ISLAMABAD, May 18: Pakistan is preparing a $615 million green financing initiative to help export-oriented industries reduce carbon emissions, improve energy efficiency and meet tougher environmental standards in global markets.

The programme, titled Enhancing Green Export Capacity Through Green Financing, is expected to support cleaner production in key export sectors, including textiles, leather, rice and surgical goods. According to project documents, the initiative could help avoid up to 80 million tonnes of carbon dioxide equivalent emissions over its lifespan.

The Export-Import Bank of Pakistan is leading the initiative in collaboration with local financial institutions and international development financing partners. The programme is designed to provide financial support to industries seeking to replace outdated machinery, adopt cleaner technologies and lower energy consumption.

Project documents show the financing package includes $600 million in concessional lending and $15 million in grant support under a blended finance model. Concessional loans are typically offered on easier terms than commercial borrowing, including lower interest rates or longer repayment periods.

The initiative comes as export industries face growing pressure to comply with environmental and carbon reporting requirements in major international markets. One key concern for exporters is the European Union’s Carbon Border Adjustment Mechanism, which can place carbon-related costs on certain imported goods based on emissions produced during manufacturing.

Officials say the programme is aimed at helping Pakistani exporters remain competitive while supporting the country’s wider industrial decarbonisation goals. The project is also linked to Pakistan’s 2030 emissions reduction commitments and efforts to expand sustainable industrial financing.

Under the proposed plan, financing may be used for machinery replacement, renewable energy integration, clean-energy upgrades and energy-efficient production systems. Technical assistance is also expected to be provided to help industries improve production processes and operational efficiency.

The programme is expected to be implemented nationwide through participating financial institutions and development finance channels. Eligible export businesses would be able to access financing for approved projects that reduce emissions and improve resource efficiency.

According to the project documents, the investment structure has been designed as a blended green debt model with foreign exchange cover to reduce risks linked to currency fluctuations.

The documents estimate the project’s net present value at $9.9 billion and its internal rate of return at 3.08 percent. These indicators are used to assess the long-term financial and economic viability of development projects.

The initiative is also linked to several United Nations Sustainable Development Goals, including decent work and economic growth, industry and innovation, responsible consumption and production, and climate action.

Authorities have not yet announced a formal implementation timeline. The programme remains in the planning and financing stage, but if implemented, it would become one of Pakistan’s larger climate financing efforts focused on industrial exports and emissions reduction.