Financing of Energy Sector: A Case of Green Energy in Pakistan

Sustainable Development Goal Seven highlights the role of green energy in reducing greenhouse gas emissions, which ensures access to affordable, reliable, sustainable, and modern energy for all. Renewable energy financing is considered green finance because it protects against environmental degradation. Pakistan's government (GoP) considers this goal a high priority basis. This chapter aims to analyze the direction of green financing in Pakistan's energy sector. This chapter focuses on domestic and international funding at the national and sub-national levels and compares the generation capacity. The chapter highlights that Pakistan contributes less than one percent to greenhouse gas emissions. However, at the policy level, the GoP has taken many initiatives to protect the adverse impact on the environment. For instance, in a recent energy policy, the GoP has committed to generating 60 percent of energy through renewable sources. The chapter further reveals that 38 percent of domestic finance has been given toward renewable energy in the past few years compared to 45 percent of international finance given to hydel-related energy projects in Pakistan. In addition, domestic financing is focused toward Nuclear power compared to international finance, which focuses on the renewable energy sector. The chapter proposes that the Government of Pakistan (GoP) could develop a comprehensive, long-term integrated energy policy. This would involve engaging all stakeholders, experts, and academia to collectively promote the adoption of green energy initiatives in the country.