The International Monetary Fund (IMF) has rejected the Pakistani government's proposal to provide subsidized electricity tariffs for crypto mining with state support. The plan was an important part of the country's goal to attract foreign investment by promoting cryptocurrency mining and artificial intelligence data centers with a 2,000-megawatt electricity allocation. However, the IMF expressed a negative opinion, citing various risks such as legal uncertainties, potential imbalances in energy distribution, and pressure on the grid.
According to local reports Dr. Fakhray Alam Irfan, Secretary of the Pakistan Ministry of Energy, stated during a session with the Senate Energy Committee, “As of now, the IMF has not approved this plan.” Dr. Irfan noted that the IMF expressed concerns that this initiative could disrupt market balance and impose additional burdens on the country's already struggling energy sector.
Legal and infrastructural warnings from the IMF
As recalled, the IMF had also opposed Pakistan's power allocation plan for Bitcoin mining last month, raising concerns about legal uncertainties and the impact on energy infrastructure. The Fund also warned that it could create unfairness in the distribution of energy resources and harm other sectors. According to the IMF, such an incentive could lead to a chain reaction of increases in energy tariffs.
One of the most striking points is that Pakistan announced this plan to the public without consulting the IMF. This situation could lead to trust issues in negotiations with the IMF. Additionally, as seen, it has also made the future of the plan uncertain.
Pakistan pursuing alternative plans
Dr. Irfan stated that the government is continuing its negotiations with the IMF and that consultations with international organizations are ongoing to reshape the incentive plan. It is known that the World Bank and other creditors are also evaluating the current plan.
The Senate committee also discussed digital solutions developed to combat energy theft and debt restructuring agreements made with banks. While some senators claimed that banks were “forced” into these agreements, Dr. Irfan firmly denied these allegations. The Ministry of Energy was tasked with providing written and comprehensive responses to all questions at the next session.
Strategic plans for crypto and data centers
The incentive plan developed under the leadership of the Pakistan Crypto Council and supported by the Ministry of Finance covered not only Bitcoin mining but also AI-focused data centers. The country aims to use the excess energy generated during the winter months in these centers to strengthen its digital infrastructure and become a data bridge between Asia, Europe, and the Middle East.
However, the IMF's negative stance could complicate the realization of these goals. Pakistan, which successfully attracted international investors with its crypto regulations implemented at the beginning of the year, will now have to create a new roadmap to sustain this investment momentum.
