Ethiopia’s national power company, Ethiopian Electric Power (EEP), is preparing to gradually eliminate cryptocurrency mining operations within the country. This decision follows internal company analyses that projected the energy-intensive sector could potentially consume as much as one-third of Ethiopia’s total electricity output this year.
According to a report published by The Reporter Ethiopia on Friday, EEP’s CEO, Asheber Balcha, announced at the company’s annual performance review on August 7th that no new agreements for data mining activities will be authorized. He further stated that the utility intends to terminate existing contracts.
Balcha characterized the adoption of crypto mining as a short-term strategy to generate foreign exchange. He noted that it brought in USD 220 million in the last fiscal year, but emphasized that it was never intended to be a permanent part of EEP’s long-term strategic vision.
The “Ethiopian Energy Outlook 2025,” a report jointly produced by EEP, the Petroleum and Energy Authority, and other governmental organizations, highlights the risk that the rapidly increasing energy requirements of cryptocurrency mining could restrict power availability for both residential consumers and industrial operations. This concern is especially pertinent in rural regions still grappling with frequent power interruptions and a reliance on diesel-powered generators.
In 2023, Ethiopia initially welcomed Bitcoin mining through a government-run licensing program overseen by the Information Network Security Agency, despite maintaining a domestic prohibition on cryptocurrency trading. Since the program’s inception, 21 operators, the majority of whom (19) are foreign-owned with significant Chinese investment, have secured power purchase agreements. Many have located their mining facilities near major electricity transmission infrastructure surrounding Addis Ababa. Various publicly traded Bitcoin mining enterprises, particularly those with roots in China and the Middle East, like Phoenix Group, Canaan, Bitdeer, BitFuFu, and BIT Mining, have previously announced expansion plans for their operations in Ethiopia.
However, according to The Reporter Ethiopia, the government halted the issuance of new licenses in February 2024, citing concerns about the progress of existing projects and the overall capacity limits of the national electricity grid. Currently, miners are charged USD 0.0314 per kilowatt-hour, payable in foreign currency, even as millions of Ethiopian citizens continue to lack consistent access to electricity.