(Sept 15): Ethiopia has slashed power supply to its crucial bitcoin-mining industry by three-quarters as the country grapples with reduced inflows into its hydroelectric dams.

The bitcoin-mining companies accounted for 35% of Ethiopian Electric Power Corp’s revenue in the past financial year and consume almost a third of the nation’s total production of 9,730MW.

The El Niño weather phenomenon has exacerbated Ethiopia’s dry season, which has reduced water inflow into hydroelectric reservoirs by 20%. In response, the agency has taken the precautionary measure of throttling delivery to the power-hungry facilities to support manufacturing and households, according to Ashebir Balcha, EEP’s CEO.

“When we noticed the dry season was approaching, we reduced the supply to 75%,” he said during an earnings presentation. “When there was no improvement we reduced to 50% and now we reached 23%.”

While cryptocurrency trading is still illegal in Ethiopia, the Horn of Africa nation has welcomed Chinese bitcoin miners lured by some of the world’s lowest electricity costs.

Ethiopia has power-purchase agreements with 39 bitcoin-mining companies, with 31 already operational. Under the arrangements, EEP had committed to deliver at least 98% of the contracted power.

It will reassess the situation by October and, depending on the outcome, may lower supply even further and also limit exports to neighbouring nations, according to the CEO.

EEP trimmed its export-revenue forecast for the financial year by 40% to US$279 million (RM1.13 billion) this fiscal year on account of the drought.

Uploaded by Arion Yeow