Finance Minister Highlights Transformational Shift to Outcome-Based, Private-Capital- Funded Skills Development as Pakistan Launches First-Ever Pakistan Skills Impact Bond
Islamabad : Pakistan marked a historic milestone with the launch of the country’s first-ever private-capital-funded Pakistan Skills Impact Bond (PSIB), backed by a guarantee from the Ministry of Finance to operationalize the inaugural Rs 1 billion pilot tranche of a three-year instrument to fund a wider and scalable Technical Skills Development Programme.
Designed to deliver measurable outcomes such as certification, job placement, and at least six-month retention for every trainee, the PSIB represents a fundamental restructuring of how Pakistan finances skill development, shifting decisively from input-based public spending to outcome-driven, private-sector-enabled social investment.
The model will gradually evolve so that subsequent tranches 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, which also featured the signing of Financing Documents including Investor and Issuer Agreements, was attended by senior government officials, development partners, private sector leaders and representatives of international organizations.
Speaking at the event, Senator Muhammad Aurangzeb, Federal Minister for Finance and Revenue, underscored the transformational importance of the PSIB in Pakistan’s broader economic reform agenda and human capital strategy. He described the day as “an important moment focused on education and training,” reiterating that Pakistan’s demographic dividend can only be realized if the country succeeds in upskilling and reskilling its youth at scale.
He stressed that NAVTTC’s work sits at the heart of this vision, noting 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.
Senator Aurangzeb emphasized that the PSIB is part of a wider, government-led strategic shift away from traditional budget-based social spending toward outcomes, evidence and accountability, reflecting a deliberate departure from input-driven systems that rely solely on public financing.
He noted that the Prime Minister had tasked him last year to chair a multi-stakeholder Committee on Social Impact Financing, which 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. This 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 stabilisation, 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, acknowledging that women’s participation and leadership in the workforce will play a decisive role in shaping Pakistan’s economic trajectory.
He reiterated that the Ministry of Finance’s role in providing a Rs 1 billion guarantee is catalytic, aimed at crowding in private capital and helping establish credibility for this pioneering structure. He emphasized 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 leads ultimately 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 & 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.
Earlier, Mr. Muhammad Amir Jan, Executive Director NAVTTC, delivered the welcome address, describing the PSIB as a defining moment in Pakistan’s skill development journey and a clear demonstration of NAVTTC’s transition toward a coherent, demand-driven, outcome-based skills ecosystem. He highlighted the extensive reforms undertaken in governance, financial transparency, provincial coordination and industry linkages, noting that 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 & 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 Mr. Zafar Masud, President, Bank of Punjab, who provided a strategic overview of the PSIB and its role in Pakistan’s emerging social impact financing landscape. Mr. Asif Rangoonwala, Vice Chairperson, British Asian Trust, outlined the Trust’s role as Programme Manager of the PSIB, while H.E. 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.
Sohail Majeed is a Special Correspondent at The Diplomatic Insight. He has twelve plus years of experience in journalism & reporting. He covers International Affairs, Diplomacy, UN, Sports, Climate Change, Economy, Technology, and Health.
