Pakistan’s climate tech industry poised for multi-billion dollar growth
Pakistan’s climate tech sector is emerging as a multi-billion-dollar opportunity, with industry experts predicting it could reach $3-4 billion in the next five years. With abundant tech talent, low deployment costs, and increasing global ESG regulations, the country is well-positioned to capitalize on this growing market. However, challenges such as regulatory hurdles and limited funding must be addressed to unlock its full potential.
Faraz Khan MBE, CEO and Partner at Spectreco, a global ESG data and tech advisory firm, emphasizes Pakistan’s potential in the climate tech sector. He highlighted that the country’s export-oriented companies are driving innovation to remain competitive amid global ESG regulations. While Pakistani climate tech is gaining international recognition, he stressed the need for fast-tracked policies on decarbonization and ESG frameworks.
“The biggest opportunity Pakistan has is to prepare businesses for climate capital and ESG-compliant capital. Our enterprises in agriculture, real estate, energy, textiles, banking, insurance, and microfinance have excelled, and now it’s about integrating data-backed technologies to align with global standards and attract investors,” Khan said.
Sara Jane Ahmed, Managing Director and Finance Advisor to the Vulnerable-Twenty (V20) Ministers of Finance, underscores Pakistan’s unique opportunity to boost its export potential by investing in sustainability. She notes that as carbon adjustments come into play and renewable energy wealth remains abundant, Pakistani export-oriented businesses can secure a competitive edge by adopting greener practices.
“The upcoming CBAM (Carbon Border Adjustment Mechanism) may risk market access or make goods quite uncompetitive,” Ahmed warned. “That said, investing in sustainability isn’t just a compliance measure—it’s a strategic move that will strengthen Pakistan’s market position and secure export markets for the future. With proactive steps toward sustainability, Pakistani businesses can improve competitiveness and thrive in a rapidly evolving international landscape.”
Climate tech and Pakistan’s challenges
Pakistan is among the most climate-vulnerable countries, facing devastating floods, changing weather patterns, and water scarcity. Climate tech startups are stepping in with solutions in renewable energy, waste management, and sustainable agriculture, but they face several barriers to growth.
Opportunities for climate tech startups
- Renewable Energy: Pakistan aims to cut emissions by 50% and achieve 60% renewable energy and 30% electric vehicle adoption by 2030. Startups in solar, wind, and hydro solutions have vast opportunities.
- Waste Management: Innovative waste-to-energy conversion and recycling technologies can mitigate environmental damage and support a circular economy.
- Sustainable Agriculture: Climate-resilient crops and precision farming techniques can enhance productivity while conserving resources.
Barriers to climate tech growth
- Limited funding: Insufficient local and international investment restricts startups from scaling their innovations. Initiatives like Climaventures are addressing this, but more financial support is needed.
- Regulatory hurdles: Inconsistent policies and bureaucratic obstacles discourage investment in sustainable ventures. The government must streamline regulations and incentivize green businesses.
- Lack of public-private partnerships: Stronger collaboration between the government, private sector, and research institutions is necessary for scaling climate tech solutions.
Support systems and initiatives
Several initiatives are fostering climate tech growth in Pakistan:
- Climaventures: A $50 million project by the National Rural Support Programme (NRSP), backed by the Green Climate Fund (GCF), aimed at attracting private investment in climate ventures.
- GreenTech Hub initiative: A NUST-led initiative supporting startups in clean energy, agritech, electric mobility, and water conservation.
- Ignite – Ministry of IT & Telecom: Focuses on fostering climate-smart solutions and green entrepreneurship.
Strategies for growth
To harness climate tech’s full potential, Pakistan must implement the following strategies:
- Enhanced funding access: Develop green bonds, venture capital, and impact investment platforms while providing grants and concessional loans.
- Regulatory reform: Simplify procedures, offer tax breaks, and introduce clear policies like feed-in tariffs for renewable energy.
- Stronger Public-Private Partnerships: Facilitate collaboration for knowledge-sharing and risk mitigation.
- Capacity building: Support training programs, mentorship, and incubation to scale climate tech ventures.
- Global collaboration: Strengthen international partnerships to enhance competitiveness and access to technology.
Climate tech startups are set to play a pivotal role in Pakistan’s sustainability transition. With innovation in renewable energy, waste management, and sustainable agriculture, they can address urgent environmental challenges while driving economic growth. However, overcoming financial and regulatory barriers is essential for long-term success.
As Faraz Khan notes, this sector has the potential to become a multi-billion-dollar industry within the next five years. By fostering investments, streamlining policies, and integrating into the global climate tech ecosystem, Pakistan can create a thriving, ESG-compliant market that attracts sustainable capital and positions itself as a leader in the climate tech space.