Pakistan launches first sovereign Green Sukuk

May 29, 2025 (MLN): In a landmark move toward sustainable and Shariah-compliant public financing, the Government of Pakistan has issued its first sovereign Green Sukuk, with strategic backing from Meezan Bank and the Pakistan Stock Exchange (PSX).

Meezan Bank played a pivotal role in this milestone transaction, acting as Joint Financial and Shariah Advisor.

The Bank also led the development of the Sustainable Investment (SI) Sukuk Framework, approved by the federal cabinet in April 2025.

This framework adheres to global best practices, incorporating both the United Nations Sustainable Development Goals (SDGs) and the Maqasid-e-Shariah.

To ensure investor awareness and market preparedness, Meezan Bank organized multiple information sessions and webinars.

These targeted Non-Resident Pakistanis, financial institutions, asset management companies, and ESG-conscious investors, as per the press release issued.

The Bank further collaborated with Dubai Islamic Bank Pakistan, Bank Islami, and Bank Alfalah Islamic to uphold full Shariah compliance and maintain the transaction’s structural integrity.

A formal launch ceremony took place at the Pakistan Stock Exchange, attended by key dignitaries including Federal Finance Minister Muhammad Aurangzeb, PSX Chairperson Dr. Shamshad Akhtar, and Meezan Bank’s Founding President and CEO, Irfan Siddiqui.

The initial Rs. 30 billion issuance received an extraordinary market response, with bids totaling over Rs161 billion an oversubscription of 5.4 times within just two hours.

As a result of this high demand, the issue size was increased to Rs31.98bn.

The auction was conducted through the PSX and executed by the Pakistan Domestic Sukuk Company Limited (PDSCL), a fully-owned entity of the Ministry of Finance.

Structured as a three-year Ijarah-based instrument, the Green Sukuk offers semi-annual rental returns and is fully tradable on the Pakistan Stock Exchange. It also qualifies for Statutory Liquidity Requirement (SLR).

With a minimum investment threshold of PKR 5,000, the offering was designed to be accessible to a broad spectrum of investors, including individuals, institutions, and Roshan Digital Account (RDA) holders.

Funds raised will be directed toward specific green infrastructure initiatives.

These include the Garuk Storage Dam in Kharan, Naigaj Dam in Dadu (Sindh), and the 26MW Shagarthang Hydropower Project in Skardu projects that aim to improve water resource management, increase renewable energy generation, and enhance climate resilience in underdeveloped regions.

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