CPEC offers opportunity to diversify Pakistan's energy mix, promote green investment

ISLAMABAD, Aug. 21 (Xinhua) -- As Pakistan targets generating 60 percent of its energy from renewable sources by 2030, experts believe that the China-Pakistan Economic Corridor (CPEC) offers a vital opportunity to diversify the South Asian country's energy mix and promote green investments in the energy sector.

Pakistan needs to capitalize on Chinese private sector investments to enhance renewable energy share, improve energy access, and reduce dependence on imported fuels, experts said Tuesday during a seminar on renewable energy organized by the Sustainable Development Policy Institute (SDPI), an Islamabad-based think tank.

Speaking on the occasion, Vaqar Ahmed, joint executive director at the SDPI, noted that Chinese stakes in global renewable investments are high and its stance on green investment signals for sustainable development and clean energy are providing multiple opportunities for Pakistan under the CPEC.

The role of the Chinese private sector in expediting the uptake of renewable energy in Pakistan is crucial as the private sector holds an important position, Ahmed said.

"One of the private sector's primary functions is to extend green financing to sustainable industries at competitive interest rates, facilitating the mitigation of environmental challenges. It also possesses the capability to fund the development of renewable energy projects, which would help in advancing Pakistan's energy transition," he added.

Mustafa Hyder Sayed, executive director of the Islamabad-based think-tank Pakistan-China Institute, said that after the successful completion of the first phase of the CPEC with energy and infrastructure projects being the highlights, the next phase of the CPEC would revolve around green and eco-friendly investments ensuring carbon-intensive development.

Sayed said that Pakistan can learn from China's best practices in renewable energy, adding that as the single largest corridor of energy investments in Pakistan, the CPEC is key to scaling up renewable energy investments in the country.

The experts were also of the view that the growth of renewable industry under the CPEC special economic zones needs to be focused upon, saying a joint working group between China and Pakistan is critical in this regard.

Special economic zones are designated areas across Pakistan that have additional facilities and lucrative benefits to local and international industrial investors with tax incentives, infrastructure support, and simplified investment procedures, Noorul Arifeen Zuberi, a senior advisor in the energy sector said.

"Relocation for the Chinese solar panel industry to Pakistan is a lifetime opportunity for Chinese and Pakistani investors due to abundant raw material, cheap labor, special zones, one window business facility and other benefits," he said.

Launched in 2013, the CPEC, a flagship project of the China-proposed Belt and Road Initiative, is a corridor linking the Gwadar Port in southwest Pakistan's Balochistan province with Kashgar in northwest China's Xinjiang Uygur Autonomous Region, which highlights energy, transport, and industrial cooperation in the first phase, while in the new phase expands to fields of agriculture and livelihood, among others.