Ethiopia Halts New Electricity Permits for Bitcoin Mining
Ethiopia has halted the issuance of new electricity supply permits to businesses engaged in Bitcoin mining, citing its inability to meet the increasing demand for energy, as stated by Ashebir Balcha, the CEO of Ethiopian Electric Power (EEP). This decision raises concerns that the government prioritizes financial profit over the needs of its citizens, particularly as an estimated 57 million people in Ethiopia lack access to electricity due to insufficient transmission infrastructure.
Current Energy Usage and Mining Operations
Currently, Bitcoin mining operations utilize approximately 600 megawatts (MW) of power, constituting around 11% of the nation’s total electricity generation capacity of 5,631 MW, as reported on the EEP’s official website. This level of energy usage is sufficient to power half of Addis Ababa, the capital of Ethiopia.
The surge in Bitcoin mining has been significant: since the beginning of 2023, around 27 companies have been officially licensed to mine cryptocurrency within Ethiopia. There are nearly 20 additional foreign firms waiting for permission to begin operations. The draw for these miners comes primarily from the nation’s inexpensive hydroelectric power, largely generated from the Grand Ethiopian Renaissance Dam (GERD), one of the continent’s largest energy projects. According to reports from Bitcoin Birr, miners in Ethiopia are charged a competitive rate of $3.60 per kilowatt hour (kWh) after taxes, which is significantly lower than average costs in global markets.
Profitability and Economic Impact
Mining operations have proven to be highly profitable, with individual mining machines reportedly yielding daily profits of around $5.71. Certain miners have even managed to deploy up to 50,000 machines. Notably, Ethiopia has increased its share of Bitcoin’s global computing power from approximately 2.5% in January to about 5% now, reflecting a growing interest in mining activities.
This expansion has been financially beneficial for Ethiopian Electric Power, which reportedly earned more than $200 million in 2025 through electricity sales to Bitcoin miners—a figure some analysts contest. They argue the true monthly earnings hover around $25 to $28 million. Not surprisingly, recent statistics disclose that EEP’s total revenue, including from electricity exports to neighboring countries, reached $338 million in the fiscal year 2024/2025. A significant portion, approximately $118 million, came from power sales to regions such as Djibouti and Kenya, while $220 million was generated from Bitcoin mining and other data-intensive activities.
Future Plans and Criticism
With plans to add 5,000 MW of capacity to the national grid over the coming months, officials believe the halt on power agreements for Bitcoin miners could soon be lifted. Critics argue that dedicating substantial amounts of electricity to mining, especially when millions remain without access to basic energy services, lacks foresight. Over 45% of Ethiopia’s population, nearly 120 million people, still live in areas without reliable power, and blackouts remain commonplace even in urban centers.
Experts like David Gitonga, head of Kenya-based crypto platform BitKE, emphasize the moral implications of the government’s strategy, warning that profits from Bitcoin mining may not be reinvested responsibly into improving energy access for the impoverished. Gitonga urges that policies should be enforced that mandate miners to attend to the community’s basic needs.
On the other hand, Kal Massa, founder of Bitcoin Birr, defends the government’s electricity sales to miners. He highlights the concept of ‘stranded energy’—power generated but underutilized due to transmission limitations—that Bitcoin miners effectively consume. This sector provides an essential market for excess energy that could otherwise remain unused.
Infrastructure Developments
Despite infrastructural challenges, including inadequate substations necessary for effectively distributing power, the ongoing developments aim to support steady energy growth as Ethiopia aims to mature its middle class. As reported, over 28,571 kilometers of new transmission lines have been constructed in the past year, partly funded by Bitcoin mining revenues, and more than 8,700 new substation bays have been established. EEP has indicated that the income generated from cryptocurrency mining will play a role in enhancing the electricity transmission and distribution network, indicating that effective planning could allow both sectors to flourish simultaneously.
