Debt management, climate funding: Malaysia's ‘green finance model' being adopted: Aurangzeb
He made these remarks while addressing a gong ceremony organized by the Pakistan Stock Exchange (PSX) via video link from Karachi on Friday, marking the launch of the country's first-ever sovereign domestic green Sukuk. The finance minister highlighted that Pakistan stands to gain valuable insights from the Malaysian model and expressed confidence that the country can effectively move in that direction.
He further told the participants that in overall debt profile of Pakistan, Sukuks have the share of around 14 percent. 'We are in the process of restructuring and reorganizing our debt management office in line with the global best practices and adopting modern lines' he added. He further said that 'What we will do is to continue to engage the investors to get their feedback on this and you will listen soon on these lines.'
Talking on the Green Sukuk, Finance Minister said that Climate Change is the existential threat for Pakistan and the government is stressing on the need of financing for it along with acquiring IMF's $1.3 Billion Climate Resilience fund and with other concrete reform measures. He termed the launch of Green Sukuk Bond as a great achievement of Pakistan.
Aurangzeb also mentioned his recent meetings in United States and UK and said that the messages coming from Multilateral, bilateral partners and investors is that they are surprised with the speed of recovery of country's economy showed in a short span of time. He further told the audience that structural reforms are under way in various sector of the economy including energy, SOEs, Privatization, and Public Finance in terms of right sizing, pension reforms and others which will also be carried actively in next Fiscal year also.
Finance Minister stated that the upcoming budget will reflect the strategic direction of Pakistan's economy that will be very much in line with the home grown economic agenda.
The Finance Minister also congratulated PSX for hitting record all time high market index on Thursday that according to him show strong confidence of the investors in terms of comprehensive successes, however, he believed that best is yet to come both for PSX (Pakistan Stock Exchange) and Pakistan.
The Chairperson of the Pakistan Stock Exchange Dr. Shamshad Akhtar revealed the country's plans to issue both Green Sukuks and Green Bonds, aiming to tap into the US$ 4 trillion Islamic finance and US$ 2.5 trillion green bond markets. With climate adaptation needs projected to reach US$ 348 billion by 2030, exceeding traditional financing capacity, Green Sukuks are seen as a crucial gateway to addressing this gap.
She added that Pakistan has significant potential to become a regional leader in Shariah-compliant green finances. Despite the current energy mix being 60% fossil fuels, Green Sukuks can facilitate a transition to renewables. The country boasts over 40,000 megawatt (MW) of solar and 50,000 MW of wind potential, presenting key opportunities for green investment. Additionally, Green Sukuks can finance waste-to-energy projects, further diversifying Pakistan's energy landscape, she added.
On the occasion, Advisor to the Finance Minister, Khurram Schehzad, also highlighted two major national challenges: climate change and population growth. He also shared positive development in three key indicators of economic improvement, including a rise in tax-to-GDP ratio from 9.5% to 10.6% and that is expected to reach 11% by FY26, while reduction in debt-to-GDP ratio from 74% to 65%, and an increase in government revenues.
Officials said that issuing of Green Sukuk is a landmark move towards sustainable development and environmental stewardship, which Pakistan Stock Exchange (PSX) has successfully launched under the Sustainable Investment Sukuk Framework. These Shariah-compliant Sukuk aim to finance key green initiatives, including renewable energy, pollution control and climate adaptation projects.
On the other hand, Investors can also earn competitive returns while contributing to a greener Pakistan, making a positive impact on both the environment and society.
Dr Shamshad Akhtar highlighted the significance of Pakistan's inaugural domestic sovereign Green Sukuk, marking a new era in financial innovation rooted in sustainability, inclusion, and accountability. This debut issuance demonstrates Pakistan's commitment to a greener economy, unlocking investments in renewable energy, green transport, and climate-resilient infrastructure.
Meezan Bank's President & CEO, Irfan Siddiqui, emphasized the role of Islamic finance in sustainable development, stating that the Green Sukuk combines Islamic finance with climate-resilient investments, offering Shariah-compliant avenues for investors to contribute to Pakistan's green transition.
The Sukuk was remarkably oversubscribed by 5.4 times, reflecting strong investor confidence. PSX's MD/CEO, Mr. Farrukh H. Sabzwari, noted that this milestone showcases the growing integration of Environmental, Social, and Governance (ESG) principles in Pakistan's capital market, with more sustainable Sukuk issuances expected in the coming months.
The event was attended by key stakeholders, including Mohsin Mushtaq Chandna, Director General (Debt); Muhammad Ali Malik, Executive Director of the State Bank of Pakistan; Nassir Salim, President of HBL; Badiuddin Akber, CEO of CDC; Naveed Qazi, CEO of NCCPL; and prominent members of the financial sector and capital market fraternity.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
3 hours ago
- Business Recorder
India's July palm oil imports fall as soyoil jumps to 3-year high
India's palm oil imports declined in July following cancellations of import contracts, while soyoil shipments jumped to a three-year high, driven by competitive prices and the arrival of delayed June consignments, a leading trade body said. Lower palm oil imports by India, the world's biggest buyer of vegetable oils, could lead to a stock buildup in top producers Indonesia and Malaysia and weigh on benchmark Malaysian palm oil futures. India's palm oil imports in July fell 10.5% to 855,695 metric tons from June, the Solvent Extractors' Association of India (SEA) said on Thursday. Imports of soyoil increased 36.9% to 492,336 tons, the highest level in three years, and sunflower oil imports fell7.5% to 200,010 tons, the industry trade body said in a statement. Higher imports of soyoil lifted India's total edible oil imports in July by 1.1% to 1.55 million tons from a month earlier, the highest level since November, the SEA said. Palm oil imports fell in July because of the order cancellations, but they could rise in August as refiners are building stocks for the upcoming festival season, said a Mumbai-based trader. In India, edible oil demand, particularly for palm oil, typically rises during the festival season due to increased consumption of sweets and fried foods. India's July palm oil imports drop as soyoil shipments surge, dealers say A significant amount of soyoil is being diverted to substitute rapeseed oil, which is currently fetching a hefty premium over other edible oils, the dealer said. India'soyoil imports are poised to surge 60% year-on-year to a record 5.5 million tons in 2024/25, six dealers told Reuters earlier this week. The country buys palm oil mainly from Indonesia and Malaysia, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine. India's drive to produce more ethanol is leading its farmers to switch away from growing oilseeds, undermining government efforts in the world's largest buyer of cooking oils to reduce costly imports.
Express Tribune
9 hours ago
- Express Tribune
Industrial zone on PSM land planned
The government on Wednesday decided to establish a new industrial estate on the land of the closed Pakistan Steel Mills (PSM) and also sanctioned the diversion of Rs2.9 billion in publicity funds for the upgradation of an English news channel operated by the Pakistan Television Corporation (PTV). The decisions were taken by the Economic Coordination Committee (ECC) of the Cabinet, which met under the chairmanship of Finance Minister Muhammad Aurangzeb. The ECC approved the establishment of the industrial estate on 3,200 acres of PSM land by changing its designated use from steel mills to industrial. The decision followed discussions with the Sindh government and deliberations in the apex committee of the Special Investment Facilitation Council (SIFC). The ECC also rescinded its two-and-a-half-year-old decision banning the lease of PSM land to any industry, organisation, group, or individual, a move aimed at facilitating the development of the new industrial estate over the 3,200 acres. The government is also attempting to revive the closed PSM with assistance from Russia. Last month, Special Assistant to the Prime Minister (SAPM) on Industries Haroon Akhtar Khan visited Russia and held talks on the mill's revival. According to Khan, the Russians expressed willingness to finance and conduct a feasibility study for the project. The matter of pricing PSM land remains open, although the SIFC has already instructed that instead of selling land for industrial purposes, the concerned entities should issue licenses, a step that would substantially reduce costs for setting up new factories. The ECC directed the Board of Investment (BOI) to develop clear criteria and terms and conditions for the allotment of land to industrial units and private developers for the establishment of the industrial estate within one month. The government maintains that the industrial estate should not be developed using taxpayers' money and that private developers should be engaged instead. PSM owns about 19,013 acres of land in Karachi. Of this, 6,409 acres are available for setting up an industrial estate. However, the Sindh government has stated that establishing such an estate would require a change in land use from steel mills to industrial. The Ministry of Industries informed the ECC that Pakistan's regional competitors are offering a wide range of incentives to attract investment in the manufacturing sector, extending far beyond the provision of land at subsidised rates. Furthermore, comparatively higher costs of energy, power, and taxes constitute major impediments that could be offset by granting land through licenses. The ministry also noted that the PSM has accrued liabilities of around Rs400 billion and that land remains the primary source to offset these. Since the current proposal does not involve transferring ownership of the land, the option to leverage it to offset PSM liabilities at an appropriate stage would remain intact, it added. The ECC also approved a supplementary grant of Rs2.9 billion for upgrading PTV World, the English news channel owned by the state-run PTV Corporation. The decision was influenced by the context of the India-Pakistan war. Both military and civilian authorities believe the country requires more English-language channels to convey the state's narrative to foreign audiences and the diplomatic corps in Pakistan. The Rs2.9 billion will be used to modernise PTV World's infrastructure, enhancing its capacity for high-quality national and international broadcasting, the ECC was informed. The Ministry of Information told the ECC that, through its special wartime transmissions, PTV World had made a vital contribution to safeguarding national and ideological interests, boosting public morale, and projecting the courage and professionalism of Pakistan's Armed Forces on the international stage. Based on this experience, the PTV Corporation emphasised the urgent need to upgrade and modernise PTV World's infrastructure to meet the demands of emerging broadcast technologies. However, due to severe financial constraints and limited internal resources, the corporation cannot undertake this initiative independently. The government has decided to divert Rs2.9 billion from the Rs5 billion allocated in the budget for government publicity and advertisement expenditure. The finance ministry also agreed to reallocate the funds from the publicity budget. The finance ministry stated that the ECC had sanctioned Rs2.9 billion for the upgradation of its English news channel to improve broadcast quality and expand outreach to global audiences. The ECC further urged the ministry to develop a comprehensive business plan to make the channel self-sufficient and financially sustainable, thereby reducing dependence on federal grants in the future. The ECC also approved the removal of the requirement for Health Quarantine Certificates on the import and export of leather, a step aimed at facilitating the leather industry and enhancing its competitiveness in international markets, according to a Ministry of Finance announcement after the meeting. The committee additionally approved a supplementary grant for the Ministry of Climate Change and Environmental Coordination for the current financial year 2025-26, enabling the ministry to strengthen initiatives for environmental protection and climate resilience through participation in the upcoming 30th Session of the Conference of Parties (COP-30) to be held in Brazil later this year.
Business Recorder
10 hours ago
- Business Recorder
Weaker dollar supports copper
LONDON: Copper prices held broadly steady on Wednesday as a weaker dollar helped to extend the support gained from this week's 90-day extension of the tariff truce between the United States and top metals consumer China. Benchmark copper on the London Metal Exchange slipped 0.1% to $9,832 a metric ton in official open-outcry trading. It hit $9,865 on Tuesday and Wednesday, the highest since July 25. 'The 90-day extension for the US-China trade discussions has been welcomed and helped all base metals rise yesterday. Copper is holding onto those gains with the aid of a weaker US dollar,' said Nitesh Shah, commodity strategist at WisdomTree. The dollar hit a two-week low on Wednesday, making dollar-priced commodities more attractive for buyers using other currencies, on bolstered expectations of a Federal Reserve rate cut next month. Sets of data from China due this week may provide clearer direction to base metals as any weakness could bolden the case for economic stimulus, Shah said. China's new yuan loans contracted in July for the first time in 20 years, falling well short of analysts' forecasts. However, outstanding total social financing, used by analysts as a gauge of industrial metals demand, rose 9%, hitting the highest since February 2024. Suspension of production at a major lithium mine by Chinese battery giant CATL earlier this week as it applied to renew its mining licence raised hopes of a broader crackdown on overcapacity in other sectors. 'China has demonstrated its determination to stem 'involution' with the halting of CATL's lithium mine. We are watching to see if China will address copper refining overcapacity through similar measures, which could lend support to prices,' Shah said. LME aluminium rose 0.4% to $2,629.5 a ton in official activity, zinc fell 0.1% to $2,845, lead lost 0.4% to $2,008, tin eased 0.3% to $33,800, while nickel was steady at $15,335.
