PNN: Pakistan has launched its first private-capital-funded Skills Impact Bond, backed by the Finance Ministry, to roll out a Rs1 billion pilot under a three-year programme supporting scalable technical training.
According to an official statement, the PSIB has been designed to deliver measurable outcomes, including certification, job placement and at least six-month job retention for each trainee. The initiative represents a shift from traditional input-based public spending towards outcome-driven, private-sector-enabled social investment.
Under the proposed structure, subsequent tranches of the bond are expected to gradually link repayments to a nominal portion of trainee salaries. The objective is to embed long-term sustainability while monetising Pakistan’s demographic dividend both domestically and through the export of certified skills. The launch ceremony also featured the signing of financing documents, including investor and issuer agreements. It was attended by senior government officials, development partners, private sector representatives and international organisations.
Speaking at the event, Federal Minister for Finance and Revenue Muhammad Aurangzeb said the launch marked an important moment focused on education and training. He said Pakistan’s demographic dividend could only be realised if the country succeeded in upskilling and reskilling its youth at scale.
He said the work of the National Vocational and Technical Training Commission (NAVTTC) was central to this effort, noting that global demand for high-value digital skills offered significant earning potential. He added that Pakistan’s position as one of the world’s largest freelance markets underscored this opportunity.
Aurangzeb said the PSIB formed part of a broader government-led shift away from budget-based social spending towards outcomes, evidence and accountability. He described this as a deliberate departure from systems reliant solely on public financing. He said the prime minister had tasked him last year with chairing a multi-stakeholder Committee on Social Impact Financing. The committee brought together policymakers, development experts, technology partners, international organisations and financial sector practitioners to develop Pakistan’s first Social Impact Financing Framework.
According to the statement, the framework identifies six national priority pillars. These include education and human capital, gender equality, health and well-being, population stabilisation, climate resilience, and poverty and migration. Highlighting gender inclusion, Aurangzeb welcomed a recommendation by the British Asian Trust that 40% of PSIB trainees should be women. He said women’s participation and leadership in the workforce would be critical to shaping Pakistan’s economic trajectory.
He reiterated that the finance ministry’s Rs1 billion guarantee was intended as a catalytic and non-structural intervention. He said the purpose was to crowd in private capital and establish credibility for the new financing structure. He added that the roadmap envisaged reduced reliance on sovereign guarantees, greater participation by institutional and capital market investors, and a future model without government balance-sheet exposure. Earlier, Executive Director NAVTTC Muhammad Amir Jan described the PSIB as a defining moment for skills development. He said reforms in governance, financial transparency, provincial coordination and industry linkages had repositioned skills training as a strategic investment in human capital.
Separately, Aurangzeb said Pakistan was preparing for the inaugural issuance of a Panda Bond in the Chinese capital market. Speaking in an interview with China Global Television Network (CGTN), he said the move reflects the growing strength, maturity and diversification of bilateral relations, strengthening financial and economic ties with China.
He said Pakistan hoped to launch the Panda Bond ahead of the Chinese New Year, allowing the country to access the world’s second-largest capital market.