Ethiopia has frozen the issuance of new electricity supply permits for cryptocurrency mining operations, which officials say is necessary to safeguard domestic energy needs as demand surges nationwide.
The Ethiopian Electric Power (EEP) announced the decision during its annual performance review on Friday, citing limited capacity to meet additional high-demand activities without jeopardising household and industrial consumption.
“From our current assessment, access appears to be at capacity,” EEP CEO Ashebir Balcha said, confirming that the utility will not approve fresh crypto-mining agreements—referred to locally as “data mining.”
Ethiopia seeks balance between revenue and access
Crypto mining has rapidly grown into a lucrative business for Ethiopia, with 25 companies already operating in the sector and nearly 20 more awaiting approval.
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These operators have been drawn by the country’s abundant hydropower resources and relatively low tariffs, particularly after restrictions on mining in China, Kazakhstan, and parts of North America pushed firms to seek new locations.
EEP has marketed its electricity sales to miners to monetise stranded power during off-peak periods. In the last fiscal year, mining operations, alongside other power exports, contributed to $338 million in foreign currency earnings—a 141 per cent increase compared to the previous year.
The company also generated 75.4 billion Birr in total revenue, accounting for most electricity sales.
As a result, Ethiopia currently operates 20 power plants with a combined generating capacity of over 7,900 megawatts.
While exports to neighbouring countries like Kenya, Djibouti, and Sudan remain a key source of income—bringing in $118 million last year—domestic demand is climbing due to population growth, industrialisation, and rural electrification initiatives.
The country’s energy profile is poised for a significant shift with the imminent commissioning of the Grand Ethiopian Renaissance Dam (GERD), Africa’s largest hydropower project.
GERD, expected to be inaugurated within two months, will add more than 5,000 megawatts to the national grid, potentially allowing Ethiopia to meet its domestic and export needs more comfortably.
EEP has also received a request from Kenya for an additional 100 megawatts, on top of the 200 megawatts it currently supplies. Expanding generation capacity from GERD could help accommodate such requests without straining local supply.
Seen as a strategic pause, not a ban
While the current freeze is framed as a capacity safeguard, Ashebir have hinted that crypto-mining approvals could be revisited once generation levels increase and infrastructure is strengthened.
“Our focus is on meeting Ethiopia’s growing domestic electricity needs first, before expanding supply to energy-intensive activities such as digital mining,” Ashebir explained.
The government appears intent on ensuring that its hydropower advantage—already the largest in Africa—benefits local households and industries before expanding further into energy-hungry exports.
Ethiopia’s energy policy will continue to balance short-term foreign currency gains with long-term energy security.
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