Ethiopia Cuts Bitcoin Mining Power Supply to 23% Amid El Niño Hydro Shortage

What to Know:

• Ethiopian Electric Power CEO Ashebir Balcha announced at an earnings presentation that it will reduce power supply to bitcoin mining firms in the country. 
• The EEP previously agreed to deliver 98% of its contractual power obligation to these bitcoin mining firms and dropped it from 75% to 50%, and now to 23%.
• The supply drop is due to El Niño, a climate phenomenon that has reduced the country’s water inflow and hydroelectric reservoir levels.
• Bitcoin-mining companies accounted for 35% of the EEP’s revenue in the last financial year. The effect of the drought on supply has led the EEP to reduce its export-revenue predictions by 40%. 
• Despite the revenue generated by Bitcoin-mining companies in the country, cryptocurrency remains illegal in Ethiopia.

The Ethiopian Electric Power (EEP) has cut electricity supply to licensed Bitcoin mining firms by 75%. Bitcoin mining firms in Ethiopia will now receive just 23% of their contracted power supply.

Bloomberg reports indicate that the cut is due to the impact of the El Niño climate phenomenon on water inflow into Ethiopia’s hydroelectric dams. The EEP will now prioritise supply to domestic households and traditional manufacturing.

The Cut, In Numbers

In a press briefing in Addis Ababa, CEO of the EEP Ashebir Balcha shared that the EEP had agreed to deliver 98% of contracted power to its bitcoin data mining customers. Bloomberg reports that, as the dry season approached, the EEP reduced the supply to 75%.

Ashebir Balcha added, “When there was no improvement, we reduced it to 50%, and now we reached 23%.” Balcha described the reduction as deliberate and pre-emptive, not a response to an unforeseen technical failure. 

El Niño has cut water inflows to Ethiopia’s dams by 20%. El Niño, a natural climate pattern, warms the surface waters of the central and eastern Pacific Ocean more than usual. Among its other effects, El Niño leads to the disruption of wind, rainfall, and evaporation patterns around the world, including Ethiopia.

According to Ashebir Balcha, peak water inflows traditionally occur between July and August and extend into September and October.

New reports from joint monitoring operations, however, indicate reduced water inflow since June. The Grand Ethiopian Renaissance Dam (GERD), the continent’s largest hydroelectric project, and the Gilgel Gibe III dam, which together account for over 65% of Ethiopia’s electricity generation, have taken the hardest hits. 

The Scale of Bitcoin Mining in Ethiopia

After the 2021 crypto ban in Beijing, many Chinese mining firms began looking for low-cost power options to keep mining. Over the last two years, Ethiopia has become a destination of choice for these Bitcoin mining firms. 

• Ethiopia has one of the lowest electricity costs in the world. Following the introduction of new tariffs in December 2025, costs grew from $0.0314 to about $0.06 per kWh. Despite this increase, it is still one of the cheapest countries for bitcoin mining companies. 
• This low rate is made possible by massive hydroelectric generation, led by GERD. In the last financial year, Ethiopia produced 9730 MW. Bitcoin mining companies account for a third of total electricity consumption within that period. 
• Bloomberg reports that Ethiopia has power-purchase agreements with 39 bitcoin mining operations, 31 of which are already in effect. 
• Bitcoin-mining companies accounted for 35% of the EEP’s 119 billion Birr revenue in the past year.
• Reports indicate that Ethiopia is now the 8th largest Bitcoin miner in the world, accounting for an estimated 2.5-2.7% of the global Bitcoin network’s hash rate.

Despite the scale of Bitcoin mining operations in the country, cryptocurrency remains illegal in Ethiopia. 

Operational Impact on Mining Firms

This reduced supply could potentially impact mining economics across the country. Slashed gas rate outputs are expected, as mining facilities will be forced to turn off the vast majority of their hardware, leading to a sharp drop in daily Bitcoin rewards.

This also means that firms will be unable to meet projected operational yields. The EEP has also reduced its regional export revenue forecast for the financial year to $279 million, down 40%. 

The EEP says it will reassess its reservoir water levels by October. The outcomes of that reassessment, the EEP says, will determine whether it will further reduce supply to bitcoin mining operators.