Finance Minister Calls for Climate Resilience in Global Financial Systems

Climate resilience must be fully integrated into global financial systems, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said while speaking at the Global Development Finance Conference, Momentum 2025 in Riyadh. The Finance Minister took part in a high-level panel on climate adaptation alongside senior officials from Jordan, Tajikistan and the West African Development Bank. The session focused on how vulnerable economies can secure the capital needed to manage rising climate risks. Aurangzeb said Pakistan’s recent experience with severe floods shows that climate change has become “a tangible and costly reality”. He recalled the 2022 floods that caused an estimated US$30 billion in losses, followed by renewed flooding this year that is expected to cut almost half a percentage point from Pakistan’s GDP growth. He noted that Pakistan has created fiscal and external buffers to manage emergency relief using domestic resources. However, he stressed that reconstruction and long-term adaptation require large-scale external financing. The Minister highlighted progress in climate preparedness, including an AI-enabled early warning system at the National Emergency Center that now provides monthly climate forecasts. Even with such initiatives, he said, Pakistan’s own resources remain insufficient for the scale of adaptation needed. He also pointed to Pakistan’s 10-year Country Partnership Framework with the World Bank Group, which allocates around US$20 billion, including one-third for climate resilience and decarbonisation. The priority now, he said, is for Pakistan to urgently prepare strong, bankable projects to unlock these funds. Aurangzeb expressed concern that global climate financing channels such as the Green Climate Fund and the Loss and Damage Fund remain slow and bureaucratic. By contrast, Pakistan is beginning to mobilise support from multilateral partners, including receiving the first US$200 million tranche under the IMF Climate Resilience Fund. Responding to a question on climate-aligned development, the Finance Minister said national budgets worldwide must mainstream climate priorities to ensure alignment with external financing and private investment. He highlighted Pakistan’s strengthened engagement with the United States, especially in minerals, digital technologies and renewable-linked sectors. He cited the Reko Diq copper project as a “transformational” development for Pakistan, with a financial close of US$7 billion backed by IFC and the U.S. EXIM Bank. The mine is expected to generate export earnings equivalent to 10 percent of Pakistan’s current export base by 2028. Aurangzeb reaffirmed that Pakistan continues to follow an “and-and” approach toward major global partners. China remains a longstanding ally through CPEC, which has now entered Phase 2.0, focusing on commercial and business-to-business partnerships. He said Pakistan is well-positioned to maintain balanced ties with both China and the United States, allowing the country to attract diversified foreign investment while supporting its climate and development goals. As the session concluded, panelists agreed that regional cooperation, innovation and collaborative financing are essential for helping vulnerable countries withstand growing climate pressures and achieve sustainable growth.