PAKISTAN’S pursuit of climate resilience and low-carbon development is inextricably linked to its macroeconomic stability. The country needs to undertake structural reforms to accomplish climate-compatible development. Just as macroeconomic stability depends on the seriousness of reforms, access to international climate finance and investments is linked to internal systemic reforms.

Pakistan’s climate finance landscape is at a critical juncture. As the country’s needs for additional finances have increased, traditional sources have become inadequate. Short-term borrowing has created a mountain of internal and external debt. Policymakers are frustrated by the shrinking pipeline of humanitarian assistance, grants, concessional loans, and budgetary support. As the need for investment in climate resilience and low-carbon development has become urgent, we must adopt a multifaceted approach that addresses policy, institutional and market barriers, as a recent study by the UK’s Foreign, Commonwealth and Development Office on Accelerating Green Climate and Resilient Financing in Pakistan has pointed out. Lethargic attitudes must be shed and equity investments, de-risking projects, leverage-blended finance, and facilitating debt-swaps for climate action focused on.

Blended finance is a promising avenue for leveraging limited public funds to mobilise private capital. Pakistan should actively seek partnerships with development finance institutions to design blended finance vehicles which are tailored to our climate priorities. They could focus on renewable energy, climate-smart agriculture, water-resource management, public health, or energy and urban infrastructure projects.

In fact, the country needs expertise to........

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