STANDING by Pakistan through think and thin over the last many years, France is going full steam ahead to help Pakistan to meet targets of climate mitigation and adaptation, one of vital objectives of UN Sustainable Development Goals (SDGs) in the upcoming year 2025. Trapped in a web of debt, climate vulnerability and under-investment in human development, Pakistan is ranked 137th out of 166 nations in the UN Sustainable Development Report 2024. While slight improvements are noticed in some areas, eight out of the 17 SDGs made no progress and three are regressing. Given the situation France is committed to supporting Pakistan to offset climate challenges by launching many green and low-carbon projects.
As of September 2024, Pakistan’s total debt and liabilities stood at an estimated $308.2bn, representing 81.2pc of GDP. Of this, total external debt and liabilities amounted to $133.4bn. Debt servicing costs the government over half of its annual budget, leaving little room for investment in development priorities. Every dollar allocated to debt repayment is a dollar denied to mitigating the impacts of climate change and others. France has mobilized its expertise to close the SDG financing gap, through scaling up official development assistance.
In an area as essential for population like that of access to water and energy, the French Development Agency – AFD – participated actively for green and sustainable development with nearly 700 million euros mobilised in the hydropower sector, urban transports and water. Moreover, AFD helped finance 94 million euros for the treatment of Faisalabad’s water.
In order to champion the cause of upholding the commitment to meet SDGs 2030, Pakistan has witnessed a promising shift towards sustainable clean energy in recent years, with its hydro and wind energy potential gaining significant traction. To harness the renewable potential and encourage investment in green power projects, the government has offered various incentives which include attractive tariff rates, availability of land on cheaper rates, wind risk, guaranteed power purchase, zero-rated import duties on equipment and exemption of income tax & sales tax. The government has tasked the AEDB with ensuring 6% of total national power generation capacity to be generated through renewable energy technologies by the year 2030. The French Development Agency or Agence française de développement, (AFD), a public financial institution that implements France’s development and international solidarity policies, has been supporting Pakistan with some 62% of its financing directed towards green energy development.
One such initiative is the renovation of the Mangla hydropower station, originally built in 1967 and one of the largest multipurpose dams in Pakistan. AFD has helped finance renovation of the dam, which has increased energy capacity, reduced emissions and is in line with national aim of creating a sustainable energy sector. Planners expect the project to extend the life of the power station by another 50 years and forecast that the project will be completed by 2027.
With €2.5 million in funding from the EU’s Asia Investment Facility, AFD is helping to carry out the renovation of the Mangla Hydropower Training Institute (HPTI), renewing both the infrastructure and its curriculum to ensure that local people are qualified for the burgeoning sector. A number of other projects are underway to accelerate the move towards greener energy, including the construction of the Keyal Khwar hydropower plant (co-financed by AFD, KfW and WAPDA). The project aims to replace a number of thermal power plants, save 182,000 tonnes in CO2 emissions per year and improve the quality of electricity access for 600,000 residents by 2028. Work also began in 2023 to extend the power grid in Punjab province, thanks in part to AFD financing, in partnership with National Transmission and Despatch Company (NTDC)). The project is expected to improve access to reliable electricity for millions of people, particularly during heatwaves. The renovation of the Warsak hydroelectric power station will also contribute to clean, reliable electrification, particularly in the industrial sector. Funded in part by AFD, the European Investment Bank (EIB) and the European Union, the project will repair and renovate dilapidated equipment as part of an effort to boost its considerable energy production, to improve service for an estimated two million people and avoid some 280,000 tons of CO² every year.
With power cuts and an unreliable energy supply costing the country an estimated 2% to 3% in annual GDP growth, such initiatives will not only boost clean energy production, they could also spur economic growth. The shift away from fossil fuels towards cleaner and more sustainable energy has been slow and gradual, but it is truly underway. In Pakistan, a new wind farm was built in the province of Sindh. Developed thanks to AFD’s private sector branch, Proparco, the project is a factor in creating local jobs and bolstering renewable energy in a country marked by a shortfall.
An initial 20-turbine farm producing a total of 50 MW appeared in the Jhimpir corridor in the country’s southern region. Over and above the energy they produce, wind farms drastically reduce greenhouse gas emissions and carbon footprints by reducing reliance on fossil fuels. They are also a significant boon for economic development thanks to the jobs created by the wind farm industry and reduce dependence on fossil fuel imports: a costly endeavour that tips the country’s books into the negative. Affordable, eco-friendly, with a positive knock-on effect for economic development and jobs: all these reasons prompted Proparco to invest $20m in wind farms in Pakistan. This initiative aligns perfectly with AFD’s strategy for fighting climate change.
—The writer is contributing columnist.
