ISLAMABAD: Experts have urged the government and the State Bank of Pakistan (SBP) to implement targeted policy measures to help unlock the potential of renewable energy financing and drive the country’s transition towards sustainable and renewable sources.
The appeal was made during the launch of a new study conducted by the Islamabad-based think tank, Policy Research Institute for Equitable Development (PRIED), in collaboration with the German think tank, Agora Energiewende.
The study titled “Facilitating Green Loans for Sustainable Energy Transition” has underscored the existing financing limitations for renewable energy projects in Pakistan.
The study emphasized the imperative for the government and financial institutions to devise concrete strategies to bridge the delivery gap in financing green energy initiatives.
“While green lending options are available, their implementation and access to them is not always consistent and constant,” said the study.
The study also highlighted the reluctance within Pakistan’s banking sector to engage in green product financing, despite the country being among the top ten nations affected by climate change.
It emphasised the urgent need for concerted efforts, including priority lending and financing of green energy projects, to achieve national targets of producing 60% energy from renewable sources and running 30 percent of vehicles on electric engines by 2030.
“Finance is poised to play a pivotal role in meeting these targets and leveraging our energy transition momentum,” stated the study.
Speaking on the occasion, Naila Saleh, Project Manager at Agora Energiewende, expressed concern over the shortfall in financing for clean projects in Pakistan and the hesitance within the banking industry to promote sustainable energy initiatives.
Rimsha Rehan, a researcher at PRIED, stressed 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.
Senator Seemi Ezdi emphasised the urgent need for a just transition to sustainable transportation and energy sources, particularly focusing on Electric Vehicles (EVs).
Ahsan Gaylani (UNIDO) highlighted product standardization and reduced taxation to encourage investment.
From academia, participation from multiple universities highlighted the importance of financing for greener technology development and implementation. Dr. Azir Anwar Khan from the University of Lahore underscored incentives and the need for smoother financing options.
LUMS Energy Institute’s Dr. Naveed Arshad raised concerns about high-interest rates on EVs and advocated for greater climate financing.
USPCAS-E, NUST’s Dr. Qazmi emphasised market flexibility and in-house Indigenization for cost-effective solutions, suggesting positive incentives for green financing.
Rashid Azim addressed banking restrictions, while Xiang Yang (China Study Center, NUST) highlighted Pakistan’s lag in green technology adoption.
Dr. Sharjeel Sulehri (RE GEN) stressed changing national attitudes towards energy conservation, while Ali Moin discussed the affordability challenges of EV bikes.
Senator Seemi Ezdi highlighted the urgent need for a just transition to sustainable transportation and energy sources, with a particular focus on Electric Vehicles (EVs).
From academia, experts underscored the importance of financing for the development and implementation of greener technologies. Suggestions ranged from incentives and smoother financing options to market flexibility and in-house indigenization for cost-effective solutions.
Arslan Iqbal, the Chief Risk Officer from the Bank of Punjab, advocated for positive incentives and tax credits to enhance green financing for banks, rather than penalization.
The session concluded with the CEO of PRIED, Badar Alam, reiterating the urgent need for sustainable transportation and energy sources, emphasizing the plight of 19 million people in need of financing facilities.
