The International Monetary Fund (IMF) rejected Pakistan’s proposal to offer subsidized electricity rates to crypto mining, data centres, and heavy industries on July 3. Secretary Power Dr. Fakhray Alam Irfan informed the Senate Standing Committee on Power that although surplus electricity is available during winter, the IMF strictly stands against it.
In a session with the Senate Standing Committee on Power, chaired by Senator Mohsin Aziz, the ongoing discussions with the IMF on crypto mining were outlined. IMF cited concerns about market distortions before rejecting the proposal to offer subsidized rates to energy-intensive industries such as crypto mining, data centres, and metal industries.
Pakistan’s plan to allocate 2,000 megawatts for crypto mining, aiming at interest foreign investments, has now been rejected by the IMF. “As of now, the IMF has not agreed,” said Secretary Irfan. However, ongoing discussions suggest that Pakistan is committed to refining its energy plan to align with global standards and recommendations.
Dr. Irfan confirmed that the government is still in talks with international institutions to redefine its power subsidiary plan after the IMF rejected the proposal. The committee also discussed the technological solutions aimed at combating electricity theft.
Pakistan government’s recent agreement with scheduled banks to reduce the circular debt stock of Rs. 1.275 trillion was also discussed during the meeting. Senator Shibli Faraz criticized the deal, accusing the banks of being “forced at gunpoint” to offer loans.
The Secretary Power added that 58% of users pay a subsidized rate of Rs. 10 per unit, which is a lot less than the government standard price. The government is planning to allocate Rs. 250 billion in subsidies this year and expand anti-theft technology in he country. The committee has directed the power division to submit a comprehensive answer to various issues at the next meeting.
Pakistan’s 2,000 MW crypto mining plan aimed to allocate surplus electricity, especially during winter, to energy-intensive industries like crypto mining, data centers, and metal industries. Its goal was to attract foreign investment, monetize underutilized power, and create high-tech jobs, turning surplus energy into a revenue-generating asset.
The IMF’s rejection creates significant hurdles for Pakistan’s crypto ambitions, particularly regarding large-scale, subsidized crypto mining operations. It means Pakistan must refine its energy plan to align with global standards and avoid market distortions, potentially slowing down its aim to become a regional crypto and AI hub.
Widespread electricity theft in Pakistan poses a significant challenge to the feasibility of large-scale crypto mining. It contributes to financial losses for utilities, potentially leading to higher tariffs for honest consumers and instability in the power grid. Such issues make it difficult to guarantee a stable and cost-effective power supply for energy-intensive operations like crypto mining.
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