The international financial institution raises concerns over the energy sector and market distortions.
The International Monetary Fund (IMF) has rejected Pakistan’s proposal to introduce subsidized electricity rates for Bitcoin mining operations. According to local media outlet Profit, the government in Islamabad is continuing negotiations with international bodies to revise the strategy.
During a session of the Senate Standing Committee on Energy, Energy Secretary Dr. Fakhray Alam Irfan stated:
“As of now, the IMF has not agreed.”
The central institution expressed reservations about Pakistan’s plan, fearing it could further undermine an already struggling energy sector. Profit‘s sources report that the IMF warned the initiative could, in its view, create distortions in the national energy market. Subsidized rates for Bitcoin mining could, the IMF suggested, disrupt the balance of Pakistan’s power grid.
The IMF’s objections extend beyond the energy issue. The international organization also raised concerns about the legal status of mining activities in Pakistan. The current regulatory framework contains grey areas that could lead to legal complications.
The national power grid, already under strain, is another critical point according to the institution. The IMF fears that the addition of 2,000 MW dedicated to mining could worsen an already precarious situation, with possible repercussions on energy prices for all consumers.
Another point of criticism was Pakistan’s failure to consult with the IMF in advance. The country unilaterally announced the initiative last May without informing the IMF beforehand, creating tensions in bilateral relations.
The Pakistani initiative envisioned allocating 2,000 MW to power Bitcoin mining farms and data centers. The project, promoted by the Pakistan Crypto Council with the support of the Ministry of Finance, aimed to attract foreign investment into the digital asset sector. The government’s strategy sought to position Pakistan as a regional mining hub, leveraging potential competitive advantages in energy costs.
Despite the initial rejection, Dr. Irfan confirmed that negotiations are ongoing. The government is working to redefine the energy subsidy plan, seeking a compromise that could satisfy the IMF’s demands without entirely abandoning the goal of developing the digital asset sector. Other critical topics also emerged during the parliamentary session, including technological solutions to combat electricity theft.
