Questions raised over green bond mechanism

Finance Minister Muhammad Aurangzeb has aired concerns over the mechanism for the Water and Power Development Authority's (Wapda) green bond, which lacks provisions for mitigating liabilities of the government and its consequences. The finance minister said that the same mechanism, established for Wapda's green bond, was being used for Pakistan Social Impact Bond (PSIB) that was to be floated to generate financing for the National Vocational and Technical Training Commission (NAVTTC). The Economic Coordination Committee (ECC) has reached an understanding that raising debt through PSIB without a solid business plan would not be an appropriate course of action. In a recent ECC meeting, the Ministry of Federal Education and Professional Training emphasised that the proposal of floating PSIB was developed using an outcome-based approach to enhance NAVTTC's footprint.