Experts Push for Renewable Energy Financing Policies

Experts have called upon the Government of Pakistan and the State Bank of Pakistan to implement targeted policy measures aimed at unlocking the potential of renewable energy financing.

In a recent study launched in Islamabad, experts have called upon the Government of Pakistan and the State Bank of Pakistan to implement targeted policy measures aimed at unlocking the potential of renewable energy financing.

The study, conducted by the Policy Research Institute for Equitable Development (PRIED) in collaboration with the German think tank, Agora Energiewende, sheds light on the limited financing opportunities for renewable energy projects in Pakistan.

Titled “Facilitation Green Loans for Sustainable Energy Transition,” the study underscores a significant delivery gap in financing green energy projects in the country. Despite the availability of green lending options, their implementation and accessibility remain inconsistent and inadequate. This is particularly concerning given Pakistan’s position as one of the top ten nations most affected by the adverse impacts of climate change.

According to the findings, the banking sector in Pakistan has shown tepid interest in financing green energy projects, indicating a broader hesitance within the industry to embrace and promote sustainable energy initiatives. Naila Saleh, project manager at Agora Energiewende, emphasized the urgent need for financing clean projects in Pakistan, stating that such initiatives are crucial for the country’s energy transition.

Rimsha Rehan, a researcher at PRIED, highlighted the necessity for substantial investments in renewable energy, focusing on accessibility and affordability. She emphasized the pivotal role of green loans, particularly for technologies like solar and wind. Despite dedicated schemes for Electric Vehicles (EVs) and Distributed Solar Photovoltaic Systems (DSPVs), inertia at the policy level persists, hindering the widespread adoption of these technologies.

Senator Seemi Ezdi stressed the urgent need for a just transition to sustainable transportation and energy sources, with a particular focus on Electric Vehicles (EVs). Ahsan Gaylani from the United Nations Industrial Development Organization (UNIDO) underscored the importance of product standardization and reduced taxation to encourage investment in sustainable energy.

Academia also weighed in on the discussion, with representatives from multiple universities highlighting the significance of financing for the development and implementation of greener technologies. Dr. Azir Anwar Khan from the University of Lahore emphasized the importance of incentives and smoother financing options.

Dr. Naveed Arshad from the Lahore University of Management Sciences (LUMS) Energy Institute raised concerns about high interest rates on EVs and advocated for greater climate financing. Dr. Qazmi from the U.S.-Pakistan Center for Advanced Studies in Energy (USPCAS-E) at the National University of Sciences and Technology (NUST) emphasized the need for market flexibility and in-house indigenization for cost-effective solutions, suggesting positive incentives for green financing.

Rashid Azim from the United Bank Limited (UBL) addressed banking restrictions, while Xiang Yang from the China Study Centre at NUST highlighted Pakistan’s lag in green technology adoption. Dr. Sharjeel Sulehri from RE GEN stressed the importance of changing national attitudes towards energy conservation, while Ali Moin discussed the affordability challenges of EV bikes.

The collective expertise and recommendations put forth by these experts underscore the pressing need for concerted efforts from the government, financial institutions, and other stakeholders to facilitate the transition towards sustainable and renewable sources of energy in Pakistan.

Unlocking the potential of renewable energy financing will not only contribute to mitigating the adverse effects of climate change but also foster economic growth and energy security in the country.