In September 2026, Ethiopia sharply cut electricity supplies to bitcoin miners to 23 % of contracted volumes. The reason is a drought intensified by El Niño, which reduced water inflow into hydro reservoirs by 20 %. The state company Ethiopian Electric Power (EEP) gave priority to households and industry rather than to energy-intensive farms, which until recently consumed almost a third of the country's entire output.
Not long ago, cheap hydropower at 3,2 cents per kilowatt-hour turned Ethiopia into a magnet for international miners. Chinese and Middle Eastern companies signed 39 agreements, and 31 were already operating. Miners provided 35 % of EEP's revenue and brought foreign currency into the budget. The firm Phoenix Group alone in April 2025 increased capacity to 132 MW. Now these investments depend on the water level in the dams, including the Grand Ethiopian Renaissance Dam.
The situation exposes a paradox of the crypto industry: a digital asset that is positioned as independent of traditional systems is in fact tied to physical infrastructure and the weather. When rivers run shallow, mining becomes unprofitable, and equipment sits idle. The government is forced to choose between foreign-currency receipts and the basic needs of citizens — half the population still lacks reliable electricity.
For an investor, this is a signal of hidden risks. Cheap energy is not an eternal resource but a bet on a stable climate and the priorities of the authorities. Analysts already note that global electricity consumption by miners may have peaked in 2024–2025 due to halvings and competition with AI data centers. In Ethiopia, the cutback may continue: in October, EEP will review the terms and does not rule out restricting energy exports to its neighbors.
Imagine a farmer who invested all his savings in a greenhouse with automatic irrigation, and then it turned out that the river dries up once every few years. It is similar here: the high profitability of mining rests on a fragile balance of water, politics, and demand for bitcoin. One drought season — and the margin evaporates.
The conclusion is simple: diversify your risks and do not stake large sums on assets whose profitability depends on a single energy source and a single region.
