UNDP presents project to govt: Idea floated for scalable ‘behind-the-meter’ storage market
ISLAMABAD: The United Nations Development Programme (UNDP) has presented a project to the Government of Pakistan aimed at establishing a scalable market for behind-the-meter electricity storage to improve grid flexibility and provide clean, reliable industrial heat for small and medium enterprises (SMEs).
The project, titled “SHIFT-GridFlex Pakistan – Behind-the-Meter Thermal Storage for Grid Flexibility and Clean Industrial Heat,” will be implemented with consortium partners Green Growth Consultants (Pvt.) Ltd. (GGC), iTerra Volt (Pvt.) Ltd., and AZM Foundation.
According to a concept paper prepared by UNDP, the initiative will be supported under Germany’s International Climate Initiative (IKI), which fulfils part of Germany’s financial commitments under the United Nations Framework Convention on Climate Change (UNFCCC), the Paris Agreement, and the Convention on Biological Diversity (CBD) through the Kunming-Montreal Global Biodiversity Framework (GBF).
IKI serves as a key instrument for Germany’s international climate finance, supporting climate mitigation, adaptation and biodiversity conservation in emerging and developing countries.
Through its IKI Large Grants funding instrument, the initiative supports large-scale projects capable of driving systemic change at global, regional, national and sub-national levels.
In the concept paper, UNDP Pakistan Resident Representative Samuel Rizk noted that Pakistan’s rapid expansion of behind-the-meter solar photovoltaic (PV) systems in commercial and industrial sectors is creating new grid dynamics.
Midday electricity surpluses at consumer level increasingly coincide with evening peak demand stress, voltage constraints and frequent load shedding.
For SMEs operating in emission-intensive sectors such as textiles, rice processing and food production, outages and fuel price volatility disrupt operations and push firms toward diesel generators or fossil-fuel boilers for process heat.
Process heat is among the most difficult segments to decarbonise in these industries, while electrification is constrained by reliability concerns and the high cost of conventional storage systems.
According to UNDP, the key barriers include not only technology costs but also perceived performance risks, credit risks and the absence of investable aggregation structures that could attract domestic banks once early deployments demonstrate reliability.
The project aims to establish a scalable market for behind-the-meter electricity storage capable of enhancing grid flexibility while enabling clean industrial heat solutions for SMEs.
ThermoVolt thermal storage technology will function as a behind-the-meter storage and flexibility resource. Charging will absorb midday solar or off-peak electricity and reduce peak demand, while discharge will provide dispatchable heat independent of grid events, ensuring production continuity during outages.
Key performance indicators will be tracked through metered data, including electricity charged during solar or off-peak windows, peak demand reduction, outage heat-continuity hours, fossil fuel heat displaced and associated carbon dioxide emission reductions.
A key component of the initiative is the proposed Clean Heat and Flexibility Facility (CHFF)—a revolving financing facility offering leasing and Heat-as-a-Service (HaaS) models for SMEs.
The facility is designed to remove upfront capital expenditure barriers by deploying assets and recovering costs through structured payments linked to delivered heat and verified flexibility performance.
Risk management tools—including standardised appraisals, performance verification and portfolio analytics—will support refinancing by Pakistani banks and impact investors once performance and cash flows are demonstrated.
The UNDP stated that the project will include multiple work streams covering pilot installations, data and monitoring systems, policy engagement, financing operations, manufacturing capacity and knowledge dissemination.
The UNDP will provide fiduciary management, procurement, safeguards through an Environmental and Social Management System (ESMS), monitoring and evaluation, and coordination with government and power sector stakeholders.
The GGC will act as the funding management anchor, leading feasibility studies and the design and administration of the CHFF, including disbursement controls, risk tools and investor packaging for refinancing.
iTerra Volt will lead technology engineering, deployment and commissioning, manufacturing enablement, and operation of the facility management unit for asset registry and operations and maintenance compliance.
The AZM Foundation will lead civil society engagement, awareness campaigns and capacity building to ensure inclusive participation and operational feedback mechanisms.
Independent measurement, reporting and verification (MRV) will be conducted through an external service provider to strengthen credibility with regulators and financial institutions.
The project aligns with Pakistan’s Nationally Determined Contributions (NDCs), including the target to reduce projected greenhouse gas emissions by 50 percent by 2030, comprising 15 percent unconditional reductions and 35 percent conditional reductions.
The UNDP expects to increase utilisation of behind-the-meter solar power through storage-driven load shifting, reduce fossil-fuel-based industrial heat and generate verified flexibility data to inform tariff and electricity market reforms.
Public funding will be required to address first-mover risks and capitalise the revolving CHFF facility, while private financing will be mobilised through SME co-payments, structured repayments and portfolio refinancing once operational performance is established.
Key risks include occupational health and safety hazards associated with high-temperature equipment and operational constraints at SME facilities. Safeguards will follow IFC-aligned ESMS standards, including site assessments, mandatory safety training, emergency shutdown procedures and waste management plans.
Inclusion measures will target women-owned and women-managed SMEs, with participation targets for women in training programmes and skilled employment opportunities.
The UNDP noted that since the initiative is a bilateral project, IKI requires a Government of Pakistan endorsement letter at the outline stage. The consortium will obtain and submit the endorsement confirming alignment with national priorities and NDC implementation.
Copyright Business Recorder, 2026