Ethiopia has suspended the issuance of new electricity supply permits for data mining companies, effectively putting a brake on cryptocurrency mining expansion in the country.
The move comes after the East African nation earned $55 million from Bitcoin mining over a 10-month stretch in 2024, largely through agreements with 25 licensed mining companies. The sector’s rapid growth, fueled by cheap hydropower and surplus energy from the Grand Ethiopian Renaissance Dam (GERD), has now hit a wall due to capacity constraints.
EEP Reaches Energy Supply Limit
In a statement, Ethiopian Electric Power (EEP) CEO Ashebir Balcha confirmed that the company has no additional capacity to accommodate new mining operations.
“From our current assessment, access appears to be at capacity,” Balcha said.
EEP began supplying power to crypto-miners in foreign currency in recent years as a way to monetize so-called “stranded power” , electricity generated during off-peak hours that would otherwise go unused. This initiative helped attract global mining firms seeking lower operational costs.
Currently, 25 mining companies are active in Ethiopia, with nearly 20 more awaiting permits. However, the freeze means these pending applications will not move forward until additional capacity becomes available.
A Lucrative but Resource-Intensive Industry
The mining sector’s appeal lies in Ethiopia’s low-cost electricity tariffs and abundant hydropower, with much of it coming from the GERD. This dam alone will eventually add over 5,000 megawatts to the national grid once fully commissioned in the coming months.
In the last fiscal year, EEP exported nearly 7% of Ethiopia’s total power output, generating $338 million in foreign currency. Crypto-mining operations were among the largest contributors, alongside exports to Kenya and Djibouti. Kenya, in particular, has requested an additional 100 megawatts on top of the 200 megawatts it already imports.
While Bitcoin mining has helped Ethiopia tap into global digital economies, the practice has faced criticism for its high energy consumption and its potential to limit electricity access for local communities. Currently, only half of Ethiopia’s population has access to electricity, despite a national grid spanning over 20,000 kilometers.
Balancing Growth with Energy Needs
The government’s decision underscores a growing tension: how to balance the economic benefits of selling surplus energy to crypto miners with the urgent need to expand domestic electricity access and preserve grid stability.
For now, Ethiopia’s crypto-mining future will hinge on how quickly it can boost generation capacity beyond current limits. The commissioning of the GERD could eventually re-open the door for new entrants, but industry insiders warn that domestic power needs will remain a priority.
