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China inspired renewable policy model can unlock the investment potential in renewables in Pakistan: Experts

EnvironmentChina inspired renewable policy model can unlock the investment potential in renewables in Pakistan: Experts

ISLAMABAD: Experts at a conference on Wednesday were of the view that China has emerged as a global leader in renewables and green development, and thus its renewable policy model can open up vistas of investment in renewables in Pakistan.  

The conference titled, “The need to switch towards a greener future: Lessons from China”, was jointly organized by Pakistan China Institute (PCI) and Sustainable Development Policy Institute (SDPI) here.   

Senator Mushahid Hussain Syed said that “green is a defining element of China’s development agenda” and President Xi Jinping on the occasion of COP in 2015, while pledging carbon neutrality, had made the commitment that China would emerge as a leader in green development. Today China is leading the world as producer and investor in green technology and finance, he said, adding that the shift to green technology has created additional 54 million jobs so far, which shows the immense multifaceted potential of green development. He was of the view that China is officially at par or has taken lead from USA in green technologies, AI, STEM, etc. 

Senator Engg. Rukhsana Zuberi stressed on conducting energy audits to identify wasteful practices and increase the energy efficiency. She said that after the first energy audit of the building of Pakistan Energy Council, 35% reduction in energy consumption was achieved. She stressed the need for advocacy and engaging with common people to increase energy efficiency at the household level by highlighting the financial cost that can be saved by making small consumption changes. 

Dr Abid Q. Suleri, the Executive Director, SDPI, said that we must recall success stories from China in tackling environmental and climate issues. He further said that China successfully reduced SMOG and particulate-matter air pollution by 60% in a short span in Beijing. He maintained that China’s Great Green Wall in 2013-14 was another initiative, which effectively managed desertification. China offers a leadership model from micro to meso-level in managing resources efficiently, and addressing the growing threats of environment and climate change, which Pakistan must take inspiration from, he said. He added that CPEC is not limited to trade or energy rather agriculture and food security are an essential component of green CPEC and use of nature for greening is visible in various CPEC initiatives, including China’s assistance to Pakistan in the form of genetically engineered seeds and rice.   

Dr Zhao Baige, Vice Chair of the 12th NPC Foreign Affairs Committee, Chair of Advisory Committee of RDI recalled that China announced in 2016 its policy for carbon neutrality and has been committed to achieving the policy guidelines, which is the reason behind China emerging as a global leader in renewables and emission reduction. She stressed that Pakistan has immense potential for green development by promoting renewable energy. She said that Chinese enterprises are interested in investing in green development projects in Pakistan and much can be achieved with commitment, cooperation and right policies. 

Dr Sajid Amin Javed, Deputy Executive Director, SDPI said that the green financing in Pakistan is still a residual policy and not a mainstream economic policy. First and foremost, it must be made a main economic and financing policy, he said, adding that climate change is a macro-economic risk and no longer an environmental risk, which is evident from recent floods. He said “we need change of narrative and highlighting the return on investment in green projects is crucial to attract foreign investors. He said that green energy is the future of Pakistan’s macro-economic policies.   

Dr Hassan Daud, Senior Advisor, SDPI said that Pakistan was the first to receive cashflow from China under BRI’s energy projects aimed at wind and solar energy generation. Despite being the first, we have not explored the true potential of the sector so far, he said and emphasized that every penny spent on renewable energy technology guarantees long-term energy and economic security for the country. 

Christoph Nedopil, said that since 2022, there’s a much stronger willingness among Chinese companies to invest abroad in hi-tech sectors, as it is an area with immense potential, which Pakistan can avail. He said that till 2019, China followed the host country’s environmental regulations in Belt and Road Initiative (BRI) construction and banking projects, but that has changed significantly. He called for preventing brown environmental risks at the heart and center of BRI projects. He said that China has a traffic light system to identify environmental risks and enable Chinese stakeholders to evaluate them and decelerate brown projects and accelerate green projects. He stressed on working with local communities to avoid resistance to development projects. There is a mechanism for environmental and social impact assessment as well, he said, adding that by 2030 all development projects under BRI must be green as per green development guidance. 

Farid Ahmed, Group Chief, Corporate and Investment, Bank of Punjab said that the forex crunch, lack of indigenous production of RE machinery and import restrictions is hindering the uptake of projects. He said that the financing space is dominated by 8-10 banks offering long-term financing for RE projects and must be expanded. He further said that only one bank in Pakistan is currently accredited with Green Climate Fund and two more banks are in process which renews the hope for increase in concessionary financial instruments and international financing. He stressed on strict implementation of green financing guidelines to enable local banks to partner with international financing institutions and access concessionary funds. He stressed on increasing advocacy for captive, off-grid and wheeling for RE projects to generate significant interest from investors which is not subject to circular debt. He suggested that SBP and FBR should introduce financial and tax incentives to attract foreign investments. 

Sajeed Aslam, Regional Lead Public Affairs, Asia Pacific Region, ACCA, said that circularity is central to climate action and by not utilizing the potential of solar energy, we are fundamentally being wasteful. He stressed on developing a comprehensive value driven system and ensuring accountability on these projects to build back trust of investors. He stressed on building the commercial viability of projects and emphasized on trade to attract foreign investments for the economic interests of the country. 

Hamza Orakzai, Director Strategic Planning and Regulatory Affairs, Special Technology Zones Authority (STZA), informed that for the first time, new laws for investors in SEZs have been introduced in Pakistan to simplify the legal and regulatory environment which will build a strong business case for attracting investments. He stressed that we must learn from neighboring countries and ensure transfer of technology when the market is liberalized to reduce import dependence for technology.  

Mujtaba Khan, CEO of Reon Energy, said that our demand for solar technology has been increasing annually which in itself is an opportunity. However, government regulations complicate the process and discourage investors. He stressed that our strategy for renewable sector should be based on our strengths and what can be indigenized as our options are limited due to the economic crisis.  

Mustafa Hyder Sayed, the Executive Director, Pakistan China Institute, in his concluding remarks, stressed on establishing Special Economic Zone (SEZs) at strategic location to explore their true potential as simply mushrooming them is not enough. He said that Shenzhen emerged as the most successful model of SEZs is due to its strategic location in proximity to other business clusters. Renewable energy can be expanded in Pakistan if they are made profitable and return on investment can be guaranteed. He called for adopting a synchronized approach to expand the renewable energy market and reduce the import bill for energy generation. 

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