Renewable Energy Initiatives Highlighted as a Priority within the China-Pakistan Economic Corridor (CPEC)
Economists, experts, and academia have emphatically called upon the government to prioritize renewable energy initiatives within the China-Pakistan Economic Corridor (CPEC), highlighting the previous lack of focus on renewable energy projects.
Dr. Mian Farooque Haq, Director of SME, Housing, and Sustainable Financing at the State Bank of Pakistan, underscored the pressing issue of climate change. Despite Pakistan's modest contribution of less than one percent to global greenhouse gas emissions, a staggering one-third of the country is grappling with devastating floods triggered by climate change.
P.c. China-Pakistan Economic Corridor
Addressing the "Green Financing, CPEC, and Industry" session at the 2nd International Conference on CPEC, organized by the Economics and Management Sciences Department (EMD) at NED University, Dr. Haq revealed the State Bank of Pakistan's progressive steps. In 2017, they issued voluntary Green Banking Guidelines and are in the process of collaborating with both a smaller and a major bank to implement the Environmental and Social Risk Management (ESRM) framework, aiming to transform them into exemplary green banks. This initiative will later serve as a model for other banks. Dr. Haq also announced the SBP's groundbreaking green taxonomy, set to redefine Pakistan's banking industry.
While discussing renewable energy financing through commercial banks, he revealed that 2,300 renewable energy projects with a total capacity of 1,600MW were currently in progress. These financing opportunities are also accessible to individual consumers at a reduced interest rate of 6 percent. In light of the country's macroeconomic challenges, he extended an invitation for innovative solutions from conference participants.
Abdul Sattar Jumani, CEO of Younus Energy Limited, hailed the positive impact of the Jhimpir wind corridor's development on the local population. Windmill companies have not only provided employment to the locals but have also equipped them with solar panels for electricity.
Shehryar Omar, CEO of the Petroleum Institute of Pakistan, expressed concern about Pakistan's soaring energy demands, particularly in the winter when it surges from 12,000MW to 30,000MW, primarily due to increased air conditioning use. He candidly referred to the previous reliance on CNG as a major error and predicted the exhaustion of indigenous gas reserves within the next 8 to 10 years. He cautioned against placing too much hope on pipeline gas imports, citing Europe's experiences as a cautionary tale.
Hussain Jarwar, CEO of Indus Consortium and co-organizer of the session, highlighted the ongoing water crisis in Sindh, with several areas still submerged in 3 to 4 feet of water, four months after the monsoon rains. He lamented the plight of 75,000 pregnant women who endured the floods while having no role in greenhouse gas emissions, and who continue to reside in flood relief camps. Jarwar predicted that climate change would lead to either floods or droughts, emphasizing the urgency of addressing these issues.
Mirza Faizan Ahmed, a research associate at NED University, presented findings on the "In-depth analysis of GBG" and revealed that 18 out of 33 commercial banks had taken some steps to adhere to the Green Banking Guidelines. He also highlighted that out of the 21 projects in CPEC, 5,000MW were focused on coal-based energy. He recommended a realignment of CPEC projects towards green financing to promote sustainability.
Concluding the session, Dr. Raza Ali Khan, Chairman of the Economics and Management Sciences Department at NED University, extended his gratitude, and Fiza Naz moderated the discussion.