Pakistan to float green bond to secure first installment under IMF's RSF programme
Business
The green bond, with a three-year maturity period, will be issued after federal cabinet's approval
ISLAMABAD (Dunya News) – Pakistan has decided to issue green bonds worth Rs30 billion under "Resilience and Sustainable Facility" through the Pakistan Stock Exchange during the current month to finance projects aimed at tackling the impacts of climate change.
According to reliable sources, the green bond, with a three-year maturity period, is being issued under a new 28-month arrangement with the IMF under the Resilience and Sustainability Facility (RSF). The bond will be issued after approval from the federal cabinet.
Under the RSF programme, the IMF has set a condition that Pakistan must secure financing from various sources, including local and international avenues, and ensure the completion of climate change-related projects. The first installment from the RSF will only be released after this condition has been fulfilled.
Sources have revealed that a $300 million Panda bond is expected to be floated in the Chinese market in November or December 2025. The plan for issuance of bond on the advice of the IMF, originally proposed floating a $1 billion Eurobond and a $300 million Panda bond in the Chinese market.
According to sources, the issuance of Panda bonds in the Chinese market has been delayed due to some procedural restraints. During his visit to China in July, Finance Minister Muhammad Aurangzeb had requested a guarantee from the China Export and Credit Insurance Corporation for the issuance of $300 million worth of Panda bonds. An advisor has also been appointed for the issuance of the Panda bonds.
The Ministry of Economic Affairs Division, in its report, mentioned the issuance of Panda bonds in the external financing needs plan for the current fiscal year. Initially, the bonds were scheduled to be issued during the first quarter of the fiscal year, but the plan was later revised, and discussions were finalized to issue them in the second quarter instead. However, the implementation of this plan will now not be possible.
The first installment of the $1.30 billion RSF between Pakistan and the IMF will not be provided upfront. Pakistan will have to fulfill 13 conditions to receive the full amount. On top of it is IMF’s monitoring of the climate change-related projects initiated under the RSF.
