PAKISTAN
Raza Ahmed Khan | Jamshed Ali
September 5, 2025
DAWN
PAKISTAN is in the grip of another extreme monsoon season. Once again, cloudbursts and flash floods in KP and parts of Punjab have damaged infrastructure, displaced communities and laid bare the country’s deep vulnerability to climate change. We no longer need to ask whether climate disasters will strike. They are here and they are escalating. What we must ask instead is: how do we redesign our systems to survive these shocks and reduce the risks that fuel them?
The answer begins with how we produce and use energy. While attention often falls on fuel prices, power plants, or the national grid, one major sector remains overlooked: industry. Factories are seen as consumers of energy, but they can become a key part of the solution. Cleaner, more efficient industrial systems will make Pakistan more self-reliant, cost-efficient and climate-resilient.
The textile and apparel sector alone accounts for over half of Pakistan’s export revenues. So if just one segment of industry carries that much weight, imagine how deeply the entire export base depends on stable, reliable energy for industrial production. Power outages and unstable supply lead to missed deadlines, rising costs and lost contracts. If we want to keep our economy afloat and our exports competitive, we must start treating industrial energy security as a national priority.
Currently, the industrial sector consumes more than 37 per cent of Pakistan’s total energy. Less than 30pc of that energy comes from renewable sources. This lack of diversification exposes industries to global fuel price fluctuations, rising import bills and tightening international emissions standards. In 2023 alone, Pakistan’s energy import bill crossed $11.9 billion, while industrial emissions continued to climb.
Other countries have shown what’s possible. China has steadily electrified its manufacturing sector, improving efficiency while maintaining growth. Germany helped its industries switch to renewables by offering long-term contracts and guaranteed grid access. These transitions improved both environmental and economic outcomes.
Pakistan has set clear targets for renewables: 20pc of electricity by 2025 and 30pc by 2030. But these goals are unlikely to be met without industrial participation. Ambition on paper will not drive change unless it is backed by financing, implementation, and accountability.
Industrial energy security should be a national priority.
There are some encouraging signs. By mid-2025, Pakistan’s industrial zones were sourcing over 1,800 megawatts from wind and more than 500 MW from solar. The textile, cement and agro-processing sectors are beginning to lead this transition. Biomass plants in sugar and rice mills are also starting to show commercial and environmental promise. Still, significant barriers remain. Much of Pakistan’s industrial infrastructure is outdated. SMEs, which make up over 90pc of all businesses, often lack the capital to invest in cleaner technologies. Compliance with energy efficiency standards is inconsistent and energy audits are often overlooked.
To accelerate change, Pakistan must mobilise targeted financing. Green bonds, concessional loans and public guarantees can reduce risk for industrial investment. Tax credits for solar, biomass and energy-efficient upgrades would send a strong market signal and make clean choices more viable.
The transition also depends on people. Pakistan needs a new generation of engineers, auditors, and energy managers trained in efficiency solutions and renewable technologies. Partnerships with universities, vocational institutes and the private sector can help build this critical capacity. Public-private partnerships can expand the scale of change. Under CPEC, joint ventures have already supported large solar and wind projects. Similar models could accelerate rooftop solar and biomass adoption in industrial zones, particularly if they are aligned with green priorities. Development partners like the Asian Development Bank, International Finance Corporation and GIZ continue to support Pakistan’s energy goals. But their contributions will only go so far without domestic clarity, consistency and political will.
This transition is not just about climate targets. It is about energy security, cost competitiveness, and economic survival. Cleaner energy reduces costs, builds supply chain resilience and opens new markets. For Pakistan’s industries, this is an opportunity to lead, while the rest of the world catches up. The country’s energy future will not be shaped in power plants alone. It will be shaped in factories, where decisions about energy, innovation and investment will determine whether Pakistan powers ahead or falls behind.
Raza Ahmed Khan is Research Economist at the National Energy Efficiency and Conservation Authority. Jamshed Ali is Joint Director Policy at Neeca.
Published in Dawn, September 5th, 2025
PAKISTAN is in the grip of another extreme monsoon season. Once again, cloudbursts and flash floods in KP and parts of Punjab have damaged infrastructure, displaced communities and laid bare the country’s deep vulnerability to climate change. We no longer need to ask whether climate disasters will strike. They are here and they are escalating. What we must ask instead is: how do we redesign our systems to survive these shocks and reduce the risks that fuel them?
The answer begins with how we produce and use energy. While attention often falls on fuel prices, power plants, or the national grid, one major sector remains overlooked: industry. Factories are seen as consumers of energy, but they can become a key part of the solution. Cleaner, more efficient industrial systems will make Pakistan more self-reliant, cost-efficient and climate-resilient.
The textile and apparel sector alone accounts for over half of Pakistan’s export revenues. So if just one segment of industry carries that much weight, imagine how deeply the entire export base depends on stable, reliable energy for industrial production. Power outages and unstable supply lead to missed deadlines, rising costs and lost contracts. If we want to keep our economy afloat and our exports competitive, we must start treating industrial energy security as a national priority.
Currently, the industrial sector consumes more than 37 per cent of Pakistan’s total energy. Less than 30pc of that energy comes from renewable sources. This lack of diversification exposes industries to global fuel price fluctuations, rising import bills and tightening international emissions standards. In 2023 alone, Pakistan’s energy import bill crossed $11.9 billion, while industrial emissions continued to climb.
Other countries have shown what’s possible. China has steadily electrified its manufacturing sector, improving efficiency while maintaining growth. Germany helped its industries switch to renewables by offering long-term contracts and guaranteed grid access. These transitions improved both environmental and economic outcomes.
Pakistan has set clear targets for renewables: 20pc of electricity by 2025 and 30pc by 2030. But these goals are unlikely to be met without industrial participation. Ambition on paper will not drive change unless it is backed by financing, implementation, and accountability.
Industrial energy security should be a national priority.
There are some encouraging signs. By mid-2025, Pakistan’s industrial zones were sourcing over 1,800 megawatts from wind and more than 500 MW from solar. The textile, cement and agro-processing sectors are beginning to lead this transition. Biomass plants in sugar and rice mills are also starting to show commercial and environmental promise. Still, significant barriers remain. Much of Pakistan’s industrial infrastructure is outdated. SMEs, which make up over 90pc of all businesses, often lack the capital to invest in cleaner technologies. Compliance with energy efficiency standards is inconsistent and energy audits are often overlooked.
To accelerate change, Pakistan must mobilise targeted financing. Green bonds, concessional loans and public guarantees can reduce risk for industrial investment. Tax credits for solar, biomass and energy-efficient upgrades would send a strong market signal and make clean choices more viable.
The transition also depends on people. Pakistan needs a new generation of engineers, auditors, and energy managers trained in efficiency solutions and renewable technologies. Partnerships with universities, vocational institutes and the private sector can help build this critical capacity. Public-private partnerships can expand the scale of change. Under CPEC, joint ventures have already supported large solar and wind projects. Similar models could accelerate rooftop solar and biomass adoption in industrial zones, particularly if they are aligned with green priorities. Development partners like the Asian Development Bank, International Finance Corporation and GIZ continue to support Pakistan’s energy goals. But their contributions will only go so far without domestic clarity, consistency and political will.
This transition is not just about climate targets. It is about energy security, cost competitiveness, and economic survival. Cleaner energy reduces costs, builds supply chain resilience and opens new markets. For Pakistan’s industries, this is an opportunity to lead, while the rest of the world catches up. The country’s energy future will not be shaped in power plants alone. It will be shaped in factories, where decisions about energy, innovation and investment will determine whether Pakistan powers ahead or falls behind.
Raza Ahmed Khan is Research Economist at the National Energy Efficiency and Conservation Authority. Jamshed Ali is Joint Director Policy at Neeca.
Published in Dawn, September 5th, 2025
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