Islamabad: In a move aimed at addressing environmental sustainability, the Government of Pakistan has announced the inaugural issuance of Green Sukuk under the Sustainable Investment Sukuk (SI Sukuk) Framework for Domestic Government Securities. This initiative, approved by the Cabinet Division on April 15, 2025, is spearheaded by the Ministry of Finance (MoF) in collaboration with the Securities & Exchange Commission of Pakistan (SECP) and the Pakistan Stock Exchange Limited (PSX).
The issuance, valued at PKR 30.00 billion, will be conducted through an auction process managed by the Capital Market Infrastructure Institutions (CMIIs), which include the Pakistan Stock Exchange Limited (PSX), Central Depository Company of Pakistan (CDC), and National Clearing Company of Pakistan (NCCPL). The proceeds from this Green Sukuk will be allocated to projects promoting renewable energy and green infrastructure, aligning with the government's commitment to environmental sustainability.
The Green Sukuk is structured in accordance with Shariah principles and is part of a broader effort to develop green, social, and sustainable projects in Pakistan. According to information available from the Pakistan Stock Exchange (PSX), the auction will adhere to the existing mechanism currently in place, with specific details to be announced separately.
The SI Sukuk Framework, under which this Green Sukuk is being issued, is designed to attract both domestic and international investors. It aims to mobilize capital for projects that not only promote environmental goals but also contribute to public health and infrastructure development in underserved communities. The framework supports the government's broader strategy of integrating Sukuk into Pakistan's financing strategy to promote sustainable development.
Sukuk, the plural of "Sak," are Shariah-compliant instruments used for raising funds and are characterized by their prohibition of interest and emphasis on permissible returns for investors. Pakistan's regulatory environment, including the Government of Pakistan Ijara Sukuk Rules, 2008, provides a foundation for issuing such instruments, allowing for flexible asset selection under a Shariah-compliant structure.
This inaugural Green Sukuk issuance marks a significant step in the government's efforts to diversify funding sources for sustainable infrastructure projects. The funds raised will be directly or indirectly allocated to identified eligible green, sustainable, or social projects, supporting the country's National Adaptation Plan, National Climate Change Policy, and National Climate Finance Strategy.
By issuing the Green Sukuk, Pakistan aims to foster economic growth while ensuring social and environmental responsibility, contributing to a holistic approach to sustainable development. The strategic alignment with sustainable development goals is expected to enhance the well-being of the nation's citizens.