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Home»Mining»How a shipping container and Bitcoin saved a struggling African hydro project
Mining

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

NBTCBy NBTC27/03/2025No Comments8 Mins Read
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What happens when a rural African community generates more electricity than it can use? Could Bitcoin mining turn unused hydropower into a lifeline for local economic revival?

Table of Contents

  • Zengamina’s dimming vision finds a spark
  • Gridless rigs offer a plug-and-play fix
  • The fine line between boost and burden
  • Can this model scale?

Zengamina’s dimming vision finds a spark

In the remote Ikelenge district of northwestern Zambia, a small hydroelectric plant has quietly been producing more electricity than its surrounding villages could ever use.

Built in the early 2010s with $3 million in charitable funding, the 1-megawatt Zengamina facility was never intended to generate profit. Its purpose was to power a rural hospital, provide electricity to homes and schools, and support the foundations of local development.

For years, however, much of that electricity went unused. With a population of around 15,000 and minimal commercial or industrial activity, the community lacked the infrastructure to absorb the surplus.

As a result, more than half of the plant’s output was routinely diverted—sent back into the river, effectively wasted.

By 2022, the project was facing mounting challenges. Planned expansions were on hold, revenue had slipped below breakeven, and the vision of broader energy access was fading. Then, a new partner arrived with an unconventional solution.

Gridless, a Nairobi-based Bitcoin (BTC) mining startup, deployed a mobile unit to the Zengamina site—essentially a shipping container equipped with 120 ASIC mining machines.

Connected directly to the local mini-grid, the setup runs continuously, consuming excess power that would otherwise go unused. In doing so, it converts stranded electricity into a stream of Bitcoin.

At prevailing market rates, each machine generates approximately $5 per day, though returns fluctuate with the price of Bitcoin and mining difficulty. Gridless shares a portion of this revenue with the hydro plant, now contributing close to a third of Zengamina’s total income.

This financial boost has had practical effects. Electricity tariffs have dropped, new households have been connected, and the plant is now operating closer to its full capacity—serving the community more effectively than before.

Still, a broader question remains: is this a one-off success, or could this model offer a scalable path for rural electrification in regions where conventional economic incentives are lacking? Let’s dig in.

Gridless rigs offer a plug-and-play fix

Zengamina isn’t an isolated case. Across sub-Saharan Africa, small-scale energy projects often run into the same problem: plenty of power, not enough people to use it.

Mini-grids—typically built with donor funding or development grants—frequently operate below capacity, not because they fail to generate electricity, but because there’s no industrial base to absorb it.

According to the African Minigrid Developers Association, more than 65% of these systems remain commercially unviable, sustained by subsidies, carbon credits, or philanthropic capital.

Gridless is trying to make that model work without external lifelines. The company has installed mobile Bitcoin mining units at six hydro sites across Kenya, Malawi, and Zambia—each one selected for its ability to produce clean energy in areas where demand is too low to support the infrastructure on its own.

The mining rigs act as a kind of financial shock absorber: they operate continuously, regardless of when or how much electricity the local community consumes, and convert otherwise-wasted energy into revenue from day one.

At Zengamina, the results have been immediate. With a stable offtaker in place, the plant has expanded coverage, reduced tariffs, and extended service into new parts of the community.

Small businesses—including barbershops, kiosks, and internet cafés—are staying open later. Internet connectivity has improved. Electricity access has gone from symbolic to functional.

Importantly, the arrangement was never meant to be permanent. Gridless views itself as a transitional player. As household and commercial demand picks up, its role winds down.

Zengamina expects to connect to Zambia’s national grid within the next year, opening the door to better pricing through utility partnerships. When that happens, the mining rig will be removed, and Gridless will redeploy elsewhere.

The fine line between boost and burden

Gridless is now seeking capital to develop its own small-scale hydroelectric projects, with a focus on run-of-river systems that do not require dams and can operate in remote, off-grid environments.

The company’s approach is to integrate Bitcoin mining from the outset—using it as an initial revenue stream while local energy demand gradually takes shape.

Co-founder Janet Maingi describes this as a “consumer-driven, adaptive energy model,” one designed to begin with mining but ultimately transition toward long-term community electrification.

There is evidence to suggest that the model could scale. The International Renewable Energy Agency (IRENA) estimates that Africa holds over 300 gigawatts of untapped hydropower potential, much of it located in areas with limited industrial activity—regions typically overlooked by traditional energy investors.

In such environments, Bitcoin miners could serve as early offtakers, monetizing power infrastructure before broader economic demand materializes.

However, the concept is not without controversy. Some policymakers across the continent have expressed concern that mining could eventually compete with local users for electricity, especially if Bitcoin prices surge and miners become more aggressive in securing low-cost power.

These concerns are not merely theoretical. In 2021, Kazakhstan experienced significant disruptions after a wave of miners arrived following China’s crypto ban. National electricity consumption rose sharply—by 7% in a few months—resulting in blackouts, higher energy prices, and, ultimately, government intervention.

Similar issues have emerged in parts of the United States. In New York and Texas, regulators have taken steps to limit large-scale mining operations during periods of high grid demand.

Even smaller facilities have encountered pressure. In early 2024, Greenidge Generation—a gas-powered mining plant in upstate New York—was temporarily shut down during a cold spell to free up capacity for residential heating.

The incident prompted regulatory agencies to begin drafting guidelines on when and how miners should reduce activity during energy shortages.

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

The company also states that residential and commercial users are always prioritized, and that mining is scaled back as local demand increases.

Still, some observers note that market incentives can shift quickly. If Bitcoin prices rise dramatically—as some forecasts suggest—the financial appeal of mining could prompt even off-grid operators to favor crypto revenue over community supply.

Without clear regulation or transparent agreements on power usage, the same approach that initially supports rural development could become a source of friction.

Can this model scale?

The results seen at Zengamina have begun to draw attention beyond Zambia. As global scrutiny over Bitcoin’s energy consumption grows, an increasing number of off-grid energy projects are exploring mining as a financial stabilizer—particularly in regions where electricity is available but remains underused.

Off-grid mining, once considered niche or opportunistic, is gaining traction not only for its cleaner profile but also for its practical advantages: it enables miners to sidestep regulatory constraints, avoid peak-hour tariffs, and reduce exposure to political tensions tied to public grid infrastructure.

Several real-world applications are emerging. In the Democratic Republic of Congo, a Bitcoin mining operation powered by Virunga National Park’s hydro plant is helping to fund conservation efforts and support park operations.

In Ethiopia, the government has approved electricity sales from the Grand Renaissance Dam to industrial mining companies as a way to monetize excess capacity and manage debt burdens.

Similar activity is underway in Paraguay and Suriname, where hydroelectric generation continues to exceed domestic demand.

In such cases, the incentive structure is aligned. Energy developers gain a consistent and immediate revenue stream, while miners access reliable, low-cost power. These arrangements typically require no subsidies and do not depend on large-scale transmission infrastructure.

However, these outcomes are not guaranteed. They rely on clearly defined agreements—ensuring community access is prioritized, revenue-sharing is transparent, and provisions exist to exit mining operations when alternative uses for the energy arise.

Gridless, for instance, plans to end its Zengamina operation once the plant connects to Zambia’s national grid, as selling electricity directly to the utility is expected to offer greater long-term returns.

This phase-out is a core feature of the Gridless model. Mining serves as a temporary financial mechanism—bridging the gap until local demand matures. The equipment is portable and designed to be redeployed elsewhere once its purpose is fulfilled.

What this suggests is not that Bitcoin mining resolves deeper energy challenges, but that under certain conditions, it can serve as a transitional tool—monetizing stranded or surplus power that might otherwise go unused. It provides a way to activate infrastructure rather than letting it sit idle.

With Bitcoin now trading near $88,000 and mining profitability facing tighter margins worldwide, more companies are turning to remote locations in search of low-cost, regulation-light energy sources.

In regions with available capacity but limited investment, this model could scale—quietly and pragmatically—if allowed the operational space to do so.

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