustainable development and reducing our environmental impact”.

It offers investors a unique opportunity to support environmentally friendly projects while promoting economic growth by integrating sustainable finance into the core of Pakistan’s development strategy. The Green Sukuk will attract a broader investor base, deepen financial markets, and accelerate the country’s transition to a green and resilient economy.

The Rs50bn two-phased sukuk is targeted to fund additional requirements of three small dam-cum-hydropower projects, Garuk in Balochistan, Nai Gaj in Sindh and Shagarthang in Gilgit-Baltistan.

Published in Dawn, May 8th, 2025