Amir Saeed

Climate finance and policy Energy are essential for the sustainable development of mini hydropower plants (MHPPs) in Pakistan, as they help address the financial and technical challenges through innovative models and regulatory reforms.

Talking to WealthPK, Dr. Abid Qaiyum Suleri, Executive Director of the Sustainable Development Policy Institute (SDPI), highlighted that the development of mini hydropower plants (MHPPs) in Pakistan is gaining attention as a vital source of renewable energy, particularly for underserved communities.

 He underscored the cost-effectiveness of MHPPs in providing renewable energy to remote areas. However, he noted that these projects required enhanced provincial policy support, public-private partnerships (PPPs), concessional financing, and access to climate funds to ensure their viability.

Dr. Suleri also emphasized the potential of carbon markets in securing long-term financial sustainability through the sale of carbon credits. Addressing implementation challenges such as security concerns, financial sustainability issues, line losses, and power theft is crucial for the long-term success of MHPPs beyond grants and blended finance. Moreover, he stressed that capacity building at the municipal and community levels is vital for the projects’ sustainability.

Talking to WealthPK, Aftab Ahmad Shah, a technical expert at KfW, identified key challenges facing micro and medium hydropower projects, including low maintenance budgets, shortages of technical staff, and inefficient outsourcing models. He emphasized the need for standardized climate-resilient project designs, tariff mechanisms, regulatory reforms, and innovative financing models to attract private investment.

Mr. Shah also recommended regular monitoring, predictive sensors, and flood early warning systems to enhance the longevity and efficiency of MHPPs. Additionally, he highlighted how digitized monitoring and anomaly detection could improve load management and overcome inefficiencies.

He said the synergy between climate finance and policy is critical for overcoming these challenges. By leveraging climate funds and implementing robust policies, the country can attract more investment in MHPPs. Moreover, he added, integrating MHPPs into broader climate strategies would help align these projects with national goals for renewable energy and climate resilience.

Credit: INP-WealthPk