Funding Landscape and Opportunities for SMEs and Startups in Pakistan’s Climate Sector

This paper explores financing methods for the Pakistani Climate Relevant SMEs and Startups. The country offers a microcosm of the challenges and opportunities facing climate-adaptation finance across developing markets. After a record-breaking USD 365 million in venture capital (VC) inflows in 2021, funding fell by ~90 % through 2024 as global liquidity tightened and US aid support withdrew. Yet the diversity of instruments now available – ranging from blended-equity funds to Islamic finance and revenue from voluntary carbon credit – shows how Small and Medium Sized Enterprises (SME) and investors can still mobilise capital amid macro headwinds.