ISLAMABAD:

Minister for Finance and Revenue Senator Muhammad Aurangzeb on Wednesday termed the launch of the Capital Market Development Fund (CMDF) a “milestone” and urged coordinated reforms to deepen, broaden and modernise Pakistan’s capital markets, according to an official statement.

Addressing the CMDF signing ceremony organised by the Securities and Exchange Commission of Pakistan (SECP), the finance minister said strong capital markets are essential for sustainable economic growth, mobilising savings and unlocking long?term financing for key sectors. He emphasised that “robust capital markets are engines of sustainable growth” that enable capital formation, risk?sharing and financing for infrastructure and startups. Aurangzeb outlined four key areas of focus: the broader capital market framework, the balance between equity and debt markets, the regulatory role of SECP, and the importance of partnerships among stakeholders. He noted that Pakistan must draw lessons from ongoing global and regional challenges, stressing that commercial reserves alone are insufficient. He called for the creation of strategic reserves to strengthen economic resilience.

The minister also underlined the need to accelerate investment in renewable energy, including solar, wind and hydropower, adding that capital markets would play a crucial role in financing this transition. He emphasised building indigenous economic capacity, noting that stronger fiscal buffers could reduce dependence on international assistance during crises such as floods.”The power of macroeconomic stability lies in our ability to respond to shocks with our own resources,” he said, linking economic strength with national and energy security.

Aurangzeb noted that Pakistan must move away from over?reliance on the banking sector, calling for greater use of capital markets by both the public and private sectors. He acknowledged progress in the equity market, citing the entry of more than 220,000 new investors over the past two years, largely driven by young, tech?savvy participants. However, he expressed concern over the underdevelopment of the debt capital market, saying it had “gone into reverse gear” and requires regulatory reforms, improved ease of doing business and taxation adjustments to revive corporate bond activity.

The minister also stressed the importance of financial literacy and investor education, urging authorities to focus outreach efforts on Gen?Z and younger investors who are increasingly shaping market trends through digital platforms. On regulation, he described SECP’s role as a “fine balancing act” between expanding market participation and ensuring investor protection, fiscal discipline and risk management.

Separately, addressing the DawnMedia Breathe Pakistan International Climate Change Conference 2026, Aurangzeb said Pakistan currently has access to about $600?700 million in climate finance and is actively pursuing diversified funding avenues, including green bonds and innovative instruments, to support climate resilience and energy transition goals. He said Pakistan expected to get approximately $200 million from the International Monetary Fund (IMF), while the Asian Development Bank (ADB) was also extending assistance. The government is working to launch its inaugural Panda bond this month, expected to be about $250 million equivalent in renminbi. The minister stressed the need for a pragmatic approach, urging stakeholders to effectively use currently available resources instead of focusing on large, theoretical financing gaps.”The discussions about hundreds of billions of dollars in gaps are academic at this stage. The priority should be to deploy available funds efficiently,” he remarked.

Referring to international best practices, Aurangzeb said China’s rapid growth in green finance – achieving nearly 40% of global green bond issuance – provided valuable lessons. He highlighted ongoing initiatives including energy efficiency measures, electric vehicle promotion, subsidies and risk?sharing mechanisms to support the transition. He called for greater reliance on indigenous resources, strengthening domestic capital markets and reducing overdependence on bank financing.