Pakistan's initiative to utilize surplus electricity for Bitcoin mining has been jeopardized after the International Monetary Fund (IMF) rejected a proposal for subsidized power for energy-intensive sectors. The Pakistani Secretary of Power, Fakhre Alam Irfan, conveyed that the IMF cited potential market distortions and worsened issues in the fragile power sector as reasons for the dismissal. Although there is excess electricity available, particularly in winter, the IMF's concerns about pricing disruptions persist. Irfan mentioned that all key energy policies require IMF approval. An earlier proposal aimed to establish a marginal-cost tariff between 22-23 rupees per kilowatt-hour for industries, promising an increase in electricity demand to remedy surplus capacity. The IMF compared the plan unfavorably to past sector-specific tax breaks that have led to economic imbalances in Pakistan. Despite this setback, the proposal is under review by the World Bank and other partners as the government seeks to refine it. In May, Pakistan had introduced incentives for Bitcoin mining and AI centers, advocating for a digital transformation to attract investments.

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