KARACHI: The World Bank’s Board of Executive Directors has approved $350 million in financing for Pakistan under an initiative to strengthen fiscal management and promote competitiveness for sustained and inclusive economic growth in the country, said its statement on Wednesday.
The Second Resilient Institutions for Sustainable Economy (RISE-II) Operation was launched in December 2022 and followed the first program in the series, RISE-I, which began two years before that.
Speaking at the occasion, a top World Bank official emphasized the need for Pakistan to carry out comprehensive reforms for improved economic progress.
“Pakistan needs urgent fiscal and structural reforms to restore macroeconomic balance and lay the foundations for sustainable growth,” Najy Benhassine, the bank’s country director for Pakistan, said. “RISE-II completes a first phase of tax, energy and business climate reforms geared to raising additional revenues, improve the targeting of expenditures and stimulate competition and investment.”
According to the World Bank statement, the RISE-II operation contributes to better fiscal management by improving fiscal policy coordination, enhancing debt transparency and management, strengthening the taxation of property and improving the financial viability of the power sector.
The operation also aims to foster growth and competitiveness by reducing the cost of tax compliance, improving financial sector transparency, encouraging the use of digital payments, and promoting exports by lowering import tariffs.
“Based on the foundations laid through RISE-II and parallel support by other IFIs [international financial institutions], Pakistan has the opportunity to tackle long-standing structural distortions in its economy after the upcoming general elections,” Derek H. C. Chen, task team leader of the operation, said. “Failing to use this opportunity would risk plunging the country back into stop and go economic cycles.”
Pakistan and the World Bank have had significant and multifaceted engagements spanning over decades, focusing on various development challenges and strategic priorities.
The bank has also launched a series of policy notes in recent years as part of its engagement and outreach program to contribute to the public dialogue on reforms needed for a brighter economic future for the country.
World Bank approves $350 million for Pakistan’s fiscal strengthening, economic competitiveness
https://arab.news/9nm56
World Bank approves $350 million for Pakistan’s fiscal strengthening, economic competitiveness
- The financing under the RISE-II operations will enhance debt transparency and make power sector more viable
- World Bank officials say Pakistan must tackle longstanding structural distortions in economy after national polls
Pakistan issues over $7 billion sukuk in 2025, nears 20 percent Shariah-compliant debt target
- Finance Adviser Khurram Schehzad says this was the highest-ever Sukuk issuance in a single calendar year since 2008
- Pakistan’s Federal Shariat Court ordered in 2022 the entire banking system to transition to Islamic principles by 2027
ISLAMABAD: Pakistan’s Finance Adviser Khurram Schehzad on Monday said the country achieved a landmark breakthrough in Islamic finance by issuing over Rs2 trillion ($7 billion) sukuk this year, bringing it closer to its 20 percent Shariah-compliant debt target by Fiscal Year 2027-28.
A sukuk is an Islamic financial certificate, similar to a bond, but it complies with Shariah law, which forbids interest. Pakistan’s Federal Shariat Court (FSC) had directed the government in April 2022 to eliminate interest and align the country’s entire banking system with Islamic principles by 2027.
Following the ruling, the government and the State Bank of Pakistan (SBP) have undertaken a series of measures, including legal reforms and the issuance of sukuk to replace interest-based treasury bills and investment bonds.
“In 2025, the Ministry of Finance (MoF) through its Debt Management Office, together with its Joint Financial Advisers (JFAs), successfully issued over PKR 2 trillion in Sukuk,” Schehzad said on X, describing it as “the highest-ever Sukuk issuance in a single calendar year since 2008 by Pakistan.”
Pakistan made a total of 61 issuances across one-, three-, five- and 10-year tenors, according to the finance adviser. The country also successfully launched its first Green Sukuk, a Shariah-compliant bond designed to fund environment-friendly projects.
He said the Green Sukuk was 5.4 times oversubscribed, indicating investor demand was more than five times higher than the amount the government planned to raise, which showed strong market confidence.
“The rising share of Islamic instruments in the government’s domestic securities portfolio (domestic debt) underscores strong momentum, growing from 12.6 percent in June 2025 to around 14.5 percent by December 2025, clearly positioning the MoF to achieve its 20 percent Shariah-compliant debt target by FY28,” Schehzad said.
“This milestone also reflects the structural deepening of Pakistan’s Islamic capital market, sustained investor confidence, and the strengthening of sovereign debt management.”
He said Pakistan was strengthening its government securities market by making it more resilient, diversified, and future-ready, supported by a stabilizing macroeconomic environment, a disciplined debt strategy, and a clear roadmap for Islamic finance.
