IMF Rejects Pakistan's Cheap Power for Crypto Mining

The International Monetary Fund (IMF) has rejected Pakistan's proposal to provide subsidized electricity rates for cryptocurrency mining and other energy-intensive industries. This decision, confirmed by Dr. Fakhray Alam Irfan, Secretary of Pakistan's Power Division, follows a proposal submitted last November suggesting a marginal cost-based pricing of Rs 22–23/kWh.

Key Takeaways

• The IMF rejected Pakistan's plan for discounted electricity for crypto mining.
• Despite electricity surpluses, the IMF is concerned about potential market distortions.
• Pakistan's government continues to work with international institutions to revise the proposal.

Pakistan's Energy Surplus and Proposed Plan

Pakistan's Power Division aimed to utilize surplus electricity, particularly during winter, to boost energy consumption and reduce fixed costs from underutilized generation capacity. The proposal included a cost-based package. However, the IMF's concerns center on the potential for market disruptions in Pakistan's already fragile power sector.

Bitcoin Mining and a National Reserve

Separately, the Pakistan Crypto Council proposed using the country's excess energy for Bitcoin mining, suggesting a 2,000-megawatt investment to support mining operations and AI data centers. This plan, which also includes establishing a government-backed Bitcoin reserve, has also drawn scrutiny from the IMF, which hasn't been consulted and is seeking clarification from Pakistan's Finance Ministry.

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