Pakistan's plan to use surplus electricity for Bitcoin mining has hit a roadblock after the International Monetary Fund (IMF) reportedly rejected a proposal to offer subsidized power to energy-intensive industries, including Bitcoin miners . Pakistan's Secretary of Power Fakhre Alam Irfan told the Senate committee on energy that the IMF claimed such measures could distort the energy market and worsen existing issues in the country's fragile power sector, according to a report from Urdu-language news outlet Independent Urdu .
Although Pakistan has excess electricity, particularly during winter, the IMF remains concerned that pricing schemes could disrupt the market balance . Irfan noted that all significant energy policies must be approved by the IMF . The Power Division's November 2024 plan proposed a marginal-cost tariff of 22–23 rupees per kilowatt-hour for industries like copper smelting, data centers, and crypto mining . Officials argued the scheme would boost electricity demand and help absorb surplus capacity .
The IMF reportedly dismissed the plan, comparing it to sector-specific tax breaks that have historically created economic imbalances in Pakistan . Irfan noted that the proposal hasn't been shelved entirely and is under review by the World Bank and other international partners . He said that the government is working on refining the plan with input from these institutions .
In May, Pakistan earmarked 2,000 megawatts of surplus electricity for Bitcoin mining and AI centers as part of a digital transformation initiative led by the Pakistan Crypto Council and supported by the Ministry of Finance . The project aimed to attract foreign investment, create jobs in emerging technologies, and put idle generation capacity to productive use .
The IMF's rejection of the proposal underscores the organization's concerns over the potential economic and financial risks associated with such a plan, particularly in the context of Pakistan's ongoing debt crisis and the need for sustainable development goals . The IMF's stance is rooted in the broader economic challenges faced by Pakistan . The country is grappling with a full-blown debt crisis, which has derailed its sustainable development goals .
The IMF’s rejection of the energy subsidy plan for crypto mining is a clear indication of its focus on ensuring that Pakistan’s economic policies are aligned with long-term stability and growth, rather than short-term gains that could exacerbate its financial woes . Pakistan's broader strategy includes significant reforms in the taxation and energy sectors, aimed at addressing its economic challenges . The allocation of 2,000 megawatts to power Bitcoin mining is part of this broader reform agenda, which seeks to leverage the potential of the cryptocurrency industry to drive economic growth .
Currently, 58% of consumers benefit from a discounted tariff of 10 rupees per kilowatt, with a provision of 250 billion rupees allocated for this support in the 2025 budget .