Ethiopia is rapidly positioning itself as a global player in Bitcoin mining, contributing 2.5% of the world’s hash rate. This surge is fueled by agreements with 25 Bitcoin mining companies, generating $55 million in revenue over 10 months.
The East African nation has become an attractive destination for mining operations due to its abundant renewable energy, primarily hydropower, which constitutes 90% of its energy production. Despite only half of its population having access to electricity, Ethiopia has a power generation capacity of 5,250 MW, leaving a surplus that is being monetized. Alongside selling excess power to neighboring countries like Kenya and Djibouti, the Ethiopian Electric Power (EEP) has allocated 600 MW to Bitcoin mining operations, with plans to increase this to 1 GW by year-end.
The government has actively supported this industry, seeing it as an opportunity to earn foreign exchange and boost economic growth. Many mining companies, including Chinese firms, have relocated to Ethiopia following China’s Bitcoin mining ban. These firms benefit from Ethiopia’s low electricity costs, estimated at $0.03 per kilowatt-hour, thanks to the Grand Ethiopian Renaissance Dam (GERD).
Bitcoin mining, while energy-intensive, is critical for blockchain transactions. To address these challenges, Ethiopia is pursuing policies to make itself a global hub for mining while implementing reforms such as a legal framework for central bank digital currency (CBDC).
This dual approach—welcoming Bitcoin mining operations and preparing for a digital economy—reflects Ethiopia’s ambitions to leverage its energy surplus for economic transformation. With the potential to double its hash rate contribution by the end of the year, Ethiopia is set to become a significant player in the cryptocurrency world.