IMF Blocks Pakistan’s Plan to Offer Subsidized Electricity for Crypto Mining Operations

IMF Rejects Pakistan's Request for Crypto Mining Power Subsidies

Government Seeks to Harness Surplus Electricity for Blockchain Sector

The International Monetary Fund (IMF) has turned down Pakistan's proposal to supply subsidized electricity for crypto mining projects, dealing a blow to the nation's ambitions of boosting its blockchain industry and digital economy. The government had considered allocating up to 2,000 megawatts of excess electricity specifically for crypto mining and AI data centers as part of a broader national drive to attract foreign investment and create high-tech jobs.

 

Senate Committee Discusses Ongoing Negotiations

During a session with the Senate Standing Committee on Power, led by Senator Mohsin Aziz, Secretary of Power Dr. Fakhray Alam Irfan provided key updates on Pakistan’s engagement with the IMF. According to local media outlet Profit, Dr. Irfan revealed that recent efforts focused on obtaining discounted electricity rates for energy-intensive sectors, primarily targeting cryptocurrency mining and select heavy industries. The objective was to stimulate economic growth while maximizing the country's surplus power generation.

However, the IMF has raised significant concerns. The organization warned that introducing sector-specific energy subsidies could destabilize Pakistan’s electricity market and worsen financial pressures within the already fragile power sector.

 

Repeated Proposals Face Pushback

The rejection comes after multiple government attempts to support crypto and blockchain-related industries. Previous proposals included a six-month marginal cost tariff set at Rs 23 per kilowatt-hour to benefit miners and similar high-consumption users. The IMF, wary of market imbalances, limited its approval to a brief three-month duration. When officials later revisited the idea with targeted subsidies, the IMF remained unconvinced, likening these incentives to temporary tax holidays and cautioning that they could disrupt the economic equilibrium.

 

Looking Ahead: Ongoing Dialogues and Industry Outlook

Despite these setbacks, Dr. Irfan reassured the committee that negotiations with the IMF and other global partners are continuing in pursuit of a mutually acceptable solution. For now, Pakistan’s crypto mining sector faces significant uncertainty but remains hopeful for a breakthrough that could position the country as a regional blockchain technology leader.