What occurs when a rural community in Africa produces more electricity than it can utilize? Could Bitcoin mining transform excess hydropower into a vital resource for local economic revitalization?
A Glimpse of Hope for Zengamina
In the secluded Ikelenge district of northwestern Zambia, a modest hydroelectric facility has been generating more electricity than the nearby villages can consume.
Constructed in the early 2010s with $3 million in donated funds, the 1-megawatt Zengamina plant wasn’t designed for profit. Its primary objective was to provide energy for a rural hospital, supply homes and schools, and lay the groundwork for local progress.
However, for years, a significant portion of this electricity went untapped. With a population of roughly 15,000 and limited commercial or industrial activities, the community lacked the necessary infrastructure to utilize the surplus.
This resulted in more than half of the plant’s output regularly being redirected—flowing back into the river and effectively wasted.
By 2022, the project faced increasing difficulties. Plans for expansion were stalled, revenue had fallen below break-even, and the vision of wider energy access was dimming. Then, a new collaborator introduced an innovative solution.
Gridless, a Bitcoin mining startup based in Nairobi, installed a mobile unit at the Zengamina site, which consisted of a shipping container outfitted with 120 ASIC mining machines.
Connected directly to the local mini-grid, this setup runs continuously, utilizing surplus electricity that would otherwise be wasted. In this way, it converts stranded electricity into Bitcoin.
At current market prices, each machine generates around $5 per day, although returns fluctuate with the price of Bitcoin and mining complexity. Gridless shares a portion of this revenue with the hydro plant, now accounting for nearly a third of Zengamina’s overall income.
This financial uplift has led to tangible improvements. Electricity costs have decreased, new households have been connected, and the plant is now operating at a higher capacity—serving the community more effectively than before.
Yet, a broader question lingers: is this a unique success, or could this model provide a scalable approach for rural electrification in contexts where traditional economic incentives are absent? Let’s explore further.
Gridless Mining Units: A Practical Solution
Zengamina isn’t alone in its situation. Across sub-Saharan Africa, small energy projects commonly encounter the same challenge: ample power but insufficient demand.
Mini-grids—often established with donor support or development funds—frequently operate at less than full capacity, not because they can’t produce electricity, but due to the lack of an industrial base to take advantage of it.
According to the African Minigrid Developers Association, over 65% of these systems remain commercially unviable, reliant on subsidies, carbon credits, or charitable funding.
Gridless is working to make this model sustainable without dependence on external support. The company has implemented mobile Bitcoin mining units at six hydro sites in Kenya, Malawi, and Zambia—each selected for its capability to generate clean energy in areas where demand is too low to sustain standalone infrastructure.
The mining rigs function as a sort of financial buffer: they operate consistently, irrespective of when or how much electricity the local population consumes, transforming otherwise-wasted energy into earnings from day one.
In Zengamina, the impact has been immediate. With a reliable offtaker in place, the plant has broadened its service area, lowered rates, and reached new sections of the community.
Small businesses—like barbershops, kiosks, and internet cafés—are now able to operate for longer hours. Connectivity has improved, and electricity access has transitioned from a mere concept to a practical reality.
Importantly, this arrangement was never intended to be permanent. Gridless positions itself as a temporary facilitator. As household and commercial demand grows, its involvement diminishes.
Zengamina anticipates connecting to Zambia’s national grid in the coming year, paving the way for better pricing through utility partnerships. Once that occurs, the mining unit will be removed, and Gridless will relocate to another site.
Navigating Between Benefits and Challenges
Gridless is currently seeking funding to develop its own small hydroelectric initiatives, focusing on run-of-river systems that don’t require dams and can function in remote, off-grid settings.
The company’s strategy is to incorporate Bitcoin mining from the beginning—utilizing it as an initial revenue source while local energy demand evolves.
Co-founder Janet Maingi refers to this as a “consumer-driven, adaptive energy model,” intended to kick off with mining but ultimately shift towards sustainable community electrification.
There is data indicating that this model could be expanded. The International Renewable Energy Agency (IRENA) estimates that Africa has over 300 gigawatts of untapped hydropower potential, a lot of which is found in regions with limited industrial activity—areas often neglected by conventional energy investors.
In these circumstances, Bitcoin miners could act as early buyers, monetizing power infrastructure before broader economic demand arises.
However, this concept is not without its critics. Some policymakers across the continent have expressed concerns that mining could ultimately rival local users for electricity, especially if Bitcoin prices soar and miners become increasingly competitive in their pursuit of low-cost energy.
These fears are not unfounded. In 2021, Kazakhstan faced major disturbances after a surge of miners arrived following China’s ban on cryptocurrencies. National electricity consumption spiked sharply—by 7% in mere months—leading to blackouts, increased energy costs, and, ultimately, governmental intervention.
Similar challenges have surfaced in parts of the United States. In New York and Texas, regulators have begun limiting large-scale mining activities during peak grid demands.
Even smaller facilities have felt the pressure. In early 2024, Greenidge Generation—a gas-powered mining facility in upstate New York—was temporarily shut down during a cold snap to allocate capacity for residential heating needs.
This incident prompted regulatory authorities to draft guidelines on when and how miners should scale back operations during energy shortages.
Gridless asserts that its model mitigates these risks. All of its operations are off-grid, powered by renewable sources, and developed in direct collaboration with local communities.
The company also emphasizes that residential and commercial users take priority, with mining being decreased as local demand increases.
Nonetheless, some analysts note that market dynamics can change rapidly. If Bitcoin prices surge as some forecasts suggest, the allure of mining could drive even off-grid operators to prefer crypto profits over supplying the community.
In the absence of clear regulations or transparent agreements on energy consumption, the same model that initially fosters rural development could turn into a source of tension.
Is This Model Scalable?
The positive changes observed at Zengamina are beginning to garner attention beyond Zambia. As global scrutiny regarding Bitcoin’s energy consumption intensifies, more off-grid energy projects are investigating mining as a financial stabilizer—especially in areas where electricity is both accessible and underutilized.
Off-grid mining, once viewed as niche or opportunistic, is gaining traction not just for its greener credentials but for its practical benefits: it helps miners bypass regulatory hurdles, dodge peak-hour charges, and mitigate risks related to public grid infrastructure.
Several tangible projects are taking shape. In the Democratic Republic of Congo, a Bitcoin mining operation powered by Virunga National Park’s hydro facility is supporting conservation efforts and aiding park management.
In Ethiopia, the government has approved the sale of electricity from the Grand Renaissance Dam to mining companies in order to capitalize on excess capacity and alleviate debt burdens.
Similar initiatives are underway in Paraguay and Suriname, where hydroelectric production continues to exceed local demand.
In these instances, the incentives are aligned. Energy developers obtain a reliable and immediate income stream, while miners access consistent, inexpensive energy. These arrangements typically require no subsidies and do not depend on extensive transmission infrastructure.
However, these successes are not guaranteed. They depend on well-defined agreements—ensuring community needs are prioritized, revenue-sharing practices are transparent, and mechanisms exist to phase out mining operations when alternative energy uses emerge.
Gridless, for example, plans to conclude its operations at Zengamina once the facility connects to Zambia’s national grid, anticipating that selling electricity directly to the utility will yield greater long-term benefits.
This phase-out is a crucial component of the Gridless model. Mining is a short-term financial solution—bridging the gap until local demand develops. The equipment is mobile and designed for redeployment once its mission is accomplished.
What this indicates is not that Bitcoin mining solves fundamental energy issues, but that under specific conditions, it can function as a temporary tool—monetizing stranded or surplus energy that might otherwise go unutilized. It offers a means to activate infrastructure rather than allowing it to remain dormant.
With Bitcoin currently trading near $88,000 and mining profitability tightening globally, more companies are seeking remote locations for low-cost, lightly regulated energy sources.
In areas with surplus capacity but limited investment, this model could expand—quietly and effectively—if given the operational latitude to thrive.