Crypto mining to be legalized in Abkhazia despite acute energy crisis

In Abkhazia, there were reports that the government is preparing to once again legalize crypto mining, despite the fact that the republic is currently facing an acute energy crisis lasting for more than six months. At the same time, it became known that the head of the Chernomorenergo company Mikhail Logua had resigned.

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Officially, Mikhail Logua left the position due to “health concerns”. However, in society, the true causes of his resignation are being actively discussed. One of the reasons named is the fact that Logua did not agree with the government’s plans for the legalization of crypto mining and transfer of several hydroelectric power plants on the Inhur River o Russian businessmen.

Logua worked as the Director-General of the Chernomorenergo for exactly a year. From 2011 to 2013, during the presidency of Alexander Ankvab, he served as the vice president of Abkhazia. At that time, the official cause of resignation was also “health concerns”.

The Minister of Economy of Christina Ozgan confirmed that the government is working on proposals for the provision of conditions for crypto mining.

This will include:

• Organization of electricity supplies from Russia.
• In order to minimize the load on the power grid – there will be places to accommodate equipment for mining cryptocurrency, taking into account the throughput and capacities of specific substations.

“We had representatives of the Russian side, which studied the technical scheme of deliveries. At the moment, we are sent a draft treaty that we work out”, Ozgan said on a specially convened briefing on July 23.

Many in Abkhazia speak of a dejum. In September 2020, the authorities of Abkhazia adopted a decree on the legalization of mining. The consequence was the hard energy crisis, which continues until now.

In December 2020, the government, due to the increased loads on the network and lack of electricity, banned crypto mining again. But nothing has changed, the load on the network remained the same. Because of this, all winter, entire Abkhazia was on schedule with electricity being turned off for six hours a day.

The situation has somewhat improved with the beginning of the tourist season. Now the light is only being turned off at night for two hours. But it has already been stated that with the completion of the summer season, the electricians will increase the dispensing time again to six hours per day.

Commentary

Leonid Agrba, journalist:

“Maybe enough to live as if we were in a cave when the government cannot manage anything? The energy crisis has been going on for so long and it has now approached the point of no return.

Everyone knows the saying about free cheese, which can only be found in a mousetrap. [The cost of electricity is 40 kopecks per kilowatts, or approximately $0.5] but people do not pay even that, despite having an electric floor and heating at home. Even developed countries save on electricity and use cheaper gas or wood heating instead.

All this has long required regulation, long before the appearance of mining. There are no audit conclusions for Chernomorenergo. This monopolist eliminates electricity, and, in fact, gets it for free”.

Abkhazia is almost fully supplied with electricity produced by INGURGES, managed jointly by Georgia and Abkhazia. All costs associated with the production and supply of this electricity of Abkhazia is paid by Tbilisi – JAMnews

“Maybe it’s time to think about why is it beneficial for them? [the authorities] After all, the population is regularly paying for the Internet – 1,000 rubles per month [about $ 15], because there are responsible service providers. And most importantly – all these moments are managerial axioms. And this means someone favorably does not fulfill them.

Let’s leave the cave. Examples can be found all around the world. Maybe we will bypass without scandals, if we think and act essentially and professionally”.

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