ISLAMABAD: Key experts are calling on the government to implement innovative financing and policy reforms to de-risk Renewable Energy (RE) Investments, a key event at Renewable Energy Finance Insights, a leading energy and environment thinker, said. – Assessing the risk in the changing landscape here on Wednesday.
This initiative aims to bridge the gap between financial sector stakeholders and energy sector policy makers by promoting joint dialogue on key issues, particularly the high cost of financing solar and wind power in Pakistan.
Pakistan has made significant progress in utility solar and wind projects; however, attracting additional investment remains a challenge due to Pakistan’s risk level and macroeconomic conditions.
To answer this problem, Ahtasam Ahmad of Renewables presented his latest study, Green Capitalization: The Share of Renewable Energy Financing for Pakistan. The report maps the current state of renewable energy financing and highlights the obstacles that keep the cost of capital high, thereby holding back progress in renewable energy investment. creating a platform for joint discussion and risk-taking action.
Mr. Farid Ahmed Khan, CEO, Bank of Punjab, noted the lack of investors in the capital market for renewable energy and urged local and foreign businessmen to invest in the sector. He pointed to the high-risk nature of the price increase and the resulting high cost, suggesting solutions such as the promotion of Development Financial Institutions (DFIs) and increasing investment participation in energy projects.
Shehzad Abdullah, Head of Investment Banking, JS Bank, reflected on the development of wind energy financing, highlighting the learning curve through the next generation. Highlighting the key point in the dynamics of the market, he said consistent policy and more engaging dialogue is needed to ensure growth. Karandaaz Chief Investment Officer Naveed Goraya said there is a need to explore alternative financing mechanisms for renewable energy projects, citing security as a way to free up liquidity for the financial sector.
BR Business Recorder’s head of research, Ali Khizar, and PIDE’s senior economist, Afia Malik, each support decentralization and the use of local currency in financing.
Developers from China’s Three Valleys, wind gas and UEP stressed the importance of integrated planning, reliable transmission infrastructure, and regulatory permits and land ownership to reduce the risk profile of renewable energy technologies.
Mr. Shah Jahan Mirza, Managing Director, PPIB said that joint efforts of all stakeholders are necessary to pave the way for sustainable energy solutions in Pakistan.
The panelists unanimously agreed on the importance of rebuilding the renewable energy financing space, and exploring alternative financing channels through innovative instruments and risk-based measures is essential to unlock the potential of the sector.
