Islamabad: Pakistan will require an estimated $331 billion in climate financing by 2030 to strengthen its resilience against climate change and reduce future economic losses, according to the State Bank of Pakistan (SBP).
In its latest report, the central bank said the country will need approximately $47 billion annually between 2024 and 2030, equivalent to around 10% of cumulative GDP during the period, to fund climate adaptation and mitigation initiatives. The estimate, based on data from the Climate Policy Initiative (CPI), highlights the scale of investment needed to safeguard infrastructure, livelihoods, and long-term economic growth.
The SBP noted that Pakistan is among the world’s most climate-vulnerable nations, ranking as the 15th most affected country by climate-related disasters between 1995 and 2024, despite contributing only about 1% of global greenhouse gas emissions.
According to government estimates cited in the report, Pakistan’s climate financing requirements range between $200 billion and $348 billion by 2030 to support climate-resilient development and achieve its Nationally Determined Contributions (NDCs). The government’s Pakistan Climate Prosperity Plan also envisions investments of $1.6 trillion by 2050.
The report stated that climate-related disasters have caused an estimated $58.8 billion in economic losses across the country. This includes $29.3 billion in damages between 1992 and 2021, approximately $28 billion from the devastating 2022 floods, and another $1.5 billion in losses caused by the 2025 floods.
Despite the growing funding needs, Pakistan has received only $1.4 billion to $2 billion annually in climate finance over the past decade, with inflows reaching a peak of around $4 billion in 2021, well below the amount required.
The SBP attributed the financing gap to several factors, including limited global funding for climate adaptation, macroeconomic challenges, elevated sovereign risk, political uncertainty, underdeveloped financial markets, weak institutional capacity, and difficulties in developing bankable climate projects.
Citing World Bank projections, the report warned that climate change could reduce Pakistan’s GDP by 4.5% to 6.5% by 2050 under an optimistic scenario, and by as much as 7% to 9% under a more severe scenario, with the agriculture and industrial sectors expected to be the most affected.
