How a shipping container and Bitcoin saved a struggling African hydro project

What occurs when a rural African group generates extra electrical energy than it may use? Might Bitcoin mining flip unused hydropower right into a lifeline for native financial revival?

Zengamina’s dimming imaginative and prescient finds a spark

Within the distant Ikelenge district of northwestern Zambia, a small hydroelectric plant has quietly been producing extra electrical energy than its surrounding villages may ever use.

Constructed within the early 2010s with $3 million in charitable funding, the 1-megawatt Zengamina facility was by no means supposed to generate revenue. Its objective was to energy a rural hospital, present electrical energy to houses and colleges, and assist the foundations of native improvement.

For years, nonetheless, a lot of that electrical energy went unused. With a inhabitants of round 15,000 and minimal industrial or industrial exercise, the group lacked the infrastructure to soak up the excess.

Consequently, greater than half of the plant’s output was routinely diverted—despatched again into the river, successfully wasted.

By 2022, the venture was going through mounting challenges. Deliberate expansions had been on maintain, income had slipped beneath breakeven, and the imaginative and prescient of broader vitality entry was fading. Then, a brand new accomplice arrived with an unconventional answer.

Gridless, a Nairobi-based Bitcoin (BTC) mining startup, deployed a cell unit to the Zengamina web site—basically a transport container geared up with 120 ASIC mining machines.

Related on to the native mini-grid, the setup runs constantly, consuming extra energy that will in any other case go unused. In doing so, it converts stranded electrical energy right into a stream of Bitcoin.

At prevailing market charges, every machine generates roughly $5 per day, although returns fluctuate with the worth of Bitcoin and mining issue. Gridless shares a portion of this income with the hydro plant, now contributing near a 3rd of Zengamina’s whole earnings.

This monetary increase has had sensible results. Electrical energy tariffs have dropped, new households have been linked, and the plant is now working nearer to its full capability—serving the group extra successfully than earlier than.

Nonetheless, a broader query stays: is that this a one-off success, or may this mannequin provide a scalable path for rural electrification in areas the place typical financial incentives are missing? Let’s dig in.

Gridless rigs provide a plug-and-play repair

Zengamina isn’t an remoted case. Throughout sub-Saharan Africa, small-scale vitality tasks usually run into the identical drawback: loads of energy, not sufficient folks to make use of it.

Mini-grids—sometimes constructed with donor funding or improvement grants—continuously function beneath capability, not as a result of they fail to generate electrical energy, however as a result of there’s no industrial base to soak up it.

In line with the African Minigrid Builders Affiliation, greater than 65% of those techniques stay commercially unviable, sustained by subsidies, carbon credit, or philanthropic capital.

Gridless is attempting to make that mannequin work with out exterior lifelines. The corporate has put in cell Bitcoin mining items at six hydro websites throughout Kenya, Malawi, and Zambia—every one chosen for its potential to provide clear vitality in areas the place demand is just too low to assist the infrastructure by itself.

The mining rigs act as a type of monetary shock absorber: they function constantly, no matter when or how a lot electrical energy the local people consumes, and convert otherwise-wasted vitality into income from day one.

At Zengamina, the outcomes have been speedy. With a secure offtaker in place, the plant has expanded protection, decreased tariffs, and prolonged service into new components of the group.

Small companies—together with barbershops, kiosks, and web cafés—are staying open later. Web connectivity has improved. Electrical energy entry has gone from symbolic to useful.

Importantly, the association was by no means meant to be everlasting. Gridless views itself as a transitional participant. As family and industrial demand picks up, its function winds down.

Zengamina expects to hook up with Zambia’s nationwide grid inside the subsequent yr, opening the door to raised pricing by means of utility partnerships. When that occurs, the mining rig will likely be eliminated, and Gridless will redeploy elsewhere.

The nice line between increase and burden

Gridless is now in search of capital to develop its personal small-scale hydroelectric tasks, with a give attention to run-of-river techniques that don’t require dams and may function in distant, off-grid environments.

The corporate’s method is to combine Bitcoin mining from the outset—utilizing it as an preliminary income stream whereas native vitality demand step by step takes form.

Co-founder Janet Maingi describes this as a “consumer-driven, adaptive vitality mannequin,” one designed to start with mining however finally transition towards long-term group electrification.

There may be proof to recommend that the mannequin may scale. The Worldwide Renewable Vitality Company (IRENA) estimates that Africa holds over 300 gigawatts of untapped hydropower potential, a lot of it positioned in areas with restricted industrial exercise—areas sometimes ignored by conventional vitality traders.

In such environments, Bitcoin miners may function early offtakers, monetizing energy infrastructure earlier than broader financial demand materializes.

Nevertheless, the idea just isn’t with out controversy. Some policymakers throughout the continent have expressed concern that mining may finally compete with native customers for electrical energy, particularly if Bitcoin costs surge and miners turn out to be extra aggressive in securing low-cost energy.

These considerations aren’t merely theoretical. In 2021, Kazakhstan skilled important disruptions after a wave of miners arrived following China’s crypto ban. Nationwide electrical energy consumption rose sharply—by 7% in just a few months—leading to blackouts, increased vitality costs, and, finally, authorities intervention.

Comparable points have emerged in components of the USA. In New York and Texas, regulators have taken steps to restrict large-scale mining operations in periods of excessive grid demand.

Even smaller amenities have encountered strain. In early 2024, Greenidge Era—a gas-powered mining plant in upstate New York—was briefly shut down throughout a chilly spell to unlock capability for residential heating.

The incident prompted regulatory businesses to start drafting pointers on when and the way miners ought to cut back exercise throughout vitality shortages.

Gridless maintains that its mannequin avoids these dangers. All of its operations are off-grid, powered by renewable sources, and developed in direct coordination with native communities.

The corporate additionally states that residential and industrial customers are all the time prioritized, and that mining is scaled again as native demand will increase.

Nonetheless, some observers notice that market incentives can shift shortly. If Bitcoin costs rise dramatically—as some forecasts recommend—the monetary attraction of mining may immediate even off-grid operators to favor crypto income over group provide.

With out clear regulation or clear agreements on energy utilization, the identical method that originally helps rural improvement may turn out to be a supply of friction.

Can this mannequin scale?

The outcomes seen at Zengamina have begun to attract consideration past Zambia. As international scrutiny over Bitcoin’s vitality consumption grows, an growing variety of off-grid vitality tasks are exploring mining as a monetary stabilizer—notably in areas the place electrical energy is obtainable however stays underused.

Off-grid mining, as soon as thought of area of interest or opportunistic, is gaining traction not just for its cleaner profile but in addition for its sensible benefits: it allows miners to sidestep regulatory constraints, keep away from peak-hour tariffs, and cut back publicity to political tensions tied to public grid infrastructure.

A number of real-world purposes are rising. Within the Democratic Republic of Congo, a Bitcoin mining operation powered by Virunga Nationwide Park’s hydro plant helps to fund conservation efforts and assist park operations.

In Ethiopia, the federal government has authorised electrical energy gross sales from the Grand Renaissance Dam to industrial mining firms as a technique to monetize extra capability and handle debt burdens.

Comparable exercise is underway in Paraguay and Suriname, the place hydroelectric technology continues to exceed home demand.

In such instances, the inducement construction is aligned. Vitality builders acquire a constant and speedy income stream, whereas miners entry dependable, low-cost energy. These preparations sometimes require no subsidies and don’t rely upon large-scale transmission infrastructure.

Nevertheless, these outcomes aren’t assured. They depend on clearly outlined agreements—making certain group entry is prioritized, revenue-sharing is clear, and provisions exist to exit mining operations when different makes use of for the vitality come up.

Gridless, as an illustration, plans to finish its Zengamina operation as soon as the plant connects to Zambia’s nationwide grid, as promoting electrical energy on to the utility is anticipated to supply better long-term returns.

This phase-out is a core characteristic of the Gridless mannequin. Mining serves as a short lived monetary mechanism—bridging the hole till native demand matures. The gear is transportable and designed to be redeployed elsewhere as soon as its objective is fulfilled.

What this means just isn’t that Bitcoin mining resolves deeper vitality challenges, however that beneath sure circumstances, it may function a transitional instrument—monetizing stranded or surplus energy that may in any other case go unused. It supplies a technique to activate infrastructure fairly than letting it sit idle.

With Bitcoin now buying and selling close to $88,000 and mining profitability going through tighter margins worldwide, extra firms are turning to distant areas seeking low-cost, regulation-light vitality sources.

In areas with obtainable capability however restricted funding, this mannequin may scale—quietly and pragmatically—if allowed the operational area to take action.