Credit guarantee for Rs10 billion green funding agreed
National Credit Guarantee Company Limited (NCGCL) has agreed to support green financing up to Rs10 billion in a bid to create a conducive ecosystem for climate-smart entrepreneurship, particularly for young innovators and women-led green startups.
NCGCL, which has recently been awarded 'AAA' rating by Pakistan Credit Rating Agency (Pacra), will provide support for green financing through a structured guarantee programme. The Ministry of Climate Change has expressed its readiness to striking a Rs10 billion green financing deal with NCGCL to boost green entrepreneurship.
Federal Minister for Climate Change and Environmental Coordination Musadik Malik held a high-level meeting with NCGCL CEO Ammar Habib to finalise a major financial collaboration aimed at supporting green development across Pakistan.
Under the arrangement, NCGCL will evaluate projects to add a guarantee cover for both convertible bonds and hybrid structures as well as guarantee for credit, loans and to de-risk equity investment through a structured approach, depending on the financial and operational viability of green ventures.
This partnership signals the ministry's commitment to creating a conducive ecosystem for climate-smart entrepreneurship, particularly for young innovators and women-led green startups.
Malik welcomed the collaboration as a meaningful step towards mainstreaming green finance and mobilising private sector partnerships in Pakistan's climate and sustainability goals. NCGCL issues credit guarantees to financial institutions for unserved segments of the small and medium enterprises (SME) sector.
"The SME sector is the backbone of any resilient economy," Ammar Habib, CEO of NCGCL, had told media earlier, adding that credit guarantees are a strategic lever, giving financial institutions the confidence to lend where they currently hesitate. He stressed that NCGCL is not just a credit guarantee company, but a market reform institution.
Pakistan has currently witnessed a burgeoning landscape of climate startups and a growing recognition of the need for sustainable solutions. These innovative ventures have emerged across diverse sectors, largely targeting key environmental challenges such as energy transition, resource scarcity and waste management.
Initiatives like Climate Innovation Pakistan and the Green Tech Hub, launched by NUST, are climate tech startups aimed at developing their climate-focused technologies and business models.
Many of these startups are also directly aligning with Pakistan's ambitious Nationally Determined Contribution (NDC) targets, which include 50% reduction in projected emissions by 2030, a 60% renewable energy target and 30% electric vehicle uptake.
Companies like EzBike and Vlektra are working on electric mobility revolution, aimed at decarbonising urban transportation. In the renewable energy sphere, startups such as EcoEnergy have focused on providing affordable solar solutions, particularly to off-grid communities through solar installations nationwide.
Pakistani climate startups are also making significant contributions in areas like waste management and sustainable agriculture. Companies such as Trashit and ConceptLoop are innovating in circular economy models, transforming waste into valuable resources or new products.
Meanwhile, agritech startups are leveraging data and AI to enhance crop productivity, optimise water use and promote climate-resilient farming practices, directly addressing food security and water scarcity.
Funds have been a challenge for such startups and recent deals between the Ministry of Climate Change and NCGCL will give a boost to both startups and entrepreneurs in green technology.
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