ISLAMABAD: Pakistan has allocated nearly 35 percent of the proceeds raised through its inaugural domestic Green Sukuk toward climate-resilient infrastructure projects, with major investments directed to water storage and renewable energy initiatives.
According to the Ministry of Finance’s “Domestic Green Sukuk Allocation & Impact Report FY2025-26,” the government has so far utilised Rs11.256 billion out of the Rs32 billion raised through the three-year Variable Rental Rate (VRR) GOP Ijarah Green Sukuk launched under Pakistan’s Sustainable Investment Sukuk Framework.
The report stated that the remaining Rs20.744 billion would be allocated within 24 months of issuance and could continue supporting ongoing climate-related infrastructure projects across the country.
The Green Sukuk proceeds have been earmarked for three major projects: the Garuk Storage Dam in Balochistan, the Naigaj Dam in Sindh, and the 26MW Shagarthang Hydropower Project in Gilgit-Baltistan. These projects are aimed at improving water security, promoting clean energy generation, and strengthening climate resilience.
“The projects are aligned with Pakistan’s National Climate Change Policy, National Adaptation Plan, and National Climate Finance Strategy,” the report noted.
Among the three schemes, the Garuk Storage Dam recorded the highest utilisation of Sukuk-backed expenditure. Located in Kharan district of Balochistan, the project is currently 81.68 percent complete, with plugging work underway.
The dam is expected to irrigate over 5,059 hectares of land and benefit more than 216,000 people living in water-stressed areas. It will also have a storage capacity of 65.41 million cubic metres and contribute to annual groundwater recharge of 9.14 million cubic metres, helping improve drought resilience in the province.
Meanwhile, the Naigaj Dam Project in Sindh remains the most delayed among the three initiatives. Disbursement for FY2025-26 is still pending due to preparation of a revised PC-1, while physical progress on the project currently stands at 48.3 percent.
The integrated project includes a 4.2MW hydropower generation facility, annual clean energy production of 17.67 GWh, and sustainable water management for nearly 23,000 hectares of land. Officials indicated that the revised implementation timeline could extend completion beyond June 2028, subject to approval of updated cost estimates and availability of funds.
The 26MW Shagarthang Hydropower Project in Skardu is currently under active construction, with physical progress reaching 32.11 percent. Upon completion, the project is expected to generate 160.39 GWh of electricity annually and help avoid approximately 82,000 tonnes of carbon emissions each year.
The hydropower project is also projected to supply electricity to around 40,000 households and create nearly 300 jobs during the construction phase.
Story by Tahir Amin
