By Abdul Ghani

The government is set to soon roll out a $615 million green financing initiative to enhance export competitiveness while reducing up to 80 million tons of carbon emissions over its lifespan.

According to a document available with Wealth Pakistan, the programme, led by EXIM Bank in collaboration with local and international financial partners, targets key export sectors including textiles, leather, rice, and surgical goods, to help them meet the upcoming European Union Carbon Border Adjustment Mechanism (CBAM) regulations.

The blended finance structure includes $600 million in concessional lending and $15 million in grant support, enabling exporters to adopt clean technologies and energy-efficient production systems at lower borrowing costs.

Currently in the structuring phase, the initiative has completed stakeholder consultations and is expected to roll out through partner financial institutions. It will provide both financing and technical assistance to industries for machinery upgrades and renewable energy adoption.

Financial projections indicate a net present value (NPV) of $9.9 billion, though the internal rate of return (IRR) stands at 3.08%, reflecting its long-term environmental and economic benefits rather than short-term gains.

The programme will support industrial decarbonisation while maintaining Pakistan’s access to key export markets, particularly in Europe, where environmental compliance is becoming increasingly mandatory.

In addition to emissions reduction, the initiative is expected to generate skilled employment and improve industrial productivity. It aligns with Sustainable Development Goals (SDGs) 8, 9, 12, and 13.

The project represents a critical step towards transitioning Pakistan’s export sector to sustainable practices, ensuring resilience against evolving global trade regulations while contributing to climate mitigation efforts.

Credit: INP-WealthPk