Page 119 - AJWEP-22-4

Asian Journal of Water, Environment and Pollution. Vol. 22, No. 4 (2025), pp. 111-122.
doi: 10.36922/AJWEP025160121

ORIGINAL RESEARCH ARTICLE

Exploring stakeholder perspectives on barriers to green
financing in Pakistan’s transportation sector

Umelaila Shah , Atiqah Binte Fayyaz , Hamza Iftikhar * , and
1
2
1
Rana Sakandar Hayat 3
1 Department of Government of Public Policy, School of Social Sciences and Humanities, National University of Science and
Technology, Islamabad, Pakistan
2 School of Interdisciplinary Engineering & Sciences, National University of Science and Technology, Islamabad, Pakistan
3 Riphah Institute of Public Policy, Riphah International University, Islamabad, Pakistan
*Corresponding author: Hamza Iftikhar (hiftikhar@s3h.nust.edu.pk)

Received: April 18, 2025; 1st revised: June 10, 2025; 2nd revised: June 18, 2025;
Accepted: June 20, 2025; Published online: July 16, 2025

Abstract: Green finance plays a key role in closing the funding gap for sustainable development and environmental
initiatives. In Pakistan, the transport sector contributes over 43% of emissions, causing significant air pollution
and public health risks in urban areas. While projects like Karachi’s Green Bus Rapid Transit (BRT) aim to
address these issues, the implementation of green financing remains limited due to weak financial incentives,
institutional gaps, and low stakeholder engagement. Despite the National EV Policy’s target of 30% electric
vehicle penetration by 2030, adoption remains below 1%. This study investigates how green financing can
enable sustainable transportation in Pakistan by identifying regulatory, financial, and institutional challenges and
opportunities. It analyzes mechanisms such as green bonds, public–private partnerships, and climate funds to
assess their potential in addressing barriers to low-carbon mobility. Key challenges identified include the lack of
a structured green finance framework, restricted access to international climate finance, and misaligned policies.
The research employs thematic analysis, policy matrix evaluations, and meta-analysis to assess financial viability
and policy effectiveness. Drawing on stakeholder interviews and a review of national strategies and global best
practices, findings emphasize the urgent need for a national green finance strategy, improved climate finance
access, and coordinated policy action. Advancing sustainable transport – through EV scale-up, BRT expansion,
and clean mobility – demands collaboration across government bodies, financial institutions, and the private
sector to build a supportive financial ecosystem, reduce urban air pollution, and align with Pakistan’s climate
goals.

Keywords: Green financing; Sustainable transportation; Electric vehicles; Climate finance; Public–private
partnerships

1. Introduction projects. The mobilization of public and private
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capital for financing projects that result in positive
Green finance plays a crucial role in bridging the environmental outcomes as well as financial returns is
financing gap for sustainable development and considered green finance. Efforts toward developing
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facilitating the implementation of environmental green finance initiatives are ongoing, with governments,

Volume 22 Issue 4 (2025) 111 doi: 10.36922/AJWEP025160121