Zafar Masud views on Climate-Sensitive Finance Projects

The Bank of Punjab is gearing up on learning climate sensitive finance projects, for which, more that $1trillion is available worldwide. CEO of the Bank Zafar Masood says, his institution is working on learning skill set for this new niche.

Mr. Tahir Dhindsa of SDTV, upon listening to mind-boggling speed of Climate Minister Senator Sherry Rehman commented that climate financing is now a matter of life and death.

He welcomed Mr. Zafar Masud (President and CEO) of Bank of Punjab and asked that since climate financing is a relatively new niche and its risk profile is not clearly known to the institutions, therefore, investing in climate projects would not make financial sense for the commercial banks.

Mr. Zafar Masud responded that climate financing is mainly an uncharted territory and there’s minimal awareness about the matter specially in Pakistan. Although, SBP has played is due role in terms of coming out with ‘Green Banking’ guidelines and ‘environment and social risk management framework’, the banks need to up their game as far as their people quality and skill set are concerned to be able to undertake such green projects.

He added that an estimated more than a trillion dollar funding is available for climate sensitive projects, however, the skillsets required to tap that potential is currently lacking. Therefore, the Bank of Punjab has partnered with the German bank ‘KfW Development Bank’ since their risk assessment expertise will benefit us hugely.

The viability of ‘Green’ projects is very different once we remove the ‘green’ aspects of the project. Therefore, we need to evaluate these projects very differently because the returns are compromised and the risks are elevated in terms of project delivery. Availably of adequate expertise in running green-compliant projects is also a major unknown factor.

Watch full interview here.

Comments are closed.