AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Islamabad: The Pakistan Credit Rating Agency Limited (PACRA) has assigned preliminary ratings to the National Vocational and Technical Training Commission’s (NAVTTC) Term Finance Certificates (TFCs), marking a significant step in the launch of Pakistan’s first social impact bond. The bond aims to enhance skills training and employment outcomes across the country.
NAVTTC, a statutory body established under the NAVTTC Act, 2011, is spearheading this initiative with the support of the Government of Pakistan and in collaboration with Transaction Advisors and Program Managers (TAPM). The Pakistan Skills Bond Impact Program (PSIB Program) is a results-based, blended-finance, public-private partnership designed to finance skills-development initiatives.
The program plans to issue rated, privately placed, and GoP-guaranteed TFCs amounting up to PKR 1 billion. The proceeds are intended to fund training for approximately 4,850 individuals, with an average cost of PKR 200,000 per trainee.
The TFCs will be fully guaranteed by the GoP, with redemption through a bullet payment at Final Maturity and semi-annual profit payments to holders. NAVTTC is mandated to ensure adequate budgetary allocation for its TFC-related obligations and must provide supporting documentation to the Issue Agent well in advance of redemption dates.
Pak Oman Investment Company Limited has been appointed as the Issue Agent. The company will oversee fund management, ensure compliance with program documents, and act on behalf of investors. In case of default, the Issue Agent is authorized to issue a payment demand to the GoP under the government guarantee after a specified cure period.
The PSIB Program represents a collaborative effort to improve vocational training and job placement in Pakistan, with the potential to significantly impact the nation’s workforce development. Compliance with the conditions and government guarantees remains crucial as the program progresses.