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Friday June 14, 2024

Experts advocate for green financing

By Our Correspondent
May 04, 2024
Representational image of green financing. — APP File
Representational image of green financing. — APP File

Islamabad: Experts have called the government and state bank of Pakistan for coming up with targeted policy measures to help unlock the potential of renewable energy financing and drive the country’s transition towards sustainable and renewable sources of energy. They stated this while launching a study here.

A new study by an Islamabad-based think tank, Policy Research Institute for Equitable Development (PRIED), points out that the financing opportunities for renewable energy projects remain limited in Pakistan. It also recommends that the government and the State Bank of Pakistan need to come up with targeted policy measures to help unlock the potential of renewable energy financing and drive the country’s transition towards sustainable and renewable sources of energy.

The study, done in collaboration with a German think tank, Agora Energiewende, and titled Facilitation Green Loans for Sustainable Energy Transition, highlights that a major delivery gap exists in the financing of green energy projects.

“While green lending options are available, their implementation and access to them is not always consistent and constant,” it says. The study shows that Pakistan’s banking sector has shown lackluster interest in green product financing even when our country among the top ten victims of climate change’s negative impacts.

It also says that we need to make a concerted effort, including priority lending and financing of green energy projects, to achieve our national target of producing 60 per cent energy from renewable sources and running 30 per cent of our vehicles on electric engines by 2030.

“Finance is poised to play a pivotal role in meeting these targets and leveraging our energy transition momentum,” the study states. Naila Saleh, project manager at Agora Energiewende said: “Our findings reveal a shortfall when it comes to urgently needed financing for clean projects in Pakistan and broader hesitance within the banking industry to embrace and promote sustainable energy initiatives.”

Rimsha Rehan, a researcher at PRIED, emphasised that the widespread adoption of renewable energy necessitates substantial investments, with a focus on accessibility and affordability. She highlighted the pivotal role of green loans, particularly for technologies like solar and wind. Despite dedicated schemes for EVs and DSPVs, inertia at the policy level persists, hindering the adoption of these technologies.

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 standardisation 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 (University of Lahore) underscored incentives and the need for smoother financing options.

Dr. Naveed Arshad (LUMS Energy Institute) raised concerns about high interest rates on EVs and advocated for greater climate financing. Dr. Qazmi (USPCAS-E, NUST) emphasised market flexibility and in-house Indeginisation for cost-effective solutions, suggesting positive incentives for green financing. Rashid Azim (UBL) addressed banking restrictions, while Xiang Yang (China Study Centre, 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 affordability challenges of EV bikes.