Ethiopia’s cheap electricity is attracting Chinese mining companies: Bloomberg

Ethiopia’s affordable electricity costs are catching the attention of Chinese mining companies seeking new opportunities, reveals Bloomberg’s latest report. While cryptocurrency trading is officially prohibited in both China and Ethiopia, Bitcoin mining was legalized in Ethiopia in 2022. Consequently, Chinese firms, searching for new investment avenues following China’s cryptocurrency ban in 2021, are increasingly turning to Ethiopia for their mining operations. Bloomberg’s report indicates that out of the 21 companies that have forged partnerships with Ethiopia’s power monopoly, 19 are Chinese. The appeal of cheap electricity, provided primarily by hydropower (accounting for 92% of the country’s power supply), draws miners to Ethiopia. This is despite the fact that nearly half of the Ethiopian population lacks access to electricity. Additionally, Ethiopia’s moderate climate facilitates mining operations, unlike Texas, which faces higher temperatures and increased cooling costs. To gain access to electricity without official state approval for Bitcoin mining, some miners may masquerade as factories or agricultural projects, as detailed in the report. However, similar operations in Iran and Kazakhstan were abruptly shut down due to government reversals, highlighting the risk of political instability in Ethiopia. Elsewhere in Africa, hydropower has been utilized in the Democratic Republic of Congo to benefit its national park and local communities.