Finance

Ethiopia makes data center deal with Hong Kong company, may start mining

The Ethiopian government has entered into a partnership with a Hong Kong data center operator. According to reports, Bitcoin mining will be among the activities the sides develop together.

State-owned Ethiopian Investment Holdings has signed a Memorandum of Understanding with Data Center Service, a subsidiary of Hong Kong’s West Data Group, according to an announcement released on Feb. 5. Ethiopia and West Data will cooperate on a $250-million project “dedicated to establishing cutting-edge infrastructure for data mining and artificial intelligence training operations in Ethiopia.”

Kal Kassa, CEO for Ethiopia at Hashlabs Mining, stated in an X post that:

“The Ethiopian Government will be mining bitcoin through it’s [sic] partnership with Data Center Service.”

Indonesian Hashlabs Mining already has operations in Ethiopia, where mining has been permitted since 2022, but cryptocurrency trading is prohibited.

Related: Payments platform Fuse integrates ChromePay to bring DID services to Africa

The announcement by Ethiopian Investment Holdings did not mention crypto mining. Bloomberg said in a report on Feb. 7 that the Ethiopian government has created a sandbox to experiment with issuing licenses for “cryptographic products.”

Bitcoin (BTC) mining is controversial in Ethiopia, Bloomberg continued. The new Grand Ethiopian Renaissance Dam across the Blue Nile River tributary, even though it is only partially functional so far, has provided Ethiopia with the world’s second-lowest electricity rates. The controversy arises from the fact that half of the country’s population lacks electricity in their homes.

According to another report, there are 21 crypto miners already in Ethiopia, of which 19 are Chinese. Crypto mining, like crypto trading, is banned in China, although it still goes on.

Bitcoin miners have had a lobby in Ethiopia backed by groups such as Project Mano and BitcoinBirr. Ethiopia also collaborates with the Cardano blockchain’s Input Output Hong Kong (IOHK) to overhaul its education system.

West Data Group is a blockchain-powered fintech that established its first data center in 2017, in Kentucky. It also has centers in Texas, Kazakhstan, Angola and Kenya. According to the company’s website, “From 2021, we repositioned its [the company’s] strategic focus on Bitcoin mining, digital currency investment and trading.”

Magazine: Bitcoin in Senegal: Why is this African country using BTC?