ISLAMABAD, Dec 11 (APP): Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, on Thursday highlighted Pakistan’s urgent climate vulnerabilities and outlined the country’s forward-looking financing strategy during a high-level panel discussion at the Global Development Finance Conference – Momentum 2025 in Riyadh.
Speaking on the theme “Climate Adaptation & Resilience: How do we secure the capital we need?” he emphasized the urgency of mobilizing sustainable finance to strengthen national and global climate resilience, said a press release issued by the Finance Ministry here.
The session, attended by senior global finance leaders including Zeina Toukan, Minister of Planning and International Cooperation of Jordan; Qahhorzoda Faiziddin, Minister of Finance of Tajikistan; and Serge Ekue, President of the West African Development Bank, explored the rising challenges of climate adaptation for emerging economies.
Highlighting Pakistan’s recent experience with extreme climate events, the minister said climate change is an increasingly tangible and costly reality for Pakistan. Recalling the devastating floods of 2022, which caused an estimated US$30 billion in losses, and the renewed flooding this year, he noted that the frequency and intensity of such disasters are accelerating. As a result, Pakistan expects to lose roughly half a percentage point of GDP growth this year, placing additional strain on an already challenged emerging economy.
Senator Aurangzeb stated that Pakistan’s commitment to macroeconomic stability has enabled the creation of fiscal and external buffers to manage immediate rescue and relief efforts through domestic resources. However, he emphasized that rehabilitation and reconstruction require substantial external support.
He noted the progress made through the establishment of an AI-enabled early warning system at Pakistan’s National Emergency Center, which provides month-by-month climate forecasts allowing for proactive planning and rapid response. Even so, he stressed that Pakistan’s resources remain insufficient for the scale of adaptation needed, making multilateral partnerships and private sector engagement essential.
Addressing questions on balancing development imperatives with climate adaptation, Senator Aurangzeb said that as one of the world’s most climate-vulnerable countries, Pakistan must continue mitigating emissions, but the more pressing challenge lies in securing adaptation financing.
He highlighted the government’s 10-year Country Partnership Framework with the World Bank Group, which allocates roughly US$20 billion — one-third dedicated to climate resilience and decarbonization. The minister underscored that the responsibility now lies with Pakistan to develop high-quality, bankable investment projects with urgency to unlock these funds.
Expressing concern over global climate financing mechanisms, he said that platforms such as the Green Climate Fund and the Loss and Damage Fund remain slow and bureaucratic, with lengthy accreditation processes that hinder timely access for vulnerable countries. In contrast, Pakistan has begun mobilizing support through multilateral channels, including the recent receipt of the first tranche of US$200 million under the IMF Climate Resilience Fund.
He reiterated that while domestic fiscal resources will continue to be allocated, external financing from development partners and international capital markets remains indispensable for Pakistan’s adaptation agenda. He called for a pragmatic, step-by-step approach focused on deploying available resources while working to close the wider financing gap.
Responding to a question on foreign investment and climate-aligned growth, the minister said finance ministers worldwide must lead the mainstreaming of climate priorities within national budgets to ensure alignment across government and financing mechanisms.
He noted that Pakistan’s relationship with the United States has strengthened significantly, particularly in minerals, mining, and advanced technologies including AI, blockchain, and digital infrastructure.
Discussing Pakistan’s flagship copper mining project, Reko Diq, he described it as a transformative development for the country’s economic and energy transition future. The project’s financial close — valued at US$7 billion, with IFC leading the syndication and the U.S. EXIM Bank participating — marks a major milestone. The mine is projected to generate export revenues equivalent to 10 percent of Pakistan’s current export base by its first commercial year in 2028, making it a major driver of growth and foreign exchange earnings.
He added that Pakistan anticipates strong investor interest from the U.S., China, GCC, and other countries as the project scales, contributing to national development and global supply chains for energy transition materials.
When asked about navigating geopolitical dynamics between major powers, the Finance Minister said Pakistan maintains an “and-and” approach to partnerships. China remains a longstanding ally, particularly through the China-Pakistan Economic Corridor (CPEC), whose first phase focused on critical infrastructure. Pakistan has now launched CPEC Phase 2.0, aiming to commercialize this infrastructure through business-to-business partnerships.
He affirmed that Pakistan is well-positioned to maintain constructive relationships with both the United States and China, ensuring stability and opportunities for diversified foreign investment.
The session concluded with reflections on the importance of regional and international cooperation in addressing climate challenges and promoting sustainable development. The panelists emphasized that despite the difficulties facing emerging economies, a shared commitment to resilience, innovation, and collaborative financing can help countries protect their people, strengthen their economies, and contribute to global climate goals.
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