Catalyzing Green Investments in Pakistan

Project Summary:

The objective of this grant is to promote green growth policies and practices in Pakistan’s Punjab province that will address growing pollution and waste by catalyzing green investments through technical assistance and dissemination of international best practices, including from Korea. The Punjab province of Pakistan is facing mounting pollution and waste issues as a result of rapid industrialization and urbanization. This has resulted in rising environmental, social, and economic costs. According to Yale’s 2018 Environmental Performance Index, Pakistan ranks 177 out of 180 countries in terms of environmental health, including aspects such as air quality, water and sanitation deficiencies, and exposure to heavy metals. To address these issues, this World Bank KGGTF grant will provide resources in support of several key activities as part of a board multi-sectoral program in agreement with the Government of Punjab. Activities include developing a framework for green industrial estates, improving planning for integrated solid waste management, facilitating access to finance for SME investments in resource efficiency and cleaner production, and assessing the scope for Public-Private Partnerships (PPPs) for green infrastructure. The grant will also support a green technology expo to promote knowledge and technology exchanges between Punjab and other provinces of Pakistan with Korea and other countries. Activities under this grant will make a critical contribution to support the Government of Punjab towards policies, regulations and incentives that will lead to greener investments and a more sustainable future. The program hopes to streamline long-term green growth into project design, to ensure that green investments are more resilient to potential future conditions. 

This grant is linked to Lending ($200,000,000)

List of Activities:

1. Integrated Solid Waste Management - Sound policy framework in place for ISWM in Punjab, Priority investments identified 
2. Sustainable Industrial Estates - Strategy/policy in place for the greening of industrial estates
3. Green Financing - Opportunities, constraints and reforms for green PPPs identified, Scheme for green SME financing developed and bank capacity built 
4. Knowledge sharing and learning - Exchanges with Korea organized, Exchanges with other provinces in Pakistan and Afghanistan

Outcomes:

Output 1:

• Initial ISWM diagnostic report
• ISWM strategy / investment plan
• Training for relevant institutions

Output 2:

• Review of current IE policy/regulatory
• Updated policy/regulatory framework for sustainable industrial estates
• Training for public and private stakeholders

Output 3:

• Green PPPs and commercial financing diagnostic reports 
• Green PPP strategy and policy/incentive scheme for green commercial financing
• Capacity building for banks

Output 4:

• Exchanges with Korea organized 
• Exchanges with other provinces in Pakistan and Afghanistan 

Outcomes:

• Improved efficiency: Proposed activities will foster increased green investments in Punjab that will notably: (i) improve the efficiency of waste management systems by adopting an integrated approach including reducing, recycling and composting waste to reduce the amount disposed of in landfills of incinerated; (ii) improve the production efficiency of firms introducing RECP technologies; and (iii) improve the efficiency of industrial estates by identifying opportunities for shared infrastructure (waste, wastewater) and symbiosis between industries within estates. Given the economic cost of pollution noted above, measures to reduce it will also contribute to broader economic efficiency. 
• Greater resilience: Pakistan and Punjab are highly prone to flooding and vulnerable to water scarcity, which are expected to intensify with climate change. The green investments promoted under the program will contribute to reducing water use and pollution (RECP, green IEs) and reduce the amount of solid waste that can block drainage gullies (ISWM), which should all strengthen resilience. 
• Increased competitiveness: The Program’s focus on improving the resource efficiency and reducing the environmental footprint of industries is expected to increase their productivity. For export-oriented industries such as leather, this can also improve their capacity to comply with environmental and social standards set by global buyers. All this would contribute to enhance and more sustainable competitiveness in Punjab. 

Collaboration with K-Partners and Others:

• Korea Environmental Industry & Technology Institute (KEITI)
• Korean National Cleaner Production Center (KNCPC)
• Korean Energy Agency (KEA)
• United Nation Industrial Development Organization (UNIDO)