SECP issues guidelines to float Green Bond in Pakistan
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued guidelines to float green bonds in Pakistan.
Pakistan has already launched the Green Euro bond in the international market to raise funds for Wapda hydropower projects.
The objective of guidelines is to provide an easy and efficient procedure for issuance with a concise offer document/prospectus.
Pakistan has already floated a green euro bond to raise funds for power projects Water and Power Development Authority Limited (Wapda).
The initiatives of SECP to issue bonds in Pakistan will also help raise funds for clean energy projects.
Pakistan had raised funds in the international market by floating green euro bonds for hydropower projects.
Read More: Pakistan to sell $500m green Euro bond
All issuers with eligibility to issue debt securities, including Sukuk either by way of a public offer or private placement are eligible to issue a green bond in Pakistan. However, they will ensure compliance with the applicable regulatory framework.
The issuance of Green Bonds will help Pakistan in initiating sustainable projects to combat climate change in addition to facilitating issuers of debt securities to diversify their source of financing.
It will also provide an additional financing instrument to those investors who are conscious of financing and re-financing projects that contribute to the environment.
To qualify as a green bond, SECP said that the proceeds must finance or refinance green projects or activities that bring energy efficiency, protect the environment, utilize renewable energy.
They also prevent and control pollution, use natural resources, projects related to land management, pollution-free transportation, wastewater, water treatment, etc.
Read More: ECC allows Wapda to float Eurobonds
As per the green bond database (source: www.climate.net), different countries have issued green Bonds worth US$ 1.2 trillion to date. This includes US$ 297 billion in 2020 and US $ 130.9 billion in 2021(till April) showing an increasing trend.
As per International Capital Market Association (ICMA)’s database, as many as 60 countries have issued a total of 640 Green Bonds.
Different countries issue Green bonds in line with globally accepted standards/goals. They follow the Green Bond Principles of the International Capital Market Association (ICMA), the UN’s Sustainable Development Goals (UN SDGs), etc.
