IMF Rejects Pakistan's Proposal for Subsidized Electricity in Crypto Mining

The International Monetary Fund (IMF) has rejected Pakistan's proposal to provide subsidized electricity for cryptocurrency mining, despite the country's plans to allocate 2,000 megawatts of surplus power to the sector. During a session with the Senate Standing Committee on Power chaired by Senator Mohsin Aziz, Power Secretary Dr. Fakhray Alam Irfan outlined the government's efforts to negotiate reduced electricity tariffs with the IMF, as reported by Pakistani news outlet Profit. The proposal sought to offer discounted power rates to energy-intensive industries, particularly cryptocurrency mining, aiming to boost economic activity and utilize excess electricity. However, the IMF opposed the initiative, warning that such subsidies could destabilize the energy market and exacerbate financial pressures on Pakistan's struggling power sector. This decision follows Pakistan's earlier announcement of dedicating 2,000 megawatts of surplus electricity specifically for Bitcoin (BTC) mining and AI data centers as part of a national digital infrastructure plan. The project was designed to attract foreign investment, create jobs in emerging tech sectors, and optimize unused generation capacity. Previous attempts to secure IMF approval for similar measures, including a six-month marginal cost tariff proposal in September and a targeted subsidy plan in November, were also rejected over concerns about market distortion and economic imbalances. Despite these challenges, Dr. Irfan confirmed that discussions with the IMF and other international institutions continue in search of viable solutions.