'Financial solutions key to energy transition'

Federal Minister for Energy Awais Ahmed Khan Leghari stressed on Saturday that innovative financial solutions are critical to driving Pakistan's energy transition.

"Initiatives like the Asian Development Bank's Energy Transition Mechanism and Just Energy Transition Partnerships can mobilise the necessary capital for this transition," he stated during the first day of the Asia Energy Transition Summit at the Lahore University of Management Sciences (LUMS). The two-day event is organised by the Pakistan Renewable Energy Coalition (PREC), a conglomerate of think tanks, research organisations, advocacy groups, and activists, in collaboration with LUMS.

Leghari urged participants at the summit to leverage Chinese expertise to enhance Pakistan's renewable energy capabilities, focusing on knowledge transfer, infrastructure development, and technical training. He also suggested that Pakistan "must not rely solely on traditional funding sources but also consider instruments available in China's financial markets, including RMB-based bonds. Additionally, Pakistan can position itself in the supply chain for green metals essential for future energy technologies."

Speaking at the inaugural session, Governor of the State Bank of Pakistan Jameel Ahmad underscored the urgency of transitioning to renewable energy in countries like Pakistan but highlighted the financial constraints they face. "The countries that need to make energy transitions most urgently—because they are highly vulnerable to climate change—are also among the most indebted countries in the world," Ahmad noted. This indebtedness, he added, makes foreign individual and institutional investors reluctant to invest. He also affirmed the State Bank of Pakistan's commitment to developing a climate-driven banking framework to facilitate energy transition financing in the country.

In a keynote speech during another session, Dr Nafisa Shah, co-convener of the Parliamentary Forum on Energy and Economy, highlighted the deep connection between energy and economic crises. "We cannot overcome these crises unless we change the way policies are made in Pakistan," she said, stressing the need to turn policymaking into a transparent, open, and participatory process.