ISLAMABAD: The World Bank approved $450 million in financing for Pakistan to invest in renewable energy projects and reduce greenhouse gas emissions.
The World Bank’s board of executive directors approved the loan to support the country’s transition to renewable energy resources that reduce its reliance on fossil fuel imports and lower costs of electricity production.
“The Khyber Pakhtunkhwa hydropower and renewable energy development project will help shift the national energy mix to domestic clean resources by investing in renewable energy generation, including hydropower and solar, in province,” the World Bank said in a statement. “It will also help strengthen energy sector institutions to better manage a growing portfolio of renewable energy projects across the province.”
World Bank Country Director for Pakistan Najy Benhassine said the project supports Pakistan’s goal to become a low-carbon, renewable energy-reliant economy by 2030 and contributes to its national target in reducing greenhouse gas emissions to combat climate change. “It will facilitate the expansion of renewable energy in Khyber Pakhtunkhwa by identifying and preparing solar and hydropower projects that are technically sound, environmentally and socially sustainable, and investment ready.”
Last month, the government unveiled a plan to increase the share of renewable power in the energy mix to 30 percent by 2030 from about 4 percent. The targets in the newly announced policy are a 20 percent share of renewables in installed capacity of Pakistan’s power mix by 2025 and 30 percent by 2030.
Alternate and renewable energy (ARE) policy 2020 aims to protect the environment by increasing the share of green energy in the overall energy mix, fast track and transparent procurement of ARE projects through auctions, develop and open up the power market and ease pressure on the public purse for investments in power system expansion.
The policy aims to facilitate development of ARE technology local manufacturing, skilled human resource and technology transfer. The policy provides procurement of new RE capacity, displacement energy capacity, and replacement capacity for retiring plants will be done through auctions.
The project financed by the World Bank will provide low-cost and low-carbon electricity to consumers and will support the economic development of those communities near the hydropower and solar projects by revitalising infrastructure, creating jobs, and supporting the development of tourism activities.
“To scale up renewable energy in Khyber Pakhtunkhwa, the project includes a comprehensive skills training program to build technical capacity in identifying investment opportunities, preparing projects, and mobilising commercial financing,” said Mohammad Saqib, Task Team Leader for the Khyber Pakhtunkhwa hydropower and renewable energy development project. “In addition, by installing solar photovoltaic systems onto hydropower assets, production capacity is expected to rise and generate greater return on investments.”