KARACHI: Pakistan can unlock a new era of capital market growth by channelling investment in renewable energy and mineral resources into structured financial instruments, according to a study released by the Institute of Cost and Management Accountants of Pakistan (ICMA).
The research, published in ICMA’s Chartered Management Accountant Journal, highlighted that the country’s rapidly expanding solar energy sector and vast mineral wealth offer significant opportunities to deepen financial markets, mobilise domestic savings and reduce dependence on external debt.
The study noted that Pakistan’s capital markets have entered a new phase with the establishment of the Capital Market Development Fund (CMDF) under the Securities and Exchange Commission of Pakistan (SECP). Supported by key capital market institutions, the fund aims to broaden investor participation and strengthen financial intermediation.
According to the report, Pakistan has imported more than 51 gigawatts (GW) of solar capacity since 2018, including around 17GW in 2024 alone, with installed solar capacity estimated at 32-34GW. This rapid adoption reflects a structural shift in which households and businesses are increasingly investing directly in productive energy assets.
The research stated that solar adoption has generated estimated savings of over $12 billion in oil and LNG imports between 2021 and early 2026, with further savings expected by the end of the year. It argues that renewable energy cash flows can be converted into investable products such as green bonds, infrastructure REITs, and green sukuk, creating new opportunities for investors while supporting sustainable development.
The study also highlighted Pakistan’s substantial mineral reserves, including approximately six billion tonnes of copper ore, 1.5 billion tonnes of iron ore, and significant gold deposits. Despite this resource base, the mining sector contributes only around 3 per cent to GDP, indicating considerable untapped potential. Projects such as Reko Diq are expected to generate substantial export revenues and attract long-term investment once operational.
To capitalise on these opportunities, ICMA recommended the development of commodity-linked securities, mining investment trusts, exchange-traded mineral instruments, and other innovative financing mechanisms that could transform resource assets into investable products. International experience from countries such as Chile and Australia shows that well-structured resource finance frameworks can strengthen capital markets and mobilise institutional investment at scale.
The report further noted that low retail participation remains a major constraint, with capital market penetration still below one per cent of the population. Expanding digital investment platforms, enhancing financial literacy, and linking financial products to tangible assets could help attract new investors and increase public confidence in capital markets. Pakistan’s mobile ecosystem, with over 190 million connections, provides a strong foundation for scaling digital investment access and fractional ownership models.
The research stated that integrating renewable energy and mineral assets into structured financial instruments could facilitate a transition from debt-driven financing to an asset-backed investment model. Such a transformation would help mobilise domestic capital, attract ESG-focused global investment, strengthen economic resilience, and support long-term sustainable growth.
“Pakistan’s renewable energy expansion and mineral wealth provide two powerful foundations for capital market transformation. By connecting these productive assets with innovative financial instruments, the country can build a more inclusive, resilient, and investment-driven financial system capable of supporting long-term economic prosperity,” the study concluded.
