Hong Kong-Based West Data Group Breaks Ground on 20MW Bitcoin Mining Facility in Ethiopia

Construction of a 20MW Bitcoin mining facility has broken ground in Wolaita, Sodo city in Southern Ethiopia, by the Hong Kong-based data center service provider West Data Group. The facility is slated to begin operations in six months while estimated to entail an investment of 15 million dollars.

Kal Kassa, an advisor to West Data Group, anticipates that the facility will house nearly 6,000 specialized Bitcoin mining units upon completion. He says the import of essential mining equipment is already underway as the Group moves to meet its six-month target.

This development follows a $250 million data mining partnership agreement signed between Ethiopian Investment Holding and the Hong Kong-based company in February of this year, aimed at establishing advanced data mining and artificial intelligence training infrastructure.

West Data Group has also established another data mining facility in Bole Lemi Industrial Park with a capacity of 30 MW and an estimated investment of $20 million. According to Kal, so far West Data Group has invested around $30 million in operational facilities. 

Situated in the high-altitude city of Woliata Sodo, the new facility is expected to leverage Ethiopia's abundant renewable energy resources, sold at one of the lowest tariffs in the world.

Ethiopia is increasingly becoming an attractive destination for miners, as evidenced by the Ethiopian Electric Power’s report two months ago. The state-owned enterprise revealed earnings of nearly $55 million from electricity sales to data miners in less than a year. EEP began collecting payments in foreign currency from data miners back in March, which allowed it to earn two million dollars within two months. 

There are currently around 18 data mining companies operating in the country, consuming between 10 and 100 MW of electricity.

However, Ethiopia’s legislative framework remains slightly behind the rapid pace of change in the sector. While the Information Network Security Administration (INSA) signaled a relaxation of rules in 2022 as it began registering crypto entities, a thorough framework has yet to receive a full green light.

Despite EEP’s implementation of a rolling tariff increase spread across the coming four years, Ethiopia continues to have one of the lowest rates in the world, second only to Iran. Bitcoin mining is an energy-intensive process, which makes countries with abundant, affordable electricity eye-watering prospects for investors. Ethiopia’s current 5,200 MW installed generation capacity is expected to more than double in the near term with the completion of the Grand Ethiopian Renaissance Dam (GERD) and Koysha Hydro Power Project.