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Pro Pakistani

Published Date: Mar 31, 2021

Green Recovery is the Key to Respond to Future Challenges in Energy Sector of Pakistan: Experts

Therefore, the target is to increase the share of renewable energy in the country to 60 percent in the next ten years. He said this while sharing his view with the participants of the webinar ‘Impact of COVID on Energy Sector of Pakistan: Opportunities and Challenges,’ held by Sustainable Development Policy Institute (SDPI) in Islamabad on Wednesday.

While highlighting the impacts of COVID-19 on the sector, he informed the participants that the pandemic affected investment in the energy sector globally by 20-30 percent and in the Renewable Energy sector by 15 percent.
He added further that there have been several challenges on the demand side as commercial activities were ceased for a while, leaving a bad impact on the country’s economy.
Therefore, the government provided a 25 percent discount to the industrial sector, and the SMEs were provided with 50 percent relief, he said.

Anne Sackville-West, Economic Officer US Embassy in Islamabad, informed the participants that the United States and Pakistan have been working on Renewable Energy for several years. Besides, USAID has recently made investments in several clean energy projects within the country.

In the context of Pakistan, she said that structural changes are expected in tariff, and thus, the energy would be getting expensive in the coming days.

She added further that the price of the electricity would ensure that Pakistan moves out of the current situation regarding circular debts.

However, on the other hand, a significant number of people still do not have access to electricity, she said. Further adding that it signifies the need of having a holistic approach and a broader stakeholder’s engagement to resolve several technical and policy level issues, including the affordability and sustainability of the energy.
The Economic Officer said that financial incentives are the key for the market to come up with appropriate solutions. Therefore, long term integrated conversation approach is required, she added.

Khurram Lalani, an expert in the energy sector, was of the view that the key learning from COVID-19 is that scientific economic diversity should be accepted in the policy-making process.

In the energy sector, he said, the grid modernization framework is lacking in Pakistan. The subsidy retargeting regime needs to be addressed as a majority was not able to pay bills during the pandemic, he added.

He highlighted that that investors lose out hope when it comes to tariffs, necessitating a competitive market regime. Besides good financing, a clean and stable regime requires a technical base, he added.

He further said that COVID-19 has provided an opportunity to reassess and come up with a comprehensive framework concerning fuel pricing, and mitigating cost.

General Manager Engro Energy Limited, Dr. Fatima Khushnud, highlighted that slow economic activity was observed after the COVID-19 occurrence. It is a positive sign that the supplier regulation is out for the consultation process, and we are moving effectively on the policy side, she added.

Therefore, a lot of market reforms are expected because of the impacts of the pandemic.

She opined that many industries were now aware of Renewable Energy, especially in the textile industry and steel industry, and they are also moving towards green energy for better financing.

She added further that we need to move towards electrification of the transport sector and highlighted that better financing opportunities exist if we are inclined towards green energy.

Dr. Sajjad Amin, Research Fellow SPDI, highlighted the importance of fiscal stimulus and said that we need to explore possible actions as fiscal stimulus is not aligned with green recovery.