The International Monetary Fund (IMF) has officially turned down Pakistan’s proposal to offer subsidised electricity tariffs for large-scale Bitcoin mining operations.
The announcement was made during a session of the Senate Standing Committee on Power, where Secretary of Power Dr. Fakhray Alam Irfan confirmed the IMF’s stance.
The plan, initially intended to support a national crypto-mining initiative by offering cheaper electricity rates, was viewed as a strategic move to attract foreign investment.
However, the IMF’s disapproval has halted the immediate implementation of the policy, raising questions about the feasibility of Pakistan’s ambitions in the digital asset space.
IMF Raises Red Flags on Economic and Legal Grounds
The IMF has expressed several key concerns that led to its rejection of Pakistan’s energy subsidy proposal for crypto mining.
Foremost among them is the additional burden such a plan would impose on the country’s already struggling power sector.
The international financial institution warned that allocating subsidised power could lead to serious market distortions, especially when the country is already grappling with energy shortages and inefficient distribution.
The IMF also flagged legal ambiguities, noting that Pakistan has yet to establish a clear regulatory framework for cryptocurrencies and mining, raising questions about the legality and enforceability of the proposed initiative.
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Strain on Power Grid and Tariff Implications
Another central issue highlighted by the IMF involves the strain that Bitcoin mining operations could place on Pakistan’s fragile power grid.
With frequent outages and load-shedding already affecting citizens and businesses, adding high-consumption crypto mining facilities into the equation could worsen the situation.
Moreover, the IMF pointed out the potential knock-on effects on power tariffs.
Redirecting thousands of megawatts toward mining could force price hikes for other consumers or deepen the circular debt crisis in the energy sector.
The Fund also criticised the Pakistani government for failing to consult international partners prior to announcing the 2,000MW crypto power allocation plan.
Government Continues Talks to Refine Crypto Energy Strategy
Despite the IMF’s rejection, the Pakistani government has not abandoned its plan entirely. Dr. Irfan confirmed that discussions are ongoing with international institutions to rework the framework.
The proposal, backed by the Pakistan Crypto Council and supported by the Ministry of Finance, was seen as a bold step to attract tech investment and modernise the economy.
The government is reportedly exploring alternative energy management models and regulatory pathways that could make the proposal more acceptable to global financial institutions.
However, any future version of the plan would require clearer legal footing and a transparent energy allocation mechanism.
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Broader Economic and Political Implications Discussed
During the committee meeting, broader energy and financial issues were also brought to the forefront.
Members discussed possible technological solutions to curb electricity theft, a chronic issue in Pakistan’s power sector.
They also reviewed a recent controversial agreement between the government and scheduled banks to reduce circular debt stock.
Senator Shibli Faraz sharply criticised the arrangement, alleging that banks were “forced at gunpoint” to approve the loans, pointing to deeper governance concerns.
The committee has since directed the Power Division to prepare a detailed report and address outstanding issues in the next meeting, highlighting growing scrutiny over the country’s power and fiscal policies.