The Bank of Punjab (BOP), alongside the British Asian Trust (BAT) jointly acting as the Transaction Advisors and Program Managers (TAPM), is proud to announce the formal launch of the Pakistan Skills Impact Bond (PSIB)—a AAA-rated, Government of Pakistan (GoP)-backed, privately placed Term Finance Certificate (TFC) valued at PKR 1,000 million.
Developed under the visionary guidance of the Honorable Minister of Finance Mr. Muhammad Aurangzeb and the Honorable Minister of Education and Professional Training Dr. Khalid Maqbool Siddiqui, and in close collaboration with the National Vocational and Technical Training Commission (NAVTTC), the PSIB represents a paradigm shift in Pakistan’s social impact financing landscape.
Under the leadership of Mr. Zafar Masud, President and CEO of The Bank of Punjab, BOP has played a pivotal role in structuring this innovative financial instrument. As a results-based “pay-for-success” model, the PSIB channels upfront investor funding into high-impact skills development programs, with outcome payments tied directly to independently verified measurable milestones, such as successful job placements and sustainable employment for thousands of Pakistani youth. This initiative leverages private sector efficiency to deploy PKR 1 billion in funding, closing the national skills gap, fostering economic participation, and enhancing women’s inclusivity in the workforce.
The PSIB has received strong international endorsement, including a generous contribution from the Foreign, Commonwealth & Development Office (FCDO) as the International Developmental Partner, channeled through BAT via FCDO’s Private Sector and Capital Markets Department. This support underscores the program’s innovative potential to drive systemic change in skills development and employment, while boosting visibility among global funders and reducing design and management costs. FCDO also plans further assistance through its REMIT program, mobilizing UK-based Pakistani diaspora investors and featuring PSIB in upcoming promotion activities to expand engagement.
By shifting from traditional grant-dependent models to a performance-driven system, the PSIB redefines the intersection of banking and social development. It links investor returns to measurable socioeconomic outcomes, including elevated technical training standards, increased job placement rates, and long-term career stability.
As TAPM, BOP and BAT has overseen the inaugural PSIB issuance, creating a blueprint for future projects in high-priority sectors such as education, healthcare, women’s empowerment, climate resilience, and national economic development. This reaffirms BOP’s leadership in innovative finance and alignment with the Prime Minister’s vision of a digital, skilled Pakistan.
Speaking at the launch ceremony in Islamabad, Mr. Zafar Masud stated: ” Bank of Punjab has played the role of risk investor and underwriter, providing initial capital and assuming performance risk to enable this blended finance mechanism. This initiative marks a turning point—not merely a financial arrangement, but a deep commitment to Pakistan’s economic stability and human capital development. it is a testament to how the banking sector can lead national transformation.”
Senator Muhammad Aurangzeb, Federal Minister for Finance and Revenue, also underscored the transformational importance of the PSIB in Pakistan’s broader economic reform agenda and human capital strategy. He described the day as “an important moment focused on education and training,” reiterating that Pakistan’s demographic dividend can only be realized if the country succeeds in upskilling and reskilling its youth at scale
Earlier, Executive Director NAVTTC Muhammad Amir Jan described the PSIB as a defining moment in Pakistan’s skills ecosystem, reflecting NAVTTC’s evolution towards a transparent, outcome-based approach. Federal Minister for Education and Professional Training Dr. Khalid Maqbool Siddiqui also addressed the ceremony, describing the signing ceremony as a major step toward a better Pakistan and a better future. He also emphasized that Pakistan stands at a crossroads and coordination action from public and private sector are essential to meeting national challenges.
The Bank of Punjab extends deepest gratitude to the Ministry of Finance for the catalytic sovereign guarantee that enabled this pilot, establishing credibility for this new asset class. BOP also commends NAVTTC and its leadership for reforming the vocational landscape, as well as the Pakistan Credit Rating Agency (PACRA), Pak Oman Investment Company Limited (as Issue Agent), and Haidermota & Co. (as Transaction Legal Counsel) for their invaluable contributions.
