Ethiopia Taps Surplus Hydropower for Bitcoin Mining Revenue

Ethiopia is generating revenue from surplus hydropower by selling it to Bitcoin miners, who pay around $0.03-$0.04 per kilowatt-hour. This has brought in $55 million in foreign currency over the past 10 months. The revenue supports the economy, creates jobs, and promotes universal electrification. While concerns exist about straining the domestic electricity supply, the model demonstrates the potential for surplus energy to be converted into foreign currency while reinforcing social infrastructure.

Ethiopia is harnessing its surplus hydropower to generate revenue through Bitcoin mining, a strategy that has brought in $55 million in foreign currency over the past 10 months. This initiative, spearheaded by Ethiopian Electric Power (EEP), involves selling excess energy to Bitcoin miners at a rate of approximately $0.03 to $0.04 per kilowatt-hour. The revenue supports the economy, creates jobs, and promotes universal electrification.

The model demonstrates the potential for surplus energy to be converted into foreign currency while reinforcing social infrastructure. For instance, the revenue has accelerated the government's push for universal electrification and created opportunities for international mining companies to set up shop locally, teaching technical skills and creating jobs.

However, there are concerns about straining the domestic electricity supply. Estimates suggest crypto mining might consume up to eight terawatt-hours this year, prompting authorities to temporarily pause new mining permits once capacity thresholds are hit. Environmental analysts warn that mining's energy demands should not compete with residential and industrial users, emphasizing the need for a delicate balance.

The model, which converts surplus energy into Bitcoin revenue to fund the grid and social infrastructure, has the potential to work in other countries as well. For example, Paraguay's Itaipú Dam hosts over sixty mining sites, generating more than a billion dollars in investment, while the Democratic Republic of Congo uses hydro-powered mining to support conservation projects.

In Ethiopia, the model is contributing to market clarity, particularly regarding how crypto gains are treated in fiscal 2026. Tools like loss carry and clear rules on capital taxes help bring the industry into the open and make revenue flows easier to predict, facilitating responsible growth.