Speakers at a study launch have urged the world financial institutes to stop fossil fuel funding in Pakistan and divert their finances towards renewable energy projects in the country. This was stated by the academics, researchers, environmentalists and policymakers at the “Energy Finance Outlook – A Case of Pakistan” study launch at a local hotel here on Wednesday. The study has been conducted by the Department of Economics and Management Sciences of NED University in collaboration with Indus Consortium, which works on humanitarian, environmental and development initiatives in the country.
Dr Raza Ali Khan, chairman of EMD, NED University chaired the session on “Energy Financing Trends in Pakistan”. In contrast, renowned environmentalist Nasi Panhwer chaired the session on “Climate Change and Environmental Sustainability”.
Dr Mirza Faizan Ahmed, a senior researcher and Assistant Professor at EMD presented the findings of the study. Other speakers included Hussain Jarwar, CEO Indus Consortium, Divisional Head – Policy and Transformation, Compliance Group, UBL Rashid Azeem, Iqbal Hyder, Ms Fiza Qureshi, Director Knowledge Forum Zeenia Shaukat, Yasir Darya, Representative of Sindh Forest Department Shehzad Sadiq, Fisherfolk community leader Fatima Majeed and others.
The study, which is a pioneering study on this subject, unveils crucial insights into the financing flows from 2019 to 2022 of various energy sources and their implications for the country’s future energy supply. The study comprises a comprehensive analysis of financing data, policy reviews, and a detailed case study of Jamshoro Power Company Ltd. It sheds light on the need for a comprehensive and integrated energy policy.
The findings of this study are of utmost importance for policymakers and the industry, highlighting the opportunities and challenges that lie ahead.
Despite some prior efforts to address environmental concerns, Pakistan’s energy sector continues to heavily rely on fossil fuels, with over 85% of the energy supply originating from such sources. Moreover, thermal sources contribute to more than 60% of electricity production, despite the availability of greener alternatives like wind, solar, and hydropower.
China, the World Bank, the Asian Development Bank, and other international and domestic entities emerge as major financiers in Pakistan’s energy sector. Hydropower has received the largest share of 40% financing, followed by 17% coal, nuclear, transmission and distribution projects, and capacity building. Notably, the study indicates a potential decrease in the proportion of fossil fuels in the energy mix, despite expectations of an increase in coal usage.
Jamshoro Power Company Ltd. has been taken as a model in the study. The study says that it poses risks, including environmental pollution and adverse health effects to the Indus River, local communities and surrounding three universities; Liaqat Medical University, Sindh University Jamshoro and Mehran University of Engineering, Science and Technology.
Based on the study’s findings, several recommendations are proposed. A comprehensive, long-term integrated energy policy that encompasses all energy types and consumer sectors is essential.
The study suggests that indigenization, financial sustainability, and environmental responsibility should be prioritized, with private sector involvement encouraged to reduce reliance on international financiers. Additionally, the optimization framework of the Indicative Generation Capacity Expansion Plan should consider separate scenarios for environmental and economic costs, fostering a balanced energy mix.
On the side-lines of the study launch, Grow Green Network, a group of 20 CSOs from Sindh and Punjab that work on environmental, humanitarian and development issues also showcased their work, which focused on the demand for renewable energy financing and opposed the fossil-fuel-based energy development.