Pakistan Introduces Inaugural Green Sukuk at PSX

Pakistan inaugurated its first Sovereign Domestic Green Sukuk, valued at Rs30 billion, at the Pakistan Stock Exchange (PSX) on Friday. Finance Minister Muhammad Aurangzeb stated that this initiative elevates the proportion of Shariah-compliant financing within the nation’s total domestic debt to 14%.

The country’s domestic debt amounts to Rs37 trillion, with Sukuk-based debt comprising Rs5 trillion, which is about 14%.

Details of the Sukuk

In a video address, Aurangzeb noted that the Sukuk demonstrates growing investor confidence in both the Pakistani economy and its capital market. The three-year Sukuk, structured on an Ijarah model, will feature a fluctuating rental rate and is being launched under the Sustainable Investment Sukuk framework.

The bidding process for the Sukuk was underway on Friday morning as this report was compiled. It will be listed on the PSX, allowing for trading activities.

Use of Proceeds

The funds generated from the Sukuk will be allocated to finance qualified green energy ventures, notably including the construction of three dams.

Financial Institutions Involved

Meezan Bank is the lead joint financial advisor, supported by Dubai Islamic Bank, Bank Islami, and Alfalah Islamic.

Investor Participation

The auction welcomes participation from local retail, institutional, and corporate investors, alongside non-resident Pakistanis (NRPs), Roshan Digital Account holders, and international investors.

Launch Coincides with PSX Milestone

The launch occurred on Youm-e-Tashakur, as the PSX commenced trading following a historic peak of 119,961.91 points the previous day.

Aurangzeb conveyed optimism, stating, “The best is yet to come for both PSX and Pakistan,” and highlighted positive investor sentiment, including that of international investors he recently engaged with in London.

International Investor Interest

The finance minister emphasized that global investors have expressed interest in Pakistan, contingent upon the nation sustaining macroeconomic stability and pursuing reforms in the energy, taxation, and state-owned enterprises sectors.

Aurangzeb mentioned that the government is currently consulting with various stakeholders to formulate a promising budget for FY26.