ISLAMABAD: Pakistan needs low-cost financing in renewable energy to promote green and clean energy and to minimize climate-induced risks and disasters, Managing Director of Private Power and Infrastructure Board (PPIB) Shah Jahan Mirza said.
While launching the annual “State of the Renewable Energy Report Pakistan” here, he called upon the International Financial Institutions (IFIs) to make a distinction while providing loans for renewable energy as he said Pakistan is so far getting loans for coal/gas-based power plants and the renewable energy projects at same terms and interests rates.
He said while speaking at a plenary session titled “Policy Dialogue on Bridging the Financing for Achieving SDG-7”, on the fourth day of the 25th Sustainable Development Conference (SDC) of Sustainable Development Policy Institute (SDPI), jointly held alongside UNESCAP’s 6th South and Southwest Asia High-level Political Forum and Policy Dialogue on SDGs.
The 4-day conference is being held in Islamabad from 5-8 December 2022.
Shah Jahan said Pakistan has launched an ambitious renewable energy policy under which 26000 MW (13000 MW from solar/wind energy and 13000 MW from hydropower) of renewable energy would be added to the national grid by 2030.
He said the country would need $100 billion by 2030 to achieve the ambitious target. Shah Jahan said the newly launched renewable energy report focuses on clean cooking, electric vehicles, and shifting completely towards renewable energy.
Regional Coordinator, Asia, and Pacific – UNCDF Vincent Wierda said UNCDF is looking to support energy service companies to promote clean and green energy.
Jade Shu Wong, Infrastructure Finance Specialist, GIF, The World Bank said mobilization of financing on the global level is essential to provide affordable electricity to households and businesses in developing countries.
She said World Bank, IFC, ADB, and AIIB should support the projects in a way that the local private sectors take interest in financing the energy projects in the developing countries.
Kimberly Roseberry from UNESCAP, Thailand said the countries can achieve their clean energy targets by depending on their own domestic resources. However, she said if they require adequate financing and technical support for their projects, that would be available by the IFIs.
Economic Affairs Officer, MPFD, ESCAP, Deanna Morris said lack of financing is one of the major barriers in the energy sector, and the annual SDG financing gap is around $4.3 billion globally and most of this gap is driven by the energy sector.
She said amid the pandemic, rising inflation, and higher interest rates, the countries are facing challenges in creating fiscal spaces and raising funds for the developing nations.
Morris recommended cutting the fossil fuel subsidies and setting up a carbon pricing policy to promote investment in renewable clean energy projects as this policy would also mobilize climate
With respect to Pakistan, she said in today’s scenario, besides seeking international investors, the country should also try to mobilize domestic resources to finance clean energy projects.
Regional Energy Counsellor (Asia) at the Embassy of Denmark in Singapore, Assar Qureshi said a long-term and predictable framework initiative to bridge the financing gap is very important besides making the capital cost for renewable energy projects cheaper and more competitive.
He said financial innovation is also required to unlock the local financing of renewable energy projects.
Qureshi said promoting renewable energy projects would not only provide clean energy but it would also provide high-quality jobs, innovation, and industrial development for the socio-economic development of the people.
Chief of Sustainable Energy Development Section, Energy Division, ESCAP, Michael Williamson said we need enormous financing to reach SDG 7 goal. He said the current slowdown in the economy has made it very difficult for international financiers to finance the projects.