Pakistan’s transition from coal to clean energy is critical for achieving energy security, climate resilience, and sustainable economic growth. To make this shift practical, inclusive, and investment-ready, the following policy actions are recommended:

• Develop a unified, data-driven National Energy Transition Plan (NETP) that ensures energy security, equity, and gradual replacement of coal with renewables such as solar and wind, starting with pilot conversions in Thar and Sahiwal.
• Establish a Just Transition Framework (JTF) under the Ministry of Energy (Power Division) to support coal-dependent workers and communities in Tharparkar and Lakhra through skills training, social protection, and alternative livelihoods.
• Strengthen governance and financial transparency in the power sector by addressing circular debt, ensuring timely payments to Independent Power Producers (IPPs), and restoring investor confidence in the National Transmission and Dispatch Company (NTDC) and Central Power Purchasing Agency (CPPA-G).
• Mobilise innovative green finance, including debt-for-climate swaps, blended finance through Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB), and sovereign green bonds to refinance coal debt and accelerate renewable investments.
• Repurpose existing coal infrastructure such as idle plants in Jamshoro and Port Qasim, for solar power generation, battery storage, and green hydrogen production to prevent stranded assets.
• Reform Power Purchase Agreements (PPAs) to reduce unsustainable capacity payments and introduce market-based mechanisms, similar to China’s capacity payment model, for improving system reliability and affordability.
• Promote local manufacturing of renewable energy technologies such as solar panels, inverters, and wind turbines through China-Pakistan Economic Corridor (CPEC) industrial zones in Gwadar and Faisalabad, enabling Pakistan to become a regional technology supplier.
• Create policy incentives for private sector participation, including tax breaks and concessional financing, to attract foreign direct investment (FDI) in renewable projects from partners like the United Arab Emirates (UAE) and China’s Renewable Energy Development Company (REDC).
• Establish a National Transition Coordination Working Group (NTCWG) bringing together the Ministry of Finance, Ministry of Energy, and Ministry of Climate Change to link up fiscal, energy, and climate priorities.
• Engage regional and international partners such as IEEFA (Institute for Energy Economics and Financial Analysis), IRENA (International Renewable Energy Agency), Rockefeller Foundation, and PPCA (Powering Past Coal Alliance) to access technical assistance, capacity building, and transition financing.
• Develop bankable, evidence-based transition models using data from National Electric Power Regulatory Authority (NEPRA) and the Pakistan Bureau of Statistics (PBS) to justify coal-to-clean shifts and attract concessional finance.
• Institutionalise multi-stakeholder dialogue platforms under the Sustainable Development Policy Institute (SDPI) to foster open dialogue among government, industry, academia, and civil society for politically feasible and socially equitable energy transition policies.