Islamabad: Pakistan is set to unveil its $250 million Green Impact Fund (GIF), a bold initiative designed to propel climate-conscious growth among micro and small enterprises (MSMEs).
Led by the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, the Green Impact Fund aims to harness global climate commitments, providing concessional loans to support green MSMEs in combating climate challenges while boosting economic development.
The announcement was made during the second meeting of the Prime Minister’s Committee on Social Impact Financing, which was held on January 15, 2025, at the Finance Division in Islamabad.
A proposal crafted by Karandaaz, a non-profit organisation backed by international donors, was the focal point of discussion in a meeting held by the Prime Minister’s Committee on Social Impact Financing, presided over by Finance Minister Muhammad Aurangzeb.
During the presentation, Karandaaz showcased the impressive global expansion of impact investing, which has now amassed $1.571 trillion in assets under management, experiencing an annual growth rate of 21% since 2019. A proposal has been put forward for the creation of a Green Impact Fund (GIF), which is a $250 million initiative designed to support green micro and small enterprises (MSMEs).
“This fund will provide concessional loans, equity with first-loss guarantees, and technical assistance, supported by global climate financing, commercial institutions, and donor funding,” the Ministry of Finance said.
Representatives from both public and private sectors, such as Akhuwat Foundation, Karandaaz, Pakistan Environment Trust, InfraZamin, and the Pakistan Microfinance Investment Company, joined the Governor of the State Bank of Pakistan and other high-ranking officials.
The discussion highlighted how these initiatives could drive economic growth, tackle climate issues, and encourage grassroots development by generating employment and uplifting marginalized communities.
Insights into ongoing initiatives within the social impact financing framework were also shared by the Ministry of Poverty Alleviation and Social Safety. The initiatives encompassed the Benazir Income Support Programme (BISP), the Nashonuma initiative aimed at providing nutrition and stipends to 2 million pregnant women and children under two, and the Kafalaat Program, which delivers cash transfers to 9.3 million women with a budget allocation of Rs. 461 billion.
Similarly, through the National Poverty Graduation Program (NPGP), productive assets were transferred to 151,822 households, along with 252,012 interest-free loans and livelihood training. The program reported a 74.4% graduation rate from extreme poverty, accompanied by a 30% increase in income.
Under the initiative aimed at uplifting extremely poor and flood-affected households, a substantial investment of USD 134.2 million has been made to provide essential livelihood assets, climate-smart agricultural technologies, and interest-free loans. Meanwhile, the Pakistan Bait-ul-Mal Programs have been actively managing shelter homes, women empowerment centers, and support programs for orphans and widows.
The Finance Minister emphasized the need for a structured approach to measure the actual social impact of financial inclusion efforts. He remarked, “It is crucial to focus on the structuring, monitoring, and reporting of social impact outcomes to effectively gauge the results of our initiatives.”
The Minister also highlighted the importance of capacity building across all sectors and the creation of comprehensive dashboards for tracking progress. “While we are doing a commendable job in specific verticals, as a country, we must take a more holistic approach and scale up our efforts horizontally to ensure broader impact,” he added.
The Finance Minister called on all stakeholders to expedite their endeavours in finalising and implementing the proposed frameworks, thereby assuring the realisation of Pakistan’s objectives pertaining to sustainable development, climate resilience, and poverty alleviation.