Pakistan's potential path to becoming an energy transit state
Doha
At the crossroads of strategic ambition and regional complexity lies Pakistan's untapped potential to emerge as a critical energy transit state—linking the hydrocarbon-rich Gulf and Central Asian states with the energy-hungry economies of South and East Asia.
In its latest Energy Research Paper, the Al-Attiyah Foundation delves into Pakistan's efforts to harness its geographical advantage, analysing over US$ 35 billion in energy investments from China, Saudi Arabia, the UAE, and Qatar, as well as major transnational projects like the Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI), Central Asia–South Asia Electricity Transmission and Trade Project (CASA-1000) and the China-Pakistan Economic Corridor (CPEC).
The analysis reveals a complex web of opportunity and vulnerability. CPEC, a project that involves upgrading roads, railways, and energy infrastructure to facilitate trade and transportation between the Pakistan and China, has delivered over 13 GW of power capacity through coal, hydro, solar, and wind projects.
However, it has also contributed to Pakistan's US$ 1.4 billion in unpaid energy debts and drawn security risks—including militant attacks on Chinese workers between 2021 and 2024. Qatar's US$ 15 billion LNG agreement addressed Pakistan's gas deficit but has become a financial strain amid declining domestic energy demand and currency depreciation.
Meanwhile, instability in Afghanistan threatens to derail the US$ 7.7 billion TAPI pipeline and the US$ 1.16 billion CASA-1000 transmission line, both of which are critical to Pakistan's regional integration and energy diversification.
Despite these challenges, serious momentum is building. Pakistan's domestic energy system remains under strain, with over 60% of demand met by imported fossil fuels and widespread transmission losses weakening grid reliability. Yet a shift is underway. Solar and wind energy now account for 10% of installed capacity, and the government has pledged to reach 60% clean energy by 2030, including targets to electrify 30% of road transport.
Meeting this goal will require 22 GW of new renewable capacity, competitive procurement, and grid modernisation.
However, persistent fiscal stress, climate vulnerability, and geopolitical friction continue to test Pakistan's credibility as a stable energy partner in the region.
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