Despite the millions of dollars the activity has brought into the economy, Ethiopia’s government has made it known that Bitcoin mining will not be a permanent fixture in its energy policy. The CEO of Ethiopian Electric Power (EEP), Asheber Balcha, confirmed that cryptocurrency mining will be scaled back once it begins to strain the country’s electricity grid, underscoring that the sector was only licensed to take advantage of temporary surpluses in hydropower.
Since authorising mining in 2023, Ethiopia has attracted a wave of foreign-owned operators to buy power via contracts at low rates (~US$0.0314 per kWh) using renewable hydropower.
The country’s new Grand Ethiopian Renaissance Dam (GERD) supplies surplus power, particularly during off-peak hours, and that surplus fuels mining operations. In the last ten months, Ethiopia generated roughly US$55 million in foreign exchange by selling that surplus power to Bitcoin miners.
However, electricity demand from mining has raised alarms. Internal projections from EEP show mining could consume up to one-third of the country’s total electricity output this year. In response, the government has suspended issuing new power‐supply licenses to mining firms until it ensures the grid can handle the existing load without degrading service to homes and factories.
The policy has delivered results. According to government figures, over the past year, Bitcoin mining has contributed more than $200 million in foreign currency inflows and around $55 million in direct revenue from energy sales to miners. For a nation facing persistent shortages of foreign reserves, these earnings have provided welcome relief.
Yet the growing appetite for electricity among miners has triggered serious concerns. Internal estimates suggest the industry could consume nearly a third of Ethiopia’s power supply in 2025, raising the risk of blackouts for households and factories. In response, the government has halted the issuance of new licenses for mining operations while it assesses the sustainability of current demand.
For policymakers, mining offers much-needed capital, but it cannot come at the expense of reliable power for citizens, many of whom still live without stable electricity. Authorities have framed Bitcoin mining as a stop-gap measure, useful while excess power exists, but not central to Ethiopia’s long-term energy or economic strategy.
The future of Ethiopia’s crypto experiment now hinges on whether it can expand energy infrastructure, establish transparent regulation, and ensure that mining revenues are reinvested in public needs. Without that balance, what began as an innovative way to monetise surplus power could turn into a liability for Africa’s second-most-populous nation.
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