UN support aimed at steering Pakistan towards clean energy transition

WEB DESK: The United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) has agreed to assist Pakistan with policy guidance and technical expertise aimed at strengthening energy financing and shaping the country’s Energy Transition Investment Plan (ETIP).

Following a formal request from the Pakistani government, a UN-ESCAP delegation recently carried out a scoping visit to the country. During the visit, the team engaged with relevant government ministries and development partners to assess Pakistan’s financing needs, identify obstacles, and explore opportunities linked to the shift toward cleaner energy sources. According to UN-ESCAP, these discussions helped pinpoint key areas where a comprehensive and effective ETIP can be developed.

Pakistan’s move toward cleaner energy is seen as essential for long-term economic stability, meeting climate obligations, and reducing fiscal pressure. The country’s strong dependence on imported fossil fuels, along with a mounting circular debt that has crossed Rs2.6 trillion, highlights the urgency of transitioning to renewable energy solutions to meet demand by 2030. Despite this need, progress has been slowed by inconsistent policies, continued reliance on fossil fuels, and limited access to affordable financing.

The proposed ETIP is expected to play a central role in closing this gap by encouraging environmentally friendly foreign investment and promoting blended finance approaches. These models combine public funds and philanthropic capital to mobilise private sector investment. Access to concessional financing—such as low-cost loans and risk guarantees—will be particularly important in making renewable energy projects viable, especially in underserved and remote areas.

UN-ESCAP has also emphasized the importance of expanding existing initiatives such as Green Eurobonds, Panda Bonds, and Green Sukuk, along with innovative pay-as-you-go financing systems. Strengthening these mechanisms could attract new investment while supporting efforts to modernize the national power grid. Grid upgrades are considered critical to addressing Pakistan’s circular debt problem and enabling the integration of decentralized solar power and battery storage into the energy system.

Drawing on its Financing Energy Transition (FET) programme—which has already delivered targeted technical assistance to countries including Indonesia, the Philippines, and Vietnam—UN-ESCAP has expressed its readiness to extend similar support to Pakistan. This assistance would build on the commission’s ongoing collaboration with the country.

Under the FET initiative, UN-ESCAP has produced several analytical studies highlighting gaps in energy transition financing, alongside capacity-building programs and regional policy dialogues. The organization believes its expertise in integrated energy planning, scenario modeling, and institutional strengthening could help Pakistan diversify its energy mix, enhance industrial competitiveness, and move closer to its net-zero emissions goals. The use of tools such as green bonds and carbon markets is also expected to be part of this strategy.

At present, Pakistan’s power sector remains largely dependent on imported oil, liquefied natural gas, and coal. This reliance continues to strain public finances and poses long-term risks to the country’s energy security, reinforcing the need for a faster and more coordinated transition to renewable energy sources.

Web Desk