Ethiopia turns surplus energy into profit: hydroelectric dam and bitcoin mining

Ethiopia has implemented a unique model for using energy from Africa's largest dam, the Grand Ethiopian Renaissance Dam (GERD), by directing resources to Bitcoin mining. This approach allows for the efficient use of excess hydroelectric power and opens up new economic opportunities.

The Ethiopian Electric Power Corporation (EEP) initiated this project, monetizing excess energy that would otherwise remain unclaimed. According to Hiwot Eshetu, EEP’s Director of Marketing and Business Development, the current situation has become mutually beneficial: the country receives funds for the development of the power grid, and miners receive a stable and affordable source of energy.

To date, Ethiopia cooperates with 25 companies involved in mining, which has brought the state revenue of $55 million in the last 10 months. The attractiveness of such a business is enhanced by low electricity rates - about 3.2 cents per kilowatt-hour, which distinguishes the country from its competitors.

International investments in this sector are of particular interest. For example, BIT Mining, one of the major companies, acquired a 51 MW mining farm, which further strengthens Ethiopia's position in the cryptocurrency arena.

The demand for electricity from mining companies has already reached 600 MW, and forecasts promise further growth. The expansion of this industry could increase Ethiopia's share of the global hash rate to 7%, which would make it one of the leading players in the market.

Bitcoin mining is becoming an important part of global energy strategies. For example, Virunga National Park in the Democratic Republic of the Congo uses mining revenues for environmental initiatives, maintaining infrastructure and funding employee salaries.

In other African countries, such as Kenya and Zambia, mining is boosting the development of remote regions by connecting them to renewable energy sources. However, there are also growing concerns about the potential exploitation of the region’s energy capacity by large cryptocurrency corporations.

Some countries are already taking strict measures to protect their own energy resources. For example, Angola has banned mining operations to maintain its energy security.

South Africa, on the other hand, has taken a more flexible approach, requiring miners to declare their income and pay taxes. This allows the country to regulate the market while maintaining a balance between economic benefits and sustainable development.