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Ethiopia is quickly emerging as a significant hub in the Bitcoin mining industry, having generated an impressive $55 million over the past ten months. This remarkable growth can be largely attributed to the country’s abundant and affordable energy resources, especially hydropower, which have attracted numerous companies, particularly those relocating from China since. The Ethiopian Electric Power (EEP) has committed 600 megawatts of electricity to support these operations, giving Ethiopia a notable 2.25% share of the global Bitcoin mining market.
In February, Ethiopian Investment Holdings revealed a preliminary agreement with Hong Kong’s West Data Group to inject $250 million into boosting the nation’s digital infrastructure. Although the specifics of the deal are still emerging, the government has consistently highlighted these efforts as crucial components of its high-performance computing strategy, which prominently includes Bitcoin mining.
In an interview with BBC News Africa, Kal Kassa, Founder and Educator at Bitcoin Birr in Addis Ababa and Advisor at West Data Group, shared insights into Ethiopia’s rise as a key player in the global Bitcoin mining scene. “Ethiopia is becoming a major hub for Bitcoin mining due to our extremely competitive electricity prices,” Kal explained. “At just 3.2 cents per kilowatt-hour, our electricity is much cheaper than many other parts of the world.”
Kal highlighted Ethiopia’s reliance on renewable energy, with over 92% of its power coming from sources like hydroelectricity, notably the Grand Ethiopian Renaissance Dam (GERD), a $6 billion project that generates six gigawatts of power from the Nile River. “This combination of low electricity costs and sustainable energy sources is why Bitcoin miners are flocking to Ethiopia,” he said.
While Bitcoin mining has traditionally been concentrated in countries like the United States, Russia, and China, rising energy costs in those regions have led many miners to seek out more affordable alternatives. Ethiopia now commands about 5% of the global Bitcoin hash rate, a measure of the computing power used in mining. “Previously, miners were operating in places like Venezuela and Kazakhstan, but Ethiopia now offers a more favorable energy market,” Kal explained.
The influx of miners has had a noticeable impact on the Ethiopian economy. “Currently, there are 20 registered mining companies in Ethiopia, with 11 operational,” Kal said. “Around 80% of these companies are from China, with the remainder coming from Russia and the United States.” This surge in mining activity has translated into substantial revenue for Ethiopia’s state-owned utility, Ethiopian Electric Power (EEP), which earned $55 million from Bitcoin miners in the past year. Over the next year, that figure is expected to rise to $123 million.
“The revenue generated from Bitcoin mining can be used to further develop Ethiopia’s power grid and provide electricity to the approximately 50% of Ethiopians who currently lack access,” He noted.
Despite the ban on cryptocurrency trading, which reflects a cautious stance toward the volatile market, authorities in Ethiopia are actively developing regulations for crypto mining. Over the past two years, there has been a notable increase in crypto-mining companies establishing operations in the country, driven by relaxed regulatory restrictions and a modest boost in electricity generation capacity. Ethiopia’s growing prominence in the Bitcoin mining industry highlights its strategic use of renewable energy and competitive pricing.
