Russia to Supply Electricity to Crypto Miners of Kazakhstan

Russia to Supply Electricity to Crypto Miners of Kazakhstan

Russia is set to provide Kazakhstan with the additional energy needed to run crypto mining farms in the Central Asian nation. The new facility will permit crypto miners in Kazakhstan to buy electricity directly from the Russian power generation and distribution giant Inter RAO.

Miners in Kazakhstan to Source Energy from the Russian Federation

Crypto mining enterprises operating in Kazakhstan will be able to obtain electricity produced in neighboring Russia to power their units. The two partnering nations will amend a bilateral agreement governing the coordinated operation of their energy systems.

The government in Moscow is set to implement the necessary changes needed to organize the power supply for the crypto mining sector in Kazakhstan, the crypto news page of the Russian business information portal RBC has revealed.

Inter RAO, which holds the monopoly on the export and import of electricity in Russia, will be able to sell in Kazakhstan under contracts concluded on commercial terms directly with the mining firms as per the new arrangement.

Kazakhstan attracted numerous mining companies after the Chinese government cracked down on the industry last year with its low and subsidized electricity tariffs. The subsequent surge in consumption was blamed for the power shortages and multiple breakdowns of the country’s aging energy infrastructure. Kazakhstan temporarily shut down around 200 mining facilities in January 2022.

The state-owned Russian energy giant first started considering additional supplies to Kazakhstan last fall, when the country was expecting its electricity deficit to reach 600 megawatts amid increasing demand during the cold winter months after consumption peaked at 83 billion kilowatt-hours (kWh) in the first nine months of 2021.

Lawmakers in Nur-Sultan have recently proposed a bill to reduce what they describe as the "uncontrolled use of electricity by gray miners." The new legislation seeks to reserve the opportunity to mint digital coins only for mining companies registered with the Astana International Financial Center (AIFC). If the law is adopted, foreign entities would only be allowed to mine under contracts with domestically licensed data centers.