Andrew Grant
Key Takeaways
- The IMF rejected Pakistan’s proposal to offer subsidized electricity rates for crypto mining and energy-intensive industries.
- Despite electricity surpluses, the IMF is concerned about market distortions and has only approved limited relief plans for the power sector.
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The International Monetary Fund (IMF) has dismissed Pakistan’s proposal to lower electricity costs for crypto mining and energy-intensive industries, as confirmed by Dr. Fakhray Alam Irfan, Secretary of Pakistan’s Power Division, in his testimony before the Senate Standing Committee on Power this week.
The Power Division, which oversees Pakistan’s energy sector policies and administration, shared the proposal with the IMF and other international development partners last November, suggesting a marginal cost-based package priced at Rs 22–23/kWh.
The plan aims to increase the consumption of surplus electricity and reduce fixed costs associated with underutilized generation capacity.
“As of now, the IMF has not agreed,” Dr. Irfan said, noting that all major power sector initiatives require IMF approval.
Despite Pakistan’s surplus electricity, particularly during the winter months, the IMF remains wary of pricing mechanisms that could disrupt the country’s already troubled power market.
Dr. Irfan said the government continues to engage with international institutions to refine the plan rather than withdraw it.
IMF scrutinizes Pakistan’s plan to allocate power for Bitcoin mining
In March, Bilal Bin Saqib, CEO of Pakistan Crypto Council, suggested utilizing the country’s excess energy for Bitcoin mining.
Saqib reiterated the plan in May, adding that Pakistan plans to invest 2,000 megawatts to support mining and AI data centers to address energy excess, foster local growth, and attract international investment.
The IMF has expressed concern regarding Pakistan’s plan. The IMF, which was not consulted about this initiative, fears the impact on power tariffs and overall resource distribution, and has requested urgent clarification from Pakistan’s Finance Ministry.
Apart from Bitcoin mining, the Council’s head also revealed that Pakistan would establish a government-led strategic Bitcoin reserve, following in the US’ footsteps.
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