Pakistan's First Private-Funded Skills Impact Bond Launched

Table of Contents

A New Era in Pakistan's Skill Development

Pakistan has taken a significant step forward by launching the country's first-ever private-capital-funded Pakistan Skills Impact Bond (PSIB). This groundbreaking initiative is backed by a guarantee from the Ministry of Finance, which aims to operationalize the initial Rs1 billion pilot tranche over a three-year period. The PSIB is designed to support a broader and more scalable Technical Skills Development Programme, focusing on measurable outcomes such as certification, job placement, and at least six-month retention for every trainee.

This innovative model marks a fundamental shift in how Pakistan finances skill development. Instead of traditional input-based public spending, the PSIB emphasizes outcome-driven, private-sector-enabled social investment. Over time, subsequent tranches will link repayment to a nominal portion of trainee salaries, embedding long-term sustainability while monetizing Pakistan's demographic dividend both domestically and through the export of certified talent.

The launch ceremony was attended by senior government officials, development partners, private sector leaders, and representatives of international organizations. During the event, Senator Muhammad Aurangzeb, Federal Minister for Finance and Revenue, highlighted the transformational importance of the PSIB within Pakistan's broader economic reform agenda and human capital strategy. He described the day as "an important moment focused on education and training," emphasizing that Pakistan's demographic dividend can only be realized if the country successfully upskills and reskills its youth at scale.

Senator Aurangzeb pointed out that NAVTTC's work lies at the heart of this vision. He noted that the global shift toward high-value digital skills such as blockchain offers unprecedented earning potential for Pakistani youth, who already constitute the world's third-largest freelancer community. He stressed that the PSIB is part of a wider, government-led strategic shift away from traditional budget-based social spending toward outcomes, evidence, and accountability. This reflects a deliberate departure from input-driven systems that rely solely on public financing.

He mentioned that the Prime Minister tasked him last year to chair a multi-stakeholder Committee on Social Impact Financing. This committee brought together policymakers, development sector experts, technology partners, international organizations, and practitioners from the financial sector to co-create Pakistan's first Social Impact Financing Framework. The framework identifies six national priority pillars, with education and human capital being the first and most critical, followed by gender equality, health and well-being, population stabilization, climate resilience, and poverty and migration.

Highlighting gender inclusion as central to the programme design, the finance minister welcomed the recommendation led by the British Asian Trust that 40% of trainees under the PSIB be women. He acknowledged that women's participation and leadership in the workforce will play a decisive role in shaping Pakistan's economic trajectory. The minister emphasized that the Ministry of Finance's role in providing a Rs1 billion guarantee is catalytic, aimed at crowding in private capital and helping establish credibility for this pioneering structure.

He clarified that this support is non-structural and intended strictly as a proof of concept, with a clear future roadmap that reduces reliance on sovereign guarantees, encourages participation of institutional and capital market investors, and ultimately leads to a model that functions without government balance-sheet exposure. The minister added that only through such structured public-private partnerships can Pakistan achieve scale, credibility, and sustainability in human capital development.

Senator Aurangzeb congratulated NAVTTC's leadership, the programme's steering committee, the Foreign, Commonwealth and Development Office (FCDO), and the Bank of Punjab for advancing this landmark initiative. He reaffirmed the government's commitment to embedding skills, productivity, and employment at the core of economic planning and concluded by reiterating confidence in Pakistan's ability to deliver measurable impact through this new financing model.

Key Stakeholders and Contributions

Earlier, Muhammad Amir Jan, Executive Director of NAVTTC, delivered the welcome address, describing the PSIB as a defining moment in Pakistan's skill development journey. He highlighted the extensive reforms undertaken in governance, financial transparency, provincial coordination, and industry linkages. NAVTTC has repositioned skills training as a strategic investment in human capital rather than a series of fragmented interventions.

He acknowledged the support of the Prime Minister, SIFC leadership, the Planning Commission, development partners, and private sector collaborators including Bank of Punjab, British Asian Trust, and EY for their role in enabling the PSIB's launch.

Dr Khalid Maqbool Siddiqui, Federal Minister for Education and Professional Training, also addressed the ceremony, describing the signing ceremony as a major step toward a "better Pakistan and a better future." He emphasized that Pakistan stands at a decisive crossroads and that commitment, coordination, and well-thought-out action are essential to meeting national challenges. He expressed gratitude to Pakistan's development partners, especially FCDO and the British Asian Trust, for their contribution.

The ceremony was further addressed by Zafar Masud, President of Bank of Punjab, who provided a strategic overview of the PSIB and its role in Pakistan's emerging social impact financing landscape. Asif Rangoonwala, Vice Chairperson of the British Asian Trust, outlined the Trust's role as Programme Manager of the PSIB, while Matt Cannell, British Deputy High Commissioner to Pakistan, shared insights on FCDO's partnership and long-term commitment to Pakistan's skills and employment agenda.

Ms Gulmina Bilal Ahmad, Chairperson of NAVTTC, delivered the concluding remarks and vote of thanks, acknowledging all partners and reaffirming NAVTTC's commitment to delivering measurable, youth-centered results under the Pakistan Skills Impact Bond.