n early 2025, Pakistan became one of the fewer than 20 nations that generated at least 25 percent of their electric energy from solar. In 2020, solar energy had accounted for less than 3 percent of total utility electricity generation. Pakistan imported over 30 GW of solar modules in 2024 and 2025. Its more than 33 GW of distributed solar capacity is equivalent to two-thirds of Pakistan’s total installed generation capacity of 49 GW.

To date, rooftop capacity installed under a net metering policy (excluding off-grid) has surpassed 7 GW. The off-grid capacity is estimated at twice that amount. The energy transition in Pakistan is no longer a promise in a policy document like NDC 3.0 or a hypothetical question; it is a structural shift already under way, driven largely by consumers rather than the governments.

The relevant policy question is, therefore, no longer whether Pakistan will transition, but how the costs and benefits of that transition will be distributed: who pays, who gains and who is protected during the adjustment. The current institutional evidence shows that the distribution is skewed. Adjustment costs are borne by consumers and workers and the frameworks that could protect them are absent from energy planning.

Consider the labour market into which this transformation is landing. The Labour Force Survey 2024-25 records a workforce of 85.6 million, of whom 80.8 percent, roughly 69 million people, work informally - without written contracts, minimum wages, access to social protection or legal recourse when employment ends. Female labour force participation stands at 24.4 percent, among the lowest in South Asia. Of the country’s 33.6 million wage and salaried employees, only 5.8 percent (fewer than two million workers) belong to a trade union or association. This is the institutional base from which workers are expected to negotiate the largest economic restructuring in a generation.

The Indicative Generation Capacity Expansion Plan 2025-35 determines which power plants are to be developed and which are to be closed or retired over the next decade. Its consultation list names the Power Division, the regulator (NEPRA), market operators (DISCOS), the Special Investment Facilitation Council and a university institute. It includes no trade union and no workers’ body; not even the Ministry of Overseas Pakistanis and Human Resource Development, nominally responsible for labour issues. The plan schedules 2,577 MW of thermal retirements but contains no employment impact assessment or worker transition framework.

The exclusion of workers and their representatives from decision-making reflects the energy sector’s institutional design rather than oversight. Pakistan’s power sector was strengthened in the 1990s around a single organising principle: attract private capital by shielding investors from risk through dollar-indexed returns and guaranteed capacity payments. The costs were passed on to consumers and the public balance sheet as circular debt. The power sector’s circular debt, Rs 1.84 trillion by February 2026, is the fiscal legacy of that model.

In this framework, workers are seen only as an operating cost, not as stakeholders with any standing in the decision-making process. Five legacy IPP contracts were terminated in October 2024; public thermal plants are under review for privatisation, leasing or closure; and the distribution companies, which employ over 100,000 workers, are on the privatisation agenda. Each of these decisions impacts tens of thousands of livelihoods, yet each is treated as a tariff-and-debt question, with “employee-related social considerations” left for later.

The legal framework exacerbates the governance gap. In January 2025, the federal government invoked the Essential Services (Maintenance) Act, 1952, to ban trade union activity across the electricity sector by declaring it an essential service. The ILO’s supervisory bodies have long held this law incompatible with Conventions 87 and 98, which Pakistan ratified in the 1950s. The National Industrial Relations Commission suspended the order in March 2025, holding that it potentially violated fundamental constitutional rights. Still, the statute remains in force and can be applied in future. The de jure right to organise exists, but the de facto right to organize can be suspended at administrative discretion precisely when contested reforms, such as DISCO privatisation are pursued.

By global standards, Pakistan is not a major coal employer, but coal matters deeply in the few places where coal jobs and supply chains are concentrated. Five Thar coal IPPs supply 3,300 MW and Shanghai Electric alone reports directly employing around 7,000 Pakistani workers in its Thar operations. Other than Thar’s mechanised open-pit mines, coal mining in Balochistan, Punjab’s Salt Range and Sindh remains labour-intensive, employing workers with few alternative livelihoods in coal towns like Duki. Even the modest thermal retirements already scheduled will have significant localised effects on power sector workers, contractors and the surrounding service economy. Pakistan currently has no dedicated transition instrument to manage these effects: no wage insurance, no structured redeployment mechanism and no regional diversification compact.

The same issue exists on a larger scale in the distribution companies. In the 2026 FES report on Just Energy Transition, trade union interviewees report that roughly 80 percent of the workforce across energy sector workplaces is now engaged through third-party contractors. These workers service the grid but have no formal employment relationship with the entities being restructured and will not appear on any severance list when a DISCO is privatised. A transition that converts formal, unionised, pensionable employment into informal, contracted, unprotected work does not meet the ILO’s definition of a just transition.

The most ambitious policy scenario

The rooftop solar boom is already generating demand for electricians, installers, inverter technicians, battery vendors and after-sales workers well beyond what official data captures.

The quality of newly created employment opportunities in the renewable sector is a policy concern. Around three-quarters of the projected jobs are semi-skilled or unskilled. One in five renewable-energy workers is part-time. Small rooftop firms retain only sales staff while assembling temporary or “floating” technical teams on a project-by-project basis. More than 80 percent of renewable energy companies provide in-house training to address gaps in the public TVET system. The training capacity is concentrated in the Punjab, leaving other regions less equipped to supply the necessary workforce. The Pakistan Bureau of Statistics does not yet classify green jobs, so this entire workforce remains statistically invisible to policy and social protection systems.

The problem is not a lack of principles or policy intent, but a lack of institutions to enforce them. Pakistan’s NDC 3.0 already commits to sector-specific just transition plans, employment-impact assessments and the involvement of unions and worker groups in decision-making. Six measures can turn these commitments into practice.

First, legislate a statutory National Just Transition Commission. Germany managed its coal phase-out through a Coal Commission, in which relevant stakeholders such as the government, employers, unions, scientists and affected regions negotiated both the phase-out timetable and the compensation package for the region and workers. Spain wrote just transition into its 2021 climate law and mandated five-year territorial agreements between the state, regions, unions and municipalities, administered by a dedicated Just Transition Institute with its own budget and staff.

Building on the Parliamentary Forum on Energy and Economy and the Federal and Provincial Tripartite Consultative Committees (established under ILO Convention 144), Pakistan should create a statutory National Just Transition Commission to review transition decisions. The parliament and provincial legislatures should legislate just-transition guarantees rather than leave them to administrative discretion. Punjab Labour Code 2026 expands the scope of tripartite consultation to include issues of employment and unemployment in the province and provides a statutory basis for the consultative committee.

Provinces should establish Provincial Just Transition Committees linked to existing tripartite labour forums. These committees should prepare district-level transition plans for areas exposed to coal, thermal power, transport electrification, renewable energy expansion and climate stress. Thar needs one kind of plan; Balochistan’s mining districts another; thermal power regions yet another. Labour Departments should also strengthen inspections in emerging green sectors. Labour legislation and its protections need to be extended to the informal sector. The Punjab Labour Code 2026, applicable to all workers across all workplaces and sectors, is a good start.

Second, make a labour impact assessment a legal pre-condition for every major energy sector decision. No plant retirement, DISCO privatisation, IPP renegotiation or procurement round above a defined threshold should proceed without a published assessment of direct, indirect and induced employment effects, disaggregated by gender, contract status and district, together with a mitigation plan approved before the decision is finalised. Vietnam has developed a workable labour force projection methodology as part of its energy transition programme. Pakistan can do the same.

Third, establish and finance a National Just Transition Fund. Financed through employer levies on fossil-fuel-intensive employers, a modest transition charge on electricity use and grant-based international climate finance, the Fund should cover income support, retraining, relocation assistance, early retirement aligned with the National Electricity Policy’s employee-protection clause and economic diversification in coal- and thermal-dependent districts. Tripartite governance, with workers, employers and provinces represented, is necessary to ensure resources reach displaced workers.

Fourth, attach labour conditionalities to public and international support. If Pakistan could guarantee returns for independent power producers for three decades, it can also make decent work a condition for the support now being given to the renewable energy sector. Tariff guarantees and public procurement should be conditional on written contracts, social security and EOBI registration, safety standards, freedom of association and apprenticeship and gender-based hiring targets. The same logic applies to international finance. Public money should not be used to promote labour market informality.

Fifth, count the workers. PBS should introduce a green-jobs classification into the Labour Force Survey. The NEPRA, the Power Division and Energy Departments should be required to publish plain-language transition briefs, sex-disaggregated labour data in the energy sector and plant-level restructuring notices. Workers cannot bargain over decisions that are kept hidden and policymakers cannot plan for a workforce they do not measure.

Finally, the unions must organise the new workforce. The rooftop solar installer on a temporary team, the EV mechanic in a workshop and the battery vendor in a local market operate outside traditional organising channels. Trade unions need to map where green work actually happens; organise sectorally rather than workplace-by-workplace; recruit through services such as legal aid, accident-claim support and certification assistance; and build participation models that women can use safely. The Punjab Labour Code 2026, extending the right to organise to informal and self-employed workers, has opened a legal avenue that the labour movement has yet to use.

Article 9A of the constitution recognises every citizen’s right to a clean and healthy environment; read together with the rights to association, equality and dignified working conditions, it establishes that environmental and labour objectives carry equal constitutional weight. Pakistan can make the energy transition a virtuous cycle: cheaper and cleaner energy; better jobs; stronger social protection; women’s inclusion; safer workplaces; and a more resilient economy. Or it can create a “green” version of the old exploitative and informal economy.

The writer is the founder of the Centre for Labour Research,

Pakistan. He was part of the core drafting team for the Punjab and Sindh Labour Codes.

He can be reached at [email protected]