International Journal of Foreign Trade and International Business Upgradation

The Impact of Chinese Investment on Pakistan's Infrastructure in the Renewable Energy Sector

Noor Usman¹

1. ¹

Abstract

Making the shift to renewable energy is a pressing concern for developing nations aiming to alleviate energy poverty, climate change, and sustainable economic growth. In Pakistan, a nation grappling with persistent energy shortages and dependence on imported fossil fuels, foreign investment has become a growing solution to address infrastructure challenges and gaps. In this context, one of China's flagship projects under the Belt and Road Initiative (BRI), China–Pakistan Economic Corridor (CPEC), has become a key initiative for infrastructure development in Pakistan. This paper explores the impact of Chinese investment on Pakistan's renewable energy sector, covering various aspects such as the development, integration, and sustainability of renewable energy infrastructure projects. It is a mixed-methods approach, focusing on quantitative analyses of energy capacity trends and investment costs from 2014 to 2024, and qualitative policy analysis and case studies of the major renewable energy projects like Quaid-e-Azam Solar Park, and Jhimpir Wind Corridor. This analytical framework is based on theory related to Foreign Direct Investment (FDI), Energy Transition Theory, and Sustainable Development Theory. The results show that Chinese infrastructure investment has been an important enabling factor for the development of renewable energy in Pakistan, especially in strengthening the transmission grid, transport infrastructure, and integration with the grid. Some of the study's insights are the key challenges of financial pressures in the power sector, governance and transparency issues, institutional fragmentation and environmental and land use risks. Recommendations are made to increase the sustainability and developmental benefits of these investments in the long term.

Keywords: China–Pakistan Economic Corridor (CPEC)Renewable Energy DevelopmentInfrastructure InvestmentEnergy TransitionForeign Direct InvestmentPakistan

How to cite

Licensed under CC BY 4.0.