By REUTERS

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 Ethiopia has signed a preliminary agreement to develop infrastructure for data mining and artificial intelligence training operations, the government's strategic investment arm said.

Ethiopian Investment Holdings (EIH) initially said in a social media post on Thursday that a memorandum of understanding for a $250 million project had been signed with a subsidiary of Hong Kong-based West Data Group, but it later removed references to the value of the deal and the identity of the company.

The EIH, West Data Group and an official from the Information Network Security Administration, which oversees data mining in Ethiopia, did not respond to requests for comment about the deal.

Read: Why cryptocurrency is becoming popular in Africa

Bloomberg reported last week that Ethiopia has become a leading destination for bitcoin mining - which an Ethiopian official referred to in a statement to the news agency as "data mining" and "high-performance computing" - since the government authorised the practice in 2022.

The report said bitcoin miners, whose computers compete to solve complex algorithms and consume large amounts of electricity, are attracted by low power costs in the nation.

China banned crypto trading and mining in 2021 to control financial risks and reduce energy consumption.

Read: Risk aversion driving crypto surge in Africa

Ethiopia has about 5,200 MW of installed generation capacity, with around 90 percent of it coming from hydropower and the remaining 10 percent from wind and thermal sources.

It is also finalising construction of the Grand Ethiopia Renaissance Dam (Gerd), which has a projected installed capacity of 5,150 MW.

About 40 percent of Ethiopia's 120 million people do not have access to electricity.