Ethiopia Slashes Power to Bitcoin Miners Amid Drought

Ethiopian Electric Power (EEP) announced a drastic reduction in electricity supplied to bitcoin mining operations, cutting deliveries to just 23% of contracted amounts. The cut follows a 20% drop in water inflows to the nation’s hydro‑electric reservoirs caused by an El Niño event.

Mining’s Rise and Dependence on Hydropower

Bitcoin miners quickly became one of EEP’s largest customers. Agreements with 39 mining firms—31 of which are active—led miners to consume roughly one‑third of Ethiopia’s total electricity. In return, the sector generated about 35% of the utility’s revenue, paying in foreign currency at rates around 3.2 cents per kilowatt‑hour.

Impact of Reduced Reservoir Levels

Hydropower accounts for roughly 95% of Ethiopia’s electricity. Inflows to the country’s 21 dams fell by about 20%, affecting major facilities such as the Grand Ethiopian Renaissance Dam (GERD), which produced 18.3 TWh last year—about 52% of national output. Declining water levels have forced some generating units to lose up to 50 MW of capacity.

Consequences for Miners and the Economy

• Power allocations dropped from 75% of contracted supply to 50%, and now to 23%.
• Miners’ electricity costs and operational uptime are expected to rise sharply.
• EEP’s forecast for electricity‑export revenue was cut by 40% to $279 million.
• Mining one bitcoin in Ethiopia is estimated to use 6.4 million kWh, equivalent to the annual consumption of about 15,000 Ethiopian households.

Future Outlook

EEP will review the situation in October. If reservoir inflows remain low, further reductions in power to miners are possible, and export shipments to neighboring countries could also be limited. Ethiopia’s share of global Bitcoin hashrate is modest—around 2.4% (approximately 23 EH/s)—so the cuts do not pose a network‑wide risk, but they could significantly affect local mining operations.