The Securities and Exchange Commission of Pakistan (SECP) has issued guidelines for the issuance of green bonds in Pakistan. The guidelines provide an easy and efficient procedure for the issuance with the concise offering of documents/prospectus.
All the issuers who are eligible to issue debt securities, including sukuk, either by way of public offer or private placement are also eligible to issue green bonds in compliance with the applicable regulatory framework.
The issuance of green bonds will help to initiate sustainable projects for the combating of climate change besides facilitating the issuers of debt securities to diversify their sources of financing.
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It will also provide an additional financing instrument to investors who are conscious of financing/re-financing projects that contribute to the environment.
To qualify as a green bond, the proceeds must finance or refinance green projects or activities that involve energy efficiency, protect the environment, utilize renewable energy, prevent and control pollution, use natural resources, land management, pollution-free transportation, wastewater and water treatment, etc.
As per the green bond database, green bonds worth $1.2 trillion have been issued by different countries to date, including $297 billion in 2020 and $130.9 billion in 2021 (to April), showing an increasing trend.
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As per the database International Capital Market Association (ICMA), a total of 640 issues of green bonds have been made by 60 countries.
Green bonds can be issued based on globally accepted standards/goals such as the International Capital Market Association (ICMA)’s Green Bond Principles, and the UN’s Sustainable Development Goals (UN SDGs), etc.
The SECP’s guidelines for green bonds are available here.
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