Overview:
Given the shared challenges of climate change, energy security, and development in South Asia, regional partnerships are becoming increasingly important. Through this interview, we’d like to understand the country’s priorities, existing collaborations, and the opportunities and challenges in building stronger bilateral/ multilateral energy partnerships across South Asia.
Interview:
- Regional energy cooperation in South Asia is driven by a combination of energy security needs, climate action goals, and economic efficiency. For countries like Pakistan, rising energy demand and dependence on imported fuels highlight the need for more reliable, affordable, and diversified energy sources.
- Regional integration, such as electricity trade and shared infrastructure, can enhance system stability while making better use of the region’s diverse energy resources.
- As South Asian nations pursue their climate commitments under the Paris Agreement, cooperation can also help lower decarbonization costs and open access to climate finance, particularly for projects with cross-border impact.
- Beyond technical and economic benefits, regional energy collaboration can strengthen trust and interdependence in a geopolitically sensitive area, offering developmental and diplomatic gains alike.
- Pakistan has participated in several regional energy partnerships, with varying degrees of success. On a bilateral level, energy trade initiatives with Iran and Afghanistan have focused on electricity imports to support underserved border regions.
- A major multilateral initiative is CASA-1000, which aims to connect surplus hydropower from Central Asia to South Asia, including Pakistan. However, such efforts often face hurdles, political instability, security concerns, and institutional delays have slowed progress.
- Within South Asia, broader initiatives under SAARC’s energy cooperation frameworks have also struggled to move forward due to geopolitical tensions and a lack of implementation mechanisms.
- Despite these challenges, there is growing recognition that regional energy collaboration remains both necessary and mutually beneficial.
- Several sectors offer immediate potential for regional collaboration.
- Power grid integration stands out as a top priority, enabling the efficient exchange of electricity, especially renewables, between countries with complementary generation and demand profiles. This could significantly improve system reliability and reduce costs.
- Joint development in renewable energy manufacturing, such as solar panels, wind turbines, and batteries, would help lower technology costs and reduce import dependence.
- Green hydrogen is another emerging area of shared interest, given global momentum and the region’s renewable energy potential.
- Other areas like electric mobility, energy efficiency, and innovation partnerships can also deliver broad benefits if aligned with national climate and energy strategies.
- Regional platforms such as SAARC and BIMSTEC have contributed to dialogue and technical cooperation, but their overall impact on energy integration has been limited.
- SAARC, in particular, made early progress with agreements on electricity trade, yet implementation has lagged due to political sensitivities and the absence of strong institutional follow-through.
- BIMSTEC presents a newer avenue for engagement, with a focus on connectivity and economic cooperation, though its energy initiatives are still in early stages.
- To be more effective, these platforms will need stronger political backing, clearer implementation structures, and a shift toward project-driven collaboration.
- The main challenges to scaling up regional energy cooperation include policy misalignment, infrastructure gaps, financing barriers, and political sensitivities.
- Each country operates under different regulatory frameworks and pricing structures, making it difficult to coordinate cross-border initiatives.
- Physical infrastructure, such as transmission networks and grid integration, is often lacking or outdated.
- Financing remains a constraint, large transboundary projects face higher risks and require multilateral coordination.
- Overcoming these issues will require harmonized regulations, strong governance, targeted infrastructure investments, and stepwise confidence-building efforts.
- The role of neutral third-party institutions, such as multilateral development banks, can be critical in bridging political divides and providing technical and financial support.
- To attract more climate finance and private investment for regional energy projects, South Asian countries need to present a coherent, shared vision built around feasible, impactful solutions.
- Joint strategies, like cross-border renewable corridors or integrated electricity markets, signal scale and commitment, making projects more attractive to funders.
- Blended finance models and regional project preparation facilities can help reduce investment risks.
- Multilateral development banks can provide concessional financing, guarantees, and technical support.
- Harmonizing investment policies and regulatory standards across countries will further enhance investor confidence.
- Engaging climate finance institutions such as the Green Climate Fund with a unified regional approach can also unlock new funding opportunities.
- Multilateral organizations have a vital role to play in facilitating regional energy transition partnerships. They can act as neutral conveners and technical advisors, offering expertise, financing, and coordination support.
- Institutions like the ADB and World Bank can help design and fund cross-border infrastructure, align policies, and strengthen institutional capacity.
- Their involvement adds credibility and reduces perceived risk, encouraging broader stakeholder engagement.
- These organizations can also support regional data systems, knowledge-sharing platforms, and innovation hubs that make collaboration more evidence-based and inclusive.
- Ultimately, their support can help turn political ambition into implementable action.
- Regional knowledge-sharing and capacity-building platforms are essential to support policy alignment and institutional learning.
- Peer-to-peer exchanges, joint training programs, and technical dialogues can help policymakers adapt and adopt best practices in areas like renewable integration, regulatory reform, and access to climate finance.
- Platforms supported by academic and research institutions, along with digital tools such as open data portals and regional knowledge hubs, can improve transparency and help governments design more effective policies.
- Over time, such platforms can build trust and competence, allowing countries to move from isolated efforts to joint action.
- To strengthen and accelerate regional energy cooperation, countries should take pragmatic, confidence-building steps that demonstrate clear mutual benefits.
- Establishing cross-border working groups on issues like power market integration, renewables, and regulatory harmonization can provide a solid foundation for collaboration.
- Joint feasibility studies and pilot projects can offer proof of concept and build momentum.
- Financially, regional funds and co-financing mechanisms can lower early-stage risks.
- Diplomatically, regular engagement at both political and technical levels is key to navigating sensitive issues.
- Above all, high-level political commitment is needed to position energy cooperation as a strategic priority and drive sustained progress toward a more integrated, secure, and sustainable regional energy future.