There is a vast potential in Pakistan for renewable energy especially wind, solar and biogas. Despite this potential, the current RE share is very small (4% of installed capacity and 2% of power generation). Presently, the energy sector at Federal level is governed by the Ministry of Energy (Power Division) and regulated by National Electric Power Regulatory Authority (NEPRA) through the NEPRA Act, 1997 amended further by the Act of 2018. Broadly, the functions of NEPRA include grant of licenses for power generation, determination of tariffs for supply of electric power services by the generation, transmission and distribution companies and enforcement of performance standards. For renewable energy, NEPRA announced regulations for approval of upfront tariffs in 2011 and net metering regulations in 2015. To promote the investment in renewable energy sector and to shift the emphasis towards Green and Sustainable energy, the government established the Alternative Energy Development Board (AEDB) in 2003. Subsequently, AEDB Act, 2010 was passed to provide legislative coverage to the AEDB setup. The Federal Government announced Policy for Development of Renewable Energy for Power Generation 2006 (RE policy) providing incentives for development of RE for commercial (IPP based), captive and net-metering. The scope of RE policy was extended to wind, solar, small hydropower (upto 50 MW), and bio-mass/waste. Consequent to expiry of RE policy 2006 in March 2018, a new ARE policy 2019 has been floated by the Federal Government aiming to fast track the procurement of AREPs setting a target of achieving 20% capacity from ARE technologies by 2025 and 30% capacity by 2030. The provinces have raised various observations and objections to the policy in CCI. The most significant feature of the policy is the shift to competitive bidding of procurement instead of cost-plus and upfront tariffs- the schemes under which most of the existing project of RE have been established. On the policy side, so far no federal or provincial agency or department has formulated an effective implementation mechanism for policies addressing the rural electrification issues ARE Policy 2019 envisages enhancement of ARE output not only through capacity addition but also through displacement of expensive fossil energy. Small hydro-technologies have been omitted from the ambit of new policy while new technologies including synthetic gas, ocean wave energy and geo-thermal energy have been included in the scope of the policy. The 18th amendment in the constitution of Pakistan empowered the provinces to put in place provincial energy policies and regulations, develop power project and setup transmission and distribution lines for power within the province. Accordingly, the provinces established their own Energy departments. RE policy 2006 was adopted by all the provinces with minor changes and also established their respective Energy Boards. In the institutional framework, Ministry of Commerce regulates the import of renewable energy products through Import Policy and Federal Board of Revenue governs the fiscal regime. Currently, the import of renewable energy items including plant and machinery for setting up of new RE power projects is completely exempt from all duties and taxes. State Bank of Pakistan has also announced concessional financing at 6% for RE projects covering commercial projects between 1-15 MW and net-metering based initiatives upto 01 MW. Ministry of Finance, Ministry of Science and Technology, Ministry of Environment and various departments at provincial level are also part of the institutional framework for RE development. Now the question arises as to why the development of renewable energy has not taken off as per the policy goals despite the presence of an elaborated institutional framework. The following reasons and factors are worth mentioning: The foremost reason is the lack of consistency of policy and frequent policy shifts in the energy sector. In 2013, owing to a huge shortfall of nearly 5000 MW causing public unrest due to excessive load shedding, the government announced reliance on imported coal for power production. The emphasis so on shifted to Thar coal and subsequently to RLNG. Simultaneously, work was initiated on the development of nuclear power plants and Tarbela 4th extension. In this scenario, the renewable energy was not given due priority till the cost of solar and wind power production started going down substantially. The frequent changes in policies have, accordingly, created an environment of unpredictability in the investment circles. There is a structural incongruence in the power sector and the efficiency of private sector in power generation is not matched by inefficiency of transmission and distribution sector (NTDC, DISCOs). Resultantly the RE based generation plants which have inherent low plant factor (less average output due to limitation of availability of natural resources such as wind, solar energy on round the clock basis) as compared to fossil fuel based plants also become a part of the vicious cycle of circular debt. Due to haphazard planning, there has been a mushroom growth of fossil fuel based power plants which undermine the environment and produce expensive electricity. Currently, due to the sufficient installed capacity of power projects in the country (35000 MW) as against the peak demand (27000 MW), the development of new RE projects faces a serious challenge of low market demand. Therefore, it is important that energy sector planning is dovetailed with demand. The overlapping roles of federal and provincial governments and lack of synergies among them is negatively impacting the growth of RE sector. It may be noted that work on development of more than 100 new pipeline RE projects of 6547 MW capacity has not begun so far. According to Indicative Generation Capacity Expansion Plan (IGCEP) of NTDC, there are 29 bagasse based projects planned to be established by year 2023 but most of these have not seen the light of day so far. Similarly, only 75 MW is available through net-metering. At this rate, the country is most likely to miss the ambitious target of 20% capacity from ARE technologies by 2025 and 30% capacity by 2030. Moreover, the spread of projects over a long period till year 2040 in IGCEP seems unrealistic. The industry experts have expressed surprise and dismay on placement of some projects after 20 years from now on in the timeline. It may be noted that the private players in power sector of the country have been enjoying the sovereign guarantees regime, capacity payments and lucrative tariffs. The major policy shift in new ARE policy relating to competitive bidding and the resources risk to be borne by project sponsor would be unattractive for private investors who have been reaping huge profits from commercial power projects with zero risk. Despite the establishment of AEDB with the key objective of promoting and facilitating the RE sector, the process of establishment of a medium or large scale RE project involves dealing with multiple state agencies by the investors. These include Provincial Energy Departments (issuance of LOI), NEPRA (Tariff determination, generation license), AEDB (Letter of Support), CPPA (power purchase agreements), and many other departments including Provincial Board of Revenue, Irrigation Department, C&W Department etc. Despite tall claims by AEDB, currently there is no single window for establishment of RE projects in Pakistan. The process is marred by long delays and excessive red tape. On the policy side, so far no federal or provincial agency or department has formulated an effective implementation mechanism for policies addressing the rural electrification issues. Only some work for RE based electrification of off-grid villages and schools has been undertaken by Punjab Energy Department. Similarly, the huge potential of off-grid applications including nearly 250,000 electricity operated agricultural tube wells having a sanctioned load of over 2500 MW and 850,000 diesel water pumps need to be gradually shifted to RE. Pakistan has over 500,000 street lights with sanctioned load of over 400MW which offer opportunity to be replaced with efficient solar lighting. This huge potential is being tapped on a limited level mainly through imported renewable energy products (solar inverters, solar lights, etc) by private investors and individual consumers. However, there is a need to encourage local manufacturing of RE based products. They ARE 2019 policy mentions promoting indigenization of energy resources and development of local manufacturing capabilities in renewable energy equipment. However, a framework or roadmap is not laid down to achieve this objective. The State Bank of Pakistan’s scheme offering financing for Re projects at concessional rate of 6% has also not received an encouraging response from the investors. The scheme need to be made attractive and should include the micro-financing of off-grid RE initiatives. (To be concluded). The writer has done MPA from Institute of Administrative Sciences (IAS) Lahore and can be reached at saudzafar5@gmail.com