When Energy Becomes Digital Gold: Ethiopia’s Grid Got a New Boss

By Aksah Italo
Published on 11/24/25

Just beyond Addis Ababa’s outskirts where the country’s power stations hum, data miners have tapped into the country’s renewable hydroelectric might.

One of the companies is BitCluster, a Russian-owned company operating near the Kilinto high-voltage substation since 2024, where its facility has been engineered to meet the exacting demands of large-scale crypto mining.

Vitaly Borshenko, BitCluster’s co-founder, says cheap electricity and a forgiving climate conditions, and the welcoming business environment had been the main draw.

“It came with the favourable conditions,” he says.

BitCluster is among 27 foreign firms licensed to mine Bitcoin in Ethiopia, the world’s largest crypto-currency.

Bitcoin exists entirely in the digital ether, where coins are bought, sold, and traded without the meddling of banks or governments.

It comes down to vast computing networks racing to solve cryptographic puzzles that verify transactions on blockchains. Each successful solution births a new Bitcoin, though at a steep energy cost.

Each mining machine earns roughly 5.70 dollars per day, according to NiceHash, a Slovenian crypto-currency platform. Multiplied by thousands of machines, the result is billions in digital wealth and, crucially, megawatts in energy demand. Ethiopia has already set aside 600 megawatts for such operations, half the energy needed to power its capital.

In December 2024, Bitcoin reached a dizzying peak above 103,000 dollars, buoyed by the election of Donald Trump, who vowed to make America as the crypto hub of the world.
“I want America to be a nation that leads the way,” he declared.

But the digital coin is no stranger to collapse. In 2022 and 2023, its value plunged below 15,000 after FTX (Future Exchange), one of the world’s largest crypto exchanges, fell apart in a fraud scandal. Its founder, Sam Bankman-Fried, was convicted of fraud and sentenced to 25 years in prison.

Now, just weeks after Ethiopia implemented one of its most significant electricity tariff reforms, miners find themselves in a tightening vise of costs and controls.

The new pricing policy, issued by the Ethiopian Electric Power (EEP) in October and due to take effect on December 1, 2025, targets the booming ranks of crypto and data-mining operations. It replaces the long-standing flat-rate system with a Time-of-Use tariff, in which electricity costs vary by the hour.

Peak hours, from 6:00 pm to 10:00 pm, will command the highest rates; shoulder hours (5:00 am to 9:00 am) are moderately priced; and off-peak hours (9:00 am to 6:00 pm and 11:00 pm to 5:00 am) will offer the lowest tariffs.

During the first phase, December 2025 to July 2026, the base rate will be six cents during peak periods, 4.5 cents during shoulder hours, and 3.5 cents overnight. The second phase, from July 2026 to July 2027, raises averages to five cents, peaking at 6.3 cents. The final phase, through July 2028, will lift tariffs further to 6.5 cents, with top-hour costs of 7.2 cents.

Critics warn that these changes could erode Ethiopia’s appeal as a low-cost crypto hub.

The industry’s three dominant players, Phoenix Group (UAE), West Data Group (Hong Kong), and BIT Mining Limited (China), have collectively invested hundreds of millions. Phoenix operates a 132MW facility, West Data entered with a 250 million US dollars deal in 2024, and BIT Mining runs 35MW, with plans to expand to 51MW.

Around Addis Ababa’s transmission corridors, Chinese-origin firms such as Canaan, Bitdeer, and BitFuFu have clustered. Officials estimate foreign investment in the industry now tops half a billion dollars, dominated by these few giants.

Elsewhere, enthusiasm has faded. Many nations initially welcomed crypto miners, seduced by the promise of foreign investment, only to discover the darker side of energy-hungry data farms. Kazakhstan offers a cautionary tale: once a crypto haven, it saw miners devour up to seven percent of national output, sparking blackouts and prompting the government to sever their power supplies.

Ethiopia appears to be learning from such examples. Authorities have temporarily halted new power permits for data-mining firms, 20 applications remain pending, while 27 companies already operate. In 2024, electricity sales to miners reportedly generated 55 million dollars, but many wonder if the trade-off is worth it.

Crypto-mining’s colossal appetite for energy and emissions has ignited fierce debate over its strain on national grids and environmental goals. Some see long-term power-purchase agreements as essential for balancing infrastructure needs with economic gain.

Bitcoin itself was born from disillusionment. After the 2008 financial crisis, mistrust in traditional banking inspired an anonymous figure, Satoshi Nakamoto, to publish a nine-page white paper proposing a decentralized digital currency. The first Bitcoin was mined in 2009. Back then, it was worth mere cents.

China, too, learned its lesson. In 2021, it banned Bitcoin mining altogether, citing threats to grid stability and environmental impact. Russia followed suit in parts of its territory.

Yet advocates remain undeterred. A mining advocate sees promise in Ethiopia’s hydropower bounty and pragmatic regulatory stance. “The return is lucrative,” he says. 

For him, crypto-mining could inject foreign capital, create jobs in maintenance, security, and management, and fuel development projects. Energy accounts for 90 percent of operational costs, making Ethiopia’s cheap electricity a decisive lure.

Experts like Mikael Alemu, a close observer of the energy sector and Co-founder of 10 Green Gigawatt, raise critical concerns.

“The playground is between prohibition and increasing expense,” he says.

He argues that as Ethiopia raises rates for household users, miners should also pay more. He believes regulation is inevitable once Bitcoin is recognized as a financial asset.

“The government should make it impossible to mine,” he suggests bluntly. To him, foreign companies “sponging off subsidized tariffs” represent a troubling imbalance. 

Subsidies, he insists, should benefit Ethiopians, not Chinese, Russian, or European firms exploiting low-cost power. “It’s a terrible thing,” he laments. “A very, very bad thing.”

For would-be investors, he offers a warning: “It’s all a gamble.”

Biniam Tufa, General Manager of Jasbel Energy, advocates a middle path. He urges regulators to allow miners to use off-grid solar systems to ensure fairer power distribution. With reports suggesting the sector could consume up to a third of Ethiopia’s power output, he sees existential risks for grid stability and energy access. Yet, he cautions against outright bans, citing potential losses in foreign exchange and a rise in illegal operations.

“It is bound to backfire,” he warns.

He believes the government’s temporary freeze on new permits and rollout of a time-of-use and Availability-Based Tariff represent pragmatic steps to manage capacity and public concern. 

“The era of cheap power for miners is ending by design,” Biniam says.

Mining companies have set up operations to take advantage of surplus electricity created by distribution gaps, allowing utilities to sell otherwise unused power. But experts warn that the activity is beginning to encroach on supply meant for consumers. They note that if the 20 pending firms become operational, total consumption could jump to 50 percent. They argue that any excess power should instead be channelled into productive sectors such as agriculture, where it can generate stronger economic and employment gains.