Bitcoin Miner Marathon partner with Kenya for renewable energy projects

On Friday, May 24, 2024, Kenya’s Ministry of Energy and Petroleum (MOEP) signed a Memorandum of Understanding with Marathon Digital Holdings Incorporated to develop government renewable energy projects, including exploring renewable bitcoin mining projects.

This development is part of a broader trend in African countries, such as Ethiopia, that are increasingly turning to renewable energy Bitcoin mining exploration as a more cost-effective and sustainable approach to energy production, development and management of renewable energy sources and projects.

Marathon Digital Holdings (MARA)

Marathon Digital Holdings is an American digital asset technology company founded in 2010. Initially known as Marathon Patent Group, Inc., it changed its name in February 2021. Marathon is a company listed on the stock exchange under the name MARA. It is one of the largest Bitcoin miners in North America and one of the largest holders of Bitcoin among US publicly traded companies.

The most important points of the contract

Under this agreement, as outlined under the heading “Capitalization of Current Renewable Energy Sources,” the Government of Kenya is partnering with Marathon to help monetize stranded renewable energy and manage renewable energy production and projects in the country.

In a statement released by Marathon on May 24, Marathon and MOEP will “exchange policy, scientific and technical information, as well as project investment expertise, to better understand how to optimize renewable energy projects” under this agreement.

In addition, both Marathon and MOEP will jointly establish a steering committee “that will include senior MOEP and Marathon officials” to oversee the implementation and development of energy projects across Kenya. The statement also highlighted that the venture is expected to attract over $80 million in foreign investment and is poised to “bring economic benefits to the Kenyan economy and generate revenue for the local energy sector ecosystem.”

The Kenyan government is keen to optimize its energy infrastructure, explore renewable energy projects and improve its technological infrastructure.

As Marathon Digital Holdings President and CEO Fred Thiel noted, “This agreement with the Ministry of Energy and Petroleum is a pivotal moment for our business as it provides us with a clear framework to pursue opportunities across the Republic of Kenya. This demonstrates the innovative approach Kenya is taking to optimize energy consumption and improve technology infrastructure.”

The path ahead for nation-state energy projects through bitcoin mining in Africa

This agreement may surprise those who follow the regulatory landscape surrounding Bitcoin mining in Africa. However, it is important to note that as African countries prioritize the development of energy infrastructure, they are becoming more open to Bitcoin mining due to its success in Africa and beyond, namely conventional methods that contribute to energy production, electrification projects and management network.

Moreover, as African countries look for ways to stabilize and develop their economies, we will see more efforts to manage and develop renewable energy through Bitcoin mining. Bitcoin mining continues to deliver real returns as an effective mechanism for electrification, stabilizing the grid, and catalysing green energy projects.

Critics of these events highlight the historical risks of energy projects in Africa. Given Africa’s history of foreign enterprises and energy exploration, governments must remain conscious of protecting national interests and prioritizing long-term economic benefits for their citizens over short-term profits.

Moreover, the tendency to partner with foreign companies rather than local players in these projects is primarily due to the size and stage of development of the Bitcoin mining landscape in Africa. As more local players get started and existing players expand their capabilities, we can expect to see more similar initiatives from these local players.

Over the next few months and years, more and more governments in Africa will become increasingly open to facilitating Bitcoin mining energy exploration projects based on other countries’ successes in the sustainable use of abundant energy surpluses, community electrification, and as a means of accumulating Bitcoin for national sovereign funds property and currency reserves.