Tether Joins Volcano Energy Project in El Salvador
Tether is putting money into a big renewable energy park called “Volcano Energy” in Metapán, El Salvador
Dancing_Man/Shutterstock, modified by Blockworks
Stablecoin provider Tether is participating in a $250 million investment in a renewable energy project in El Salvador.
As one of a few investors participating in the project that aims to raise $1 billion, Tether will invest in a 241-megawatt renewable energy park called “Volcano Energy” in the northern city of Metapán.
Tether said its goal is to help create a major bitcoin mining farm by harnessing solar and wind power within the volcanic region.
The chosen site, located in the El Chiste hamlet, will have 169 megawatts of solar power and 72 megawatts of wind power, Tether said in a statement published Monday. This setup is expected to generate computing power of more than 1.3 exahash, which would be crucial for supporting operations like cryptocurrency mining.
Tether CTO Paolo Ardoino hailed “Volcano Energy” as an innovative and strategic project and expressed enthusiasm for working alongside Josue Lopez, El Salvador’s Bitcoin consul and the project’s CEO, along with his team.
Lopez mentioned that currently over 52% of bitcoin mining is done using sustainable methods. “We believe this percentage will significantly increase in the coming years through important investments like ours,” he added.
A Tether spokesperson declined to provide details on whether USDT tokens would be included in the investment, but said the investment does not utilize or impact the reserves that support the tokens.
“The current size of our investment in Volcano Energy is quite contained considering the profits Tether is generating every month and well within our own excess reserves. It is not taken from or affecting the reserves backing the tokens,” the spokesperson said.
El Salvador began exploring bitcoin mining using power from its volcanoes in 2021. President Nayib Bukele tweeted that he told the president of the state-owned geothermal electric company, La Geo, to come up with a plan to offer facilities for mining bitcoin using cheap and eco-friendly energy from the country’s volcanoes.
However, the country’s leading environmentalist Ricardo Navarro has reportedly said that Bukele’s volcano-powered bitcoin mining plans will end in environmental disaster.
He suggested that while he would usually be all for climate-friendly geothermal energy, this policy was plain wrong.
“Talking about building this city beside a volcano is like thinking you are rich because you live next to a bank. Geothermal energy doesn’t need volcanoes. It needs groundwater, steam. But we already have problems with not enough water in El Salvador,” Navarro told The Telegraph.
In late 2021, Bukele shared a teaser video featuring a government-branded container filled with bitcoin mining rigs, technicians setting up miners, and scenic aerial shots of an energy factory near a volcano. But he mentioned that the volcano-powered mining project was still ongoing, with ongoing tests and installations of new mining equipment.
The country’s legislature passed a law in January to authorize the issuance. The volcano energy initiative is seen as a sign of progress, however the country has yet to issue any of the bonds which have been beset by delays.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- The Drop: Apps, games, memes and more.
- Lightspeed: All things Solana.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
