ISLAMABAD: Without completion of necessary homework and approvals from the relevant forums, the Ministry of Finance on Sunday announced the allocation of 2,000 megawatts of electricity for Bitcoin mining and Artificial Intelligence (AI) data centres to `transform Pakistan into a global leader in digitalinnovation`.

The government also promised to announce lucrative incentives such as tax holidays, customs duty exemptions on equipment, and reduced taxes for AI infrastructure developers, under this greenfield economic avenue in the upcomingfederalbudget.

The MOF said it was the first phase of the ambitious national initiative spearheadedbyPakistanCrypto Council a recently created government-backed body under the Ministry of Finance as part of a broader strategy to monetise surplus electricity, create high-tech jobs, attract billions of dollars in foreign direct investment, and generate billions of dollars for government.

This comes within a week after the government announced setting up the Pakistan Digital Assets Authority (PDAA) to regulate and accelerate the virtual asset economy, compliant with Financial Action Task Force (FATF) safeguards.

Questions taken up with the ministries of finance and power, including Finance Minister Muhammad Aurangzeb, about the power tariff for the cryptocurrency sector, its approval process, and related infrastructure and mechanisms remained unanswered. The minister did notrespond to questions about the power tariff and approval process, although he said that `this strategic allocation marks a pivotal moment in Pakistan`s digital transformation journey, unlocking economic potential by turning excess energy into innovation, investment, and international revenue`. A senior power ministry official, however, said the country had a surplus capacity and the power division could provide it to any consumer category or sector willing to pay the supply cost.

Anything more should be referred to the finance division, overseeingthe cryptoregularisation and thus responsible for working out such financial arrangements, discussing with the IMF, or providing some profit-sharing with or subsidy allocations for potential crypto firms, he said.

Power Minister Sardar AwaisLeghari said Pakistan currently had about 7,000MW of surplus capacity and had been advocating its sale to new sectors, like data centres, at the marginal cost currently estimated at about Rs24 per unit (kWh). He has been pleading with international lending agencies, like the World Bank and the International Monetary Fund, to allow power supply to these new economic avenues at marginal cost, like the winter incentive package for industries on incremental consumption.

However, even the marginal cost of about Rs24 (about 8 US cents) per unit is unviable for crypto mining and data centres that can have access to power at almost half (4-5 cents per unit) that rate in other countries.

Informed sources said the stable power supply and conducive fiscal arrangement could help Pakistan earn $400-500 million annual revenue in profit sharing out of an estimated $1.5bn cryptocurrency and Bitcoin business very quickly and then expand.

Therefore, a proposal was under consideration to set up a specialpurposevehicleunderthe Ministry of Finance to purchase electricity from distribution companies (Discos) at marginal cost and subsidise it to the cryptofirms by half to bring down the power rate to about 4 cents per unit) against profit-sharing in the data mining business, capable of generating returns multiple times greater than the investment in the power tariff.

`There is no approval as such from relevant forums so far, but once the MOF is able to work out a viable business model, approval should be just a formality,` the finance ministry official said, while agreeing that some answers were not available at this stage.

The finance ministry said Pakistan was uniquely positioned-both geographically and economically-to become a global hub for data centres. As a digital bridge between Asia, Europe, and the Middle East, Pakistan offers the most strategic location in the world for data flow and digital infrastructure. Since the inception of the Pakistan Crypto Council, there has been tremendous interest from global Bitcoin miners and data infrastructure companies. Several international firms have already visited the country for exploratory discussions, and following the announcement of power capacity allocation, more global players are expected to visit in the coming weeks, it said.Pakistan`s underutilised power generation capacity is now being repurposed into a high-value digital asset. AI data centres and Bitcoin mining operations, known for their consistent and heavy energy usage, provide an ideal use case for this surplus.

Redirecting idle energy, especially from plants operating below capacity, allows Pakistan to convert a long-standing financial liability into a sustainable, revenue-generating opportunity, the ministry said.

Bilal Bin Saqib, CEO of the Pakistan Crypto Council, emphasised the transformative nature of this initiative. He explained that with proper regulation, transparency, and international collaboration, Pakistan can become a global crypto and AI powerhouse.He said the energy-backed digital transformation not only unlocks high-value investment but enables the government to generate foreign exchange in USD through Bitcoin mining. Additionally, as regulations evolve, Pakistan can accumulate Bitcoin directly into a national wallet marking a monumental shift from selling power in Pakistani rupees to leveraging digital assets for economic stability.