Pakistan marked a historic milestone on December 30, 2025, with the launch of the country’s first-ever private-capital-funded Pakistan Skills Impact Bond (PSIB). Backed by a Rs1 billion guarantee from the Ministry of Finance, the inaugural pilot tranche funds a three-year Technical Skills Development Programme led by the National Vocational and Technical Training Commission (NAVTTC). This outcome-based instrument shifts from traditional input-driven public spending to private-sector investment tied to measurable results, including trainee certification, job placement, and six-month employment retention.
Harnessing Demographic Dividend
Finance Minister Muhammad Aurangzeb hailed the PSIB as a transformative step in Pakistan’s economic reform agenda, emphasizing the need to upskill youth to realize the nation’s demographic dividend. “Pakistan’s demographic dividend can only be realized if the country succeeds in upskilling and reskilling its youth at scale,” he stated. The initiative involves key partners like the Bank of Punjab, British Asian Trust (as Programme Manager), FCDO, and EY. It promotes gender inclusion with at least 40% female trainees and focuses on high-value digital skills, leveraging Pakistan’s status as the world’s third-largest freelancer community. Future tranches aim to link repayments to trainee salaries, reducing reliance on sovereign guarantees and attracting broader institutional investors. Officials, including NAVTTC Chairperson Gulmina Bilal Ahmad and Education Minister Khalid Maqbool Siddiqui, praised the model for fostering accountability, sustainability, and public-private partnerships in human capital development.