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Shah, et al.

Table 1. Demographic details of the respondents
Name Organization Experience Sector Role/Profession
AH Special Monitoring Unit 12 years Government Head of Special Monitoring Unit
BI Ministry of Climate Change 8 years Government Section Officer
AK Ministry of Climate Change 18 years Government Director
SL Ministry of Communication 18 years Government Director of Transport
UZ SDPI 7 years Non-governmental Head of Energy Unit
HJ Center for Environmentally 17 years Non-governmental Chief Executive Officer of Indus
Sustainable Transport Consortium
MI SDPI 15 years Non-governmental Senior research fellow
YD Climate Action Centre–Darya Lab 11 years Civil society organization Founder
DA World Bank 15 years International agency Global lead
AW NICE, NUST 12 years Academia Professor
BW Stanford University 16 years Academia Professor
SR World Bank 9 years International agency Senior economist
Abbreviations: NICE: NUST Institute of Civil Engineering; NUST: National University of Science and Technology; SDPI: Sustainable
Development Policy Institute.

adequate financial instruments, concessional loans, and “We have to come up with local solutions – using
blended finance mechanisms to mobilize investment in local materials and technology – to reduce costs.”
green mobility. (HJ, oral communication, [July] [12], [2024])
Green bonds and international climate funds remain “The green financial ecosystem in Pakistan is still
underutilized in Pakistan’s transport sector, particularly for underdeveloped, and access to global funds is also
large-scale electrification, BRT expansion, and charging difficult due to procedural inefficiencies.” (YD, oral
infrastructure development. While the PSX introduced communication, [April] [19], [2024])
its first green bond framework in 2021 and the Green “There is a lack of capacity in financial institutions
Climate Fund (GCF) approved the Green BRT Karachi to design and implement green finance projects,
project (FP085), overall uptake has been minimal. Key creating further hurdles in accessing international
barriers include low investor confidence, lack of project climate funds.” (AW, oral communication, [May]
bankability, and the absence of a national green finance [23], [2024])
taxonomy. Moreover, procedural hurdles, such as lengthy
application processes, inadequate feasibility studies, From a business perspective, many private-sector
and misalignment with global reporting standards, actors view sustainable transport investments as
discourage access to multilateral funds such as the GCF, financially unviable due to long return cycles, lack of
Climate Investment Funds, and Global Environment risk-sharing mechanisms, and limited tax or policy
Facility. As a result, opportunities to fund sustainable incentives. Several stakeholders noted that businesses
transport remain largely untapped. Furthermore, private are hesitant to shift toward electric fleets or invest in
investors often perceive these projects as high-risk, long- clean logistics without strong regulatory guarantees and
gestation ventures, further restricting capital inflows accessible financing channels. The evidence indicates
into sustainable transport. This theme is reflected in the that financial risk perception and the absence of targeted
perspectives of interviewees, as shown below: business incentives are key barriers to environmental
“The cost of electrifying the public transport is too sustainability in Pakistan’s transportation sector.
high, as it cannot be done without a concessional
loan or subsidy.” (SL, oral communication, 4.1.2. Regulatory constraints
[August] [11], [2024]) The absence of a clear financial regulatory framework
“Innovative financing mechanisms like blended for green transport projects poses a major challenge.
finance can reduce high upfront costs, but they There is no dedicated national policy that aligns
are not yet operational in Pakistan.” (DB, oral financial incentives with low-carbon transport goals.
communication, [September] [23], [2024]) Policies such as the National Transport Policy (2018)

Volume 22 Issue 4 (2025) 116 doi: 10.36922/AJWEP025160121