As the year nears the end, Bitcoin has set up shop in the middle of East Africa. Ethiopia used its hydroelectric power, produced by the Grand Ethiopian Renaissance Dam (GERD), to facilitate Bitcoin mining. To that end, Ethiopian Electric Power (EEP) has converted latent energy into valuable digital assets, generating a revenue of 18%.
Hiwot Eshetu, EEP’s marketing and business development director, asserted that Ethiopia’s grid is not yet developed and that much of the dam’s energy would otherwise go to waste. He added, “Bitcoin miners have a lot of money to invest, and we need lots of money to develop our grid, so it’s a win-win.”
GERD is Africa’s largest dam, and using it for Bitcoin sets up crypto for major adoption within Africa. According to reports, spending $1 billion on Bitcoin mining activities over the past year exceeded the profits generated from exporting power to neighboring countries.
In addition, Ethiopia has monetized its surplus of electricity. Over the course of a few months, the country has generated tens of millions of dollars in income. This has been made possible by securing deals with 25 BTC mining enterprises.
EEP reported generating over $55 million in revenue in the past 10 months from deals with the mining companies, underscoring the sector’s economic potential. These agreements have also attracted international miners.
Ethiopia’s crypto stance and its economic effects
Ethiopia’s electricity rates, at about 3.2 cents per kilowatt-hour, are among the lowest in the world. This makes it appealing to miners who are looking for affordable options.
The relocation of Chinese miners following Beijing’s prohibition of crypto mining in 2021 has been the catalyst for Ethiopia’s strategic ascent in Bitcoin mining. BitFuFu and BIT mining, both sponsored by Bitmain, are notable investments that have supported Ethiopia’s expanding industry.
A 51 MW Bitcoin mine and 17,869 mining machines were recently acquired by BIT Mining for $14.3 million. This is a significant milestone in the sector.
Notably, Ethiopia’s mining operations presently consume approximately 600 MW of energy. However, its proportion of the global Bitcoin rate could potentially increase to 7% as a result of this expansion.
Ethiopia has entered the rankings of the top Bitcoin mining nations, which include the Czech Republic, China, and the United States. It is anticipated that the country’s share of the global rate will increase as it expands its operations. This will further solidify its position in the crypto industry.
However, the development of Ethiopia’s ambitious initiatives also underscores the broader repercussions of Bitcoin mining and its impact on green energy policy.
What Bitcoin mining is doing for Africa
In other regions of Africa, the integration of Bitcoin mining with renewable energy initiatives has resulted in substantial environmental and social impacts. In Kenya and Zambia, microgrids that operate on renewable energy sources are providing electricity to rural communities. As a result, it is facilitating the development of previously neglected regions.
At the same time, the renowned Virunga National Park in the DRC employs Bitcoin mining to fund environmental initiatives.
The park generates substantial monthly revenue by using hydroelectric power. This revenue is then allocated to maintaining infrastructure, paying staff wages, and supporting local businesses, such as cacao processing.
However, there are apprehensions that wealthy crypto operations will exploit Africa’s emerging power-production capacity. This could happen if governments are attracted to the lucrative financial incentives.
In February 2024, Angola enacted a bill prohibiting crypto-mining operations to protect the nation’s energy security.
On the other hand, CNF has previously emphasized that public Bitcoin miners worldwide have amassed $5 billion in 2024 and have reinvested $3.6 billion in infrastructure and hardware development.
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