Facilitating green loans for a sustainable energy transition in Pakistan

The case of decentralised solar PV and electric vehicles lending in Pakistan

The global shift towards sustainable transportation and clean energy sources has sparked increased interest in electric vehicles (EVs) and renewable energy solutions. As countries strive to curb greenhouse gas emissions and combat climate change, green lending schemes and concessional renewable energy financing facilities have gained traction in promoting renewable energy deployment worldwide.

In this context, Agora Energiewende and the Policy Research Institute for Equitable Development (PRIED) have collaborated on a study to examine tailored financing facilities aimed at boosting the expansion of distributed solar photovoltaics (DSPV) and EVs in Pakistan. Our findings reveal that green lending is still in its infancy, with only a small fraction of banks currently providing financing for EVs and DSPV systems. This limitation arises from regulatory constraints that govern green lending facilities. This is compounded by banks' perceived concerns about high default risk and low profitability associated with renewable energy technology, for example, which also hinder broader initiatives. Moreover, these perceived risks by financial institutions lead to the securitization of loans, further undermining the equitable distribution of green loans.

By identifying key shortcomings in current lending facilities and proposing improvements, our goal is to drive the adoption of sustainable energy systems not only in Pakistan but also in other similar regional countries. We invited you to join us for a webinar where we unveiled the results of our analysis and engage in discussions with key stakeholders from Pakistan.

The event lasted one and a half hours and included a Q&A session.

Slides
The slides shown during this event can be found further down.

Recording
We have recorded the event. The recording can be found above.