Ethiopia sets up Large Data Centre to Explore Crypto Mining

Ethiopia is planning to set up a large data centre amid a surge in bitcoin mining, having signed a preliminary agreement to develop infrastructure for data mining and AI training operations.

Ethiopian Investment Holdings (EIH) initially said that a memorandum of understanding (MoU) for a US$250m project had been signed with a subsidiary of Hong Kong-based West Data Group, but it later removed references to the value of the deal and the identity of the company.

Cryptocurrency continues to explode in popularity, which is ultimately causing data centre facilities to face higher demand. 

A leading destination for bitcoin miners

Data centres provide the facilities to host large-scale Bitcoin mining operations. Those that host bitcoin mining clients typically boast facilities between one and five megawatts to keep up with demand and are therefore in operation constantly.

During a time of mass demand for AI and high-performance computing (HPC), data centres are having to adapt quickly in order to handle the technology. As a result, AI has become a widely used tool in digital applications and processes for bolstering operational efficiencies and boosting productivity.

With this in mind, Ethiopia has become a leading destination for bitcoin mining since its government authorised it in 2022. As bitcoin miners use computers to solve complex algorithms and consume large amounts of electricity, they are attracted to the lower power costs that Ethiopia can offer.

The country also offers an abundance of hydroelectric power and other renewable energy sources - which is important to the data centre industry, which is continually seeking to become more sustainable to reduce carbon footprint.

Aiming to deliver world-class data centre infrastructure

Ethiopia’s decision to set up a bitcoin data centre comes in the wake of crypto mining operations in the People’s Republic of China relocating, after the Chinese government banned crypto trading and mining in 2021. 

This decision was taken to control financial risks and reduce energy consumption.

With the data centre market in Africa expected to expand to more than US$3bn by 2025, global businesses are evolving to develop new digital transformation strategies to improve customer connectivity. 

Leading data centre operators are continuing to invest across the continent, including in Ethiopia. In November 2023, Raxio Data Centres launched a new 3MW Tier III certified data centre facility, with the goal of offering wider customer assurances.

In expanding their digital transformations in Ethiopia, data centre operators are hoping to deliver more to their customers and deliver world-class infrastructure to underserved markets across Africa as a whole.

According to Reuters, roughly 40% of Ethiopia's 120 million people do not currently have access to electricity.

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