Despite progress being made to tackle it, the energy access gap is still very prominent in remote rural areas in Africa. One method to bridging the gap is through mini-grids – as such, GHash Mining, the sustainability-focused cryptocurrency mining company, has established 25 small cryptocurrency data centres across the continent to supplement mini-grids.
In 2010, there were approximately 500 microgrid installations in sub-Saharan Africa, but according to the World Bank, more than 160,000 mini-grids are reportedly needed to meet access needs. The International Renewable Energy Agency (IRENA), an intergovernmental organisation that supports African countries, noted in its Annual Review of Renewable Energy and Jobs 2023 that Kenya plays a significant role in deploying mini-grids across Africa. In fact, it makes up a big part of its transition to a sustainable future.
However, not all are sold on mini-grinds. Many commercial financiers do not believe they are a worthwhile investment. This is due to them not being viewed as economically sustainable under the current funding model. Especially as community energy demand remains low so soon after commissioning. Such huge capital expenditures are the reason why the dominant model for energy development in Africa to date has been through concessional funding – donations, grants and low-cost debt.
Crypto assistance
Attempting to break the mould and instil confidence in investors, 25 small cryptocurrency data centres are being created by GHash Mining to deliver power to rural communities that are far from the central grid. Energy developers do not have to deal with excess stranded energy based on future community needs. Additionally, financial sustainability collocated mini-grids and small Bitcoin data centres can see financial ROI immediately upon commissioning.
This new financing model justifies the large initial capital outlay of renewable energy infrastructure, while the demand unleashed by Bitcoin miners benefits households and businesses that previously lacked access to electricity.
As anchor tenants, miners provide energy developers with consistent, predictable, and paid energy needs, narrowing the gap in risk-return expectations between energy developers and financiers. Additionally, Bitcoin mining data centres facilitate sustainable and profitable private investment, driving electrification for hundreds of millions of households in Africa currently living in darkness.
As primary customers, Bitcoin mining data centres provide initial and ongoing power needs, turning mini-grids into profitable enterprises even during the critical initial stages.
The GHash Mining plan to build 140 small cryptocurrency data centres is expected to be completed in 2024.
A win-win-win situation
The development of microgrids can help provide electricity to rural communities, thereby boosting economic development and improving education and health outcomes. At the same time, cryptocurrency mining operations can generate profits for investors, which can then be reinvested back into the mini-grid to expand its coverage and scale.
It’s a win-win-win situation for energy developers, local community businesses and households, and the national utility grid to which these microgrids are ultimately connected. Bitcoin mining data centres facilitate sustainable and profitable private investment needed to power hundreds of millions of households in Africa currently living in darkness.
Protecting wealth
Affected by many factors, the Economic Outlook for Sub-Saharan Africa released by the International Monetary Fund (IMF) shows that the inflation rate in the region has reached “a level not seen in decades”. In fact, more than half of the countries have inflation rates exceeding 10 per cent. As of May 2023, Nigeria’s inflation rate reached 22.3 per cent, and the inflation rates in Sao Tome and Principe, Egypt, and Ethiopia were 23.5 per cent, 31 per cent, and 32.7 per cent respectively.
Decentralised cryptocurrency holding and mining can effectively fight inflation. Protect residents’ wealth.
By leveraging cryptocurrency mining operations to fund mini-grids, the company is providing a sustainable solution to rural electrification, benefiting both investors and local communities. As Africa continues to develop, we expect GHash Mining’s approach to energy investment and green energy innovation will continue to play an important role in the continent’s development.
Francis Bignell
