The International Monetary Fund has rejected the proposal from the Pakistani government to provide subsidized electricity for energy-intensive sectors, including crypto mining.
IMF's Rejection: Distortion of Competitive Environment
According to a report from Pakistan Today, the IMF has rejected Pakistan’s plan for a 2,000 MW energy allocation for crypto mining and heavy industry. Dr. Fakhray Alam Irfan informed the Senate Energy Committee that the IMF's refusal was due to potential disruptions in the competitive environment. The IMF stated that the subsidy could create artificial price differences in tariffs, negatively affecting long-term efficiency.
Government Actions to Address the Issue
Following the veto, the government has engaged with other financial institutions to redesign the subsidy policy. Currently, 58% of consumers benefit from a discounted tariff of 10 rupees per kilowatt, with a provision of 250 billion rupees allocated for this support in the 2025 budget. To reduce loss and theft rates, the government plans to implement smart meters and remote monitoring systems.
Uncertainty and Future Steps
Dr. Irfan indicated that 'approval is not given as of now; negotiations continue,' suggesting that the proposal might be revised to meet international standards. Measures to address the 1,275 trillion rupee circular debt were also discussed, with an emphasis on increasing transparency in agreements with banks.
Despite the IMF's rejection, the Pakistani government continues to seek ways to adapt its energy project, leaving uncertainty for its future.
