These recommendations aim to create a more transparent, stable, and supportive financial environment for the growth of the Renewable Energy (RE) sector in Pakistan, encouraging private sector investment and participation:

o   The Ministry of Climate Change and Environmental Coordination, Government of Pakistan, should collaborate with policymakers and regulators to establish a strong Measurement, Reporting and Verification (MRV) system. This system will ensure transparency in climate finance investments and direct them towards appropriate projects, enhancing credibility and accountability.

o   Collaborate between the government, State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), and Pakistan Stock Exchange (PSX) to create a de-risking framework for climate finance. For foreign investments, develop mechanisms like Currency Exchange Funds in collaboration with Development Finance Institutions (DFIs) to manage risks associated with currency devaluation.

o   The Ministry of Energy, supported by relevant authorities, should hasten decisions on policy frameworks that create a conducive environment for RE investment. This includes easing private sector facilitation and implementing larger policy reforms such as power wheeling, to attract more investors to Pakistan’s RE sector.

o   The government should introduce financial incentives for the private sector in the RE domain, including preferential loans, tax reduction schemes, lower import duties, and RE bonds, to encourage investment and participation.

o   Address the challenges of the RE sector being a risky venture for financing institutions and the banking sector. Reinstate the SBP’s RE financing facility and provide additional concessional financing options. Utilise structured financing products like InfraZamin or Pakistan Credit Guarantee Company (PCGC) through equity provisions or guarantee structures to support RE offtake.