( Addis Ababa) – Ethiopia has made significant strides in the global Bitcoin mining scene, generating over $55 million in revenue over the past 10 months through its Bitcoin mining operations. The state-owned utility, Ethiopia Electric Power (EEP), has signed power purchase agreements with 25 mining companies, which have been attracted by the country’s abundant and affordable renewable energy. This success is largely driven by the power generated from the Grand Ethiopian Renaissance Dam (GERD).
Ethiopia Electric Power has allocated nearly 600 megawatts (MW) to Bitcoin mining operations, according to Ethan Vera, Co-Founder and Chief Operating Officer of Luxor Mining. This large allocation of energy has made Ethiopia a notable player in the Bitcoin mining industry, contributing 2.25% to the global Bitcoin hash rate. The country ranks fourth globally in terms of Bitcoin mining hash rate contribution, trailing only the United States, Hong Kong, and other Asian countries.
The Ethiopian government has strategically capitalized on its renewable energy resources to attract international Bitcoin miners. This influx began after China’s 2021 ban on cryptocurrency mining, which saw Chinese miners turn to countries like Ethiopia, where abundant hydropower and surplus energy make it an appealing destination. As part of its effort to position itself as a global hub for Bitcoin mining, the Ethiopian government has worked with various international partners to build necessary infrastructure and expand operations.
In February 2024, Ethiopian Investment Holdings (EIH), the government’s investment arm, signed a $250 million memorandum of understanding with Hong Kong-based West Data Group. This partnership is focused on developing infrastructure to support not only Bitcoin mining but also data mining and artificial intelligence (AI) training operations. This partnership underscores Ethiopia’s broader ambitions to establish itself as a leader in the digital economy and renewable energy sectors.
Ethiopia’s energy generation capacity is substantial, with a total of 5,250 MW of installed generation capacity. Around 90% of this capacity comes from clean hydropower. Despite the abundant supply of electricity, only about half of the population has access to power, leading to a significant energy surplus. This surplus energy is being sold to neighboring countries. In the past year, Ethiopia Electric Power has sold over 169,710 megawatt-hours (MWh) of electricity to Djibouti for $10.38 million and 314,931 MWh to Kenya for $20.47 million. Additionally, Ethiopia earned more than $659,000 from supplying 13,185 MWh to Sudan. However, due to ongoing conflict, the supply to Sudan was reduced, with only 15% of the planned electricity being delivered.
This strategy of leveraging renewable energy to attract Bitcoin miners and selling surplus electricity to neighboring countries has been a profitable venture for Ethiopia. It not only helps generate significant revenue but also positions the country as a key player in the growing global cryptocurrency market.