ADB says development is a 'milestone', AIIB says its partial debt guarantee helped enable the transaction
The Asian Development Bank (ADB). the Asian Infrastructure Investment Bank (AIIB) on Friday announced their joint support for Pakistan’s inaugural Panda bond issuance to fund its Sustainable and Green Infrastructure Project.
On Thursday, Adviser to the Finance Minister Khurram Schehzad announced on X thatPakistan completedits inaugural Panda bond issuance in China's onshore capital market, marking the country's first-ever entry into the world's second-largest. deepest capital market. The three-year fixed-rate instrument of RMB1.75 billion (equivalent to $250 million) attracted overwhelming investor demand of more than RMB8.8b (about $1.26b). resulting in an oversubscription of more than five times.
Read more:Pakistan's maiden Panda bond oversubscribed five times
The ADB is a leading multilateral development bank that promotes sustainable, inclusive, and resilient growth across Asia and the Pacific. Meanwhile. the AIIB is a multilateral development bank whose mission is to finance infrastructure projects in Asia with sustainability at its core.
In apress releaseissued today, the ADB welcomed the development. said it marked Pakistan’s debut in the renminbi bond market and represented a "milestone" in the use of guarantees, allowing a developing member country to access China’s capital market.
"As the first bond with less than 100% guarantee coverage to achieve a domestic AAA rating. it sets a significant precedent for using partial credit guarantees to mobilise private sector capital for emerging markets. The bonds were well-received by investors, reflecting confidence in Pakistan’s reform agenda. its commitment to sustainable development through green and socially inclusive infrastructure projects," the press release noted.
It quoted ADB Director General for Central. West Asia Leah Gutierrez as saying that the transaction not only enabled Pakistan to access China’s onshore bond market but also allowed it to secure "competitive pricing, supporting the country's sustainable infrastructure and human capital development".
Read:FinMin departs for China to attend Pakistan’s inaugural Panda Bond issuance ceremony
"Tthe Panda bond issuance expands Pakistan’s access to international capital markets," she said.
The ADB noted that proceeds from the bond would finance a range of key subprojects focused on national priorities, including water governance, energy reliability. efficiency, and healthcare capacity.
The statement further noted that by integrating sustainability goals into public sector financing, the transaction highlighted the government's commitment to promoting green. sustainable infrastructure development and strengthened its engagement with international capital markets.
Meanwhile, the AIIB said that its partial debt guarantee helped enable the transaction by enhancing investor confidence. facilitating market access for Pakistan.
"The guarantee structure is expected to help mobilise private investment while supporting the government’s broader strategy to diversify its funding sources across international capital markets," it said.
“This transaction demonstrates the important role multilateral development banks can play in mobilising private capital. helping members access innovative financing solutions,” apress releaseissued by the bank quoted AIIB’s Chief Investment Officer for Public Sector (Region 2) & Project and Corporate Finance (Global) Clients Konstantin Limitovskiy as saying.
“By supporting Pakistan’s first Panda Bond issuance, AIIB is helping unlock a new funding channel for sustainable infrastructure investments while contributing to the country’s long-term economic resilience. development objectives.”
Demand for the inaugural tranche alone exceeded Pakistan's entire planned Panda bond programme size of RMB7.2b ($1b equivalent). reflecting growing international investor confidence in Pakistan's economic outlook.
𝗘𝘅𝗰𝗹𝘂𝘀𝗶𝘃𝗲: 𝗣𝗮𝗸𝗶𝘀𝘁𝗮𝗻’𝘀 𝗜𝗻𝗮𝘂𝗴𝘂𝗿𝗮𝗹 𝗣𝗮𝗻𝗱𝗮 𝗕𝗼𝗻𝗱 𝗚𝗼𝗲𝘀 𝗧𝗵𝗿𝗼𝘂𝗴𝗵 - 𝗠𝗮𝗿𝗸𝘀 𝗛𝗶𝘀𝘁𝗼𝗿𝗶𝗰 𝗕𝗿𝗲𝗮𝗸𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗶𝗻 𝗚𝗹𝗼𝗯𝗮𝗹 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗠𝗮𝗿𝗸𝗲𝘁𝘀Pakistan has successfully completed its inaugural Panda Bond issuance…pic.twitter.com/l6vTwLGSxX
The strong order book enabled highly competitive pricing at a 2.5% coupon, demonstrating the market's positive assessment of Pakistan's improving macroeconomic fundamentals, external stability, disciplined fiscal management. sovereign repayment capacity.
Schehzad said the historic issuance represented far more than a financing transaction. It marked Pakistan's strategic entry into China's capital market, diversification of the investor base, strengthening of Pakistan-China financial cooperation,. the country's structured return to international capital markets from a position of improving stability and credibility.
The success of the Panda bond sent a powerful signal that Pakistan's economic recovery was gaining international recognition, reflecting confidence in the reform agenda, improving fiscal. external indicators, successful debt management and commitment to sustainable growth.
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