Ayesha Saba

Strategic planning and policy innovation are essential for Pakistan to fully capitalise on its cooperation with China in energy and sustainable infrastructure sectors for robust economic growth.

Talking to WealthPK, Mehmood Khalid, former executive director of CPEC Centre of Excellence and senior research economist at the Pakistan Institute of Development Economics (PIDE), said China is currently a global leader in green technology and finance, excelling both as a producer and an investor. “Its development approach emphasises shared progress not only for Pakistan but for the broader South Asian region.” He said that Pakistan should fully utilise the platforms it engages in to align its national development planning with these opportunities.

“This strategic alignment is essential to unlocking the full potential of Pakistan-China collaboration, particularly in areas such as sustainable development and economic resilience.” Khalid said the second phase of CPEC emphasises the need to revisit and refine Pakistan’s energy policy to address challenges associated with energy shortages and transition toward a more sustainable and cost-effective energy framework. “Given Pakistan’s heavy reliance on oil imports, which contribute significantly to its high import bill, transitioning to low-cost and renewable energy sources is imperative.

Green energy initiatives and climate finance present transformative opportunities for Pakistan to reduce its dependence on fossil fuels while addressing climate-related challenges. Pakistan-China collaboration in different areas provides the ideal venue for forging partnerships that can enhance access to these opportunities,” he said. Khalid said that Chinese diplomatic and institutional collaborations were already advancing critical initiatives in climate finance. “These efforts focus on building capacity for generating climate-focused funding such as green and social bonds, which are essential for financing environmentally sustainable projects.”

The PIDE expert underscores the importance of Pakistan leveraging these initiatives to secure the resources and expertise necessary for a greener future. He said debt management also emerges as a key aspect of Pakistan-China cooperation. “Debt swap agreements negotiated between the two countries have provided Pakistan with more favourable terms, such as reduced interest rates and extended repayment schedules.”

Speaking at a seminar titled “10 Years of CPEC: Success, Opportunities and Challenges” organised by the Asian Institute of Eco-civilisation Research and Development (AIERD), Deputy Chief of Mission at the Chinese Embassy in Islamabad, Shi Yuanqiang highlighted the CPEC's transformative journey over the past decade. Yuanqiang revealed that CPEC has brought $25 billion in direct investment to Pakistan and entered a new phase of development. Yuanqiang emphasised that 14 operational energy projects under CPEC currently contribute one-fifth of Pakistan's total installed power capacity.

Credit: INP-WealthPk