Pakistan initiates work on green financing instruments

Pakistan has initiated work on a number of green financing instruments, buoyed by widespread global investor interest in the country’s first green bond floated in the international market last week.

The development follows the growing concern in Pakistan that it’s one of the most vulnerable countries in the world to climate change, and has been hit hard by extreme weather events including devastating floods.

Prime Minister Imran Khan on Thursday said 10 most vulnerable countries in the world, including Pakistan, were at high risk of climate change due to green gases’ emission by developed states of the world.

“Pakistan is contributing less than one per cent to global carbon emissions, yet we are more vulnerable than Bangladesh … due to the melting of our glaciers. It is not our fault. There are giants that contribute to carbon emissions but countries like us face the consequences,” the prime minister said while addressing a ceremony on “green financing innovations” organised by the Ministry of Climate Change in connection with World Environment Day.

Wapda on May 27 launched Pakistan’s first-ever US dollar-denominated green Eurobonds, seeking $500 million 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 and as well as green credibility,” Climate Change Minister Malik Amin Aslam told Reuters.

Pakistan is the host country of the UN’s annual World Environment Day on June 5. It is now looking to become a major player in the global green financing market.

Mr Aslam said Pakistan plans to further tap the green bond avenue for building and transport financing.

PM Khan said speedy glacier melting in Pakistan was a major threat, adding that his government had launched several green initiatives including Ten Billion Tree Tsunami project to mitigate the effects of global warming.

Pakistan on Thursday 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, Mr Aslam said that Pakistan had launched its first blue carbon estimation, aided by the World Bank.

He said the World Bank had estimated that the country’s new plantation projects if nurtured successfully would be worth $500m by 2050.

The World Bank, he said, had used conservative estimates for carbon pricing, and the valuation could go up to $2.5 billion.

It has been reported that United States is one of the top most carbon-emitting countries in the world.

Referring to the matter, PM Khan in his speech said: “For the first time in the United States, President Joe Biden’s administration is focusing on climate change. The previous administration was not thinking about environmental degradation.”

He said that California wildfires and Australia bushfires had jolted the global community and renowned personalities, like Microsoft founder Bill Gates, had realised that steps were needed to mitigate the challenges of climate change before it was too late.

Lauding the green bond initiative, Mr Khan said saving forests, particularly mangroves, and urban plantation were urgently needed for Pakistan.

“Now it is being realised that ruthless waste of natural resources is resulting in disastrous consequences for mankind,” he said.

“Through future green financing, Pakistan is proud to take a lead in the conservation of ecological systems and ensuring a secure and livable environment for its coming generations. It is high time for Pakistan to seriously value its natural resources to combat the negative impacts of climate change.”

On this occasion, the prime minister witnessed the issuance of a joint statement by the United Kingdom, Canada, and Germany to engage in a dialogue on the modalities of Pakistan’s first Nature Performance Green Bond. The bond will be developed by a consortium of financial advisers, thereby creating an enabling environment for private sector finances and non-traditional development partners to play their role in sustainable development.

“The nature bond is chartering totally unchartered territory,” Mr Aslam said.

Also, a memorandum of understanding was signed between the government of Pakistan and China’s Elion Group to pilot green ecological zones in Cholistan desert on ‘Kabuqi model’ of turning deserts into green areas.

The prime minister said the preservation of natural resources was taught to mankind by the Holy Prophet (peace be upon him) around 1,500 years ago, which was relevant even today.

He reiterated that if they wanted to protect future generations from the impact of climate change, it was imperative to take steps to protect environment, which included developing national parks, planting trees and carrying out urban forestry.

“We need to utilise all available resources to increase the number of trees in the country. China has developed a green city and we can learn a lot from China,” he added.

He lauded that fact that mangroves had increased in the country during the last 20 years despite deforestation. He said awareness about climate change had increased among the public, especially among school children.

“We need to take this further so that our entire country is focused on ensuring a better future for coming generations,” the prime minister added.

He said the world was slowly realising the greed with which it had exploited nature. “There were always going to be consequences of that. Thankfully, awareness has increased in the past 10 years,” he added.

He said Pakistan would take the lead in raising awareness about climate change.

“People only started caring about global warming in the past 20 years. Before that when someone used to talk about it, others used to laugh. Even now, in the past three to four years, some developed countries did not take it seriously,” he added.

Country Director of World Bank in Pakistan Najy Benhassine presented to the prime minister the report on blue carbon, which for the first time gives an economic value to Pakistan’s unvalued marine wealth, including mangroves and sea grasses.

PM meets PTI leaders

Later Prime Minister Khan held a meeting with the leaders of Pakistan Tehreek-i-Insaf (PTI) and discussed political situation in the country.

The meeting was attended by Governor of Sindh Imran Ismail, federal Minister for Kashmir and Gilgit-Baltistan Affairs Ali Amin Gandapur, Senator Saifullah Niazi, Amir Mahmood Kiani and Sardar Tanveer Ilyas.

The meeting also discussed the matters relating to coming elections in Azad Kashmir.

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