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Panda bond

Pakistan wins award for sustainable sovereign Panda bond

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Pakistan wins

ISLAMABAD: Pakistan has won an international award for issuing its first sustainable sovereign Panda bond, Adviser to the Finance Ministry Khurram Shehzad said Wednesday.

Shehzad said in a statement that investor demand for the bond was five times higher than the amount offered, reflecting strong interest in Pakistan’s debut sustainable Panda bond.

Pakistan issued the three-year bond worth 1.75 billion Chinese yuan in May 2026, with a coupon rate of 2.5%.

Shehzad said the Panda bond gave Pakistan access to a broader pool of institutional investors and further strengthened financial ties between Pakistan and China.

He said proceeds from the bond would be used to finance projects in the water, energy and health sectors.

The issuance is also expected to create new opportunities for green and socially inclusive investment in Pakistan, he said.

The award recognizes Pakistan’s entry into China’s domestic capital market through a sustainable sovereign bond and its efforts to diversify sources of external financing.

Pakistan rejects Eurobond, Sukuk issuance, explores alternative options

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Pakistan rejects

ISLAMABAD: The government has decided against raising funds through Eurobond or Sukuk issuances this fiscal year, opting instead for a new financing approach that includes launching Pakistan’s first Panda bond in China to raise $250 million in the initial phase.

According to official sources, the Panda bond is expected to be issued by mid-January 2026, with the Prime Minister’s Office granting formal approval for the launch by January 31. A second phase of the programme, valued at $500 million, is expected to be completed before June 30, 2026.

Senior government officials told that the Panda bond is likely to be issued at an interest rate of around 4 percent. Pakistan faces two major external repayments during the current fiscal year due to the maturity of Eurobonds.

The first instalment of $500 million was paid in September 2025, while the second payment is due in April 2026, amounting to $1.3 billion, including $1 billion in principal and $300 million in interest.

Meanwhile, the International Monetary Fund (IMF) has expressed reservations over the government’s plan to issue Panda bonds in the Chinese market, questioning why Pakistan is not opting for commercial borrowing if Chinese banks are expected to be the main buyers.

In response, Pakistani authorities informed the IMF that the government is pursuing diversification of its financing sources and aims to strengthen its presence in the Chinese capital market through the issuance of Panda bonds.