Last week, on Thursday, February 15, the Ethiopian Government’s investment arm, Ethiopian Investment Holdings (EIH), signed a memorandum of understanding with Honk-Kong-based West Data Group’s Center Service PLC to commence mining bitcoin.
The partnership is under a general agreement for a groundbreaking $250 million data mining project “that is dedicated to establishing cutting-edge infrastructure for data mining and artificial intelligence training operations in Ethiopia,” according to the EIH. Ethiopia is positioning itself as a leader in the data centre space in Africa, which is estimated to grow to $5.4 billion by 2027, according to Aritzon Advisory and Intelligence.
As noted by Kal Kassa, CEO for Ethiopia at Hashlabs Mining, “the development is part of the Ethiopian Government’s aim to drive economic growth by leveraging technology and energy sources to attract foreign investments.”
The EIH has yet to confirm the details of its bitcoin mining operations or respond to requests for comment by other publications. Nevertheless, as the project matures, we can expect to get more clarity from them on the particulars of the arrangement.
Despite the ban on crypto trading in the country, 2022 saw the ratification of favorable data mining laws that permit “high-performance computing” and “data mining,” which is where bitcoin mining falls under. In the last two years, this has opened the floodgates to miners seeking its comparatively positive reception to bitcoin mining, coupled with its abundance of energy sources—chiefly hydro—to its optimal weather and cheap energy costs.
According to data from Bitcoin mining services company Luxor Technologies, in 2023, Ethiopia ranked fourth behind the USA, Hong Kong, and Asia as one of the top destinations for Bitcoin mining rigs. Russian bitcoin mining company Bitcluster has already built the first 120 MW bitcoin mining facility, and companies such as Hashlabs Mining have started building bitcoin mines in Ethiopia for their global clients.