What is Green Sukuk Bond? Pakistan issues Green Sukuk Bond worth Rs30 billion

Pakistan has launched its first Sovereign Domestic Green Sukuk at the Pakistan Stock Exchange (PSX), marking a major step in the country’s push for sustainable finance. The Sukuk is valued at Rs30 billion and is based on an Ijarah (lease-based) structure.

This three-year Sukuk will offer a variable rental rate and is being issued under the Sustainable Investment Sukuk Framework, introduced by the government to promote climate-friendly investment opportunities in the domestic capital market.

Finance Minister’s Remarks

Speaking via video link at the launch event, Finance Minister Muhammad Aurangzeb said the issuance reflects growing international trust in Pakistan’s economic direction.

He shared that during his recent visits to London and Washington, investors expressed strong interest and confidence in Pakistan’s economic reforms and future outlook.

“The entire world is recognizing our progress. Pakistan’s economy is gaining momentum, and the Pakistan Stock Exchange is crossing psychological barriers regularly,” the minister said.

Aurangzeb added that investors were particularly encouraged by ongoing reforms in energy, taxation, and state-owned enterprises. He emphasized the importance of macroeconomic stability to attract long-term foreign and domestic investments.

Focus on Green and Sustainable Finance

The Green Sukuk is a part of Pakistan’s wider effort to tap into the green finance market. Proceeds from the issuance are expected to fund projects that support climate resilience, renewable energy, clean transportation, and environmental protection.

This initiative aligns with Pakistan’s goals under the Paris Climate Agreement and its national commitment to reduce carbon emissions and enhance sustainability.

Upcoming Budget & Investor Expectations

Minister Aurangzeb also stated that the government is in discussions with key stakeholders to present a promising and reform-oriented budget for FY 2025-26.

The government hopes this Green Sukuk will pave the way for more Islamic finance instruments in Pakistan’s local market, promoting both sustainable growth and financial inclusion.