Ethiopia has reportedly increased its electricity allocation to Bitcoin mining to 600 megawatts, making it one of the world’s fastest-growing markets for this activity. According to Ethan Vera, co-founder and CEO of Bitcoin miner Luxor, the African country plans to add a few hundred more megawatts by the end of the year.
Vera, who recently visited Ethiopia’s dozen mining farms, revealed that many of the miners are using mid-generation machines such as the S19J Pro, A1346, and other models. The CEO attributes the popularity of these devices in African countries to their low power consumption.
“Most mining farms had evaporative cooling (water walls) set up, although it is not needed for the majority of the year given the cold climate,” Vera added.
Earlier this year, Ethiopia signalled its intention to become a leading Bitcoin miner when it signed power supply agreements with 21 primarily Chinese mining companies. Coupled with the commissioning of the Grand Ethiopian Renaissance Dam, these agreements were expected to not only open a new source of foreign exchange for Ethiopia but also position the country as a hub for Chinese Bitcoin miners.
According to a report published late last year, Ethiopia only utilizes approximately 5% of the 4.9 gigawatts of hydroelectric power it generated since 2021 because only 51% of the population has access to electricity. The state electricity company, Ethiopian Electric Power, has been unable to build the necessary infrastructure to reach all Ethiopians.
The report suggested that Bitcoin miners could potentially use the excess electricity to help Ethiopia generate the capital needed to invest in the power distribution infrastructure. However, the African nation will only be able to achieve this if regulators such as the Ethiopian Information and Network Security Administration take steps to reduce bureaucratic red tape.
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