Pakistan on Tuesday 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 operationalise the inaugural Rs1 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 monetising 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 organisations.
Speaking at the event, Federal Minister for Finance and Revenue Muhammad Aurangzeb 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 realised if the country succeeds in upskilling and reskilling its youth at scale.
Senator Aurangzeb emphasised 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 PM Shehbaz 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 organisations 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.
He reiterated that the Ministry of Finance’s role in providing a Rs1 billion guarantee is catalytic, aimed at crowding in private capital and helping establish credibility for this pioneering structure.
FinMin 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.
