Download report
All markets


With a cumulative score of 1.57, Pakistan ranks number 42 among emerging markets and number 71 in the global ranking.

  • Emerging markets
  • Asia-Pacific

1.84 / 5

Power score

0.95 / 5

Transport score


Buildings score

Only 56 markets (28 emerging markets) are scored on the Buildings sector. See the full list on the methodology page.


Low-carbon strategy

Net-zero goal and strategy

Pakistan does not have a net-zero goal or strategy.

Nationally Determined Contributions (NDC)

Pakistan submitted an updated ‘nationally determined contribution’ – its plan to help achieve the goals of the Paris Agreement – in October 2021. The country is aiming to lower its greenhouse gas (GHG) emissions by 15% from 2018 levels by 2030 versus a business-as-usual scenario (BAU). It says that with international support in the form of $101 billion of grant finance, GHG emissions could be cut by a further 35% by 2030.

The areas being targeted for mitigation are renewable energy, transportation, coal, and land use change and forestry. Pakistan is looking for 60% of all energy produced in the country to come from renewables by 2030 and for 30% of all new vehicles sold to be electric. Meanwhile, a moratorium on new coal plants was introduced in 2020 and coal imports have been banned. The country is also investing in nature-based solutions, undertaking an $800 million afforestation program, which it says will sequester 149 metric tons of CO2 equivalent over the next decade.

Fossil fuel phase-out policy

Pakistan does not currently have a fossil fuel phase-out policy. However, new coal-fired power plants have been subject to a moratorium since 2020 and power generation from imported coal is prohibited. Two new coal-fired power plants have been shelved in favor of hydro power, and there is an increased focus on coal gasification and liquefaction for indigenous coal.


Power policy

Pakistan’s power sector is currently dominated by fossil fuels, which make up 59% of total capacity. It is hoping to flip this balance by 2030, with 60% of energy produced in the country coming from renewables, including hydro. The country aims to increase capacity to 20% renewable energy by 2025 and 30% by 2030. This is being achieved through policies such as feed-in-tariffs and net metering, and around 57 megawatts has been added through its net metering policy. The country has suspended its renewables auctions having failed to add any capacity through this policy. All power purchase agreements in Pakistan (PPAs) are over 15 years.

Power policies

Renewable energy auction
Feed-in Tariff
Import tax incentives
Net Metering
Renewable energy target
VAT incentives

Power prices and costs

Commercial tariffs increased by 34% in 2020, while industrial and residential tariffs decreased by 51% and 3%, respectively. Pakistan is currently working on setting up a wholesale electricity market. It is not yet completely established but is projected to be up and running by May 2022.


Power market

Generation, transmission and retail are unbundled in Pakistan, with the Water Power and Development Authority having been separated into generation companies, the National Transmission and Despatch Company (NTDC), and distribution companies. There are many independent power producers in Pakistan, primarily active in renewable energy, while government-owned entities are primarily responsible for developing hydro and conventional assets.

Installed Capacity (in MW)

20122014201620182020010K20K30K40K50K MW

Electricity Generation (in GWh)

20122014201620182020050K100K GWh

Utility privatisation

Which segments of the power sector are open to private participation?


Wholesale power market

Does the country have a wholesale power market?

Not available

Doing business and barriers

The single offtaker in Pakistan is the Central Power Purchasing Authority, meaning the offtaker risk for renewable energy developers is relatively low. However, the country has a high level of utility debt, which has doubled since 2018, and owing to this, the government has not paid subsidies to generators in some cases. Losses due to theft and transmission system inefficiency stood at 29% of all power generated in 2020, equivalent to just under $1bn in electricity not paid for.

For utility-scale solar development, the major challenges are land identification and transmission bottlenecks. Without a local Pakistani partner, picking suitable land for project development is difficult. In addition, grid connection agreements take time to finalize, which often delays solar projects in the country.

This year, Pakistan discovered that it had been producing excess energy and is facing curtailment problems for the first time. Without appropriate battery policies, this will continue, even with the low rural electrification rate of 59%.

Currency of PPAs

Are PPAs signed in or indexed to U.S. Dollars or Euro?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Fossil fuel taxes

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Fossil fuel subsidies

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?

Not available


EV market

The electric vehicle (EV) market in Pakistan is very new, and most policies were introduced in 2020. The country has a target for 30% of new vehicle purchases to be electric by 2030, and 90% by 2040. This is supported by infrastructure initiatives that aim to have one fast DC charging station per 3 kilometer (km) square area, DC charging stations on all motorways every 15-30km, and uninterrupted power on feeders for charging stations.

EV policy

EVs benefit from 0% sales and income tax at the import stage in Pakistan, as well as a 50% reduction in motorway toll tax.

Transport policies

Electric vehicle target
Electric vehicle purchase grant or loan incentive
VAT incentives for EV
Import tax incentives for EV
EV charging infrastructure target
EV charging infrastructure support

Fuel economy standards

Does the country have a fuel economy standard in place?

Not available


Buildings market

Pakistan has implemented a minimum requirement for energy efficient design and construction of new non-residential buildings. The ultimate goal is to decrease building energy use by 20%, which the government is pushing through new laws targeting heating, ventilation, lighting, and air conditioning.

Energy performance standards

Are there minimum energy performance standards for buildings?

Not available

Energy efficiency plan

Does the country have a national energy efficiency plan?

Not available

Buildings policy

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.

Buildings policies

Low-carbon heat target/roadmap
Tax credits
Boiler scrappage schemes
Heat pumps purchase grants/loans incentive
Ban on boilers: new build homes
Ban on boilers: all homes

Additional insights
from BNEF

Explore more detailed information on global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.

Read more

Powered by

Climatescope 2021

Energy Transition Factbook

This marks the 10th anniversary of Climatescope, BNEF’s annual assessment of energy transition opportunities. For the first time, the project has expanded its scope to include activity not just in clean power but in the decarbonization of the transportation and buildings sectors.

Read the reportSee all reports

Stay up to date

Subscribe to our mailing list to get the latest news about Climatescope directly in your inbox.


© 2023 Climatescope. View license and Privacy policy