The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, <\/em><\/strong>subscribe now<\/a>.<\/em><\/strong><\/p>\n <\/a><\/p>\n The Ethiopian government is set to enter a partnership with companies from China to establish powerful new Bitcoin mining infrastructure in the country, all centered around a massive hydroelectric dam. <\/p>\n On Thursday, February 14, actors involved with the project announced<\/a> a partnership between Ethiopian Investment Holdings, a state-owned investment firm, and Data Center Service PLC, subsidiary of West Data Group, based in Hong Kong. Kal Kassa, the CEO for Ethiopia at Hashlabs Mining, initially went to Twitter to claim that \u201cThe partnership will be for the purposes of a $250 million data mining project in Ethiopia,\u201d but he would subsequently delete this announcement and replace<\/a> it with a similar announcement that did not include an exact dollar amount. Regardless of the specific cash commitments involved, the aim of this partnership is clear: the establishment of a data center and other critical infrastructure to supercharge Bitcoin mining in Ethiopia.<\/p>\n Bitcoin Magazine Pro\u2122 is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.<\/p>\n Since Bitcoin mining has largely been prohibited in China, West Data Group has been actively working to begin new operations abroad, in familiar mining hubs like Kazakhstan and the United States alongside multiple other African nations. Chinese investment money has already been flowing into various countries in Africa due to the Belt and Road Initiative, but Ethiopia has a couple of distinct advantages that make it even more attractive: for one, it joined<\/a> BRICS (Brazil, Russia, India, China, South Africa) in January 2024, making it the newest member of this economic alliance of emerging nations. This added diplomatic relationship will doubtlessly make massive international deals run much more smoothly.<\/p>\n The second biggest advantage in Ethiopia\u2019s favor is the Grand Ethiopian Renaissance Dam (GERD), a massive project<\/a> to construct a dam on the Nile River to revolutionize Ethiopia\u2019s energy generation. The dam has been in construction for more than a decade; it finally began filling with water in 2020, and has been generating hydroelectric power since 2022. But its current operations are only a fraction of its full potential, assuming the project completes smoothly. For these reasons, Chinese Bitcoin miners have been flocking<\/a> to Ethiopia in 2024, to the extent that 19 of the 21 bitcoin mining firms that have reached agreements with Ethiopia\u2019s state power company are headquartered in China. Several specifics of the dam have sweetened the deal additionally; not only has a substantial amount of Chinese investment already gone into the dam\u2019s construction, but its altitude and consistent climate create conditions that are fairly ideal for year-round mining operations. This is the situation as it stands today, but this major new infrastructure partnership has only just started. One can only imagine how far it can go from here. <\/p>\n Source<\/a><\/em><\/p>\n Nevertheless, there are several concerns with the long-term viability of the site as a global hotspot for Bitcoin mining. First of all, the GERD has been something of a hotly contested issue between Ethiopia and the Egyptian government. The Nile River has two main tributaries, the White and Blue Nile. Although the White Nile is one of the longest rivers in the world, stretching more than 2,000 miles from Lake Victoria to where it meets up with its counterpart in Sudan, the much shorter Blue Nile flowing from the Ethiopian Highlands supplies about 85% of the water once the two tributaries meet. The Egyptian government\u2019s long-held concern is that the dam could cut off most of their country\u2019s water, unless Ethiopia is extremely scrupulous with not filling the dam too quickly. However, until the dam is full, it will only be able to generate a fraction of projected energy goals.<\/p>\n Source<\/a><\/em><\/p>\n Talks between the two governments have repeatedly<\/a> broken down<\/a> over the past several years, and no agreement to resolve this dispute formally exists. The Ethiopian government has nevertheless claimed that they will proceed with normal construction and operations whether an agreement is reached or not. The United States has brokered<\/a> several of the talks between these two governments and is generally considered to favor Egypt\u2019s position; considering the rivalry between the US and China, there are no shortage of opportunities for either side to attempt to influence the dam\u2019s progress and operations.<\/p>\n Still, despite these possible setbacks, the GERD in its present state is substantially operational, with many Bitcoin miners already setting up shop. Reuters<\/em> reported<\/a> that 90% of Ethiopia\u2019s electricity comes from hydroelectric sources, and that the finished dam will produce about as much electricity as the entire country generates today. Nuo Xu, founder of China Digital Mining Association has claimed<\/a> that \u201cEthiopia will become one of the most popular destinations for Chinese miners,\u201d and he is already arranging for representatives from additional mining firms to visit the site. <\/p>\n As far as the actual infrastructure that will be built from this multinational partnership, details have been particularly sparse, especially considering how Kal Kassa revised his claim to downplay the specific amount $250M invested. Bloomberg<\/em> claims that most government discussion of the project uses various euphemisms like \u201chigh-performance computing\u201d and \u201cdata mining\u201d to refer to Bitcoin mining, with the project officially designated a data center. \u201cEthiopia is heavily regulated,\u201d claimed Nemo Semret, CEO of Ethiopian miner QRB Labs, which is involved in pro-Bitcoin lobbying efforts. \u201cIntroducing a new sector like this has been a big challenge, and we\u2019ve been working for the last two years to get all the necessary permissions from the government.\u201d In other words, it seems that the government still has some sort of squeamishness over directly endorsing Bitcoin and the industries that support it. Nevertheless, its actions have supported Bitcoin miners a great deal.<\/p>\n