KEY POINTS
- Climate fund to finance adaptation, mitigation, and environmental protection.
- The fund aligns with the Paris Agreement goals.
- Funding sources include govt allocations, endowments, donations, and profits from carbon projects.
ISLAMABAD: Pakistan is planning to establish a dedicated national climate finance vehicle, the Pakistan Climate Change Fund, with an initial seed money request of Rs1 billion ($3.6 million) to start its operations.
The proposal, outlined in documents, frames the fund as a cornerstone of the country’s strategy to finance climate adaptation, mitigation, and environmental protection.
Under Section 12 of the Climate Change Act 2017, the fund would mobilize resources for resilience and sustainable development, aligning with Pakistan’s Paris Agreement commitments.
Officials say the initial capital will enable the fund to become Pakistan’s primary financing mechanism for climate action, supporting both domestic projects and international obligations.
Draft rules detailing the fund’s structure and governance are awaiting final approval from the climate ministry.
If approved, the Pakistan Climate Change Authority would oversee the fund, with three key committees guiding its work: a Fund Management Committee for decision-making, a Fund Technical Committee for project evaluation and monitoring, and a Fund Investment Committee to steer financial strategy.
Funding sources would include government allocations, endowments, donations, investment profits, and revenues from carbon projects and other Authority initiatives.
The ministry hopes to attract international development partners and private sector investors once seed money is secured.
Disbursement plans allocate 40% of funds to climate adaptation projects, 30% to mitigation, and 20% to capacity building, research, and communication, with up to 10% reserved for administrative costs.
To broaden participation, the fund would operate a tiered grant system: small grants up to Rs5 million for community projects and NGOs, medium grants Rs5–Rs50 million for scalable public-private initiatives, and large grants above Rs50 million for multi-sector transformational programs.
A co-financing scheme would invite private sector involvement at a 1:2 ratio, boosting investments in green ventures.
Officials emphasize that once approved, the fund could become a lynchpin of Pakistan’s environmental and economic sustainability framework, channeling capital into projects that reduce climate risks and accelerate a transition to low-carbon growth.
