What happens when you generate more electricity than rural African communities can use? Can Bitcoin mining transform unused hydropower into a lifeline for the local economy revival?
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Zengamina’s dim vision finds sparks
In the remote Ikerange district of northwest Zambia, small hydroelectric power plants are quietly producing more electricity than the surrounding villages can use.
The 1-megawatt Zengamina facility, built with $3 million in charity funds in the early 2010s, was not intended to generate profits. The aim was to power rural hospitals, power homes and schools, and support the foundations of local development.
But for years much of that power was not used. With a population of about 15,000 and minimal commercial or industrial activity, the community had no infrastructure to absorb the surplus.
As a result, more than half of plant production was routinely decoupled. Back in the river, it was effectively wasted.
By 2022, the project was facing an increasing number of challenges. The planned expansion was pending, revenues slipped under the break-even point, and the broader energy access vision was in decline. A new partner then arrived with an unconventional solution.
Nairobi-based Bitcoin (BTC) mining startup Gridless has deployed its mobile unit on its Zengamina site. This is a shipping container with 120 ASIC mining machines.
Setups that are directly connected to the local mini-grid will run continuously and will be unused otherwise. This will convert chained electricity into Bitcoin flow.
At a typical market rate, each machine generates around $5 per day, but returns fluctuate with the price of Bitcoin and the difficulty of mining. Gridless shares a portion of this revenue with Hydro Plant, and now contributes nearly a third of Zengamina’s total revenue.
This financial boost had a practical effect. With power tariffs falling, new households are connected, and the factories are now operating near their full capacity, creating communities more effectively than before.
Still, broader questions remain. Is this a one-time success, or could this model provide a scalable path for rural electrification in areas where traditional economic incentives are lacking? Let’s dig deeper.
Gridless Rigs provide plug and play modifications
Zengamina is not an isolated case. Throughout sub-Saharan Africa, small energy projects often encounter the same problem. Not enough people to use it.
A mini-grid typically built with donor funding or development grants operate below capacity, not because they cannot generate electricity, but because they do not have an industrial base to absorb it.
According to the African Minigrid Developers Association, more than 65% of these systems are commercially unfeasible and maintained by subsidies, carbon credits or charitable capital.
Gridless is trying to make its model work without an external lifeline. The company has installed mobile Bitcoin mining units at six hydrosites in Kenya, Malawi and Zambia. It was chosen because of its ability to produce clean energy in regions where demand is too low to support infrastructure.
Mining rigs act as a kind of financial shock absorber. It operates continuously and converts waste energy from day one, regardless of when or how much electricity the community consumes.
At Zengamina, the results were immediate. With stable offtakers in place, the plant has expanded coverage, reduced tariffs and expanded its services to new parts of the community.
Small businesses, including barber shops, kiosks and internet cafes, will remain open later. Internet connection has been improved. Electrical access has gone from iconic to functional.
Importantly, this arrangement was not intended to be permanent. Gridless considers itself a transition player. As household and commercial demand recover, its role fades.
Zengamina hopes to connect to Zambia’s national grid within next year and open the door to better pricing through its utility partnership. When that happens, the mining rig is removed and Gridless is redeployed elsewhere.
Fine line between boost and strain
Gridless is currently seeking capital to develop its own small-scale hydroelectric power project, focusing on river driving systems that do not require dams and can operate remotely in off-grid environments.
The company’s approach is to integrate Bitcoin mining from the start. This is used as an initial revenue stream while local energy demand is gradually taking shape.
Co-founder Janet Maingi describes this as a “consumer-driven adaptive energy model.”
There is evidence to suggest that the model can be scaled. The International Renewable Energy Agency (IRENA) estimates that Africa holds the potential for 300 gigawatts of undeveloped hydroelectric power generation. Many of them are in areas where industrial activities are limited.
In this environment, Bitcoin miners can act as early offtakers and monetize their power infrastructure before wider economic demands can be realized.
However, the concept is not without controversy. Some policymakers across the continent have expressed concern that mining could ultimately compete with local users, especially if Bitcoin prices skyrocket and miners become more aggressive in ensuring low-cost electricity.
These concerns are not merely theoretical. In 2021, Kazakhstan experienced major chaos after a wave of miners arrived following the Chinese cryptography ban. The country’s electricity consumption rose sharply at 7% in a few months, resulting in blackouts, rising energy prices and ultimately government intervention.
A similar problem has been revealed in parts of the United States. In New York and Texas, regulators are taking steps to limit large-scale mining operations during periods of high grid demand.
Even smaller facilities are experiencing pressure. In early 2024, Green Didge Generation, a gas-powered mining factory in upstate New York, was temporarily closed during cold spelling, releasing the capacity of residential heating.
The incident prompted regulators to begin drafting guidelines on when and how miners should reduce their activities during energy shortages.
Gridless claims that the model avoids these risks. All of its businesses are off-grid, equipped with renewable sources and developed in direct coordination with local communities.
The company also says residential and commercial users are constantly prioritized, and mining will shrink as local demand increases.
Still, some observers note that market incentives could change quickly. As some predictions suggest, if Bitcoin prices rise dramatically, the financial appeal of mining could encourage even off-grid operators to support crypto revenues over community supply.
Without clear regulations or clear agreements regarding power usage, the same approach to supporting rural development in the first place could lead to friction.
Can this model be scaled?
The results seen at Zengamina have begun to attract attention beyond Zambia. As global scrutiny of Bitcoin’s energy consumption increases, more grid-off-grid energy projects are exploring mining as a financial stabilizer. Especially in areas where electricity is available but still underused.
Once considered niche or opportunistic, off-grid mining has gained traction not only due to its cleaner profiles but also due to its practical benefits. Miners can avoid regulatory constraints, avoid peak tariffs and reduce exposure to political tensions tied to public grid infrastructure.
Several real applications have emerged. In the Democratic Republic of the Congo, Billunga National Park’s hydropower plant-equipped Billunga National Park Billunga National Park’s Billunga National Park helps to support conservation efforts and park operation.
In Ethiopia, the government approved the sale of electricity from the Grand Renaissance Dam to industrial mining companies as a way to monetize excess capacity and manage debt burdens.
Similar activities are underway in Paraguay and Suriname, where hydroelectric power continues to exceed domestic demand.
In such cases, the incentive structure is aligned. Energy developers get consistent, immediate revenue streams, while miners access reliable, low-cost power. These arrangements typically do not require subsidies and do not rely on large transmission infrastructures.
However, these results are not guaranteed. They rely on well-defined contracts. The supply of access to the community is prioritized, revenue sharing is transparent, and there are provisions to terminate mining operations in the event of alternative use of energy.
Gridless, for example, plans to end Zengamina operations when the plant connects to Zambia’s national grid.
This phase-out is the core feature of the Gridless model. Mining serves as a temporary financial mechanism. This means filling the gap until local demand matures. The equipment is portable and is designed to be relocated elsewhere once the purpose is met.
What this suggests is not that Bitcoin mining solves deeper energy challenges, but could act as a migration tool under certain conditions. It provides a way to activate your infrastructure rather than idle.
With Bitcoin currently trading nearly $88,000 and profitability facing tougher margins around the world, more companies are turning to remote locations in search of low-cost, regulated light energy sources.
In regions where availability is limited, this model can be scaled measurably and practically if operational space allows it to do so.
