Guidance

Growth Gateway: Accelerating green and climate resilient financing in Pakistan (summary)

Published 13 October 2025

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This publication is available at https://www.gov.uk/government/publications/growth-gateway-accelerating-green-and-climate-resilient-financing-in-pakistan/growth-gateway-accelerating-green-and-climate-resilient-financing-in-pakistan-summary

Pakistan faces a dual crisis of economic fragility and climate vulnerability, with climate change threatening to undermine development gains and exacerbate poverty. The country requires an estimated £275 billion in climate finance by 2030: £120 billion for adaptation and resilience, and £155 billion for mitigation.

However, in 2021, only around £3.2 billion was invested in climate-related activities, with 80% directed towards mitigation, particularly renewable energy. Adaptation remains severely underfunded, despite Pakistan’s high exposure to floods, droughts, and extreme heat. The report highlights the urgent need to rebalance climate finance flows and strengthen institutional frameworks to attract both public and private investment.

The report identifies 21 initiatives across 4 categories:

  • enabling governance and data systems
  • de-risking bankable mitigation projects
  • facilitating blended finance for adaptation
  • developing a disaster risk financing ecosystem.

Five core enablers are prioritised:

  1. Develop an evidence-based quantification of the cost of inaction.
  2. Develop a robust locally-adapted climate action roadmap.
  3. Enhance green finance guidelines for financial institutions and develop regulations.
  4. Develop a green taxonomy that aligns with the pressing climate priorities.
  5. Agree a climate finance governance framework to streamline oversight and coordination.

These foundational steps aim to build investor confidence, improve coordination, and ensure climate finance is directed to the most critical areas.

To close the climate finance gap, Pakistan must also improve access to international funds, expand credit guarantee schemes, and explore innovative instruments such as catastrophe bonds and debt-for-nature swaps.

The UK government, in collaboration with the Climate Finance Development Partners Coordination Group, will support the Government of Pakistan and private sector to take forward these 5 core institutional strengthening and governance initiatives, before progressing the remaining initiatives.

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