Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has assigned an initial instrument rating to Pakistan's first-ever Green Bond, issued by Parwaaz Financial Services Limited (PFSL). The bond, valued at PKR 1 billion, marks a significant step in the country's efforts to promote sustainable finance and projects.
PFSL, a non-banking financial institution and a subsidiary of Karandaaz Pakistan Limited, focuses on meeting the credit needs of Small and Medium Enterprises (SMEs). The company's operations are governed by a robust risk management framework, which has been instrumental in expanding its financing portfolio to an asset base of approximately PKR 3.5 billion as of the current year.
The proceeds from the newly issued Green Bond are dedicated to projects that align with sustainability objectives. These include renewable energy, energy efficiency, clean transportation, sustainable agriculture, and pollution prevention and control. To ensure adherence to sustainability standards, PFSL has developed a Green Bond Framework that complies with the Securities and Exchange Commission of Pakistan's guidelines and the International Capital Market Association's principles.
To further support transparency and accountability, PFSL's Green Bond Framework has been certified by PET Nature (Pvt.) Ltd., providing external validation. A Green Bond Committee has been established to oversee project selection, fund allocation, and ongoing monitoring, ensuring all projects meet the company's Environmental and Social Governance Policy.
PFSL has committed to disclosing key performance indicators regarding the allocation and impact of the bond's proceeds. An independent auditor will conduct periodic reviews to ensure proper fund utilization, reinforcing the company's commitment to governance and transparency.
The rating for PFSL's Green Bond reflects the company's governance standards, risk management controls, and the structural safeguards established for the bond issuance. These elements are crucial for PFSL's ability to achieve its strategic goals and maintain regulatory compliance.