The federal government has failed to get approval from the International Monetary Fund (IMF) for a plan to provide 2,000 megawatts of electricity at subsidised rates for Bitcoin mining.

Sources in the Power Division said the government presented this plan to the IMF in negotiations three times, but failed to convince the global financial institution.

The IMF argued that past experiences of providing cheap electricity under industrial status did not yield positive results and such concessions end up becoming a form of “tax holiday.”

It raised concerns about the government’s strategy, questioning: if this electricity is provided at subsidised rates, what will be the plan to later sell the same electricity at market rates?

Sources revealed that the government has also shared this presentation with the World Bank and other tripartite donors in an attempt to persuade the IMF.

The government plans to offer electricity at up to Rs 24 per unit for Bitcoin mining, while currently, the country has a surplus of 7,000 megawatts of electricity, of which 2,000 megawatts are being considered for allocation to crypto mining.

The government maintains that the project could bring foreign exchange into the country and efforts are ongoing to convince the IMF to approve the proposal.