Ethiopia Uses Bitcoin Mining to Fund Power Grid Expansion
Ethiopia has turned to Bitcoin mining operations as a temporary revenue source to finance electricity infrastructure expansion, selling excess power from Africa’s largest dam at rates significantly below global averages while 55 percent of citizens lack electricity access.
Grand Ethiopian Renaissance Dam Creates Power Surplus
The $5 billion Grand Ethiopian Renaissance Dam officially launched on September 9, doubling Ethiopia’s power generation capacity to a maximum of 5,150 megawatts annually. Despite this increased production capability, infrastructure gaps prevent electricity distribution to over half the population. The government sells surplus power to Bitcoin mining companies at three to four cents per kilowatt hour, compared to the global average of 15 cents.
Ethiopia Electric Power CEO Ashebir Balcha confirmed the arrangement serves as a temporary funding mechanism for transmission infrastructure development. The country earned $55 million from Bitcoin mining operations within ten months last year, contributing 2.5 percent of the global Bitcoin hash rate through agreements with 25 mining companies.
Mining Operations Reach Grid Capacity Limits
Ethiopian authorities have suspended new Bitcoin mining permits after reaching grid capacity limits, with nearly 20 additional companies on waiting lists for approval. Balcha addressed concerns about prioritizing Bitcoin operations over local industries during the temporary arrangement.
“No way…Until the people have full access and the economy starts to consume all the power, we are using Bitcoin for transmission. It’s not a permanent endeavor,” Balcha stated. The government plans to phase out Bitcoin mining agreements as domestic electricity demand increases and transmission infrastructure reaches underserved communities across the country.
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