Karandaaz wins Green Climate Fund accreditation, but no money comes with it
The Pakistani development investor can now apply directly to the fund for climate finance. The accreditation caps it at medium risk projects and allocates nothing.
Karandaaz Pakistan can now apply directly to the Green Climate Fund for money to lend, invest and guarantee in Pakistan. The accreditation brings no funding with it: Karandaaz must still write proposals and win them.
The fund's board approved it at its 46th meeting in Songdo, South Korea. The board paper behind the decision, dated 5 October, shows what the approval rests on. The fund's accreditation panel found that Karandaaz met every screening requirement and recommended it for the normal track, with a maximum environmental and social risk category of medium, labelled category B, intermediation 2.
What the panel read
Karandaaz is a public company limited by guarantee, with no shareholders and an eight member board. The paper says it has had financial and institutional support from the British government's development office and the Gates Foundation, and it lists the programmes the panel relied on.
The largest is the Enterprise and Assets Growth Programme, at £187 million in grants, loans and equity. Next come £15.7 million in loans for renewable energy and energy efficiency, Rs1.3 billion in grants for financial inclusion, and Rs4.1 billion, about $16.5 million, in equity to set up the National Credit Guarantee Company, which the paper calls Pakistan's first and only credit guarantee company for small businesses. Its climate related investments, the paper says, have ranged from $0.1 million to $4 million.
The panel also reviewed sample deals, including a proposed Rs50 million loan to Farm Dynamics Pakistan in 2024 and a syndicated facility for the electric vehicle maker Megamotor. Karandaaz took part in that facility, and the paper puts total financing from all stakeholders at Rs45.16 billion, about $160 million.
The magazine's analysis
A direct access entity lets a Pakistani institution, rather than a foreign agency, structure a climate deal and carry the paperwork. That makes Karandaaz one more route to the fund for Pakistan, not a guaranteed flow of money.
The medium risk ceiling is a real limit. Under the fund's definition, category B covers activities whose adverse effects are few, mostly confined to one site, largely reversible and readily fixed, and it allows no activity with significant, irreversible or unprecedented harm. The paper's list of intended sectors fits that: renewable energy, energy efficiency, sustainable transport and climate smart agriculture.
Karandaaz has said it will build a pipeline with partners, focused on small businesses and clean energy. The first proposal it sends to the fund will show which sectors it chooses to lead with.
