China’s green investment in Pakistan: Solar dreams, debt shadows, and the politics of a rapid transition

Can China choose a different path than the West? 

Originally published on Global Voices

This article was submitted as part of the Global Voices Climate Justice fellowship, which pairs journalists from Sinophone and Global Majority countries to investigate the effects of Chinese development projects abroad. Find more stories here.

Since 2023, Pakistan has faced severe annual heatwaves that have caused the national energy grid to collapse repeatedly. This, combined with rising electricity tariffs and repeated outages, has forced households and small businesses to turn to the only reliable source of power they have left: the sun. 

Pakistan’s solar sector has expanded at a staggering rate. In the 2024 fiscal year alone, the country imported 16 gigawatts of solar panels from China,  more than triple the 4.9 GW imported the year before. By mid-2025, cumulative imports had reached roughly 36 GW — a volume that now amounts to about three-quarters of Pakistan’s total installed power-generation capacity. This surge has turned rooftop and small-scale solar into one of the fastest-growing sources of electricity in the country.

This solar explosion captured global attention. It was hailed by some as evidence that South Asia could leapfrog into a renewable future. But beneath the optimism lies a more complex story — one that reveals how China’s expanding role in Pakistan’s energy sector sits at the intersection of climate vulnerability, financial fragility, and geopolitical ambition.

“Green CPEC” and the remaking of Pakistan’s energy map

Under the China–Pakistan Economic Corridor (CPEC), Beijing has helped develop a broad mix of energy projects, ranging from the Karot Hydropower Project to the Quaid-e-Azam Solar Park and the Dawood Wind Farm. Coal has also played a significant role. Of the 21 CPEC energy projects, including those still in development, eight are coal-fired plants, reflecting Pakistan’s long-standing effort to address severe electricity shortages through projects that could be built quickly and operated at scale.

Coal occupies an uneasy place in Pakistan’s energy landscape. Environmental groups warn that expanding coal mining and power generation deepens carbon dependence, worsens pollution, and threatens vulnerable communities, with studies showing that long-term reliance risks locking the country into a high-carbon pathway. Yet coal’s persistence reflects material constraints: Pakistan holds one of the world’s largest lignite reserves, offering a domestic alternative to costly fuel imports during recurring power shortages and periods of fiscal stress. Some domestic energy experts argue that, with strong regulation, modern technology, and community safeguards, local coal can serve as a reliable backbone while Pakistan builds toward a cleaner energy future. 

This debate captures the central dilemma of the country with weak economic stability, like Pakistan, and its energy trilemma, where security, affordability, and sustainability often pull in different directions.

This is where the contradiction in China’s energy footprint in Pakistan becomes impossible to ignore. Beijing presents itself as a global leader in renewable technology and increasingly frames its overseas investments as part of a global green transition, yet some of its most influential projects in Pakistan were built on coal — the very fuel it now urges the world to move beyond. The result is a dual legacy: China is simultaneously the country enabling Pakistan’s solar boom and the country whose earlier coal investments continue to shape the power system’s financial and environmental burdens. This is the uncomfortable contradiction at the center of the so-called “Green CPEC”: China’s green technology is enabling a transition, but China’s earlier coal-heavy investments restrict the government’s ability to deepen that transition.

This tension sets the stage for the narrative now promoted by both governments to take action. In recent years, Chinese and Pakistani officials have rebranded this infrastructure shift as “Green CPEC.” The messaging suggests an evolutionary turn from coal-oriented development to a low-carbon partnership.

On paper, this turn aligns with climate justice principles: improving access to clean energy, lowering generation costs, and reducing dependence on imported fossil fuels.

In practice, the picture is more complicated.

Chinese solar: Liberation and dependency in one package

The spread of inexpensive Chinese solar panels has been transformative for the Global South, Pakistan included. Villages that endured hours-long blackouts can now run fans, pumps, and small appliances. Urban households can survive heatwaves without relying solely on an unstable grid. Mosques, farms, schools, and even wedding dowries now include Chinese-made panels.

Solar has become both a survival mechanism and a status symbol.

But this shift exposes deeper structural issues. Because Pakistan lacks domestic manufacturing capacity, every solar expansion increases its dependence on imports. Currency depreciation instantly raises costs. A 10 percent tax placed on solar panels in 2024 to protect grid revenue did little to slow demand, yet it underlined a fiscal dilemma: the more people turn to rooftop solar, the more revenue the grid loses.

As rooftop solar spreads across Pakistan, its effect on the national grid has become a point of real contention. Analysts warn that rising self-generation could shrink utility revenue, citing projections that net-metered systems may eventually displace billions of kilowatt-hours of grid sales. Yet officials tell a different story: despite a 173 percent jump in net-metering output last year, the Central Power Purchasing Agency says most solar households still draw roughly the same amount of electricity from the grid during evenings and cloudy months, meaning revenue losses have not yet fully materialized. Solar is already changing consumption patterns, but the financial consequences remain uneven, contested, and deeply tied to tariff design, seasonal variation, and the pace of adoption. 

The solar–battery wave and a changing social landscape

A second wave is now underway: affordable Chinese lithium batteries are flooding into Pakistan’s markets. Roughly 68 percent more lithium batteries were exported to Pakistan from China in the first six months of 2025 than during all of 2024, allowing households to store solar electricity for nighttime use. For many families, this is the first time they have enjoyed uninterrupted power.

Energy access is no longer something only the state provides; it is something people build for themselves. This grassroots electrification, enabled almost entirely by Chinese hardware, has shifted the social meaning of energy in Pakistan.

And yet inequality persists. The poorer households, even the urban middle class, cannot afford rooftop systems even when prices fall. Without targeted financing or subsidies, solar becomes a privilege rather than a right. 

Pakistan has pledged to generate 60 percent of its electricity from renewable sources by 2030. As of 2023, it had reached 40 percent, including nuclear power, and 26 percent without it, according to Ember. The rapid spread of solar-battery systems offers a potential shortcut toward meeting that goal, often moving faster than large hydropower or wind projects that are frequently slowed by financing gaps, land conflicts, and political delays.

Yet this shift is unfolding with almost no regulatory scaffolding. Pakistan has no national standards for battery installation, storage, or fire safety, and no clear framework for integrating small solar-battery systems into the national grid. There is also no policy for handling the coming wave of e-waste, whether from expired lithium batteries or discarded solar panels, which could create severe environmental and public-health risks if left unmanaged. Much of the transition is being improvised by households and businesses acting out of necessity rather than guided by coherent policy, leaving the green surge both promising and precarious at the same time.

China’s geopolitical bet: Setting the technical standards

Beyond Pakistan, China has a broader ambition: to set the technical and operational standards for energy systems across the Global South. If grids, meters, turbines, storage systems, and digital monitoring platforms are built around Chinese technologies, switching to alternatives becomes costly.

This is not unusual. Western powers have shaped global standards for decades. But it raises critical justice questions for South Asia. Will China’s model allow local industries to grow? Will knowledge transfer accompany hardware? Or will countries be trapped in yet another cycle of technological dependency?

Can China choose a different path than the West? 

China now faces a strategic choice in Pakistan. It can continue with the existing approach of high-volume equipment exports, project-by-project financing, and contract terms that safeguard investors but often strain Pakistan’s public finances or create inequality. Or it can move toward a model that aligns more closely with climate-justice principles: restructuring legacy coal contracts to ease fiscal pressure, supporting local manufacturing of solar components, and helping design regionally integrated grids that reduce Pakistan’s dependence on volatile fuel imports. Such a shift would also mean prioritising infrastructure resilient to heatwaves and floods to cope with the country’s most acute climate threats and expanding concessional climate finance in ways that do not deepen existing debt burdens.

These shifts would not only stabilize Pakistan’s transition but also demonstrate a model of Global South–South cooperation that is not extractive.