Energy sectors worldwide are undergoing rapid transformations towards a more sustainable and low-carbon pathway utilising renewable resources. In light of the finite nature of natural resources, exponential increases of Pakistan’s population and high vulnerability to experiencing floods and droughts as a result of climate change, the adoption of renewable energy technologies will not only present a more future-oriented technology choice but is an necessity to ensure sufficient energy supply for Pakistan for the years to come.

In addition renewable energy choices are a promising way for expanding access to electricity to a larger part of the population that lives in very remote areas without access to the electricity grid. To bolster this transformation process and to build renewable energy markets the right policy mix will be required to promote employment intensive investments and market oriented skills development. The German Bank for Development is heavily engaged in the field of renewable energy in Pakistan and also in the financing sector. Additional funding is made available by the German Government to specifically support TVET.

The KfW is new to the field of TVET in Pakstan. Hence, the KfW commissioned a pre-feasibility study to investigate avenues for TVET investments to implement a 9.8 million EUR (grant). Unfortunately, the pre-feasibility study did not conduct a comprehensive labour market assessment to understand labour market dynamics in the broader macro-economic context to guide planned project interventions but rather focused on understanding the current TVET system in itself, with its challenges and opportunities. The pre-feasibility study suggested a focus on Solar PV and Micro-hydro sub-sectors for planned TVET interventions in Pakistan. Translating the recommendations of the pre-feasibility study into more concrete actions required carrying out a more comprehensive labour market assessment as part of the actual feasibility-study.

This assessment aims to understand skills development challenges, specifically related to solar PV and micro-hydro from the labour market and market perspective in a much more holistic way. Hence, a team of two senior labour economists, with a good understanding of the labour market in Pakistan were engaged for carrying out the analysis of Pakistan’s Labour Market aimed at informing the envisaged establishment of the renewable energy TVET hubs in Solar PV and Micro-hydro. This report explains the assessment methodology, provides comprehensive analysis of quantitative and qualitative market evidence and suggests some avenues for the planned KfW TVET investments. It sheds light on the actual state of the renewable energy market in Pakistan, specifically the solar PV and micro-hydro-power subsectors, provides an overview of general labour market trends, technical skills available in the labour force and the demand for employable skills and labour as well as the employment conditions offered.