Ethiopia Threatens to Cut Power to Bitcoin Miners Amid El Niño-Driven Drought

The Ethiopian Electric Power (EEP) is considering terminating electricity supply agreements with Bitcoin mining operations due to the severe drought triggered by El Niño. The state-owned utility has been scaling back power deliveries to cryptocurrency miners, reducing supply from 98% of contracted capacity down to just 23%. EEP's Chief Executive Officer Ashebir Balcha explained that the utility initially reduced supply to 75%, then to 50%, and finally to 23% due to low reservoir water inflows.

The potential termination marks a significant shift for the commercial sector, which has become a lucrative source of foreign exchange. In the past fiscal year, data mining firms generated over $300 million, contributing roughly 35% of EEP's total corporate revenue. Ethiopia currently holds power purchase agreements with 39 crypto-mining companies, with 31 fully operational facilities consuming nearly a third of the nation's total installed generation capacity.

The drought has exposed structural fragilities in Ethiopia's energy mix, which is overwhelmingly dependent on large-scale hydroelectric infrastructure. The Famine Early Warning Systems Network (FEWS NET) reported that key catchment areas received up to 50% less rainfall than historical averages during the June-to-September Kiremt rainy season.