Finance Minister stresses urgent climate financing to protect Pakistan’s future

ISLAMABAD: Finance Minister Muhammad Aurangzeb has said that Pakistan urgently needs climate-related financing to protect its economy and environment, as climate change and rapid population growth are becoming serious threats to the country’s survival.

Speaking at a conference organised by SDPI, he said Pakistan must improve its financial and regulatory systems to attract investment for climate projects. He noted that global growth is improving and Pakistan is carrying out economic reforms to restore investor confidence.

Aurangzeb said Pakistan has set up the Virtual Asset Regulatory Authority (VARA) to regulate crypto and digital assets and plans to introduce a law soon. He believes digital finance can help support green investments. He also mentioned that Pakistan has secured $1.3 billion from the IMF for climate projects, $500 million from ADB, and expects $2 billion annually from the World Bank, in addition to plans to issue Panda Bonds in China.

He stressed that Pakistan must remain focused and committed to economic reforms, saying no new institutions or constitutional amendments are needed—only consistency.

During the event, experts from banking, climate, and international organisations suggested creating a Regional Climate Bank, improving coordination between federal and provincial governments, shifting from a linear economy to a circular one, and using blended financing (public + private funding) to attract investment. They highlighted lack of capacity, weak project planning, and unclear regulations as major barriers to climate funding.

SDPI also launched a report titled “Beyond Pledges: Unlocking Pakistan’s Domestic Climate Finance Potential,” providing a roadmap to increase climate finance within Pakistan.