Climate risk: Pakistan launches ‘Paris-Aligned Finance Fellowship’

KARACHI: Pakistan is taking a decisive step toward climate-smart banking and investment with the launch of the Paris-Aligned Finance Fellowship in October 2025, a first-of-its-kind initiative aimed at equipping the country’s financial sector to manage climate risks and support green investment.

Financed by the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by GIZ Pakistan in collaboration with the State Bank of Pakistan (SBP), the Fellowship marks a milestone in aligning Pakistan’s financial sector with global climate standards.

The Fellowship will bring together senior professionals from the central bank, and commercial banks, development finance institutions, and other regulators. By building their capacity in sustainable finance, the Fellowship aims to help Pakistan’s financial system channel more investment into clean energy, resilient infrastructure, and green exports — strengthening both economic stability and competitiveness.

Global trade and investment rules are changing fast, with buyers and markets increasingly demanding lower carbon footprints and stronger sustainability standards. The Fellowship will prepare Pakistan’s financial institutions to respond to these shifts by adopting practices that integrate climate and sustainability considerations into lending, investment, and risk management. This will help banks support businesses in meeting new requirements and in seizing opportunities from the global green transition.

Commenting on this development, Maraj Mahmood, Managing Director, BSC, SBP said that the State Bank is pleased to support this important initiative as strengthening the financial sector’s ability to respond to climate challenges is central to ensuring sustainable growth.

According to Maria-Jose Poddey, Country Director, GIZ Pakistan, this Fellowship will enable Pakistan’s banks to unlock new opportunities for climate-smart investment while managing risks more effectively. It is about preparing the sector for the future of global finance.

Key features of the Fellowship Programme will start from October 13-17, 2025, beginning with a Foundation Track in Karachi and an Expert Track in Germany.50 Fellows have been selected who are senior bankers and finance professionals nominated by their institutions.

Training covers climate and financial risk management, climate stress tests, transition finance, climate and sustainability reporting and disclosures .Establishment of a Community of Practice amongst Pakistan’s financial sector to advance climate finance.

The Paris-Aligned Finance Fellowship is expected to create long-term impact by embedding sustainable practices in Pakistan’s banking and investment ecosystem. Its central aim is to unlock climate finance flows-supporting projects and businesses that build resilience, enhance competitiveness, and contribute to sustainable growth.

Copyright Business Recorder, 2025