Pakistan is looking to issue its first sukuk under a recently approved sustainable investment sukuk framework and could raise up to Ps52bn (US$185m) to fund three eligible hydropower projects, according to local media citing officials at the ministry of finance.

The target projects are the Garuk storage dam in the western Balochistan province, the Naigaj dam in the southeastern Sindh province, and the Shagarthang hydropower project in the city of Skardu in Kashmir. The projects are underway but will require an additional Ps52bn in funding.

The first sukuk issue will be in the range of Ps30bn, according to officials. Further details including the timing of the issues and target tenors are unknown.

Pakistan's federal cabinet approved the sustainable investment sukuk framework earlier this month.

Government agency Water and Power Development Authority in 2021 raised US$500m from a 10-year green bond to fund hydropower projects, but this will be the first time the government issues instruments tied to particular ESG assets.

The sovereign's domestic ratings are Caa2/B–/CCC+, according to LSEG data.

Source: IFR