The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) will provide policy advisory and technical assistance to Pakistan to support the development of its Energy Transition Investment Plan.
According to officials, a scoping mission of UN ESCAP recently visited Pakistan at the government’s request and held consultations with relevant ministries and development partners.
The discussions focused on understanding Pakistan’s needs, challenges, and opportunities related to energy transition financing and identifying entry points for building a credible and bankable investment plan.
The move comes as Pakistan’s energy transition has become increasingly critical for economic resilience, climate commitments, and fiscal stability.
Heavy reliance on imported fossil fuels, combined with a circular debt crisis exceeding Rs. 2.6 trillion, has underscored the urgency of accelerating the shift toward renewable energy to meet growing demand by 2030.
UN ESCAP noted that while the transition is essential, progress is constrained by policy inconsistencies, continued dependence on fossil fuels, and limited access to concessional financing. These factors have slowed the scale-up of renewable energy projects and hindered investment flows into the sector.
To address these gaps, the Energy Transition Investment Plan is expected to focus on attracting green foreign direct investment and promoting blended finance structures that combine public and philanthropic funds to unlock private capital.
Concessional financing, including low-interest loans and guarantees, has been identified as a key requirement to make renewable energy projects commercially viable, particularly in underserved areas.
The UN body also highlighted the need to build on existing initiatives such as Green Eurobonds, Panda Bonds, and Green Sukuk, along with pay-as-you-go models, to widen the investor base.
Greater attention is also required on how financing supports grid modernisation, which remains central to addressing Pakistan’s circular debt challenge and integrating distributed solar and battery storage into the national grid.
UN ESCAP said it is prepared to support Pakistan through its Financing Energy Transition programme, which has already provided technical assistance to countries including Indonesia, the Philippines, and Vietnam.
The programme has produced analytical studies identifying gaps in energy transition finance, alongside capacity building and regional policy dialogues.
Through its expertise in integrated energy planning, scenario analysis, and capacity development, UN ESCAP said it could help Pakistan strengthen its national energy mix, improve industrial competitiveness, and move closer to net zero emissions, while leveraging instruments such as green bonds and carbon markets.
Pakistan’s power sector remains dominated by imported oil, LNG, and coal, posing ongoing challenges to fiscal sustainability and energy security.
Officials believe the Energy Transition Investment Plan, supported by UN ESCAP, could play a central role in reshaping the sector and unlocking long term, sustainable financing solutions.
