ADB, AIIB support first Panda Bond issuance for green projects in Pakistan
- Bond sets significant precedent for using partial credit guarantees to mobilise private sector capital for emerging markets, ADB says
ADB and AIIB extended their support for first Panda bond issued by Pakistan to finance sustainable and green infrastructure projects.
- Pakistan's debut in China's capital market.
- The use of partial credit guarantees.
- Financing sustainable infrastructure and human capital development.
The Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) collaborated to support Pakistan’s first issuance of a Panda bond to finance its Sustainable and Green Infrastructure Project, the ADB said in a statement.
Pakistan issued its first $250 million Panda Bond, marking its entry into China’s capital market and strengthening Pakistan-China financial cooperation.
“The CNY 1.75 billion (approximately $258 million equivalent), sustainable development bond, issued today, marks Pakistan’s debut in the renminbi bond market,” the ADB said.
The bond marked “a milestone in using guarantees to enable a developing member country to access the capital market in the People’s Republic of China (PRC)”.
“As the first bond with less than 100% guarantee coverage to achieve a domestic AAA rating, it sets a significant precedent for using partial credit guarantees to mobilise private sector capital for emerging markets. The bonds were well-received by investors, reflecting confidence in Pakistan’s reform agenda and its commitment to sustainable development through green and socially inclusive infrastructure projects,” the bank said.
“This transaction not only enabled Pakistan to access the PRC’s onshore bond market, but also allowed it to secure competitive pricing, supporting the country’s sustainable infrastructure and human capital development,”ADB Director General for Central and West Asia Leah Gutierrez was quoted as saying in the statement. “The panda bond issuance expands Pakistan’s access to international capital markets.”
The proceeds from the bond would support a range of transformative sub-projects aimed at addressing national priorities in water governance, energy reliability and efficiency, and health care capacity, the ADB said. “By embedding sustainability objectives into public sector financing, this transaction underscores the Government of Pakistan’s strong commitment to fostering green and sustainable infrastructure development and reinforces the country’s active engagement with international capital markets.”
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