Pakistan Needs $331 Billion in Climate Financing by 2030: SBP

Pakistan will require an estimated $331 billion in climate financing by 2030 to strengthen resilience against climate change and avoid mounting economic losses, according to the State Bank of Pakistan (SBP), underscoring the enormous funding challenge facing one of the world’s most climate-vulnerable countries.

In a recent report, the central bank said the country will need around $47 billion annually between 2024 and 2030, equivalent to roughly 10 percent of cumulative GDP over the period, to finance climate adaptation and mitigation efforts. The estimate, based on the Climate Policy Initiative (CPI), highlights the scale of investment needed to protect infrastructure, livelihoods, and long-term economic growth.

The SBP noted that Pakistan ranks as the 15th most affected country by climate-related disasters between 1995 and 2024, despite contributing only around 1% of global greenhouse gas emissions.

According to government estimates cited in the report, Pakistan’s climate financing needs range between $200 billion and $348 billion by 2030 for climate-resilient development and implementation of its Nationally Determined Contributions (NDCs). Meanwhile, the government’s Pakistan Climate Prosperity Plan envisages investments of $1.6 trillion by 2050.

Climate disasters have already inflicted an estimated $58.8 billion in economic losses on Pakistan. Of this, $29.3 billion occurred between 1992 and 2021, while the devastating 2022 floods caused around $28 billion in damages, followed by another $1.5 billion in losses from the 2025 floods.

Despite these growing needs, Pakistan has received only $1.4 billion to $2 billion annually in climate finance over the past decade, with inflows peaking at about $4 billion in 2021—far below the level required to address its climate commitments.

The SBP attributed the financing gap to several factors, including the global preference for funding mitigation projects over adaptation, recurring macroeconomic instability, elevated sovereign risk, political uncertainty, underdeveloped financial markets, and weak institutional capacity.

It also highlighted Pakistan’s limited ability to develop bankable climate projects and bureaucratic delays that have slowed implementation of internationally funded initiatives.

Citing World Bank projections, the report warned that climate change could reduce Pakistan’s GDP by 4.5 percent to 6.5 percent by 2050 under an optimistic scenario, and by as much as 7 percent to 9 percent under a more severe scenario, with agriculture and industry expected to bear the brunt of the impact.