Pakistan Plans to Raise $500 Million From First Green Bond Sale
(Bloomberg) -- Pakistan plans to raise $500 million next week with the sale of a debut green bond that may lead the way for similar deals from the nation to fund hydroelectric projects.
Pakistan Water and Power Development Authority, known as Wapda, is looking to sell a 10-year note this month, and intends to offer more environmentally-friendly debt over the next two years, said Muzammil Hussain, chairman of the organization. The nation aims to tap soaring investor demand globally for green debt as it pushes forward with plans to increase renewable and hydroelectric generation to 60% of total electricity by 2030.
Pakistan is targeting economic growth of 5% in the year starting July from around 3% this fiscal year with the help of spending on large infrastructure projects. The funds from the proposed dollar bond will be used to fund the Diamer Basha and Mohmand dams in the nation, according to Wapda’s Hussain.
“We are taking a lead against fossil fuel,” he said by phone.
Pakistan sold $2.5 billion of dollar bonds in March, its first since 2017, in a sign of investor demand for debt from the nation. Fitch Ratings affirmed its B- ratings for Wapda, the same as for sovereign, earlier this year.
“The government currently provides a large share of financing for power-related capex, but the policy direction for WAPDA is to expand its own indebtedness without the government’s commitment,” Fitch said at the time. “The government owns 100% of WAPDA and has a tight grip on its overall operation, including financing.”
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