Addis Ababa, Ethiopia – November 8, 2025 – Phoenix Group (ADX: PHX), the Abu Dhabi-listed digital asset infrastructure operator, has officially energized a new 30-megawatt (MW) Bitcoin mining facility in Addis Ababa, Ethiopia. This significant expansion, announced on November 6-7, 2025, leverages Ethiopia's abundant hydropower resources, contributing an estimated 1.9 Exahashes per second (EH/s) to the global Bitcoin network's computing power. While this move initially bolsters Phoenix Group's position as a global mining leader and provides crucial foreign currency revenue for Ethiopia, it unfolds against a backdrop of imminent and dramatic policy shifts by the state-owned Ethiopian Electric Power (EEP), which could profoundly redefine the future of cryptocurrency mining in the nation.

The immediate implications are a boost to the Bitcoin network's security through increased hash rate and a short-term economic infusion for Ethiopia, a nation grappling with foreign exchange shortages. However, MarketMinute readers should note the critical timing: this operational launch occurs just weeks before new, significantly higher electricity tariffs for data mining customers are set to take effect on December 1, 2025, and amidst EEP's explicit long-term goal to phase out crypto mining entirely, prioritizing domestic energy needs over the energy-intensive sector. This creates a volatile and uncertain outlook for all mining operations within the country.

Detailed Coverage: Phoenix Group's Ethiopian Foray and the Shifting Sands

Phoenix Group's latest 30 MW facility is strategically located within the Bole Lemi Industrial Park in Addis Ababa, spanning a 6,250-square-meter area. This state-of-the-art operation is entirely powered by Ethiopia's national hydropower grid, underscoring the company's commitment to carbon-neutral and sustainable mining practices. Beyond Bitcoin mining, the infrastructure has been designed with future versatility in mind, capable of supporting advanced compute workloads like Artificial Intelligence (AI) hosting, compute leasing, and High-Performance Computing (HPC). This 30 MW deployment is a key component of Phoenix Group's larger ambition to establish a total of 132 MW of power capacity in Ethiopia and ultimately achieve 1 gigawatt (GW) of global compute capacity across five countries, solidifying its status among the top 10 Bitcoin miners worldwide.

The timeline of Phoenix Group's engagement in Ethiopia reveals a rapid and ambitious expansion. The company first announced its entry into the African market in January 2025 with an 80 MW power purchase agreement (PPA). This was swiftly followed by securing an additional 52 MW in April 2025, bringing its total secured power to 132 MW. The recent energization on November 6-7, 2025, represents a significant milestone in actualizing this planned capacity. Phoenix Group (ADX: PHX) also indicates that 20 MW were already operational through an existing site, with an additional 82 MW under development across two locations, scheduled to go live in 2026.

Key players in this venture include Phoenix Group PLC (ADX: PHX) itself, a portfolio company of International Holding Company (ADX: IHC); Ethiopian Electric Power (EEP), the state-owned utility and crucial partner; Munaf Ali, Co-Founder and Group CEO of Phoenix Group; and Reza Nedjatian, CEO of Phoenix Mining, AI & Data Centers. The Ethiopian Government is also a critical stakeholder, viewing these partnerships as avenues for attracting foreign investment and developing technology infrastructure.

Initial market and industry reactions to Phoenix Group's expansion were largely positive, highlighting Ethiopia's potential as a green energy mining hub. The move was seen as a boost for Ethiopia's economy and its efforts to attract foreign investment. Analysts, such as H.C. Wainwright & Co., reaffirmed "Buy" ratings for Phoenix Group (ADX: PHX), citing confidence in its strategic execution and global growth. However, these initial positive sentiments are now tempered by the looming policy changes from EEP, which introduce a layer of uncertainty that the market is still processing.

Companies on the Cusp: Winners, Losers, and the Ethiopian Power Shift

Phoenix Group's (ADX: PHX) expansion in Ethiopia initially positioned it as a clear winner. Access to stable, low-cost (historically around 3.2 US cents per kWh), and carbon-neutral hydropower significantly enhances profitability and strengthens its environmental sustainability credentials. The facility's design for future AI/HPC workloads also aligns with Phoenix's strategic diversification into a broader digital infrastructure platform, providing resilience against Bitcoin price volatility. This strategic foresight has been a major factor in analyst confidence.

However, the landscape for Phoenix Group (ADX: PHX) and other Bitcoin miners in Ethiopia, such as Canaan (NASDAQ: CAN), Bitdeer (NASDAQ: BTDR), and BIT Mining (NYSE: BTCM), has dramatically shifted. Ethiopian Electric Power (EEP) announced in August 2025 its intention to gradually phase out Bitcoin miners from the country by the end of 2025, citing concerns that the sector could consume up to a third of Ethiopia's electricity and hinder access for domestic households and industries. Furthermore, effective December 1, 2025, EEP will implement a revised electricity tariff for "data mining customers," replacing the previous flat rate with a two-tiered system. The baseline daily average rate will start at 4.00 US cents per kWh but will increase significantly during peak hours (6:00 PM to 10:00 PM) to 6.00 cents per kWh – a 91% increase from the old flat rate. These rates are projected to rise further to 6.50 cents per kWh by year three, with peak rates potentially reaching 7.2 cents per kWh by July 2028.

This policy reversal turns what was once a significant competitive advantage into a substantial challenge. Other global public Bitcoin mining companies like Marathon Digital Holdings (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), CleanSpark (NASDAQ: CLSK), Hut 8 Mining (NASDAQ: HUT), and Core Scientific (NASDAQ: CORZ) might indirectly "win" as their competitors in Ethiopia face increased operational costs and potential regulatory pressure, reducing the overall competitive intensity from that region. However, the increased global hashrate, partly driven by Phoenix's initial expansion, still contributes to rising network difficulty, which can compress margins for all miners.

Indirect beneficiaries include Ethiopian state-owned enterprises like the Industrial Parks Development Corporation (IPDC), which benefits from land lease agreements and services within industrial parks, aligning with national development goals. Logistics and construction companies in Ethiopia also stand to gain indirectly from the infrastructure development required for such large-scale projects, though specific publicly traded entities are not explicitly linked.

Wider Significance: A Bellwether for Global Mining and Energy Policy

Phoenix Group's Ethiopian expansion, now viewed through the lens of EEP's policy shift, serves as a critical bellwether for several broader industry trends. The initial move exemplified the industry's accelerating pivot towards sustainable energy sources, with Africa emerging as a prime destination due to its abundant, untapped hydropower. This aligns with the global push for greener Bitcoin, with sustainable energy comprising over 50% of Bitcoin's energy mix in 2025.

However, the EEP's decision highlights the growing tension between the economic opportunities presented by foreign investment in crypto infrastructure and the imperative of managing national energy resources for broader public benefit. While EEP initially welcomed miners for foreign currency revenue (projecting $312.5 million for the fiscal year ending June 2026), the rapid growth of the sector (potentially consuming one-third of Ethiopia's electricity by 2025) has forced a re-evaluation. This ripple effect will impact not only direct competitors but also the perception of regulatory stability in emerging markets for energy-intensive industries.

The regulatory shift in Ethiopia echoes historical precedents. China's sweeping ban on crypto mining in 2021, driven by energy and environmental concerns, led to a mass exodus of miners and a fundamental reshaping of the global mining landscape. Similarly, nations like Kazakhstan and Kosovo have imposed restrictions, citing grid strain and prioritizing domestic energy needs. Ethiopia's move underscores that even regions with abundant renewable energy can face challenges in balancing industrial growth with national energy security and equitable distribution, especially when half the population lacks reliable access to electricity. The new tariffs and phase-out signal a mature phase of regulatory scrutiny, where governments are less willing to offer carte blanche to energy-intensive industries without clear long-term benefits and managed energy consumption.

What Comes Next: Navigating a Treacherous Path

The immediate future for Phoenix Group's (ADX: PHX) Bitcoin mining operations in Ethiopia presents significant operational challenges. The new, higher electricity tariffs, effective December 1, 2025, will immediately increase operational costs, potentially eroding profitability. The time-of-use (TOU) and availability-based tariff (ABT) system will necessitate sophisticated energy management strategies to avoid peak-hour pricing and manage potential curtailments.

Long-term, the outlook for pure Bitcoin mining in Ethiopia for Phoenix Group (ADX: PHX) is highly precarious. EEP's explicit statement that crypto mining was a short-term foreign exchange earner, not a long-term strategy, suggests a high probability of a complete phase-out. Therefore, a crucial strategic pivot for Phoenix Group will be the accelerated diversification of its Ethiopian infrastructure into non-mining compute workloads, such as AI hosting and HPC. The company has already indicated this direction, and its ability to successfully re-tool and secure new types of agreements with EEP that differentiate these services from energy-intensive crypto mining will be paramount.

Potential scenarios include a forced exit or complete phase-out of Bitcoin mining, where Phoenix Group would either relocate its mining assets or sell them off, leading to a write-down of its Ethiopian mining investment. Alternatively, a conditional continuation for non-mining compute services could emerge, where EEP allows AI/HPC operations under new, specialized agreements and the revised tariff structure, recognizing their potential contribution to Ethiopia's digital economy. This would transform Phoenix Group's Ethiopian operations from a crypto mining hub to a broader digital infrastructure center. Market opportunities for foreign currency revenue from mining are diminishing, but opportunities for contributing to Ethiopia's digital infrastructure development through AI/HPC could still exist. The challenges, however, are substantial: strict policy enforcement, increased operating costs, potential grid instability, and reputational risk if local energy needs are not met.

Comprehensive Wrap-up: A Strategic Expansion Under Regulatory Duress

Phoenix Group's (ADX: PHX) 30 MW Bitcoin mining expansion in Ethiopia, operational as of early November 2025, stands as a testament to the company's aggressive growth strategy and its commitment to sustainable, hydropower-backed digital asset infrastructure. It initially represented a mutually beneficial partnership, providing Phoenix Group with low-cost, green energy and Ethiopia with valuable foreign currency and technological investment.

However, the market is now moving forward under the shadow of a significant policy pivot by Ethiopian Electric Power (EEP). The imminent implementation of sharply increased electricity tariffs (December 1, 2025) and the stated intention to phase out crypto mining by the end of 2025 fundamentally alter the economic calculus and long-term viability of Bitcoin mining in the country. This makes Phoenix Group's strategic diversification into AI hosting and HPC not just an an opportunity, but a critical imperative for its continued presence in Ethiopia.

The lasting impact of this event will be two-fold: it highlights the industry's ongoing shift towards sustainable energy and diversification, but more importantly, it underscores the inherent regulatory risks in rapidly evolving markets. Ethiopia's experience serves as a stark reminder that even abundant renewable energy resources do not guarantee long-term stability for energy-intensive industries if they clash with national energy security and development priorities.

Investors should closely watch Phoenix Group's (ADX: PHX) progress toward its 1 GW global compute capacity target, paying particular attention to the actual implementation and impact of EEP's new tariffs and phase-out policies in the coming months. The success of Phoenix Group's pivot to AI/HPC in Ethiopia, its ability to secure favorable agreements for these services, and its overall financial resilience will be key indicators of its adaptability and long-term prospects in a rapidly changing global digital asset landscape.

This content is intended for informational purposes only and is not financial advice