tl;dr
The IMF rejected Pakistan's proposal to subsidize electricity rates for crypto mining, data centres, and heavy industries due to concerns over market distortions. Pakistan planned to allocate 2,000 MW for crypto mining to attract foreign investment, but the IMF disapproved. Secretary Power Dr. Fakhr...
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 opposes subsidized rates for these sectors.
During a session chaired by Senator Mohsin Aziz, discussions highlighted the IMF's concerns about market distortions caused by subsidizing energy-intensive industries such as crypto mining, data centres, and metal industries. Pakistan’s plan to allocate 2,000 megawatts for crypto mining to attract foreign investments was explicitly rejected. Secretary Irfan confirmed the IMF has not agreed to the proposal but indicated ongoing efforts to refine the energy plan in line with global standards.
Dr. Irfan also mentioned that Pakistan continues to engage with international institutions to revisit its power subsidy plans following the IMF’s refusal. The meeting included talks on implementing technological solutions to combat electricity theft. Notably, the government’s recent deal with scheduled banks to reduce the Rs. 1.275 trillion circular debt was discussed, with Senator Shibli Faraz criticizing the arrangement, alleging coercion in obtaining loans.
Addressing power theft, the Secretary outlined that 58% of users receive electricity at a subsidized rate of Rs. 10 per unit, significantly below the government standard price. To address this, Pakistan is planning a Rs. 250 billion subsidy allocation this year alongside expanding anti-theft technologies nationwide. The committee has directed the power division to provide a comprehensive report addressing these various issues in their next meeting.