Pakistan to launch first-ever Panda Bond with ADB support

August 28, 2025 (MLN): Pakistan is set to launch its first-ever Panda Bond with backing from the Asian Development Bank.

This would mark a breakthrough in the country's efforts to diversify financing sources and tap into China's capital markets.

The commitment came during high-level talks between Finance Minister Senator Muhammad Aurangzeb and ADB President Masato Kanda, who made Pakistan his first official destination since taking office.

The meeting concluded with both sides reiterating their strong mutual commitment to advancing the Pakistan–ADB development partnership in the years ahead.

The high-level discussions at the Finance Division included senior officials from multiple ministries and ADB's regional leadership team.

Finance Minister Aurangzeb highlighted Pakistan's economic turnaround, noting the country has successfully stabilized its macroeconomic framework with declining inflation, improved current account position, and recent sovereign rating upgrades that have reduced borrowing costs.

A key focus of the discussions was Pakistan's climate resilience needs, particularly in the aftermath of devastating floods.

The Finance Minister expressed gratitude for ADB's solidarity and reiterated Pakistan's commitment to building disaster preparedness capabilities.

ADB has approved a $500 million policy-based loan to support climate change and disaster risk reduction and resilience in Pakistan in recent months, demonstrating the bank's commitment to the country's climate adaptation efforts.

President Kanda welcomed Pakistan's plans to launch its inaugural Panda Bond and assured ADB's readiness to support innovative financing instruments including Green Bonds, blended finance, and Debt-for-Nature swaps.

The discussions also covered enhanced collaboration in policy-based financing and capital markets development.

The Finance Minister extended an invitation for deeper collaboration under ADB's upcoming Country Partnership Strategy 2026–2035, which will align with Pakistan's medium-term development priorities.

Key areas for enhanced cooperation include:

• Energy transition and clean energy projects
• Transport and logistics infrastructure
• Human capital development
• Private sector participation through public-private partnerships
• Resource mobilization and tax reforms

President Kanda praised Pakistan's reform efforts and resilience, commending progress in structural reforms and economic stabilization.

He assured continued ADB support across climate adaptation, infrastructure development, and addressing population challenges.

The visit underscores Pakistan's strategic importance to ADB, with the country being among the first destinations for the new president's international engagements.

Senior officials of the Ministry of Finance, Federal Board of Revenue, Ministry of Economic Affairs and top management from ADB, including Ms. Emma Fan, Country Director ADB Pakistan, were also present during the comprehensive discussions.

The strengthened partnership comes as ADB has significantly expanded its climate financing globally, with ADB committed a record 40 private sector transactions worth $1.7 billion through its own capital resources, 54% higher than the previous year in 2023.

Both sides emphasized the importance of sustained reforms in taxation, tariff rationalization, state-owned enterprise restructuring, and regulatory modernization to ensure long-term economic resilience and growth.

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