Pakistan has issued its first Sovereign Domestic Green Sukuk, valued at Rs30 billion, on the Pakistan Stock Exchange (PSX), marking a momentous advancement in sustainable finance. With these funds, the country intends to finance projects related to renewable energy as well as those that support climate resilience.
At the event, Finance Minister Muhammad Aurangzeb spoke through a video link and noted that these issues reflect the recovering confidence of investors in the economy and capital markets of the country.
He also informed that this issuance allows the share of Shari’ah compliant debt instruments in the country’s domestic debt to increase to 14%, out of a total domestic debt of Rs37 trillion.
The Sustainable Investment Sukuk Framework issues the three-year Sukuk with a variable rental rate. Under the framework, the proceeds will be used to fund the construction of three dams as part of offset-eligible green energy projects.
Meezan Bank is a lead joint financial advisor along with Dubai Islamic Bank, Bank Islami, and Alfalah Islamic.
At the time of the announcement, bidding for the Sukuk was already underway with intentions to list and trade the Sukuk on the PSX.
Retail and corporate as well as institutional investors based in Pakistan, NRPs, and holders of Roshan Digital Accounts were and remain eligible to participate in the auction.
The launching coincided with Youm-e-Tashakur (Thanksgiving Day) after PSX reached an all-time high of 119,961.91 points just the day before. Minister Aurangzeb noted for the first time in a long time, there was optimism about Pakistan’s economy saying,
The best is yet to come for both PSX and Pakistan.
He also mentioned he heard good responses from investors around the world during his last trip to London.
The issuance of this Green Sukuk aligns with Pakistan Vision 2028, which sets goals to evolve the country into an interest-free economy as well as embed sustainable financing into the nation’s development core.
The government aims to raise funds through investment by directing money into sustainable projects to expand the investor base, deepen the nation’s financial markets, and accelerate the shift towards a resilient economy.
With the collaboration of the Ministry of Finance, the Debt Management Office (DMO), the Securities and Exchange Commission of Pakistan (SECP), and PSX, the issuance process is being led to embrace Pakistan’s Green Sukuk. The Capital Market Infrastructure Institutions (CMIIs), such as PSX, CDC, and NCCPL, provide the auction.
It is projected that this innovative financial instrument will significantly impact the sukuk landscape of the country by utilizing the funds in sustainable ventures, which in turn would accelerate economic progress.
It enables investors to participate in fostering green initiatives and stimulating economic activities simultaneously.
