How Bitcoin and Shipping Containers Rescued a Struggling Hydropower Project in Africa

27-04-2025
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When a hydropower plant in a rural African community produced more electricity than it consumed, the question was: how to make use of the excess energy? A model combining blockchain technology and renewable energy has provided a groundbreaking solution.

From a Dim Vision to a New Direction

Located in the Ikelenge district of northwestern Zambia, the Zengamina hydropower plant once faced a power glut. Built in the early 2010s at a cost of $3 million from philanthropic donations, the 1-megawatt plant was originally designed to power hospitals, schools, and homes in the area. However, with a population of only about 15,000 and a lack of industrial capacity to absorb the energy, more than half of Zengamina’s electricity output was wasted, flowing back into the river. By 2022, the project was facing declining revenues and its expansion plans were on hold.

An unexpected way out came when Nairobi-based Bitcoin mining startup Gridless deployed a shipping container containing 120 Bitcoin ASIC miners to the plant. These machines consume the excess electricity, converting unused energy into Bitcoin, creating a new revenue stream for the plant.

How the Model Works

Gridless’s miners produce about $5 worth of Bitcoin per day per machine (depending on Bitcoin’s price and mining difficulty). This revenue is shared with Zengamina, helping the plant increase its income by nearly 30%, reduce electricity prices, expand its services, and connect more households to the grid. This opens up opportunities for communities to grow, from expanding business hours to improving internet access.

Scalability of Off-Grid Bitcoin Mining

Zengamina is not alone. In many parts of Africa, small-scale energy projects face a similar challenge: excess power but not enough demand to absorb it. According to the African Small Grid Developers Association, more than 65% of these systems are not commercially viable, relying on subsidies or philanthropic funding.

Gridless solves this problem by installing Bitcoin mining rigs at small hydropower plants in Kenya, Malawi, and Zambia. The rigs convert surplus power into revenue from day one, helping the plants cover costs and stabilize their finances.

Potential Risks and Controversies

However, not everything has been smooth sailing. Some policymakers worry that if Bitcoin prices rise, miners may prioritize profits over providing electricity to communities. Kazakhstan in 2021 is a case in point, as cryptocurrency mining increased the country’s electricity demand by 7% over several months, causing blackouts and rising energy prices.

Gridless, however, insists that its model is different: all operations are off-grid, powered by renewable energy, and prioritize communities. Mining rigs are even dismantled when local demand increases or when the plant connects to the grid.

Can This Model Be Replicated?

Projects like Zengamina demonstrate that Bitcoin mining can be a transitional tool, monetizing stranded energy and supporting infrastructure development. Globally, countries like Congo, Ethiopia, Paraguay, and Suriname are also leveraging excess hydropower capacity to mine cryptocurrencies.

The model relies on transparent agreements that prioritize community interests and ensure the ability to exit mining operations when they are no longer needed. With over 300 gigawatts of untapped hydropower potential in Africa, this could be a viable solution to the problem of rural electrification.

Conclusion

Bitcoin mining is not just a money-making tool, but also a means of promoting economic development in disadvantaged areas. If managed carefully, this model could bring long-term benefits to both local communities and the cryptocurrency industry, turning unused renewable energy into a sustainable economic lifeline.