As one of the most climate vulnerable countries globally, Pakistan has an imperative case for adaptation investment. However, there are multiple factors currently restricting the impact investing ecosystem, leading to SMEs offering innovative adaptation solutions struggling to mobilize investments, and investors facing diverse barriers when seeking to invest in adaptation solutions on the ground. In this study commissioned by PAF and developed by SLK Capital and Resources Future, the underlying factors for these challenges are analyzed in detail, based on desk research and consultations, interviews, and surveys with stakeholders across the impact investment ecosystem in Pakistan. The study also provides concrete pathways to make Pakistan more investment-friendly and close its significant adaptation finance gap.

The study was developed as part of the Private Adaptation Finance Project of GIZ.