Cryptocurrency on the water: miners of Kyrgyzstan turn hydroelectric power plants into gold veins

New technologies and digitalization are rapidly developing around the world, creating new industries that do not require complex physical infrastructure. Mining of cryptocurrencies has become one of these areas. It is especially attractive for emerging economies, where access to low-cost electricity plays an important role. Although mining is a digital activity, its impact on the environment is quite real, since crypto mining requires a lot of electricity, which means it leads to greenhouse gas emissions. Therefore, issues of ecology and sustainable development are increasingly being raised in the discussion of the future of cryptocurrencies.

According to the University of Cambridge, the annual energy consumption of the Bitcoin network is comparable to the total capacity of the entire Swedish energy system. At the same time, a significant part of the world’s electricity is still generated at coal, oil and gas thermal power plants, which exacerbates the problem of global warming.

That is why the discussion about the transfer of the cryptocurrency industry to green energy is increasingly being raised. In support of this initiative, an international Crypto Climate Accord structure has been created — a digital analogue of the Paris Climate Agreement, the purpose of which is the complete decarbonization of mining.

Green Mining Potential

While the leading Western mining companies are only setting themselves the task of abandoning non-renewable sources by 2030, Kyrgyzstan already offers a unique green advantage. Due to its geographical location, almost 40% of the volume of water in Central Asia is formed in the river systems of our republic.

Rich in water resources, the Kyrgyz Republic generates about 90% of all electricity through hydropower, a clean and renewable energy source. Moreover, today, according to various estimates, only 10-11% of the total hydropotential of the country is used.

Thus, any mining farm operating in Kyrgyzstan automatically becomes part of the environmentally friendly crypto industry and produces a truly green cryptocurrency.

More farms means less money

In 2024, mining taxes brought 51.6 million soms to the budget of our country – almost half as much as a year earlier. Officially, there are more farms, geography has expanded, companies are paying. But in fact, we see a reduction in payments in key regions where miners are present.

According to official statistics, in 2024 the geography of mining in the Kyrgyz Republic has expanded: the number of regions where the activity of mining farms has been recorded has increased from three to five. Naryn and Osh regions were added to the already well-known Chui, Issyk-Kul regions and the city of Osh. And in 2025 – and Jalal-Abad.

It would seem that this should have led to an increase in tax revenues. However, in fact, the opposite happened: if in 2023 the budget received 93.7 million soms from crypto mining, then in 2024 it was only 51.6 million, that is, almost 1.8 times less.

The reason lies in the drop in the activity of already proven mining centers. Farms that provided the bulk of revenues in 2023 have noticeably reduced their payments in 2024.:

• The Chui region, the main mining hub of the country, reduced payments by 12.7%;
• Issyk-Kul — almost twice;
• Osh — 6.6 times.

Despite the fact that, according to the Ministry of Finance, miners paid almost 100 million soms to the budget in 2023, through the Open Budget portal, it was possible to track the receipts of this tax by regions by only 51.7 million — a little more than half.

In 2024, the situation has improved markedly. It has already been possible to confirm 83.1% of the declared amount — 42.9 million soms out of 51.6 million. However, part of the proceeds is also lost in bureaucratic corridors between the Ministry of Finance, the State Tax Service and the Open Budget portal.

How much does mining consume?

At the initial stage, the development of mining in Kyrgyzstan faced a number of serious obstacles. Firstly, due to the lack of a legislative framework, pioneer companies worked in a gray area – without clear rules and regulations. Secondly, the chronic energy shortage in the republic has become a serious barrier.

If the problem of the legal vacuum was solved thanks to the development of a regulatory framework for the regulation of virtual assets, then the shortage of electricity remains relevant. Today· the deficit is estimated at about 1 billion kWh. To overcome it, the authorities are actively building new hydroelectric power plants, wind farms and solar stations, as well as importing electricity from abroad.

Against this background, the emergence of new mining farms related to energy-intensive industries often causes a negative reaction. However, most often this is due to a lack of awareness of the real state of affairs.

So, in the Kyrgyz Republic, the mining tax rate is 10% of the cost of electricity consumed, and the tariff for miners last year was 5.58 soms per 1 kWh. Based on the mining tax revenues, it can be calculated that in 2024 crypto miners consumed about 92.5 million kWh.

“Entities registered as payers of mining tax are required to report for the entire amount of electricity consumed, both received from state-owned hydropower plants and from private sources of generation,” the STS explained to Akchabaru.

If you look at it nationwide, the share of miners in total energy consumption turns out to be insignificant. In 2024, electricity consumption in Kyrgyzstan amounted to 18.2 billion kWh, which means that miners accounted for only 0.51% of the total. For comparison, 75% of electricity is consumed by household subscribers — ordinary citizens.

Moreover, every kilowatt-hour sold to miners brings 6.138 som to energy companies. This amount consists of a basic tariff of 5.58 soms per 1 kWh and an additional mining tax of 0.558 soms for each kilowatt-hour consumed. As a result, last year, the total amount of revenues from electricity consumed by miners, according to calculations, amounted to about 567.75 million soms: 516.15 million of them were electricity payments and 51.6 million were tax revenues.

In other words, 1 kWh sold to miners brings as much as the payment of 2.5-5.5 kWh consumed by ordinary subscribers, depending on the current tariff. At the same time, from May 1, 2025, the tariff for miners will be increased to 6.06 soms per 1 kWh, which will further increase the profitability of this segment for energy enterprises.

The ability to sell electricity at commercially reasonable rates is of critical importance for the sustainability of the energy sector. Recall that in 2023, the state is forced to take on the debts of energy companies, the amount of which exceeded 120 billion soms.

Not just consumers

Even with relatively modest amounts of electricity consumption, the mining market in Kyrgyzstan remains quite active. From 2021 to 2024, several players came to the country, many of whom were re-registered.

According to the register of Financial Supervision, there are ten mining companies operating in the Kyrgyz Republic:

1. “Satellite 2005” (re—registration – October 2024; founder and head — Adylbek Mirzamatov).
2. “Business Drive” (August 2021; founders — Syymyk Mamatkanov and Mirbek Teschebaev).
3. MBT Stroy (June 2023; founder — Alexey Zaitsev, head — Igor Mikhailyuk).
4. Exjay Mining PTE (2023; with foreign participation; founders — Exjay Power PTE LTD and Zhu Yong).
5. “BaiLider” (September 2023; with foreign participation; founder — Bai Gunpu).
6. Xiamen Zhiasheng Engineering Machinery (June 2024; founder — Asan Sadykov).
7. “Fenyuen Technology Company” (August 2023; founder — Jia Libiao).
8. “Spetsenergomontazh Kara-Balta” (April 2024; founder — Andrey Ivannikov).
9. ViNET (August 2021; founder — Rakhatbek Irsaliev).
10. Solarkoin (January 2023; with foreign participation; founders — NBTS Keiji LLC, Tatyana Martynova and Lu Jincheng).

Interestingly, most of these enterprises are not officially registered as mining enterprises. Their main activity is “other activities in the field of information technology”, the use of web portals or maintenance of electrical equipment. Some profiles are completely unexpected — for example, Xiamen Zhiasheng Engineering Machinery is officially associated with the production of metallurgical equipment.

However, a deeper analysis of the founders shows that miners in the Kyrgyz Republic are not just energy consumers, but also its producers.

Of the ten operating mining companies, six have connections through their founders with companies engaged in electricity generation.

For example:

• Adylbek Mirzamatov (Satellite 2005) is also the founder of Chatkal Zharygy LLC (hydropower), Kobuk 19 LLC (thermal power plants) and Gulsha-21 LLC (other power plants);
• The founders of Exjeyuay Mining PTE are directly connected with EXJEYUAY Power PTE LLC, which is engaged in the production of electricity at HPPs;
• Asan Sadykov (Xiamen Zhiasheng Engineering Machinery) owns shares in Metrum Keiji LLC, Kyrgyz Energy Systems LLC, SuLu LLC (all three work in hydropower), as well as in Birimdik Resource Plus LLC (other types of power plants) and Future Energy Key Ji OJSC (electricity sales);
• Rakhatbek Irsaliyev (“ViNET”) participates through affiliated companies in the projects of Koisuuy HPPs, Ala-Bash HPPs, Talas HPPs, Chui HPPs, Ton HPPs, Ak-Terek HPPs, Kochkor HPPs, as well as in other hydropower projects;
• Tatyana Martynova (founder of Solarkoin) is also a co-owner of Metrum Cage LLC, specializing in hydropower.

Thus, mining enterprises in Kyrgyzstan do not just consume electricity, but also participate in its production or plan to generate electricity in the future by directly investing in the development of the country’s energy infrastructure.

So, for today, most of the HPPs associated with ViNET through its founder, according to the Open Budget portal, are working. For example, the following companies have made payments through the budget in the amount of:

• Koisui HPPs — 36.5 million soms;
• Ala-Bash HPPs — 14.6 million soms in 2023 and 1.03 million in 2024;
• Chui HPPs — 1.7 million soms in 2025;
• Tonskaya HPP — 1.23 million soms in 2024;
• Kochkorskaya HPP — 346.1 thousand soms.

The firm “Metrum Keiji”, connected through the founders with two mining companies at once — “Xiamen Zhiasheng Engineering Machinery” and “Solarkoin”, transferred 60.1 thousand soms to the budget last year. This may indicate the beginning of her work. Also Asan Sadykov (co-owner of Xiamen Giasheng Engineering Machinery) He is known to the public for the project of building a wind farm in Issyk-Kul. Probably, some of the electricity generated on it can be sold to a mining farm.

Geography of mining: where do they dig?

The Chui region remains the leader. Especially Orlovka, where Solarkoin works. In 2023-2024, it paid more than 84 million soms in the form of a mining tax.

In general, in 2023, the miners of the Chui region replenished the budget by 46 million 325.6 thousand soms. The lion’s share of this amount, almost 44 million, was contributed by Solarkoin. But, in addition to it, in 2023 there were five more farms in the region. One each in the Son-Tash aiyl aimag (paid mining tax for 634.6 thousand soms) and Uzun-Kyr aiyl aimag (5.6 thousand soms) of Ysyk-Ata district, one in Ak-Sui Aiyl aimag (20.5 thousand soms) Moskovsky district and one each in Tokmak (49.3 thousand soms) and Kara-Balta, where the Karabalta Special Power Plant operates (1 million 617.2 thousand soms).

In second place in terms of the amount of mining tax paid, although it is significantly less than in the Chui region, there are farms located in the Issyk-Kul region — 3 million 621.4 thousand soms. These revenues were provided by two farms, in the Bolot Mambetovsky aiyl aimag of the Ton district (1 million 746.8 thousand soms) and “ViNET” in Balykchi (1 million 874.6 thousand soms).

And, finally, Osh is in third place. According to the Ministry of Justice, only one mining company is registered in the southern capital – JSC “Satellite 2005”. And she paid 1 million 769.6 thousand soms in 2023 in the form of mining tax.

In 2024, farms appeared in Kyrgyzstan in the Ak-Moyunsky aiyl aimag of the At-Bashinsky district of the Naryn region, which paid 344.8 thousand soms to the budget, and in the Gulchinsky aiyl aimag of the Alai district of the Osh region. However, the company made a symbolic payment — 1 som.

As a result, the mining farms added last year paid relatively little in the form of a tax on their direct activities. Therefore, despite the expansion of the geography of the miners’ work in Kyrgyzstan, this did not compensate for the decrease in payments from large enterprises.

However, despite the fact that 2025 has just arrived, it has all the prerequisites to become more successful in terms of the relationship between miners and the state, since a new player has already appeared on the legal market.

A newcomer from the Jalal-Abad region. The farm is located in the Uch-Terek aiyl aimag of Toktogul district. Most likely, we are talking about the MBT Stroy company, which makes deductions just in this aimag. In the first four months, it has already replenished the treasury by 9 million 76.5 thousand soms in the form of a tax on mining activities.

The volume of payments clearly indicates that this is a fairly large player. His payments are almost 2.5 times higher than the tax deductions made by Satellite 2005 for the whole of 2023, as well as the amount of taxes paid by the miners of the Issyk-Kul region.

In addition, the mining farm in Osh seems to be back in the game. For four months of this year, she has already paid 947.8 thousand soms to the budget in the form of a mining tax, which is 3.5 times higher than her payments for 2024.

Mining in Kyrgyzstan clearly demonstrates how digital technologies can integrate into the country’s energy system. And, despite the risks, crypto farms are able not only to consume, but also to generate income, including through participation in the energy infrastructure. And given the willingness of miners to buy electricity at commercial rates, mining can play an important role in the energy transition of the republic.

Maria Indina (“Akchabar”)