State-owned utility Ethiopian Electric Power (EEP) has issued a stern warning that it may completely cancel electricity supply agreements with commercial Bitcoin mining operations. The drastic measure is being considered as an intensifying El Niño weather phenomenon triggers severe drought conditions, crippling reservoir inflows across the nation’s major hydroelectric infrastructure.
The move highlights a high-stakes balancing act for East Africa’s largest power producer, which must weigh lucrative foreign exchange revenues against domestic energy security and international diplomatic commitments.
According to EEP Chief Executive Officer Ashebir Balcha, the utility has already dramatically throttled energy deliveries to cryptocurrency data centers. Supply has plummeted from a contracted 98 percent capacity down to a mere 23 percent.
The phased curtailments followed a nearly 20 percent drop in water inflows across critical hydroelectric reservoirs. EEP initially reined supply back to 75 percent as the dry season approached, later dropping it to 50 percent, and finally to 23 percent as seasonal rainfall failed to replenish water levels.
Moges Mekonnen, Communication Director at EEP, emphasized that the government is fully prepared to take harder actions if climate indicators worsen.
“If the intensification of El Niño’s impact continues, Ethiopia may reconsider its power sales relationship with data mining operators,” Moges stated, noting that the utility is ready to enforce measures “up to outright termination”.
The potential termination marks a major shift for a sector that quickly grew into a vital financial engine. Over the past fiscal year, data mining firms injected more than 50 billion birr (over $300 million) into the economy, accounting for roughly 35 percent of EEP’s total corporate revenue.
Ethiopia currently maintains power purchase agreements with 39 crypto-mining companies, 31 of which are completely operational. At peak capacity, these tech facilities consume nearly a third of the nation’s total installed generation capacity of 9,752 megawatts.
While ultra-competitive industrial electricity tariffs priced at 3.2 US cents per kilowatt-hour successfully drew international mining giants like Phoenix Group to the country, the massive energy footprint drew heavy scrutiny. Mining a single Bitcoin requires an estimated 6.4 million kilowatt-hours—the equivalent of the annual electricity usage of roughly 15,000 average local households. With nearly half of Ethiopia’s population still lacking reliable access to grid electricity, mounting climate volatility has exposed the fragilities of a power matrix that depends on river inflows for over 90 percent of its generation.
Data from the Famine Early Warning Systems Network (FEWS NET) indicates that key catchment areas received up to 50 percent less rainfall than historical averages during the recent rainy season. Compounding the crisis, the United Nations has warned that severe drought conditions could stretch well into early 2027.
Despite these domestic constraints, EEP has stressed that its contingency strategy explicitly protects sovereign cross-border trade. Volumes delivered to neighboring countries via the Eastern Africa Power Pool (EAPP)—including Kenya, Djibouti, and Sudan—will remain untouched, even as EEP revises its cross-border export revenue targets downward by 11 percent to $279 million for the 2026/27 fiscal year.
Furthermore, EEP officials noted that commercial power contracts signed with data miners do not include mandatory supply guarantees or penalty clauses for climate-induced interruptions, granting the state utility full legal flexibility to suspend operations without financial liability.
A comprehensive technical review is scheduled for October to measure final reservoir storage at the close of the hydrological calendar. Until then, EEP’s stance remains unyielding: national electrification, domestic manufacturing, and regional diplomatic obligations will take absolute precedence over digital currency profits.
