Government Urged To Focus On RE projects Under CPEC
RE financing through commercial banks was underway for 2,300 RE projects totaling 1,600 MW, but this financing was also available to individual consumers at a discounted rate of 6%.
Economists, experts, and academics have urged the government to prioritise renewable energy projects as part of the China-Pakistan Economic Corridor (CPEC), which has placed a lower priority on RE projects.
According to Dr. Mian Farooque Haq, Director SME, Housing, and Sustainable Financing at the State Bank of Pakistan, climate change has caused flooding in one-third of Pakistan despite Pakistan contributing less than 1% of greenhouse gas emissions.
He was speaking at the “Green Financing, CPEC, and Industry” session of the 2nd International Conference on CPEC, which was organised by NED University’s Economics and Management Sciences Department (EMD).
According to Haq, the SBP issued voluntary Green Banking Guidelines in 2017 and planned to engage two banks, one small and one large, in the implementation of the Environmental and Social Risk Management (ESRM) framework in order to make them model banks.
Other banks would eventually follow suit. He stated that SBP has initiated a “green taxonomy,” which will be a watershed moment in Pakistan’s banking industry.
Renewable energy financing through commercial banks was underway for 2,300 RE projects totaling 1,600 MW, but this financing was also available to individual consumers at a discounted rate of 6%. He stated that the country was facing macroeconomic challenges and invited the organisers to provide solutions for implementation.
According to Younus Energy Limited’s CEO, Abdul Sattar Jumani, the development of the Jhimpir wind corridor has benefited the local population. Windmill companies hire locals and provide them with solar panels for electrification.
Shehryar Omar, CEO of the Petroleum Institute of Pakistan, stated that Pakistan’s peak energy demand in winter was 12,000 MW, which increased to 30,000 MW due to air conditioning alone. “CNG was a huge mistake, and there would be no indigenous gas within the next 8 to 10 years.” Any pipeline gas import would not work as well as it did in Europe, he added.
Hussain Jarwar, CEO of the Indus Consortium and co-organizer of the session, stated that despite the passage of four months since the monsoon rains, 3 to 4 feet of water was still standing in several areas of Sindh, while 75,000 pregnant women, who do not contribute to greenhouse gases, were affected by the floods and were still residing in flood relief camps.
The province experienced a water shortage of up to 70% just before the monsoon. “With climate change, there will be either floods or droughts,” Jarwar added. Mirza Faizan Ahmed, a research associate at the NED University, presenting findings on “In-depth analysis of GBGs,” said that 18 commercial banks out of 33 commercial banks had taken some initiative to follow the GBGs.
He stated that around 21 CPEC projects were energy-focused, with 5,000 MW of projects based on coal. “The government may need to align CPEC projects with green financing,” he suggested. Dr. Raza Ali Khan, chairman of the NED’s Economics and Management Sciences Department, proposed a vote of thanks. The session was moderated by Fiza Naz.
The China-Pakistan Economic Corridor (CPEC) is a collection of infrastructure and RE projects in Pakistan that are being developed with the help of Chinese investment and expertise.