By Muhammad Faisal Kaleem
ISLAMABAD, Oct 23 (Wealth Pakistan) — The Ministry of Climate Change has formally requested Rs1 billion in seed funding from the Finance Division to establish the Pakistan Climate Change Fund (PCCF), a landmark initiative aimed at financing national climate adaptation and mitigation projects.
According to documents obtained by Wealth Pakistan, the fund will be created under Section 12 of the Pakistan Climate Change Act 2017. It is designed to mobilize financial resources for resilience, sustainable development, and environmental protection.
Once operational, the PCCF will become Pakistan’s main climate-financing mechanism, supporting both domestic and international commitments, including those under the Paris Agreement.
Funding proposal and objectives
Officials said the proposal has been submitted to the Finance Division, but no allocation has yet been approved. The ministry emphasised that launching the fund is essential to address Pakistan’s rising vulnerability to extreme weather events, floods, droughts, and heatwaves.
The Pakistan Climate Change Fund will help build a structured financial base for climate projects and reduce reliance on unpredictable foreign aid.
Governance and operational framework
The Draft Climate Fund Rules, vetted by the Finance and Law Divisions, define the fund’s governance and financial structure. These rules now await final approval from the Federal Minister for Climate Change and Environmental Coordination.
Under the proposed framework, the fund will be administered by the Pakistan Climate Change Authority and guided by three main committees:
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Fund Management Committee for decision-making
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Fund Technical Committee for project evaluation and monitoring
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Fund Investment Committee for financial planning and investment strategy
The PCCF will draw resources from government allocations, endowments, donations, and investment income. Additional revenue will come from carbon-credit projects and other climate-linked ventures of the Authority.
Funding allocation and grant tiers
The ministry’s draft plan allocates 40 percent of funds for climate adaptation, 30 percent for mitigation, 20 percent for research and capacity building, and up to 10 percent for administrative costs.
To promote broad participation, the Pakistan Climate Change Fund will operate a tiered grant system.
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Small grants of up to Rs5 million will support community and NGO-led projects.
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Medium grants of Rs5–50 million will target scalable public or private initiatives.
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Large grants above Rs50 million will finance transformational, multi-sector programmes.
A co-financing model will encourage private investment, allowing participation at a 1:2 ratio for green ventures.
Institutionalising climate finance in Pakistan
Officials described the Rs1 billion request as a critical first step toward institutionalising climate finance in the country. They said the fund would help Pakistan respond more effectively to natural disasters and transition to low-carbon development.
Once capitalised, the Pakistan Climate Change Fund will channel investments into projects that improve environmental resilience and sustainable economic growth. It is expected to become a cornerstone of Pakistan’s national framework for climate action and green development.