Ethiopia’s Revenue from Hydropower and Bitcoin Mining

Ethiopia is turning its surplus hydropower into a concrete source of revenue through Bitcoin mining. The country generates more electricity than its grid can handle, particularly from the Grand Ethiopian Renaissance Dam. Instead of letting up to 11 percent of that capacity sit idle, Ethiopian Electric Power is selling this excess energy to Bitcoin miners at about three to four cents per kilowatt-hour. Over the past ten months, this approach has generated around fifty-five million dollars in foreign currency, showing that monetizing stranded power benefits government finances.

Bitcoin Mining Revenue Supports Ethiopian Economy

Revenue from these deals has a significant impact on the economy. Miners pay in US dollars, accelerating the government’s goal for universal electrification. International mining companies are establishing operations locally, creating jobs and imparting technical skills, mostly around Addis Ababa and nearby rural areas. The combination of hydropower mining and Bitcoin revenue supports both economic and social objectives.

Energy Supply Concerns in Growing Bitcoin Mining Demand

However, there are concerns. Directing a substantial portion of EEP’s output to mining could impact the domestic electricity supply. Estimates suggest crypto mining might consume up to eight terawatt-hours this year. Authorities have temporarily paused new mining permits after reaching capacity thresholds. Environmental analysts caution that mining’s energy demands should not overshadow residential and industrial users. Maintaining this balance is crucial for sustaining both energy surplus and local development.

Low-Cost Electricity Attracts Investment

At just over three cents per kilowatt-hour, Ethiopia competes with some of the cheapest electricity markets worldwide. The framework illustrates a cycle: surplus energy converts into Bitcoin revenue, which then funds the grid and social infrastructure. If regulations ensure equitable energy access and environmental standards, this model could work elsewhere, demonstrating the intersection of policy, finance, and infrastructure.

Global Examples of Hydropower-Backed Bitcoin Mining

In Paraguay, the Itaipú Dam houses over sixty mining sites, generating more than a billion dollars in investment despite regulatory challenges with illegal operations. The Democratic Republic of the Congo utilizes hydro-powered mining to support conservation projects, while Kenya and Zambia employ small-scale hydropower for community electrification and mining. These examples highlight the broader potential for hydropower mining to generate foreign currency and enhance social infrastructure.

Clarity Strengthens Ethiopia’s Bitcoin

In Ethiopia, this model promotes market clarity, especially regarding the treatment of crypto gains for fiscal 2026. Tools like loss carry and clear capital tax rules improve industry transparency and revenue predictability, essential for responsible growth. The initiative smartly leverages hydropower mining, providing rural electrification and skill development while also increasing foreign currency inflows and strengthening the overall fiscal setup.