Country faces USD348bn climate finance gap: Rana Ihsaan

Islamabad: Pakistan is projected to require a staggering USD348 billion in climate finance by 2030, necessitating significant concessional financing, private investment and access to international carbon markets to bolster climate resilience, expedite the transition to clean energy, and support sustainable, export-driven economic growth, Rana Ihsaan Afzal Khan, the Prime Minister's Coordinator on Commerce and Industries, stated on Wednesday.

Speaking at the 29th Sustainable Development Conference hosted by the Sustainable Development Policy Institute (SDPI), Khan emphasized the need to shift from policy formulation to implementation through the Climate Prosperity Plan, Pakistan Green Taxonomy, and a multi-sectoral national platform to align international climate financing with national priorities.

He urged the international community to transcend commercial lending and honor its historical climate obligations via loss and damage funds and multilateral concessional financing, asserting that climate justice entails financing the transition rather than merely advocating for it. Khan highlighted Pakistan's strides in renewable energy, noting that the nation imported more solar capacity than any other country in 2024, with distributed solar supplying over a quarter of national electricity in 2025.

The government is also developing a policy to cultivate local battery manufacturing and position Pakistan as a regional manufacturing hub for battery storage equipment. The government's Auto Policy 2026-31 and Electric Vehicle Policy aim to achieve 30 percent EV penetration by 2030, which is projected to generate economic savings of over USD15 billion.

Khan reported that Pakistan's Accelerated Vehicle Electrification (PAVE) program offers subsidies for electric two-wheelers and three-wheelers, and the country ranks 15th in the 2026 Climate Change Performance Index. Pakistan has also submitted its Nationally Determined Contribution (NDC) 3.0. Hamza Ali Haroon, the Regional Director for South and West Asia at CVF-V20, reported that Pakistan's Climate Prosperity Plan had expanded from 69 projects worth USD4.5 billion to 100 projects costing USD8.5 billion.

The updated plan, submitted to the Finance Ministry, seeks to mobilize USD1.6 trillion by 2050. Six operational models have been developed, emphasizing national ownership, implementation capacity, and investment expertise. Adnan Pasha, the Adviser to the Finance Minister, said the Finance Division would lead the institutional framework for climate finance mobilization, facilitating projects by federal ministries and provincial governments.

The Finance Division would develop the financial framework, while the Economic Affairs Division and External Finance Wing would engage with development partners. Dr Muhammad Rafiq of the Pakistan Climate Change Authority (PCCA) pointed out that climate initiatives were fragmented across federal ministries and provincial institutions, leading to gaps in data, governance, planning, and budgeting.

The proposed country platform aims to integrate existing frameworks, including the Finance Ministry's Sustainable Finance Framework and the Planning Ministry's Blended Finance Framework. The proposal has been submitted to the Green Climate Fund, with a decision expected in the coming week. In a separate session on integrated economic governance, participants advocated for transitioning from crisis-driven management to sustainable, export-led growth through policy consistency, institutional reforms, and increased private-sector investment.

Economist Khaqan Najeeb identified a competence crisis in both public and private sectors and criticized Pakistan's prolonged dependence on IMF programs, emphasizing that the country has been in 25 programs over 79 years without addressing its structural weaknesses.