Pakistan’s federal cabinet has approved the Sustainable Investment (SI) Sukuk Framework, marking a significant step toward financing climate-resilient and socially impactful projects through Islamic bonds.
The framework, introduced by the Ministry of Finance, enables the issuance of Green Sukuk, Social Sukuk, and Sustainability Sukuk, collectively known as SI Sukuk, to mobilize domestic capital for environmentally and socially beneficial initiatives.
What Is the Sustainable Investment Sukuk Framework?
The framework is designed to align Pakistan’s financing strategy with key global and national sustainability commitments, including:
– United Nations Sustainable Development Goals (SDGs)
– Pakistan’s Nationally Determined Contributions (NDCs) 2021 under the Paris Agreement
– National Adaptation Plan (NAP) 2023
By issuing Sharia-compliant sustainable bonds, Pakistan aims to attract ethically driven investors while diversifying its borrowing instruments beyond conventional debt.
Key Focus Areas for Funding
Proceeds from SI Sukuk will be allocated to projects in sectors such as:
✅ Renewable energy (solar, wind, hydropower)
✅ Water management (flood control, irrigation, clean drinking water)
✅ Climate adaptation (disaster resilience, sustainable agriculture)
✅ Sustainable infrastructure (green buildings, eco-friendly transport)
How Will the Framework Work?
1. Project Selection & Transparency – A rigorous evaluation process will ensure funds are allocated only to eligible projects.
2. Periodic Reporting – Regular updates will track fund utilization and project impact.
3. Continuous Issuance – There is no fixed cap on fundraising; amounts will depend on project viability and market demand.
Collaboration With Key Stakeholders
The framework was developed in consultation with leading Islamic banks, including:
– Meezan Bank
– Bank Islami
– Dubai Islamic Bank
– Bank Alfalah Islamic
The Ministry of Planning, Development, and Special Initiatives also played a crucial role in shaping the policy.
Why This Matters for Investors & Pakistan’s Economy
– Attracts ESG-focused investors – The framework opens doors for environmentally and socially conscious investors.
– Reduces reliance on conventional debt – Diversifies Pakistan’s financing options.
– Supports climate resilience – Directs capital toward projects that combat climate change and promote sustainable development.
The Ministry of Finance and State Bank of Pakistan (SBP) will oversee implementation in the coming months, ensuring compliance and operational efficiency.
Pakistan’s Green Sukuk Framework is a bold move toward a greener, more sustainable future. By leveraging Islamic finance principles, the country is positioning itself as a leader in climate-resilient investments while addressing pressing environmental and social challenges.