President and Editor-in-Chief for the Dunya Media Group Kamran Khan went to Twitter to give Pakistan another good news from the financial world.
He tweeted, “Very Exciting very positive news from International markets, Pakistan’s WAPDA Green Bond for 500 million USD, till this moment Green Bond has attracted bids worth more than 1.8 billion USD by market close likely to top 2 billion USD, huge confidence on Pakistan Alhamdolillah.”
Very Exciting very positive news from International markets, Pakistan's WAPDA Green Bond for 500 million USD, till this moment Green Bond has attracted bids worth more than 1.8 billion USD by market close likely to top 2 billion USD, huge confidence on Pakistan Alhamdolillah 👏👏
— Kamran Khan (@AajKamranKhan) May 27, 2021
This is great news for Pakistan as the WAPDA bond’s acceptance means that WAPDA can raise money to bring any structural/infrastructural changes to its system.
Why is WAPDA raising this money?
According to two days old national news cycle, Pakistan had planned to raise $500 million with the sale of a green bond that may lead to raising money to fund Hydroelectric projects.
WAPDA is the first public sector enterprise in Pakistan to offer a Green Eurobond (GEB) to meet its financial needs for the upcoming and ongoing projects that need financing.
Thus, the company would rather go to the international markets rather than the government, in an attempt to create greater independence of the institution as advocated by the incumbent government.
The plan is to use the raised money on the Diamer Basha, Mohmand dam, and other mega projects as mentioned above.
A national media outlet reported that Water and Power Development Authority (WAPDA) is looking to sell bonds with 10-year maturity this month and intends to offer more environmentally friendly debt over the next two years, according to Chairman WAPDA retired Lt. General Muzammil Hussain.
Business recorder reported citing an investor note that WAPDA has hired banks to arrange investor calls starting this week to aid in the issuance of dollar-denominated green bonds. According to the document, JPMorgan, Deutsche Bank, Standard Chartered, and Habib Bank were hired for the job.
GVS had earlier reported that the government was also working on a debt-for-nature plan to combat climate change and debt. It would work in a way that a creditor nation, or maybe even an IGO like the World Bank or IMF would agree to write off a portion of the newly issued debt or reduce repayment interest rates if the debtor (Pakistan) met agreed biodiversity and nature restoration targets.
It is worth mentioning that WAPDA had in March 2020 secured a “B-“ratings from credit rating agencies like Fitch and Standard & Poor’s (S&P).
According to the Fitch report, the rating was given based on its hydroelectric business, rather than the water and finance segments, as the hydroelectric unit is its only regulated business that engages in commercial activity; the water and finance segments are funded by government aid and grants.
WAPDA Assigned B-/Stable by Fitch Ratings https://t.co/nmOrUdMJcA
— ProPakistani (@ProPakistaniPK) May 26, 2021
Similarly, the USD notes by WAPDA also received ‘B-‘ or ‘Stable’ rating. The statement read, “The proceeds of the proposed notes will be used to finance or refinance eligible green projects.”
In another news, Pakistan Stock Exchange set another record of 2 billion stocks traded in one day on Thursday. On Wednesday, it broke previous records of trading 1.56 billion shares traded in the Stock Exchange in one day. Local and international investors show confidence in Pakistan’s economy.
#PSX makes history – KSE All volumes cross the 2bn mark!
— PTI Achievements (@PTI_Achievement) May 27, 2021
Stock Market on 26th May
On 26th May, Pakistan’s Minister for Planning, Development, and Special Initiatives Asad Umar went to Twitter to state the fact that the Pakistan Stock exchange has set a new daily trade volume record as the volume exceeded the previous record by 39 percent.
“New daily traded volume record set on the Pakistan Stock Exchange (PSX). Today’s volume exceeded the previous record by 39 %. Market reacting to signs of sustained recovery. The successful containment of the COVID 3rd wave. Though risk still remains. Also adding to the positive sentiment”, the minister said in his tweet.
This tweet got major support from different corners of the country.
PTI Senator Faisal Javed Khan also tweeted on the matter informing, “Congratulations Pakistan!! Pakistan Stock Market Makes History, Crosses 1 Billion Shares. For the first time in the country’s history 1.56 billion shares traded in Stock Exchange in one day. Post which an increase of 547 points has been recorded in 100 points.”