Karachi: Parwaaz Financial Services Ltd. (PFSL), a subsidiary of Karandaaz Pakistan Limited, is set to launch Pakistan’s first Green Bond, which has been assigned a preliminary ‘AA-‘ rating by the Pakistan Credit Rating Agency Limited (PACRA) as of October 22, 2024. This initiative marks a significant step towards supporting environmentally sustainable projects across the country.
According to The Pakistan Credit Rating Agency Limited, the inaugural Green Bond, valued at PKR 1 billion, is designed to fund projects that promote renewable energy, energy efficiency, clean transportation, sustainable waste and water management, and pollution prevention. This effort aligns with global environmental goals and responds to the growing demand for sustainable investment opportunities in Pakistan.
PFSL benefits from a robust governance framework and professional management, enhancing its ability to manage risks effectively. The company has established a solid asset base of approximately PKR 2.8 billion, demonstrating its financial stability and commitment to expanding its portfolio responsibly. The Green Bond is structured under a comprehensive framework that adheres to the Securities and Exchange Commission of Pakistan’s Green Bond Guidelines and the International Capital Market Association’s Green Bond Principles.
A specialized Green Bond Committee has been formed to oversee the management and allocation of the bond’s proceeds. This committee is responsible for ensuring that all funded projects align with PFSL’s stringent Environmental and Social Governance (ESG) Policy and the company’s overarching sustainability objectives. The committee’s duties also include the rigorous selection and monitoring of projects to ensure compliance and effectiveness.
PFSL has committed to maintaining high levels of transparency and accountability by publicly disclosing key performance indicators related to the environmental impact and allocation of the bond’s proceeds. Furthermore, the company plans to engage an independent auditor to perform periodic reviews of fund utilization.
The ‘AA-‘ rating reflects PFSL’s strong governance, risk management practices, and the secure structure of the bond issuance. The future of this rating depends on PFSL’s ongoing adherence to its strategic goals, maintaining high asset quality, and compliance with regulatory standards.