Green, blue, other financial instruments: MoF unveils SFF to attract investments

ISLAMABAD: The Finance Ministry on Monday unveiled a ‘Sustainable Financing Framework (SFF) 2025’ aimed at mobilizing climate and social investments through green, blue, social and sustainability-linked financial instruments, including bonds and Sukuks.

The Finance Ministry said the framework will align Pakistan’s debt strategy with international market principles, enabling the country to access funds for renewable energy, clean transportation, biodiversity conservation, social protection, and poverty alleviation programmes.

According to the framework, eligible green projects include solar, wind, and small hydropower, energy efficiency upgrades, sustainable agriculture, clean transportation, and green buildings. Social spending will target healthcare, education, affordable housing, employment generation, food security, and women’s empowerment.

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The plan explicitly excludes financing for fossil fuels, nuclear energy, tobacco, gambling, weapons, and industries linked to child or forced labour.

A Sovereign Sustainable Finance Committee, chaired by the Finance Secretary and including representatives from the Debt Office, Planning Commission, Climate Change Ministry, and State Bank, will oversee project selection, monitoring, and impact reporting.

The government aims to allocate at least 50 percent of proceeds to new expenditures, while ensuring transparent allocation and annual impact reporting in line with international standards set by the International Capital Market Association (ICMA) and Loan Market Association (LMA).

The framework has already received a Second Party Opinion from Sustainable Fitch, confirming its compliance with global sustainability financing guidelines.

The initiative reflects Pakistan’s commitment to its Nationally Determined Contributions (NDCs) under the Paris Agreement, which target a 50 percent reduction in projected emissions by 2030, conditional on international support.

“The SFF provides us with a credible mechanism to channel climate and social financing, strengthen resilience, and foster inclusive growth,” the Finance Ministry said, adding that the government may also explore Debt-for-Nature swaps as part of its strategy.

Copyright Business Recorder, 2025