Pakistan’s finance ministry has announced the allocation of 2,000 megawatts (MW) of electricity for the initial phase of a national plan to support bitcoin mining and AI data centers.

The initiative aims to address the country’s surplus electricity issue, a growing concern in its energy sector. Pakistan faces challenges such as high tariffs and excess generation capacity.

Additionally, there is an increase in solar energy as consumers seek affordable options. The project is led by the Pakistan Crypto Council (PCC), a government-supported organization.

According to the ministry, this effort is part of a broader strategy to monetize surplus electricity, create high-tech jobs, and attract foreign investment.

This allocation marks the first phase of a larger multi-stage plan to develop digital infrastructure in the country.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Pakistan tackles energy paradox similar to global “duck curve” challenge

Pakistan’s electricity allocation for Bitcoin mining directly addresses its energy sector’s costly paradox: having excess generation capacity while charging high tariffs.

The country has 46.2 GW of installed power capacity but faces declining electricity consumption with industrial usage dropping 11% according to multiple sources 123.

This creates a financial trap where capacity payments to power producers have surged 46% to PKR 1.9 trillion, despite underutilized plants 13.

Similar challenges exist globally in grids with significant renewable penetration, where power plants remain necessary but economically strained during low-demand periods.

By directing 2,000 MW to Bitcoin mining and AI data centers, Pakistan can create flexible demand that utilizes surplus capacity while generating revenue to offset these fixed costs.

This approach allows power plants to operate more efficiently while potentially reducing the pressure on tariffs that has driven consumers toward alternatives like the booming rooftop solar sector (4.9 GW by March 2025) 2.

2️⃣ Pakistan leverages its unexpected cryptocurrency strength for economic benefit

Pakistan’s allocation strategy builds upon the country’s strong position in cryptocurrency adoption, where it ranks third globally in the Global Crypto Adoption Index 45.