KARACHI — Pakistan is facing an existential challenge from climate change, Finance Minister Muhammad Aurangzeb said on Monday, warning that recurring climate-induced disasters are placing severe strain on the country’s economy and infrastructure.
Addressing the fourth Pakistan Climate Conference in Karachi via video link, the finance minister said climate change is no longer a future risk but a present-day crisis, with floods and extreme weather events increasingly affecting livelihoods across the country.
He cited the devastating floods of 2002 as a major economic shock and said that in 2025, flooding across three major rivers affected almost all provinces, underscoring Pakistan’s vulnerability to climate-related disasters.
Financing climate action amid constraints
Aurangzeb said the government is pursuing multiple strategies to address climate risks despite limited fiscal space. He noted that Pakistan currently has access to approximately $1.3 billion in climate-related financing through the International Monetary Fund, alongside climate support facilities from the World Bank and the Asian Development Bank.
He acknowledged that international commitments announced at the Sharm El-Sheikh climate summit had fallen short of expectations but said Pakistan is working to bridge the financing gap through market-based instruments. These include issuing green bonds, green sukuk, and exploring panda bonds to attract climate-focused investment.
Role of institutions and partnerships
The finance minister said the State Bank of Pakistan is supporting climate-related initiatives by encouraging sustainable financing, while public-private partnerships could help deliver effective outcomes at scale.
He also highlighted coordination with the National Transmission and Despatch Company and other energy sector stakeholders to strengthen climate resilience and support the transition toward cleaner energy systems.
Aurangzeb stressed that addressing climate change will require sustained policy focus, international cooperation, and innovative financing to protect economic stability and ensure long-term development in a climate-vulnerable country like Pakistan.
