Financing Pakistan Efforts to arrest Climate Change

by M. Wasim

Climate Change is a global issue and can only be tackled with global efforts. But disparity of resources between developing and developed world has always been a big obstacle in this regards. Powerful nations, international organizations and financial institutions all have to come up to help countries who are developing and top vulnerable to climate change.  

The world is interdependent with nothing bound by borders so global warming is equally impacting the whole world. The resource-rich countries, therefore, have to support the developing countries which are at the frontline to fight the war of climate change.

Incentifying Climate Performance

While addressing the main ceremony of World Environment Day hosted by Pakistan, Prime Minister Imran Khan says “The issue is resource gap. Pakistan has minimal contribution in carbon emission. The rich countries responsible for huge carbon emission have the responsibility to at least provide funds so that the countries like ours may fight global warming and improve our environment.”

Pakistan, therefore released a joint statement with Canada, Britain, Germany and the United Nations Development Programme outlining its push to establish a “Nature Performance Bond” to provide the country with accelerated access to development financing and debt relief in exchange for meeting ecosystem restoration targets. Elaborating it, Imran Khan writes in his Opinion Piece for the CNN “Pakistan is presently working with international creditors on a debt-for-nature swap deal, in which relief will be linked to achievements in biodiversity conservation.”

Launching Green Bond

Recently Pakistan also floated the country’s first Green Bond, amounting to $500 million. The Water and Power Development Authority on May 27, 2021 launched the country’s first-ever US dollar-denominated green Eurobonds, seeking $500 million for environmentally friendly projects to enhance the clean energy share in the country’s power generation mix, which relies heavily on fossil fuels — particularly coal.

The Green Bond has been well received in international market, buoyed by widespread global investors’ interest. Malik Amin Aslam, Special Asistant to Prime Minister on Climate Change elaborates about it “The green bond is six times oversubscribed … which shows there is a global appetite for a country that has economic stability and as well as green credibility.”

Other Financing Venues

Malik Amin Aslam further revealed the government plans to further tap the green bond avenue for building and transport financing. According to him the government also completed its first assessment for blue bonds, a financing instrument that raises capital from global investors for projects that protect ocean ecology and related industries, such as fisheries and eco-tourism.


Editorial, Infocus

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