• Afghanistan
  • Bangladesh
  • Bhutan
  • India
  • Maldives
  • Nepal
  • Pakistan
  • Sri Lanka
    • Energy Scenario

    State of Energy Transition in South Asia

    - held on 26thNov 2025

    Energy Transition Platform South Asia conducted a webinar titled “State of Energy Transition in South Asia” on 26th November 2025 highlighting how global commitments are translating into national actions—highlighting key progress, persisting challenges, and emerging opportunities for building a just, inclusive, and resilient clean-energy future across the region – Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka.

    Over the past year, the region has made steady but uneven progress – India has crossed 50% renewable installed capacity, Bangladesh and Nepal are expanding cross-border electricity trade, Bhutan and Maldives are deepening resilient energy planning, while Pakistan has set ambitious 2030 clean energy targets. Experts reflected on policy shifts, sectoral progress, and lessons on balancing clean energy transition with access, affordability, and inclusion

    Panel Discussion:

    Moderated by: Rini Dutt, Associate Director – Climate Policy and Director – Strategic Engagement and Partnerships, Vasudha Foundation

    • Alias Wardak, ONAI Climate Change Studies Organization for Afghanistan, Afghanistan
    • Sohel Ahmed, Chief Executive, WePOWER, BNC (a forum of World Bank), Bangladesh
    • Lam Dorji, Centre for Environment and Development, Bhutan
    • Vrinda Gupta, Associate Director – Energy Transition and Director Strategy and Innovations, Vasudha Foundation, India
    • Sambaddha Pradhan, Practical Action Nepal
    • Ejaz Ahmad, Executive Director of the Institute of Urbanism, Pakistan
    • Jayantha Gunasekera, Janathakshan, Sri Lanka

    Key Highlights:

    Bangladesh:

    • Background:
      • Facing energy access issue (generates 25% of electricity) and imports electricity to meet electricity needs (>75% from Iran).
      • Has huge potential in terms of hydro and wind (68 GW).
    • Opportunities:
      • Afghanistan is the main linkage between central and South Asian countries so is geographically strategic. Pipeline infrastructure in discussion –
        • The Central Asia-South Asia Electricity Transmission and Trade Project (CASA-1000), a $1.2 billion regional power project, designed to bring the benefits of interconnectivity to four countries Kyrgyz Republic, Tajikistan, Afghanistan and Pakistan (resumed in 2024 after a brief pause in 2021).
        • Turkmenistan–Afghanistan–Pakistan–India (TAPI) natural gas pipeline having been in discussion for 40 years is still not functional.
      • There have been ongoing projects like United Nations Development Programme’s (UNDP), Sustainable Energy Services for Education and Health in Afghanistan (SESEHA) project, is bringing solar power to hospitals, clinics, and schools across the country.
      • Since 2023, there has been growing interest from private sector.
        • Turkish company, 77 Insaat , expressed interest in investing in power-producing projects including a wind-generating endeavor that could produce 200 megawatts of electricity in Afghanistan.
        • Afghanistan has started building a 40 MW solar project, with completion expected within 18 months. The $28 million facility includes a 126 MVA substation and transmission line extension costing $7.6 million. Once operational, the solar plant will supply electricity to 40,000 households and the Mohammad Agha Industrial Park.
        • $10 billion energy infrastructure project with Azizi Energy was launched in August 2025. The MOU signed details a phased construction of energy facilities, starting with a 200-megawatt solar plant in Kabul, slated to be operational in eight months. The project intends to produce 10,000 megawatts of power using a combination of solar, wind, hydro, gas, and coal. Of this, 4,000 megawatts will meet household demand and the remaining 6,000 will support industrial activity.
    • Progress: There has been a 5-35% increase in electricity connection rate.
    • Challenges:
      • The non-recognition of the current regime and sanctions led to Afghanistan being excluded from international forums like the recently held COP 30.
      • Isolation is leading to increase in poverty, shrinking economy.
      • Institutional capacity is worsening due to brain drain and stagnation.
    Bangladesh:
    • Progress:
      • Energy access in Bangladesh has improved significantly – 20% in 2000 to 85% now.
      • Is being known as Land of Solar Home Systems: 6.3 million.
    • Updated National RE Targets: 20% by 2030 (6,145 MW), 30% by 2040 (17,470) (RE: Policy, 2025)
    • Key Measure:
      • Fiscal Incentives: 10-year tax benefit to encourage investments in renewable energy-based power facilities (starting 1st July 2025) at the following exemption rates: – 100% for 10 years from the date of commercial production; – 50% for the next 3 years; and – 25% for the following 2 years.
      • Regulatory Incentives: Introduced Renewable Purchase Obligations (RPOs) in the new RE Policy will require large electricity consumers to buy a specific portion of their power from renewable sources; Updated Net Metering Guidelines 2025 which has expanded eligibility by including single-phase consumers (like residential users) and those with prepaid/smart meters.
      • Technical & Infrastructure Improvements: Pushing for grid upgradation: ADB and AIIB has provided financing for Dhaka and Western Zone Transmission Grid Expansion Project.
      • Investor Confidence Measures
    • Major Challenges:
      • Shaky geopolitical situation in South and Southeast Asia, so cannot depend on trade
      • Slow implementation of RE (3.6-5.7%, 1.6 GW),
      • Financing Shortfall (USD 933-980 million per year till 2030),
      • Inconsistent policy implementation
    • Opportunities:
      • International concessional funds, GCF, L&D Fund, PPP models, Regional power trading
      • Immediate measures:
        • National Rooftop Solar Programme 2025- 3,000 MW, tenders issued totalling ~72.5 MW, 12,000 MW of captive rooftop solar by 2040
    • Just Transition:
      • The recent NDC (3.0, 2025) formally embeds a “Just Transition” chapter – making Bangladesh one of the first in Asia to do so.
        • Key Measure: Just Transition Framework & Sectoral Roadmaps, Social Dialogue & Stakeholder Participation, Skills Development & Green Job creation, Gender & Social Inclusion, Protection of Vulnerable Groups.
        • Major Projects: GIZ-Skills Development/Policy Advisory on Sustainable Energy, Establishment of Bangladesh National Chapter of WePOWER.
    Bhutan:
    • Background:
      • Bhutan is an already carbon negative country.
      • Dependent majorly on hydropower (98%) [1020 MW of Hydropower] but intends to diversify ease export dependence on economy and intermittent seasonal impacts on hydropower.
      • Development philosophy is of Gross National Happiness – one of the 4 pillars is Environment.
        • Large carbon sink
        • In its latest 5 year-plan aims for 75% of forest conservation.
      • The only reason of import of fossil fuels is mostly to power the transport sector – in 2024, 268,000 kilolitres of fuel was imported.
      • In terms of energy demand and consumption:
        • Industry – 88%
        • Transport – 28%
        • Buildings – 12%
    • Progress and Interventions:
      • Energy audits are being undertaken to improve industrial energy efficiency.
      • Gelephu Mindfulness City aims to improve people’s lives by living in harmony with nature. One of its development roadmaps is to serve as a hub for sustainable innovation, with a focus on renewable energy, such as hydropower, solar, geothermal, and emerging green technologies.
      • Bhutan’s recently released National Energy Policy 2025 aims to achieve a total installed capacity of 25,000 MW by 2040:
        • 15,000 MW from hydropower
        • 5,000 MW from solar energy
        • 5,000 MW from wind, geothermal, biomass, and other complementary renewables.
    • Challenges:
      • Though, companies are investing in setting up solar energy infrastructure, development of large-scale non-hydro and storage systems is still constrained financially.
    India:
    • Overview of India’s electricity capacity mix – Meeting the Paris Agreement Pledge:
      • Fossil fuel decline: The combined share of coal and gas declined from 69% to 48%, while renewables rose from 29% to 50%, enabling India to achieve its 50% non-fossil fuel capacity target under its NDCs five years ahead of the 2030 goal.
      • Solar takes center stage: Share rose from 2% to 26%, making solar the second-largest source after coal and the fastest-growing in the mix.
      • Surge in solar additions: Solar consistently led new capacity, highest addition at 24 GW in 2024-25, far outpacing coal additions throughout the decade.
      • Notably, In CY 2025, added 40 GW in just 10 months, thus, gearing up to meet towards it 50 GW/year target till 2030.
    • A structural shift in India’s power mix:
      • There has been a rise in solar generation share in meeting peak demand from 6% in 2019 to 17% in 2025.
      • The percentage of Invertor-based Resources capacity has increased from 12% in 2015 to over 53% as of September 2025, underscoring a structural shift in India’s power mix.
      • Higher shares of renewable energy is meeting real-time demand.
    • Mainstreaming Clean Energy:
      • PM Surya Ghar: Muft Bijli Yojana – 2.2 million households have rooftop solar
      • PM UJJWALA – 330 million LPG connections for cooking
      • PM KUSUM – 1 million solar pumpsets
      • PM E-DRIVE Scheme – 7 million electric vehicles
      • 460 industrial units identified first compliance-based carbon market
    • In line with clean unified national vision, sub-nationally too, states and union territories have come up with their respective clean energy targets.
    • Challenges:
      • Storage is still nascent and more expensive than other fuels.
    Nepal:
    • Background and target:
      • Nepal’s NDC 3.0 aims to:
        • reduce net greenhouse gas emissions by 17.12% by 2030 and 26.79% by 2035, compared to a business-as-usual scenario.
        • Expand renewable electricity generation capacity to 14,031 MW by 2030 and 28,500 MW by 2035, including 10% by 2030 and 15% by 2035 from mini and micro-hydro power, solar, wind power and bio-energy.
        • Specific sectoral targets include achieving 95% of private vehicles as battery-electric by 2035 and maintaining at least 46% forest cover.
        • Nepal’s Solar Thermal Roadmap (part of NDC 3.0) aims to expand solar thermal installations to 1,354 MW-thermal (MWth) in households by 2035.
        • By 2030 and 2035, increase sales of battery electric vehicles (BEVs) to 90% and 95% for all private passenger vehicles (including 2-wheelers), and to 70% and 90% for all public passenger vehicles respectively.
    • Key Intervention/Progress:
      • Rooftop solar has gained prominence due to price reductions and its feasibility for industries.
      • Nepal introduced government-support mechanisms like generation-based incentives to incorporate solar in the energy mix.
      • Other initiatives include streamlining of net metering policy to resolve discrepancies, lower tariffs for battery storage, and multiple projects/programmes supporting renewable energy expansion.
      • There are trade agreements with India and Bangladesh to export surplus energy, beneficial for revenue but requiring domestic balancing.
    • Challenges:
      • 60% of e-mobility is imported.
      • Transmission networks are outdated.
      • Seasonal energy deficit, especially during dry season, requiring energy imports.
    Pakistan:
    • RE Targets:
      • 60% of electricity from renewable sources by 2030
      • GHG emissions: 585.08 MtCO2e – 2024 (NDC 2025)
    • Current status:
      • Total installed capacity: 43,721 MW
      • Total RE capacity: 20,312 MW (46%)
    • Key Interventions:
      • Financial: Industries are focusing on solar power generation.
      • Payback period has fallen to 8 to 10 years.
      • Loans are provided by multilateral development banks for grid modernisation.
    • Challenges:
      • 20–30 million people without electricity access.
      • Surplus installed capacity yet load-shedding persists due to outdated grids.
      • High T&D losses, weak recoveries across sectors, and heavy subsidy burden.
      • Net-metering has induced aggravation in demand and supply imbalance.
      • Women are not part of planning.
    Sri Lanka:
    • Target and Background:
      • NDC 3.0 outlines strategies to:
        • Reduce cumulative GHG emissions by 20.09% (8.11% unconditionally and 11.98% conditionally).
        • Increase net carbon removal by 4.49% (0.96% unconditionally and 3.53% conditionally) compared to the BAU scenario over ten years.
      • Achieved 100% household electrification long ago.
      • Growth rate of 5% per annum due to industry expansion.
    • Progress:
      • In 2024, 408 MW of solar was added; rooftop solar saw a 7% increase in power produced and purchased by the state utility.
      • Overall, the solar target is achievable, with a potential of 16,000 MW.
    • Policies:
      • The government is unbundling its state utility company into transmission, distribution, and generation entities to improve cost-effectiveness and accountability.
      • The government reduced the target price paid to solar energy producers — criticized by some, but considered acceptable as lower investment reduces losses in new technology.
      • Green Bonds: ~USD 60 million raised in 2 years, showing strong investment progress.
      • Wind mill installation faced challenges in one area due to concerns about impacting migrant birds.
    • Challenges:
      • In Sri Lanka’s energy transition journey, two major pressures:
        • It has committed to become carbon-neutral by 2040, requiring a 70% reduction in emissions.
        • The country declared bankruptcy in 2022 and is still reviving its economy.
      • Efforts toward clean energy are mostly focused on the electricity sector; progress in the transport sector is still limited.