Ethiopia has cut electricity supplied to Bitcoin mining companies to about 23% of contracted levels as falling water inflows strain its hydro-dependent power system forcing the state utility to ration electricity and prioritize households and manufacturers.
Ethiopian Electric Power (EEP) initially reduced deliveries to miners to 75% of contracted volumes, then to 50%, before cutting them further to 23%, EEP Chief Executive, Ashebir Balcha, said at the utility’s annual performance briefing.
The utility had committed to supplying miners with 98% of their contracted electricity under power-purchase agreements.
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The cuts followed a roughly 20% decline in water inflows into Ethiopia’s hydroelectric reservoirs with El Niño-related dry conditions adding pressure to the system. Hydropower accounts for about 95% of EEP’s generation mix leaving electricity production particularly exposed to changes in rainfall and reservoir levels.
The move highlights the tension at the centre of Ethiopia’s Bitcoin-mining strategy. Data-mining companies generated about 50.37 billion birr for EEP in the last financial year, making them the utility’s largest revenue-generating customer category, according to StockMarket.et.
Separate reporting cited by Bloomberg put mining companies’ contribution at about 35% of EEP revenue, while miners consumed almost one-third of Ethiopia’s electricity output.
Yet EEP has chosen to give up some of that revenue as electricity becomes scarcer.
“The people come first,” Balcha said in explaining the utility’s decision, according to StockMarket.et. The utility has prioritized public and domestic industrial supply over data mining and electricity exports.
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The timing is significant.
Ethiopia has spent the past year emerging as an important destination for global Bitcoin miners, attracted by abundant renewable power and relatively low electricity costs. EEP has power-purchase agreements with 39 Bitcoin-mining companies, of which 31 are operational, according to figures reported by Bloomberg.
The current squeeze exposes the vulnerability of that model where cheap renewable electricity is only an advantage when the underlying resource is available.
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StockMarket.et described the broader situation as Ethiopia entering a “rationing season,” with the power utility cutting its largest revenue-generating customer before the full effects of the shortage arrive. EEP’s installed generation capacity rose 23% to 9,730 megawatts but capacity utilization fell to about 60%, below its 67% target, as water availability limited generation.
The utility has also been undergoing a financial turnaround. It reported about $739.7 million in revenue for 2025/26, up 57.8% year-on-year, and gross profit of roughly $245.5 million, after years of losses. A restructuring also moved about $1.64 billion of EEP-related debt off its books, while electricity tariffs have been rising under reforms introduced in 2024.
EEP plans to reassess the electricity situation in October 2026. If reservoir conditions remain weak, supplies to Bitcoin miners could be reduced further while electricity exports to neighboring countries could also face restrictions.
For Ethiopia, the episode underscores a central trade-off in its mining strategy – Bitcoin miners can provide substantial foreign-currency and electricity revenue when power is abundant, but they are also among the easiest major loads to curtail when the grid comes under pressure.
The country’s Bitcoin-mining boom is therefore facing its first major test, not from Bitcoin prices or regulation, but from the most basic constraint on a hydro-powered mining economy – water.
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