Pakistanis are increasingly realising that year-round sun may be a quick and cheap answer to an energy crisis. (Photo by FAROOQ NAEEM/AFP via Getty Images)
PAKISTAN said it has initiated work on several green financing instruments, buoyed by widespread global investor interest in the country’s first green bond floated in the international market last week.
A Pakistani utility company on May 27 launched the country’s first-ever US dollar-denominated green Eurobonds, seeking $500 million (£353m) for environment-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 was six times oversubscribed … which shows there is a global appetite for a country that has economic stability as well as green credibility,” climate change minister Malik Amin Aslam said.
Pakistan, which will host the UN’s annual World Environment Day tomorrow (5), is one of the most vulnerable countries in the world to climate change. It has been hit hard by extreme weather events including devastating floods.
It is now looking to become a major player in the global green financing market.
Aslam said Pakistan plans to further tap the green bond avenue for building and transport financing.
Pakistan on Thursday (3) 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.
For this, Aslam said, Pakistan had launched its first blue carbon estimation, aided by the World Bank.
He said the World Bank had estimated the country’s new plantation projects – including planting 10 billion trees over the next few years – if nurtured successfully would be worth $500m (£353m) by 2050.
The World Bank, he said, had used conservative estimates for carbon pricing, and the valuation could go up to $2.5 billion (£1.7bn).
Pakistan also 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.
“The nature bond is chartering totally unchartered territory,” Aslam said. The bond will be developed by a consortium of financial advisers and is in its initial stages.