- Friday | 30 Sep, 2022
- Muhammad Umar Ayaz
- Policy Briefs/Papers
Muhammad Umar Ayaz and Zahid Majeed
Globally fossil fuels accounts for 80% of total energy generation leading to serious environmental damages. Consensus exits that green energy transition can help reduce this environmental degradation. Financing this transition, however, is a big challenge. By 2040, Pakistan needs around $9.76-$14.44 billion every year to finance green energy transition. Given limited fiscal space from conventional sources, it is needed that the country explores new strategies to generate the required financing. This paper discusses the potential options and challenges of market-based green financing faced by Pakistan. There is a need to formulate green financing policies with clear objectives and target followed by a comprehensive legal and institutional framework and that the focus in this regard must go beyond banking sector expanding to capital market and institutional investors.