PBA Chairman Proposes to Set Up South Asia’s Only Climate Bank in Pakistan

Pakistan has called for stronger regional collaboration on climate financing as the government and banking leaders pushed for new initiatives to tackle the growing climate crisis and strengthen South Asia’s resilience. At a high-level conference organized by the Sustainable Development Policy Institute (SDPI), Pakistan Banking Association Chairman Zafar Masood proposed the creation of a Regional Climate Bank to fund green projects across the region. He said climate change is a shared challenge that demands joint financial mechanisms, urging that climate financing be made a constitutional priority under the proposed 27th Amendment. Masood said developing countries still face a shortage of viable, bankable projects to attract climate funds, despite the global focus on green finance. Finance Minister Muhammad Aurangzeb, addressing the same forum, described climate change and population growth as Pakistan’s key survival challenges, calling for urgent, practical solutions instead of new bureaucratic structures. The minister appreciated innovative private sector initiatives such as Acumen’s $90 million Climate Action Fund and Sindh’s pioneering mangrove carbon credit project, urging that these be replicated and scaled up nationwide. He highlighted the growing potential for debt-for-nature swaps and called for enhanced technical capacity to design, structure, and monitor bankable, investable climate projects meeting international standards. Aurangzeb said Pakistan has already secured strong multilateral backing, including a 10-year Country Partnership Framework with the World Bank worth $2 billion annually, a $1.3 billion climate financing arrangement with the IMF, and $500 million from the Asian Development Bank (ADB). He confirmed that Pakistan remains on track with its IMF reform program and plans to issue Panda Bonds in the Chinese capital market to diversify funding sources. The minister said Pakistan Crypto Council and the Virtual Asset Regulatory Authority had already been created and now new legislation will soon be enacted to regulate digital assets. Aurangzeb stressed that Pakistan must resolve its climate and population challenges well before the country’s 100th anniversary in 2047. The Minister urged collective ownership and coordination across all stakeholders, emphasizing that Pakistan must make the most of existing opportunities and resources before seeking new policy instruments. “We must take ownership, coordinate better, and move forward with urgency to address these existential issues,” he stated.