Ethiopia’s Crypto Mining Surge Sparks Debate: Is the Power Drain Worth the Digital Gold Rush?

Ethiopia's electricity grid groans under the weight of Bitcoin miners—while locals ask if the juice is worth the squeeze.

The Energy Paradox

Farms of ASICs hum in converted warehouses, sucking megawatts from a grid that still can't keep lights on for millions. Government incentives lure foreign miners with dirt-cheap power rates, but at what cost?

Crypto Colonization?

Chinese operators dominate the mining scene, trading ETH and BTC while Ethiopian households ration electricity. 'We're subsidizing digital monopoly money,' grumbles one Addis Ababa economist—between rolling blackouts.

The Hashrate Hustle

Miners claim they're building infrastructure. Skeptics see another extractive industry—one that leaves behind empty wallets and overheating transformers. Meanwhile, the central bank quietly hedges its reserves with Bitcoin. Classic.

Ethiopia’s energy outlook for 2025 report raises concerns

While crypto mining operations have been seen as a means of foreign exchange and digital infrastructure, the massive energy footprint they generate has sparked debates over equity and efficiency. There has also been slower progress in electrifying Ethiopia despite the numerous targets and large-scale infrastructure programs carried out in the country.

“Since the demand and supply balance is tight, it remains an open question whether the power could be better used for export, general electrification or other productive uses, like pumping of water in the water and agriculture sector, where diesel generators are used to a wide extent,” it reads.

According to the report, under the National Electrification Program (NEF), about 2.2 million households were connected to the grid in the last five years, leading up to 2024. But still, nearly 50% of the population does not have access to reliable electricity, with only 22% having legal metered grid connections.

The report also warns that the slow expansion of electricity access has been one of the factors hindering economic development, reducing the potential benefits of other sector reforms. ”Addressing this issue requires increased infrastructure investment and innovative solutions to extend energy access to underserved areas. The respective tariff and exchange rate reforms are expected to alleviate the lack of materials for electrification, one of the main barriers to its progress,” the report said.

While the current distribution only covers 25% of Ethiopia’s land area, about 68% of the population resides less than five kilometers from the grid. “This highlights the potential to triple the number of household connections within the footprint of the existing grid. Implementing cost-reflective tariffs will provide EEU with resources for new connections, making widespread electrification more feasible,” the outlook reads.

Critics urge the government to consider essential services

The report also mentioned that while Addis Ababa enjoys an electrification rate of about 93%, regions like Afar and Somali remain below 12%. There have also been talks of increasing electricity tariffs by up to 400% by 2028 under the new cost-reflective pricing regime under the NEP 3.0.

Analysts expect the price increase to reduce crypto mining activities, which currently benefit from below-market power rates and tax regulations.

While crypto mining offers direct foreign investment opportunities and taps into Ethiopia’s 98% renewable energy, critics have argued that its expansion during the national electrification crisis could affect broader development goals. According to the report, about 15 million households are still waiting for their first grid connections.

Ethiopia made a shift to embrace Bitcoin mining after the National Bank of Ethiopia (NBE) banned crypto trading in 2022. The following year, the government started registering mining firms quietly through its cyber security agency INSA, showing a move towards monetizing digital infrastructure.

According to critics, a country that struggles to provide clinics with reliable electricity and farmers dependent on diesel pumps for irrigation should reassess energy allocation. They also urged policymakers to consider trade-offs between digital infrastructure growth and essential services.

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